Astral Codex Ten

Dutch

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Dutch

Article

Dutch is a recurring concept in the Astral Codex Ten archive, appearing 4 times across 4 issues between November 04, 2021 and June 21, 2024. The archive places it in contexts such as “refugees from globalism - ‘Germans, Dutch, French and Italians’”; “a cheerful Dutchman who assumed that he and his countrymen were coming back to the peaceful reoccupation of their Empire”; “the Dutch chose to build their colonial capital on Manhattan”. It most often appears alongside Europe, Japan, Austria.

Metadata

  • Category: Concepts
  • Mention count: 4
  • Issue count: 4
  • First seen: November 04, 2021
  • Last seen: June 21, 2024

Appears In

Source Context

Recovered passages from the original issue text. When the raw archive preserved outbound links inside the source passage, they are listed directly under the quote.

Dictator Book Club: Orban
November 04, 2021 · Original source
To that end, he - probably sarcastically - opened Hungary to “genuine refugees”, by which he meant refugees from globalism - “Germans, Dutch, French and Italians, terrified politicians and journalists, who here in Hungary want to find the Europe they have lost in their homeland”. A few right-wingers took him up on it and resettled in Hungary. Potentially his most famous admirer is former Trump campaign strategist Steve Bannon, who’s been going back and forth to Hungary as part of his plan to build a populist network across Europe.
Inline links: former Trump campaign strategist Steve Bannon
Your Book Review: The Internationalists
July 01, 2022 · Original source
The US keeps starting or engaging in wars, like in Libya, Afghanistan, and Iraq. I will briefly summarize the 3 major sections of the book and how they tackle the first five claims. Section 1: The Old World Order This section refutes the claim that outlawry of war wasn't actually a significant change for anyone at the time. To do so, it covers the history of the international laws of war as described by Hugo Grotius in a set of books titled The Law of War and Peace, including how he came to write it, what the laws were, and how they were used and understood. In this section, H&S work to fully immerse us in the laws of war before the Peace Pact, and the ways that people understood war as a result. I’ve already included a number of things about this up above, so I’ll just put in a few interesting notes here, and if you want more persuasion that people viewed war differently, I’d suggest you pick up the book. There is lots of historical evidence that attitudes toward war before the Peace Pact were not like attitudes toward war today, that people - lawyers, diplomats, sovereigns, and citizens - believed it to be normal and legal, and frequently justified. Conquest in response to debts or offenses was one of the primary motivators of war in the period ruled by the Old World Order (generally, from some time before 1625 when Grotius wrote the rules down to 1928, when the Peace Pact was signed), though H&S also document some of the weirder ones, like a King who declared that they had the right to wage war against another because the other King stole his wife. But because Grotius had declared that no one outside the belligerents could determine whose side was just without violating neutrality, the reasons for war were largely whatever Monarchs could get away, which ran the gamut. Perhaps because it was fashionable, perhaps to convince their citizenry of their rightness, Monarchs paid handsomely for famous thinkers to write manifestos explaining why they were going to war, and other Monarchs and the citizenry generally accepted these reasons. It would be like if Putin had called up Google co-founder Sergey Brin and asked him to write out why Russia had the right to conquer Ukraine, and then everyone else shrugged and decided, sure, that sounds reasonable. Heads of state enlisted esteemed writers and scholars as well as experienced lawyers to draft [war manifestos]. The English military and political leader Oliver Cromwell commissioned John Milton, the great epic poet, to write A Manifesto of the Lord Protector of the Commonwealth in 1655 when he ordered the invasion of the Spanish possessions in the Caribbean. In 1703, the Holy Roman Emperor Leopold I employed Gottfried Leibniz, the rationalist philosopher, co-inventor of calculus, and a trained lawyer, to compose the Manifesto for the Defense of the Rights of Charles III, which defended the empire’s involvement in the War of the Spanish Succession. Commodore Perry arrived in Japan in 1853 and returned for real the next year. Because they were so confused about how the laws of war were supposed to work, Japan proceeded to send Nishi Amane to the Netherlands to study the Law of War and Peace, and twenty years later, in 1875, Japan conquered Korea. Their logic for doing so was that they were afraid Europe or China would get there first. The world recognized their conquest at the time, though after WWII they were made to give it up. Korea was alluring prey for aggressive Western nations. As Nishi Amane [the scholar who brought the Grotian rules to Japan] would later explain, defending one’s borders “is like riding in a third-class train; at first there is adequate space but as more passengers enter there is no place for them to sit. The logic of necessity requires the people to plant both feet firmly and expand their elbows into any opening that may occur for, unless this is done, others will close the opening. (Chapter 6) Section 2: The Transformation Period Recall our list of counterclaims, #s 2 and 3. 