108: Noah Smith – Abundance, Georgism and YIMBYism

Play episode
Hosted by
Will Jarvis

In this episode we’re joined by Noah Smith to talk about Georgism, why we need abundant energy, housing, heathcare and dignity, and the success of the YIMBY movement. Noah Smith is an economist who blogs at noahpionion.

William Jarvis 0:05
Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse in the past, where it’s a better, more definite vision of the future. I’m your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com. Additionally, in this episode, my friend Lars du se joins us as a co host. Well, Noah, how are you doing this afternoon? Hey, John. All right. Thank you so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you’re interested in?

Noah Smith 0:50
brief bio. So I grew up in Texas, very close to where Lars lives, then went to Stanford and majored in physics decided not to continue with that. Move to Japan, where I lived for about three years there. And then just, you know, chilling, decided I wanted to become a famous econ blogger. And so I went, of course, I did, you know, grad school, because you have to sort of do that. So I went and got a PhD at University of Michigan, worked as a professor for a couple years at SUNY Stony Brook, then sort of just quit because I didn’t really like academia at all. And and just did the blogging thing. And now I blog at substack. My substack is called no opinion and Oh, h p i n IO n. And that’s all I’m pretty much doing right now.

Lars Doucet 1:45
Yeah, is that was that was that tongue in cheek when you said you wanted to be a famous econ blogger? Was that the plan all along it, it just kind of happen? It

Noah Smith 1:51
wasn’t tongue in cheek. So that actually was why I went to grad school. Oh, really? That’s all I wanted to be like Brad DeLong. You know, I wanted to do that. And yeah, like, I never really wanted to be a professor. I just I tried it out, because sort of my advisors all insisted. So I think if they place professors, they look better. But then, um, but they insisted, oh, just give it a try. Give it a try. So I did, you know, some things were fun. Mostly, it wasn’t for me. And so then I, I just left. And so now, here I am out in San Francisco.

Lars Doucet 2:24
Now, I want to follow up on that because you said you wanted to be a famous econ blogger. And that wasn’t just like an accident that happened to you. That was what you’re actually trying to do. But when you first set off on that, what being a famous econ blogger on the internet looked like, it’s probably a lot different than how it looks now. And I was wondering if you had any thoughts on,

Noah Smith 2:42
I didn’t expect to do it as a job, I expected to do it just as a hobby, I never expected to get paid money for it. I want my my dream was to just do whatever job, you know, I don’t know, consulting, or, you know, whatever. And then, and then have blog on the side, because I thought the Econ blog would allow me to affect the national conversation, sort of inject good ideas into the mix, give good advice to people, I thought bloggers are going to be the most have the most outside influence, you know, over the next couple of decades, in terms of policy and ideas. That’s the thing to be. And so even just as a hobby, I felt like I could make some sort of an impact.

Lars Doucet 3:21
Yeah, well, that’s that’s kind of interesting to me, because I remember I remember reading that sci fi book Ender’s Game. And the most far fetched part of the whole thing was not the 3d battle room was not the space aliens was not even what I now recognize to be the kind of deep dream style fantasy AI driven game. But the two teenagers taking over the world through posting was the like, least, like most far fetched aspect of that book to me. And it seems like I’m eating a little bit of crow on that, in terms of kind of the influence that will actually let’s talk about that is the tension between being terminally online and therefore completely out of touch with reality. And then online personalities like having a lot more influence and ability to change the world than anyone expected.

Noah Smith 4:15
Right. So the thing about Ender’s Game is, you’ve got to be a really good blogger. You know, like, it’s like, all fantasies are just about people doing things unusually well. Well, a lot of anyway, I’ve tried to get my sister to make the lock in Demosthenes blog to ask any blog with me, but she won’t do it. She’s a human rights lawyer. And so, you know, she can’t really blog for her job she, she works to the Equal Opportunity Employment Commission. It would be great to have locked into moss and his blog with

Lars Doucet 4:51
her so you’re telling her that she’s Valentine, the soft hearted Compassionate One, and you’re the evil Machiavellian Peter?

Noah Smith 4:57
I’m the evil Machiavellian brother. Yeah. No, no like that, that sort of also makes me feel bad because I don’t think I was that bad of a brother. You know,

Lars Doucet 5:06
I think you’re probably a little less to district than Peter wasn’t Ender’s Game a little less in any case to get a little like bunnies a little bit on script. You know, you recently tweeted, you know that there’s four things we need an abundance right now. And he said housing, energy, healthcare and dignity. And I think that’s a good kind of overview start for this conversation. Can you talk a little bit about those things?

Noah Smith 5:29
Tech? Yeah. So, um, oh, that’s a Texan ism. By the way. I definitely say Heck, yeah.

Unknown Speaker 5:35
Oh, yeah. That’s definitely it’s, it’s,

Noah Smith 5:37
it’s a more, it’s more emphatic than hell. It’s sorry, it’s six in there. Yes. Um, so a number of people most prominently as recline and Derek Thompson have been, but you know, a bunch of people have been focusing on this idea of abundance, this idea that, you know, we focus so much on on Well, I don’t even want to talk about that. The point is that we’ve neglected the, the, the need to get people stuff to get people a bunch of stuff. And we just sort of assumed that America was this land of abundance, and it was all about dividing up the pie. But in fact, it’s, it’s not to a large degree. We’ve hit sort of the limits of cheap free housing by sprawl. And we hit those limits in 2006.

Lars Doucet 6:26
How do we know specifically in 2006, that we hit those limits? homebuilding. Okay, can you can you

Noah Smith 6:33
just look at the homebuilding statistics, oh, they That was why so 2007 with the limits of prices in six, we hit the limits of like, building out basically, in seven, we hit the and I can, you know, get you some numbers on that. But in in seven, we hit the limits of prices, and then an eighth the financial system crash. Interesting. So essentially, what happened was that we built out so far, that people couldn’t handle the commute.

Lars Doucet 6:55
And is this what they traditionally call like? The the margin of productivity with like, David Ricardo, and all that.

