Ambiguity as a product
Reading this story in the Wall Street Journal over the weekend about surrogacy & birth tourism, led me to thinking about how ambiguity skews incentives that might not otherwise be possible, whether we're talking about illegal hotels, non-local companies flooding streets with scooters, illegal cabs or grey-area sectors building entirely around something questionable.
Sometimes, I read articles like I'm experiencing them from the past and wonder what someone from 1950 would think about these problems we've created for ourselves and where we've chosen to invest as a society.
Over the past year, my thinking about Public Mechanics has sharpened around a simple premise: systems already exist, and the work is learning how they get built so the things inside them can function.
Following that line has made a different pattern increasingly visible. Everyday life contains a high volume of distortion created by arbitrage between systems. Legal, jurisdictional, and institutional gaps support entire service layers that route activity across boundaries faster than public coordination can register it.
Consider short-term rentals. A regulated housing market exists, with zoning, tenant protections, and tax obligations attached to residential property. A platform reframes the activity: this is hospitality, happening to occur in a residential unit. Property managers, cleaning services, dynamic pricing tools, and key exchange systems operationalize that reframe at scale. Investment capital flows in, enabling portfolios of units to be acquired and coordinated faster than any municipal licensing regime can track.
Five years later, the city's housing authority is fielding complaints about affordability, displacement, and neighborhood stability; externalities produced upstream by a service layer that never appeared on the housing authority's radar and really isn't in their jurisdiction to solve at scale.
The Ambiguity Economy Loop
I've started calling this the ambiguity economy loop. Here's the structure:
- A regulated civic domain exists. Housing, labor, citizenship, taxation, reproduction, transport—areas where public authority has established categories, obligations, and boundaries.
- A reframe detaches activity from the regulated category. The service becomes something else: hospitality, contracting, consulting, logistics, facilitation. Language does the work of relocation.
- Intermediaries operationalize the gap. Platforms, law firms, agencies, marketplaces, and logistics providers build durable infrastructure inside the seam the reframe opened.
- Capital accelerates coordination faster than oversight. Scale comes from orchestration across the gap, compounding before public systems register the activity.
- Externalities land on public institutions. Enforcement costs, social risk, legitimacy erosion, and cleanup labor arrive downstream, often years after the coordination stabilized.
This loop generates durable value without requiring formal ownership, mandate, or accountability. It explains why certain industries persist regardless of periodic legal attention. The service layer does the real work.
Why This Frame Matters
In Public Mechanics, this matters because it shifts attention away from individual failures and toward system choreography. Seeing the loop makes it easier to understand how public capacity erodes, where intervention might register earlier, and why fixing these things is often too difficult for any individual actor to do.
Public attention typically activates at step five, after coordination has scaled and externalities have landed. By then, it's too late to really do anything about it. (We're not even talking about how many palms have been greased along the way to make people look the other way.) What's worse is, some neighbors benefit from these platforms not just as first movers, but in the form of taking assets and turning them into profit engines; they're not seeing the bigger picture.
The frame offers something else: precision without requiring a policy argument. You can trace the loop through gig labor, cryptocurrency, fertility services, private education, asylum processing, or debt collection. Each domain has its own politics.
I'm teaching a Public Mechanics elective next semester, that probably won't get this wonkish (Va = Vp + Ve + Vr), but I'm hoping that we can test more of these theories as we work at a baseline to look at the enveloping engines of services & systems.