The Joe Walker Podcast - Bryan Caplan — The Economics of Housing Abundance

Episode Date: May 13, 2024

Bryan Caplan is Professor of Economics at George Mason University. A bestselling author, his books include The Case Against Education, Open Borders, and Build, Baby, Build: The Science and Ethics of Housing Deregulation. Full transcript available at: josephnoelwalker.com/bryan-caplan-155See omnystudio.com/listener for privacy information.

Hello and welcome back to a new season of the show. This episode is a conversation with economist Brian Kaplan. Brian is professor of economics at George Mason University. He is also a blogger and an author. He's written several books, including The Case Against Education and Open Borders. Brian has recently published a new book on housing deregulation, a topic I've been thinking and writing about recently. So naturally, I had many questions for Brian. I traveled to George Mason University in Fairfax, Virginia, where Brian and I recorded this episode in person. Enjoy.

Brian Kaplan, welcome to the podcast. Fantastic to be here. So Brian, 14 years ago, you wrote, I will consider my career a success if I publish a total of five excellent books on five different important topics. Book number five has now arrived in the form of Build Baby Build, the Science and Ethics of Housing Regulation. I read an advanced copy. It was excellent. We're going to talk about it today. All right. But first, why was Five Excellent Books on Five Different Topics your metric for career success?

I feel like most of the most influential living public intellectuals I know, people like Peter Thiel, Nassim Taleb, tend to be the sort of hedgehogs who have one central idea and they kind of meditate on its implications over the course of many decades. So why is it better to be a fox than a hedgehog? I mean, that's possibly generous to me because you might just say, well, it's all hedgehog stuff and you're just pretending to be a fox. But I mean, honestly, I just get bored doing the same topic. I work on it for five years and I feel like I understand this well, I'm going to go and explain what I figured out. And then to keep working on it or keep revisiting the same ground,

just seems like I've got more things to do. There's other projects. I've got something else to say that that's the main thing in my mind, I guess, is like, do I want to be the person who just keeps rewriting the same book over and over? A few of my favorite people are like that. But for me, it just is tiresome and it just also not living up to my potential. I could move on and basically figure something out. It's like,

how much more precision do you really want to get on this one topic? I think it's close enough. If you were forced to characterize yourself as a hedgehog and you had to pick one deep idea that runs under all of your work, what would that be? Human irrationality. The world's wrong. It's wrong because human beings are wrong. They're wrong because they just aren't trying very hard. They are throwing away common sense because it conflicts with their emotions. I think that's the main idea. I mean, you can even summarize it just as simply as like the world is wrong. That's not quite right. But if you really want to boil it down, that's something like that.

Yeah. So really like every one of my books comes down to, there's something really important and people are making mistakes. And as a result of thinking something false about the world, they are doing something that would make sense if the world were totally different. But since the world isn't that way, what they're doing is screwed up. Okay. So let's talk about housing deregulation. So at a very concrete level, how does America look different with full housing deregulation? Is it mainly that the non-metropolitan population drops to like a few million and then New York City and the Bay Area become megacities of 40 million people each? I think that's too strong.

It is true that your downtowns are the most regulated. So I think in percentage terms, they will gain the most. But the main thing is that there's just a long list of regulations, each of which is strangling construction of a particular sort. So yeah. So in cities, the main issue is that it's really hard to build skyscrapers, right? And sometimes, like in San Francisco, you also combine it with really strict regulation of historic sites and just tearing things down. But that's one kind of regulation that makes cities a lot smaller than they would otherwise be. But when you move out to suburbs,

then the issue is that it's really hard to go and do multifamily housing. There's something like 80% of residential land gets reserved for single-family homes. So we can have a lot more people living out in suburbs, in apartments. You might say, well, it's not really the suburbs anymore if it's apartments. Like, well, it can be kind of like the suburbs. It's not so clear as to what the

right dividing line is. And then you have finally just even with single family homes, what's crazy is that it's usually required to waste a ton of land. So these are minimum lot size regulations saying you've got to use like an acre of land for a house or around here actually sometimes it's two acres or even five acres. So I do think that things would tend to be more urban, but actually I think a lot of it is just people spreading out. There's just a lot more leg room for everybody because we could just build a lot more in every location and it would be affordable. So I like the idea of you live in Manhattan, but you aren't in a tiny apartment that's cheap.

Instead, you spend a good amount of money and you have a very spacious apartment. Often people are getting worried, well, wouldn't it lead to really small family sizes? A lot of people move to Manhattan. Yeah, it would if they kept living in the same kind of square footage that they're in now. But if it were a lot cheaper, people wouldn't want to be in a shoebox. They'd want to have a much bigger place. And so it's once again, a very different story. Okay. So the most famous approach to measuring the impact of zoning regulations on house prices is the approach pioneered by Joe Jerko and Ed Glazer. And a lot rests on that approach. So given that, how strong do you think their method is? And what do you think its main limitation or limitations are? Right. I mean, I would say that Jerko in

particular has done later work that avoids some of the main criticisms. But let's start with Glazer and Jerko. Essentially what they do is they try to find homes that are otherwise similar, but some have some more land than the other. So you get two homes. Ideally, it would be exactly the same home, same neighborhood, but one has an extra hundred square feet of undeveloped land. And then you just see, well, so how much do people really value pure land? And the main result of this is that while people like it a little bit, they just don't like it very much. The actual marginal value of additional land is low.

So the way you could think about it is that that's kind of giving you a measure of how much is land worth if you can't really build anything on it. And it turns out it's not worth very much. It'd be different for agriculture, right? For agriculture, like having another hair on your square feet, it'd be like, all right, fine. We'll go and put another 100 square feet of crops on it. But when you're dealing with housing, having an extra area of land is just not very valuable, which shows, first of all, what is the big problem with these minimum lot size regulations? You're making someone buy extra land that they actually don't appreciate very much.

Why make someone buy an acre of land when they barely value it? Someone else, you could put another house there. You could put several additional houses there. So anyway, that's basically what they're doing is looking at the marginal value of additional land. So if you're in a city, this would sort of be like the setback land. And then from there, you can see, all right, we've got this measure of just the raw value of land, but really without the permits to build things on it attached. So we have this measure of the raw value of land. Then the next thing they do is they find manuals of construction costs, which are actually used in the industry.

They're like this thick. And from there, it's like, all right, so if we just had from the raw value of land combined with the physical construction cost, what then would that be? If you sum that up, what would that expense be? And then they compare it to market price. And then they treat regulation really as a residual. The cost of the regulation is the difference between the market price on the one hand and the physical cost of having the property. And then that difference is going to be their measure of all regulation combined. It's like, why do they do it that way?

Although, you know, the problem is that there's just so many regulations and they vary so much from area to area as to which ones matter. They're trying to come up with some general generic way of measuring all regulation or they call it the zoning tax, which is a bit of a weird term because most people who know something about zoning will say, well, we don't really tax things in the zoning code. And it's like, yes, it's a metaphorical tax, or it's just a name we're giving to the full regulatory burden. It would be more accurate to say, what's the regulatory burden rather than the zoning tax? But the zoning tax is a term of art that they wind up using. And what do you make of the critique that the real reason these parcels of marginal land are valued so little is actually just like land is indivisible. We can't really do anything with these offshoots. And so the market doesn't attach a great price to them. Yeah. And the answer is for some particular cases, that's reasonable, but it's not reasonable when you're talking about zoning saying you have to use an extra acre of land. In particular, what you can really see this very clearly at the construction stage,

you see there's a developer, he's got a substantial amount of land, he knows he can put more than one property on it. And then normally what a builder wants to do is just squeeze as many properties on it as he can get away with legally. It is totally standard to go up to the legal limit of what the regulators will allow, which does give you an idea about how little people actually appreciate the extra land. They want a little bit usually, but they don't like it enough to really pay anywhere close to the value of preventing another person from having a property

in the same location. So essentially, initially, there is a division. And at that point, that's where I would say the regulation really matters. Afterwards, you can come back and you could say, well, if you deregulate it now, it wouldn't change very much. And yeah, if it was a small amount of regulation, that's true. Although again, even in cases where you would have to go and tear everything down and start from scratch, if you go to places with high prices in San Francisco, I just say there's no doubt that if it was legal, there would be developers going and buying up whole blocks of two and

three story townhomes, demolishing them and putting skyscrapers there. I just think it's crazy to say they don't want to do that. They totally want to do it. And it is a very standard regulatory thing to get a variance to go and add an extra property on a somewhat larger piece of land. So while what they're doing is not perfect, but what's done by the hand of man is perfect. It's a reasonable first approach. So what Jerko wound up doing in some later pieces, he actually got prices of actual vacant lots, which does totally solve this problem or

almost totally solve this problem of just saying it's due to the indivisibilities where we can't go and combine a bunch of square feet from 20 different properties and put a home there. That's true. But anyway, when you go and use the prices of actual vacant lots and he was able to go and just get a giant sample of vacant lots, you get very similar results. So I think the method is sound. Okay. So for better or for worse, immigration and housing are increasingly being linked in a zero-sum way. You see this in Canada, you see this in Australia. Should I think of Build Baby Build as the necessary sequel to open borders? My sense was that there are no keyhole solutions that will make housing sufficiently affordable in the face of

high immigration-driven demand. And so if we want high immigration, we simply have to deregulate housing. Is that how you see it? I think that's a bit overstated. For the United States, we do have one virtue, which is that almost all of these regulations are set at the local level, some more at the state level. And there's a lot of variation in the United States. There's some parts of the US where regulation remains quite light. And not coincidentally, you see that's where we're getting massive population increase because you can move there affordably. So Texas is probably the really famous state that would be known to people around the world for lighter regulation, a lot lighter. And even if you go to the boom areas of Texas, like Austin,

you really only have to drive like 45 minutes to get to cheap housing again. It's not as cheap as the middle of nowhere, but it's by the standards of most of San Francisco or New York, it's crazy cheap. So that's, basically in the US, I would say, if someone says, do we have to first deregulate housing before we can allow immigration?

It's like, no. Immigrants are going to places where we're allowing people to build. And so we can still get a lot of the gains, even though we can't get all of them. If you really were setting it at the highest level, I mean, I would still say that it's better to let people in and let housing prices go up and people complain. But it's still making the best out of a less than ideal situation anyway. But yeah, when people are complaining that really immigrants are driving up prices, all right, well, how about you allow the industry to build more homes for people? Is that really such a terrible thing to allow this industry to do its job? Of course, a lot of the

workers that were building those homes are themselves going to be immigrants. That'll make sense. But what about open borders? The truth is that the US was able to go and cope quite well with modest levels of regulation for 50 years. So if you were to go back to when zoning starts really taking hold in the 1920s, and then just say the sky is going to fall, housing prices are going to go back to when zoning starts really taking hold in the 1920s and then just say the sky is going to fall, housing prices are going to go through the roof. There's actually a long period where it doesn't happen, right? And it's like, well, why not?