Noah Smith 7:02
Exactly, exactly. And of course, he, I mean, he was thinking of farms, but it really does a similar kind of thing. There’s very similar sort of inverse square laws to all of this. There’s classic economics models with inverse square laws, basically monocentric city model, you can get the all of these models will spit out the idea that land value taxes is awesome, and should pay for everything. Even enjoy, definitely playing. Yes. So you should check out those models. But they also basically say that you get to this periphery. And so we built too far out. Now if we get self driving, you know, electric cars, or very fast transportation into the city, that’s gonna change and remote work might change that. So there if you have fully remote workers, they can go live in Bozeman, and, you know, work for a company in Boston. Right, right. And so like, so really remote work and improve transportation technology might change the equation, but in the short term, we built out to our limits. And then, you know, we started and at the same time, knowledge, economies, this so called clustering economy, started taking over our economy, we, in in the 20th century, we turn from an agricultural nation into the workshop of the world, a factory based industrial base nation. Now in your factory, it’s not that expensive to ship stuff, especially if you don’t care about burning a ton of coal. And you have really good freight rail lines, which are both true of us. And so in other words, you could put a factory out in bumfuck. Nowhere Can I swear on this podcast?

Lars Doucet 8:43
I don’t know if we have a policy, but we’ll beat it if we deserve. All right. I have Tourette Syndrome. So it’s just an ever like, danger at all times. So we’re prepared for it. Oh, really? Do you have the kind of dreads that makes you swear I have all the kinds of Tourette’s Syndrome, unfortunately, including the one that makes you punch your best friend in the nuts every once in a while. That one’s called common practice. Okay, what happens? Let’s

Noah Smith 9:01
just do that. So it’s fine. Maybe don’t go hang up.

Lars Doucet 9:05
Yeah, I have like a bubble. I keep around my friends for this reason. It’s also why I worked from home for 10 years.

Noah Smith 9:12
Wow. Yeah, no, all the people I’ve met with Tourette’s just you know, had occasional like a long stammer.

Lars Doucet 9:18
Yeah, the more we talked about it, the more it will happen. So Oh, wow. Okay, so no, no, no, no.

Noah Smith 9:24
The point is that that with factories, we had this economy based on factories, and then we could put the factories anywhere and we have these small towns later, we connected them with the Interstate at first was just railroads and then and then they could ship stuff anywhere around the country and then on ships to the world. And so that meant that we had this very even pattern of economic distribution around the country. Now, macro agglomeration effects and technology and all these things we could talk about have changed the game so that China is now the workshop of the world and to a lesser extent, other dense, densely populated places. close to the Eurasian population center. And thus, you’ve seen that circle which just circles China Indian is like more people live inside the circle than outside, well, that’s where the stuff is going to be made. And so we’ve been making less and less stuff as a proportion of our economy, not D industrializing an absolute sense a little little bit of that, but then D industrializing in a relative sense, with less less and less important our economy, what became important, we stopped being the world’s workshop, and we started being the world’s Research Park. Interesting. And so, knowledge industries, which are software, high value added manufacturing, biotech, finance, and those are the basic four, those knowledge industries became entertainment, there’s some other things, those those knowledge industries became the core of our economy.

Lars Doucet 10:50
Now, I want to and I want to, I want to probe on something here. So you said agglomeration effect before and so for the sake of our audience, that is something where when you have a lot of productive activity in one place, that makes everybody more productive, right? You know, that’s why people go to cities in the first place. And that’s right.

Noah Smith 11:08
But there’s two kinds of effects here called agglomeration and clustering. And let me explain those. agglomeration is about a whole bunch of different industries want to locate near each other, okay? Because, first of all, they supply each other. But also because a whole bunch, the consumers are also workers. So the workers want to live where the jobs are, and the companies want to go where the consumers are. And so you get this massive agglomeration. New York is the most famous example, this New York, it has everything, there’s manufacturing in New York City, right? Everything is near to everything in New York,

Lars Doucet 11:44
like to have a garment district in the garment district, a diamond district or this district in that district.

Noah Smith 11:49
Exactly. You can get everything you need, right there. And so that’s sort of the original force of agglomeration. And that’s what Paul Krugman is theories are about. And so, so this comes right from Krugman. And so, so that’s important. But then the second thing is clustering, which is within a single industry. So you have software, right? So with software, all the software companies want to locate next to the other software companies. Reason being, that number one, they can share employees and ideas. So employees will flow back and forth between the companies. Number two, capital is there. So like venture capital within a certain industry, you have all the VC firms right there in the Bay Area, you have and then so you have the tacit knowledge spillovers, you have the concentration of capital, and you have thick markets within a specific domain. So you have when you have very highly specialized workers, software engineers, right? Who would be it would be very hard to retrain those people to go work in finance or bio not that hard, okay, but not super easy either. It would take them years to get used to the new industry. And so basically, you have these super specialized workers, everyone, every software company wants to be in SF, because that’s where the best engineers are. Because that’s where the ideas are. And because that’s what the venture capitalists, that is called a clustering effect, it’s within a single industry. So we’re moving away from the model of everything gets done locally, to you know, because everything’s manufacturing based to this, everything, you know, the most important economic activities and knowledge based, and they clustered together in the cities with a huge number of educated people. Right, so you can name you can count on like a couple of hands, the cities that have been the winners, the big winners of this, San Francisco, New York, LA Seattle, you know, Austin, and you know, a few others, and then the college towns, right, you got like an arbor college stations getting their route. And then, you know, other places like that Madison, Wisconsin, and so then that’s been the driver of a lot of this housing unaffordability in the big cities. If you look at housing prices overall, in America, they haven’t gone up that much, they’ve actually gone up about the same rate as incomes. So you paying about the same percent of your income if you’re just a median schlub, you’re paying the same percent of your income for your housing, whether you’re buying or renting now as you were in 1980, right, but but that there’s huge geographic variation, because, you know, if you’re out in wherever, like, you know, some decaying factory town in Indiana, it sucks to be there. And yeah, the house is cheap, but it sucks to live there. And half the people leave, and the rent, the other half can’t pay for the upkeep of the roads and the public goods, and everything starts to crumble, and then everybody does a bunch of meth. And then everything’s filled methods and the methods start hanging out in the shuttered stores and pretty much your meth town and then you suck and then you vote for Trump or something. And so then, that sucks, and meanwhile, everyone’s piling into the cities, but The the landlords have taken all the value from that the companies and the workers are creating the value, you know, and the landlords are just taking it. This idea that companies are appropriating all the value from the workers in this Marxist blah, blah, blah. That was in an era of cheap land that Marx thought of that Marx, like Henry George was out there in a, you know, in a place where there was expensive land, and he was saying, No, it’s the landlord’s take it all guys. Like that seemed an antiquated notion to Marx. Because everyone is building up these factory towns, George happened to live in a place where land was really scarce. At that time, land is scarce everywhere now. And clustering makes it more scarce. Because every single software engineers piling into Silicon Valley, okay, so every single finance person is piling into New York, or at least was

Lars Doucet 15:45
and so when you’re saying clustering, you mean like within a specific industry, you’re saying like the effect of clustering, specific to knowledge industries, is stronger than it was for old school agglomeration?

