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naraburns  nihil supernum  1yr ago (text post)   29600 thread views

Culture War Roundup for the week of February 6, 2023

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I think you are fighting a strawman of yimbyism. Of course everyone wants to live in pleasant neighborhoods with friendly stable people and not drug addict criminals! The nimbys don't have a monopoly of that desire.

Since you cited Coase. There's a very obvious path of reasoning that leads to one not being a "nimby", that is being for free markets. If you believe in the power of the market to allocate scarce resources among agents with infinite wants most effectively. Then dense housing will be built where dense housing is in demand because there is no stronger force in the universe than people wanting to make money. Using any form of political leverage to oppose such developments let that be through onerous zoning regulations or whatever is interfering with the free market, and as such creating economic deadweight losses.

A study by economists Chang-Tai Hsieh and Enrico Moretti estimated that the housing restrictions brought on by NIMBY activists are costing US workers $1 trillion in reduced wages, (several thousand dollars for every worker), by making it unaffordable to relocate to higher-productivity cities.

Your preferred mode of living would still be available in a world without rampant nimbyism of the likes present in America. It's not like there are no good neighborhoods with high-earning residents in Japan, or Korea or Finland or the UAE. But you won't have housing prices so ridiculously high that you start dun goofing the birth rates. If there is a demand for the type of living arrangement you so revere, it will exist even in a yimby world, you will have to pay for the privilege though (you already are in aggregate and directly). I've said it before and I will say it again, there is some serious bullshit afoot if random housing in your city costs more to rent than renting a much superior arrangement in the tallest building in the world in pure luxury.

Since you cited Coase. There's a very obvious path of reasoning that leads to one not being a "nimby", that is being for free markets. If you believe in the power of the market to allocate scarce resources among agents with infinite wants most effectively. Then dense housing will be built where dense housing is in demand because there is no stronger force in the universe than people wanting to make money. Using any form of political leverage to oppose such developments let that be through onerous zoning regulations or whatever is interfering with the free market, and as such creating economic deadweight losses.

That is only part of it. the NIMBY debate is about people who exact an externality without the counterparty being justly compensated. Yes, land is being used sub optimally, then optimization should mean all parties are compensated, which is consistent with a free market approach. You want to build an apparent complex in my nice neighborhood, fine, but you owe me the difference of what my home would otherwise be worth.

I've said it before and I will say it again, there is some serious bullshit afoot if random housing in your city costs more to rent than renting a much superior arrangement in the tallest building in the world in pure luxury.

It's not that surprising. Think of how hard it is to transport goods to the top floors of a skyscraper. Prices are driven by connivence, proximity to jobs etc.

You want to build an apparent complex in my nice neighborhood, fine, but you owe me the difference of what my home would otherwise be worth.

Does the inverse also apply? If you want that apartment complex to remain a parking lot, you owe the owner the difference of what his parking lot would be worth if it were turned into apartments? If you're really so committed to maintaining your neighborhood, you should be willing to put your money where your mouth is and outbid every property developer.

Your preferred mode of living would still be available in a world without rampant nimbyism of the likes present in America. It's not like there are no good neighborhoods with high-earning residents in Japan, or Korea or Finland or the UAE. But you won't have housing prices so ridiculously high that you start dun goofing the birth rates.

Uh, have you seen the birth rates in those places? Korea is 0.81. Japan is 1.34. Finland is 1.37. The UAE is 1.46. The US is 1.64. It's not NIMBY or the housing prices for that matter.

I've said it before and I will say it again, there is some serious bullshit afoot if random housing in your city costs more to rent than renting a much superior arrangement in the tallest building in the world in pure luxury.

No, it isn't. Real estate is largely about location, and as a location, Dubai is a problem in many ways.

Uh, have you seen the birth rates in those places? Korea is 0.81. Japan is 1.34. Finland is 1.37. The UAE is 1.46. The US is 1.64. It's not NIMBY or the housing prices for that matter.

YES!! I did not imply that these places did not have bad birth rates, I should have put them in separate paragraphs to make the point and avoid confusion. My point was that these places have the kind of neighborhoods OP wants, AND the income to cost of housing ratio is a lot lower!

Housing prices being one of the many anti correlates to birth rates is another point. But it makes a lot of mechanistic sense.

No, it isn't. Real estate is largely about location, and as a location, Dubai is a problem in many ways.

Price is determined by demand and supply (and not much else), location influences demand. If NYC built more houses, the prices would be lower, this is really not a controversial statement to make. I gave the example of Dubai because I live here, and because housing gets built in abundance and it has some of the lowest housing to income ratios.