Well, there's a few things going on. But the big one is regulation can be bad in principle without really being that harmful because it's not that strict and there's a lot of loopholes and there's other places you can build. So that's the main thing that I would say about do you need to have full deregulation of housing to have open borders? No. Is it important to have no more than a shock doctrine of, look, probably the best way to get the deregulation that we want is just to go and start deregulating other things until people say, look, this is intolerable. And maybe they will then go and say, fine, we'll reverse what we did in immigration. And then I figure, well, we're not really worse off than we were before. Or on the other hand, maybe they will finally say say i guess we need to actually let people build stuff so that is my

my general view of things is you know don't wait for one kind of deregulation before you do another kind of deregulation instead just turn the dial as much as people let you get away with and it's very likely that that will put enough pressure on it that the dam will burst and you'll start deregulating other stuff. During the early days of the end of the Soviet Union, there was a big issue. Well, we can't go and change this thing without changing this thing. We can't go and deregulate this without deregulating that. And at the time, and also in hindsight, say, just do it. Just start deregulating. It's going to cause a bunch of problems. People complain. And then

the likely outcome is that once you just get the ball rolling, a bunch of other things will happen. And finally, you will get very wide scale deregulation. That is generally what happened there. On the other hand, saying, well, we just can't, we have to wait until every, all of our ducks are lined up in a row. It's like, yeah, if you wait until all the ducks are lined up in a row, you're just going to wait forever. So don't wait. Yeah. Yeah. Fair enough. Okay. So if you saw them, what did you make of Angus Deaton's recent comments in that IMF publication, which to put them in my own words, I think there was something like, in America, the low skilled end of the immigration distribution has pushed down wages for domestic low skilled workers. And that's unacceptable, not least because we owe special obligations

to our fellow citizens that we don't owe to foreigners. Yeah. And you have to get a Nobel Prize in economics to understand that this argument is true, right? You know what I'd say is that Deaton's comments were disappointing to me because in his book with Anne Case, Deaths of Despair, he talks quite a bit about housing regulation and how this is a big problem. So it's like as to why it is that your first inclination is to go and try to keep out low skin immigrants rather than focus on deregulating housing and doing other things that in his own book he said were important for going and making things better. Disappointing. This is a big part of my general critique of moderate left-wing economists, which is that even though on their good days they will say, yes, government's doing a whole bunch of things that are bad for the poor, doing a whole bunch of things where

we just deregulated, things were better. But it's really only on those days they'll mention it. And then on remaining days, they're back to being a normal left-wing person, just complaining about how the market is unequal and we need regulation. So that's a lot of my complaint there. And in terms of how he's discovered in his late age, how important it is to go and take care of your own countrymen, it's like, well, first of all, I think that he probably knows that estimates of the effect of low-skid immigration on wages of low-skid Americans are small at best. And there actually is a debate about whether it goes the other way, it's like, well, how could it go the other way? And the answer is that

even though we call them all low-skilled workers, whether they're native or foreign, they actually have different skills. Most obviously, native-born workers have much better language skills. And so when you get more immigration, a big part of what happens is that low-skilled natives specialize in doing other kinds of jobs. They specialize in jobs where language skills are necessary. The really obvious one, of course, would be supervisor, right? So one of the main things that happens when you let in more low-skilled immigrants is that there is a promotion for natives who were doing similar

jobs before, but now they need to go and basically be the manager or the intermediary between native customers and the new workers. So that's actually a lot of what happens. So basically, it's like there's a lot of doubt about whether it's even true that low-skilled immigrants are bad for low-skilled natives. Rather, it looks like often they are compliments. So there's that as well. My general take on this is that econ Nobelists often say, now that I've won this prize, I'm entitled to go and get up on a soapbox and give my general opinions about the world. And yet their whole career, they have not really been training to do a good job on this. And so what they say is often just sadly conventional and not very thoughtful.

Whereas say bloggers who've been doing this their whole life, they've trained in giving the bigger picture and they're better at it. So Deaton is someone who has not really been thinking about the biggest issues in this way. And so it's not surprising that when he decides he's going to speak to it, he really says something very conventional and one that doesn't even really incorporate his own best work. Bloggers are trained in consilience. Yes. Well, some are self-trained anyway. It's not like this blogging school where they go and say, Consilience 101.

But yes, bloggers are the people that are most likely to be trying to go and draw from a number of different bodies of knowledge to go and get a big, thoughtful picture. Obviously, the typical one is just a hack going and repeating talking points. But if you're saying like, who are the people that are trying to go and combine a number of different areas of knowledge in order to get a thoughtful view of the world? Yeah, I'd say that bloggers are overwhelmingly overrepresented in that endeavor. Why does blogging incentivize that kind of eclectic style? Well, I mean, I think that probably the better way of thinking about it is why does everything else disincentivize it? So if you are a professor, the way that you gain status is by publishing very high quality,

narrow articles that demonstrate a picky point with a great deal of certainty. At least that's how it is in economics and philosophy. There are some other academic fields that are worse and that are screwed up in a bunch of other ways. But that's the standard way that academics gain status is by specializing, narrowing your focus to a really small range, and then working it out in gory detail to the point where almost no one would want to read it. So that's what is standard for academics to do. And then if you are a government worker writing a white paper or something, it's a pretty similar deal.

If you're writing the CBO report on return to Social Security, you're on that exact narrow topic. For a journalist, it's much more about, I need to talk about whatever's hot today, which is in a way an even more narrow topic. For a journalist, it's much more about, I need to talk about whatever's hot today, which is in a way an even more narrow focus. It's like, it's got to be the very thing that's hot today. And it's like, what about yesterday? What about tomorrow? Those take care of themselves. Bloggers are the main people where they've got this latitude. Well, I could write about whatever I want that people read. And then what are the areas that other people aren't doing? Well, we're covering the super narrow topic. We're covering the super narrow chronological period. What could I do?

And of course, a lot of bloggers just go and do the super narrow chronological period. Not too many doing the really narrow topic, actually. So I'll expand in topic. I'll expand in time period. Not too many doing the really narrow topic, actually. So I'll expand in topic. I'll expand in time period. So that's probably what's going on with why bloggers do anything different. Important to remember that it's not like all bloggers do this. In fact, I think most bloggers are very much like journalists. They're talking about whatever's hot today. But there is this reduced pressure to do what everybody else is doing. And it's like, well, I need to find my niche. What niche is not being supplied? And I think it is the niche of doing the consilience or trying to do the interdisciplinary

thing. I mean, there are a few interdisciplinary professors. I consider myself one, but normally the way that you become an interdisciplinary professor is first you become a disciplinary professor and you get tenure in whatever your regular field is. And then it's like you pull off the mask and say, actually, I have bigger thoughts and I'm going to go and share them the world at this point. And the other colleagues are like, oh no, oh no. Some of it is just a feeling that no one can say anything worthwhile on a broader topic. But another thing is, well, it's just not what we do. That's for someone else to do. It's like, well, who is the someone else? It's like, I don't know. I don't have to answer that question. That's great. Okay. So let's talk about the gains of agglomeration and zoning.

So the most relevant paper here is the famous 2019 paper by Shea and Moretti. And that paper is now more or less being refuted. You found some basic errors in it in 2021. And then at the end of 2023, Brian Greeney found some more errors. Could you, I guess, just outline why you nevertheless think that housing deregulation would have massive productivity gains? Right. I mean, it's probably easiest to step back to immigration and then move over to housing. So one of the main things that, I mean, honestly, the main benefit of immigration comes down to this. Right now, most people in the world live in countries with very low productivity,

but there are some other countries with very high productivity. You might think the problem is the people, but we know that's wrong. And how do we know it? From immigration. Because from immigration, we've seen what happens when you go and you take a low-skilled worker from Haiti, say a shoeshine on the streets of Haiti, and you move them to Miami. Or you take a low-skilled Mexican farm worker and you move them to American farm. And basically overnight, what happens when you do this is that their earnings skyrocket. And like, well, how can their earnings skyrocket? Basic economics says it's got to be the productivity is much higher. For a farm worker,

it's obvious that their productivity is higher because on that primitive farm, they're barely growing any food. And on a modern mechanized farm, they're growing a lot of food. For something like a shoe shine, it takes a little bit more reflection. Well, in what sense is he more productive in Miami than in Haiti? Until you remember, oh yeah, shoe shining is a service. The point of a service is to save customers time. When you save the time, when you save more valuable time, then you are actually being more productive.

So that's the main economic case for immigration is just that immigration restrictions prevent workers from doing what they naturally would do, which is move from places where their productivity is low to places where their productivity is high. It is transformative to the point where it is easy to go and multiply someone's productivity by a factor of 10 in a week. All right. So that's how immigration works. If this is different from almost any pro-immigration argument you ever heard, it's like, yeah, I know, but this one's

the best, right? It's one that is hard to get people on board with because it's like, well, gee, mean that like it's good to have illiterate workers on our farms coming from other countries? Like, yeah, exactly. It's like, well, why? Because they produce way more food for humanity. And that is not just good for the migrant.

It's good for everybody who eats, namely everybody. So this is the main benefit of immigration. It's just for everybody who eats, namely everybody. So this is the main benefit of immigration. It's just moving people from places where the productivity is low to places where the productivity is high. With immigration, the gaps in wages are often so dramatic that there's little doubt that incredible numbers of people would move. So often surveys say like a billion people would move, and there's some reason to think that's too high, some reason to think it's too low. Also depends upon over what time period, but still massive migration would happen if people were allowed to move. Now, when we think about housing,

so within a country, normally there's no legal limitation on moving. So someone from rural Mississippi could move to the Bay Area today without getting any permission from anyone. And traditionally, this actually was very common in the United States and, of course, a lot of other countries where there's some areas that are backwards, other areas that are advanced. And one of the main things that happens in these economies traditionally is that people from the backwards, low-wage places say, hey, I would like to get a large raise. I will go and move from Mississippi to California and get a better life for myself.