Noah Smith 15:56
That’s right, because old school agglomeration was was limited by the fact that you could ship stuff from from cheaper places out of town. Gotcha. You know, you had a lot of manufacturing in New York City, we got a lot of manufacturing in upstate New York, right? They would ship stuff to New York City, or even in Germany, that would ship stuff to New York across the sea. So like, because ocean transports always cheaper than land.

Lars Doucet 16:19
Okay, so let’s physics, let’s probe here on the whole work from home angle, right? Because if we go to work for Home, we’ve kind of invented like crappy teleportation, right, I can send my face and my words somewhere, even if I can’t physically be there. And it’s not as good as being there in person for certain things. But like, I can have a meeting and I can talk to a person and I can talk to Noah Smith and William Jarvis, even though I have no idea where the two of you are right now, you know, and we can do this. And we can do lots of other things, too. But even so, it’s not quite the same as me being able to teleport from Pluto, because there needs to be good internet, like freaking here physically. And there also needs to be like, food in my refrigerator somehow and other services and local industry to like, keep me alive and happy and entertained or whatever else I want. Right. So what effect does work from home, in your opinion, have on the clustering effect? And on just the margin of production? In general? You know,

Noah Smith 17:20
we do not know yet. Okay, that is a giant question. It is, everyone’s been talking about the death of distance, right? If we have teleportation, we can live anywhere. If you’ve read the Hyperion books, everyone just has these teleporters. And they just live out on some like, lonely, abandoned planet out there in the universe, and then just like step into the bathroom on a different planet. And so that is the true Death of Distance. Spoiler that doesn’t work out. But anyway, so read read I period. Um, but in real life, we don’t know how well it’s gonna work. Because at the office, you have serendipitous interactions that build relationships allow and build your human networks allow exchange of tacit ideas, and allow for a sort of, you know, I guess, competitive organization, ladder climbing and stuff like that. You have that you have interviewing, it’s very hard to interview remotely. Even if hanging out in person is just 25% Better, whatever, then online, that will add up across a huge number of people and clustering will still be very robust. So my guess is that there’s going to be a bifurcation we’re going to have, we’re going to have 85 90% of people work in the office three days a week or whatever, and then work flexibly work from home etc. And so there’s going to be a reallocation of working within the city, but everyone’s still going to live in the city. And then 10 to 15%, I think are going to go for remote and they’re going to live in Bozeman, Bangladesh. I mean, you can’t go too far to the timezone it becomes harder. But um, there those people are going to go live in in you know, Vietnam, or somewhere or or just, you know, Bozeman, Montana, I think, hot new town.

Lars Doucet 19:08
I think there’s also like two interesting angles explore with that I’m, I’ve learned not to do double barreled questions. Last one. But I’ll just make a mental note about the second one. One is that, but what about the effect of making basically giant virtual bedroom communities? Like where are we already seeing effects of like housing being bid up in places where it’s cheap to live in? They have good internet and you can telecommute into Austin or whatever. Are we not saying that?

Noah Smith 19:32
Absolutely, absolutely. And so that’s, that’s, um, when I said, Bozeman, I really just mean I’m using that as a stand in for like, any place any, any pop up bedroom community. And I guess my point is that this, my prediction is this will take the edge off clustering effects by 10 to 15%. Okay, if that’s not going to be significant enough for this problem goes away. I see. No, I think we’re seeing distortions in the numbers. I think we’re seeing a giant price spike in these cities. That’s not going to last that’s just the inflation generi excess pandemic demand era that’s gonna subside pretty soon. We’re also seeing a reallocation between commercial real estate and, and residential real estate because of the flex time work thing within cities, that’s gonna be important, but I think that the full work from home, you know, teleportation kind of idea that is going to be marginal. And so we’re still gonna have this problem of clustering, we’re still gonna have this problem where we can’t get enough, get enough housing unless we build it near the big cities near the near the fancy towns, big cities and college towns, knowledge hubs and college towns. Those are the places the the Bay Area’s. And the Ann Arbor is of the world of the places we need to build a housing. And that doesn’t mean we need to build it right in the middle of San Francisco. Although that would be nice, Dean Preston should allow a lot of housing in his district in San Francisco. But that’s not going to really solve the problem completely. It’ll take the edge off. But what will really solve the problem is if every city in the Bay Area has some sort of incentive to build housing, if Daly City has incentive to build housing of South San Francisco and Burlingame and San Mateo, and Oakland, and Fremont, and Berkeley, and Marin, and all these places, just build a lot of housing, and then people can commute into the city like they do in New York, or like they do in Tokyo.

Lars Doucet 21:15
So on that note, go ahead. Well,

William Jarvis 21:18
yeah, I’m probably gonna ask the same question largest is going to ask here, but correct me if I’m wrong here, Lars. how possible is it for us to push through zoning reform in the West giving? You know, housing is kind of a backbone of welfare kind of this middle class, upper middle class that has kind of emerged in the United States?

Noah Smith 21:36
Well, it’s that’s a problem. But it’s not as much of a problem as you think. So the I have to say that the idea that nimbyism is around preserving property values. Yeah, is wrong. Oh, really? That’s wrong. Interesting. Why

Lars Doucet 21:50
is it wrong?