2. Outlawry wasn't taken seriously at the time by the signatories - that it was just feel-good propaganda. 3. World War II proves that it failed, so it wasn't important. This section tells the story of how the Peace Pact came into existence, including how influential it was on the thinkers of the time. Throughout the 1930s and 40s, thinkers and diplomats attempted to turn the Peace Pact into practice, and then, when World War II demonstrated that they needed significantly more teeth to make the Peace Pact real, created the United Nations and other international institutions dedicated to supporting the Pact’s goals. At the time, they viewed World War II as a sign that they hadn’t gotten the right combination of institutions to make the Peace Pact succeed, not that it wasn’t important. This was a classic situation of needing More Dakka and they did, indeed, keep adding more until it worked. In an account composed more than a decade later, Jackson recounted that this view of the Pact was shared by the president and his inner circle. The Peace Pact, he reported, “left no vestige of legal right for [a state] to resort to a war of aggression. From the beginning, Roosevelt, Hull, Welles, Stimson and I had been in agreement that Hitler’s war . . . was an illegal one, and that other powers were under no obligation to remain indifferent. (Chapter 11) There is some counter-evidence in support of #2, from the side of the Japanese at least. Japan, for example, did not think that it had renounced the rules of the Old World Order on August 27, 1928. Its signing of the “No-War Pact,” as the Paris Peace Pact was known in Japan, was regarded as a diplomatic gesture, a noble proclamation affirming the aspiration of all civilized nations to seek peace. Indeed, Japanese officials considered it a sign of how far their nation had come that it was included among the fifteen countries at the grand ceremony in Paris. (Chapter 7) But at least on the Allies side, they had intended it seriously, and as World War II went on, that intention redoubled. Sumner Welles, Undersecretary of State during World War II, was assigned by Roosevelt to create a plan for peace after the war. What he and James Shotwell authored was effectively an outline of the United Nations, and they put the Peace Pact at the very center of it. Shotwell was far from subtle about his effort to treat the Pact as a starting point. He placed the Pact at the start of his preliminary draft. Article 1 repeated the Pact verbatim. Article 2 provided that “[t]he United Nations, in order to strengthen and safeguard the peace of nations as set forth in the General Pact for the Renunciation of war, agree to cooperate in the establishment of the necessary instrumentalities for its effective maintenance.” What followed was an outline of nearly every essential institutional component of the modern-day United Nations. Ten days later he circulated a more detailed draft, now entitled “Provisional Outline of International Organization.” (Chapter 8) It wasn't just the United Nations. NATO was built off of the Atlantic Charter, and it was also designed to reinforce the Peace Pact. This is why it's reasonably accurate to describe it as a defensive alliance. The [first draft of the Atlantic Charter] was a remarkable document. It began by restating the principles of the Stimson Doctrine—there would be no conquest; the two countries would “seek no aggrandizement, territorial or other.” Moreover, there would be “no territorial changes that do not accord with the freely expressed wishes of the peoples concerned.” The Charter looked ahead to a time “after the final destruction of the Nazi tyranny”—a remarkable statement for a neutral in the war—and declared the two states’ “hope to see established a peace which will afford to all nations the means of dwelling in safety within their own boundaries. (Chapter 8) This section brings to bear quotes from leaders at the time showing how important they considered the outlawry of war, how they viewed it as changing the world, but also how unprepared they were for how to react to countries choosing to ignore the Pact. Most importantly, they show how the Allies were strongly motivated to fight World War II specifically to preserve and expand the Pact, to make the world safe for peace. Unfortunately, then, as now, Russia/the Soviet Union did not quite live up to the ideals that the Allies generally advocated for. The Soviet Union took territory after World War II, the only one of the Allies to do so. The only ally to gain any significant territory after the war was the Soviet Union. More than twenty million of the nation’s citizens had died in the course of the war, and Stalin insisted on several territorial gains as the price of peace—many, but not all, of them in areas previously contested. … These concessions to Stalin were seen by the other Allied powers as regrettable deviations from accepted law, not precedents to be followed in the future. (Chapter 13) To be fair, we are talking about Josef Stalin, here. Who’s surprised? Section 3: The New World Order Recall our list of counterclaims, #s 4 and 5. 4. The world isn't more peaceful post outlawry. 