This is something that traditionally happened. And you can see in the data that both low and high-skilled workers were moving out of low-wage areas of the US, especially the South, into high-wage areas. There's a famous giant move to California where huge populations moved to California in the 40s, 50s, 60s, 70s. The grapes of wrath would have you believe this was just a disaster and didn't solve anything. But actually, the real story is for the most people that moved, it was fine. It's like, yeah, things were bad back home. And now I'm in California and I have a much higher paid job and the weather's really nice and I'm happy. That was the normal thing that happened. But anyway, economically, why are people moving

from one area to another? And the answer is that they get higher pay in that other area. Why do they get higher pay? Again, just like with an immigrant, because their productivity is higher. There's some areas that are more developed in, it could be technology, it could be in management, could just be that the land is better for agriculture. Like if there's some people farming in the desert and there's some nice farmland

that doesn't have a lot of people on it, then it makes sense to move the desert farmers to the fertile land farmers, to the fertile land. All right. So anyway, if you take a look at the modern US,

there's something pretty weird, which is that there's still very large gaps in measure productivity between the main regions of the U.S., but mobility has fallen a lot. And when the economists, Ganong and Shoag, went and looked at what was going on, they found out, huh, here's what's actually happening. There's still quite a bit of movement of high-skilled people from low productivity areas to high productivity areas. But for lower-skilled workers, it's actually going in reverse. Low-skilled workers are actually leaving places like San Francisco where their wages are much higher and going to places in Texas where their wages are lower. It's like, well, that's weird.

Why would you move to places where wages are lower? And the answer is that there is the strange feature of the modern world, which is that did not always work this way, which is that housing prices are so enormous in the high productivity areas that actually you need to be quite high skilled before the percentage wage gains exceeds the extra housing cost. So essentially, what workers are doing is they are focusing on their own standard of living, which is wages minus housing cost, minus some other things, of course, minus cost of living. But the big difference in cost of living is just housing cost.

So the reason why I do think that the story is right is that we first of all know that there are large differences in productivity. Second of all, we know that during the earlier period of much lighter regulation that there was not much difference in housing costs between high productivity and low productivity areas. So it stands to reason that if we could get housing costs back down to reasonable levels, then we would restore this standard feature of the economy, which is that workers of all skill levels have a tendency to move to places where their wages are higher. Not going to be as extreme as with immigration, because when you can multiply your wages by

a factor of 10 by moving, then people are, that's almost decides the issue. You know, like if Haitians could just move to the U S legally, probably Haiti would almost empty. It's just so dramatic in terms of what their living standards are like in Haiti versus here. Whereas it's just a matter of getting like a 20 or 30% gain. Then some people say, it sounds great. Other people will say, I don't want it that bad.

But still like, you know, the productivity differences between the Bay Area and the rural South are big enough that it does still seem likely that there'd be a lot of mobility if the housing costs were reasonable in the high-wage areas. Okay. So I want to challenge this story of the productivity gains in a few ways. But first, just as a brief digression, the error you found in the Shea Moretti paper reminded me a bit of like the error that was discovered in the Reinhardt-Rogoff paper, just like a super basic error in a very influential paper. What percentage of super influential economics papers measured by, I don't know, they've got more than X number of citations,

do you think are just like built on houses of cards where there's like some error that's passed through peer review? Yeah. Would it be like a meaningful percentage? Yeah, I think so. I mean, again, it's one where people will hasten to say it's probably gotten less bad in recent years because the standards for what you have to disclose have gotten higher. But at the same time, it's like, yeah, but there's not that much in it for a person to go

and find a mistake. I mean, what happened with me is I was rereading the Shane Moretti piece very carefully. And then it just seemed like there were basic multiplication errors in some of the notes.

And I'm like, all right, well, they're really smart guys. They're not going to have basic multiplication errors. And I talked to a few friends and the usual thing friends said is, yeah, no, no, no. Like you're misunderstanding

what's going on. I'm like, Hmm. All right. And then I emailed them and they wrote back and said, no, no, no. Yeah, you're right. We made basic multiplication errors. And I was like, Oh my God. Now what was striking is that these errors were actually against their thesis, right?

Because once you went and fixed the multiplication, they wound up concluding that there were even larger gains to deregulating housing than they originally found. So that's what came out of it. So I'm like, well, I mean, that's – in a way, it's like a good sign because you figure if there was some kind of either conscious or unconscious bias towards inflating the results, then that would make sense. Like that's what you figure people would do. They want to get a bigger result, so get extra attention. But then since I found that they were understating it, it's all right. So it's more of just a careless error rather than some systematic problem. Then there was, as you mentioned, another critique by Brian Greeney,

who I think is probably right. And most people have looked into it, say that he's probably right, which is just that they have a very strange model and you have to be paying close attention to it. And you'll really probably need to at least be in a graduate program in economics to know why what they did was odd. But I mean, I think the simplest way of explaining it is that intuitively you would think, and I usually think of deregulation as just something where it just breaks a dam and you can now build more housing and the supply goes up. But they basically thought of it more along the lines of there's just going to be a greater sensitivity of construction to price. And it's like, well, those are kind of related, but not really the same thing. I mean, the main thing I think about if you were to go and deregulate San Francisco, it's not so much that suddenly they would start building more if the price got higher as they would just build a ton because prices are

currently super high but yeah but yeah like if you do the full audit uh that is a it's a great idea that's just the problem yeah yes you know it's sort of like it's a great idea for somebody other than me to do uh could someone offer a prize so I can send it. Yeah. So if there's some philanthropist watching this and just wants to go and do a prize and like, obviously, I think this would work totally or really well for also medical research, too. There's probably just a lot of really basic errors. And it's one where you can sort of go and offer different prizes for different levels, like basic arithmetic errors that lead to more than a 10% change in the prediction or in the,

in the claim of the paper. Yeah. That's the way I like, that's the one to start with. I mean, here's probably part of what a lot of what was going on. So this paper by shame already was in the American economic journal. It's a top journal.

Normally referees for those journals. Like I have talked to them. I've even seen them doing their job. They put a lot of work in, but they put a lot of work into the really intellectually demanding stuff. Like they're like, let me take a really good look. Let's read, like check every formula. Let's go and look at the system work and see whether they actually did exactly what they said. But the idea that they would need to go and check for basic arithmetic, that's not something that they're really used to. It's sort of, well, of course the basic

arithmetic is right. And like, is it, does it have like, how do you know that the basic arithmetic is right? So in a way it's one of the easiest things to check and something where you don't need a lot of knowledge of the technical material in order to go and check that stuff. So that would seem like a pretty good thing to do. Yeah. I mean, like something else that's been found is that when papers do get corrected, it doesn't seem to affect their citations or anything else. It's just like people generally don't hear about it. You just keep citing the original piece.

And like, doesn't the show that academia is corrupt? It's like, yeah, fairly corrupt. It's not as bad as possible. It's not all a pack of lies, but it does mean that quality control is just a lot lower than it seems. A good way of thinking about it is that there's probably, at least in in fields like econ there's really high quality control in some of the areas but that does not mean that overall quality control is good this would be like at the coca-cola plant like okay we have fantastic checking for whether every can has as much liquid as it's supposed to have we have fantastic checking for whether there's any stray glass around and And then once a year, we look for rodents. And if there are rodents, then it's like, okay, well, I guess somebody should get on that eventually.

Right? And it's like, well, look, be fair. Like, we're really careful about some issues in the Coca-Cola factory. It's like, all right, yes, you are. But that doesn't mean that the final product has great quality control because that would require a high level of control for everything. And in fact, you might say, perhaps you're putting too much effort into making sure that every can has the right amount of liquid down to the 10,000th of an ounce. And you should move some of those resources into checking for the rats. Okay, so let me challenge this story about the output gains we could get from deregulating in a few different ways.

So I think that the first and most obvious critique to make is that the people who've already moved to the big conurbations like the Bay Area and New York City are going to be the most naturally talented, ambitious people. And the next 5 million, 10 million people who move there aren't going to have the same productivity as those people, even after they've moved to those places. What do you make of that critique? Yeah. So it's totally reasonable as a general point.

The key question is, first of all, does the Bay Area have better janitors than other places? There's just a lot of low-skilled jobs where our stereotype of the ultra high-skilled workers at Google is fine for Google, but those people are actually a pretty small percentage of the population. So I'd say that's the place to start is just that while there are definitely quality differences between workers, but they probably are not nearly as stark as you would think just from consulting stereotypes because of this thing that behavioral economists call representativeness bias. the Bay Area, the ones that pop to mind are your really high school tech workers. There's still only a small fraction of the people there. Most of them do not have some incredible cutting edge job. It's not like their janitors are at the cutting edge of janitor science or anything like that. So for most workers, they are not actually, they are not really special.

They are typical. And, you know, especially if you just step back and just say, so like what fraction of the people that are already there were born there? And it is really high, right? And you might say, you know, like, you know, I'm someone who's really into behavior genetics. So it's like, well, like maybe what's going on is that the grant, is that the father of the Google executive worked for Hughes aircraft and his

father worked for some other big tech firm, right? There is some of that, but never, but nevertheless, a lot of what's going on is that people just stay where they're born this is a video so uh there's this famous statistic about the fraction of americans that live within like 10 miles of their mother and it's real high so you know like you're saying like so let's like what does that mean for mobility it does mean that well like you like you need to have very you know very very big wage gains to get a large share of the population moving. So like Puerto Rico, there, over half of all people of Puerto

Rican descent have left the island because there's such a large wage gap. On the other hand, when you're talking about a difference of 10 or 20%, there's a lot of people who say, I will go and just take the hit so I can just keep living near my family. But still, we do know that the US has much lower mobility than it used to. So it used to be the people were willing to move. And it does make sense that a lot of that reason is these differences in housing costs, cost of living generally, but housing cost is the really big hit. That's the main thing that varies tremendously. It's not like a loaf of bread has such a different price in San Francisco versus the South.

But a mansion has a really different price. So now in the case of work on this immigration, my colleague Michael Clemens and co-authors, they actually made a pretty serious effort to go and adjust for worker quality. I don't think that the shame-ready pieces make nearly as serious of an effort to do it, but still just basic things like conditioning on observables. So it's like, well, let's go and match up high school dropouts with high school dropouts. Does the Bay Area really have fantastic high school dropouts? So that's where I would be focusing. Right. So I guess that gets me to my next challenge, which is taking the Bay Area as an example again.

Does housing regulation somehow protect the weirdness that's concentrated in that community? And if you deregulated and had a lot of high skilled workers moving in, they kind of dilute that and you somehow lose the innovativeness of the Bay Area? Right. the innovativeness of the bay area right i mean again you figure that the these agglomeration gains are based upon like the total number of geniuses and innovators in within driving distance of each other right if you just go and add a whole bunch of lower skilled workers i mean like if they were literally blocking the roads or something so that people couldn't meet each other then you can see what the problem is. But otherwise, it does seem pretty hard to see why that would actually mess things up.

