The room the economy can't see

Very good and well-written. I wish we would also acknowledge that the market, by disincentivizing spend on stuff like this, is performing well. It is optimizing. The reason it matters to acknowledge this up front is so that we can, as the article says, get to the rule below all this which is that the market is default. This is a clear and thorough example of how the profit motive does not lead to the life any of us want to live and so these markets should be contained within a superstructure that has motives other than profit.

In my experience, the key element is slack.

For a while, I did not have to worry about money, so I could afford to be generous with my time, and to work on things that are not financially viable. It did a lot of good. I've built so many useful things and helped so many people individually.

Now, AI is tightening the screws, so I spend a lot more time worrying about making money.[0] I have to be leaner and meaner, and there just isn't enough time and energy left to work on useful things. Instead of building a community for immigrants, I'm trying to sell them insurance. I share the author's frustration because the economy is blind to the loss, even though people feel it.

I don't really like the government funding models, because I've seen what it funds in my industry. Price signals are a poor proxy for public use, but they're still better than blindly funding useless projects.

Giving people financial slack might be a better way to achieve that. If people have their own "20% time", we might see a lot of economically invisible problems get the attention they deserve.

[0] https://nicolasbouliane.com/blog/death-by-ai

Here is where we’ve found those rooms: 1. In scouts gatherings at churches or campgrounds (zero religious connotation - just use of unused space during the week). 2. In play dates with other families. 3. In sports clubs that have regular practice. 4. In local libraries which are a fantastic resource, especially for caregivers of young kids. 5 In local elementary schools where playgrounds are open and older kids can ride bikes in the yard. 6. In local parks. The market tries to capture the surplus capacity of people with no other obligations or kids. The hard part is finding the trustworthy people who will be a part of your community and the fellow families who want the same community for their children. Trust-based communities will carpool, and take turns for hosting play dates, and ignore messes to enable social interaction, and keep screen time off to ensure social interaction instead of zombie mode. There is market incentive to it and it is rare and it is hidden because it is rare and fodder for abuse. Trust networks exist in parallel to the market but they take offering value to receive value and not in a monetary way and they are also very unevenly distributed. The market profiting from gambling, and addiction, and alcohol means there are fewer safe places for this kind of network to build. But it can be started with as little as 2-3 families banding together.

> You cannot sell “a place for lonely teenagers to feel less lonely.” The value is real, but it spills out sideways

The economic notion of value is wealth-weighted. This is very, uhh, unique -- other notions of value are generally not. Whenever the economic notion of value is saying that (obviously good thing) is worthless or that (obviously evil thing) is supremely valuable, it is worth remembering this and asking "valuable for whom?"

We shouldn’t expect markets to solve all problems. That’s why there are public institutions and government regulations, to take care of the issues that the markets can’t. That the room only exists due to public grants isn’t a flaw, it’s what a functioning society should be doing. What the economy should do is provide the financing for such programs through taxes.

Great article. I agree money and time are significant issues here.

I’d just add something else I’ve noticed with social organizations, that people used to run them more often, and one form of compensation they got was status in the community for doing something good for everyone, and that status feels like it has diminished since I was a kid. As America has changed demographically, some cultural traditions like volunteerism haven’t diffused as well. There is a tendency when two status systems live side by side, that the lingua franca is always money, and so people focus on that because having money is recognized by everyone.

It would be awesome if we emphasized this more in schools. One place to start would be talking more about my favorite founding father, Ben Franklin, who started the first public library and the first fire department in the U.S.

The act of visiting grandma doesn't need to be legible to the economy, rather the time that might possibly be used to visit grandma needs to be illegible to the economy.

Speaking from a US perspective, the straightforward solution to this was defining full time work as 40 hours per week, and then incentivizing companies to not go over this (by automatically increasing pay rates). In addition, the setup where men worked in economically-legible employment while women did not effectively halved this number.

That number was never updated with women entering the workforce, nor with automation, offshoring, etc. Meanwhile the whole idea was undermined with the dynamic of "exempt" salary positions. That limit of 40 hours per week should be something like 15 hours per week in the modern world!

