Bacon's Rebellion

Democracy Thrives in Sunlight

The Distance Paradox

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by

James A. Bacon
in ,

Tim Harford, the “undercover economist” at Slate Magazine, explores what he calls the “distance paradox”:

Virtual worlds, BlackBerrys, video-conferencing from the local Starbucks — it has all become so easy — and so commonplace — so quickly. Intuitively, that should mean that geography has become less important. E-mail and video-conferencing mean fewer flights. No more business conferences or meetings at Davos. Telecommuters don’t need to clog up the roads, and property prices in London and New York should slide as people carry out their investment-banking responsibilities from Yorkshire or Iowa.

It doesn’t take a genius to figure out that there’s something wrong with this argument. Despite the ease of communication and the drop in the cost of transporting goods, geography seems to be as important as ever for most of us. …

So, what is happening? To some extent, the same thing that happened to the paperless office. … Internet networking, and cheap phone calls have made it easy to maintain a lot of relationships. … E-mail and mobile phones aren’t substitutes for face-to-face contact at all. As economists Jess Gaspar and Ed Glaeser have pointed out, they are complements to it.

That’s one of the key points to emerge from my Q&A with Mark Golan, the executive in charge of real estate for Cisco Systems. The nature of work is changing. On the one hand, it gives some people more flexibility to work from home. On the other, work is becoming more collaborative. White collar workers, managers and executives spend an increasing amount of their time in meetings. Technology has yet to diminish the need for face-to-face time.

Back to the main themes of Bacon’s Rebellion: First, there is a time and place for telework as a substitute for commuting. But it’s not a panacea. Second, the “collaborative economy” explains why “primary” jobs (as opposed to “secondary” retail and service jobs) aggregate in major metropolitan areas: People must maintain physical proximity to one another in order to collaborate on a daily basis. The tendency of jobs to aggregate in urban clumps appears to be stronger than the countervailing tendency of technology to liberate people from the confines of geography.

(Hat tip to Will Vehrs for pointing me to the Slate article.)

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12 responses to “The Distance Paradox”

  1. Ray Hyde Avatar
    Ray Hyde

    For a time, I worked at a company that had permanent videoconferencing set up at each of its locations. At first it was a little weird, but once the mindset got estblished, you wouldn’t think of actually travelling to another site. I haven’t seen any usage of the technology at other work sites, but aI can understand why it has not caught on.

    On the other hand, I once worked on a national project which used many collaborative web conferences with live group phone hookups. That worked well and eliminated many cross country trips.

    But, in the end, they were fllowed up with face to face meetings. But, those meetngs were often held at airport locations, not downtown.

    Even if cross country meetings are trumped by local meetings, it isn’t clear to me that the agglomeration of businesses has much benefit, when travelling five miles across town takes as long as traveling thirty miles someplace else. The Tysons to Dulles and Dulles to Centreville corridors are modern examples of pearls on a string, rather than raisin pudding.

    But, I think you are right. E-mail and mobile phones are not a substitute for face to face contact, they are complements, just as videoconferencing and webmeetings are.

    Same goes for transit and bike trails, they are complements to the auto, not a substitute. They all serve different purposes, and the maximum benefit comes from getting the right mix, not promoting one at the expense of another.

    “People must maintain physical proximity to one another in order to collaborate on a daily basis. The tendency of jobs to aggregate in urban clumps appears to be stronger than the countervailing tendency of technology to liberate people from the confines of geography.”

    Maybe.

    I now work in a cube farm worthy of Dilbert’s worst nightmares. The place is so huge, that on a daily basis I send more time sending emails to people in the next cube as well as the ones a half mile away than I do talking to them.

    So, why exactly am I there along with hundreds of others? I don’t think it is because inanimate jobs have a tendency to clump any more than I think inanimate technology has a tendeny to liberate us from geography.

    I think it has to do with power and control. And security. But, as mentioned before, one form of security is dispersion, not agglomeration. Just look at the recent multi-unit fires, and the flooding in India.

