The men worked fifty, sixty, even seventy or more hours a weeks the women worked all the time, with little assistance from labor-saving devices, washing laundry, ironing shirts, mending socks, turning collars, sewing on buttons, mothproofing woolens, polishing furniture, sweeping and washing floors, washing windows, cleaning sinks, tubs, toilets, and stoves, vacuuming rugs, nursing the sick, shopping for food, cooking meals, feeding relatives, tidying closets and drawers, overseeing paint jobs and household re-pairs, arranging for religious observances, paying bills and keeping the family’s books while simultaneously attending to their children’s health, clothing, cleanliness, schooling, nutrition, conduct, birthdays, discipline, and morale. A few women labore alongside their husbands in the family-owned stores on the nearby shopping streets, assisted after school and on Saturdays by the older children, who delivered orders and tended stock and did the cleaning up.
It was work that identified and distinguished our neighbors for me far more than religion.
The founders of Airbnb, Brian Chesky, Nathan Blecharczyk, and Joe Gebbia, (see yesterday’s post) were not looking to sell a trendy item like beanie babies. They were looking to change the framing of travel lodging. This entailed getting people to use their platform while having their new method benefit from all the classic institutional supports. Both hosts and visitors require safety, for instance. What are the ways people monitor for safety? They report objections. The site allows both parties to provide feedback.
A fad can take off when it strikes people’s fancy at a particular moment. When the Twins baseball team headed to the World Series twice in a handful of years, fans took to Homer Hankies as a sign of their support. The whole stadium flutter with the white kerchiefs. It’s a simple transaction: an object for cash. No further servicing or support is needed. It’s a perfect private market trade.
The sharing market, whether house sharing or car sharing, has added dimensions of safety and property damage. My son’s friend ran some cars through Turo while in college. One rental went awry when the leasor passed off the vehicle to an acquaintance. Fortunately, there was a tile in the trunk, so it was easy to track down at a nearby strip mall. The boys gained access to the parked car and waited. When the dude came out of the store, he saw the vehicle was occupied and realized his ride was over. The boys drove by him slowly to emphasize the game was up.
Some transactions, like selling stock out of your Merrilyn portfolio, are private. And then some require engaging circles of cooperative action to enforce the rules of the trade.
Often, when people discuss problems that occur in group transactions, they single out an individual experience and hold it up as a representative example. That’s out of line. If you want to talk about individual outcomes, stick to that setting. If you want to talk about group outcomes, don’t exemplify one individual’s experience.
That’s what I like about the following clip from the Airbnb founders. They’ve come up with their house-sharing idea and worked out the logistical aspects to take it to market. Now, they just need people to try it. Not one person. That won’t make the platform start humming. They need a group.
They are trying to link the two groups of people with rooms to rent and the people who are taken with the idea and feasibility of renting from a homeowner. But they need something more. They need a common cause, an affinity that overlays the group and makes them feel like one. This elevates the sense of trust and is the little push needed to overcome the hesitancy of a new experience.
In groups, no one host can make the system move, no one guest. The individual is nothing on its own. Group analysis has group features, including an underlying group shared value.
Complete text:
Brian Chesky explains how Airbnb solved the chicken-and-egg problem โMarketplaces are incredibly defensible at scale, and maybe itโs because theyโre incredibly hard to start. And the problem is simple – they call it the chicken and egg problem.โ As Brian explains, it was tough to bootstrap Airbnb in the beginning because travelers couldnโt book homes if there was no inventory, and homeowners didnโt want to list their homes unless people were going to book them. โWe didnโt know what to do for a while .We tried a lot of different things. And I can tell you what worked. Summer of 2008, the press announces that Barack Obama is moving from a 20,000 seat basketball arena to an 80,000 seat football stadium. And we said, thatโs our shot. You have 60,000 people that donโt have housing, surely at least a few of them are going to need a place to stayโฆ And so we literally started with local people in Denver. Then we started emailing bloggers. We got the bloggers. Then the Denver Post and the Rocky Mountain News covered us. Then the local ABC and NBC and CBS affiliates. And then the Wall Street Journal. Then the New York Times and CNN are in our living roomโฆ We did that in a matter of three weeks.โ Brian continues: โWe started these little infernos. You start getting a few users here, a hundred here, fifty thereโฆ And we did the same thing with the inauguration. And when you have a hundred people here and there, then you obsessively meet themโฆ Paul Graham, our first investor, said itโs better to have a hundred people love you than a million people kind of like you. And the reason why is itโs really hard to build off of a really wide but shallow base. But with a hundred people, you can find out everything they wantโฆ You meet them, you spend a ton of time with them, and once they fall in love with your product, theyโll tell every one of their friends. Thatโs why [Airbnb] took a really long time to start, but it grew much faster later on.โ
Sometimes, crazy northerners crack a hole in the ice and disrobe down to a skinny bikini before plunging into a chilly frozen lake. It’s called a Polar Plunge. It’s supposed to be fun!
