Locally optimal, globally absurd

April 18, 2019 (1426 words) :: Housing is an arena where the choices available to an individual are constrained within a narrow set of possibilities, each of which is globally suboptimal.
Tags: housing, inequality

This post is day 108 of a personal challenge to write every day in 2019. See the other fragments, or sign up for my weekly newsletter.

A theme that’s come up in a lot of my writing is the idea that a solution can be locally optimal - as in, better than the available alternatives - while being far from globally optimal - as in, the solution that would be possible if various background assumptions were changed. I’ve written about this in the context of the gig economy:

To defenders of the gig economy, the recent backlash [workers protesting working conditions] seems ridiculous. In their view, workers should be grateful that these apps provide them with any work at all, which they otherwise wouldn’t have access to. Why on earth would workers complain about having something rather than nothing? Surely it’s better than the initial, pre-gig economy starting conditions of un- and underemployment.

But that’s a false dichotomy that speaks to a failure of imagination. We don’t necessarily need to return to the initial starting conditions. We can be much more ambitious than that: we can imagine an entirely different world, one that requires a fundamental rethinking of the current economic system. We should ask ourselves if our economic optimization function has trapped us in a local maximum—a suboptimal situation that can’t be ameliorated by moving forward or backward—and if we need to take a stochastic leap of faith into the unknown in search of something better.

So here are some thoughts on a scenario that I see as “locally optimal, but globally inane”, where the delta between the two possibilities is so large - and the downsides of the status quo so evident - that I suspect we’ll all look back on it a few years from now in utter disbelief.

You’re a renter. A troubling proportion of your income goes to your landlord, a shady figure who lives in Moscow or Hong Kong or New York or maybe all three. A shadowy embodiment of global capital. You hate him. He got lucky with real estate investments in the 90s, and that evidently gives him first dibs on your bank account balance on the first of every month, simply in exchange for allowing you to safely park your corporeal self somewhere on this planet. It always takes at least three emails and a desperate voice mail before he sends someone to fix a leak.

Once you save enough for a down payment, you’ll be out of there. You resent the fact that you’re helping pay off his mortgage, when you could be paying off your own. But you can’t afford to buy your own place, not now, not in this market, and anyway you’re not sure where you’ll want to settle down. So you’re stuck with the indignities of renting for the time being. Still, you can console yourself with wistful dreams of one day owning your own home, no longer subject to the power of an absent landlord.

If you’re lucky, you’ll eventually escape through buying your own place. It’ll be a very individual escape, though. The landlord will still be there, taking tax writeoffs for the mortgage interest on his various securitised homes, exercising his shadowy power over a new set of tenants - all because his name is on a piece of paper that purports to assert his property rights. You might have gotten out, but the system isn’t going anywhere.

Opting for an individual solution to a systemic problem is extremely “local optimum”. That doesn’t mean it’s wrong, of course. It’s not your responsibility to fix these systemic problems. In any case, it’s outside of your control, at least insofar as you act on an individual level, operating within the narrow confines of the system as you know it.

Getting to a situation that’s more globally optimal would be nice, but it’s not something you have the power to accomplish on your own. That’ll need to be tackled collectively, through political mobilisation for stronger tenants’ rights, expanded and improved public housing, and curbing the use of housing as a means of capital accumulation. All of which seems kind of impossible from where you are in your leaky apartment, because it requires changing the political landscape, which you see as just as natural (and as unpleasant) as the moldy air you breathe.

In the meantime, though, go ahead and buy that house. That’s the best you can do for yourself anyway, and you’ve got to put on your own mask before helping others. But if you want to help out those who will never be fortunate enough to own a house - who will never save up enough of a down payment to qualify for a reasonable mortgage - then you’ll have to look beyond the local maximum that is our current market-dominated paradigm for housing. The system isn’t even working on its own terms (what was the subprime mortgage crisis if not the financialisation equivalent of smoke emanating from a machine?) and anyway, it’s so much worse than what it could be. What it should be, really. It is absolutely ludicrous that some hedge fund dweeb can buy a penthouse apartment in NYC for $238 million while others are made homeless because they can’t afford rent.

I understand why the system works the way it does today. I get that all these institutions and conventions and traditions are meant to support a system where housing is first and foremost a financial asset, and only secondarily a place to house your physical body, if you can afford such a thing. I even get that what I see as a major inefficiency in the system - some houses are sitting empty, while some people are homeless - may seem, to someone else, as a tragic but necessary downside of property rights. Even if it seems regrettable for now, it’ll surely iron itself out in the long run, with the help of some visionary social entrepreneurs

I know that things have to work this way, under the current paradigm. What I’m saying is that the current paradigm is dumb, and that the costs now outweigh whatever benefits it may have had in the past.

I’m reminded of a thesis in the book To Save Everything Click Here by Evgeny Morozov. In a review for the Los Angeles Review of Books, Kevin Driscoll writes:

the terms of public conflicts are always complex and contested: different stakeholders may have wildly different criteria for evaluating acceptable solutions, and some may deny that a solution is needed at all. The ideal solutionist scenario bulldozes this plurality in favor of a kind of Schumpeterian marketplace in which a progression of novel “fixes” continually disrupts existing solutions. Morozov cautions that this “never-ending quest to ameliorate” favors short-term tweaks over systemic change: “It very well may be that, by optimizing our behavior locally […] we’ll end up with suboptimal behavior globally.” The danger of solutionism lies not its solutions, but in how narrowly it defines its problems.

Sometimes you can’t achieve a global optimum simply by tweaking the parameters that are available within the current definition of the problem. Sometimes you have to redefine the problem space entirely.

There is, of course, the question of who has power to do so. Who are we expecting to do this redefining? Who really has agency here? It’s tempting to answer “nobody”, simply because the forces and structures and institutions that shape our lives often seem outside the control of any one person. Which, to be fair, is true; capitalism is so resilient partly because it manages to appear a largely impersonal system. There’s no one person at the helm who can be taken out to put everything to a halt. Rather, under capitalism, the power to stop things is diffused, among everybody - everyone who participates in the system, willingly or not.

At the end of the day, you’re still subject to forces outside of your control. It’s hard to alter the balance of class forces on your own, as an unhappy renter seeking a place to live. No one’s expecting you to - after all, your power as an individual is limited. As a collective, though, it’s a different story. With a strong enough movement, you can alter the very functionings of the institutions that make up modern society.

So if you ever find yourself in a societal situation that’s locally optimal but globally suboptimal, then you might as well accept the former, but don’t forget about the latter. A much better world is possible, and you can choose to help fight for it.

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