I have posted this on Reddit (askeconomics) a while back but got no good replies. Copying it here because I don’t want to send traffic to Reddit.
What do you think?
I see a big push to take employees back to the office. I personally don’t mind either working remote or in the office, but I think big companies tend to think rationally in terms of cost/benefit and I haven’t seen a convincing explanation yet of why they are so keen to have everyone back.
If remote work was just as productive as in-person, a remote-only company could use it to be more efficient than their work-in-office competitors, so I assume there’s no conclusive evidence that this is the case. But I haven’t seen conclusive evidence of the contrary either, and I think employers would have good reason to trumpet any findings at least internally to their employees (“we’ve seen KPI so-and-so drop with everyone working from home” or “project X was severely delayed by lack of in-person coordination” wouldn’t make everyone happy to return in presence, but at least it would make a good argument for a manager to explain to their team)
Instead, all I keep hearing is inspirational wish-wash like “we value the power of working together”. Which is fine, but why are we valuing it more than the cost of office space?
On the side of employees, I often see arguments like “these companies made a big investment in offices and now they don’t want to look stupid by leaving them empty”. But all these large companies have spent billions to acquire smaller companies/products and dropped them without a second thought. I can’t believe the same companies would now be so sentimentally attached to office buildings if it made any economic sense to close them.
What I’ve learned from following cryptocurrencies is that people don’t need intentional coordination to be affected by the reality-distorting bias of their investments. If someone has bought a narrative about why the thing they invested in has value, when faced with evidence that this narrative may actually be wrong, most of them aren’t going to be sophisticated enough to think “Well that’s a strong argument, I guess it would be in my interest to pretend that it’s false while privately defecting”. Instead they are going to want to dismiss it outright, shit-talk everyone disagreeing, and throw more money/time/effort in the hole. Being financially invested in something messes with your emotions like that.
Basically I think that being invested in commercial real estate is likely to make someone actually believe any ideas that imply that commercial real estate has value, even if they are bullshit.