Category: Travel
Rent Controls and Affordable Housing in Mumbai
The slums are the only free market housing in Mumbai.
That’s me in the latest video from MRUniversity, an on-the-ground look at the consequences and political economy of rent controls and affordable housing in Mumbai, India. Rent controls have been in place for so long in Mumbai that buildings are literally collapsing. Moreover, the approval process is so slow that just about the only new housing being built is condos for the well-off while at the same time a large fraction of the housing stock lies vacant.
Reuben Abraham is very good on how government housing is captured by the rich and why any solution to the affordable housing problem must focus on increasing supply.
The culture that is San Francisco solve for the equilibrium
A man threw his body onto a self-driving car — a GM Cruise AV — causing a car vs. pedestrian collision at the 16th and Valencia intersection earlier this month, the DMV reported Wednesday.
Operating in “autonomous mode,” the Cruise AV was stopped at a green light, facing northbound on Valencia, waiting to make a right turn onto 16th Street as pedestrians crossed.
Suddenly, a man ran across Valencia Street against the “do not walk” sign, shouting, and struck the left side of the car’s rear bumper and hatch with his entire body. This is all according to a report the self-driving car manufacturer must file with the DMV in the event of a collision.
The man sustained no injuries, but the car did. It suffered “some damage to its right rear light,” according to the report.
Here is the full story.
Why it is fun to travel around China
I submit that really every part of China is worth seeing, not just Shenzhen, Shanghai, and Beijing. Sichuan, Guizhou, and Yunnan are very different from Guangdong and Fujian, which are not at all the same as Heilongjiang, Jilin, and Liaoning, which are so distinct from the Jiangnan, and on and on, to say nothing of the far west. Each Chinese province has roughly the population of an EU country; there may not be as many differences between each province as there are between European countries, but they’re still huge.
One can’t so easily find accounts of how much fun it is to travel around China. Those who haven’t ventured far beyond Shenzhen, Shanghai, and Beijing underestimate the sheer number of totally random stuff that happens to you. In stores, traffic, restaurants, and on the streets, I regularly come across behaviors and fixtures that I had no idea were a thing. You might be driving along miles of farmland, when suddenly a massive high-tech factory with the logo of a well-known foreign company looms up on the horizon; in a restaurant, I was asked one time to help with the cooking because chefs had to go out to buy more ingredients; you never know who might come up to you and tell you an interesting story. The lack of professionalism in nearly all things is sometimes frustrating but mostly hilarious.
That is from Dan Wang’s “What I learned in 2017,” many more topics at the link, including learning and books.
What should I ask Charles C. Mann?
I will be doing a Conversation with Charles (no public event), what should I ask him? Charles is one of my favorite writers, as he is the author of 1491, 1493, and the new and excellent The Wizard and the Prophet: Two Remarkable Scientists and Their Dueling Visions to Shape Tomorrow’s World.
Here is yet another excerpt from the latter book:
Rodale died in 1971 — bizarrely, on a television talk show, suffering a heart attack minutes after declaring “I never felt better in my life!” and offering his host his special asparagus boiled in urine.
I thank you all in advance for your wisdom and inspiration. Here is Charles’s home page, he also has many excellent magazine articles.
Why don’t cities grow without limit?
In other words, why don’t they put everything into Atlanta or Los Angeles? Paul Krugman has a good blog post on that topic, here is one of his points:
…once upon a time dispersed agriculture ensured that small cities serving rural hinterlands would survive. But for generations we have lived in an economy in which smaller cities have nothing going for them except historical luck, which eventually tends to run out.
