Category: Travel

One simple reason why travel is important

by  Tyler Cowen in

Travel makes you a better reader, especially for history, geography, (factual) economics, and political science.

I have been reading two good books about Sri Lanka, namely K.M. de Silva’s Sri Lanka and the Defeat of the LTTE and also his A History of Sri Lanka.  Both would be very difficult to follow if I didn’t already have a decent sense of the place names, how the country “fits together,” and many other features of life here.  If I read about a 12th century Buddhist kingdom, in fact I absorb and retain much more of that knowledge if I have visited the ruins of said kingdom.  It is more intellectually and emotionally salient to me, whether or not that process is rational.

In part you visit places simply to make your later reading about them more productive.

And there is nowhere in the world that is not a place.

Addendum: This effect is not a small one.  If a said civilization has vanished, or is almost entirely gone, that is also an enormous blow to our reading.  It is so much easier to keep track of “the Florentines” than “the Assyrians.”  There is also a question of optimal timing — don’t read about a place too early!  Yet some early reading is necessary, so that you may develop the curiosity to want to go there.

Sri Lanka travel notes

by  Tyler Cowen in

Have you ever been to a perfect spot and wished “there should be an amazing hotel right there, except I want the hotel without any accompanying crowding or corruptions of tourism?”

If that is your desire, Sri Lanka is the country for you.  (Who cares if that is an apparent violation of the laws of economics and location theory?)  If you have visited Sri Lanka, likely you will know what I mean — it is simply so nice.  So much the right blend of exotic and comfortable.  It feels so unspoilt, so fresh, and so natural.  So easy on the visitor, as if it were a well-run state of India with a big dose of Buddhism and a vaguely Caribbean vibe, and without the extreme population density.

Here was my Kandalama hotel, let the link rotate through all the images.

Here is my current hotel, only about 30 or 40 feet away from one of the world’s major Buddhist temple complexes, medieval and mostly dating from the 12th century.  None of it is close to expensive, no matter how high the quality.

Galle, on the southern coast, is a lovely colonial city, largely intact, with notable Dutch, Portuguese, and British buildings, as well as mosques.  It is ringed by an old fort, and has numerous good views of the ocean.  Everything is walkable.  Russians are the single largest tourist group there (no visa required), and yet the town does not feel overwhelmed, even on the cusp of August.  Try Galle Fort Hotel, which is also a UNESCO heritage site.

There is an aesthetic look to so many things.  If a farmer builds a tree house so he can monitor his crops at night without being stomped by elephants, the tree house will be pretty nice, even though the farmer is poor.

So much of Sri Lanka feels like the 1980s, in a way that is good for you but not good for them.  On the plus side, education, literacy (92%), and social indicators are high.  Life expectancy is higher than in the United States.  You can drive around deep into the rural areas, and you just won’t see extreme poverty.  Nor are the drivers crazy, so the travel isn’t stressful.  The country never seems internet-obsessed.

The total fertility rate is currently about 2.0, a blessing in the short run but likely a disaster over time.  At about 4k per capita income (about 14k PPP), Sri Lanka cannot afford to grow old before it becomes wealthy.  And I can assure you, it is not on the verge of becoming wealthy.

The important buildings — and there are many of them — are all of earlier vintages.  The hotels of Geoffrey Bawa — in a style sometimes called “tropical modernism” — are of special interest.  Simply tracking down all of the Bawa hotels would be a good way of organizing your trip.  Sri Lanka is one of the few countries in the world where the very nice old architecture and the very nice newer architecture bear some aesthetic relation to each other.

Did I mention this?:

In 2022, with its GDP contracting by 7.8%, Sri Lanka was one of the worst performing economies in the world. Annual inflation was around 60%, and the currency depreciated by over 80%. These quantifiable measures of pain were exacerbated by severe shortages and uncertainty in accessing fuel, gas and medicines. Daily power cuts became normalized.

Living standards remain lower, yet visible signs of those earlier troubles are gone.  The infrastructure now works once again, yet the country feels psychically scarred by the recent economic collapse.