Obviously, even at the level of Google, they hire people that are not especially impressive to go and work as janitors and do other basic things. They don't seem to be worried, well, we better have only high school graduates going and taking out our trash or else they might mess up with this incredible environment. Say that the idea that agglomeration matters makes perfect sense, but it's one where what it would take to mess up the mechanism. So within a firm, there's just like, well, you might even think, now there's this interview question, how much does just not go switching to telework, you mess things up?

You might think that messes things up a bit. But as long as people are physically in the same location, still interact with each other, still see each other, it is at least puzzling to try to figure out how would this mess up their innovation. In fact, I'd say the opposite story is the one that makes more sense. If we could go and move, so if we could say triple the amount of low-skilled workers in the Bay Area and raise the number of high-skilled workers by 50%, seems like that would still totally raise the innovation of

the area because you get these innovators who are right now kind of isolated and they're working on their own, or at least they're not at the absolute dead center of progress. And you move them there and it seems like that would actually be what would be really crucial for high innovation. Right. Okay. Next challenge. So there's like either explicitly or implicitly two kind of core objectives in YIMBY thinking. One is making housing more affordable. And then the second is these gains of agglomeration for example, productivity. But doesn't enabling more building in major cities intensify the economies of scale and therefore raise rather than lower prices and rents? I mean, the whole point of economies of scale is to be able to reduce twice as much stuff at

less than twice the cost. But if you have these huge agglomeration effects where the city as it grows in size just becomes qualitatively different and people are way more productive, earning higher incomes, doesn't that ultimately translate into higher rents and prices? I would say that it immediately translates into higher rents and higher prices. But the thing is that it is totally possible to just keep building more buildings. And again, that's something where you don't need any kind of incredible genius to do

it. These are standard skills that have been known for over a hundred years. Right. So what I say is like when the attraction of the agglomeration hits peak, there's still plenty of room to go and say, all right, let's also, we can keep going and building more additional housing here. Probably a good way of thinking about it is this. You go to the US, we've got a few elite schools, but we have endless regular schools. Now, when you go to these

schools and walk around the campuses, it's actually usually pretty hard to tell what kind of a school you're at based upon the buildings. You need to go into the classrooms and in the elite places, all right, wow, the people in these classrooms are geniuses and they totally know their stuff. You go into classrooms at some school you never heard of and it's like, hmm, I don't know why these kids are even here, but their buildings look very much the same. And it's like, what's the difference? The difference is that there is a fundamentally scarce supply of incredible human talent, but there is not a scarce supply of ability to construct stuff. So we can go and build nearly endless, beautiful college campuses with

gorgeous buildings and landscaping. And there's nowhere in the country where we don't have the talent to do that if we got the money. And it doesn't even cost that much more to go and do it in one area versus the other. But there's no way we're going to go and have a hundred places with a student body like Harvard because we don't have the human beings to fill the school. We don't have 100 times as many human beings of that kind. So that's what I would be saying is going on where, I guess, eventually you've got such agglomeration that people know that it doesn't look like you'll have all the talent in one city, but it's gotten to the point where it's like, all right, we've gotten everybody to move that is willing to move for anything that is approaching a reasonable amount.

And at that point, it's like, but we still have tons of people that can go and build buildings and houses and do landscaping. And for them, that supply is just almost unlimited in the same way that we can build an almost unlimited number of attractive college campuses, but we can't fill the classrooms with fantastic students because that's scarce. Got it. Got it. Okay. So then on the other hand, and this is, I guess now coming back to the Shane Moretti

kind of model, but to what extent does that model fail to capture like the gains that come from entrepreneurship? Yeah, that's a really good question. So the easy answer is they just have this one measure of productivity and everything's in that measure of productivity. It's just total factor productivity. Right. And in principle, that would include things like you said. It should not include the total amount of capital or the total amount of labor. That stuff is already in a different part of the model. But any kind of like qualitative technological difference, any kind of difference in managerial quality, any kind of difference in entrepreneurship, that stuff all gets put into total factor productivity.

Now, if you had some kind of a dynamic story about how if we move more resources in that would actually change total factor productivity, that's not in the model. So normally, the model basically treats almost all economic models, really, normally treat total factor productivity as just a fixed thing, which then does lead critics of the intelligent, the thoughtful critics of both my stuff on immigration and my stuff on housing to say, well, aren't we messing up that total factor productivity? And it's like, well, I guess that's possible. Let's go and think about these specific stories about what's going wrong and why we are messing it up. In the case of immigration, the strongest story or the most horrifying story is maybe you let in a bunch of immigrants that caused the Civil War, and then your total factor productivity crashes down to the lowest in the world. And it's like, all right, if that would happen, that would be a really serious concern. Is this a serious concern? Like what examples, if any, are there of immigration leading to Civil War? Right? There are probably a couple, but normally it's nothing in that ballpark. And it's like, all right, fine. Didn't actually cause civil war, just caused some other disruption. The main one that people talk about in social science is it causes a fall in social trust. And then that leads to some general collapse or something like that. And it's like, all right,

let's go to the actual research on this social trust thing. It's the kind of thing where most people, when they hear how seriously social scientists take this construct, they're puzzled because it is one of the least overwhelming ideas in all of social science. It's like, well, we just want to ask people generally to think you can trust people or not. And then we take whatever the societal percentage of people say you can generally trust strangers and we use that to predict stuff and it's like so that's your measure of trust just whether people say you can trust strangers

yep and it's like huh seems kind of like a weak measure anyway and but anyway so well that's actually fine because if it's a weak measure of it's still really predictive then that actually shows the real thing's really powerful it's like all right but anyway uh some of the main things to know about this which is for me for many people this is the main case they make for what what's wrong is first of all in the rare cases where people have really measured the effect of rising diversity on trust, they find that more diversity leads to lower trust, but it's a microscopic fall. This is actually one where there's a famous paper by Robert Putnam. I think it's the only paper that he ever did on trust where he went and did this actual quantitative work. This is one where I did not find an arithmetic error. Rather,

I found that he just had a table where the arithmetic implied that the rest of the paper was greatly overstated. Because it wasn't like he went and did it, and then he did it, and then he said, okay, and then this shows there's this huge effect on trust. He just put up a table, and then he just said, and so we see that this is really horrible. And it's like, well, is it? And I just went and said, see that this is really horrible and it's like well is it and you just like i just went and said right so according to his paper what is the effect of moving from our current level diversity to maximum level and it was just a microscopic change oh that's so interesting because i i know that paper i've heard it cited and i i just heard the punchline

right so you can link to it on the show notes so there's a lot of verbiage about how, oh my God, I like, it really pains me to accept this harsh truth that diversity is really bad for trust. Then you look at the actual table and it's like, it's saying that trust is falling by a microscopic amount in the most extreme scenario. All right. So then it's like, hmm, it's weird that you would do that. You would think that if you were really disturbed, you would go and multiply the numbers out. And it's like, you would do that. Spend, you know, you would think that if you were really disturbed, you would go and multiply the numbers out. And it's like, well, maybe you weren't really disturbed as you said, or maybe you just got so worked up over the big picture that you didn't go and double check that the numbers

actually were in line with your adjectives right now. There is not like there's some book that just says that you're only allowed to use the word terrible. If a number changes by at least 70%. It's just a conversion that people use where intuitively we're like, well, terrible. What would count as terrible? If you watch the news, often they'll say something's terrible and it's like something fell by 0.3% or something. It's like, is that terrible?

But I mean, it's one where it's like at least seems like in the broader scheme of things it is not really accurate to call it terrible yeah right but anyway um this is the kind of thing where people have said like immigration is really dangerous for trust and it's like well at least by this diversity measure it's not really bad uh there's another story which i think is a lot better that almost nobody makes which is look it's not really the diversity we're worried about it's that we're worried about bringing in immigrants from really screwed up countries where people don't trust other people. And yeah, if you look internationally, you'll see that basically really poor countries generally have low trust, really rich countries generally

have at least moderate trust. And so you might be worried about just as a matter of if we bring in another 100 million people from a low trust country, that just lowers our average and that's bad. All right. And then there's this question of, well, first of all, maybe when you get out of a war zone, your trust would go up. Maybe if you go and ask someone in the middle of a civil war, can you trust people? And they say, no, they would give a different answer if you brought them to Switzerland. Right. Because they look around. Yeah. Like, this looks really good. Actually, people aren't killing everybody. So now I feel like I can trust these people. people and they say no they would give a different answer if you brought them to switzerland right because look around yeah like this looks really good actually people aren't killing everybody so

now i feel like i can trust these people right so that's part of it another thing is just assimilation so will their kids stick with their parental level of trust uh there is at least a moderate literature on this which uh i say you know does show the obvious point of, yes, the trust attitudes do actually depend upon the, if you grow up in a different country, that has a big effect upon your trust and you do assimilate a lot to whatever is normal in that country. I mean, like the last thing is actually like, suppose that you do have low trust, suppose immigrants lowered a lot. How bad is that really?

And this is where, when you actually look at the numbers, you'll say, look, the rock bottom countries for trust, they do look like they're messed up. Maybe that's causal. But once you get out, get away from the rock bottom levels of trust, there's a whole lot of countries with very widely differing levels of trust that are all rich. So it's like maybe you've shown that rock bottom is bad. But once you're at the level of France, which is actually pretty low, it doesn't seem like that is any big hindrance to being a modern country. So anyway, that is the kind of thing that people talk about when they think about immigration messing up total factor productivity. Right. If even these really dramatic changes from changing the national origin of your population are really overstated, then I'd say that it's very likely that whatever changes you'll get

from having more internal migration are also going to be modest at most. Okay. Interesting. Interesting. So to come at this from another angle, thinking about the gains from entrepreneurship that we can get by allowing our cities to densify. Could you quantify this by, I don't know, looking at the number of unicorns produced

in a big city versus a medium-sized city and extrapolating that somehow? Yeah, I mean, it's a good question. Being clear, I don't generally think so much about urbanizing the US just as about making housing cheaper so that everyone can, to use the colloquial, can men spread more or women spread or just to spread out. I do think that since cities are more regulated, that's likely to be where there's the biggest changes. But even in suburbs, people are often living in fairly cramped conditions and they would

like to go and have more. It's just a matter of price. You know, so how many, so there's this old idea of a starter home, right? But like the home you're in, in a different world, if housing works, we're half the price per square foot. Then it's like, oh, I thought this was our final home, but this turns out to be our second starter home, something like that. Yeah.