Noah Smith 21:51
It’s really because NIMBY, because, because when you build new housing, it doesn’t lower property values. Interesting, it raises

Lars Doucet 21:59
so So are they wrong in that they believe, erroneously, that it will reduce their property values, or they don’t believe it will reduce their property values. And that’s not why they’re doing it. But we believe we believe erroneously, that that’s why they’re doing it, it is

Noah Smith 22:13
a euphemism, okay, some people’s property values will go down, some will go up, more will go up, then will go down, some people’s property values really will go down. And that, you know, lower my property values has been a euphemism since the age of white flight. And it is very clear exactly what it is a euphemism for it is for poor people, especially poor black people, but not just poor black people moving in near you this idea that if the if you have apartment complex with poor people living nearby, then the wrong sort of people will move in there and then the neighborhood will go to hell. That is, or if or if you put in a train stop, then the wrong sort of people will ride the train to your stop, get off and start walking around in front of your house where your little children are playing bla bla bla, that has been the fear of white flight type of people for a long time. And it is not we call it white flight because it came from an era where America was primarily white and black people and black people were much poorer black people were still poor. But now you know, we have a much more multiracial nation. And, but but the the basic pattern remains.

Lars Doucet 23:22
So it’s more about preserving neighborhood character, which is something that’s preserving

Noah Smith 23:26
every character. Right. And that is not a euphemism, though. It’s a euphemism, but it’s true. It’s like, yes, a dense neighborhood will have a different character than your sleepy little suburb where only rich people live. That’s the point. Right? Like, we don’t want to preserve your neighborhood character. So that’s why people are NIMBYs. And there’s a lot of strategies we can do to sort of mitigate that nimbyism, but we’re not going to actually destroy the model, the housing based wealth model in the United States, we are not going to destroy that by building dense housing, that that model is alive and well in New York City, the densest city in the country. I promise you New Yorkers, property values are doing great. I promise that building housing in Manhattan does not lower those people’s property values. And so the homeowner class is going to do fine. You know, it’s it’s property tax that threatens the homeowner class. That’s where the property tax, including land value tax, that is where the real fight is over housing wealth, and these people like, Oh, my house is all I have for retirement. And then you have all that stuff. And that is where that fight is. But in terms of zoning, liberalization, it’s all just about keeping the poor people out of your neighborhood.

Lars Doucet 24:36
So I mean, do you think that means zoning reform will be easy, so to speak, if we if we start pushing Oh,

Noah Smith 24:40
it won’t be easy, because, you know, sort of this staying away from people you don’t want to live next to sort of the American national pastime, right? Anyone who tells you it’s baseball or sex is wrong, right? That it’s exclusionary zoning. That’s the American national pastime. And so then we so that The answer has to do at the state level. Okay? Everyone knows housing needs to be increased, no one wants it in their backyard. Instead, they’ll kick it up to the state level. And the state will simply order municipalities to build more housing. And they’re doing that right now you can see this with housing elements. So you guys know about housing elements.

Lars Doucet 25:15
Tell me about housing elements. Okay, basically, the

Noah Smith 25:17
state says you have to you have to have a plan to build this much housing, what’s your plan? And then people are like, Okay, here’s my plan, it’s complete bullshit. And it will actually build only about 1/10 of the housing that we claim in this report. And the state’s like, No. And if the state says no, then you have a period of time where anyone is allowed to build anything. It’s like, oh, chaos. So then, California,

Lars Doucet 25:40
so so so. So that’s the stick is it’s like, it’s like, I’ll allow you to have your plan. But if I don’t like it, then all the cowboys can build whatever the f they want.

Noah Smith 25:49
Yes. And that’s the idea. And that is the really the tool.

Lars Doucet 25:53
And we have we seen success with this? Are these zoning reform movements succeeding in places?

Noah Smith 25:57
Well, LA’s housing element got rejected, I believe, um, let me just make sure that that actually happened. They were just threatening to.

State reject la housing plan update that from February, state housing regulators rejected Los Angeles a blueprint for increased development over the next eight years telling the city it must rezone by mid October to accommodate 255,000 new homes instead of over the next three years, or risk losing hap risk losing access to affordable housing grants. Okay. So then.

Lars Doucet 26:29
So is this kind of like housing that the the federal government uses highway funding to like push people on like, the drinking age laws and stuff?

Noah Smith 26:40
Right. So, um, but there is, I believe there’s another stick where they have like, you have like massive up zoning if the if the housing element doesn’t work. So basically, if you want to be NIMBY, you’ve got to come up with a plan to not be too NIMBY. Gotcha. But I have to look more into the legal particulars of what the stick is on that. But anyway, so then this is really what you do. And of course, there’s other things you can do, like, automatically allowing by right, by, you know, as of right construction in various locations like Scott wieners. Bill,

Lars Doucet 27:13
and what is my public housing, what is what is my right construction? As of

Noah Smith 27:17
right construction, and sorry, buyer at the grocery store. Um, as of right construction is basically like, if you’ve got all the permits, and you meet all the qualifications, you can just start building and no one can hold you up.

Lars Doucet 27:29
Okay, so it means you don’t have to like ask for a zoning variance or whatever like it. Right. Right. Right. So that’s the lowest burden of paperwork to just go build.

Noah Smith 27:39
Correct. Gotcha. And so then, so that is very effective. Yes, and you can do things like eliminating parking minimums, and eliminating setback requirements, and bla bla, bla, bla, bla, and the mandatory allowance of like, duplex and multiplex conversions, which is very attractive for homeowners looking to get extra income, which is why it’s cool

Lars Doucet 28:02
is that when you take an existing house and split it into two dwellings, or whatever,

Noah Smith 28:06
exactly, right, exactly right. And it’s like, well, you know, or you can add an adu, you can add one of these little like, inlaw units in the back.

Lars Doucet 28:14
And then that’s an accessory dwelling unit, right?

Noah Smith 28:17
accessory dwelling units and in law, as they’re called. And that’s you get an extra person there. It’s like you get a tenant, suddenly, you’re living in the same house. But now you’re a landlord, right? Now you get money, you get cash, and you can monetize your house. And you know, and still and yet still live in it. And so that’s pretty cool. Duplex and like triplex conversions, or whatever. That can often make a homeowner more money, or landlord more money. If you have like a second home, you want to do that and rent it out, blah, blah, blah.

Lars Doucet 28:48
And is this what we call missing middle housing, where it’s like, it’s like a lot of people when they hear density, they think I’m gonna come in and plunk a tower right in the middle of your single family neighborhood. That’s right.