One Sri Lankan MR reader, with whom I chatted, argued that the country has no person or not even a group “in charge” at the wheel.  So small problems drift and sometimes turn into major crises.  The country’s “immune system” simply is not functioning.

It is striking that none of the major parties have good ideas, as there is mainly corrupt oligarchy or Marxists.  Liberalism is nowhere to be seen.  Behind the scenes, Sri Lanka is a country that outside parties (most of all China and India, earlier the colonial powers) have cared about far too much.  It never feels like there is a stable political equilibrium upon which to build, because the outsiders have so much power.

Internally, they still have not generated a true consensus on what the country is about, and if they are all willing to live in peace with each other.  As one of my drivers put it succinctly: “I don’t like the other religions.”

With textiles and tea as the major exports, the country shows no signs of moving up the value chain. Nonetheless Sri Lanka remains richer per capita than India.  And easier to handle, albeit far less dynamic.  Someone could write a very Sri Lankan version of “the complacent class.”

How good is Buddhism for economic growth anyway?

I will do a separate post on food in Sri Lanka.

The Harried Leisure Class

by  Alex Tabarrok in

How easy is it for a male breadwinner to raise a family? Oren Cass argues that the cost of “thriving,” is increasing. That’s false. When you do the numbers correctly, Winship and Horpedahl show that the cost of thriving is falling. It’s falling more slowly than we would like–but it’s still the case that current generations are, on the whole, better off than previous generations. 

Still, Winship and Horpedahl face an upward battle because while they are right on the numbers many people feel that they are wrong. Almost every generation harbors a nostalgic belief that circumstances were more favorable during their youth. Moreover, even though people are better off today, social media may have magnified invidious comparisons so everyone feels they are worse off than someone else.

I offer a third reason: the Linder Theorem. Real GDP per capita has doubled since the early 1980s but there are still only 24 hours in a day. How do consumers  respond to all that increased wealth and no additional time? By focusing consumption on goods that are cheap to consume in time. We consume “fast food,” we choose to watch television or movies “on demand,” rather than read books or go to plays or live music performances. We consume multiple goods at the same time as when we eat and watch, talk and drive, and exercise and listen. And we manage, schedule and control our time more carefully with time planners, “to do” lists and calendaring. A search at Amazon for “time management,” for example, leads to over 10,000 hits.

Time management is a cognitively strenuous task, leaving us feeling harried. As the opportunity cost of time increases, our concern about “wasting” our precious hours grows more acute. On balance, we are better off, but the blessing of high-value time can overwhelm some individuals, just as can the ready availability of high-calorie food.

So, whose time has seen an especially remarkable appreciation in the past few decades? Women’s time has experienced a surge in value. As more women have pursued higher education and stepped into professional roles, their time’s value has more than doubled, incentivizing a substantial reorganization of daily life with consequent transaction costs.

It’s expensive for highly educated women to be homemakers but that means substituting the wife’s time for a host of market services, day care, house cleaning, transportation and so forth. Juggling all of these tasks is difficult. Women’s time has become more valuable but also more constrained and requiring more strategic allocation and optimization for both spouses. In previous eras, a spouse who stayed at home served as a reserve pool of time, providing a buffer to manage unexpected disruptions such as a sick child or a car breakdown with greater ease. Today, the same disruption require a cascade of rescheduling and negotiations to manage the situation effectively. It feels hard.

By the way, the same theory also explains why life often appears to unfold at a slower, more serene pace in developing nations. It’s not just an illusion of being on holiday. In places where time is less economically valuable, meals stretch more leisurely, conversations delve deeper, and time itself seems to trudge rather than race. In contrast, with economic development comes an increased pace of life–characterized by a proliferation of fast food, accelerated conversation, and even brisker walking (Levine & Norenzayan, 1999).

Linder’s theorem, as you may have correctly surmised, is related to Baumol’s theorem. In fact, Baumol (1973, p. 630) explained Linder’s theorem succinctly, “rising productivity decreases the demand for commodities whose consumption is expensive in time.” In essence, Baumol’s theorem is about the cost of production while Linder’s theorem is about the cost of consumption. I discuss Baumol and Linder at greater length here (ungated).