Furthermore, the surplus income from all this extra employment didn't end up going into workers' savings, thus creating a natural market feedback where workers would have more market power and insist on working less (as the marginal utility from the dollars for each hour worked would be less). Rather it went into nearly-zero-sum competition for housing (aka rent), which the article touches on as the forcing function that demands continued high-hour employment.

As a parent, I've always wished that something like that would exist in the united states. I live in a nice town in the northeast but kids hang out at a local dunkin donuts or gas station or cvs. We have some of the highest property tax rates in the country and families move here specifically for the school system so there are a lot of young kids and there are a few playgrounds for younger kids but for 10-18 year olds there really is not much.

This room is an example of a public good[0] (something that is non-excludable and consumed in a non-rivalrous way, like a park or like clean air. Contrasted with private goods like a slice of pizza).

[0] https://www.investopedia.com/terms/p/public-good.asp

In India, by law, companies above a certain size are required to spend 2% of profit on social responsibility activities. So in my city, you see lots of things around adopted or funded by companies.

Is the problem really the economy when these types of places were more prevalent in a time of even less economic regulation than we have today? I don't think that these "third spaces" really ever existed as the intentional stimulators of social interaction that they are conceptualized as today. Rather, I think that they were established in order to complement already existing social structures.

These structures no longer exist, and my conjecture as to the cause of that, especially in the US, is cultural fragmentation. Almost half of this country believes that the other half of the country is evil, or at least hold profoundly evil beliefs. Why would someone want to spend time in a place where there is a 50% chance that the next person you run into is evil? Why would you want to take your children to such a place?

And if you want to establish a place where you can spend time with just the 50% percent of people who are good, it's not gonna be a public space. If it is, you can't prevent the evil people from coming, and once they do, all the good people will stop coming. Public third spaces existed in a time of greater cultural homogeneity, where it was more likely that the people in your general area held more or less the same beliefs as you do and much more importantly, had more or less the same standards of public behavior.

This is all to say, I believe these spaces are diminishing because there is not a real desire for them, even in the people who claim to desire them. There IS a desire for a place where you can gather with people who are either in your subculture or in one that is not antagonistic to it, and who behave in a way that you believe is appropriate. This is not possible in a public space of today. To apply the regulation and exclusion required, a majority with enough power to apply it legally needs to be established. And in the case where you have such a majority that agrees on standards of public behavior, you again have a sort of cultural homogeneity.

Isn‘t this an example for something that will pay off later? Public baths come to mind. Those generally don‘t make sense from an economic point of view and are prohibitively expensive for private owners to build and maintain.

But they pay off by keeping society clean and healthy and prevent loss of workforce from mental or physical disease?

This is a great article, and I've never seen the problem explained better. The solution doesn't make sense, though, and this is almost but not quite obvious in the article by virtue of how well it has stated the problem. The problem with basic income is that it provides people with cash but does not change the underlying supply-demand system. To get the lokal (the room) to work you needed more than cash: you needed a desire for teens to be happy and engaged, the will to help them get there, a sense of what might help them, leadership to set it up, attract them, and keep it going, and then, yes, money to pay rent. If all you provide is the money, you will get people spending more money on the usual things the economy "sees": phones, video games, amusing t-shirts. What you have around the lokal in the story is actually not merely basic income fed into the existing economy: you actually have a separate economy. The separate economy works differently because it sees differently, it has different demands, different desires. The society as a whole (as embodied here by the government, thankfully—though not all governments are predictably good-willed in this way) wants the teens to thrive, to provide for them, to pay for them, to guide them with modest leadership. Though individuals, and the regular markets, cannot think about the teenagers—they don't have the bandwidth, they don't have the time, they have diffusion of responsibility, etc—the society can pool its interests and act upon its collective interest through the market. This may not be the only way to "cut across" the market, to do collectively what no set of individuals will do, but it's one way. So we definitely want to solve the problem: we want to organize, lead, preserve, and fund things that are of collective value but that the market cannot see. Giving individuals a basic income, however, doesn't accomplish that. I wish it did, but it doesn't. It puts the money into the usual demand centers—individuals needing to pay rent and transportation costs and go on dates and so forth—that live within the "blind" economy.