Noah Smith 28:59
This is this is missing middle housing. And so that’s like, you already know every single answer to this. And you are explaining these to the podcast listeners. Yeah, that’s that’s the stick. What is happening right now. Exactly. So. So thank you for translating.

Lars Doucet 29:11
Yeah, we got we got to do it on some of these more like econ heavy jargony podcasts. Just absolutely. Please do.

Noah Smith 29:17
Thank you. All right. So um, yeah, so basically, these are the this is what’s going on with housing abundance. But we’re moving. You know, I just wrote a blog post about that the other day about how we’re sort of moving from this era where everybody fought over the methods by which things would get done. Do we want the government doing this? Or do we want the private sector doing this? Oh, yeah. Do we want developers making profits? Do we really want to raise taxes, shut up, just build more housing. So the point is that the houses exist, and then how you get there is of secondary importance. So I think that in crunch time, you throw out the squabbling over methods and go instead for just focus on goals and I think that’s that’s happening. Ending successfully in housing. It has not yet happened successfully in healthcare or energy.

Lars Doucet 30:05
Okay, so So can you clarify a little bit like so. So you’re saying, goals, not methods and your example, I’m gonna repeat back what you said, just make sure I understand it is that this isn’t just for the audience, I’m actually making sure is that so like methods focused is like, okay, so if I’m on the left, I’m like, well, housing would be good, but it has to happen according to Nice, good little Marxist principles, and nobody can earn any money. And if I’m on the right, I’m like, well, housing can happen. But the government can’t be involved in any way. Because that’s, that’s, that’s tyranny and theft, or whatever, is that kind of what you’re getting at. And you’re like, the point is, you get housing to happen, and I don’t care how.

Noah Smith 30:45
Right? So in, you know, you’ve had in housing stuff, you know, I, in fact, I’m, I’m having some success converting people to this idea. I just talked to a libertarian guy in San Francisco, who says, oh, we can’t do public housing, because the state has low capacity and can’t do it and blah, blah, blah, I’m like, No, build the housing. If it doesn’t get built, because the state has low capacity than fine, they’ve got to learn somehow, you know, but just but just do the thing. And so then I’m, you know, I, I think that that argument is finding resonance on the on the left side of things, I think I’m having, we are having success, convincing people that actually allowing private development is not the end of the world. And it actually helps middle class and poor people. And I think it’s been slow going, because a lot of the people who want to keep their neighborhoods exactly the same, ie not let the poor people in, they fight very, very hard to claim that allowing any new construction is jet will cause gentrification, rising rents, displacement, destruction, blah, blah, blah. That’s wrong. We just, there’s just no evidence for that, even in the short term. Yeah. Yep. Nothing. Like we’ve looked for evidence for it. It’s just not there. It’s like, no, if you build more rents go down. It’s like, very, that’s not true for everything. You know, if you build more highway extensions, often you’ll have an increase in traffic. Not always. But you can. But it turns out with housing, it’s pretty it’s it’s pretty simple. Interesting. Now, you were sort of myth that if you build this big building for yuppies, then all the other yuppies will be like, well, that’s a cool new neighborhood. I want to go there. And then you’ll just draw in yuppies, from far and wide. It turns out, that doesn’t really happen. What happens instead? Instead, the yuppies were already moving there, because what they really move for is their jobs. What yuppies are really moving to San Francisco for is their jobs, right? That’s where their company is. That’s where their job is. They move to San Francisco for the job. And then they look for a place to live. And what’s happening is that they’re going around, essentially bidding up and turfing out the middle class families and the small apartment buildings that are bound in San Francisco. So that when you build them a giant fish tank, on a spot that used to be a parking lot or something, you build them a giant fish tank right to hold the yuppies and the yuppies are like well, I could, you know live in this aging Victorian with no climate control and no insulation, and blah, blah, blah and spend all this money remodeling. Or I could just go live in this place with this pool and this common area with other yuppies? What am I going to gate security and whatever. What am I going to do? I’m going to live in the yuppie fish tank like nine out of 10 will choose that we’ve sort of left the era where yuppies wanted to pretend that they were Bohemians by going in just like living in you know, like college dorms forever. I think that that that was the 2000s really the Jack Dorsey era. But we’ve sort of left that. And now yuppies are willing to be yuppies, and then, you know, we build these fish tanks. And then they just they go there. And then you know, it’s like we’re saving your neighborhood from a yuppie by by by sticking them in these yuppie pens called, you know, market rate housing development.

Lars Doucet 33:57
I just realized that. Yes, it rhymes with Guppy. And so that’s, that’s good. That’s good.

Noah Smith 34:02
It really does. Well, that is that is where that comes from. So

William Jarvis 34:07
what will know why why have we gotten to pragmatism in housing and not healthcare and energy? It seems like there’s clear paths forward for energy, right? Nuclear power, all kinds of different stuff. You know, health care, maybe less clear, but But why have those two been so resistant?

Lars Doucet 34:23
Yeah, hit us with goals and methods for health care and energy.

Noah Smith 34:25
So all right, so let’s talk about energy first, because energy there is there is lots of room for very rapid and immediate progress on this idea. The fact is, a lot of people’s jobs depend on oil and gas. And those those regions where those places provide employment such as Texas have fought very hard or a lot of people, at least the Republicans in those areas, and sometimes occasionally Democrats like mansion have fought very, very hard to keep fossil fuel industries alive so that people will be able to keep doing the same jobs they did. We hear about coal miners, but that’s only a small part of it mostly work. Talking about people who work in the oil and gas industry, shale. And these are blue collar jobs, too. You know, these are, these are the kinds of things like good manufacturing jobs disappeared. But then you can still as a blue collar person with just a high school degree, you can get a very good salary working on like an offshore oil platform, or something like that working in a shale drilling place like that’s where blue collar people can still make a good living. And now we want to get rid of that. And you know, sure, you’ll be able to get a job installing solar panels, but it might not pay as much. And so. So that’s, that’s a problem. That’s difficulty. There’s also there’s there’s nimbyism in terms of energy as well, because a lot of these sort of legacy environmental groups value open space. They’re like, we like

Unknown Speaker 35:45
having a nice view of the mesa. So we don’t want you to build solar there because it looks unsightly.

