Decline Is a Narrative
Something kind of weird has been happening lately, which is that New York Times columnist Paul Krugman has been writing things that actually make sense. Even more astonishing, he is writing things where he sounds like a real economist and not just a partisan polemicist.
Consider Krugman’s review of why Europe is growing more slowly than the United States. One thing he points out is that labor productivity is about as high there as here (particularly in Northern Europe), but Americans choose to work longer hours, while Europeans prioritize leisure time.
But the bigger picture is more than just a lifestyle choice.
It’s essentially all about demography.
Here’s a chart comparing growth in the United States and the euro area from 1999, the year the euro came into existence, until 2019, the eve of the pandemic….
In real terms, the US economy grew a lot more over those two decades—53 percent versus 31 percent. But almost all of that difference is explained by the fact that the US working-age population (conventionally, if somewhat unfortunately, defined as adults 15 to 64) grew a lot, while Europe’s hardly grew at all (and has been declining in recent years). Real GDP per working-age adult rose 31 percent in the United States and 29 percent—basically inside the margin of error—in the euro area.
I would point out that prioritizing leisure time over working hours is probably also tied to demographics. Young people are more likely to burn the midnight oil, while an older population will tend to be less ambitious, less risk-taking in its economic decisions, and more oriented around having free time and basically sliding gracefully into retirement.
In the rest of this particular column, Krugman reverts back to usual form by claiming that the stronger American recovery from the pandemic flows from our willingness to do more government stimulus spending. That’s the dogmatic Keynesian we all know.
But in another column—well, heck, it’s almost like he’s channeling Bastiat.
A big part of the reason the US has a growing population, and therefore a faster-growing economy, is because we have not yet stamped out immigration, despite furious efforts to do so. Krugman takes on the economic arguments against immigration and identifies them as flowing from the “lump of labor fallacy.”
This is the view that there is a fixed amount of work to be done and that if someone or something—some group of workers or some kind of machine—is doing some of that work, that means fewer jobs for everyone else….
[W]hile there’s limited demand for pink flamingos or wheat, there’s no evidence that there’s limited demand for stuff in general. When incomes rise, people will find something to spend their money on, creating jobs for workers displaced by technology or newcomers to the work force. Machines do, in fact, perform many tasks that used to require people; output per worker is more than four times what it was when Vonnegut wrote, so we could produce 1952’s level of output with only a quarter as many workers. In fact, however, employment has tripled.
In effect, when machines became able to replace workers, the workers found productive new things to do. We didn’t just make all the same old stuff with fewer workers. We went on to make more and better and different stuff and provide new services. It’s the same for immigrants as it is for machines.
What about competition from new workers? If you’re worried about immigrants taking jobs away from native-born Americans, consider the effect of a truly huge influx to the labor market: the mass movement of American women into paid work from the mid-1960s to around 2000. Did working women take jobs away from men? I’m sure many men thought they would. But they didn’t.
Krugman’s conclusion: “No, AI and automation, for all the changes they may bring, won’t ultimately take away jobs, and neither will immigrants.” Like I said, sometimes this guy remembers that he’s supposed to be an economist.
As a bonus, Krugman also links to a fascinating article on how an influx of Bosnian refugees revitalized the declining city of Utica in upstate New York.
Decline Is a Narrative
Decline is the issue here, isn’t it? We’re all afraid of decline and trying to figure out how to avoid it—and some people are causing or accelerating decline in the process.
There is probably no better example of this than the overpopulation hysteria, which was supposed to save us from disaster but for which we have just begun paying the price—from China to Europe, and soon in the US.
I introduced you recently to the work of Maarten Boudry, one of the fellows in the Roots of Progress program. I also connected him to my editors at Discourse, and Maarten recently published a piece there that takes on the population issue along with declinism in general, proclaiming today to be the best time to be born.
[W]hich year looks like the most auspicious and hopeful one in which to draw your first breath: 1924, 1974 or 2024?
If you were to ask the tens of thousands of activists that are protesting on the streets, gluing themselves to highways, blocking roads and staging die-ins, I doubt that 2024 would be the most frequently picked answer. According to the founder of environmental activist group Extinction Rebellion, climate change will lead to the “slaughter, death, and starvation of 6 billion people this century.”… Four in 10 Americans believe that global warming will likely lead to human extinction. Not surprisingly, a quarter of childless adults cite climate change as part of their motivation for not having children…. As one young woman put it: “I feel like I can’t in good conscience bring a child into this world and force them to try and survive what may be apocalyptic conditions.”
He then takes on doomerism specifically with regard to global warming.