Krugman suggests that eventually many smaller cities will indeed fade away, although the process of equilibration may be a long and slow one. All of his points are well-founded, nonetheless I can see a few factors favoring the continuing existence of small cities on a greater scale than many might be expecting:
1. As Alex points out on Twitter, rents are permanently lower, and many people don’t value big city amenities very much.
2. Congestion is likely to be lower. Why should the larger city have worse traffic if it has proportionately more roads? That may require a blog post of its own, but part of the problem is geographic specialization within the larger city, which is not simply some number of smaller cities placed side by side. In other words, sometimes you have to drive all the way across town. Many people don’t like geographic specialization, but wish to find most everything in a small downtown or Walmart (or on Amazon). From this point you can see that Amazon may favor larger cities more than small towns. If it bugs you that in a large city all the shopping of a particular kind is on the other side of town, just order those goods on-line and stay within your cozy neighborhood.
3. Governance may become worse in a very large city. Furthermore, separate and specialized lobbies, as would correspond to geographically specialized parts of a large city, may be a bad influence. Here is a paper on the public choice of mega-city governance.
4. Very large, rich, and famous cities tend to become financial centers, or perhaps movie-making centers, and that is not in the interest of all city residents. Some of this is a matter of rents, in other regards a matter of culture and ethos. Anonymity also increases with size, as does (I think) sexual promiscuity. Smaller locales will have more faux conformism and more real conformism too, which some people prefer. People not wanting to live amongst all the specialization of major cities really is a significant and enduring factor in these comparisons.
5. If you are building a firm for eventual export success, you will prefer to put that firm in a larger city to begin with (“built to scale”). That in turn tends to price out companies and people with less interest in exporting. The larger city will become all that much more globally oriented, which not everyone will wish to pay for or even wish to have at zero price.
6. If I were offered an extra 50% of total salary (nominal, to make this comparison in real terms across all goods and services eliminates the very difference in locales) to move from Fairfax to Washington, D.C. (15-20 miles away), I would decline the offer.
7. The very fact that smaller cities are used to consume non-pecuniary amenities suggests their inhabitants are more diversified than it may appear at first. The shift of gdp into services further enhances this diversification, and the new crop of semi-small cities may be more resilient than the older lot dependent on manufacturing.
8. A significant and enduring trend is the move into warmer and sunnier climates. So while Rochester and Flint decline, Chattanooga and Birmingham are on the rise. I predict the more time you spend in the South, the more optimistic you will be about small and mid-size cities.
9. Here is a good Duranton and Puga piece on the costs and benefits of city size. Here is a short McKinsey piece on complexity as a limit on size. Here is a discussion of city size in Civilization VI.
Thoughts about Morocco
1. Fez is perhaps the place in the world with the clearest continuous connections to the time of late antiquity. Maimonides and Ibn Khaldun worked there, and walking through the medina that is not hard to imagine — you can dine in a small restaurant in the home of Maimonides (recommended, most of all the vegetables). Fez has the world’s oldest university, dating from the 859, and the world’s oldest continuously operating library, from 1359.
2. The country has been remarkably stable relative to the rest of the region, whether you take that to be the Middle East, MENA, or Africa. But the nature of the associated stability lessons remains unclear, read more here.
3 Social capital is higher than it was during my last visit twenty years ago. That said, every transaction is still a potential swindle waiting to happen. And if any English-speaking Moroccan climbs into your train cabin, and claims his brother is the most wonderful guide in town and offers up his phone number…simply decline any further contact. Especially if the guy has a scar on his face.
4. From the OEC:
The top exports of Morocco are Cars ($2.95B), Insulated Wire ($2.46B), Mixed Mineral or Chemical Fertilizers ($1.83B), Phosphoric Acid($1.14B) and Non-Knit Women’s Suits ($1B)…
It could be much worse, but the dangers of premature deindustrialization are real. Their exports are too dependent on Spain and France, two countries with many other trading partners and also relatively slow growth rates. Agriculture still accounts for 40-45% of employment. Tourism continues to grow, but service culture in the country is not top-notch. They export a lot of marijuana too.
5. The country has the (distant) potential to evolve into an Atlantic economy — check the map — and I don’t just mean the history of Rabat/Salé as a pirate state. Nonetheless the actual trade of the nation paints it as a Mediterranean economy, and most Mediterranean economies have not done very well lately.