But that’s not the type of plunge I’m bringing you in this article by well-known urban geographer Bill Lindeke. New construction in the legacy cities, which had made nice strides from 2017-2021, plummeted down 88%.
Comparing the slowdown to other cities of similar size reveals an undeniable first place in the worst record award to be given out. The cause, you ask? Bill suggests.
The most obvious culprit to me is that both St. Paul and Minneapolis have enacted (or taken steps toward enacting) rent stabilization policies. This was an issue that I argued about back in 2021, writing that the policy proposal appearing on the referendum would amount to St. Paul โredlining itselfโ when it came to attracting housing investment. The bigger surprise is that Minneapolis seems to also have been affected by concerns about rent stabilization, even though they havenโt actually enacted any actual policy.
I say it doesn’t stop there. The hostile environment against developers, landlords, tradespeople, maintenance and upkeep folks, and anyone who puts effort into the upkeep of real property has taken a toll.
There are other municipalities that welcome people who want to build upon and maintain investment properties. Options provide choices.
Is the Housing Act of 1949 the reason today for the hyper-local control of housing and real estate decisions? It’s hard to say. But the slum clearance, financed by the federal government, was significant enough to still be recognized today.
THE GATEWAY PROJECT City planners assumed that the Gateway area, the old core of downtown Minneapolis, would qualify for federal urban renewal assistance when they proposed clearing and reconstructing about one-third of the entire downtown in the mid-1950s. Beginning in 1956, federal renewal officials raised serious questions about the size of the project: was what was proposed too big for the local real estate market? In 1957 a group of civic and government leaders, led by Mayor P.K. Peterson, went to Washington, D.C. to convince federal renewal officials that Minneapolis needed a project this size. They were successful, and returned with a commitment for the money.
Not everyone found favor with the proposed redevelopment however. Several owners of condemned property tried to stop the Gateway plan. They sued the HRA, claiming that the condemnation action was “arbitrary and unreasonable.” They also challenged the legality of the overall development plan. The owners did not win any of these suits, nor did the preservationists who sued to stop the destruction of the Metropolitan Building (formerly the Guaranty Life Building). This last suit made it as far as the Minnesota Supreme Court, which upheld the HRA’s right to condemn the Metropolitan Building. This decision essentially reaffirmed the “greater good” argument about eminent domain (Buildings 1961 b).
The 1956 Highway Act worked with the Housing Act by sometimes forging the interstate system through poor, dilapidated neighborhoods. While I suspect only the most dedicated automobile haters would argue against a national network of roads, the lamentation of housing being leveled still lingers today. And petitions are underway to return the freeway to neighborhood streets. (Although, most recently removed from the planning process.)
What is the balance between hyper-local governanceโwhere people want to take out a freeway for residential streetsโand an all-encompassing federal project? In the end, who owns the land?
The downtown library sits in the old Gateway district.
Around the time (1961) Jane Jacobs was writing her book about cities, cities were reacting to many unpleasant issues. Skid row, for instance, was part of many downtowns home to drunks and vagabonds. A trend to suburban living had already led many people to focus their energies on the city’s limits; urban planners feared these litter-ridden blocks chased average folks from frequenting the area.
The solution? Raze to the ground the whole Gateway District of downtown.
Jacobs also comments on freeway expansions, parks, foot traffic, the impact of large institutions like hospitals, neighborhood interaction, and so much more. Her work is more about the questions about how neighborhood life worksโwhat are they, and is there a logic to them?
The Northwestern National Life Building was built in the Gateway district in 1965.
To hunt for city neighborhood touchstones of success in high standards of physical facilities, or in supposedly competent an nonproblem populations, or in nostalgic memories of town life, is a waste of time. It evades the meat of the question, which is the problem of what city neighborhoods do, if anything, that may be socially and economically useful in cities themselves, and how they do it.
We shall have something solid to chew on if we think of city neighborhoods as mundane organs of self-government. Our failures with city neighborhoods are, ultimately, failures in localized self-government. And our successes are successes at localized self-government. I am using self-government in its broadest sense, meaning both the informal and formal self-management of society.
I will be hosting a reading group for Jacobโs The Death and Life of Great American Cities. More information to follow.
There’s an inclination to make things of natural beauty available to the public. John Muir, for instance, advocated for the National Parks in general and Yosemite National Park in particular. Yet, there are still obstacles of geography. One must take themselves to the south rim of the Grand Canyon to see the sunlight paint the canyon. One must board a plane and cross the Pacific to walk through Waipi’o Valley on the Big Island.
Then, political boundaries stand between the majestic places on Earth and the traveler. Nepal announced they were increasing the permit fees for aspiring climbers of the great Mt Everest.
Nepal will increase the permit fees for climbing Mount Everest by more than 35%, making the worldโs tallest peak more expensive for mountaineers for the first time in nearly a decade, officials said on Wednesday.
Income from permit fees and other spending by foreign climbers is a key source of revenue and employment for the cash strapped nation, home to eight of the worldโs 14 highest mountains, including Mount Everest.
