Month: March 2015

Designing Private Cities, Open to All

NEW YORK — The world is building more cities, faster than ever before. China used more cement in the last three years than the United States used in the entire 20th century. By 2050, India will need new urban infrastructure to house an additional 404 million people — a task comparable to building every city in the United States in just 35 years. The global urban population is expected to rise to well over six billion by 2050 from 3.9 billion today.

The world needs more cities. The task, however, is not simply to build new cities but to design them for today, tomorrow and the next century.

Jane Jacobs taught us that a city is a complex dance of top-down and bottom-up planning. Too much of one or the other and a city fails to meet the needs of its residents.

As the world urbanizes, we need to experiment with new urban forms and new forms of urban planning, and privately designed and operated cities — proprietary cities — like Jamshedpur, India, or Reston, Va., may provide answers.

That is the opening to an op-ed in the New York Times written by me and Shruti Rajagopolan, do read the whole thing.

Addendum: The op-ed is a precis to our paper, Lessons from Gurgaon, India’s Private City in the book Cities and Private Planning. You can also listen to my EconTalk with Russ Roberts on these issues.

The tour that is Chinese

Just how confident is Los Angeles property broker Erik Coffin that he can interest Chinese clients in high-end Las Vegas villas? He’s charging $4 million a month for a quick glimpse.

It isn’t just any tour. The marketing push is set to start next month for these twice-monthly journeys that cost $250,000 a pop for a seven-day, private jet and Rolls Royce-chauffeured trip to the American heartland. Eight-person groups also will be offered consultations on plastic surgery, picking the sex of a child and wealth-management.

“It’s already a win for us,” said Coffin, 42, who employs 18 Mandarin speakers, almost a third of his staff, at Gotham Corporate Group, which recently opened an office in Beijing.

Here is one response:

“People usually come to the U.S. shopping for luxury bags or expensive clothes, but I bought a home,” said Lin, who owns a petrochemical export business in the eastern Chinese province of Zhejiang. “Maybe I’m crazy and a bit impulsive, but it was a better deal than buying a similar type of home in downtown Shanghai. And I just really like the city. It’s as simple as that.”

The full story is here, by Bonnie Cao.

The rsvp and livestream for my conversations with Peter Thiel and Jeffrey Sachs

You can sign up for rsvp or the live stream here, the chat with Peter Thiel is March 31, 2-3:30 p.m. EST, held at the Arlington campus of George Mason University.  It is part of a new event series Conversations with Tyler.

The chat with Jeffrey Sachs is April 7, 3:30 to 5 p.m., again EST in Arlington.  There will be more to come in the Fall.

I will host and talk with guests, but without formalities.  I won’t ask “So tell us about your new book,” or any of the usual soporific chit-chatty questions.  I will try to replicate the conversations I would have with these same individuals in a private setting, except that you all get to listen.  That means launching into substance immediately and seeing how far the back and forth can be pushed.  It also means asking questions that not everyone listening will understand and willing to let parts of the audience suffer in their confusion.  I want these dialogues to be as smart as possible, based on the premise that each guest, no matter how renowned he or she may be, is nonetheless a radically underrated thinker.

The goal is to be never hostile or combative, but always probing.  I’m aiming for the chat to be 1/3 me vs. 2/3 guest, more or less, but about the ideas and contributions of the guest most of all.

Assorted links

The Open Borders Manifesto

In honor of March 16, Open Borders Day, here is the Open Borders Manifesto to which I am a signatory.

Freedom of movement is a basic liberty that governments should respect and protect unless justified by extenuating circumstances. This extends to movement across international boundaries.

International law and many domestic laws already recognise the right of any individual to leave his or her country. This right may only be circumscribed in extreme circumstances, where threats to public safety or order are imminent.

We believe international and domestic law should similarly extend such protections to individuals seeking to enter another country. Although there may be times when governments should treat foreign nationals differently from domestic citizens, freedom of movement and residence are fundamental rights that should only be circumscribed when the situation absolutely warrants.

The border enforcement status quo is both morally unconscionable and economically destructive. Border controls predominantly restrict the movement of people who bear no ill intentions. Most of the people legally-barred from moving across international borders today are fleeing persecution or poverty, desire a better job or home, or simply want to see the city lights.

The border status quo bars ordinary people from pursuing the life and opportunity they desire, not because they lack merit or because they pose a danger to others. Billions of people are legally barred from realising their full potential and ambitions purely on the basis of an accident of birth: where they were born. This is both a drain on the economic and innovative potential of human societies across the world, and indefensible in any order that recognises the moral worth and dignity of every human being.

We seek legal and policy reforms that will reduce and eventually remove these bars to movement for billions of ordinary people around the world. The economic toll of the modern restrictive border regime is vast, the human toll incalculable. To end this, we do not need a philosopher’s utopia or a world government. As citizens and human beings, we only demand accountability from our own governments for the senseless immigration laws that they enact in our name. Border controls should be minimised to only the extent required to protect public health and security. International borders should be open for all to cross, in both directions.

See here to join as a signatory.

To which countries does the future come first?

In some recent talks I’ve argued that the future may be coming first to both Israel and Singapore.  Today let’s consider Israel by listing a few features of that country:

1. The tech sector is important, and, partially as a result of that, income inequality is very high; see Paul Krugman’s post on the latter.

