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Time is money

November 5, 2007

Coined quite a while before the beginning of modernity, this saying nevertheless captures the spirit of modern economics quite well. Life became a lot faster at the beginning of the 20th century, when new modes of transport were invented or established. The more money you had, the faster you could go, for in the early days, cars were for the rich only, and so was airtravel. Similarly, if you had time, you could travel more slowly and save money.

Examples involving transportation of anything (people, mail, goods) are particularly easy examples to come by. But there can be other cases, too. Take the idea, recently practiced in New York and Berlin, of selling two kinds of tickets for an exhibition: regular ones with a long wait in line, or VIP ones: more expensive, but no wait. So it seems the model can be extended. Should it be?

There are differences, of course. There is no in principle limit on how much money you can make, but there is some rough limit on how much time you will have. Also, time, as Marx would be quick to point out, does not accumulate. You cannot open a time-account, where you store saved time, preferably with some interest on it, to retrieve it later. This is the theme of one of the great children’s books of all time: Momo.

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