The room the economy can't see - Wilsons Blog

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The room the economy can’t see

There is a room in Stockholm where a bunch of kids I know hang out. It is a Sverok lokal, which is to say a little clubhouse for a gaming association, and it is exactly the unglamorous kind of good you would hope it is. Kids who do not have anywhere else to be go there. They play games, they argue about games, they sit around being teenagers together in a warm room that is not their bedroom and is not a shop that expects them to keep buying things. Some of them would be pretty lonely without it. It is, by any reasonable measure, a small and real social good.

I want to start with the fact that it works , because the rest of this post is about a problem, and I do not want you to come away thinking the situation is hopeless. It is not. We know how to make rooms like this. We have made one. The kids are ok, at least those that find this kind of resource.

Why does it exist?

It exists because it gets a grant. Public money for associations, what in Sweden we call föreningsbidrag, in this case handed out by MUCF, the agency for youth and civil-society affairs, through a system that was set up to fund youth organisations. Someone, at some point, decided that gaming clubs count, so a trickle of money flows to a federation, and some of that becomes rent on a room. That is the whole reason. Take the grant away and, almost certainly, no room.

And here is the bit that bugs me. The market was never going to build that room. Not because the market is evil, but because there is genuinely no money in it. You cannot sell “a place for lonely teenagers to feel less lonely.” The value is real, but it spills out sideways, onto the kids and their parents and the neighbourhood, and nobody can put it on an invoice. Economists call this a positive externality, which is a fancy way of saying a good thing that happens as a side effect, that the person doing it cannot charge anyone for. The dumb version is: the room makes the world a little better and makes precisely zero kronor, so left to its own devices, the economy does not build it.

So the room only exists because someone reached in by hand and paid for it directly. Can we teach the economy to see the value there naturally, without needing a planning committee? Hold that thought. I think it is most of the answer, but I want to show you the size of the problem first.

The rooms are disappearing, and so is a lot more

That Sverok lokal is an increasingly rare kind of thing. The general version has a name, the third place1, the spot that is neither home (the first place) nor work (the second place). The café, the pub, the library, the club, the church hall, the union that was also just somewhere to be. We have fewer of them than we used to2, and the ones that are left either don’t have many visitors or want you spending money the entire time you are in them.

But it is not only rooms. Look around and you notice a whole category of things quietly going missing, and they have a suspicious amount in common.

Nobody visits grandma. Partly because grandma is three hundred kilometres away, since everyone moved for work, or partly because grandma herself maybe is still working. Kids end up in front of a screen in the afternoon, because both parents have to be at a job and a tablet is a cheap stand-in for a present adult. The neighbour you used to know. The club someone used to run. The friend you used to see every week. People report fewer close friends than they used to, to the point that actual public health officials now say “loneliness epidemic” with a straight face3.

Now, I want to be careful here , because this is the part where it would be very easy to start waving my arms around. Every single one of these has many causes. Suburbs and cars. Television, and then phones. A long list of things that have nothing to do with me at all. I am not going to claim I have found the one secret root of loneliness, and you should be suspicious of anyone who does. We cannot cleanly untangle these. That is just honestly true.

What I will say is narrower, and I think it holds up: these all rhyme. And the thing they rhyme on is that they are all unpaid. Visiting grandma, raising your own kid, running the club, being a decent neighbour, keeping a friendship alive. None of it pays. All of it takes time. And I think one of the reasons we have less of it is the same boring reason I keep banging on about on this blog, which is labor pressure .

The thing the economy keeps doing

For almost all of us, a wage is the only way we get a claim on the things the world produces. That is what a salary really is. Not a reward for effort, but the one socially accepted ticket to food and shelter. Economists call this the distribution function of the wage. I just think of it as the only pipe through which stuff reaches you. And because it is the only pipe, you have to feed it. You sell your hours to a job, because the...