6. Moroccans do not seem very religious. Counterintuitively, that may be why, when they are living in Europe, they are especially vulnerable to radicalization. They are not already “filled up with belief,” and experience anomie, which is then exploited by terror groups. Arguably the same is true for Uighurs in China, by the way, who are recruited by the thousands for foreign ISIS crusades and the like.
7. More and more of the country’s gdp is concentrating in and near Casablanca, which is underrated as a visit. The famous Grand mosque, as Yana pointed out, in fact resembles a cavernous mosque-clock tower-opera house-French railway station, with even some elements of a medieval cathedral. Not all devout Muslims are happy with it.
8. The best bistillah is in Meknes, where it is moister and less sweet. In Casablanca I recommend the seafood stalls in the Grand Marché, and the roast chicken joints, always with french fries.
Uber as an ambulance substitute
Using an ambulance to travel to the hospital in an emergency can cost upwards of $1,000 USD. Now research demonstrates that a significant number of people are instead choosing Uber to perform the same service.
The paper – currently being peer reviewed – examines the effect on ambulance usage as Uber was introduced to 766 cities across 43 states. According its findings, even the most conservative estimate shows a seven percent reduction in people traveling via ambulance where the service is available.
Here is the full story, via Jeffrey Deutsch. File under “Even with surge pricing, bending the cost curve.”
Rabat notes
Is Rabat the nicest city in the Arab world? It sure seems to come close, but as a capital and major recipient of government largesse its recipe probably is not scalable. They are building a new concert hall and also a high-speed rail line up to Tangier. So many vistas are pleasant, the touts are absent, and the food never quite hits Morocco’s peaks, nor is there much in the way of crafts.
The city emits the vibe of not being especially religious. The medina and kasbah are relatively empty of economic activity, having not yet reinvented themselves as yuppie or millennial shopping districts. Other than public works projects, it doesn’t feel as if anything transformative will happen here anytime soon, economically or otherwise. Morocco, of course, did not have an “Arab spring” in 2011, and the monarchy has proven remarkably stable, beyond many people’s expectations. That is perhaps the #1 social science question about Morocco.
The citizens seem to compare themselves more to Spain and France than to say Egypt or Iran; I am not sure that is good for their happiness.
“Nace en Rabat el primer hipopótamo concebido en cautividad en Marruecos.”
The Chellah ruins exhibit traces of Phoenician, Roman, and medieval Arabic pasts, the surrounding landscape design creates a perfect integration. Winter temperatures are in the low to mid 60s. If you have never been to Morocco before, doing the whole flight for a mere two days in Rabat is worth it, but neither is it the country’s leading highlight…
My Conversation with Andy Weir
Andy was great, here is the text and audio, here is the introductory summary:
Before writing a single word of his new book Artemis, Andy Weir worked out the economics of a lunar colony. Without the economics, how could the story hew to the hard sci-fi style Weir cornered the market on with The Martian? And, more importantly, how else can Tyler find out much a Cantonese meal would run him on the moon?
In addition to these important questions of lunar economics, Andy and Tyler talk about the technophobic trend in science fiction, private space efforts, seasteading, cryptocurrencies, the value of a human life, the outdated Outer Space Treaty, stories based on rebellion vs. cooperation, Heinlein, Asimov, Weir’s favorite episode of Star Trek, and the formula for finding someone else when stranded on a lonely planet.
My favorite part was this, which Andy answered with no hesitation:
COWEN: What if there were two immortal people, let’s say it’s the two of us, placed on opposite sides of the Earth, an Earth-like planet, and we can wander freely with no constraints but just foot speed. How long does it take us to find each other?
WEIR: Can we collude in advance in any way?
COWEN: No, we cannot.
WEIR: OK.
COWEN: But we know we’re trying to find each other.
