The Cheapest Generation

The Cheapest Generation is an interesting piece over at The Atlantic about “why millennials (Gen Yers) aren’t buying cars or houses, and what that means for the economy.”

In short, the emotional appeal of owning a car or house that their parents had is no longer so strong. They prefer, instead, to have access to connectivity—everything from smartphones to car and bike sharing services.

Whilst some economists will panic because of the decline in selling big, physical things, the article points out that in places like Germany (where I live) home ownership has long been low and the German economy is the healthiest in Europe. People rent here for many years. To live in the same rented place for 30 years is not uncommon. This has a useful side-effect, which is to prevent the housing market from overheating so much that nobody can afford anything without heavily overextending on credit (c.f. Sydney) and we all know where that ended up.

I see a lot of the kind of “closed suburbs” in Germany that the article also mentions. Many people cycle here and, as a result, many services are nearby, which means families need either only one car or no car at all.

Services, not products. Access, not ownership. It’s the key to decoupling resource usage from economic growth.