But here’s a fact that you may never glean from reading climate doomer literature, even though it is also solidly based on the scientific consensus as documented in the successive reports by the Intergovernmental Panel on Climate Change: A temperature increase of 3 degrees Celsius—slightly more than we expect right now—will most likely reduce global GDP by only a couple of percentage points. That is not an absolute reduction compared to today, mind you, but compared to a hypothetical future without climate change: In all likelihood, our prosperity will keep growing and child mortality will keep falling, just by a bit less than in a counterfactual world without global warming.
What is more interesting, from my perspective, is how he ties this in to a “status quo bias” that leads us to discount future adaptation and growth.
The enormous benefits of economic growth have been on full display for two centuries, but because human ingenuity and technological innovation are inherently unpredictable, the climate debate suffers from a persistent status quo bias—the tacit or explicit assumption that human societies will just passively suffer rising sea levels, intensifying heat waves, and extreme droughts, stuck at our current level of wealth and technology. But consider that even today, millions of people are living in regions that would be “uninhabitable” without modern technologies like air-conditioning, irrigation, and dikes. Much of California, for example, was “arid beyond habitability” before visionary engineers turned all that inhospitable wasteland into “one of the world’s most vibrant economies.” When the founding father of Singapore, Lee Kuan Yew, was asked what enabled the economic miracle of the tropical city-state (its GDP per capita is 65% higher than the US’s), his answer was simple: modern air-conditioning. Even in the US, cities like Phoenix or Las Vegas would be virtually uninhabitable without artificial cooling.
Chock up another win for Willis Carrier. Maarten concludes, “now that we have finally escaped from thousands of years of drudgery and suffering and entered an age of abundance, it would be bizarrely self-indulgent to imagine that today, of all times, is the wrong moment to be born.”
He follows up with a later article looking at the “Seven Laws of Declinism,” a list of other biases that prevent us from recognizing and embracing progress.
Some of the points (for example, the blue dots of outrage) may sound familiar. Here’s one that I found to be new: the “ugly problem fallacy.”
All problems are soluble, the physicist David Deutsch explains in his 2011 book The Beginning of Infinity, but every solution will give rise to novel problems. If these are less severe than the original problem, we will rightly call this “progress”—but only if we remember just how bad the original problem was. Many ugly problems give rise to solutions that are far less ugly, but still not exactly ideal. Chemotherapy is a terrible ordeal: it ravages your body, it makes your hair fall out, it makes you vomit. It is literally toxic because its very purpose is to destroy (cancerous) cells in your body. But no matter how bad chemotherapy is, it’s vastly better than having untreated and metastasized cancer.
Since progress tends to cover its own tracks, people often forget the ugliness of the original problem and focus on the residual ugliness of the solution. The “ugly problem fallacy,” as Étienne Fortier-Dubois has called it, is a good way to make sense of calls to “defund the police.” The police can be violent, and some people understandably want to reduce that violence by removing their funding. But, as Fortier-Dubois writes: “The obvious problem with this proposal is that the police are there precisely to reduce violence. Their presence is meant to discourage any non-police person or organization from using violence to achieve their ends.”
The failure to recognize progress can become a self-fulfilling prophecy, slowing down the pursuit of innovation by discouraging people from even looking for new solutions.
John Burn-Murdoch in The Financial Times has a very interesting article on whether we’re talking ourselves into decline. It has since unfortunately disappeared behind a paywall, but you can see the key data here, graphing the long-term decline in the media of words relating to “progress and the future” and the corresponding growth of words related to “caution, worry, and risk.”
The article is largely based on this study, which is not paywalled. Here is its description of the premise behind the study.
There are many aspects of cultural change that may have impacted Britain’s industrialization, any of which may be detectable in the corpus of works written in English. In order to narrow the scope of our study, we build on an insightful recent argument put forth by Joel Mokyr linking a progress-oriented view of science promoted by great Enlightenment thinkers, such as Francis Bacon and Isaac Newton, with what would become the “Industrial Enlightenment,” and ultimately Britain’s Industrial Revolution. This progress-oriented view centered around the idea that science and our understanding of the natural world could be used to improve the lot of humankind. Mokyr argues that such a progress-oriented view of science gave birth to a pan-European “culture of growth.” This culture was, in turn, sustained and supported by the social norms of elite intellectuals that fostered the free flow, dissemination, and discussion of new ideas across Europe. Accordingly, it was these cultural values in combination with Britain’s abundance of skilled craftsmen and artisans that made its industrialization possible.
We talked ourselves into progress, and we can talk ourselves out of it. That’s the contest of our era.
The Housing Famine
One of the great recent examples of talking ourselves out of growth is housing, where the NIMBYs have induced a massive shortage. But it’s not just a shortage; it’s a widespread misallocation. Here’s an example:
Buying a family-sized home with three or more bedrooms used to be manageable for young people with children. But with home prices climbingfaster than wages, mortgage rates still close to 23-year highs and a shortage of homes nationwide, many Millennials with kids can’t afford it. And Gen Z adults with kids? Even harder.