I doubt the increase will deter the mountaineers who can accomplish such a feat. It seems that people with steep ambitions would be able to raise the finances. And there are options for reduced fees in two of the off-seasons. But of course, tackling the December through February quarter in high winter winds would whittle the group down to the fittest and most crazy.
If anything, the lines to the summit and the wait lists indicate that Nepal is underpricing access to the Himalayan peak. The climb’s popularity has exploded since Sir Edmund Hillary and a sherpa summited in 1953. Perhaps the tiny nation can use some of the fees to tidy up after the visitors who distractedly leave their debris behind.
The magnificence of nature is something to behold. If you are Nepalese, the snowy peak is a national treasure. It rises proudly every day sure as the sunlight at dawn. Citizens can also extract private benefits by accommodating the needs of visitors who come to tackle the mountain. For outsiders, issues of distance and expertise determine who can take in what part of the massif.
For still others, Mount Everest can be seen through the window of a prop plane tipping its wings at the majestic summit.
Yesterday, Carrie Underwood led the high-test audience in the Capital Rotunda in singing America the Beautiful. As a professional singer, she regularly performs in front of crowds. But in this case, the room was full of dignitaries, and the background music malfunctioned, leading to an awkward minute of silence.
Her confidence to rise to the occasion was rewarded. The acapella version, where the voices near her can be heard through the mike, was gorgeous. Both former and newly inaugurated presidents of the United States thanked her.
Paul Erdos, featured yesterday, chose a lifestyle that led to a striking number of shared work projects. Due to the sheer number of work friends, a number system was developed to keep track of the network that worked on shared ideas. Chat explains.
Paul Erdลs, one of the most prolific mathematicians of the 20th century, collaborated with an extraordinary number of researchers throughout his life. His collaborators are often counted as part of the famous “Erdลs Number” system, where Erdลs himself has an Erdลs Number of 0, his direct collaborators have a number of 1, their collaborators have a number of 2, and so on.
Estimated Number of Collaborators
Erdลs collaborated with approximately 511 mathematicians on research papers during his lifetime. These collaborations resulted in over 1,500 papers, making him one of the most prolific authors in mathematical history.
This number of collaborators reflects Erdลs’s unique approach to mathematicsโhe would travel extensively, visiting mathematicians worldwide, and work intensively with them on specific problems. This collaborative approach led to his reputation as a “mathematical nomad.”
Now, how do you think that work went when you think about all these math types puzzling over combinatorics or vertices of convex polygons? Did Erdos have a payroll and dole out cash? It seems it was the opposite. Collaborators and friends brought him into their home and put him up so he could work with them out of their university. This is not work compensated through pecuniary means.
So what’s in it for the collaborators? The Edos number, of course. Being in the Erdos network gives one sense of participation in the mathematical theory underway, and then their Erdos number specifies a claim to a distance from Erdos himself.
To recap, this type of work is voluntary and participatory, and the end product feeds into a jointly held assetโa school of thought in mathematics. Money is not the primary motivation for action. Membership in the network and the potential for the elevated position are the compensating factors. Every participant has access to the knowledge. It is a public good.
Here’s Chat’s visual.
Is it a public good to the whole world? In a sense, yes, but not in a practical sense. Just like it’s not practical to say the streets of Fargo, ND, are public to the whole world. The knowledge is open, but only a few will have the talents and learned knowledge to comprehend it. Only people in the geographic vicinity of Fargo will use their streets.
Is there externalizing and internalizing going on? Sure- when a new entrant learns a theorem, it becomes part of their knowledge. They have acquired the benefit, internalized, of the learned network. If a few of them collaborate on a textbook and sell it for their private pecuniary gain, they externalize knowledge and realize a gain. These actions do not conflict or reduce the network’s accomplishment. They add to the power and benefit of the group. The image you see inflates.
Paul Erdos’ life had living constraints, just as ours do. Yet the value of his research was such that he could be entertained at associates’ homes to assist in writing all 1,500 papers he left to the world.
Paul Erdos, traveling mathematician extraordinaire, has been on Home Economics before. The Hungarian distinguished himself both in abstract thinking and in being a prolific houseguest. This willingness to travel undoubtedly helped him to become the most collaborative scholar in mathematics.
This free-spiritedness apparently made the FBI uncomfortable. This video (13 min) will fill you in on all the details. One supporter claimed to the government agency that Erdos could never be a spy because his allegiance was to the truth, in science and not in politics.
Every year, the National Association of Realtors compiles a report on buyer and seller trends. Here’s a link to last year’s highlights.
What struck me about this chart isn’t that suburban locations came in as the top destination, but that small towns came in second. What happened to the allure of the big city?
One way to think about the public and the private is whether the activity is, rather uniformly, the benefit to a group of individuals or whether the benefit can be captured by an individual (or entity) which can preclude others.
According to Chat, here are some well-known models framed around two sectors of activity- the public and the private.