Noah Smith 35:51
And that’s these NIMBY, that’s the NIMBY voice by the way. And so

Lars Doucet 35:54
that’s like, you can’t i can’t build this wind farm, because it might kill a bird. And that means we keep the coal plant open, which kills 100 times as many. Right?

Noah Smith 36:03
And then it’s not even killing the bird. I mean, like for some like Audubon Society, maybe cares about killing birds. But then the No, it’s a views. It’s people’s views. Interesting. It’s people people want to have their nice views of hills without wind farms. Apparently the hills with wind farms look worse to them. Now, I think the hills with the wind farms look better. I actually do think solar plants look bad personally. But I think the wind farms are great. Like I love the force of windmills. They’re just majestic and great. People have different opinions and Americans have terrible taste in like,

Lars Doucet 36:35
everything you’re just making today. No. Yeah,

Noah Smith 36:39
Americans have terrible aesthetic tastes. We just wear t shirt and jeans. That’s all we wear is T shirt and jeans. The only kind of architecture we know that we like or Brooklyn brownstones. That’s the only kind of building that anyone knows that they like. I like Brooklyn brownstone. That’s like, urbanists are just like, just now learning to appreciate a diversity of architectural styles. Like after years of just thinking brownstone was the only good one that was possible. Americans are rubes were Hicks. We’re a nation of hicks. And that’s fine. You know, we’re a nation of hicks that’s having to become a nation of cities. It’s peasants into Frenchmen here, which is a great book, by the way. But we’re, you know, we’re experiencing the infill of a country that was once defined by extensive frontiers. We spread out and out in the wagons, you know, slaughtering Native Americans. I’m sorry about that. dispossessing people, but we were this country of frontiers, we spread out. And later, we spread out into the suburbs, we built out into the excerpts, we built these giant McMansions that we’re two hours away from a city. And, you know, we sprawl that way. So we had all these frontiers of land, and we’re done with that, at least until remote work gets much better, and gets to be real teleportation. And at least until that, or you know, maybe self driving electric cars, personal air transport, I don’t know. Until then we’re out of land frontiers, we’ve got to infill we’ve got to go in back and fill in the spaces that we sprawled into before. And this is really what that’s our, that’s our quest now. And you can see this with socially as well. And that’s what the redistribution of the production of increased dignity is that our society was a society where since everyone could really spread out, we could all be assholes to each other all the time. Because good fences make good neighbors, and we could be assholes. As long as we didn’t have to see each other that much, because he could put up a fence. Right? And now if we’re having to fill in this whole thing, we’re gonna have to, we’re gonna need to make room for people. And this is true at the social level as well. A lot of people that we didn’t give dignity to we’re gonna have to give dignity to and so I think you see with young people, the body positivity movement, it’s like, can we please stop making fun of fat people because that’s shitty. And like, that’s, there’s no reason you that we have to make fun of fat people. There’s no reason that we have to tell fat people, they look bad. Like, that’s mean, that’s bad. And so so we don’t have to redistribute dignity. It’s not thin people are not going to be hurt if we stop insulting fat people. Right? It’s just now now we accept a greater number of people so you can produce this abundance of dignity. And I think that the internet has brought us closer together. Even more than dense neighborhoods, I think the internet is bringing us closer together. And we’re having to infill our culture in ways because we can’t just say all those other people suck and I’m just gonna walk away from them anymore because everybody’s sort of in the same room with everybody else on Facebook, on Twitter and Instagram. Tik Tok, and then because of that, we are having to we’re confronting the fact that our society denied dignity to a lot of people. And I think ultimately, the social movement that people call wokeness is largely about that. It’s about you know, like, we can’t you know, we can’t have like, a bunch of all our like movies and TV shows have like zero agnp balling them anymore. It’s just not. That’s not cool. That’s like denying people dignity that they deserve. Right we yeah, we can’t have like, there’s anyway, all that stuff. That doesn’t mean I’m on board with everything woke, right? It doesn’t mean I’m like woke people are right about everything. No, but I think that there was a reason for that movement, which was people realized that there were a lot of people who just weren’t getting dignity in our society weren’t being afforded dignity by our culture. And what we need to do, instead of focusing on redistribution of dignity, instead of redistribution of like, you know, we’ve got a, we’ve got to, like, you know, hate on men so that women can do better. No, that’s really that’s redistribution, any thinking that is sort of, you know, a communism of respect,

Lars Doucet 40:46
right, like zero sum DVD.

Noah Smith 40:49
Right? We’d like we’ve got to shit on some people. So other people feel good. No, we’ve got to produce dignity for everybody. We’ve got to have an inclusive society where basically everyone gets respected instead of just, you know, and there’s not we don’t think of it as like, some people have to be disrespected in order to respect these other people. We’ve got to just respect everybody. We’ve got to increase respect for everybody. And I feel that that was sort of the original ideal of democracy in America. If you read, you know, Alexis de Tocqueville, you read a lot of stuff. That was sort of the democratic ideal was a lot about social respect was like everyone, everyone gets respect. And that’s, in some ways, that’s the idea behind our housing, dreams as well. The idea that, you know, like, your home is your castle. You know, Huey Long what was he Long’s campaign slogan, every man a king

Lars Doucet 41:42
chicken, every pose that someone else

Noah Smith 41:44
know, that was a chicken. Every pot was on I remember Warren Harding, maybe, Calvin Coolidge? I don’t remember. Anyway. But but every man a king, that was the idea, of course, a little sexist, but okay. And the idea that there’s this egalitarian impulse in America that we’ve forgotten, the way to create that egalitarianism is to build up everybody is to create more dignity in our society. Now, here’s here’s adopting a bunch of assholes and shitting on people to make ourselves feel good about ourselves out

Lars Doucet 42:17
here. Here’s some thoughts I have because I am a Norwegian. In addition to being a Texan, I’m a Norwegian citizen. My mother is an immigrant. I was born in Texas and raised in Texas. And what’s really interesting, having a foot of both countries is Norway. Compared to Texas, Texas is sometimes like seen as like, you know, we don’t bout any kings. It’s like you compare it to like posh London, it’s like, you know, seems like maybe not a super stratified society. But I’ve never been anywhere in the

Noah Smith 42:43
world. I stayed no till next to the king’s house. Yeah, Norway. Yeah, well was so King was my neighbor.