    I’m afraid we have to blame humans for failing to solve human problems, whether the solutions involve technology, or not.

  2. Groveton Avatar
    Groveton

    The Western Paradox –

    1. The technology exists to allow companies to let their employees work remotely – at least some of the time.

    2. Remotely working employess are happier, cost less (in physical facilities), generate less congestion and pollution.

    BUT

    3. If the employee can effectively contribute to a company in Fairfax without leaving Front Royal then maybe that same company can find an employeee in India to work remote for 1/4 the cost.

  3. Larry Gross Avatar
    Larry Gross

    Maybe come at this from the opposite direction.

    Can we say without equivocation that:

    1. – it has NO effect
    2. – there is NO trend

    I think if there is SOME going on even if less that what folks think should be done… and the trend is up even if in mirco percentages…

    then.. change IS happening… but the overall states don’t yet reflect it … OR the job growth exceeds the reduction in car due to telecommuting.

    I know a Forensic Physiatrist who for 30 years never knew what an internet was or what good email was.

    He is now living 25 miles South of Charlottesville in a Mountain Hollow connecting to the internet via cell phone… and making big bucks by reviewing cases.

    Ditto for a Lady that gives seminars in medical codes…. Moved to Moro, NM… 2 hours from Albequerkie… still does the seminars but half as many for twice as much as well as earning money by dealing with clients via email.

    It’s happening…

    I still think EMR needs to re-look at his Balanced Community models with respect to whether a person has to be PHYSICALLY at a particular location for his/her job – in every case and in each case for every day.

    I think this is changing… and a guy that lives in WVA and travels to METRO Wash once a week is 1/5 of the commuting problem that he used to be.

  4. E M Risse Avatar
    E M Risse

    Will V and Jim Bacon:

    Nice find and good analysis.

    Others:

    It is not about what you like, what you do or what you think you prefer. It is what millions in large New Urban Regions like, do and prefer.

    Larry:

    Balanced Communities are not just places to live and places to work. They are places where individuals, families and organizations can assemble the elements of a quality life.

    First was safe and happy (Aristotle), now it is “quality of life.”

    The market does not lie.

    For 10,000 years those who have a choice, tend to agglomerate in places there this is ever more possible.

    From Neolithic trading villages to Greek and Roman Planned New Communities, too … we have a whole chapter on it in “The Shape of the Future.”

    We can start building functional settlement patterns the evolve to Balanced Communites in sustainable New Urban Regions, or we can evove back to caves and clubs.

    The sooner we start, the better chance there is that we will survive.

    EMR

  5. Ray Hyde Avatar
    Ray Hyde

    Yes, but people have also been fleeing to the suburbs since before Roman times. Two hundred years ago our cities were much smaller, and even less livable. So you are right that it is more possible now.

    The market doesn’t lie. DC is no longer the center of the jobs hub, and the quality of jobs it offers is less. We wouldn’t be concerned about sprawl if it wasn’t happening.

    We don’t know if millions are really doing what they like and prefer, for all we know they may be paying their dues until they can get out, or they are just stuck, or making do because that’s where the jobs are.

    I’m in favor of balanced communities, too, we just have a different idea of what constitutes balance. I don’t consider a proposal to stack up the nex two million people in 33 Metro station areas a very balanced plan.

  6. Anonymous Avatar
    Anonymous

    Mr. Hyde:

    Geographic Illiteracy is a terrible burden for those who hope to make money from land specualtion and hide their intent behind a wall of strawmen.

    Anon Zoro and Zora

  7. Ray Hyde Avatar
    Ray Hyde

    “Speculation involves the buying, holding, and selling of stocks, commodities, futures, currencies, collectibles, real estate, or any valuable thing to profit from short term fluctuations in its price as opposed to buying it for use or for income ( via dividends, rent etc).

    My wife’s property has been in her family for 170 years. I don’t think she can be fairly accused of speculation in any sense of the word. To the minor extent that we might like to make some changes, we would expect to use them for income, not quick profit.