Yes, there are several economic models and frameworks that distinguish outcomes in two distinct spheres: public/groups (e.g., government, associations, nonprofits) and private individuals or organizations (e.g., households, corporations). These models analyze how actions, decisions, or policies produce effects that logically fall into one sphere or the other. Below are examples of such models:
1. Tiebout Model of Local Public Goods
Overview: This model explains how individuals “vote with their feet” by choosing communities that provide the optimal level of public goods (like schools, parks) for their preferences.
Public Sphere Outcomes:
Local governments provide public goods financed through taxes.
Group-level outcomes emerge as communities cater to specific preferences.
Private Sphere Outcomes:
Households or individuals make decisions about where to live based on private utility maximization (e.g., balancing taxes with public goods quality).
Distinctiveness: The model distinguishes between collective outcomes (e.g., quality of local schools) and private choices (residential decisions).
2. Coase Theorem (Private Bargaining vs. Public Regulation)
Overview: Coase’s theorem analyzes how private bargaining can resolve externalities without government intervention if property rights are clearly defined and transaction costs are low.
Public Sphere Outcomes:
If private bargaining fails due to high transaction costs, the government may step in with regulations or taxes to address the externality (e.g., pollution controls).
Private Sphere Outcomes:
Individuals or firms negotiate outcomes to internalize the externality (e.g., a factory pays a neighboring community for air pollution damages).
Distinctiveness: The model separates cases where private solutions are feasible from those requiring public intervention.
3. Public Choice Theory
Overview: Public choice models apply economic principles to political decision-making, distinguishing between individual preferences (in markets) and collective choices (in political processes).
Public Sphere Outcomes:
Collective decisions are made through voting, lobbying, or legislative processes, leading to public goods provision or redistribution.
Private Sphere Outcomes:
Individuals and corporations pursue private interests, such as profit maximization or personal utility.
Distinctiveness: The model highlights conflicts between collective outcomes (e.g., tax policies) and private incentives (e.g., tax avoidance).
4. Ostromโs Commons Governance (Private vs. Collective Action)
Overview: Elinor Ostromโs work explores how communities manage shared resources (e.g., fisheries, forests) through collective action rather than relying on markets or governments.
Public Sphere Outcomes:
Collective agreements and rules are created to manage resources sustainably, benefiting the group as a whole.
Private Sphere Outcomes:
Individuals or firms may overexploit resources if acting in self-interest without collective rules (tragedy of the commons).
Distinctiveness: The model contrasts sustainable group governance with unsustainable private behavior.
5. Samuelsonโs Theory of Public Goods
Overview: Samuelson formalized the distinction between public goods (non-excludable and non-rivalrous) and private goods (excludable and rivalrous).
Public Sphere Outcomes:
Goods like national defense or public parks benefit everyone and are provided by governments or groups.
Private Sphere Outcomes:
Private goods like food or cars are traded in markets based on individual preferences and purchasing power.
Distinctiveness: Public goods are logically grouped into collective outcomes, while private goods are tied to individual consumption.
6. Corporate Social Responsibility (CSR) Models
Overview: CSR models analyze how corporations balance private goals (profit) with public outcomes (social and environmental responsibility).
Public Sphere Outcomes:
Actions like reducing carbon footprints or supporting local communities generate public benefits.
Private Sphere Outcomes:
Firms may adopt CSR policies for private reasons, such as enhancing brand reputation or avoiding regulatory penalties.
Distinctiveness: Outcomes are split between private gains and public benefits.
7. Club Goods Models (Shared Private Benefits vs. Public Goods)
Overview: Club goods are excludable but non-rivalrous within a specific group (e.g., private golf clubs, gated communities).
Public Sphere Outcomes:
Benefits are shared within a group (e.g., access to a community swimming pool), mimicking public goods but limited to club members.
Private Sphere Outcomes:
Individuals decide to join clubs based on their private valuation of the benefits versus the cost.
Distinctiveness: The model distinguishes between group benefits (public within the club) and individual decisions to join.
8. Tax Incidence and Distribution Models
Overview: These models analyze how taxes imposed by the government affect private individuals, groups, or firms.
Public Sphere Outcomes:
Taxes fund public services like infrastructure, healthcare, or education.
Private Sphere Outcomes:
Individuals or firms bear the tax burden directly (through income taxes) or indirectly (through price increases).
Distinctiveness: Public benefits are tied to tax-funded services, while private costs are borne by taxpayers.
Summary
Models like the Tiebout model, Coase theorem, and public choice theory offer frameworks where outcomes are clearly distinguished as belonging to the public/groups sphere versus the private sphere. These models are particularly useful for analyzing policies and decisions that impact both domains, such as taxation, public goods provision, and environmental regulation. Let me know if you’d like to explore any model further!
For anyone younger than 50, it might be hard to imagine the zeal and inflammatory context wrapped in the calling out of Marxism or Communism. There was a time when it triggered fear, fear of ostracism, loss of employment, or any many other adverse physical or social outcomes. Now that history has sorted itself out, the source of terror stemmed from the madmen who adopted Marx’s writings as their intellectual endorsement. Most agree that Marx would oppose the outcomes done under his philosophical banner. Most don’t bother to read the text to find out for themselves.