If the value of time fell, we might find ourselves eating more leisurely meals and taking more time to appreciate the simple pleasures in life. But, contrary to popular belief, neither Baumol nor Linder effects reduce our well-being; instead, they are a byproduct of economic growth and greater wealth. Rather than lamenting the rise in relative prices, we should recognize and appreciate our ability to afford them, and even acknowledge that on certain occasions, they are worth paying.

Pristina notes

by  Tyler Cowen in

Imagine a third-tier Ottoman city, accidentally elevated to the status of a national capital, and you have Pristina.  Furthermore, that is a pretty good thing!  The town is charming, walkable, and has first-rate street and cafe life.  There is one good monastery nearby and some quality Brutalist architecture.  My favorite site was the National Library of Kosovo:

National Library of Kosovo – Pristina, Kosovo - Atlas Obscura

Here are additional views of the building, is it fair to call it one of the greatest Communist achievements of Yugoslavia?  1982.

Government debt is only about five percent of gdp.  I am not sure how accurate is the data, but growth rates are not so bad.  The country has about 5k per capita gdp, but about 15k PPP-adjusted, that is a large gap and maybe the truth lies somewhere in between.

Might this be the cheapest country in all of Europe?   I had one good meal in a nice restaurant with nice decor for only five euros.

Tiffany served the tastiest and also most representative meal, there is no menu and they simply bring you what they have.  The food is in general excellent, though not varied.  Be ready for meats, sausage, cheese, tomato, kebab, green and red peppers, and bread.  There is pasta too, but few other foreign offerings.  I didn’t see any Asian food whatsoever, or any international fast food chains, or any Starbucks.

Throughout the town you find scattered statues, such as the obligatory Mother Teresa, and the others of very masculine heroes, often labeled explicitly as “heroes.”  The quotient for sexual dimorphism is reasonably high.

It is quite safe, so more people should visit.  In three days I saw zero tourists.  It is not a “thrills destination,” but where else can you ponder all the historical reasons why, for so long, a “Greater Albania” has proven impossible?

Cheat sheet of neighboring countries:

Serbia: Feels imperial, “seen better days,” no longer a transport hub, looks toward Moscow.

North Macedonia: Stands a bit apart, closer to Bulgarian culture, less recent historical trauma, more right-wing and pro-U.S., keen to integrate with the West.

Albania: Tenacious, spent decades lost in the wilderness, never been able to “play its hand” on that Greater Albania thing, did it ever recover from the fall of Venetian Albania?

Few parts of the world are more interesting, or unsettling.  All of these are great countries to visit.

My Conversation with the excellent Kevin Kelly

by  Tyler Cowen in

Here is the audio, video, and transcript.  Here is part of the summary:

…Kevin and Tyler start this conversation on advice: what kinds of advice Kevin was afraid to give, his worst advice, how to get better at following advice, and whether people who ask for advice really want it in the first place. Then they move on to the best places to see traditional cultures in Asia, the one thing in Kevin’s travel kit he can’t be without, his favorite part of India, why he’s so excited about brain-computer interfaces, how AI will change religion, what the Amish can teach us about tech adoption, the most underrated documentary, his initial entry point into tech, why he’s impressed by the way Jeff Bezos handles power, the last thing he’s changed his mind about, how growing up in Westfield, New Jersey affected him, his next project called the Hundred Year Desirable Future, and more.

Here is one excerpt:

COWEN: Do you ever feel that if you don’t photograph a place, you haven’t really been there? Does it hold a different status? Like you haven’t organized the information; it’s just out on Pluto somewhere?

KELLY: Yes, I did. When I was younger, I had a religious conversion and I decided to ride my bicycle across the US. And part of that problem — part of the thing was that I was on my way to die, and I decided to leave my camera behind for this magnificent journey of a bicycle crossing the US. It was the most difficult thing I ever did, because I was just imagining all the magnificent pictures that I could take, that I wasn’t going to take. I took a sketchbook instead, and that appeased some of my desire to capture things visually.

