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Our Future Economy Today
Oct. 2nd, 2011 09:52 pmIn _Retrofitting Suburbia_ (which I cannot recommend, altho I'm not sure I would go so far as to tell readers to avoid it), the authors claim that the US has 6X the retail square footage per capita as Sweden -- and Sweden has more retail square footage per capita than any other European country. It's tough to know what to make of statistics like that, other than the obvious: probably the US has more retail square footage than it strictly speaking needs. Possibly by quite a lot.
Of course, this was pre-bust data.
I recently stumbled across a whole bunch of specific companies supplying services that I had heard about in general: Chegg (text book rental -- turns out R. has a buddy who is a Director at Chegg), AirBnB (rent space in your place to some stranger -- rent space in someone's place from some stranger), Relay Rides (rent someone else's car/rent your car out). On the one hand, I stumbled across some of these things because of the whole Kutcher laptop thing on Two and a Half Men (no, I have never watched it. I read a Gawker piece about it.), which struck me as surreal, and possibly indicative of a very different perspective on morality. On the other hand, there's a real theme here: the time sharing of everything.
AirBnB has to be cheap enough to beat a hostel. Relay Rides has to be cheap enough to beat Zipcar. Sure, they could also beat them on convenience, or some other factor, but at that point, you're probably looking at competition from VRBO and/or ordinary rental car operations. At these rates, it does not make sense, from the perspective of the value being rented out, and the cost to acquire and maintain it. On the other hand, if you have the sunk cost of the place or the ride, but aren't using it fully, renting out the fractions you are not using reduces your total financial commitment. From the renter perspective, of course, it's a Beautiful, Beautiful Thing, altho possibly very unpredictable.
From the perspective of an environmentalist, fully using existing capacity is probably better than overbuilding. From an obsolescence perspective, it's nice to get full use before something better comes along. But from the perspective of an economy based entirely on abundance and oversupply, all these business are profoundly depressing. All these people who can get a car when they need a car and walk (or bike or take public transport or take a taxi or whatever) aren't going to buy cars (even used ones, thus freeing up those owners to buy new). All these people who stay at someone's home rather than paying for a hotel room impact RevPar and hotel occupancy figures. Etc.
A little pivot here. I need a segue that I don't have, so hold that thought for just a moment.
iPods provided private music consumption in a comprehensive way that was qualitatively different from what had come before. Laptops provided access to computation and connectivity, ditto. Laptops _also_ let you watch movies and TV, even if someone else is hogging the remote. Personal media consumption devices (including the various iterations of tablets past and future) have been vilified for isolating people, but if you belong to a cohort that is, for economic reasons, timesharing every other aspect of your life (your car, your home, your textbooks), a Media Consumption Device (or Devices) Of Your Own is just about the least you might demand.
The two trends dovetail beautifully, in a way that is probably completely invisible to anyone over the age of 30, or who has an income in excess of $30K/year all to themselves.
I think both trends are fundamentally deflationary (that is, the more people adopt these strategies to make a decent life in an expensive world with erratic employment prospects, the more the economy shrinks). I'm not saying that's _bad_, per se. Just that it is. And plan accordingly.
Of course, this was pre-bust data.
I recently stumbled across a whole bunch of specific companies supplying services that I had heard about in general: Chegg (text book rental -- turns out R. has a buddy who is a Director at Chegg), AirBnB (rent space in your place to some stranger -- rent space in someone's place from some stranger), Relay Rides (rent someone else's car/rent your car out). On the one hand, I stumbled across some of these things because of the whole Kutcher laptop thing on Two and a Half Men (no, I have never watched it. I read a Gawker piece about it.), which struck me as surreal, and possibly indicative of a very different perspective on morality. On the other hand, there's a real theme here: the time sharing of everything.
AirBnB has to be cheap enough to beat a hostel. Relay Rides has to be cheap enough to beat Zipcar. Sure, they could also beat them on convenience, or some other factor, but at that point, you're probably looking at competition from VRBO and/or ordinary rental car operations. At these rates, it does not make sense, from the perspective of the value being rented out, and the cost to acquire and maintain it. On the other hand, if you have the sunk cost of the place or the ride, but aren't using it fully, renting out the fractions you are not using reduces your total financial commitment. From the renter perspective, of course, it's a Beautiful, Beautiful Thing, altho possibly very unpredictable.
From the perspective of an environmentalist, fully using existing capacity is probably better than overbuilding. From an obsolescence perspective, it's nice to get full use before something better comes along. But from the perspective of an economy based entirely on abundance and oversupply, all these business are profoundly depressing. All these people who can get a car when they need a car and walk (or bike or take public transport or take a taxi or whatever) aren't going to buy cars (even used ones, thus freeing up those owners to buy new). All these people who stay at someone's home rather than paying for a hotel room impact RevPar and hotel occupancy figures. Etc.
A little pivot here. I need a segue that I don't have, so hold that thought for just a moment.
iPods provided private music consumption in a comprehensive way that was qualitatively different from what had come before. Laptops provided access to computation and connectivity, ditto. Laptops _also_ let you watch movies and TV, even if someone else is hogging the remote. Personal media consumption devices (including the various iterations of tablets past and future) have been vilified for isolating people, but if you belong to a cohort that is, for economic reasons, timesharing every other aspect of your life (your car, your home, your textbooks), a Media Consumption Device (or Devices) Of Your Own is just about the least you might demand.
The two trends dovetail beautifully, in a way that is probably completely invisible to anyone over the age of 30, or who has an income in excess of $30K/year all to themselves.
I think both trends are fundamentally deflationary (that is, the more people adopt these strategies to make a decent life in an expensive world with erratic employment prospects, the more the economy shrinks). I'm not saying that's _bad_, per se. Just that it is. And plan accordingly.