The non-ownership society?

Tyler Cowen writes,

The great American teenage dream used to be to own your own car. That is dwindling in favor of urban living, greater reliance on mass transit, cycling, walking and, of course, ride-sharing services such as Uber and Lyft.

He gives many other examples where we have given up ownership. He does not even mention the issue of social media and who owns your data.

In all of these cases, we may be giving up control in order to have convenience. The cumulative effect may be to give away our independence.

I see this from a Specialization and Trade perspective. The more we specialize and trade, the more interdependent we become. We don’t grow our own food, make our own clothes, build our own homes, and so on. The more we consume the goods and services provided by others, the more we have to trust the institutions through which we obtain those goods and services.

I think that Tyler has a legitimate worry that liberty may be more fragile in this more specialized economy. Because we are more interdependent, there are more ways for us to be let down. That in turn could make us seek more protection from government. Libertarians must make a convincing case that market competition offers better consumer protection than government agencies.

14 thoughts on “The non-ownership society?

  1. What Tyler describes is the path of progress. Ownership is a form of market failure:

    – Your car being parked 23hrs a day just to ensure that it’s there when you need it.
    – Transaction costs of selling/buying your house tying you down and decreasing efficiency of your human capital.

    Property can be (and is) taxed reliably, yet it is less correlated to the use of tax proceeds than usage-based taxes (fees, gas tax, tolls, sales tax).

    Pretty sure similar sentiment had been prevalent when land ownership was thought to be the bedrock of stable society before the 20th century.

    An interesting (to me) implication of this decrease in ownership is its impact on money. The modern broad money is based on tangible collateral securing credit. The same capital resources (eg housing, cars) would still be around in the ‘non-ownership’ economy, just owned and financed by more concentrated, specialized players. Not sure what exact changes it will bring, but possibly similar in magnitude to the changes brought by the switch from the land-collateral to capital-collateral finance at the start of 20th century.

    • My bed is empty for 16 hours a day; maybe I should rent that out, too? How about my bathroom? I only use that maybe 40 minutes a day. Or maybe there are some things it’s just not fun to share the use of with other people.

  2. In the US the many of the most liberal Democratic cities are also the richest and Europeans live increased dense cities. Although the politics don’t align as much The Far East Asian Tigers live in the densest cities. And look at Singapore usually the most libertarian/socialist city on earth in which a well run local government seems to managing the free market economics fairly well.

    1) The one problem with such specialization and trade is it makes harder for people to withstand recessions as in the 19th century (or before 1930) a lot families lived on farms.

    2) I still say specialization and trade makes it easier for large existing firms to dominate. Look at the big banks gaining since the Great Recession and I think the reality big banks are so much more convenient to consumers. (We may hate Wells Fargo but they have all the closest branches and ATMs.) And it is harder for potential entrants in the market.

    3) I do find Specialization and Trade makes education a lot more valuable to workers. If somebody wants to enter a vocation, say truck driver, they have to realistic that vocation may disappear in 15 years and need to build skills to change careers.

    4) Smaller families tend to be less independent from the market and government and family formation is declining everywhere. Again I believe Japan is leading country here.

    5) In terms of S&T, does this diminish the role of the church in society? In a lot ways, modern people have a lot more liberty than 100 years ago where the local church and government controlled people social behavior.

    • In place of local church, global twitter. Strangers with pitchforks.

      Government officials with pitchforks? Always with us. The Colorado Civil Rights Commission, for example.

      The rebuke from Anthony Kennedy: “To describe a man’s faith as ‘one of the most despicable pieces of rhetoric that people can use’ is to disparage his religion in at least two distinct ways: by describing it as despicable, and also by characterizing it as merely rhetorical–something insubstantial and even insincere.”

      Think of the Colorado Civil Rights Commission as online harassment but with an actual building staffed with people who insult you to your face in the attempt to exert their control.

  3. What % of Americans live in a urban setting where they can forgo a car and instead rely on mass transit, cycling, and ride sharing? 10%? What % of the articles do they write? 80%?

    • +1

      We are hearing from these people very much disproportionately to their presence in society.

      And yet if I were to throw a water bottle in any direction in my neighborhood I would hit someone who agrees with them.

      • +1 And also add, youngish and childless.

        Age a bit (i.e., experience the failures of just in time promises), get married and have kids (be responsible for more than your entertainment, and also amortize fixed costs of owned stuff among more), then let me know in what direction does that swing you in this debate.

  4. That is dwindling in favor of urban living, greater reliance on mass transit, cycling, walking and, of course, ride-sharing services such as Uber and Lyft.

    As I pointed out on Marginal Revolution, these claims are simply false. Cities briefly grew slightly faster than suburbs, but that almost-too-small-to-measure trend has ended. And mass-transit use is falling in nearly every major metro area:

    https://www.washingtonpost.com/local/trafficandcommuting/falling-transit-ridership-poses-an-emergency-for-cities-experts-fear/2018/03/20/ffb67c28-2865-11e8-874b-d517e912f125_story.html

    Tyler’s generally great, but it would seem to me that if you’re going to write ‘think pieces’, you ought to at least check to see if your premises are true vs just generally accepted folk beliefs of people who you hang out with.