5. Any increase in peace since World War II is due to democracies, nuclear weapons, or other reasons, and not the Peace Pact. H&S walk through the best academic evidence we have of whether the world is more peaceful today than it was in the period from 1816 (when our data collection starts being decent) to the Peace Pact. They then spend some time discussing why the evidence better supports the Peace Pact than other causes. In particular, H&S highlight that only since the Peace Pact have countries been denied territorial gains from their conquests. There's a lot of detail in there. Here's just a taste of it. A loose team of political scientists has assembled comprehensive data to help them study war. The resulting project, with the intentionally clinical name “Correlates of War,” hosts datasets on everything from “militarized interstate disputes” to “world religion data” to “bilateral trade.” Most relevant here, it includes extensive data on “territorial change”—a record of every single territorial exchange between states from 1816 to 2014, totaling over eight hundred entries. What do our 254 cases of territorial change tell us? They tell us something that is at once striking and surprising: Conquest, once common, has nearly disappeared. Even more unexpected, the switch point is that now familiar year when the world came together to outlaw war, 1928. From the time the data start in 1816 until the Peace Pact opened for signature in 1928, there was, on average, approximately one conquest every ten months (1.21 conquests per year). Put another way, the average state during this period had a 1.33 percent chance of being the victim of conquest in any given year. Those may seem like pretty good odds. They are not: A state with a 1.33 percent annual chance of conquest can expect to lose territory in a conquest once in an ordinary human lifetime. After 1948, the chance an average state would suffer a conquest fell from once in a lifetime to once or twice a millennium. (Chapter 13) The US wars in Afghanistan, Iraq, and Libya One disappointment I have is that H&S do not spend much time discussing the US wars of the last two decades. The book was published in 2017, so there’s really no excuse for this. Even counting them, their claim that wars since the Peace Pact have been fewer and less world-changing than before the Peace Pact still holds up, but since they don’t directly discuss the most notable wars of the last two decades, they leave a significant hole in their argument. I can imagine defenses that they would make, but they should have made them. They mostly refer to these conflicts either as not a conquest (since the US isn’t officially running those places now) or as a side effect of the Peace Pact in allowing failed states (See Addendum 1 for more on that) More recently, the United States invaded Iraq in 2003, toppled Sadaam Hussein, and installed the Coalition Provisional Authority to govern the country. But what’s most notable about these “nonconquests” is how ineffective and unstable they usually are. Exerting influence indirectly is inefficient and expensive. (Chapter 13) And in 2015 alone, high-fatality civil wars continued in Nigeria, South Sudan, Yemen, Syria, Iraq, Afghanistan, Pakistan, Somalia, and Ukraine. Why, if war has been outlawed, is there still so much conflict? The answer is that these conflicts are not prohibited by the Pact. Indeed, they are the predictable consequences of it … the prohibition on the use of force by one state against the territory of another has allowed two sources of conflict to simmer… within [states]. (Chapter 15) The broader intellectual history of war Reading The Internationalists led me to want to read a broader intellectual history of war. H&S include some comments that hint at it, for example describing the Principle of Distinction and other agreements made about how to behave during war. Fortunately for the civilians of Europe, the biblical model of war was finally repudiated. By the middle of the eighteenth century, European armies had come to recognize a “Principle of Distinction,” the doctrine central to modern humanitarian law, which distinguishes between soldiers and civilians and protects the latter from the former. The Principle of Distinction was the first curtailment of Grotius’s blanket immunity for those waging war. In the next century, it was followed by a flood of new legal regulations placing stricter controls on a soldier’s license to kill. International treaties protected the wounded and medical personnel (First Geneva Convention, 1864) prohibited the use of fragmenting, explosive, and incendiary small arms ammunition (St. Petersburg Declaration, 1874) banned explosives from balloons, asphyxiating gas, and dum-dum bullets (First Hague Convention, 1899) and proscribed pillage, the execution of surrendering soldiers and prisoners of war, and forcing civilians to swear an allegiance to a foreign power (Second Hague Convention, 1907). (Chapter 3) But the history of this and other pre-Peace Pact intellectual history of war is thin within the text, as the point H&S are chasing is specific to the Peace Pact's relevance in history, not the broader history of war. Some of my favorite books are books that tie together aspects of history across wide gulfs, which The Internationalists succeeds at. It’s rare and delightful to see how a piratical ship capture by the Dutch in the 16th century ties together with the opening of Japan, the US battles with Mexico, and finally, the creation of the United Nations. H&S’s perspective is that the Peace Pact marks a turning point, and one that should not be forgotten. It’s also clear that it marks a capstone on a long history of small changes that are also, themselves, interesting battles in the long-running war to make the world less intolerable. In the end, they identify four key changes in the intellectual landscape, with Lauterpacht’s fingers in nearly all of them. Neutrality no longer requires impartiality. States can help those they view as victims.