2. There is a large segment of lower middle class, intelligent bohemians, whose low incomes do not reflect their real standard of living and orderly lives.  Many of them study Torah, and receive a kind of (selective) guaranteed annual income.

3. The rent is too damn high, and that won’t be changing anytime soon, due to building restrictions.  The bohemian class generally chooses lower rent venues to pursue its preferred lifestyle.

4. Unlike most current North Americans, Israelis do not take geopolitical stability for granted.

5. There is intense and widespread concern with demographics and the economics of population.

Mexican markets in everything, James Bond edition

Mexican government officials were allowed to make casting decisions and changes to the script of the upcoming James Bond movie, after giving the film’s producers millions in financial incentives, according to a report based on emails leaked in the Sony hack.

The government reportedly offered the makers of the upcoming “Spectre,” directed by Sam Mendes, $14 million in exchange for four minutes of the film portraying the country in a positive light.

Emails released from the Sony hack, published by tax policy website Tax Analysis, show that the studio was concerned that the film’s costs had spiraled, to a gross budget of $300 million, making it one of the most expensive movies ever made. Executives pressured the filmmakers to make changes to the script that would keep the Mexican money coming in.

“You have done a great job in getting us the Mexican incentive,” wrote Jonathan Glickman, president of MGM’s motion picture group, in an email to the film’s producers. “Let’s continue to pursue whatever avenues we have available to maximize this incentive.”

…emails revealed that Mexico asked that the character of a Mexican governor, who was the target of an assassination, be replaced with an international leader, and that Mexican police be replaced with “some special police force” instead.

A further $6 million was said to have been achieved by means such as replacing a cage fighting scene with footage of Mexico’s popular Day of the Dead festivities, and highlighting Mexico City’s “modern” skyline, the Telegraph reported.

There is more here, via Fred Smalkin.

Assorted links

*Mahabharata: A Modern Retelling*

There is a new version of the Mahabharata, in blank verse rather than prose, translated/created by Carole Satyamurti.  I’ve only read an initial sliver of it, but dramatically and linguistically it is very effective.  This is a beautiful edition, and deserves serious consideration as a purchase for just about every library.  I have yet to see any significant reviews of the work.

How much has the U.S. poverty rate declined?

Official percent poor in 1964: 19.0%

Official percent poor in 2013: 14.5%

Reduction to correct for:

Value of noncash benefits – 3.0%

Omission of refundable tax credits – 3.0%

Replacing CPI-U with PCE index – 3.7%

Adjusted percent poor in 2013: 4.8%

That is adapted from a Christopher Jencks review, “The War on Poverty: Was It Lost?”, in the 2 April 2015 New York Review of Books.

Do any of you know a good link-accessible version of comparable information?  By the way, here is Ross Douthat on money and culture.

How much are larger business firms driving the increase in income inequality?

From Free Exchange at The Economist:

The benefits of size are thus enjoyed only by the most senior workers at a firm, who can extract a bigger premium for their skills and experience. A cleaner at a single shop does the same sort of work as those at a large chain. But managing a multinational firm such as Walmart requires a different—and much rarer—set of skills than that required to run a corner store. Over time this pushes up the salaries of the top brass at Walmart compared with corner-shop managers.

The authors find that the relationship between the growth in the size of companies and the level of inequality holds across the rich world. They looked at data from 1981 to 2010 on wages and the size of largest firms for 15 countries in the OECD, a club mostly of rich countries. The relationship between rising levels of income inequality and the size of firms was strong.

This effect is particularly noticeable in America and Britain, where firms have grown rapidly in recent decades. In America, for instance, the number of workers employed by the country’s 100 biggest firms rose by 53% between 1986 and 2010; in Britain the equivalent figure is 43.5%. On the other hand, in places where the size of firms has not changed much, such as Sweden, or where it has shrunk, such as Denmark, wage inequality has grown much less. Part of what is perceived as a global trend towards greater disparity in wages may actually be the result of the biggest firms employing a greater share of workers.

The piece is interesting throughout.  The original source by the way is H. Mueller, E. Simintzi and P. Ouimet, “Wage inequality and firm growth”, LIS Working Paper 632 (March 2015), gated here, earlier version here.  One implication is that we can expect quite high rates of income inequality from a mature Chinese economy.  Another is that we simply shouldn’t expect the United States to be as equal as the smaller northern European polities.

Houston versus California

In my Econ Talk with Russ Roberts on private cities I said this about Houston:

If we think about, what are the best cities in the United States, particularly for the poor, it’s places like Houston, which have no zoning and which have very easy regulatory systems in which you can build. You can get a permit to build within a matter of days, compared to New York where you’ve got to go through a dozen different permitting processes and you have to hire specialized people whose only job is really to stand in line to help you get through the process….So, people of modest means can still buy a house in Houston. And they can’t do that in many other places in the United States because of zoning and not-in-my-backyard rules, a kind of secession of the rich, not in terms of gated communities but in terms of adding on rules and restrictions on how large your lot has to be in order to build a house, how many people can live in the house etc. All of these things have made it extremely expensive to buy in any of these cities, which use more top down planning.

The Economist illustrates with a remarkable statistic comparing Houston with all of California:

Unlike most other big cities in America, Houston has no zoning code, so it is quick to respond to demand for housing and office space. Last year authorities in the Houston metropolitan area, with a population of 6.2m, issued permits to build 64,000 homes. The entire state of California, with a population of 39m, issued just 83,000.