    If you have a problem with my straw men, then let’s talk about those, and not digress into a red herring of considering what you think my motives might be.

    In fact, I have no real intention of doing anything with my land, but I frequently use it to illustrate what I consider to be logical fallacies, false argumentation, or gross generalizations.

    I can’t think of any worse way to promote a position than to present an argument that is clearly invented, deceptive, internally inconsistent, economically foolish, and politically unobtainable.

    I am actually in favor of land use controls and reform. I have two basic contentions: if we place a control on land that provides a public benefit of $1000 and that benefit costs the owner of the land $5000, then we can’t very well show that we have a public benefit, since that owner is part of the public. In other words, the net result of that control is negative $4000 and we have not achieved the goal of public benefit we set out for.

    Secondly, we do not actually know enough about what those kinds of costs and benefits are to make rational and fair decisions: we don’t have the metrics, or at least we don’t have metrics we agree on.

    Otherwise, I agree with you: if there is some one out there who wishes to make money from land speculation, then being geographically illiterate would be a burden to him.

    I just don’t see what such comments have to do with this conversation.

  8. Anonymous Avatar
    Anonymous

    In terms of condensed or spread out living, what’s really interesting about distributed power is that you are essentially using the power from the source where it’s produced, as opposed to having centralized power production. From, say, a coal-fired power plant, you are distributing energy at long distances via the electrical grid; whereas, what’s so fascinating about distributed energy — solar and wind — is that you are using it at the point of source, so it’s that much more efficient.

  9. Larry Gross Avatar
    Larry Gross

    Exactly! and you don’t have that left over mercury either.

    The technology is here right now. It may not completely power some homes but it can make a substantial dent in useage.

    So why is it not being used?

    Cost.

    So.. for each of us.. we CHOOSE to buy cheaper power subsidized by the harm done to the environment – and to us… because we are the ones who ultimately absorb the mercury in our own tissues.

    So.. we choose 32″ LCDs and SUVs and 3rd and 4th bathrooms instead of wind/solar.

    Then we like to beat up on Dominion for burning that nasty coal….

    POGO had it right.. with regard to meeting the enemy.. 🙂

  10. Ray Hyde Avatar
    Ray Hyde

    Distributed power is much more efficient. To the extent that it is solar or wind it is much, much more expensive. To the extent it is NOT solar or wind, it puts more pollution in the places that can afford it least, and it is more expensive, unless you are using co-generation.

    One advantage of the big grid is that you can choose to buy power from a solar farm, and pay more if you like. You won’t actually get the power from the farm, but the difference in price you pay will go to the farm – after the grid collects its tolls. If it happens enough, then there will be more solar farms and wind farms.

    Don’t hold your breath.

    What do you suppose would happen if I approached Fauquier and told them I wanted to convert to a solar and wind farm? You want to buy a subscription to get your power from me?

  11. Larry Gross Avatar
    Larry Gross

    “Distributed power is much more efficient.”

    to a point.

    Folks may not know about a public/private entity called Hydro Quebec.

    Hydro Quebec’s “vision” was that the vast and mostly uninhabited lands of Canada… and the rivers that drained it could make it the Saudia Arabia of Electricity for North America.

    They also think the same way with respect to solar and wind.

    Think of it.. The KING.. the World Class of GREEN POWER.. right here in North America…

    What a perfect answer. Right?

    … errr… gee.. why not?

    The short answer – you cannot transmit electricity from North Anna to Los Angeles and still make money.

    What’s the optimal profitable distribution distance?

    it’s not from Canada to Virginia.

  12. Larry Gross Avatar
    Larry Gross

    “What do you suppose would happen if I approached Fauquier and told them I wanted to convert to a solar and wind farm?”

    you mean wind turbines on the ridges?

    Gee .. do you think if Dominion offered this as an alternative to power lines that folks who live there would buy into that concept?

    After all .. it IS Clean, no mercury… and those folks would being paying their own locational costs.. and not be subsidized by others…

    seems to have all the “right” things that good-minded folks advocate for.. right?

    🙂

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