But in terms of unicorns, that is a reasonable approach. I guess the main thing I would say is that the U.S. is the main country on Earth for unicorns, and most countries just have none. I mean, it does depend upon how high the threshold for a unicorn is. But so I assume, I mean, in a way, I would say that based on the actual evidence, the thing that we can say with more confidence is just if the U S let in a lot more high skilled workers, the U S would get a lot more height. We'll get a lot more unicorns and the world would probably get more since most countries

don't have any unicorns to lose. Their tech workers are just doing something lower down the food chain than what's happening in the tech hubs of the U S. Yeah. Okay. Let's talk about fertility. Yeah. So in a way, I would love for it to be true that housing unaffordability was an important cause of declining fertility rates, as you suggest in Build Baby Build, because that would

kind of offer up like a more tractable solution than some kind of harder to pin down cultural explanation. But there's a lot of research showing that there's an association between density and reduced fertility. And a couple of very clear examples of this would be Tokyo and Seoul. So what do you make of this result? Doesn't population density lower fertility? So here's what I'd say is that these papers are making a good point. It's one that we should be thinking about,

but they are really jumping the gun because normally high density and high prices go hand in hand. We'd really need to be finding places where there's high density, but housing is really cheap. And that's really hard to find because like why? Well, normally anytime you actually get a city, then regulation is going to be at least fairly strict. And so we just don't get to actually observe this alternate universe. Is there anything that fits the bill there? Are there any examples of cities that are both high density and have low prices? Right. So Japan has had flat prices, but they're still actually high, especially Tokyo. They're still high.

Yeah. So yeah, I don't know of any good exceptions. There may be some somewhere on earth, but that would be where you'd want to start. Definitely what we do know is there are differences in the, there's basically places of similar density with different prices. So that is what you need for minimal social science. And as far as I can tell, the people that are getting worried about this just haven't done that basic homework of trying to disentangle price from density because there are logically

different things. You can imagine an area that's very dense and yet the housing is cheap so that someone that wants to go and have a lot of living space can get it. And we really just don't see that. I mean, the important thing is, so someone was getting upset at me because the cover of the book shows skyscrapers. Now, the actual book is talking about lots of different kinds of housing deregulation.

What I say is there is really no argument against and strong evidence for that just allowing cheaper suburban housing is going to raise fertility. Because here, it's just a question of you've got more space, and also it's cheaper to go and move out of your parents' basement. So that is step one. So to say that making it easier for people to go and own their own single-family house,

that's going to raise fertility, I'd say there's just almost no doubt about that. In the case of cities, what I'd say, again, is if you would get the price down, then for the people there, I think it's just very hard to argue that this would at least tend to make them more fertile if they could get a cheaper housing. The reason for doubt is you could say, well, the people that are already in cities will have higher fertility, but it also makes cities more attractive to other people. And then maybe once they're there, that will lead to some offsetting effect. We'll say there is some doubt in my mind there. Say the overall package deregulation of just getting housing cheaper, I think that one, the pronatal effect is pretty clear that there could be some offsetting effect from cities. And if you just had a very large move into cities, then maybe that would lead on net to lower fertility. I guess that is possible. I think that that's unlikely.

But to my mind, probably the clearest sociological factor, which you can think of as cultural, but it is also economic, is living with your parents. Living with your parents, which varies a lot by country. So living with your parents varies a lot by country. So if you go and take a look at Europe, you'll see that, especially in Southern Eastern Europe, people just keep living with their parents until they they're in their thirties or forties. And then there's the cultural fact that normally if you're living with your parents, it's kind of awkward to get married. Right. And if it's awkward to get married, it's all even

more awkward to have kids. So this is one where I said, we don't have really strong evidence. What we do have are basic patterns, which is you take a look at Europe, you'll see that you do generally have higher fertility in the countries where people leave home at an earlier age, and you have the lowest fertility in places where people just keep living with their parents until they're in their 30s and 40s. Also to say, it is just common sense of you're not going to have many kids live in your parents' basement, if any. So if reducing housing costs reduces the cost of having kids, enables people to have more kids,

how do you square that story with the broader trend of as societies have been getting wealthier, fertility rates have been declining? Well, I mean, of course, there's the easy one, which is that the one area where economies have been underperforming is precisely in housing. So again, in terms of it's easy to go and have better stuff than your parents, for most areas of life, that's totally and obviously true. And especially in rich countries, things have just improved a lot and you just live well. Whatever official income numbers say, if you really compare what do I have compared to what my parents have at the same age, you're doing better. Housing is the one area where it actually is often hard for people to go and replicate what their parents had at the same age so i'd say this is a sector that we're strangling and so we're just not seeing a lot of the normal fruits of progress uh so that's part of it i am

also very open to the idea that there is a general cultural change and you need to go and push back on that. So what this means is that I think they're like just traditionalism. There is a whole worldview of kids really important and that other things are not so important. And I think there has been a gradual cultural shift, which I would say is, like I said, with economic growth, there's just a lot more options to live a life of play, which really wasn't much of an option a hundred years ago. Right. And so with so many, so much entertainment around, then it does make sense to me that some people say, well, now that I've got this totally different lifestyle that I could try of just living, basically getting to be a cadult, right be an adult child for my whole life.

I'll do that instead. Yeah. So I do have a whole book on fertility. I'm not someone who thinks that it's all economics. What I am someone who rather thinks is that economics is one of the easier dials to shift. And so if the cultural forces are going in one direction, then shifting the economic dial in the other direction is a very sensible response, at least if you think that low fertility rates are a problem, I, I definitely do think that they are a problem.

Although, I mean, for me, like low fertility, it's, it's not this kind of thing where I'm predicting disaster so much as just, it could have been so much better. Right. Right. So, you know, my colleague, Robin Hanson has been talking about innovation, grinding to a halt using that phrase, grinding to a halt. And I'm like, well, about innovation grinding to a halt, using that phrase, grinding to a halt. And I'm like, well, why would grind to a halt?

Why won't it just be that if our population is half as much, we'll have roughly half as much innovation or maybe less than half as much? Maybe it will be raised to the 0.85 power or something like that. And he says, well, grinding to a halt just means that it's going down a lot. And I'm like, I think most people are not reading you that way. To me, grind to a halt means to go down to zero and eventually anyway. And you don't really, they don't really have, you know, like, so people who are worried about fertility decline, I don't think they really have any argument for why innovation will go to zero. I think they've got a great argument for how, how wouldn't have been better if we could

have discovered a cure for aging in half as many years as it's really going to take us. We'll get there eventually. But it wouldn't be better if we figured it out in 50 years instead of 250 years. Say 50 years, maybe I can just get under the wire. What do you make of the fact that astonishing efflorescences have sprung out of cities that are quite small by today's standards? So for example, Periclean Athens was home to somewhere between 215,000 and 300,000 people. Renaissance Florence was home to about 50,000 inhabitants, growing up to about 95,000 by

the late 15th century. Manchester and Birmingham, I think started in like the low tens of thousands on the eve of the industrial revolution and then kind of grew into like the low hundreds of thousands through the industrial revolution. Don't forget Vienna. Vienna, yeah. For music. Yeah. Even like San Jose is quite small and obviously punches well above its weight. So if we believe Paul Rom, that population scale is really important, more minds means more Einsteins, how do we make sense of these small but highly productive centers? Right. So I think the best way of thinking about it comes from this paper

by Charles Jones and I think some co-authors, and it comes down to low-hanging fruit. Early on, there are some ideas that are really valuable, but they're not actually that hard to get. And so it doesn't take that, you know, you get some agglomeration. It's not like you had five incredible composers coming from one mountain village. They're still coming from one of the largest cities in the Austro-Hungarian empire. So there's still agglomeration and there's still value to agglomeration. But yes, early on, there's just ideas that are easier to get. And once – so he's mostly focusing on technological innovation, scientific innovation. So there's ideas that are easier. And then what he shows is that while it does seem like population is still really helpful, but you have to keep getting more and more minds working on the same questions in order to get the same level of innovation.

Now, some of that, and I think he does admit this, some of this could be that when you say multiply the number of PhD physicists by a factor of 100, you don't really have 100 times as many geniuses. The people that were the true geniuses were going to be in physics probably either way. And then we're adding on more people who are second stringers, who wouldn't have been, wouldn't have been great innovators. But some of it really is that people that would have been in a lower population world would have just been farmers are incredible innovators because like with a larger population, there's just more to sustain this group of people that aren't concerned with immediate survival. But yeah, the low-hanging fruit story makes a lot of sense. Early on, ideas are not

easy, but easier to find. And then, I mean, think about this. Just to get to the research frontier is getting harder and harder all the time. Just to learn everything that's already been learned that's important and relevant. And it's like, you know, in 1500,

it's like, I need to learn everything that's already been learned about physics. All right? All right. Yeah, like people barely know anything. There's like this Aristotle stuff, makes it so much that you read that, it's like, well, that's wrong. And then from there, to make any progress, most people would never have made any progress, of course, but

it isn't that hard to go and absorb everything that's known in 1500 and then improve on it. Let's put it this way. It's set like a 9.9 on a scale of 0 to 10. But to go and improve upon what we got now is more like 9.99999 on a scale from 0 to 10. Or maybe it's mistaken to even have an upper bound on the scale and just say it goes from zero to – difficulty goes from zero to infinity. And for Newton to do his work, maybe that was at 100.

But to go and get a big advance now, maybe it's at 10,000 or a million. And so you just need to go and pour a lot more resources into innovation in order to get much of anywhere. You can see this even in our own lifetimes, if you look at improvements in the internet, like the earliest stuff is just draw dropping and then you keep adding stuff. AI is sort of the latest thing that's really impressive. But my view is actually ultimately search engines were a bigger improvement over what we had than AI is over search engines.

I mean, I know a lot of people love AI, but it's like compared to wait, the way people retrieved information before Google, it's like, let's go to the library and look in some books. That's literally all we had. Oh yeah. Google wasn't really the first search engine, but you know,

like Google like things and like what, and the innovate, the, the, the change between what we had before search engines and search engines to me is a way bigger change than from search engines to AI. But AI is still developing. It is.

And then there's the question of how far does it get? When, not if, does it asymptote? Everything asymptotes eventually. I know people don't like this idea, but everything does in time. You can find something else and then it gets further growth out of that. But every particular technology asymptotes in the end. And then also it takes decades for things to really actually live up to the potential, always has. I know there's some people who even a year ago thinking like AI will be the one exception to this. Like, look, electricity takes decades to spread so good but it's just like why does it take

so long to spread well human beings yeah yeah there's just like there's a bunch of human beings that stand in the way between adoption some of its regulations some of it's just inertia and just like well like we can keep doing it this way some of it it just requires a lot of brain power just to go and re-adapt it so that it can go and work on the old thing. So yeah. Yeah. To tie the Chad Jones point back to cities, basically we stand on the shoulders of giants. We need the help of larger and larger agglomeration effects to get the same productivity growth.