Last week, an English professor, Alex Moscowitz, suggested that Marx’s work is foundational for economics. The economists objected, debunking the validity of his work. Business people are particularly offended by his Labor Theory of Value, which the nineteenth-century thinker penned in Das Capital.
“The value of a commodity, therefore, is determined by the quantity of labor expended to produce it, but only of labor that is socially necessary. Socially necessary labor time is the labor time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labor prevalent in that society.” (Das Kapital, Volume I, Chapter 1)
Everyone knows that in the commercial world, one gets paid the market rate for labor.
Noah Smith types up an interesting overview of the topic in Should Economists Read Marx. He chews through a lot of the interesting aspects of the topic, including listing out the foundational economic material he was required to tackle while a PhD student. Each work tussles with market failures or public goods. The greats like Paul Samuelson and Kenneth Arrow devoted intellectual energy to issues on the cusp of private and public sectors, two sectors each with their own structure.
It’s just that people who came after Marx took his text to initiate disruption and then exert social control. Noah closes with a reminder to his contemporaries that accuracy is not everything. An impassioned sweep and forceful embellishment of an errant study can end in tragedy.
This should serve as a warning to economists โ a reminder of why although narrow theories about auctions or randomized controlled trials of anti-poverty policies might seem like small potatoes, theyโre not going to end with the skulls of thousands of children smashed against trees. Modern economics, with all of its mathematical formulae and statistical regressions, represents academia appropriately tamed โ intelligence yoked to the quotidian search for truth, hemmed in by guardrails of methodological humility. The kind of academia that Alex Moskowitz represents, where the study of Great Books flowers almost instantly into sweeping historical theories and calls for revolution and war, embodies the true legacy of Marx โ something still fanged and wild.
But what about the labor theory of value? Is there anywhere in life where there is a pooling value to the work at hand? Consider intellectual property. Is there some pool of work hours necessary to accomplish a new way of thinking about a technology? Scientists in twos and threes or on their own throw their time into advancing an idea. Isn’t the idea behind a patent that the inventor doesn’t get his labor time paid for in the idea development process, so he has a claim to future benefits from the product as a reimbursement mechanism?
What about founders and startup folks. Don’t they calculate the labor hours they think they’ll need to put into a new venture and then figure out whether they’ll be able to recoup their labor time?
I’ve been diving into Democracy in America lately, written by a Frenchman, Alexis de Tocqueville, about a voyage to the New World in 1831. He was writing for the French government and primarily focused on public life. So, taken by the spirit of the population, it resulted in a text that shares the rhythm and enthusiasm of civic life, which makes the book popular today.
One point of fascination is the energy of governance at the township level. He ogles at the ability of a small group of men to tackle a public project, do their best (although he notes that this is often not as well done as professional bureaucrats), and see it through to completion. He notes the short distance between the man on the street and the organizer of public goods. In France, the central authority resides far from the common man. It’s a distance thing.
As an outsider, de Tocqueville was a keen observer. But this isn’t always the case. Sometimes, the outsider over-simplifies, and sometimes, they interpret to fit a convenient view.
Lately, immigration has been in the news, particularly the subset of intelligent, well-educated types. We have one such community. The tech workers from Asia gravitate to the same suburban area, the same school district, really. This public school district pulls in the highest scores in the state. It’s no coincidence. All the Tiger moms want their kids to go to the top schoolโnot a private school, mind you, but a public one. For comparison, Asians in Minnesota make up 5% of the population.
Their contribution to raising the level of education among all those other Minnesota kids doesn’t stop there. Their interests in debate club, science club, and robotics flush out the teachers who are willing to lead the group. Inevitably, a photo of the teams winning some national prize filters into the community newspaper a few pages ahead of the sports teams and their accomplishments. These families want a lot and put in the work to get it.
This community also wanted to play cricket close to home. And voila! Our city has a cricket pitch.
The activity of this group reminds me of what de Tocqueville describes in the immigrant communities he witnessed. The profile of people who support the notion that anything is possible if you put a little elbow grease into the project. The distance between those with ambition and those able to coordinate and shepherd a favorable outcome is short.
When commentators imply otherwise, you wonder where they’ve been. If you are in the education game, it’s clear who carries the ball. It’s the families and the teachers. Corporations are so far removed from education mechanics that they might as well be on an island somewhere. General observation shows that highly educated, foreign-born tech workers result in positive externalities to their surrounding communities.
Big business and corporate America aren’t even on the same playing field. And those who think so might want to check the game’s rules.
When Amazon changes the name of a product and puts it out there, it has a better chance of being embraced by the market. This seems to be true with the tiny home priced at an attractive $47K.
The 30-foot-deep house has a floor plan thatโs anything but tiny, despite its name. Itโs made with high-quality materials like steel that, according to the brand, will stand up against harsh weather conditions. It has two stories that you can access via a staircase, and it comes prewired with electricity and plumbing, making it live-in-ready upon installation. The sleek walls are also insulated, so you’ll stay cozy and cool all year long, and they’re soundproof, providing privacy between rooms.