But you’re absolutely right. It was a little bit of an addiction, where the framing of a photograph was how I saw the world. Still images: I was basically, in my head, clicking — I was clicking the shutter at the right moments when something would happen. That, I think, was not necessarily healthy — to be so dependent on that framing to enjoy the world.

I’ve learned to wean myself off from that necessity. Now I can travel with just a phone for the selfies that you might want to take.

COWEN: Maybe the earlier habit was better.

Recommended.  And here is Kevin’s new book Excellent Advice: Wisdom I Wish I’d Known Earlier.

“Almost space” markets in everything

by  Tyler Cowen in

The space race just got a new entrant. France’s Zephalto is offering passengers the chance to travel to the stratosphere in a balloon, starting at €120,000 ($132,000) per person in 2025.

“I partnered with the French space agency, and we worked on the concept of the balloon together,” says Zephalto founder and aerospace engineer Vincent Farret d’Astiès.

He tells Bloomberg that he’s planning on 60 flights a year, with just six passengers on board each flight. The company aims to provide an experience that brings the best bits of French hospitality—fine food, wine and design—to the edges of space for those who can afford the six-figure ticket.

Balloons filled with helium or hydrogen will depart from France with two pilots on board and rise 25 kilometers (15.5 miles) into the stratosphere for 1 1/2 hours. Once at peak altitude, which is about three times higher than for a commercial airliner, the balloon will stay for three hours, giving guests a chance to take in views previously seen only by astronauts. The descent will take a further hour and a half, for a six-hour round trip.

Here is more from Sarah Rappaport at Bloomberg.  Via Daniel Lippman.

How to visit Italy

by  Tyler Cowen in

Ajit requests such a post, and I note that plenty of people have plenty of experience with this topic.  So I’ll offer a few observations at the margin:

1. Venice, Florence, and Rome have, on average, the worst food in Italy.  They have some wonderful places, but possibly hard to get into, requiring advance planning, and often expensive.  For random meals, those cities are not impressive, noting that Rome, due to its size, is much better than Venice or Florence.

2. My favorite “single sights” in Italy, moving beyond the core sights of Rome, Venice and Florence, are the Giotto chapel in Padua, the Basilica in Ravenna, and the Cathedral in Monreale in Sicily (near Palermo).  To this day, they remain underrated sights.  As for the major cities, both Genoa and Torino are underrated.

3. My favorite food in Italy would be in Sicily, Naples, and the lower-tier towns of the North, such as Bologna and Parma.  The area near Torino/Piedmont would be another contender.  I have heard Veneto is wonderful for food, though have only had a single meal there, which was indeed outstanding.  In Sicily, don’t order the usual Italian dishes (which are available and excellent), rather look for regional offerings which reflect the area’s Arabic heritage.  Orange slice and mint — bring it on!

4. Usually there is little gain from pursuing Michelin-starred restaurants in Italy.  You want the “two-forker” places with outstanding regional cuisine.  Originality, which is rewarded by the Michelin system, too often is a negative in Italian food.

5. Italy has a large number of third-tier towns which are wonderful for walking through.  But you don’t need to overnight in them, so there is much to be said for randomly driving around Italy, but avoiding the larger cities.  Stop, walk for a few hours, take a meal, and then move on.

6. There is a great deal of available trip prep material for Italy in the form of movies, fiction, and history.  Most of all, however, you should focus on using picture books to have an advance sense of the art and architecture.  The classic book on Italy, Luigi Barzini’s The Italians, is still worth reading.  And often the postwar fiction, or even Manzoni, are better trip prep than the very famous classics such as Dante and Petrarch (though you should read them anyway, but for other reasons).

What else?