Lars Doucet 42:47
Exactly. Wilson, what’s crazy Norway’s I’ve never been to a place that says radically egalitarian is that I mean, it’s got its stuff. But like, in Norway, like one of the things my wife said to me, when we came back was it’s like, there’s so many blue collar people here that like are not like super conscious that they’re blue collar, like your cousin is an electrician. And that’s like, the same as if he was like, a like, like, an insurance salesman, or a dentist or something. Like he has a good wage, he owns a house, you know, he has any respect that he would have here in America if he was white collar. And in America as much as we think that we’re doing better than the British in terms of like poshness and class. Like we very much have those divides. I mean, racially, of course. But even aside from that, you know, and it’s it wasn’t totally pointed out to me, it’s like, oh, yeah, that really is there. And I mean, in Norway, it’s like, I’m not saying like, we don’t have hierarchies. Like there’s all get a Norwegian in their cups. And they both say some interesting things about immigrants, for instance. But additionally, like, there’s this notion in Norwegian culture called the law of yuanta. It’s kind of pan Scandinavian of just like, like, being too under egalitarian is like a way to like, make everyone hate you, you know, is that it’s a very aggressive kind of egalitarian ism. Not too big for your britches. Yeah. Not not quite like French style. But what but it’s interesting, because it’s an explicit goal of the country. And you see that like, the king was a the whole royal family was elected 100 years ago or something. Like they had the choice to be Republican, they picked a king, and he seems to have gotten the message that that was, you know, like he did everyone loves to take pictures of him whenever he’s on public transport and stuff, you know? But so with dignity. It’s interesting that you want to move it to a zero sum path because some people say dignity is inherently zero sum because it’s about a linear rank of where you are in the pecking order. Right. You know what I mean? It’s like, here’s like, an A high school is like the perfect example. You’re stuck in high school. There’s no other social context. You You are ranked? I mean, I mean, some of them even rank you academically, but I just mean, like socially, like, and it’s very clear who’s where it’s like, prison in that way. And so do so I think what you’re saying is like the way to to similar to is the way to make get us out of the zero sum redistribution fight about dignity where me getting more dignity means taking dignity away from you is to like create more like social contexts or whatever or what do you think?

Noah Smith 45:31
I do think that is right. And I think that deserves its own whole podcast. I think you hit upon it exactly. But, but I think that it is so so when you’re talking about status, that’s very hard to make positive, some because status is based on hierarchies, and you’re saying status is not dignity. Dignity is not, you do not that, you know, nobody having to bow to anyone as they walk past. Like, nobody’s dignity depends on being bowed to the status. Yes. If I want to be like, you know, a big shot, then absolutely. But if if what you want is to just be, you know, just to, like, have basic dignity as like a citizen, and be respected and things like that, that doesn’t actually require anyone to bow to you. And so you can, you can create it for everybody. It doesn’t require tearing anyone down, to build other people up in terms of dignity, in terms of status, it does. So I think de emphasizing status and emphasizing dignity and respect more is the key interesting, we’ve got just you’re a person, you deserve dignity, you deserve respect, you’re a citizen of this country, even if you’re not a citizen, just have a green card, I’m not going to disrespect you, but you. But you deserve respect. Right? Right. And then I deserve respect, you deserve respect. And that is the idea that America is missing. That is an idea of abundance, that I think would would heal, or at least, you know, ameliorate many of our current social disruptions, many of our current social divides, if we can just create a culture move our culture toward a culture that is not based on finding reasons to shit on people all the time. And so and that’s what this culture of abundance can do.

William Jarvis 47:25
We know it, this brings up a great question we have you know, we’ve had many guests on the podcast, talk about political polarization, probably had 10. Now that if they’ve talked about it kind of in depth, pretty much all of them come up with the answer. It’s social media, like that is the answer, kind of we get back? What’s your thought on that? What is driving this kind of political polarization we have? And that’s the answer has to do with like, not giving people dignity or something like that.

Noah Smith 47:52
There’s a bunch of stuff. Um, what’s not driving it, by the way is immigration. That is just not a factor behind political power. In fact, that’s gonna that’s going to reduce political polarization. Because when a whole bunch of conservative Hispanic people start voting Republican, it’s just gonna blow everybody’s, you know, expectations out of the water, and they’re gonna go and then like, their narratives are gonna go out the window. But um, so it’s not it’s not immigration. It is a part of it to the internet. You know, Twitter especially, I would say that the Twitter is worse than Facebook, because Facebook has replaced the old chain emails and Drudge Report and all that crap. But then Twitter’s created something new, which is dunk mobs just warring dunk mobs all day. And we’ve we’ve taken all the journalists and politicians in America and thought leaders and trap them in a room with dunking teenagers all day and that’s what they hear all day is just these asshole like teenagers just you know, and and just unhappy people just screaming and ranting, Saira Rao or some shit all day is what they’re being exposed to. Anyway, Twitter’s terrible. And we could do a whole nother podcast about that. A second factor is the big sword. So if you read that, that book, it’s about how basically, liberals were like, well, we don’t want to live in a, you know, small, podunk town where everybody’s conservative. So we’re gonna move to a college town or a coastal city. Right? And then you can see the big sword within Texas people moved to Austin, like liberals moved to Austin. That’s where we got the culture of like, slacker and Richard Linklater movies and stuff. We that was and like 80s 90s Austin is where we got that. And then in the whole country, you know, people would move to San Francisco to New York to San Diego to Portland, wherever right to the coast, Boston DC. And so then um, and then we sorted ourselves now all the Liberals are really mad because the you know, the way we divide up electoral votes and districts and all this stuff, really down weights, urban agglomerations, and cities in terms of the political power they get, and so they’re really mad, but that’s what they got because they moved away. They want to still be able to control the government. Well All physically removing themselves from the rednecks that they didn’t like grown up with. And so that’s, that’s a problem because our system is not set up to do that. But also, it means that everyone can sit there in their own town and imagine that people far away are the bad guys, you know, like you can sit in San Francisco and imagine that the world would be great. If it were just for these Republicans. And then locally, what are you doing you’re, you’re a progressive quote, unquote, but you’re voting to block housing. You’re a Republican, you’re voting Democrat, but you’re a Republican, you don’t want poor people living next to you. That’s when you know, you don’t especially want to pay more taxes, stuff like that. Maybe you vote to ban drinking straws, or some useless crap like that. But you are functionally Republican. And yet, you’re sitting there telling yourself all day, that it’s it’s those people in the red states that are, you know, that are ruining this country. It’s like, it’s, you know, and then if California ever, ever, ever succeeded, you’d get conservatives and liberals, Republicans and Democrats dividing up very quickly, right? It’s only because it’s part of this greater unit that all the Californians can imagine, well, I’m a good progressive, and if the if this nation, were just California would be so much better, blah, blah, no, it would be the same. You’d vote I mean, there would be a few differences, like gun laws. Mostly, it’d be the same. And oh, but people don’t realize that. So the sword, this big sword and the treating of political groups like sports teams that you cheer for, and then you get, like, the only time I’ve ever seen hatred, similar to the hatred of Republicans and Democrats in this country, is Michigan versus Ohio State. That’s the only thing I’ve seen that approaches it and it’s the same thing. It’s like, you know, people are just watching these elections, like sports teams and and a few people are realizing like actually, the you know, that one party wins the election or another party, there’s sometimes there’s consequences, and sometimes there’s not consequences. But then it’s like,