On the first floor, thereโs a bedroom with a full-size bathroom: It has a toilet, sink with storage, and a private shower area. The kitchen has built-in cabinets while the open-concept living room has ample space for a couch, a coffee table, and a dining room table. The second floor houses the main bedroom, an en suite bathroom, and sliding glass doors that lead out to a charming deck with space for chairs, a fire pit, or a patio heater.
Trailer homes and prefab homes have been on the market for decades. The difference lies in their setting. Despite their name, the former is traditionally stationary in a trailer park. Rent is paid to a landlord who maintains the grounds and hook-up services. Prefab homes are built in a factory and shipped in pieces to the purchaser.
So far, the prefab homes are not common in the Minnesota market. Perhaps Amazon will change all that.
Liberty regards religion as its companion in all its battles and its triumphs,โas the cradle of its infancy, and the divine source of its claims. It considers religion as the safeguard of morality, and morality as the best security of law, and the surest pledge of the duration of freedom….
From Democracy in America by Alexis de Tocqueville.
The US Census has a new look. The site has improved tremendously. This might be old news, but it’s news to me. It’s worth checking out if you haven’t been there in a while. I particularly like the profile pages, like this one.
Take note of the breakdown of housing units and households. There are approximately 5.7% more housing units than households in the state. You need some vacancies as there are units under renovation or being held while a family relocates from one living situation to another. Is 5.7% in the comfortable range? It’s hard to know. Still– comparing the spread between households and units is a measure to determine how many extra spaces, if any, there are for families to live.
The county-level profiles are great too and come in several formats. Here are three to compare.
Each county has a different spread between the number of housing units and the number of households. The range is from 7% vacancy in the agricultural area of Blue Earth to a low of 1.8% in the most densely populated Hennepin County to a generous 16% in the northern lakes area of Mille Lacs County. Hennepin County is the only place we can say with certainty that there is a clear need for more housing.
Counties are large. There may be vacant structures in rural Blue Earth county while the demand for places to live is in Mankato, a nice-sized town of forty-five thousand. For that reason, it’s great that the Census even zooms into the city level.
Here’s a snapshot of Perham, a small but humming town about an hour SE of Fargo.
The point here is that housing is local. When people observe that the price of housing did not come down when new units were added, the follow-up question should be, what type of housing and where?
Say you live in a high-density, well-frequented area where lots of people come and go to visit local amenities like ballparks, restaurants, and museums. At some point, you get tired of being unable to host book club because your friends can’t find parking in front of your home, or the noise of continual foot traffic along the sidewalk is plain annoying. You decide to do something about it. After all, this is your homeโright?
The voluntary action taken to rev up the neighbors, petition your city council, and air your grievances across social media platforms can, in sum, add up. It is an opportunity cost to you. You’ve engaged in volunteering and spent some of your time and talents to improve your environment. In fact, you’ve done such a good job that there is now a team of neighbors- Team A- all on the same quest.
Traditionally, streets and sidewalks are open-access town amenities. It’s too inconvenient to block passage for those from afar and those nearby. Hence, most roadways in the US are public in the most generous sense of the term. The free flow of people circulates around for their various needs, whether it be for a commercial delivery, a commuter getting to and from work, or a family out and about doing what families do. People in the know might adjust their schedule and stay off the roads at rush hour or following a Taylor Swift concert, but otherwise, it is a free-for-all, first-come-first-serve type commodity.
Team A, in the neighborhood wants more control than the anything goes, and engage their city to intervene in the spirit of preserving their neighborhood. They make a material claim to the pavement outside their doors. In order to make it official, they need the blessing of an official body with authority. The constraints change once a sign goes up on the block limiting parking hours, or requiring a parking pass.
Imposing minor inconveniences like restricted hours, passes, or even meters might make street parking more orderly. It’s a way of relaying information. A restriction might be just what someone needs to make an effort to drive through the alley and put their car away in a garage. A small charge encourages people to walk further and park on a less busy street.
The time to take note is when a restriction pushes other groups to form. Then, there are more preferences to consider than simply those of the neighbors who want ownership benefits of the street spots in front of their homes. Take the recent change implemented for those who wish to drive into Manhattan. To listen to this guy, it’s all a great success to charge $9 and discourage entrance by vehicle. He appears to speak on behalf of the commuting group.
Screenshot
What other groups are in the mix? Shoppers who would come into the city, but now the surcharge discourages them? Small shop workers like home repair people? Tourists who decide against coming in for the day? What is the cost of their behavior in the face of this new constraint? It seems that retail shops and restaurants could see a decrease in business. Less competition for small-scale home repair services results in higher prices for homeowners. Fewer tourists, as pesky as they seem, weakens the arts and museum support systems.
