WHAT YOU’RE MISSING WHEN YOU WORK FROM HOME:

Don’t get me wrong; remote work has real benefits. I shave two hours of commuting off of every workday, time that I can instead spend getting work done. Early in my telecommuting career, in fact, I had the following conversation with a manager who wanted me to spend more time at the office.

“I’ll be happy to. But I’m already working more than 12 hours a day, so my commute is going to have to come out of my work output, not my personal time.” (Pause) “What do you want me to do?”

“Enjoy your home office.”

These benefits are obvious. And thus, as far back as the science-fiction stories of the 1950s, people have been predicting that telecommunications would one day take the place of face time and cubicles. Yet these expectations have been steadily disappointed by reality. It turns out that some kinds of information travel very well by wire, but others get lost in transmission. It also turns out that those kinds of information are often vital to a company’s work.

To understand why, it may help to go back to the theory of the firm, and a question that economists have struggled with: Why do companies exist? Why don’t we all act as free agents, bidding our services out in the marketplace, rather than binding ourselves into subordinate relationships with larger entities?

There are a lot of answers to that question, but one of the biggest ones, provided by the eminent economist Ronald Coase, is “transaction costs.”

Yes. Though working in an office means you’re under the eye of HR, which is a transaction cost all its own.