So I think it’s interesting that the market seem so expensive for these tasks. It makes sense for the carpenter case due to the information asymmetry but I don’t see what there aren’t more affordable moving companies in your nation.
As for markets vs trust a few thoughts:
You seem to be of the view that most consumers (irrationally) go to markets for most of their transactions when they could be relying on trust instead. Is that really true? Many of the goods I get, relationships, conversations, essay feedback, sex, childrearing, etc… I get through non-market trust based mechanisms. Isn’t it the case that we just don’t think of non-traded things as goods?
You seem to be of the opinion that trust is massively more cost effective than markets in many cases? Again I’m somewhat sceptical. I think your selection procedure is to take things you do on the market and find the few of them that are far more effective when done outside of the market. This leads to a biased sample because you’re selecting specifically for things the market does badly.
Another thing to consider is the cost of trust based networks vs markets. Specifically, you’re limited to in-network people and hence to only a very small subset of goods/services.
(By the way, still think the “trust can really help with transactions” gist is super interesting and useful. Even outside of laws and just in terms of cultural norms, living/working in a low-trust culture can be a shocking experience to anyone accustomed to a western european country)
I don’t know exactly why shipping companies are so expensive in Scandinavia. Part of it is of course high tax and insurance cost, but that can’t explain the entire difference in cost compared to doing it your self. Maybe shipping is unattractive as a job for various reasons, so we have an undersupply of shipping companies?
And you’re definitly right that my post is cherry picking galore. I should have underlied that it was more of a hunch! I don’t have data to answer the question whether people in general could gain by moving more of their consumption of the market (or vice versa: gain by moving things they now do with in their network unto the market). What I do have is my single data point, and I’ve been finding a lot of ways to reduce how much I need to labor to be able to satisfy my needs by growing my network at the expense of my salaried career. (After having the realisation I share in the post, I’ve also expanded my network to supply me with food, and I’ve set up so I can loan a car instead of buying it.)
So the point I’m trying to make is a slightly different one than “trust is massively more effective than markets”. Its that one can have a higher marginal return on ones time if one consciously explore if what one wants to consume can best be served by the market or by one’s network. For me, I’ve been able to get higher returns by investing more in growing my network. (Though there are some things that I now do outside of markets that might be better served by the market!) But again, that’s one data point, and one has to go case by case. My intuition though is that since that more people could gain, given that for example the shipping companies operate though one can easily beat them by a wide margin by having (cultivating) good friends. And I thought that could be useful to share.
Let’s hope! Probably that throw away guess is not the correct one for why shipping is so expensive here. There might be some regulatory mess I don’t see.
I do find it interesting, though, that certain jobs might be undersupplied because of presitige and social factors. I think Scott Alexander mentioned somewhere that plumbers make about the same as doctors, in the US. So if you where a rational economic agent, you would go into plumbing, because its less costly to learn, less stressful etc, but that doesn’t happen, I guess, because—who knows a cool plumber? (Super Mario not counting.)
So I think it’s interesting that the market seem so expensive for these tasks. It makes sense for the carpenter case due to the information asymmetry but I don’t see what there aren’t more affordable moving companies in your nation.
As for markets vs trust a few thoughts:
You seem to be of the view that most consumers (irrationally) go to markets for most of their transactions when they could be relying on trust instead. Is that really true? Many of the goods I get, relationships, conversations, essay feedback, sex, childrearing, etc… I get through non-market trust based mechanisms. Isn’t it the case that we just don’t think of non-traded things as goods?
You seem to be of the opinion that trust is massively more cost effective than markets in many cases? Again I’m somewhat sceptical. I think your selection procedure is to take things you do on the market and find the few of them that are far more effective when done outside of the market. This leads to a biased sample because you’re selecting specifically for things the market does badly.
Another thing to consider is the cost of trust based networks vs markets. Specifically, you’re limited to in-network people and hence to only a very small subset of goods/services.
(By the way, still think the “trust can really help with transactions” gist is super interesting and useful. Even outside of laws and just in terms of cultural norms, living/working in a low-trust culture can be a shocking experience to anyone accustomed to a western european country)
Thanks for your non-market essay feedback!
I don’t know exactly why shipping companies are so expensive in Scandinavia. Part of it is of course high tax and insurance cost, but that can’t explain the entire difference in cost compared to doing it your self. Maybe shipping is unattractive as a job for various reasons, so we have an undersupply of shipping companies?
And you’re definitly right that my post is cherry picking galore. I should have underlied that it was more of a hunch! I don’t have data to answer the question whether people in general could gain by moving more of their consumption of the market (or vice versa: gain by moving things they now do with in their network unto the market). What I do have is my single data point, and I’ve been finding a lot of ways to reduce how much I need to labor to be able to satisfy my needs by growing my network at the expense of my salaried career. (After having the realisation I share in the post, I’ve also expanded my network to supply me with food, and I’ve set up so I can loan a car instead of buying it.)
So the point I’m trying to make is a slightly different one than “trust is massively more effective than markets”. Its that one can have a higher marginal return on ones time if one consciously explore if what one wants to consume can best be served by the market or by one’s network. For me, I’ve been able to get higher returns by investing more in growing my network. (Though there are some things that I now do outside of markets that might be better served by the market!) But again, that’s one data point, and one has to go case by case. My intuition though is that since that more people could gain, given that for example the shipping companies operate though one can easily beat them by a wide margin by having (cultivating) good friends. And I thought that could be useful to share.
Even if it’s unattractive, a global company like Fedex could come in and likely still higher unskilled labor for it.
Let’s hope! Probably that throw away guess is not the correct one for why shipping is so expensive here. There might be some regulatory mess I don’t see.
I do find it interesting, though, that certain jobs might be undersupplied because of presitige and social factors. I think Scott Alexander mentioned somewhere that plumbers make about the same as doctors, in the US. So if you where a rational economic agent, you would go into plumbing, because its less costly to learn, less stressful etc, but that doesn’t happen, I guess, because—who knows a cool plumber? (Super Mario not counting.)