A couple of questions on urbanism and architecture. So you recently took a trip to Japan, right? Yeah. Was there anything on that trip that you learned or that surprised you about Japanese urbanism? Hmm. I mean, so one thing you can definitely see is they just barely worry about historic preservation because their cities just got torched during World War II. They just don't have much that's very historic. Oh.

So, yeah, like if you know the horrors of the war. Yeah. You know, like Tokyo's basically burned to the ground. The firebombing. So, yeah, like they had a long tradition of building in wood and then also horrible firebombing and everything else. So, they just don't have the same issues with we got to preserve the past. I mean, a lot of people also say there's this cultural thing where because of Buddhism or Shinto, they just have the idea of reviving things. So for historic buildings,

they will actually periodically go and take them down and then rebuild them from scratch because it's made out of wood and the wood won't last forever. There's this very famous shrine in Nara where it used to be, like it's still the world's largest wooden building, but it used to,

I think my book said it used to be 50% bigger. And they said, all right, we're just not going to go and build it, build it the same size. Right. So that was something where it's like, wow, even for a tourist site, you'll go and do something different based upon like we didn't have the money or I don't know. I don't know what the rationale was. So that's one thing. You can definitely see the benefits of mixed use there because life is just really convenient in Japan as a result of having almost no regulation of can I put a store in the ground level of a building. See, I'm going to admit I'm not an expert in Japanese regulatory law. at least a lot easier for a residential home to have to operate as a small business in japan and just to go and hang out a little shingle and say we live here and also you can get some sushi we just knock on our door i'm right there was a small town in the uk where they just assigned knock and

i'll get and i'll sell you a coffee but uh that was we're like hmm all right my wife wants a coffee let's let's try it like knock and guy shows up in his bathroom so you want a coffee. Let's try it. Like, knock, and guy shows up in his bathrobe. So you want a coffee then? Yes. All right. Would you like any just sort of shuffles in his slippers and his bathrobe over to his little coffee pot, and you get a coffee out of somebody's front door. But, you know, Japan does see that all of the heralded wonders of mass transit, which I'll say even in Europe are really overblown and it's not that good. And Ed Glazer has a nice paper showing how the main reason why people like cars is that cars are faster almost everywhere. If you have any doubt, you can just go and start typing in transportation times for car versus train, even in Europe.

And you'll see normally, at best, it's a tie. With very few exceptions, it's a tie. And for anything non-standard, car is much faster, even in Europe, even in Germany or in Netherlands or Belgium or Luxembourg, where people are so enthusiastic about how wonderful the mass transit is. And the Glzer story is really pretty similar. Namely, look, with mass transit, there's always the fixed cost of walking there, waiting, and then getting, and then you get off and then you have the final thing, or maybe there's transfers. With a car, you can just go out your door and drive there. And by getting rid of those fixed costs, you are able to go and save time for almost every kind of journey unless there's horrible congestion.

And I often – when people are saying, well, like, you know, U.S. government is really encouraging cars. I'm like, is it though? If they did peak load pricing for traffic and for parking, then cars would be a lot better. I'd be happy to drive right into New York City if it cost me $40, but I knew that I could just go and pay market price in order to have no congestion and be able to park. So I say the actual package of encouraging cars in the U.S. once you realize that not having tolls is anti-car. People think of tolls as, no, it's like tolls are anti-car. No, no, it's not having tolls or anti-car. No, no, it's not having tolls or anti-car because if you had tolls, then you could use the technology. Yeah.

But anyway, so Japan is a place where you can go and put in the times for driving versus mass transit. And you say, okay, the mass transit is actually absolutely faster in Japan because it's not just the density. It's also just their incredible efficiency and conscientiousness of the Japanese. And like their cultural differences are quite shocking when you're there and you just see, wow, this would not work in other countries. In other countries, they would just be screwing up a bunch of things. And here in Japan, like their trains really do work. Now, it does not show they pass the cost-benefit test. That's something where you cannot see that with your eyes.

You have to actually do the math. One big problem with all policy analysis is people sort of go as a tourist. They look and they say, this works. It's like, well, it works in the sense that like it's on time and like it's convenient. But you have to actually look at costs before you know whether it's a good deal. And that's not something you can see just with your own eyes. There you've got to go and actually do the research. Well, how much did they spend on this thing?

And are those numbers, do they really capture all the costs? Is there something else that I should be thinking about here? Is the land price in there? Questions that in one sense they're common sense but on the other hand when you hear someone report oh mass transit is 30 cheaper it's like counting what exactly and the sad truth is usually the person that's that's telling you the numbers has no idea even what the source of the number is much less what went into the number anyway i will confess when i'm doing an interview like this,

I often have a bit of a guilty conscience because I'll cite a number and I'm like, yeah, but what does that number mean exactly? And it's like, well, if I wrote on it, I would have checked. So when you're speaking, it's just the burden of double check every fact before you say it. There's no interview if you do it that way. But what I honestly do try to do is if I'm writing it,

anytime I get to a number, I do say, okay, hold on, what's the source for the number? And what does the number even mean? Much to the chagrin of Shane Moretti. Yeah, yes. So it's like, well, hold on. What do they do there? But 0.6 times 10 is six, isn't it?

On the margin, how do you think about trade-offs between like beauty and buildings and architecture and just increasing housing supply. Yeah. Wonderful question. Many people said, so why do it as a graphic novel? And I said, yeah, a lot of the reason is because a graphic novel is aesthetic, right? It shows you things. It doesn't just describe them, right? And I realized, well, a lot of the objections to construction are just aesthetic. It's just, I don't like how it looks. Although when you listen more closely, normally when there's regulation saying something isn't allowed, it's not really based upon, I don't like how it looks. It's I don't like how I imagine it would look.

What I wanted to do in this book in part is to say, well, that's one way of imagining it. Why don't we imagine it differently? Maybe the future that we are preventing would be gorgeous. So there's a whole chapter called Bastiat's Buildings where I just try to go and show people a vision of what a deregulated world could look like. Now, is my vision of what the deregulated world would look like the way it would really

be? It's like, I don't know. But I will say that the pessimists also don't know. The pessimists do not know that the worst will happen. What we do know from historical experience is the worst almost never happens. And in fact, if you just think about areas of the world that will be recommended in tourism books, normally it's not purely natural beauty. Normally it is an area that is naturally beautiful and then modified heavily by the hand of man

to give a very pleasing combination. I say that that is the most reasonable forecast for what would happen under deregulation. We wouldn't go and turn San Francisco into some horrible cesspool. Instead, it would become an incredible futuristic city. And if you say, well, I don't want it. Well, I think that after you saw it, you would probably change your mind. Well, you don't know that. Well, here's the thing. We do have a lot of historical examples of major changes in the urban landscape, which at the time people thought would be bad. And then they were allowed. And now people not only are happy with the change, but they forgot that there was ever any alternative. So in the book, I do travel with Ed Glazer and a time machine back to the current site of the Empire State Building. There was a gorgeous hotel. The original Waldorf Astoria Hotel was there. If you look at it,

it's an awesome building. And the question is, all right, it was awesome, but isn't the Empire State Building even more awesome? I know this is a matter of taste to a fair degree, but I will just say, look, we have a lot of facts that people who think that they're going to hate something new, not only get used to it, but come to love it. And I think that is a reasonable forecast for if we did deregulate people who just say this would be horrible, horrifying,

grotesque. Like if you allow it, then it is likely though, not certain. So I said, look, I mean, wouldn't it make sense for us to now be trying

to build the buildings that people 100 years from now are saying are the fantastic patrimony of the 2020s? Right now, if you just go and strangle construction, then all we're giving to the future is our past.

What if we were to go and add to it and improve it and say maybe some things in the past aren't that great? It literally is true that New York City has historic parking lots. There are parking lots designated as historic, and you can't tear them down. And now someone might say, well, it's kind of a straw man. Obviously, there's some abuse.

It's like, you know, really as soon as you've got the laws, they just tend to be abused because it's always on the menu and it's just hard for someone to be honest and say who cares whatever tear it down blow it up let's put something else there that just sounds so bad in a town planning meeting versus someone else saying you know when i was a child we went and parked there so and someone told me like there's some city i don't even remember what it is where they have historic vacant lots there's vacant lots that have been designated as historic this vacant lot's been there that vacant for all these years and we don't want to change that it's like i think we can do better than a vacant lot so the reason that chapter is called bastiat's buildings is

there's this great 19th century french economist frederick bastiat and he had this famous essay called what is seen and what is not seen where he said a lot of why people don't like free markets is they only see some visible benefit of government but they don't see the cost right right so they see well there's a there's a giant army that does no military purpose but provides employment and we and that's great. And it's like, well, but if we went and disbanded the superfluous soldiers,

they would go and get jobs and they would do something productive for society. And they'd have an income by delivering useful goods and services instead of just being parasites on taxpayers. Right. And this is how he goes through a lot of different issues. He has this famous subsection called a negative railroad. People say, well, we need to add a stop to the railroad because every time you have a

stop in a railroad, it creates a lot of business for locals. He said, okay, how about a railroad of nothing but stops? Where all we do is stop because then every single stop would be great. And it's like, no, it's like, yeah, you're forgetting the whole point of the railroad is speedy travel. That's the reason why we're building it. And the fact that it's good to go and have a stop every now and then, it's like, look, if the stop is not justified by consumer demand, if it's not a place people want to

stop at, then to be worrying about these minor side benefits is really just beside the point. You've got to keep your eyes on the prize. And that's, you know, so in that chapter, I basically get to have a tour of a futuristic urban landscape or many different ones with bastiat where we make this point of look this is what you see you think it's great but this is what you don't see it's better yeah okay to finish some questions on nimby and yimby so you're familiar with the study that found that about 30 to 40% of Americans believe that a large exogenous increase in their region's housing stock would cause rents and home prices to rise. And the same result is found in Australia, by the way. So there was a recent survey that

found that more Australians expect an increase in housing prices than a decrease with homes being built in that area. So question, if supply skepticism is real, why aren't more people yimbies? Let's see. Ah, so you're thinking that if people believe that allowing more construction will raise prices, then homeowners would want to do it. Yeah. I mean, part of it is just, I think the supply skepticism, it starts with, I don't want construction. And then people are just latching along to any possible reason why.