A study by economists Chang-Tai Hsieh and Enrico Moretti estimated that the housing restrictions brought on by NIMBY activists are costing US workers $1 trillion in reduced wages, (several thousand dollars for every worker), by making it unaffordable to relocate to higher-productivity cities.

Wouldn't all the workers moving to higher-productivity cities lower the salaries of workers living in those cities? The glut of workers vying for jobs would probably bring the price down more than several thousand dollars for every worker.

They'd be coming from other places reducing labor supply and raising wages there. Even if migration lowers the urban wage by introducing more people as long as it's a higher wage than where they were migrating from it's possible for the average to still increase. Also the mechanism by which you restrict or increase the urban labor supply is by raising or lowering housing supply which effects rents. So if there's a ton of new houses built and a whole bunch of people can move to the city and flip burgers even if that depresses the wages of existing burger flippers they benefit from lowered rent, or the absence of a rent increase, since new housing was built.

But the main argument is that agglomeration allows specialization which increases productivity, and wages are downstream of productivity. If a bunch more skilled people move to the city they can specialize in their most productive niche due to economies of scale. Because they're incredibly specialized and productive unskilled people can earn higher wages selling services to them. You could draw in so many unskilled people that there's no longer an urban rural unskilled wage difference once you adjust for rent, but it would still be a lower average wage then if the unskilled people were selling services to less specialized skilled people.

And that wouldn't matter because on aggregate products will be cheaper (And ultimately everyone is richer on balance). I think @Ecgtheow said it a lot better than I could in another comment in this post.

Now you may say, my backyard is special and I value it over economic efficiency because I discount the value of future/geographically distant people who may want to move there. But if everyone applies this logic to their backyard we make it impossible to increase housing density anywhere, we underproduce an important commodity, and we get a housing affordability crisis. That's great for you because it increases the value of an asset you own, but it's bad for society as a whole because it reduces economic dynamism which libertarian economists are keen to remind us has diffuse benefits

For example, the value produced by biotech firms gets siphoned off by Madison area homeowners who used control of local government to enact regulations that restrict housing supply, raising prices, so that biotech firms have to offer higher wages to induce skilled workers to move there. This slows the creation of an agglomeration effect in biotech and reduces the margins of biotech firms, slowing the rate of innovation which would be beneficial to society as a whole.

This is why unions are better. People teaming up to offer lump some deals drive up the overall price when individual workers would sell cheaper. Same thing housing. If a group hangs up to ban the entire construction of new housing it can drive up home prices. But our system is based on having defectors drive down the price in nearly every business and transactions going to marginal value. Many individuals homeowners would gladly sell off their yard for cash and allowing building in it etc.

They are defecting if you consider getting something and holding onto it and not allowing more of it to be made cooperating. There is another mode of doing things, which is doing things better and doing/building more things.

From a bird's eye view, you want the price of things to go down over time, you want more competition, more things, more goods, more services, and more houses. If your mode of operating is to not grow the pie but instead defend your share then sure, large swathes of humanity operates under those principles.

That’s my point individuals will defect. Sort of a prisoners dilemma where if everyone cooperates to restrict supply of land they can cause the valué to skyrocket in a booming jobs market. But individually a lot of people who paid $500k for their house now worth $1.5 would gladly sell off their backyard for cash.

That's the dumbest thing I've ever heard, and I was an econ major.

It does matter. There are winners and losers. The people two states over who get to save two cents at a time are better off, and the people put out of work are tens of thousands of dollars worse off, but there are enough pennies to balance the tens of thousands of dollars, so it's all a wash!

The world doesn't work that way, and while it can be modeled in such a fashion, you should not confuse that model with reality.

That's the dumbest thing I've ever heard, and I was an econ major.

This hyperbole doesn't add anything to your argument--it just undermines your credibility and makes you guilty of unnecessary antagonism. Don't do this.

Arguably that is exactly the economic decisions that have been taken over the last few decades. Outsourcing manufacturing makes everything cheaper for all consumers but hollowed out steel works and manufacturing in the rust belt.

Now you can certainly argue as to whether that was a good thing ( I would lean towards yes but some of the value should have been redistributed to the losers) But it is basically the essence of the neo-liberal economics of the past 50 years or so. So it is definitely reflective of reality as it stands.

I don't care about what you majored in.

Arguing for maximally free markets is hardly a novel economic stance to hold. And yes I do think 10 people imposing anti-free-market policies to shift 2 pennies from 1000 people so that they could be 2 dollars richer is morally wrong. This is the standard free-market maximalist stance. Also, half the pennies get lost in thin air (DWL) the moment they make their deal with the devil (market restrictions) so they are 1 dollar richer each. I want there to be the most dollars in the world, not some people having a lot of them at the cost of others having less, sue me.

