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As current events are showing, a lot more of us can work much more of the time from home than we actually do. We are even getting the occasional head-scratch as people realise how much more they are able to get done without having to go to internal meetings. Plus the inevitable bean-counters are wondering whether they need to be paying for quite this many acres of cubicle space. All of which brings to the surface of the mind the thought: well, why didn’t we do this sooner?
The answer, according to economists, is the coordination problem. The insight – hey, much of economics is really just giving fancy names to what we notice people do – is that how you or I do things depends to a large extent on how everyone else does them. There is no point in my inscribing this on vellum if the editor wants an email – if the world works on left-thread screws, then little point in setting up as a right-thread hole maker.
The classic example here is which side of the road to drive on. There is no particular reason for left or right and one-third of the world does it the other way to two-thirds. But within any area, it is important that everyone adopts the same rule. It is indeed a joke that we are going to change, with the lorries starting a week before the cars.
It’s even true that, as time passes, places have changed over. Sweden did in 1969 – international travel between the Nordic frozen wastelands was growing sufficiently to make the Swedes’ habit of driving on the left inconvenient. And that they generally used left-hand drive cars to do so wasn’t a good idea either, so they changed (on 3 September, for completists).
Regimentation of work
Patterns of work, both practices and hours, are an area where the eggheads have noted that coordination problems matter. Factory working does depend on everyone being there at the same time, so the regimentation of working time was imposed as the industrial society grew in importance. It is very much less true of office work that we are dependent on the output of the person in the next cubicle for our own ability to start our task. Nothing here is entirely so, of course – this is tendencies we are talking about, not absolutes.
As our society has become very much more services-oriented – that’s now some 80% of GDP, while manufacturing is a rump of perhaps 10% of it – the idea of “nine to five” should have become very much less important. True, there are continuing experiments with flexi-working, while more of us are shuffling into the commuter train only three or four days a week. We have also had that burst of technologies that make the process easier. Broadband, the PC itself, cheap telecoms – they are the basics. There are layers of tech on top of that, Skype, Zoom, Slack, and so on, that aid.
Yet a dispassionate observer might say that given the capabilities here, we are using them much less than we could be. Much more of the economy could be done at more of a distance – with less travelling and personal presence, than is. The reason why is that coordination problem. Partly we are simply set in our ways, this is how we do things, partly this is how everyone else does them and we’ve got to fit in, got to coordinate with them.
The proof that more use could be made of home, or distance, working is all around us these very weeks. The economy is smaller than it was before lockdown started, certainly it is. But it’s not as much smaller as it would be if there hadn’t been some substitution of remote working for that in the collective location.
There has been some research on how far we are from what might be optimal not-office working. One piece claims that 37% of all jobs can plausibly be done at home. It is actually much more than that, because that doesn’t include any of the work done in the home, or about the home, but which is unpaid. But still, we are obviously a long way from 37% of all jobs, those that can be done at home, being done at home.
So, why is this so? One answer is that what can be done at home is not necessarily optimally done there and this is, of course, true. It is true in part at least. But also it is true that some portion of this is not done domestically simply because we have not done it that way so far. Our coordination solution doesn’t break that way. And, as above, we a're entirely certain that our technological ability to be doing this out of the office has increased in recent years, more than the practice itself has spread.
This brings us to what coronavirus might do for us. By smashing the previous coordination solution, we enable the growth of a new one. One perhaps more in tune with our technological capabilities and without having the problem of coordinating everyone over from the old to the new. We don’t, as the Swedes did, have to plan every road and route, rather the absence of the old solution allows the growth of a new one informed by what we have been doing this past few weeks.
This has, after all, happened before. True slavery died in England with the Norman Conquest of the Saxons. Their feudal system of villeinage met its final end with the Black Death, after which the shortage of labour led to the demand for wages and the freedom of contract. It is important to note that the new system is not necessarily an improvement. Exactly the same stimuli, the passing of one-third of the working population, led in Central and Eastern Europe – for reasons still argued about - to the imposition of the much stricter system of serfdom rather than money wage labour.
The coordination of the actions of millions of people is difficult. When a stasis has been achieved, it is difficult to change and, as historical observation tells us, a crisis that disrupts that previous system can allow the growth of a new one more in tune with technological and societal capabilities.
I would expect there to be, in the post-Covid-19 economy, much more home working, perhaps part time and part in the office, than we had at the beginning of this year. Not because our technology has suddenly leapt forward, but because we have now had a taste of how the new way might work and, who knows, we might even like it.
As to who will really benefit from this, my bet would be on the chimney pot pub. We humans are, after all, primarily social beings and once we are not getting our gossip at the water cooler, something will have to take its place. Why not that ancient grand hub of a British community, the pub on the corner?