Inline links: More Dakka
An account by a member of the British 23rd Indian Division—known as “The Fighting Cock” for the insignia on the uniforms of the men within it—shows how the colonized turned the colonizers’ ideals against them. During the war, the Japanese had seized control of Indonesia from the Dutch. When the Japanese surrendered in early September 1945, the Fighting Cock went to Java to accept a transfer of authority to Allied forces. In Singapore, en route to Java, an advance party met a “cheerful Dutchman who assumed that he and his countrymen were coming back to the peaceful reoccupation of their Empire.” But the Indonesians had a different idea. To greet the returning imperialists, they covered carriages and vehicles with graffiti declaring: “Atlantic Charter means freedom from Dutch Imperialism.” “Indonesia for Indonesians.” And, simply, “Merdeka”—Freedom. The armed resistance did not abate until the United Nations recognized the country’s independence in 1949.
Highlights From The Comments On Housing Density And Prices
May 10, 2023 · Original source
The picture on the left is Manhattan Island, NY. The picture on the right is Conanicut Island, RI. Both islands are about the same size, the same climate, the same distance from the mainland. Both are near good natural harbors. In 1600, some early European explorer would have considered them basically interchangeable. Still, the cost of housing in Manhattan is about $2000/sqft, and the cost of housing in Conanicut is about $500/sqft. Why? God didn’t create these two islands with different land value; something must have happened to make one 4x as expensive as the other. The obvious answer is “the Dutch chose to build their colonial capital on Manhattan, more and more people moved in, it became ever denser and more urban in a virtuous cycle, now it is very dense and urban, and, in the current regulatory regime, dense urban areas have higher housing prices than empty rural ones.” If back in 1624 the Dutch had decided to build their capital on Conanicut, maybe today it would be a city of 10 million people, and Manhattan would be an empty rural area. In that case, I would expect Conanicut to have 4x the house price of Manhattan. If I were a Native American living on Manhattan, and I was committed to keeping housing prices there low, I would ask the Dutch to build their capital on Conanicut instead. In fact, whenever a European came to my island seeking to build houses, I would try to fight them off. If I somehow succeeded at this for four hundred years, and Manhattan remained an empty rural area, then I would expect Manhattan prices to be much lower than they are now. So in response to all of your comments that I don’t understand basic causal inference, I answer that history provides quasi-experiments, and no, I’m pretty sure that Manhattan has high prices because lots of people moved there, rather than because of some other factor. Or, rather, both density and desirability feed into the other, but the density step is a crucial input. 2. Comments About Jobs And Amenities (And Not Density Per Se) Producing Desirability But Martin Blank writes: NYC/SF are expensive because there are MANY good jobs there and people WANT to live there. Not because of the density of housing. You could build 500,000 homes in the middle of your empty field in North Dakota, and it wouldn't do much for the demand there. You aren't going to create Manhattan by magicking 3.5 million housing units of similar quality into the Red Lake Indian reservation in Northern Minnesota. I originally found the various comments saying this annoying. Yes, there are many good jobs in NYC. You can be a barista at Starbucks, you can be an actor on Broadway, you can be a train conductor for the MTA. But why is it easier to be a barista in NYC than in North Dakota? Surely because there are millions of people in New York, those people drink a lot of coffee, and so they need a lot of baristas. Likewise, they watch a lot of plays, and ride a lot of trains, so they need actors and train conductors. If all the residents moved to North Dakota, there would be lots of demand for baristas, actors, and train conductors in North Dakota, and none in NYC. But some people gave versions of this argument that I found harder to dismiss. JSwiffer writes: The key fact your missing is if you wave a magic wand and 10x San Francisco you wouldn't 10x all jobs. You would 10x the # of waiters, and garbage men but you wouldn't 10x the # of 500k/yr Google site reliability engineers. And it's the latter not the former that are driving up prices. Other commenters analogized this to factory or coal mining towns. Here’s how I ended up thinking about this: suppose someone strikes oil in an uninhabited part of North Dakota, enough to produce 1,000 good oilman jobs. 1,000 oilmen move to the area and start a