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Source link: http://archive.mises.org/4780/the-state-and-the-cubicle/

The State and the Cubicle

March 9, 2006 by

From a Fortune article on Cubicles: The great mistake:

Another critical factor in the cubicle’s rapid ascent was Uncle Sam. During the 1960s, to stimulate business spending, the Treasury created new rules for depreciating assets. The changes specified clearer ranges for depreciation and established a shorter life for furniture and equipment, vs. longer ranges assigned to buildings or leasehold improvements. (Today companies can depreciate office furniture in seven years, whereas permanent structures–that is, offices with walls–are assigned a 39.5-year rate.)

The upshot: A company could recover its costs quicker if it purchased cubes. When clients told Herman Miller of that unexpected benefit, it became a new selling point for the Action Office [the original cubicle]. After only two years on the market, sales soared. Competitors took notice.

How many unpleasant aspects of corporate life are traceable back to government intervention? I just asked my boss why our company does drug testing (we don’t have gov’t contracts which is the usual reason). He explained that the test is only for illegal drugs and he just doesn’t want to have employees who are involved in illegal activity. I asked him what would happen if the Drug War was over and these drugs were legalized. Would he require drug tests then? He said “No”.

[Thanks Slashdot]

{ 2 comments }

Kenneth R. Gregg March 10, 2006 at 5:50 pm

Very good point, Stephen!
I also strongly suspect that if one looks at the statistics (and I’m sure there are statistics on this somewhere), cubes are moved, changed and replaced at a greater rate than are chairs, desks and file cabinets in both private and public sectors.
Just a thought.
Just Ken
kgregglv@cox.net

Andrew March 14, 2006 at 11:01 am

Why is it an advantage to be allowed to depreciate an asset more quickly? In my (limited) experience, accountants have been more interested in finding ways to increase the value they can put on assets than to decrease it, as this improves the balance sheet. Writing off the cost of furniture more quickly doesn’t mean recovering the cost more quickly. Does it?

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