WEIR: We know we’re trying to find each other. Well, we should both — but can we have a — are we both rational actors and we —
COWEN: We’re as rational as you and I are; take that as you wish.
WEIR: So, no?
[laughter]
COWEN: No.
WEIR: I think the best thing to do would be for both of us to pick an arbitrary great circle to walk, around the planet, and leave markings along the way denoting what direction you’re walking. So I would arbitrarily pick a direction to go and I would just go that direction with the intention of circumnavigating the entire globe, and I would walk at maybe half what is a comfortable speed for me. And you would do the same thing. Now, somewhere, our two — in fact, in two points — our great circles will intersect.
COWEN: Right.
WEIR: And when one of us reaches the other one’s, then they start following the markers at full speed, and then you get the guy. Right?
COWEN: And what’s your best guess as to how long that would take?
WEIR: Well, if you pick two points, I’m guessing one of us would have to walk probably about a quarter of the way around the planet before we found the other one’s great circle. And then you’d have to walk again. So in terms of circumnavigation times, it would take you 2x to get all the way around the planet, because my initial plan was you’d walk half-speed. So I’m guessing it would be a quarter of that, so one-half x to get to your great circle, and then a quarter x to find you along your great circle, on average, I’m guessing. So one-half plus a quarter, so .75x. So three-quarters of the time that it would take to circumnavigate the planet.
COWEN: OK, great answer.
WEIR: That’s my guess.
Do read/listen to the whole thing…
Fez, Morocco bleg
I’ve been to Morocco before, but never Fez. What do you all recommend?
Switzerland is Prepared for Civilizational Collapse
More than any other country, Switzerland’s ethos is centered around preparing for civilizational collapse.
All around Switzerland, for example, one can find thousands of water fountains fed by natural springs. Zurich is famous for its 1200 fountains, some of them quite beautiful and ornate, but it’s the multiple small, simple fountains in every Swiss village that really tell the story. Elegant, yes, but if and when central water systems are destroyed these fountains are a decentralized and robust system for providing everyone with drinkable water.
The Swiss political system is also decentralized. If the central government fails, the Swiss might not even notice. The mountains and valleys also mean that Swiss towns and villages are geographically independent yet linked in a spider-web of robust connections.
Despite being at peace since 1815, Switzerland is prepared for war. Swiss males (and perhaps females in the future) are required to serve in the military (those who cannot, pay a special tax) creating a robust reservoir of trained citizens ready to serve in an emergency.
The Swiss have been tunneling the Alps for hundreds of years creating innumerable secret hideaways for people and stores.
As a further example of how ridiculously well prepared the Swiss are for any and all threats, there are things like hidden hydroelectric dams built inside of unmarked mountains so that in the event of mass bombings, they’ll still have electricity from these secret facilities. And, remember, these are the things the Swiss government has let us know about. It is thought that there are probably more fortifications and hidden goodies scattered about the country’s landscape. (ital. added, AT)
In addition, to thousands of military bunkers permeating the Swiss mountains there are several hundred thousand private and public fallout shelters the largest of which can hold some 20,000 people. Some of the largest installations have been decommissioned and even turned into museums but there is little doubt that they could be rapidly re-purposed.. As the Swiss continue to improve their already fantastic railway system it’s standard practice to convert old railway tunnels to security shelters.
Buried deep alongside the hydroelectric dams, shelters and food stores, the Swiss also have libraries ready to reboot civilization:
“In another [underground bunker], detailed instructions on how to build devices for reading all known data storage formats, even older formats like floppy disks, are kept, so that if that knowledge is otherwise lost, future generations can still decode our data storage devices to access the data within correctly. Essentially, the researchers involved in this particular project have attempted to create a “Rosetta Stone” of data formats and are using a ridiculously secure Swiss bunker as the storage point for that knowledge.”