What should I ask Kevin Kelly?

by  Tyler Cowen in

From Wikipedia:

Kevin Kelly (born 1952) is the founding executive editor of Wired magazine, and a former editor/publisher of the Whole Earth Review. He has also been a writer, photographer, conservationist, and student of Asian and digital culture…

Among Kelly’s personal involvements is a campaign to make a full inventory of all living species on earth, an effort also known as the Linnaean enterprise. He is also sequencing his genome and co-organizes the Bay Area Quantified Self Meetup Group.

His Out of Control is a wonderful Hayekian book.  His three-volume Vanishing Asia is one of the greatest picture books of all time.  His new book (I haven’t read it yet) is Excellent Advice for Living: Wisdom I Wish I’d Known Earlier.  Here is Kevin on Twitter, here is his home page.

I will be doing a Conversation with him, so what should I ask?

Travel philosophies for the well-traveled

by  Tyler Cowen in

How should you choose your next trip?  I can see a few general philosophies on the table:

1. Prioritize those countries and regions you haven’t visited yet.  For me that might mean Montenegro, Lithuania, Bangladesh, and Saudi Arabia.  But the downside is waking up one morning and saying “Hey, what the hell am I doing in Sardinia!?”

2. Get to know some of your favorite places truly in depth, most of all major cities that are easy to reach and often are connected to free or paid invitations.  For me that would imply more trips to London, Paris, Tokyo, Berlin — you get the picture.  Under this view, the returns to variety are diminishing.  And have I ever regretted stopping in on those places?

3. Try to visit “events,” especially temporary events.  Right after the Berlin Wall came down, I did a big car trip around Eastern Europe.  Loved it.  Perhaps these days I should be stopping in at Neom, flying to Lviv, and so on.  Those historical moments will never be recaptured.  And usually such trips are memorable.

4. Do more trips with the friends you value most, and go wherever will maximize their interest and participation.  You already know the world, people are what make life special, and now it is time to “give back” your expertise.

How to decide!?  WWGPTS?

There is also the approach I discussed with Nabeel:

5. Figure out, within the bounds of safety and reasonable expense, where you really don’t want to go.  Then go there!  Expectations and surprise are everything, right?  And how else are you to develop a truly diversified portfolio?  Won’t you this way learn the most?

I am indebted to Ben Casnocha for a relevant conversation here, though without holding him liable for any of these views.

Addendum: GPT-4 opts for #3:

As an experienced traveler, if I were to pick only one of the philosophies, I would choose to visit events and historical moments (Philosophy 3). The reason for this choice is that it allows for unique, once-in-a-lifetime experiences that capture the essence of a particular time and place. Such trips often become memorable stories that you’ll cherish for a lifetime.

By prioritizing events and historical moments, you immerse yourself in situations that reveal the true character of a destination and its people, as well as provide valuable insights into the forces that shape societies and cultures. Additionally, this approach can lead to a greater appreciation for the world’s interconnectedness, as you witness firsthand the impact of global events on different regions.

While this philosophy might not cover all aspects of a well-rounded travel experience, it offers a powerful way to engage with the world and create lasting memories that will enrich your life beyond the confines of a single trip.

In Praise of the Danish Mortgage System

by  Alex Tabarrok in

When interest rates go up, the price of bonds goes down. As Tyler and I discuss in Modern Principles, the inverse relationship between interest rates and prices holds for any asset that pays out over time. In particular, as Patrick McKenzie points out, when interest rates go up, the value of a loan goes down. McKenzie suggests that you can use this fact to buy back your mortgage from a bank when interest rates rise.

For example, suppose you get a 500k 30-year fixed rate mortgage when interest rates are 3%–that loan obligates you to pay $2108 per month for 30 years. Now suppose that interest rates go to 6%, now that same stream of payments is only worth, in present value, about $358k. Thus, the bank should be willing to let you buy your mortgage for $358k–that is, after all, what the market would pay for such a stream of payments if your mortgage was securitized.