town. Because there are no NIMBYs, they build 1,000 houses. Each oilman creates demand for a certain amount of waiters (to serve them food), doctors (to treat their illnesses), teachers (to teach their children), etc. How many waiters, doctors, teachers, etc move to the town? Assume for the sake of argument that all jobs earn the same salary, $50,000. In that case, it has to be fewer than 1,000. Each oilman earns $50,000, and some of that gets spent on taxes and out-of-town goods. So he has less than $50,000 to spent on in-town goods and services, so (in this hypothetical) creates less than one other job. Each waiter needs doctors to treat their illnesses and teachers to teach their children, so each service employee creates some number of additional service employee jobs. Makeshift housing in a North Dakota oil boom town (source) If each person creates half a job, the original 1,000 oilmen attract 500 service workers, those 500 attract another 250, and so on until population stabilizes at 2,000 people. In this model, if there are fewer than 2,000 houses in the town, demand exceeds supply (no matter what is going on in the rest of the country), but if there are more than 2,000, supply exceeds demand. So if we imagine Google’s presence as an oil-like resource, the extra demand for housing in the Bay should gradually decline: at some point, you will have finished housing the Google workers and the service workers who support them. But this isn’t right either, because Google isn’t a natural resource - it’s a company founded by Bay Area residents. If you got more Bay Area residents, you would (with some delay) get more Googles. Or: Austin gets lots of jobs from Tesla. Tesla wasn’t founded by Austinites. But it moved to Austin when it became a known “tech hub”, ie a place with lots of tech companies and tech employees. It wouldn’t have moved to Austin if Austin was still an uninhabited plain or a one-horse town. So as Austin got bigger, it attracted more tech companies. So in both the Bay Area case and the Austin case, having more people attracted more tech companies, either because the residents themselves found the company or because the company gets attracted to this newly bustling city. Potential counterargument: Each new Bay Area resident gives the Bay another lottery ticket to found the next Google. If having the first Google gets it an extra 1 million people, but there are 300 million people in the US, then those extra 1 million only give it a 1/300 chance of winning the next lottery. So even though the Bay Area won the lottery once, and this made it have high demand, this doesn’t mean the high demand will cause it to win more lotteries. If you win the lottery once, spend all your winnings on more lottery tickets, and keep doing this forever, you haven’t invented an infinite money printing machine, eventually you’ll just lose. Potential counter-counter-argument: the Bay got Google, and Facebook, and Apple, and . . . so these can’t all be separate lotteries. I think you should probably model it as a high-level lottery to become the next hub of a tech-sized industry, plus many low-level lotteries where once you’re the tech hub, you’re attracting lots of techies, and each techie gives you a ticket in a lottery where the denominator is the number of techies to found the next big tech company. And the Bay might have half the US’s techie population. So maybe here there is a self-sustaining lottery-winning cycle, at least until tech plays itself out and nobody wants any more tech companies. And that might take a long time. Tom (author of Tom Thought) writes: The primary drivers of demand for living in NYC are the specific opportunities available in NYC. It is true that on long time horizons, one of the reasons these opportunities have tended to collect in NYC is that it is a dense place. But those aren't the only reasons - NYC is much more important than other, bigger cities in other parts of the world for complex historical reasons. Even if a catastrophe were to wipe out half the city, there would still be a great deal of demand to live near important institutions like Broadway, Wall Street, Port of NY & NJ, Columbia, etc (assuming those institutions survived the catastrophe). Increasing the number of housing units has a very mechanical impact on how many people can live in the place. But it has only a second-order impact on the types of institutions that drive demand to live in the city. People don't just generically crave to live near other people for the most part (a handful of urbanist freaks like myself excepted). The Bay Area is a great example of this. It is much less populated than other much cheaper cities. Density isn't why people want to live there - it's access to a specific culture and specific institutions. Demand for that is not simply a function of density - some people want to be part