Volunteering is a great way to see lots of these rooms!

The article doesn't mention of "Bowling Alone" by Robert Putnam, which explored pretty much the same idea, a.k.a. the value of the 'room', (which for Putnam was 'social capital'), and its rapid decline. Bowling Alone was published in 2000, looking back to 1950, and noted the massive, synchronous decline of civic participation in pretty much everything non-work-related across American society. Every kind of gentle, recurrent, voluntary activity you can imagine was on a pretty steep decline even before the smartphone or widespread adoption of the Internet

One aspect of the financialization of everything/the 'economics over all' mindset that I don't see often discussed is that if you for whatever reason can't make the 'sound' financial choice, you just...drown.

The article talks about picking up another shift instead of visiting grandma, but for some people, they can't pick up another shift. If most people pick up the extra shift, that becomes expected and locks out the people who can't and, in a society where all that matters is your income, you become homeless and die.

I'm actively preparing to end up homeless in 5-15 years because of this.

I have a full time job, but I also have MS. The ordinary financial advice for someone in my situation is to get another job/a side hustle/etc. to dig myself out of the hole, but that's not possible. It's also not possible for me to dedicate my 'outside of work time' to career progression (e.g. creating a portfolio since I can't use my work on the job since it's all proprietary) because I don't have 'outside of work time'. All of my outside of work time is either spent recovering from work or handling my health issues.

So I'm slowly drowning, and I know that there will come a time when I won't be able to make it. I can't work over 40 hours a week, so my society thinks I have no value and deserve to die.

I'm just hoping to hold on until I'm old enough to be ugly, because being a visually impaired homeless woman is just asking for constant assaults. Maybe that won't be true if I can make it to 50 or 55 with a roof over my head.

I like that article.

One thing I notice is that very busy people, are often busy by choice. Yes they have work, but they're not slaves to working those extra hours... they choose to pick up that laptop at home because it is there.

Folks after school, their kids are busy, because they signed the kid up for a dozen things.

Not to say some people aren't super stuck in a cycle, the working poor with multiple jobs, I used to do that and it was exhausting. That's still a problem.

But even people with choices seem to choose to be busy.

I really liked the article, but the authors suggestion that a universal basic income is real solution is not backed by any evidence as I can tell.

UBI's are extremely expensive (do the math on what it would cost the US to pay a measly $1000 a month for each citizen). Most economists are split on whether it's even possible to implement on a large scale.

There's a load of good posts on r/AskEconomics that go into the bitter realities of implementing a UBI if you're interested in reading more.

It is clear that having that room exist is a priority for some people. The market doesn't have a will of its own or compels people to be efficient and produce returns (which, by the way, this room surely produces down the line).

The market is the cumulative wants and needs of the people matched against the cumulative offerings of the same people. Nothing more and nothing less. This room is clearly a need and a want for people and the market only prices it in a way that best reflects its cost when compared against all the other wants and needs and offerings.

I bet you can get people to pay it out of their pocket and not depend on the whims of a public organism.

This is the good example of positive externalities => some of the most valuable things in society like the friendships, communities or informal support networks create realbenefits that are important but hard to monetize

Markets are only free when both sides of a deal can walk away from that deal. Free marketers go on about state coercion, but their idea of a free market is at least as coersive as the regulatory state.

Markets are very good at a lot of important things, but the idea that’s taken hold in many places is market fundamentalism. It’s the idea that the market should run absolutely everything and if the market doesn’t do it, it has no value.

It’s like the inverted doppelgänger of Soviet Communist ideology that the state and the party know what is best and if they don’t decide to do it we don’t need it.

Fundamentalist thinking in general seems like a huge cognitive antipattern, especially when dealing with any kind of living organic system like human society. Organic systems are complex overlays of multiple systems doing different jobs. Imagine “liver fundamentalism,” the idea that kidneys should be eliminated because the liver is the ideal way to purify blood. It’s like that.

Favours, status, time, attention, information, morals, desires:

Individuals seem to run on invisible currencies, not money.

Earning and spending money does influence our decisions, but to me most people seem to have other invisible drives.