Switzerland is famous for being the place to store wealth in times of crisis and that remains true today with a few twists. The old-rich store their gold in heavily guarded Swiss banks, the nouveau-riche store their bitcoins in Swiss underground bunkers built to withstand cyber- and nuclear attack:
It’s no surprise that Nassim Taleb likes Switzerland because this is a country that has made itself anti-fragile in order to survive the black swans of civilizational collapse.
Hat tip: Maxwell.
Are corporate jets a waste of money?
Almost certainly not:
While shareholders have strong incentives to limit value-destroying perquisite consumption, it is challenging to identify such perquisites. Many corporate assets that enable forms of perquisite consumption also provide operational benefits. Corporate jets represent a potent example. We find business-related flights increase firm performance. Our results also highlight the channels through which jet use can either enhance or destroy firm value. Consistent with the benefits of information gathering and monitoring, firms with soft and complex information that is difficult to transmit remotely are more likely to fly to company subsidiaries and plants, and these flights positively affect firm value. In contrast, among firms with weak governance structures where flights are more likely motivated by agency factors, jet use is more likely to be value-decreasing. The ability to differentiate has important implications in today’s activism environment.
The full piece is by Lian Fen Lee, Michelle Lowry, and Susan Shu, via the excellent Kevin Lewis.
Occupational licensing is a barrier to interstate migration
…we find that the between-state migration rate for individuals in occupations with state-specific licensing exam requirements is 36 percent lower relative to members of other occupations. Members of licensed occupations with national licensing exams show no evidence of limited interstate migration.
That is from Janna E. Johnson and Morris E. Kleiner in the NBER working paper series. Here are ungated copies.
The (pricing) culture that Washington is not
The Interstate 66 toll lanes opened Monday in Washington’s Northern Virginia suburbs with prices so steep they could be among the highest drivers have paid for the privilege of traveling on a state-owned highway in the United States.
Tolls in the high-occupancy toll lanes hit $34.50 — or close to $3.50 a mile — to drive the 10-mile stretch from the Beltway to Washington during the height of the morning commute.
Bravo, but we’ll see how this develops.
My Conversation with Sujatha Gidla
Here is the transcript and podcast, I enjoyed this chat very much. Here is part of the opening summary:
Sujatha Gidla was an untouchable in India, but moved to the United States at the age of 26 and is now the first Indian woman to be employed as a conductor on the New York City Subway. In her memoir Ants Among Elephants, she explores the antiquities of her mother, her uncles, and other members of her family against modern India’s landscape.
Our conversation considered the nature and persistence of caste, gender issues in India, her time as a revolutionary, New York City lifestyle and neighborhoods and dining, religion, living in America versus living in India, Bob Dylan and Dalit music, American identity politics, the nature of Marxism, Halldor Laxness, and why she left her job at the Bank of New York to become a New York City subway conductor, among other topics.
Here is one sequence:
GIDLA: Actually, the only relation I have with my family members is political views.
[laughter]
GIDLA: If we have to connect on familial links, we will always be fighting and killing each other. All that we talk about with my mother is politics and untouchability and caste and Modi and things like that.
It’s the same thing with my sister also. This is where we connect. Otherwise, we are like enemies. My brother, we’re completely alienated from each other, firstly because he goes to church now. We never used to go to church before. He’s into this Iacocca. Is there a name . . . ?
COWEN: Iacocca?
GIDLA: Yeah.
COWEN: Lee Iacocca?
GIDLA: Yeah.
COWEN: The former Chrysler chairman?
GIDLA: Yeah. He reads that kind of books.
COWEN: Management books.
GIDLA: He’s into that kind of stuff.
COWEN: You don’t?
GIDLA: No.
GIDLA: He read Freakonomics and he liked it. I don’t relate to that stuff.
And this toward the end:
COWEN: Your most touching memory of your mother?
GIDLA: I don’t know. When I was arrested, she was very worried. She said, “I wish I could take you back into my womb.”
Strongly recommended. I was pleased to see that Publisher’s Weekly named Sujatha Gidla’s book as one of the ten best of 2017, you can order it here.