of Bay Area culture and others don't. Adding more units will induce some demand as a second-order effect, but will bring prices down as a first-order effect. To relate this to your model: we might be able to say that the country has a certain number of abstract "culture points" that have been allocated to different cities by various historical forces. Each culture point a city has increases demand to live in that city by a certain amount. Adding more people to the city may allow it to generate additional culture points over time, or acquire culture points from other cities, but this doesn't happen right away, and is determined by a host of factors other than just density. Under this model, we expect a place like NYC to always cost much more than North Dakota (since NYC possesses a large number of culture points), but we would also expect that adding additional housing units to NYC would bring costs down (since there are now additional housing units per culture point). Perhaps this process will over time allow NYC to steal away some culture points from Chicago, Boston, or other cities, but this is a secondary effect. This just seems to be passing the buck. Yes, people move to New York because it has Broadway, Columbia University, and Wall Street. Why does it have those things? Because one in every X New York citizens founds a good artistic/educations/financial institution, and New York has a large population of employees to work at those institutions and customers to patronize those institutions. If Conanicut Island had a population of 10 million people instead of Manhattan, there would be lots of great institutions on Conanicut and it would have more culture points. I don’t think it’s a culture-point game and population/density just sort of occasionally redistributes culture points, I think to a first approximation culture points just track population/density. Maybe they track the population/density of upper class people better than the total population/density, but I don’t think this is a big enough distinction to sink the argument. 3. Comments About Chinese Ghost Cities Some people brought these up as a good natural experiment: the Chinese really did try building millions of houses on their equivalent of a North Dakota plain. What happened? Jeremiah Johnson (author of Infinite Scroll) writes: You currently seem like you're at the stage of understanding the thought experiments pretty well, but not understanding them on a DEEP level. For example with your hypothetical, this has actually happened before! Kind of. China built a bunch of 'ghost cities' basically out of nothing, and while there was an initial craze of speculation and tons of investment and building... nobody went to live in those cities most of the time. And now they're deeply distressed assets worth basically nothing. When nobody actually lives in the ghost city, it doesn't matter that they have super dense housing. There's no demand. (the only reason they might be worth something is that the CCP very, very much does not want to pop their huge housing bubble and is likely to bail out some of the parties involved) Parmenides (author of Last House On The Left) writes: I think your mixing up the agglomeration effects of density, which is what induces the demand, and the housing supply. You can't just build a city and expect people to move in, China has tried that. But if you have the agglomeration effects of density and shortage of housing due to artificial constraints, which we have all across the US, then you get dense areas with high housing costs. sdwr writes: Think of China's ghost cities / apartment blocks. Prices surely can't be that high there. Maybe the answer is that developers are good at their job, and build supply where theres demand for it? But several other people object that although the Western press made a big deal about Chinese ghost cities a few years ago, it mostly just took a couple of years for people to move in, and now at least some of them seem to be thriving. For example, Michael quotes the Wikipedia article, Under-occupied Developments In China: Reporting in 2018, Shepard noted that "Today, China’s so-called ghost cities that were so prevalently showcased in 2013 and 2014 are no longer global intrigues. They have filled up to the point of being functioning, normal cities". Ash Lael writes: I'm sceptical of the Chinese "ghost city" phenomenon. I haven't explored the issue rigorously but my impression is that in areas that were previously dismissed as "ghost cities" like Ordos Kangbashi, the population is now large and growing. I think we in the west are so used to infrastructure bottlenecks and short sightedness and anti-construction policies that the idea of it being possible to build the housing and infrastructure to accomodate expected demand ten years in the future is completely foreign to us. Perhaps