That's definitely a position.

There's a problem with basically lying about how "rising tide rises all boats" instead of admitting that you have this position and honestly telling the people who are getting fucked that they are getting fucked at least, not to mention actual redistributive efforts in their favor.

There was a Scott's post that I was never able to find, maybe of the Links kind, where he was seriously surprised that the majority of economists in some poll admitted that removing import tariffs hurts local workers. Because when you don't ask them directly they are very good at making it seem that the fact that their models only look at the GDP and such is OK because everything else is unimportant.

There was a Scott's post that I was never able to find, maybe of the Links kind, where he was seriously surprised that the majority of economists in some poll admitted that removing import tariffs hurts local workers.

Was it this one? It's about immigration, not tariffs, but otherwise seems to match pretty closely.

It appears I might just be totally miscalibrated on this topic. I checked the IGM Economic Experts Panel. Although most of the expert economists surveyed believed immigration was a net good for America, they did say (50% agree to only 9% disagree) that “unless they were compensated by others, many low-skilled American workers would be substantially worse off if a larger number of low-skilled foreign workers were legally allowed to enter the US each year”. I’m having trouble seeing the difference between this statement (which economists seem very convinced is true) and “you should worry about immigrants stealing your job” (which everyone seems very convinced is false). It might be something like – immigration generally makes “the economy better”, but there’s no guarantee that these gains are evently distributed, and so it can be bad for low-skilled workers in particular? I don’t know, this would still represent a pretty big update, but given that I was told all top economists think one thing, and now I have a survey of all top economists saying the other, I guess big updates are unavoidable. Interested in hearing from someone who knows more about this.

OMG THANK YOU! It's been bothering me literally for years!

How did you find it?

  • Googled site:slatestarcodex.com tariffs economists survey

  • Got the following articles and snippets

    1. Another Followup To "Economists On Education": If I remember my International Economics class, the theory actually suggests that tariffs can make a large, important country richer if it makes ...

    2. Please Take The 2018 SSC Reader Survey: Do you consider persistent depressive disorder to be depression for this survey, or only major depressive disorder? (For that matter, on surveys ...

    3. Book Review: Capital In The Twenty-First Century: Second, catch-up growth provides a powerful force for reducing inequality between nations.

    4. List Of Passages I Highlighted In My Copy Of Capital In The ...: I know that about 100% of economists who are not working for the Trump administration at this exact moment are against tariffs, but I don't ...

    5. Book Review: Ages Of Discord: Although most of the expert economists surveyed believed immigration was a net good for America, they did say (50% agree to only 9% ...

    6. Response To Comments: The Tax Bill Is Still Very Bad: First of all, the IGM Forum asked the nation's top economists whether the current tax bill would substantially raise GDP. 51% said it wouldn't, ...

    7. Predictions For 2020: Conditional on me asking about Reade on SSC survey, ... Economists surveyed during the beginnings of recessions don't generally realize ...

    8. Highlights From The Comments On PNSE: I analyze economist predictions, see that their track record of ... Remember, on the last SSC survey, 6% of respondents said they were ...

    9. A Thrive/Survive Theory Of The Political Spectrum: For a more comprehensive theory of economic self-interest and politics, ... from stereotypical leftist charges of “false consciousness”?

    10. The Tax Bill Compared To Other Very Expensive Things: I remember this Planet Money episode where a panel of economists ... the IGM, which is a nonpartisan survey of top economists surveyed them ...

  • Opened each of the links that looked promising (1, 4, 5, 6, 10) in a new tab

  • Searched for the term "econom" (which matches "economy", "economist", "economic").

  • Found the promising passage in the third article I looked at.

Had I failed to find the passage through those methods, I would have retried the same search with site:astralcodexten.substack.com and site:lesswrong.com.

While it is generally true that Google sucks at search these days, it is still useful if you know what site you're looking for something on.

If you believe in the power of the market to allocate scarce resources among agents with infinite wants most effectively.

I don't think this applies meaningfully to any of my three examples, where the externalities are born by current residents rather than the agents accruing the benefits (in the first case, there essentially isn't an economic benefit).

It's not like there are no good neighborhoods with high-earning residents in Japan, or Korea or Finland or the UAE. But you won't have housing prices so ridiculously high that you start dun goofing the birth rates.

You picked four of the absolute lowest fertility countries in the world to illustrate this point? I cannot express just how confident I am that the price of a square foot of housing in the United States is not an important driver of low fertility rates.

I will concede citing fertility rates doesn't make much sense since that metric is far too confounded. But a strong argument could be made that housing prices are variable in that, Bryan Caplan has a lot to say on the matter.

As for your examples, how so?