And one reason why to not allow construction is it won't have these gains for affordability that you're pretending it has. So we don't need to worry about it. But just to back up, political scientists know a lot about what determines people's views on policy questions. And one of the things that is best established is that objective material self-interest has almost nothing to do with what anybody thinks about politics. It's the kind of thing that you throw in your opponent's face and say, oh, the only reason you favor that is because it benefits you.

But in terms of just basic common sense, it's like, well, is it true that on average people who have this subjective self-interest favor that policy more than people that don't? And for most things, we just barely see any connection between the two. It is also like there's another paper, I'm forgetting the authors, but they find is that owners and tenants have very similar levels of resistance to deregulation. If it was based upon homeowners want to go and keep supply scarce for their own self-interest and tenants, on the other hand, want more supply so they can pay lower rents, that's

what objective self-interest would tell you. But the real story is people in general, whether there's homeowners or tenants, just don't like the idea of deregulation. So, I mean, what's going on? So, two things. So, I mean, one is that while people don't like the idea of new construction, it's not primarily out of some fear of personal financial harm. It's more of a feeling that it will be bad in general for human beings. So why do people favor the regulations they do?

I'd say basically every regulation exists because most people think the world would be worse without it. And not in particular that they would be a loser, but rather that just it would be bad for society. I was debating a guy who isn't, he is actually a town planner. He's in town hall meetings. And he says, nobody in town meeting ever says,

I oppose this because it's bad for my property value. They always come up with some public interested reason. Now you could just say, this is all a smokescreen and they're pretending, oh, I really care about other people. But the broader data just say that, look, we just have a general result. It's not true that rich people are against high taxes on the rich. It's not true that poor people are really eager to go and expand the welfare state. It's rather that people form political views for philosophical reasons. It's not a very sophisticated philosophy, but it's philosophical rather than some assessment of material self-interest. On the specific question of why there's so much denial of allowing more construction will reduce

prices, I think it starts with a philosophy of we don't want to let a bunch of greedy fat cats go and get rich building homes, and that's only going to be good for them. And then once you have that philosophy, then if someone says, oh, this is going to have these social benefits, then the supply skepticism allows them to say, no, it won't. But why this doesn't turn big homeowners into YIMBYs, I think it's because the real philosophy is building bad and must be stopped, and it's bad for society. Going through this list of other regulations, I already mentioned one of the main reasons people don't want to allow more construction is

it causes traffic and parking problems. Right now, why not solve that the cheap way? It's like, no, the cheap way is terrible. There's even the equivalent of supply skepticism or tolls, solve that the cheap way it's like no the cheap way is terrible and also there's even like some kind of sort of the equivalent of supply skepticism or tolls with people to say like it wouldn't change anything and it's just like really charging 20 bucks to go and drive during rush hour will not lead anybody to stop driving that's pretty amazing i mean often the same not just different not just

critics but the same person will vacillate between it wouldn't change anything and no one would drive if you charge 20 bucks. And it's like, I think that's actually in the middle. Some people would drive, but less, depending upon what price you set. But things like if you allow more skyscrapers, it'll block people's views and cast shadows. And it's, what are you even going to say to that? It's like, true, of course. It's like, but that is a fairly minor complaint compared to the incredible value getting to build the skyscraper like we're like how much weight are we going to put on people

complaining about it you know this is one or you might say it's all self-interest like i think if you give this story to people that don't even live in the city they will still generally side with the complainers you might say if you don't live there, why not side with the new tenants or why not side with landlords? But I think philosophically, there is the strong tendency just to side with complainers. They're there. Things should not change. The fact that there's billions of dollars of gains and their complaints are fairly petty should not count. In fact, it might even be your philosophical principle. This is not about money. And so in town meetings, a common reason to go and block a major construction project is it would disrupt

some migratory birds. And it's like, well, how much are those birds migration patterns worth? Put a price tag on it. And it's like, oh no, I'm not going to let you go and make me put a price tag on these noble birds. We're not going to like, they have been flying this way for years. And the fact that you, that someone can make a billion dollars is immaterial. It's like, well, what would our whole society be like

if the fact that you could get a billion dollars out of bothering birds is immaterial? It's like definitely Kentucky Fried Chicken has to go. So I buy your characterization of N nimby motivations at the local level like i i agree like i think the you know the home voter hypothesis is kind of like debunked now it's not yes not really about the money or equity values it's more about maybe there's more like amenity related concerns and status quo bias but i feel like at the national level, or even the state level,

it just seems implausible to me that if a federal politician or a state politician was proposing some policy whose clear stated objective was to reduce house prices, that that would be greeted with warm applause by homeowners. So here's the thing is most of the major YIMBY moves have been done at the state level to go enforce localities to go and deregulate. So there have been state level policies adopted in California, Oregon, Minnesota, probably some others, only one or two others,

where essentially they just start putting a lot of pressure on local governments to deregulate. Now, the usual economist story is that the state governments realize that there's some kind of prisoner's limo where almost every locality wants to go and have high regulation, and yet people don't want to have regulation in general because they recognize the costs. That's a convenient story. I don't think that's what's really going on. I think it's more along the lines of there are the elites in these states

have realized the truth and then they're trying to figure out how can i go and push things in a better direction without getting too much blowback and that's what they're doing so it's like well look i'm not going to go like i'm going to go and push them to go and deregulate i'm not going to go and actually order them i'm not going to pass law just invalidating the zoning rules i am going to go like i'm going to go and push them to go and deregulate i'm not going to go and actually order them i'm not going to pass law just invalidating the zoning rules i am going to although even there they're like so like uh you know so some of these states they have gone and officially said we're getting rid of single family zoning so i guess that is invalidating a particular zoning rule although normally with a bunch of exceptions and carve out so that it doesn't upset people so much. But I'd say that either they are just doing what they think is the right thing, or maybe they have figured out the right policy and they're thinking, look, this policy by itself

is not going to be really popular and people are going to be resentful of us, but they will like it when housing prices go down. And I'm hoping that their appreciation of lower prices will exceed their dissatisfaction with the policies. So usually when you survey people, they do like the idea of making housing prices more affordable, but they want it to be from public housing or something like that. And the fact that public housing supplies less than 1% of all housing in America, and almost everybody doesn't personally want to live there, that when you put that together, it's like, isn't the more realistic thing just to deregulate the sector that works rather than to go and

double down on this very small and disappointing sector? But people normally choose their policies based upon what sounds good. And government building housing for the poor sounds a lot better than letting the private sector go and build a lot more stuff, which then indirectly leads to lower prices for older units. Right. Yeah. I want to come back to that because I have some questions on the politics of EMV. Yes. Oh, yeah. So on the federal level, that's one where very little has been tried. I did actually talk to at least one guy in early 2017 who was working for Trump who said that Trump was open to this stuff and then nothing came of it. It's one where since the regulation is so strict in blue states, you could almost market it as another case of we're going to go and exasperate or aggravate blue states by going and overturning a bunch of local regulations that are in fact popular in those states so i think if we're sold in that way of look we're going to go

and screw over blue states by helping them something that's actually good for them uh you can see that uh getting some sadistic pleasure out of uh trump supporters in other states this is one where i have this old essay called Politics is Cruelty. Cruelty is the, you know, anatomically, if you go and look at a face that gets labeled as cruel, anatomically, this just combines the muscular movements for joy and anger. Cruelty is joy plus anger.

And I say, yeah, what is politics? Politics in general is joy plus anger. The say yeah what is politics politics in general is his joy plus anger the joy of victory and getting your way with the cruelty of go with the anger against your enemies and the combination is yeah yes we we've crushed our enemies ha ha ha isn't they uh they'll be we're happy because they're mad and he's, gee, this is such a standard international feature. Like, is there anyone who comes to power purely on promising ponies and rainbows? It's like, no, there always has to be a villain.

There has to be someone that you are going to be harming, someone that you blame for everything wrong. And so yet they will suffer. They will rue the day that they went and crossed the American people. So now that you've raised politics, I'll ask my political questions now. So Operation Warp Speed was successfully run by the Trump administration. Trump boasts about his vaccine, but then somehow vaccines become left-coded,

and so it becomes a Republican thing to not take a vaccine. Right now, housing abundance and YIMBYism seems more or less bipartisan, if you ignore the far left and the far right. How likely is it that YIMBY becomes either left-coded or right-coded, and which of those options is more likely? Yeah, good question. So I say right now, the two actual centers of YIMBY, there's largely left-wing activists in major blue cities. And then there are just red states that are YIMBY by default, where they haven't really turned it into a philosophy. It's just always been that way. And they don't have the same kind of resentment against construction. Like in Texas? So basically, the places that it could be bipartisan. But yeah, I think you are right that if something becomes popular, it will tend to go to one side. I would say that, strangely, the most likely outcome is that because the actual vocal activists tend to be left-wing, that is enough to go and give it a left-wing coding because they're the ones that'll be on TV talking about it. Again, of course, if I go and influence a generation, then it could be different.

But I'm just one person here. I think that I've got the absolutely most entertaining book on housing regulation that anyone has written. Let's stick my neck out and say that because I think it's the only graphic novel about it. I think that by itself makes it more fun but yes having the most articulate spokespeople for a view be left wing 10 gradually over time makes people think of it as a left-wing thing right so i think that that is the more likely scenario um especially because in in red low regulation red states there's very little

activist move of we want to become more like ourselves we want to go and make sure that not only like do we stay low regulation we want to double down it's more like a default policy uh so that's why i don't think that it's too likely to rather to become right coded but so again it's still in this inchoate phase so maybe um again it's one where it's like the low regulation is in the red states, but the following regulation is in the blue states. And which you do tend to get more.

Again, you get more media attention for the change than for the level, which is another reason I think that it will be thought of. It's one of those weird things they're doing in left wing states. Even though the truth is that most NIMBYs are also left wing.

Yeah, right. And these places would definitely towns with the very strictest regulation are generally very left-wing towns in places like California. Yeah. Yeah. Yeah. So at the moment, Ezra Klein and Derek Thompson are writing a book on supply side progressivism. And I don't know, but presumably there'll be like a chapter on housing.

Be one of the main chapters. What would your advice to them be? Like tread carefully maybe just make it a section rather than a whole chapter i mean honestly i almost always tell you to max out i just figure that the people on your side read you to such a greater extent that you should never worry about improving your own side right you'll always try to make your side as good as it can be and like especially you combine it with saying there's something we can learn from the other side, that last add-on does tend

to make it hard to really persuade your side. But that's why it's great that someone as high status as Ezra Klein is going to be the voice because it's like, well, do we go and kick him

out of the movement or do we listen to him? It's like, all right, just want to kick him out or listen to him? It's like, all right, which one? Kick him out or listen to him? It is true, especially one of the uglier features of the modern left is this very sanctimonious, like you have to agree with every single part or else. So I don't see yin-bi as being part of wokeness. I see it as something that is in the same general area, but it's more like when someone is a YIMBY, it's more inspired by effective altruism and evidence-based thinking.

