National Public Radio recently broadcast a segment on the concept of the open office. When I went back to my office I planned to listen to the entire segment and when I Googled it, there were multiple hits to NPR segments. One might suspect that NPR has some disgruntled reporters working in the open office format.
The open office concept of no office walls and door with employees sitting in relatively cramped space is often lauded as a way to encourage employee interaction and collaboration. In high tech companies the concept is thought to encourage group problem solving and group creativity.
However, studies suggest just the opposite. In their study, Professors Ethan S. Bernstein and Stephen Turban began their study with an open mind:
I find both sides of this debate equally compelling. On the one hand, it looks kind of miserable to somebody who would like to have some private space to get their work done. On the other hand, we have this image of the vibrancy of human interaction that takes place when you can just reach out and touch someone literally and talk to them.
The researchers went to two large corporations who were in the process to transitioning from cubicles to the open office format and they had employees wear special badges that could track personal interactions. Much to their surprise personal interactions decreased by a whopping 70%! Electronic communications increased by 25-50%.
Of course, the cubicle itself is widely reviled by “office workers” and their fictional counterparts. Had he seen one, Karl Marx himself would have seen it as a favorable step in the march to the workers’ revolution. The inventor of the cubicle, Robert Propst even cursed his invention for contributing to the modern “monolithic insanity.” Writer Julie Schlosser quipped that what the cubicle lacked in beauty and amenity, it has made up for in crabgrass-like persistence.
Even customers who never see the light of day inside companies using the open office or cubicle approaches suffer. When sales departments, help desks, and customer service departments use these approaches it is hard to communicate and mistakes are often made.
These office formats make sense in certain situations and applications, but it is not about communication, collaboration or problem solving. Those are things that occur in meeting rooms, break rooms, and cafeterias.
The real reason for these approaches is much more straightforward. They reduce costs by reducing construction costs and by reducing the amount of floor space per employee. They also can reduce interaction and communication of non- company business.
The Role of Government in Encouraging Cubicles
There is also a nefarious tax-related cause at work.
In the 1960s when marginal tax rates were very high, the US Treasury changed the tax code with the idea of increasing business investment. New rules were instituted regarding the depreciation of assets. Henceforth, desks, furniture, and equipment could be depreciated over a shorter life of seven years, while longer term assets such as the building and walls are depreciated over nearly 40 years. This was a big savings for companies and sales of cubicles skyrocketed.
This is just another example of how government intervention, in this case the tax code, insidiously harms our lives. It also contributes to what Mises called the anticapitalistic mentality. Not a day goes by that social justice punks and Ivy League professors attack capitalism, and specifically business, without really knowing what they are talking about.
Businesses operate within a framework of both market competition and web of government interventions. They are led by the visible hand of government intervention to do things which are not of their intention or purpose and thus harm the general interests of society. Workers no doubt resent their cubicles, but because of the real reason for their circumstances, much of their resentment should be focused on Uncle Sam and his diabolical tax code.
Mark Thornton is a Senior Fellow at the Mises Institute and the book review editor of the Quarterly Journal of Austrian Economics. He has authored seven books and is a frequent guest on national radio shows.
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