I cannot express just how confident I am that the price of a square foot of housing in the United States is not an important driver of low fertility rates

You are absolutely wrong. Population density and it's associated costs are maybe the biggest difference in variation between tfr of developed countries.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1693032/

This is why France, Russia, and the US have had relatively higher birth rates than other developed countries--they all still have quite a bit of low cost free space. On the other end of the spectrum, extremely densely populated over urbanized countries with high cost per square foot of property in east asia, such as Korea, China, and Japan, are on the opposite end of the spectrum.

You can easily see this within the US as well. Places like NYC have abnormally low birth rates, especially among native populations.

This is why France, Russia, and the US have had relatively higher birth rates than other developed countries--they all still have quite a bit of low cost free space.

Russia and France have the same sub-replacement TFR as the Maldives and Qatar, two countries famous for having no free space at all. Next to the latter two are equally cramped Djibouti and the Seychelles, both with above-average TFR.

It makes sense that Djibouti would have a high fertility.

...what do you mean, specifically?

I just checked, and Djibouti's TFR is 2.522, according to this. This is actually interesting when one compares it to Somalia (note: Djibouti's population is majority Somali and overwhelmingly Muslim) with a TFR of 5.661, ie. over the double the rate in Djibouti. Just the effect of Djibouti's (obviously) greater urbanization?

I was making a childish pun about the pronunciation of the name Djibouti.

Russia and France modernized post WW2. Qatar is currently modernizing and therefore is only just now dropping below replacement. It's where France was in the 50+ years ago in the cycle. Obviously modernization is the main trend here that dominates all other, but Qatar doesn't seem to be an outlier at all. UAE is already sub 1.5. Saudi Arabia seems to be behind on the curve, but its still quickly trending below 2.1. It may be the case that in 20 years Qatar's TFR will still be 1.80, but it doesn't seem that way.

France modernized post WW2.

Wait.... Really? By what measurements? I always imagined they were as modern as the US or England prior to WWII and I'm surprised to hear that they weren't.

Basically all industrialized countries went through the modernization that led to declining birth rates post WW2, but France definitely lagged behind Germany and the UK economically before the 2nd world war.

This is why France, Russia, and the US have had relatively higher birth rates than other developed countries--they all still have quite a bit of low cost free space. On the other end of the spectrum, extremely densely populated over urbanized countries with high cost per square foot of property in east asia, such as Korea, China, and Japan, are on the opposite end of the spectrum.

I think this can be explained by demographics, like immigration and high Muslim population in France. Religiosity seems to be correlated with birth rates. Look at the Mormons for example.

Religiosity doesn't seem to have much correlation in general. There are exceptions (mormons, like you said, but even they are trending down fast) and the most religious countries in the world, the Arab peninsula states, have low birth rates that are trending down fast.

This is a complete tangent. But I want some more opinions on this matter. I understand the general two themes of

  1. lower birth rate = Less young people to take care of old people

  2. less young people = less productive working people

I these negative consequences of a lower birthrate; however, resources in any country (or planet) are necessarily finite. So even if there is space now for there to be a higher birthrate in most of these countries, at some point there won't be. At some point it will be NECESSARY to have a lower birth rate (Alternatively a higher death rate, but i don't like that alternative) to account for the resource constraints. And the first issue issue is also a transitory one in many respects as long as the birth rate is at or above replacement, the number of people in the space will eventually stabalise to a consistent level and there will once again be enough young people to support the old. And both could potentially become obsolete someday with the increase in mechanical automation of labor.

TL;DR Can someone give me an argument against the fact that at some point we will eventually need a lower birth rate in at least some parts of the world at a given time.

Earth is nowhere near its carrying capacity, and the human population is more realistically limited by the resources of the solar system on any time scale where the Earth's carrying capacity is an issue. If Human population was about to trend to 40 billion, then Malthusian carrying capacity might become an issue. 9 billion? Not even close.

The biggest issue right now is that modern welfare systems are basically ponzi schemes. The eventual solution will be obvious--drastically cut spending, but that's difficult to achieve in democracies where the people paying are outnumbered by the people being paid.

This just seems like a kind of pointless worry as we don't actually have a high enough birthrate to replace ourselves. It's not at some point we're going to need to dip below positive so that we don't run out of space, it's we crossed that point decades ago and are so far on the other side that things are going to get weird. Unless you're talking on a global context, at which point housing policy in specific countries is not really an important factor.

If we accept that NIMBY policies lead to lower density, then sure. I don't think that's the case. Very few places have an incentive to build up and not out, but regulations increases costs for both.

Or conversely, low costs per area will allow bigger houses to be cheaper.

YIMBYs don't want bigger houses; they want more houses in the same space.

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