Meanwhile, Baby Boomers are staying in their larger homes for longer, preferring to age in place and stay active in a neighborhood that’s familiar to them. And even if they sold, where would they go? There is a shortage of smaller homes in those neighborhoods.
As a result, empty-nest Baby Boomers own 28% of large homes—and Milliennials with kids own just 14%, according to a Redfin analysis released Tuesday. Gen Z families own just 0.3% of homes with three bedrooms or more.
Addison Del Mastro finally came up with the right words to express the problem: We are suffering from a “housing famine.”
We use the term “housing crisis” a lot. Sometimes “housing shortage” or “housing crunch” or just “housing problem.” With the exception of “shortage,” all of these terms are somewhat vague….
So what do you call an artificial, policy-driven, to some extent politically driven, acute shortage of a basic necessity?
A famine. Zoning has induced the housing equivalent of a famine.
Famine conditions do not mean that everybody starves to death. But they mean that everything surrounding food, and by extension most or all of life, is impacted to some degree or another. The housing famine doesn’t mean everybody is homeless, of course. But it means that what should be a pretty unselfconscious necessity becomes a choke point in people’s lives, a source of stress and friction far beyond what it should naturally be….
The operating principle of our housing status quo is a kind of Malthusianism, but even worse. Malthus believed that food production couldn’t keep up with population growth, and that famine was inevitable. We have nothing but our own choices to blame. In a time of unparalleled affluence, we have imposed a famine on ourselves, and wonder why people are starving.
We can also talk ourselves out of this artificial famine, and one of the biggest stories right now—big, but diffused in a series of small reforms across the country—is that we are starting to do something about it. Here’s a recent report by NPR.
To ramp up supply, cities are taking a fresh look at their zoning rules that spell out what can be built where and what can't. And many are finding that their old rules are too rigid, making it too hard and too expensive to build many new homes.
So these cities, as well as some states, are undertaking a process called zoning reform. They're crafting new rules that do things like allow multifamily homes in more neighborhoods, encourage more density near transit and streamline permitting processes for those trying to build.
Minneapolis has been at the forefront.
Researchers at The Pew Charitable Trusts examined the effects of the changes between 2017 and 2022, as many of the city's most significant zoning reforms came into effect.
They found what they call a "blueprint for housing affordability."
“We saw Minneapolis add 12% to its housing stock in just that five-year period, far more than other cities,” Alex Horowitz, director of housing policy initiatives at Pew, told NPR….
That supply increase appears to have helped keep rents down too. Rents in Minneapolis rose just 1% during this time, while they increased 14% in the rest of Minnesota.
Amazing, isn’t it, that the Law of Supply and Demand still works?
The report goes on to mention examples in Houston and Northern Virginia, but notes that this is a nationwide trend.
Researchers at the University of California, Berkeley built a zoning reform tracker and identified zoning reform efforts in more than 100 municipal jurisdictions in the U.S. in recent years.
Milwaukee, New York City and Columbus, Ohio, are all undertaking reform of their codes. Smaller cities are winning accolades for their zoning changes too, including Walla Walla, Wash., and South Bend, Indiana.
But of course the old forces opposed to growth aren’t going down without a fight. So the recent zoning reform movement is creating a split within the environmental left—also with Minneapolis at its center. Jerusalem Demsas talks about a lawsuit that has temporarily blocked some of the city’s zoning reforms on environmental grounds. But notice the nature of the arguments used by the pro-development environmentalists.
Writing in the local-news outlet MinnPost, the University of Minnesota urban geographer Bill Lindeke argues that promoting dense urban housing is “by far the most effective carbon reduction policy.” Focusing development in the urban environment, he writes, is fundamentally conservationist. “If regional newcomers can’t live in Minneapolis, they’ll live in Carver, Dakota and Anoka counties”—suburban areas with limited access to transit. “The direct result,” Lindeke continues, “will be habitat loss and the erasure of agricultural land in the exurbs, creating impervious surface and heat island intensification at a much larger scale.”
This argument can be counterintuitive if you’re used to thinking of new construction as inherently anti-environment. Nevertheless, one recent paper found that the “skyscraper revolution” since 1975 has been responsible for the “preservation of surrounding rural land, over 80% of which is covered in tree canopy or short vegetation.” A popular Crisis Green internet meme depicts two potential development scenarios for a fictional island: In one, all of the land is cleared for 100 single-family homes, each with its own lawn; in the other, a 100-apartment building perches along the shore, and the forest covering the remaining 96 percent of the island is intact. The moral at the bottom: “Density saves nature.”
It is an indication of our wider problem that advocates still have to sell growth as a form of reduction.
USS Enterprise
And yet growth is still happening, despite the most frenetic efforts to stop it.