I am skeptical that I could find the right person at the right bank to actually authorize a deal like this but it turns out that the Danish mortgage system is built to allow this relatively easily. The Danish mortgage system is built on the match principle:

JYSKE Bank: The match-funding principle entails that for every loan made by the mortgage bank, a new bond is issued with matching cash-flow properties. This eliminates mismatches in cash-flows and refinancing risk for the mortgage bank, which also secures payments for the bondholder. In the Danish mortgage system the mortgage bank functions as an intermediary between the investor and borrower. Mortgage banks fund loans on a current basis, meaning that the bond must be sold before the loan can be given. This also entails that the market price of the bond determines the loan rate. The loan is therefore equal to the investment, which passes through the mortgage bank.

In essence, in the Danish system, mortgage banks are more like a futures clearinghouse or a platform (ala Airbnb) than a lender–they take on some credit risk but not interest rate risk.

Thus, if a Danish borrower takes out a 500k mortgage at 3% interest and then rates rise to 6%, the value of that mortgage falls to $358k and the borrower could go to the market, buy their own mortgage, deliver it to the bank, and, in this way, extinguish the loan. Since the value of homes also falls as interest rates rise this is also a neat bit of insurance. Remarkable!

The Danish mortgage market appears to be very successful and so may be a model for American reform:

JYSKE Bank: The Danish Mortgage Bond Market is one of the oldest and most stable in the world, tracing its roots all the way back to 1797 with no records of defaults since inception. Furthermore, the market value of the Danish Mortgage Bond Market is approx. EUR 402bn, making it the largest mortgage bond market in Europe.

Indonesia observations (from my email)

by  Tyler Cowen in

These are from Khalil Manaf Hagerty:

I’m half Indonesian by ethnicity (one-quarter Bugis, one-quarter Minangkabau, half bule, what we refer to as ‘blasteran’ or mixed race) and have worked on and off there for the past 15 years. Here are some observations:

The internal market is enormous. Unlike many SE Asian countries Indonesia really isn’t dependent upon exports. Domestic demand is massive and the middle class is growing. Combined with a cultural life social structure that allows for upward mobility (more than, say, India), many Indonesians have seen and experienced significant improvements in the quality of life over the past 25 years, post-Suharto. They have a lot of democracy and increasing wealth.

So, adding to this: There are 17,000 islands and if someone wants to ‘make it’, they can quite easily go to Jakarta, a city of around 15 million people, depending on whose estimate you are using. Even within the less urbanised islands, there have still been significant rural agricultural opportunities for smallholder farmers operating on 10ha or so to meet domestic demand for food. So these are big improvements for many people and the success or changes in wealth are all relative.

Think of the narrative of President Jokowi: born and raised in a slum, now President.

On emigration: I’m sorry, but the West still tends to treat Indonesians as though they are Muslim terrorists. The immigration and visa requirements for Indonesians entering Australia for example are (informally) tougher than those entering from Malaysia, the Philippines, Thailand and Singapore (obviously), e.g. there is no easy-to-obtain 30-day holiday visa for Indonesians.

With foreign education, Indonesians are likely to go to Australia for higher ed, it’s cheaper and closer, and the objective is generally an English-language education. There’s a small number of wealthy folks that can afford the US system. There’s a generation of folks who were educated in the US system under the Colombo Plan and its successors, but that has thinned out. You will occasionally meet a guy who went to Purdue for this Masters.

Following on from this, why do Indonesians go home after their degree? Most folks will have very, very strong ties to their community in Jakarta, rural Indonesia or both. This often expresses itself in Islam but is present in Javanese/Sumatran/Malay culture more broadly.

On the entrepreneurial spirit, it very much exists in the country, but as noted above the growth is higher and the cultural barriers to entry are lower domestically. The Chinese community is arguably the best at this, but they see bigger or as many opportunities across the region — particularly through informal Chinese diaspora networks across Asia. Ethnic Chinese are much less persecuted now across the region than they were 25 years ago.

Finally, Indonesia is a big country and the sense of national identity is getting bigger. The US-China thing is a good example; Indonesians believe they can carve their own path without having to choose between the West (and there is still a great deal of resentment towards Europe after 1945-1949) and China. The country’s population is expected to overtake the US within a couple of decades.

If I was to summarise: opportunities at home are big, real and probably easier.

Here was my initial query.