“Time is money”

“Time is money.” When Benjamin Franklin wrote this sentence in 1748, he created for the first time a fundamental relationship between time and money, which then appears as two substitute notions.

From the beginning of the history of human thought, when Man realized his own boundary and his ephemeral passage in the dynamics of the world, time was at the heart of his fundamental philosophical questions. Thus, according to Saint Augustine, “the experience of time is sometimes amusing, painful, often tragic and, ultimately, inevitable. Dealing with Chronos has always been on the agenda of various social groups”.

We can begin with this verse of Luke’s Gospel which says “lend without expecting anything in return”. This is the basis of the Christian attitude in relation to time and money, because to lend while waiting for a replacement is certainly at the appropriate time not for you, because time belongs to God. So it’s like taking something we don’t own, to take advantage of it. Francois Hartog

Because of its importance in understanding the human condition, the economy has also invested a field of time to understand its own logic and what drives the decision-making processes of its actors. Irving Fisher was the first, in theory of interest (1930), to consider time as a variable considered by economic agents in their consumption choices. By showing themselves in the future, individuals are invited to maximize the intertemporal utility of their actions and therefore avoid consuming all of their income in a given period of time. The resort to frugality thus reflects the consideration and influence of time on economic choices; especially the future is often associated with uncertainty in the collective imagination.

Fisher pioneered the development of studies that further examine economic cycles, whether long or short. Although they were seen in the mid-19th century, it was only in the 1930s that statistical studies focused specifically on the factors leading to these cyclical changes, such as the interest rate. The change in interest rates changes the future investment levels of companies, the rate of household savings and therefore the disposition of capital. Thus, for many economists, especially those from the Austrian school, the interest rate is the main element. Francois Gardes

Time is now fully considered an economic resource in its own right because it appears as an element that constitutes different moments of life, the different activities of individuals. According to economist Gary Becker, “working time”, “rest time”, “leisure time”, … are proof that time can be understood as an available quantity that can be appreciated. .

To study how individuals allocate their time is to understand their intimate relationship with the economic universe. How much time do they devote to work? For consumption? all are valuable information to better understand their options in terms of resource allocation.

The question is whether we can legitimately measure a “value for money” in time. Gary Becker, sa A Theory of Time Allocation (1965), was the first to develop the “opportunity cost of time” based on the fact that the amount of time (of an hour gained or lost) corresponds to the net wage in the agent’s market. Based on this assumption, studies conducted in France, Canada and the United States seem to show that the amount of time corresponds to approximately half of the net salary earned by individuals in the market. It can also be based on the total income earned by the individual in his or her entire life cycle, which amounts to more than 3 million dollars in developed countries.
However, the amount of time depends on the different characteristics of individuals because they often show personal choices and above all is a pleasure that varies according to different criteria.

If you consider the value of domestic production, it represents at least 50% of domestic GDP, which is substantial. The informal economy typically represents between 5 and 10% of GDP. We can therefore see that the current GDP calculation is somewhat inaccurate as it indicates only 50% of real wealth. Gary Becker took a major step because he was interested in time constraints as well as in the financial constraint in analyzing GDP. According to him, it is not only necessary to consider the monetary value of an activity, for example the cost of fuel when talking about transportation, but also its temporal cost, which corresponds, in this example, to the time spent on transportation. multiplied by the amount you provide at this time. He called it the “full price” of an economic activity. Francois Gardes

Currently, the available time of individuals seems to be significantly reduced. Over the past thirty years, it has been reduced by the proliferation of individual activities, particularly in fields other than work. The “liberation of time” caused by the overall reduction in working hours led, at first glance, to a reduction in the time available.
Moreover, this paradigm is also linked to the fact that the economic literature increasingly considers non-market activities when considering the time available. Housework, time devoted to raising children, even bedtime are now fully considered as data that contribute to the basic needs of individuals and their capacity within the productive equipment.

“Time is money” therefore necessarily leads to questioning the monetary and philosophical value that an individual puts into time and its influence on his or her choices within the economic universe.

We see, especially at the beginning of the Anthropocene, that the periods we face are very vast. The temporalities of the Earth itself are expressed in the direction of the past and the future, which is discounted over billions of years. Because we were in the middle, simply equipped with our little presentism, we were completely lost. Moreover, this future is more complex to contemplate because we now know that it has been partially played out, due to the irreversible climate damage that has been done. I believe that humanity has never been faced with such a mental problem and such difficulty in describing the future; which will say a lot about our future economic options. Francois Hartog

To enlighten us on the basic meaning of this proverb, we are pleased to accept Francois Gardes, emeritus professor at the University of Paris I Panthéon Sorbonne, Associate Member of the Paris School of Economics and Francois Hartog, historian and director of studies at EHESS.

Sound references

  • Excerpt from the opening scene of the film Time Out, Andrew Niccol (2011)
  • Reading ofA theory of time allocation by Gary Becker (1965) by Tiphaine de Rocquiny
  • MA beloved witch : The appreciation of homework over time spent on household chores
  • reading, The Skin of SadnessHonoré de Balzac (1831) by Tiphaine de Rocquiny

Music references

Season Time – Zombies (1967)

Leave a Comment