Although, you know, like there are some YIMBYs where really it just comes down to regulation causes racial segregation. That's the worst possible thing. If we deregulate, then we can have everything will be diverse. Right. Which I'd say is one of the, definitely one of the weaker arguments, but it's like that, or if that persuades you, I'll take what I can get. Yeah. Yeah. So just a couple of final questions on regulation. What would a Robert Moses figure do today if faced with like the regulatory environment in the tri-state area? Like would he completely screwed and he'd have to live a diminished life or do you think he can still find some creative loopholes?

There's always creative loopholes. You can always find stuff. There's the old saying, where there's a way, if you want it, you will find a way, otherwise you'll find an excuse. I think it would be a lot harder for him to go and do as much because a big part of what's happened to modern regulation is not just the rules are stricter, but there's just more different approvals you have to get in order to move forward. The question is, so would he be at the level where he could actually go to the state government of New York City and say, I want you to go and invalidate a bunch of local stuff? The way the US system works is kind of strange where state governments do have enforceable rights

against the federal government, but local governments have no enforceable rights against state governments. So that does mean that if your Robert Moses figure could go and get in good with the governor

and the state legislature, then there's almost no limit to what he could get away with. Right. And he could just say, look, like you say, I can't do this. Well, I've got this new law

from the governor, signed by the governor, passed by the legislature, saying that you guys have no longer anything to say, and we break ground today. So that in principle is possible. That is hard to imagine something that could happen, but some toned-down version of that where you get the state government on your side to overcome local resistance would be the kind of thing that I would have in mind. Yeah. Do you know whether anyone in America is running a test case or like a case to try and overturn the Supreme Court's Euclid decision? But I was thinking that seems like a big opportunity for a Yimby sympathetic philanthropist, kind of in the manner of like the Peter Thiel funded Gawker case. I have not heard of any such case.

But yeah, the Euclid decision, essentially before Euclid, it seemed like zoning regulation of most kinds would just be considered a government taking without compensation. So to go and say you can't build an apartment on your land, the government would actually have to give you all the money that you would have made, all the extra money that you would have made building the apartments compared to doing whatever else they allow you to do. And this Euclid decision actually specifically said, no, no, no, an apartment is like a nuisance. An apartment is like blowing horrible smoke on your neighbors. We've had many centuries where you could sue your neighbor for creating a giant fire that made so much smoke that you were coughing on your property.

But for most of this period, it had to be like that if you wanted to go and take in the court. The Supreme Court case basically said that local governments can go and have all kinds of rules, and basically almost anything could be a nuisance. It could be a nuisance to go and have a candy store because the kids will go and complain about not getting candy, or it could be a nuisance to go and build apartments. It could be a nuisance to go and build a skyscraper. It could be a nuisance just to go and put four homes on one acre that could be a nuisance for the supreme court to literally overturn it the same way that they overturn roe versus wade i would be so stunned i i would just sit around for days saying wow uh and then my and then once i overcame my shock i'd be like they're not going to get away with it. Because we know when the Supreme Court says something that is really out of line with what the rest of the country wants to do, then it doesn't happen.

There's this famous line when the U.S. Supreme Court actually upheld a treaty with some American Indians saying it was their land. And then Andrew Jackson, president, famously said, Supreme Court has made its ruling. Now let them enforce it. How many divisions of this the Supreme Court got? And then he just broke, broke the, ignored the Supreme Court

and went and did ethnic cleansing anyway. So that's what happened then. In the case of the 1930s, there were a bunch of regulations that were popular that Roosevelt wanted to impose. Supreme Court at first said

they were unconstitutional. And then he said, all right, well, let's just do court packing. That failed. But then what happened is one Supreme Court justice either died or retired. He was able to go and flip what was a 5-4 decisions against him to 5-4 decisions in favor. And then everything was fine after that. Right.

And now you might think, don't you need a constitutional amendment in order to fundamentally change the U.S. Constitution? And no, the actual fundamental principle of U.S. constitutional law is five votes. And if you got five votes, then the constitution means whatever they say they want it to mean. However, if there were actually a Supreme decision that we're just overturning all zoning i just think that local governments would be so and state governments would be so resistant they would just keep doing it and you just have to keep suing and they would keep acting like every little case was a little bit different right and you can get away with this where you just

drag it out every five or ten years you get back to spring court and we said no we changed it a little bit which is legal and the spring court says no, no, we changed it a little bit where this is legal. And the Supreme Court says, no, it's not. We were very clear, right? I mean, this is what people expect is going to happen with affirmative action in US colleges is they will claim they're abiding by the ruling, but the actual change might be quite small and then you have to resue them and it takes another 10 years. And if they really don't want to, they could just spend the legal fees and drag their feet and really resist. It doesn't mean that it wouldn't be great to have the ruling

and then just throw all this stuff into doubt and at least then someone could flip it around and say, well, I'm building it. Screen court says I can and if you don't like it, you have to sue me. Yeah, there is this infamous case in India alex has blogged on where there's a developer that cannot get permission to build a property so they just keep building it and then and then they just drag it out in court for as long as they can they know they're going

to lose in the end and then after five years they're ordered to tear their building down and they follow the law and then day that it's torn down they just start rebuilding it and the lawsuit begins again and they make so much rent off of the five years the building is intact that it pays for all the construction costs. That is classic. That's also a very Indian story as well. So final question. Taking the long view, is your modal case, do you see human history kind of moving inevitably towards a planet where we just densify all of the available landmass? It's kind of like a Coruscant in Star Wars.

Yeah. Interesting question. Very long run. Very long run, probably yes, because despite low fertility rates, life finds a way. Jurassic Park was correct. And we cannot have low fertility forever. We know that there is strong genetically-based variation in completed fertility. Some of it's just some people more fertile. Others, it's just some people have a stronger preference for having kids. In combination, this means that right now, we are seeing a great die-off of the genes of people that do not like children. And while in the short run, this is very likely to go and lead to absolute population fall, that right now we are seeing a great die-off of the genes of people that do not like children.

And while in the short run, this is very likely to go and lead to absolute population fall, eventually, if you have a world where everybody who doesn't like kids has zero kids and the only people having kids are people like kids, there will be a transformation of human psychology. And again, probably over the course of a few centuries, which in evolutionary time is not very much. So we're just going to get rid of all or almost all of the antenatal attitudes in the population in the same way that right now almost everybody likes sugar. In a few hundred years, almost everyone will like kids. And the complaints that make sense to people now, like just a bunch of crying, changing diapers, is like, I love hearing that. There's people right now, there's variation, and as long as there's variation and there's sexual selection, put that together, and there's going to be a change in the population and the way that we think about things and feel about things, the emotions are going to change. So my view is that it's often hard to see evolution at work over the course of one generation. Over the course of the 10 generations, it's just unmistakable.

So in the future, we are going to have to be very pronatal. And once people are very pronatal, then there's no reason for us to do anything other than just have very high population growth for a long time. And once we can do that, well, where are we going to put all the people? Yeah, we're going, we will in the very long run. Yeah. So, um, maybe in a thousand years, then the course on prediction is quite reasonable, uh, all the way down to settling Antarctica and things like that. I mean, and then, you know, based on my understanding of costs, I think that, you know, the bottom

of the ocean is better than the moon. Yeah, I've heard that too. Yes. So the bottom of the ocean has got problems, but the moon is way worse on so many levels. So yeah, I mean, I think that that bottleneck of getting to another planet that is comfortably inhabitable at a reasonable cost, that's a really big bottleneck, actually. Yeah. inhabitable at a reasonable cost that's a really big bottleneck actually yeah that i mean like i wouldn't be shocked if that took tens of thousands of years actually and that we go and that we do finally go and max out the you know like at least get close to a maximum human population using all

available technology we're using like a crazy so crazy about from modern standards of the of the existing earth right you know like things that are also probably a lot more doable than the moon crazy about from modern standards of the existing Earth. Things that are also probably a lot more doable than the Moon are things like going and draining large oceans to get more land, that kind of thing. So I think that is our long-run future

of looking like Coruscant, maybe even more, maybe even denser than Coruscant, and then having these amazing technologies the future that will sustain us in that bottleneck of getting to other habitable planets seems so big to me right uh again we have these unfortunate facts of like you can't go fast in the speed of light and the amount of energy to get anywhere near the speed of light is also crazy large and you got to accelerate for half the way and decelerate for the other half. And then you show up there and like something could be wrong with the planet.

It's like, well, it seems, you know, from light years away, it seemed like it would be ideal for human habitation. But unfortunately, there's just there's one previously unknown poison in this planet, and it ruins the entire planet. Oh, now what? Oh, yeah. Yeah, yeah. Self-destruct? What are we doing? We were counting on getting energy from this planet here, but it turns out we will melt if we land.

Oh, no. It makes housing deregulation seem easy. It does. Yeah, so you probably know about the Fermi paradox. Like, if there's alien life elsewhere elsewhere in the universe where is it and you know my preferred choke point is it's so crazy expensive to get to another habitable planet and so i think there's probably tons of intelligent life right here in our galaxy it's but numbers that are successfully going and colonizing other worlds at any at a rate that is you know it is visible i think that's probably super low so like you know number of alien civilizations that have two planets in this

galaxy maybe that's zero but like there's the other ones now there's got to be a bunch of alien civilizations but get together but multi-planetary alien civilizations that's my preferred bottleneck i know i'm almost the only person who believes this because i've talked to a bunch of people and they all oh that's crazy brian it's like is it really though it seems really hard doesn't it and the cost it's not just whether it's physically doable but whether it is cost effective to do it. Right, right. Well, at least we can still have trillions of people here on Earth.

Yeah, there's plenty of room. Yeah. Brian, this has been so much fun. I really enjoyed it. Thank you. Thank you very much. Appreciate it. It's a real deep dive.

Yeah, it was. Thanks so much for listening. Two quick things before you go. First, for show notes and the episode transcript, go to my website, jnwpod.com. That's jnwpod.com. And finally, if you think the conversations I'm having are worth sharing, I'd be deeply grateful if you sent this episode or the show to a friend. Message it to them, email them, drop a link in a WhatsApp group, or even better, blast it out on Twitter.

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