Time will tell. But it seems that gaining a little bit of ownership of the asphalt might cost Team A more than the time it took to lobby for the change. Commuter Team B may benefit the most, as the $9 is a fraction of the income they earn in the city. And the othersโworkers, shoppers, and touristsโall lose out. After all, there’s no free lunch. But more importantly, is this matrix of tradeoffs between various interest groups the desired outcome of implementing the surcharge?
It might be a bit difficult to buy this picture as a model of spontaneous order. Spontaneity, perhaps, but order?
Each little bubble is a representation of an independent actor out fulfilling their purpose of the day. Bubble wrapped, as they each get to retain their skills, talent and experiences and bring those forth in the work they do.
This is in fact their super power. No matter who you know in life or where you start, you have the power to devote your time and energy to the endeavors of your choice.
Luckily, the twentieth century is full of modeling the chores done in exchange for pay. No need to review that here. Economics is most comfortable in this environment: money for goods, services, and labor. It’s countable. The measures are used in all sorts of reports and for all sorts of comparisons.
Sometimes the numbers seem off. Sometimes, people don’t end up where someone thinks they should. And Social Welfare Economics tried to get a handle on such things. As a method, it really couldn’t pull off the knowing part. How do you know when such a group is better off than the other? Isn’t a comparison contingent on all the factors that go into the moment? This is what James M Buchanan seems to argue in Positive Economics, Welfare Economics, and Political Economy (1959)
A second major problem which has concerned theorists in welfare economics has been the possible existence of external effects in individual consumption and production decisions, sometimes called “spillover” or “neighborhood” effects. But this annoying complication also disappears in the approach to welfare economics suggested here. If, in fact, external effects are present, these will be fully reflected in the individual choices made for or against the collective action which may be proposed. External effects which are unaccounted for in the presumptive efficiency criterion of the economist and the proposal based upon this criterion will negate the prediction of consensus represented in the alternative suggested. The presence of such effects on a large scale will, of course, make the task of the political economist more difficult. His predictions must embody estimates of a wider range of individual preferences than would otherwise be the case. The compensations included in the suggested policy changes must be more carefully drawn and must be extended to include more individuals who might otherwise be neglected.ยฎ
The reader might be led to believe, in this bottom-up observation of human behavior, that consumers reflect a comprehensive analysis of the entirety of their transaction, including internalizing spillovers and externalizing expenses. The market filters through individuals’ private desires and their accommodations for public or group enterprise in a complex, yet thoughtful manner.
The graphic specifies the draw of a common cause, whether it be education, peace, or public health (and there are thousands more). It is the cause that sorts the analysis. It’s not a group being told to sign up to walk for MS. It’s the desire to be on the team fighting a deadly disease that drives the worker to devote their superpower to a cause.
In review
First principles of the model are
1. Actors are independent free agents.
2. Actors may offer work for private benefit or toward a group goal.
Everybody knows what labor is. It’s the activity performed by an individual in return for a paycheck. But what about all those other activities that are done that also benefit some or many people?
I asked Chat to list all the terms out there for unpaid work done in homes and communities. And here is what I got.
1. The Home
Unpaid labor focused on household maintenance, caregiving, and family life:
Household Production
Domestic Work
Unpaid Domestic Labor
Reproductive Labor
Invisible Labor
Social Reproduction
Home Production
Unpaid Household Services
Homemaking
Housekeeping
Child-Rearing
Elder Care
Family Caregiving
Emotional Labor (within the household)
Caregiving
Informal Care
Unpaid Childcare
Parental Care
Kin Care
2. The Office or Other Professional Settings
Unpaid or voluntary labor in organizational, administrative, or professional contexts:
Pro Bono Work
Volunteer Work (for professional organizations)
Advocacy Work (unpaid)
Mentorship (unpaid)
Internship (unpaid)
Apprenticeship (unpaid)
Emotional Labor (in workplace or professional settings)
3. The Church or Other Places of Worship
Unpaid labor related to spiritual, communal, or faith-based activities:
Charitable Work
Community Service
Faith-Based Caregiving
Volunteer Work (religious organizations)
Advocacy Work (faith-driven)
Grassroots Organizing
Altruistic Work
4. The Community Center or Public Spaces
Unpaid labor supporting community well-being and public engagement:
Mutual Aid
Neighborly Assistance
Community-Based Care
Volunteer Work
Charitable Work
Grassroots Organizing
Community Service
Non-Market Work
Social Support Work
Advocacy Work (public or civic)
5. Schools or Educational Settings
Unpaid labor supporting education, learning, and mentoring:
Unpaid Tutoring
Mentorship (unpaid)
Parent-Teacher Association Work
Volunteer Work (schools)
Advocacy for Education
6. Medical and Health-Related Facilities
Unpaid labor related to caregiving and health support:
Elder Care
Family Caregiving
Informal Care
Unpaid Childcare
Caregiving (medical settings)
Volunteer Work (hospitals and clinics)
7. Farms, Rural Settings, or Outdoor Spaces
Unpaid labor connected to food production or outdoor community support:
Subsistence Work
Self-Provisioning
Reciprocal Labor
Communal Work
Obligatory Labor (culturally expected in rural communities)
8. Government or Civic Buildings
Unpaid labor focused on governance, policy, and public service:
Advocacy Work (political or civic)
Volunteer Work (government programs)
Grassroots Organizing
Community Service
9. Museums, Theaters, and Cultural Institutions
Unpaid labor supporting arts, culture, and historical preservation:
Volunteer Work (cultural organizations)
Passion Work (for the arts)
Charitable Work (for cultural causes)
This categorization demonstrates how unpaid work is intricately woven into all aspects of society, emphasizing its importance across diverse settings. (end Chat)
Although a lengthy list, I think Chat missed a few.