Even businesses have goodwill: a $ valuation of many non-financial values.

I haven't done economics at university: is utility and externalities the only words that covers that concept?

The market has been creeping into more and more facets of our lives, with delirious results: social networks are the market mediating family and friendship, dating apps are the market mediating meeting strangers, etc. I wouldn't expect that the answer to these problems would be letting the market mediate even more aspects of our lives.

Everything, literally everything is being turned into a hellscape by the ever increasing demands of financialization - driven especially by the unique American decision to base their entire pension system on the stock and asset markets.

The sheer amount of money flowing into pension contributions needs some way to escape (i.e. to be invested), and that means that everything not "profitable" - like most third spaces are - gets priced out of existence. That park in the middle of the city? What a prime real estate location (see e.g. Berlin Tempelhofer Feld). That kindergarten in the next housing block? Creates noise, everyone complains, yeet it in favor of yet another overpriced restaurant that generates much more in terms of rent for the building owner, who is in more and more cases some huge ass REIT backed by pension funds. That youth center? Tear it down, it's all used only by migrants (yes, I've seen that take way too often for my liking), and replace it with yet another soulless office building in a city that already has too much of it.

It would be one thing if this issue were only limited to the US. They voted for it, they should suffer from their choices. But unfortunately, there is so much money in the system it spills over to Europe, and now US backed investment funds are buying up healthcare and real estate here as well.

I think the premise here is wrong; the market is perfectly capable of coming up with communal spaces. Some of the nicest buildings in a small town can be the churches, for example.

The issue is creating a space for a group of teenagers to exist in would be a legal hornets nest that anyone touching it would get stung by. It is a sex scandal waiting to happen, a fight waiting to happen, a drug den waiting to happen and all sorts of other problems.

Ie, the issue probably isn't the market, it is that in practice there is probably going to be a soft ban on this sort of space because whoever provides it is eventually going to be dragged over the coals by their community. People sorely underestimate what regulation does to someone who isn't making a commercial return - it is all hard downsides with no possibility of upside except some social reinforcement. So they stop.

It's long but it really expands the point of this article: https://www.youtube.com/watch?v=F4SmgrAmdUQ

Maybe what can happen is that the people who benefit from it donate back into the organization of this room when they have the means decades later?

That's the kind of space I've been missing in my youth. I love that Swedish kids have got it available to them.

Most churches I've been to have these?

Some even have seperate kids/teens rooms...

Many open source efforts seem to belong to this category as well.

At least we have the first trillionair

How much of this is just due to changing tastes? For example, Minecraft, Roblox, or an Xbox live subscription are the new lobbies for younger generations.

Heck, the article mentions Internet cafes but those died out once computer and smartphone penetration reached high double digits.

There are fewer of these third spaces because there is less demand for them than before due to changing preferences, as could be seen with the decline of church members as well as pubs or innovations making them irrelevant like Internet cafes.

Instead of trying to push back against what is now the norm, maybe try to think about how to minimize the negative impacts of what are now common attitudes? But that requires admitting a lot of people on here are absolutely out-of-touch boomers.

It almost gets it.

These positive externalities are supposed to be paid from the owners of capital, primarily via tax. This is how it very successfully worked for quite some time. However, most western societies have decided in the last few decades to believe two things -

1) The government and elected representatives (and thus, voters) cannot be trusted with the allocation of capital spent on social welfare

and contradictorily,

2) The government and elected representatives can be trusted with the allocation of capital when it comes to the market and the owners of capital

Both of those things cannot be true at the same time.

This sounds like a gaming club. A small one, but a gaming club. Those exist, we have them all over. You pay for them in a variety of ways, in this case the way being forced seizure of wealth aka taxes. Other ways are via profit from sales of consumables (what the article alludes to) or membership fees. In all cases it is the parents that pay for them. It is absolutely possible for the market to build a non-predatory gaming club, but I concede it is easier when you can just get a government grant. It is entirely possible nobody in Stockholm can run a gaming room as a profitable business. Profitable businesses are hard even when they are simple.

The rest of the article can basically be summed up with "work takes too much time and pays too little", which is absolutely true.