In this day of obsession with fossil fuels and global warming, I am happy to report that we have reach an auspicious milestone: “The United States Is Producing More Oil than Any Country in History.”
As the world grapples with the existential crisis of climate change, environmental activists want President Joe Biden to phase out the oil industry, and Republicans argue he’s already doing that. Meanwhile, the surprising reality is the United States is pumping oil at a blistering pace and is on track to produce more oil than any country has in history.
The United States is set to produce a global record of 13.3 million barrels per day of crude and condensate during the fourth quarter of this year, according to a report published Tuesday by S&P Global Commodity Insights….
US output—led by shale oil drillers in Texas and New Mexico’s Permian Basin—is so strong that it’s sending supplies overseas. America is exporting the same amount of crude oil, refined products, and natural gas liquids as Saudi Arabia or Russia produces, S&P said.
As for the role of the Biden administration, our Man in the Middle initially tried to appease the greens. But: “’President Biden has been dragged kicking and screaming from his initial keep-it-in-the-ground strategy towards a more pragmatic policy,’ McNally said, noting the administration was ‘mugged by the reality of high gas prices and Russia’s invasion of Ukraine.’”
Meanwhile, America has gone back to the moon—remotely—for the first time in decades. And better yet, it was done by a private enterprise.
A US company has gone to the moon–and into the history books.
Intuitive Machines IM-1 mission reached the moon’s surface on Thursday evening, in the first American lunar landing since the Apollo era.
The company’s Nova-C cargo lander, named “Odysseus” after the mythological Greek hero, is the first US spacecraft to land on the lunar surface since 1972. Adding to the feat, Intuitive Machines is the first company to pull off a moon landing—government agencies have carried out all previously successful missions….
“Today, for the first time in more than a half century, the U.S. has returned to the moon. Today, for the first time in the history of humanity, a commercial company and an American company launched and led the voyage up there,” NASA Administrator Bill Nelson said on the livestream.
The mission was also launched on a SpaceX rocket. This follows the recent launch of United Launch Alliance’s Vulcan rocket, which will compete with SpaceX and with Jeff Bezos’s Blue Origin in the increasingly crowded private space launch market.
This reflects a big change in NASA policy over the last few decades, which is to rely increasingly on private companies and private enterprise for the exploration of space. The article on the Oddyseus lander notes that “IM-1 marks the second mission under NASA’s Commercial Lunar Payload Services (CLPS) initiative, which aims to deliver science projects and cargo to the moon with increasing regularity in support of the agency’s Artemis crew program.” That’s the plan to land Americans on the moon again some time in the next few years.
Chant it with me: U-S-A, U-S-A! Who says the great and inspiring achievements we associate with America in the middle of the 20th Century are all in the past?
“Culinary Luddism”
Here are couple of last links, just for fun.
In recent decades, dissatisfaction with the modern world—on both the left and the right—has taken the form of glamorizing “traditional” foods. So check out an interesting article from 2010 on this “culinary Luddism,” which discusses the way in which many traditional foods are not so traditional.
The dishes we call ethnic and assume to be of peasant origin were invented for the urban, or at least urbane, aristocrats who collected the surplus. This is as true of the lasagna of northern Italy as it is of the chicken korma of Mughal Delhi, the moo shu pork of imperial China, and the pilafs, stuffed vegetables, and baklava of the great Ottoman palace in Istanbul. Cities have always enjoyed the best food and have invariably been the focal points of culinary innovation.
Nor are most “traditional foods” very old. For every prized dish that goes back 2,000 years, a dozen have been invented in the last 200. The French baguette? A 20th-century phenomenon, adopted nationwide only after World War II. Greek moussaka? Created in the early 20th century in an attempt to Frenchify Greek food. Tequila? Promoted as the national drink of Mexico during the 1930s by the Mexican film industry….
In the first half of the 20th century, Italians embraced factory-made pasta and canned tomatoes. In the second half, Japanese women welcomed factory-made bread because they could sleep a little longer instead of getting up to make rice. As supermarkets appeared in Eastern Europe, people rejoiced at the convenience of ready-made goods. For all, culinary modernism had proved what was wanted: food that was processed, preservable, industrial, novel, and fast, the food of the elite at a price everyone could afford. Where modern food became available, people grew taller and stronger and lived longer. Men had choices other than hard agricultural labor; women had choices other than kneeling at the metate five hours a day….
Far from fleeing them, we should be clamoring for more high-quality industrial foods.
In following up on this point, I came across a very amusing article from all the way back in 1949 in The Atlantic explaining to Americans a new and very exotic dish called…pizza.
It’s a dish that today is considered so basically, elementally American that it is astonishing to discover that there was once a time when it had to be painstakingly explained to the public for the very first time.