A notable one is the hours tinkerers spend trying to develop new products and technologies. Did the Wright Brothers get paid for their first flight?
Duncan Ironmonger, an Australian household economist, wrote in 2001.
3.2 The New Household Economics In the mid 1960s a major theoretical development took place, known as the โnew household economics” (see Becker (1981), Ironmonger (1972) and Lancaster (1971). In this theory the household is regarded as a productive sector with household activities modeled as a series of industries. In this new approach, households produce commodities that are designed to satisfy separate wants such as thirst, hunger, warmth and shelter. The characteristics, or want-satisfying qualities, of the commodities used and produced can be regarded as defining the production and consumption technology of households. With changes in incomes and prices, households still alter expenditures as in the earlier theory. However, in the new theory, households adjust their behaviour as they discover new commodities and their usefulness in household production processes. The activities approach derived from the theory of the new household economics readily combines with the earlier input-output approach of Leontief (1941) to establish a series of household input-output tables as the framework for modeling household production.
And then this in conclusion.
6 Household Production and a World of Binary Economies
The major scientific achievement of this field has been the measurement of the magnitude of household production through surveys of the uses of time. Household production is now recognised as an alternative economy to the market; in many countries the household economy absorbs more labour and at least one third the physical capital used in the market economy.
In future, national statistical organisations will produce regular estimates of GHP. Data on outputs of household production – accommodation, meals, clean clothes and the care of children and adults – will complement data on inputs of unpaid labor and the use of household capital.
Proper recognition of the household economy will have arrived when national household accounts are published each quarter alongside national accounts for the market economy. These data will enable greater scientific research on the organisation of household production, the interactions with the market economy, the role of households in building human capital, on the effects of household technology and alternative social and economic policies on gender divisions of labor and on family welfare.
Here at Home Economics, much thought is given to the distribution of labor and resources throughout all facets of life. In the twentieth century, the economy is talked about as if held in a sphere of its own nested in greater society, with the government sitting on high, ready to use its power to intervene.
Embedded is a term used to depict a feature of this model. The sphere where all the money is exchanged for goods and services, from industry to agriculture to banking and so on, is cradled in a nest. The business works logically within the sphere but is nudged and tugged at by all the pesky twigs and branches that make up the lodge that holds it. This world isn’t complicit with the education system or the family. These are subsidiary concerns present to push things along for industry. They are supports, not players, in economic affairs.
By the 1970s, the public started voicing concerns. Many objected when acid-stained river beds from industrial pollutants burned through some of the thatchings in the nest. When small farmers were displaced by large-scale operations or factory closures caused massive layoffs, the support structure thinned, and people fell right through it. Market failure was the term coined for every debacle left behind by the economic sphere, guided by the rational economic man. The dented and damaged underpinnings of greater society were left for the government to fix.
I suggest we focus on Carl Menger, a European economist (1840-1921), who proposed a different view of the economy’s driver: the actors. Introducing Ed and Frida.
Individuals make independent decisions about their welfare and needs based on their present situation. Although they look after themselves, they are directed by human impulses like fairness, justice, and altruism. They are also influenced by what polymath Michael Polanyi described as tacit knowledge since individual experiences weigh heavily on one’s judgment throughout one’s life. The bubble around the figures represents their tacit knowledge as well as their education, or human capital, and unique skills, which are inalienable.
As atomic agents, individuals cling to others who share a similar goal in producing goods and services to accomplish those goals. This may very well be in industry, family life, the care of their elderly parents, and the countless other interests people pursue and share. These groups form, merge, and reconfigure. The model becomes a dynamic structure of movement as actors group and regroup throughout the day.
Each dot under the magnifying glass is a person with agency on the move. Generally, a spontaneous order pulls and pushes contributors to various objectives. They use their time, talents, and resources together with others and then move on to do it all again.
For the most part, we think of these agents as adults with the capacity to hold a job, raise a family, make it to the doctor regularly, and so on. But we all start out in this world as vulnerable infants in need of constant care. And many of us will need care again before we die. For this reason, it makes sense, for calculation purposes, to use a household as a base unit of analysis.
Throughout 2025, the goal will be to show how individuals participating in systems of spontaneous order contribute to or deter from the viability of their household unit and how that impacts neighborhoods and the public goods found herein. This is Home Economics.
Home Economics 