I am not sure what the jab at stay at home moms or grandparents who help with childcare is supposed to be. Probably some other communist drivel. Grandma absolutely did not do unpaid childcare, she was insistent she had to teach us right and also got tons of labour and money from my parents. If the exchanges of money and labour between parents and grandparents in the context of childcare were measured, it would probably double the nation's GDP.

One fundamental challenge with basic income that gets overlooked is that if you’re a smart person and you’ve built a career where you make a lot of money, you have cash flow issues that prevent you from going to basic income. It’s a huge sacrifice that requires drastic quality of life changes which means the people who will be subsisting on that aren’t the people who have the motivation to set up that room nor are necessarily going to be people you want running it.

Universal income is a fancy name around what happened in Soviet Union with the key difference is that in the Soviet Union you were forced to work to collect it - you couldn’t not work. The whole “make work optional” part of the idea sounds like it adds a “fun” new twist on the outcome if “fun” means dystopia.

It is hilarious to me that all the AI CEOs are libertarians and right wingers that complain about welfare fraud and espouse Ayn Rand yet at the same time push for UBI which is essentially a form of communism.

The problem with paying everyone the same wage is that it disincentivizes personal growth and those that have invested in that growth don’t get rewarded. The problem with not investing in personal growth is you end up with a socially ill population in a death spiral. Russia still hasn’t recovered from the Communists and the imperialists before them. China has had to be quite violent and repressive to create stability.

Looks like someone else recreated some of the premises that Marx discussed over 150 years ago.

He wrote 2 major treatises: failings of capitalism, AND Communism.

This falls squarely under failings of capitalism. And you don't have to be a Communist to acknowledge failings of capitalism. But we can still identify failings under the correct name.

Naming the problem allows us to start fixing the root causes.

I'm fully prepared to be downvoted into oblivion and called naive or worse, but in the USA we have non-profit organizations. You might have heard of things like the YMCA, BGCA, etc.

This genre of posts should be called “the author has reached adulthood.” Not quite settled in, but no longer a clueless idiot, either.

insta-subscribe, very well written.

>> And the economy looks at you taking the shift and concludes, smugly, that the shift must have been the most valuable thing you could possibly have been doing, because look, you chose it

I struggle with economics as a discipline. Or more precisely, I struggle with the parts of economics that get treated as if they are describing human life with scientific precision, when they often seem to be describing a very strange fictional creature who happens to resemble a spreadsheet.

There is a lot in what we might loosely call microeconomics that I find genuinely useful. It gives us a language for trade-offs, incentives, constraints, opportunity costs - all the little pressures and choices that shape daily life. Used well, it can help us understand the world more clearly and make better decisions inside it.

But then there is the other stuff. The grander stuff. The part that starts making confident claims about whole economies, whole societies, whole populations of supposedly rational actors - and this is where my patience starts to wobble.

Because so much of it depends on assumptions that feel heroic at best and comic at worst. Take something as ordinary as buying a loaf of bread. How much time do you spend, in that moment, weighing your expected future tax burden? For most people, across most of human history, the answer is: none. Absolutely none. The bread is there. You need bread. You buy the bread.

And yet models that assume people behave as if they are constantly running these elaborate forward-looking calculations end up informing policies, forecasts, and decisions that shape the conditions of everyday life. That is the part I find hard to swallow. Not because models are useless - they are not - but because the gap between the modelled human and the living human can be treated as a rounding error, when sometimes it feels like the whole problem.

>> A basic floor of income that everyone gets,

Surely the author has to know that providing UBI is just going to lead to inflation of rent, food, and transportation.

This is what religion is for, and what you refer to as THE ECONOMY is simply the hard wired human precondition stand in when you decide there is no God(s).

"The Market" (God) would never have built such a place! The market (God) punishes any behavior that is outside its predilections! We must sacrifice to appease the The Market in order to gain its favor!

Back to the 3rd space for teens. What is the first issue you think of when teens gather in that 3rd space? Behavior, what are they doing, how will it influence them and eachother. This is where the religious moral code and moral guidance comes in. At a church (or w/e) there will be someone there who would at least monitor them. And sure its beset with issues but so is everything at some level.