Lars Doucet 51:56
what’s funny when you compare him to sports people be like, he’s not taking politics seriously enough? And I’m like, No, I think you’re not understanding how much people care about sports.

Noah Smith 52:07
Exactly. Like I have, I have had to physically run from opposing team fans, like, No, I had to as a college kid, I had to physically run from Berkeley kids,

Lars Doucet 52:18
people, people in Berkeley kids, this always came up in in, like, whenever people are talking about, like, how video games are dangerous. I’m like, Are they more dangerous than sports? And I don’t mean this. I mean, the fans, like what’s the number of murders per year of a Call of Duty fan versus, like, you know, football hooligans? Right? Right. Even making it up per fan. Right.

Noah Smith 52:41
Sports is like, what what we do when we don’t have video games, and sports is war?

Lars Doucet 52:45
Oh, yeah, for sure. Yeah, sports, sports, sports is domesticated more, and it’s less worse than the alternative. Alright, so

Noah Smith 52:53
I know you have to go soon. Let me give you the 32nd rundown of why abundance and health care will be the hardest. It’s because healthcare is what we’ve used is the vehicle we’ve used to create middle class mass middle class employment in the era of knowledge industries, and the decline of manufacturing, healthcare was what everyone went into. And that’s what sustains the middle class. And so it’s very difficult to make super productive health care and cut costs, because that’s where everybody works. And where everybody, you know, building a bunch of houses isn’t really going to destroy people’s property value. So it’s not really gonna destroy middle class wealth. But I guarantee you that making healthcare more productive will destroy middle class income for a large swath of people, even though eventually there’ll be reallocated to better jobs. I can’t even tell you what those jobs will be. And when we when we destroyed all the manufacturing jobs and shipped them to China or automated them or just like, whatever. We didn’t, you know, everybody went into health care. The question is, what other people do now the answer was health care. We don’t have an answer lined up after health care. And that’s why creating true abundance and health care which requires dramatically reducing prices will be very difficult,

Lars Doucet 53:56
political staying cool. Well, we’ll bring it off on a favorite Georgia’s topic is natural resources are another kind of undiscussed aspect of land, right? It’s not exactly the same as like territory or locations. But like Norway famously has, you know, this natural resource fund, and they manage their hydropower their energy sector, much like they manage the oil sector, on the premise that pre existing natural resources in this case, water and oil belong to the Norwegian people, and so the windfall profits should go to them. Do you think such a model could be helpful for dealing with our energy sector here in America?

Noah Smith 54:33
I really do think so. I think that we have some of the resource curse here because Exxon and all those companies contribute heavily to the Republican Party. That’s not going to solve all our problems because who wants to shift away from oil when oil gives us other Alaskans get the Alaska Permanent Fund Right, right. They get Alaskans get a dividend from all the oil that’s produced in Alaska, but Alaskans really value the oil industry for this reason you get rid of oil Where’s The dividend coming from where’s our monthly check coming from? And

Lars Doucet 55:02
so So are you saying that cost attendance?

Noah Smith 55:05
If there is path dependence? Absolutely. So that as well, that’s an interesting thing for some problems like it can alleviate some of the political problems. But it can’t alleviate, ultimately the political economic problem. What we really just have to do is sell consumers on cheap electricity so that we build solar and wind but especially solar, how would you like some cheap electricity? Yes, there will be these these these black panels there, but you’ll get used to it. How about some cheap electricity? Would you like that? And that’s why solar power has to get cheaper than fossil fuels. Not coal, because everyone hates coal smoke that’s just makes the world bad. But cheaper than natural gas. Solar has to get considerably cheaper than natural gas. So the pitch for solar can be How would you like abundant electricity, cheap electricity can’t just be global warming is going to kill us all? How about we reduce our emissions because everyone sort of on some level understands that their own locality is responsible for only a small percent of emissions. And so there’s this social loafing problem. There’s this free rider problem where everybody’s like, Well, someone else can reduce their emissions. I’m not going to reduce mine. Instead, it has to be a private monetary incentive to switch to solar.

Unknown Speaker 56:13
I got we’ve got afternoon.

Lars Doucet 56:14
I gotta run in one minute. So one minute, what is the most important low hanging fruit America should do now to UNEF ourselves?

Noah Smith 56:24
The most important low hanging fruit is abolish the filibuster, make this country governable? Again, I don’t care if there’s a Republican majority left Republicans passed some stuff, you know, abolish the filibuster so that the federal government can actually govern start doing stuff. Please do it even if you’re a Republican. Okay. That’s great.

Lars Doucet 56:41
That’s great. Do it. No, I said so. Well, no,

Unknown Speaker 56:43
thank you so much for coming on.

Lars Doucet 56:45
Yeah, you’ve been you’ve been great. Really appreciate it.

Noah Smith 56:47
Thanks, guys. Really fun.

William Jarvis 56:53
Special thanks to our sponsor, does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations, and live players. You can subscribe to Bismarck breeze at brief dot Bismarck analysis.com. Thanks for listening. We’ll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out Donovan’s work in music at Donovan dorrance.com

Join the discussion

More from this show