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Culture War Roundup for the week of August 19, 2024

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What about the third world kleptocrats looking to escape to greener pastures with their gains?

I read an essay somewhere talking about how suspicion and hatred of the rich was totally reasonable up until about the last 200 years. Rich people were noblemen (descended from those who conquered lands and secured rents) or schemers who'd found some way to secure the bag in a zero-sum universe. You didn't make money, you took money.

This is somewhat true in much of the less developed world. Does the US need an influx of Saudi royals? If you want high human capital, just make them pass a test to enter.

Plus you'd be bringing inflation and higher house prices. Australian and Canadian real estate has been rendered ludicrously expensive by rich Chinese buying it all.

Anyway, I disagree with 1. in that a country is more than an economic zone, there should be ties of blood and solidarity. When the chips are down, wouldn't elite human capital just leave for safer pastures? What incentive do they have to behave in a pro-social way, why should they behave honourably with people of a completely different race, culture and creed? In-group bias is part of the human condition, that's why we came up with the nation-state. Mass immigration reduces social trust and opens up all kinds of divisions and conflicts.

Australian and Canadian real estate has been rendered ludicrously expensive by Australians and Canadians making it difficult to build housing. There's no reasonable level of demand that can't be supplied by the market, when not constrained. (Not to say that I suggest their approach to immigration as an exemplar!)

It takes two to tango! Supply is obviously an issue but so is demand.

OECD population growth average is about 0.6% per annum, Australia is at 2% or higher.

Australia's net migration was 400-500K in the last couple of years, fertility is below replacement so all the pressure on housing comes from migration.

ludicrously expensive by Australians and Canadians making it difficult to build housing.

This is incorrect - it is in no way the costs of building housing that make Australian real estate so expensive. There's a huge variety of reasons, and I'd put negative gearing policies as a much bigger contributor. Throw in the vast amounts of immigration and the incentives created by almost every member of parliament being a landlord and I think that "making it difficult to build housing" doesn't even reach the top 5 for causes of the Australian property bubble.

I read an essay somewhere talking about how suspicion and hatred of the rich was totally reasonable up until about the last 200 years. Rich people were noblemen (descended from those who conquered lands and secured rents) or schemers who'd found some way to secure the bag in a zero-sum universe. You didn't make money, you took money.

This surely can't be entirely true. It would be quite surprising if there were zero or negative returns to ingenuity and assiduousness.

I could certainly believe that that was often the case, though.

This surely can't be entirely true. It would be quite surprising if there were zero or negative returns to ingenuity and assiduousness.

Of course you might be ingenious on your own little farm and do things smarter than the next guy. But beyond a certain size/scale, there is certainly a negative return because your success attracts some bellend to come and take it.

To some extent, this is a circular problem. There's little protection against expropriation, so lots of it happens. Most wealth is therefore expropriated (at least once) and hence there is little social support protecting wealth from expropriation.

Look at the chart of global GDP.

there is certainly a negative return because your success attracts some bellend to come and take it.

While I think this may often have been true, I don't know that that was always the case. Usually emperors wanted functioning empires, for example, which upholding property rights is helpful towards. But social pressure would have been common, of course.

Comparing wealth between times is hard to do with a consistent unit.

The emperor or his governors are the most likely culprits to decide they need some extra grain so their army can conquer/defend.

"In-group bias is part of the human condition, that's why we came up with the nation-state."

Except the "in group" here is highly path dependent. Prussians and Saxons are part of the same nation state, but Austrians are not, even though all three were part of the German confederation. it's incoherent to pretend that in-group bias explains why two of those are together and one is apart. Other examples abound similarly.

Does the US need an influx of Saudi royals?

"Need" is a strong word, but rich oil barrons would fit right in in Houston.

Plus you'd be bringing inflation and higher house prices. Australian and Canadian real estate has been rendered ludicrously expensive by rich Chinese buying it all.

My forex is a bit rusty. Wouldn't rich individuals trying to convert their foreign-denominated assets into dollars result in deflationary pressure on the dollar? My sense is that lots of the Chinese demand for real-estate is speculative in nature. Speculative demand will subside once supply catches up. America has much more developable land than Australia or Canada.

I’ve heard similar things about Chinese demand. That foreign real estate is a relatively safe way to store wealth compared to domestic, since it’s out of the reach of the CCP. But I don’t know how credible this theory is. It’s certainly a tidy way to disdain China, which suggests “too good to check.”

Anecdotally briefcases full of cash (which may or may not also get laundered through government-owned casinos) and empty condos are known elements of the real-estate scene in Vancouver. (Canada)

Wouldn't rich individuals trying to convert their foreign-denominated assets into dollars result in deflationary pressure on the dollar?

Increased demand for USD would, ceteris paribus, raise the equilibrium price of USD (that is, the value of USD relative to the foreign currency in question), assuming a free market in forex / floating exchange rates.

This does mean that holders of USD can purchase more units of the foreign currency per dollar, but it’s nonstandard to call that “deflationary”.

If that foreign currency can be exchanged for goods and services that are useful here, that part is deflationary.

In the case of the Saudis, they already denominate oil in USD and there's nothing else to buy with the riyal so yeah. But for Euro or Yen ...