    I see this from a Specialization and Trade perspective. The more we specialize and trade, the more interdependent we become. We don’t grow our own food, make our own clothes, build our own homes, and so on.

    Perhaps. But we haven’t grown our own food, made our own clothes, or built our own homes for generations now. I might even say that trend has reversed somewhat due to the Internet–now that parts, ingredients, and instructions are so much more readily findable and available than in the past. People now brew their own beer and cook much more complex foods than people of my parents’ generation. I’m something of a DIYer, and I’ve tackled some projects because the internet made them so much easier. For example, I have done minor car repairs that I wouldn’t have done in the past because it was so easy to order replacement parts and see step-by-step instructions for the work.

    As for DIY house building, there may be something of a resurgence there, too. There’s the ‘tiny house’ fad, of course. But I’m also something of a fan of the UK ‘Grand Designs’ program (available on Netflix), and there are many cases of never-ever builders successfully tackling home construction projects aided by free information from the internet, for example:

    https://www.express.co.uk/life-style/property/811188/grand-designs-episodes-cow-shed

    • I think you’re right that Tyler exaggerated the demise of the automobile and the appeal of dense urban living. However, a lot of his article really resonated with me. I really despise the trend toward non-ownership of software. The software companies have always claimed that they owned the programs and we only used them, but now they are trying to make us pay monthly or annual rental fees, which reduces even more our control over our computer environment. I have always thought that Kindles seem very convenient, but I have been unwilling to get one because of the lack of ownership of the books you buy. That was really brought home a few years ago when there was some sort of issue about a book (I can’t remember the details now) and Amazon actually pulled it off of the Kindles of everyone who had bought it.

  5. I think this speaks to where the boundaries are of working markets, even when technology removes much of the friction. Just how much efficiency can we squeeze out of ownership? Just how much specialization can occur before the mechanisms that hold markets accountable break down? How far can we extend trust mechanisms when people are involved? What are the limits of consumer mind space?

  6. Not sure why libertarians have some special obligation to make the case, or really, if they would hurt more than help. Judging by the Niskanen Center and their advocacy for a welfare state, it may just be safer to just leave it to conservatives who are already doing a fine job of advocating for private property rights. The Property Rights Alliance, an affiliate of American’s for Tax Reform, publishes the International Property Rights Index (IPRI) annually which provides objective data from which anyone can draw their own conclusions. They deserve much credit and a much larger audience.

    Perhaps the most persuasive depiction of the data is at table 5 on page 17 at:
    https://s3.amazonaws.com/ipri2018/IPRI2018_FullReport2.pdf

    It is hard not to look at that table and not draw the conclusion that private property rights matter.

  7. A quote from 130 years ago on the dangers to freedom of speech and much more to freedom of thought due to specialization and crowding into cities

    “Freedom of speech and freedom of thought are catchpenny phrases. There is much of the former, but very little of the latter. Speech is generally the result of automatic thought rather than of ratiocination. Independent thought is of all mental processes the most difficult and the most rare; habit, tradition, and reverence for antiquity unite to forbid it, and these combined influences are strengthened by the law of heredity. The tendency to automatic action of the mind is still further promoted by the environment of modern life. The crowding of populations into cities, and the division and subdivision of labor in the factory and the shop, and even in the so-called learned professions, have a tendency to increase the dependence of the individual upon the mass of society. And this interdependence of the units of society renders them more and more imitative, and hence more and more automatic both mentally and physically.”

    —Charles H. Ham, Mind and Hand: manual training, the chief factor in education (1900)

    Of course, as to owning a car, people’s attitudes change quickly when faced with the need to evacuate in the face of fire, flood, storm or loss of electricity. As demonstrated in New Orleans, the public infrastructure is taken offline and those dependent are left to their own devices. Oops, none of their devices are theirs.

    • American cities went 9 to 1 for Hillary. Let’s be charitable and assume that all these Democrats put a great deal of thought into the pros and cons of the regulatory state, and the effects of government subsidies, and the consequences of America’s Permit Raj, and the power of government employee unions, and the need to grant government officials an unlimited power to intervene in any aspect of the economy because, as Hillary says, “We’re all in this together.”

      Or we could be less charitable and wonder if America’s cities aren’t full of conformists and careerists who are deathly afraid of stepping out of line and expressing anything suggestive of independent thought, lest they end up ostracised like Bret Weinstein or in hospital like Allison Stanger. Both Democrats, of course, because the whole point of narrowing the range of thought is that there can be nothing outside the party.

  8. Cities (and universities) are running low on diversity.

    Think Different was the slogan, but Apple wants to lock you in to their ecosystem.

    Thomas Jefferson would be too much of an eccentric to work at Google or get a degree at Sarah Jeong’s alma mater.

    There’s a certain sameness between our glorious socialist future and our benighted feudal past.

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