universal basic income in any country.
The mutating technology/unemployment narrative tends to attract public
attention when a new story creates the impression that the problems generated by
technological unemployment are reaching a crisis point. A celebrated 1932 book
by Charles Whiting Baker, Pathways Back to Prosperity, sought to explain why
the public’s concerns about labor-saving machines replacing jobs were wrong
until now, the early 1930s. Baker emphasized the newness: “The widespread use
of automatic machinery and economic transportation is only a thing of
yesterday.” He stressed that unemployment was a new long-term problem, not
going away, ever. Thus Baker advocated something like a universal basic income
for all:
We have got to face the fact that there is one way, and only one, whereby we
can make a market for our huge surplus of goods.… Increase the purchasing
power of the 95 percent of the families of the United States who have only
tiny incomes, and they will at once buy more.28
Recent years have seen a renewal of this great wave of concern as new
redistribution proposals are put forth and discussed. Notably, Google Trends
shows a huge uptrend in searches for the term universal basic income starting in
2012. ProQuest News & Newspapers reveals essentially the same uptrend.
Public attention to inequality has burgeoned, with much attention to the
increased share of income by the top 1% or the top one-tenth of 1%. Thomas
Piketty’s Capital in the Twenty-First Century, which described this trend, was a
best seller that generated intense discussion. The term “digital divide” has gone
viral, describing a sort of inequality related to access to digital computers.
No one can predict the effects of labor-saving and intelligent machines on
livelihoods and work in the future, but the narratives themselves have the
potential to drive amplified economic booms and recessions, as well as public
policy. The narratives at the time of this writing about artificial intelligence and
machine learning replacing human intelligence and disintermediating skilled
workers lend an instability to expenditure and entrepreneurship patterns. These
and other economic narratives may show up in the speculative markets, notably
the real estate markets and the stock markets, to which we turn in the next two
chapters.

Chapter 15
Real Estate Booms and Busts
Real estate narratives—stories about the often tantalizing increase in value of
land, housing, locations, and homes—are among the most prominent economic
narratives. A strong example of their influence was the talk leading up to the
Great Recession of 2007–9, which disrupted economies all over the world. The
2007–9 Great Recession was fueled by stories communicating inflated ideas of
the value of housing.
Real estate narratives have a long history. From ancient times through the
Industrial Revolution, real estate talk centered on the price of farms. In modern
times, attention shifted first to stories about empty city property suitable for
building homes, then to actual homes in metropolitan areas. These shifts are just
mutations of a perennial narrative about the scarcity of land and its value.
We might think that the real estate boom and bust narratives would be part of
the same constellation of panic or confidence narratives that we discussed in
chapter 10. But real estate confidence is very different from confidence in the
state of the economy, because people tend to view the two as very different
things.1 Real estate is regarded as a personal asset, which one might have useful
opinions about, while the economy is seen as the product of myriad forces. As
this chapter reveals, however, real estate is also a socially informed asset, with
its value depending on how people compare themselves to their neighbors and
beyond.

Speculation and Land Bubbles
For much of history before the twentieth century, popular narratives celebrated
land speculation (either of farmland or of vacant city lots in burgeoning or
promised cities) rather than home speculation or stock speculation. The
following land speculator’s narrative, full of human interest, was written in
1840, after the collapse of a US land bubble that had started in 1837:
His father left him a fine farm free of incumbrance [sic]; but speculation
became rife, fortunes were made in a twinkling, and D. fancied “one thing
could be done as well as another.” So he sold his farm, and bought wild lands
in the prairies, and corner lots in lithographed cities; and began to dream of
wealth worthy of “golden Ind.” Work he could not: it had suddenly become
degrading. Who could think of tilling or being contented with a hundred acres
of land, when thousands of acres in the broad west were waiting for
occupants or owners. D. was not the man to do it, and he operated to the
extent of his means. At last the land bubble broke; lithographed cities were
discovered to be mere bogs; and prairie farms, though the basis of exhaustless
wealth, worthless unless rendered productive by labor.2
Here we see a perennial narrative of a foolish speculator buying unseen land in a
bog, a narrative resurrected in the 1920s Florida land bubble, where a swamp
replaced the bog.