building brand new cities before they are even needed is what the YIMBY utopia looks like. See also Bloomberg: China’s Ghost Cities Are Finally Stirring To Life After Years Of Empty Streets. This wasn’t trivial. It looks like the Chinese government had to put in some work to make people move in, including opening good schools and universities there. Probably if they had just built apartments in the middle of the desert and nothing else, they would have stayed empty. But that’s even more of a reductio ad absurdum than the original ghost city plan. Kangbashi, China’s most famous ghost city. What are housing prices like in the ghost city? Again from Bloomberg: Sitting on the southern outskirts of Inner Mongolia’s Ordos City (population 2.2 million), Kangbashi was the archetypal ghost city 10 years ago, with barren boulevards and empty buildings standing forlornly in the desert. Local officials are adamant that things have changed. They say 91% of homes in the district are occupied. In fact, after a yearslong construction freeze, the government approved six housing projects in 2020 and expects 3,000 homes to be built by the end of this year. Apartments in a new development are selling for 9,500 yuan per square meter, and downtown they go for 15,000 to 16,000 yuan, according to Liu Yueyue, 28, a salesman at a new residential development in the district’s northeast. “Would houses in a ghost town sell at such high prices?” asks Liu. Half of his customers come from outside Kangbashi, and most are parents who want to send their children to the well-regarded local schools, he says. Looking at this list of real estate prices across Chinese cities, Kangbashi seems squarely in the middle - for example, Wuhan and Xian are also in the 15,000 - 16,000 range. I claim this supports my argument: surely twenty years ago, houses in this particular deserted corner of Inner Mongolia would have been dirt cheap (if any even existed). But if you build a city there, it becomes just as expensive as any other city! Here it’s very obvious that the density caused the high prices instead of the other way around. Still, the Chinese housing market is weird, with significant vacancies even in expensive, well-developed cities. Paul Botts: No official vacancy rates are published in China and no specific definition of it exists there. Various think tanks and researchers both within that country and elsewhere have published estimates ranging from as low as 11 percent to as high as 24 percent. Those estimates have been for varying samples of Chinese cities, have used various definitions of housing vacancy rate, etc. The best (as in most systematic) estimate yet produced has come from researchers at a university in Liaoning. They used night-time urban lightsheds captured by a new (2018 launch) Chinese satellite having a new level of light sensing technology which allows separating out light from parks and plazas. They covered a large sample (49 cities), and made their sample representative of city type, city size, regions within China, etc. They also crossed-referenced with local housing data to ensure accurate balancing of their sample and to confirm that the satellite was successfully identifying light coming from housing blocks. They found vacancy rates of just under 20 percent in China's Tier 1 cities, and found rates above 20 percent in 40 of the 49 cities. They found the highest vacancy rates in western and northeastern cities, which are also the newest ones; that finding is consistent with the hypothesis of significant numbers of recently-built ghost cities. https://www.researchgate.net/publication/345092218_Housing_Vacancy_Rate_in_Major_Cities_in_China_Perspectives_from_Nighttime_Light_Data And Phil H (author of the blog Tang Poetry) writes: The price of housing in China has skyrocketed over the past few decades, as all those extra apartments have been built. I live in a pleasant but unremarkable southern city, and I paid London prices (about 4.5m yuan/$650k for a 1,300 sq ft flat). That seems to match Scott's hypothesis that high density leads to high prices. House prices here have risen much faster than incomes. They've risen in rural areas, too, but the increases in price in cities have been stratospheric. 4. Comments Accusing Me Of Not Considering Tokyo, Even Though I Included A Section In The Post On Why I Didn’t Think Tokyo Was Relevant I won’t name and shame people, but for example: You excluded Tokyo from your dataset. Tokyo has much higher density than SF and much lower price per sqft. Tokyo just kills this. Tokyo is bigger than New York and has significantly lower rent because they build more housing! This is in a wealthy country with even lower interest rates than the US. I don't think you have justified excluding non-US metros, like Tokyo, or Auckland. Doesn't this lead to the natural conclusion that there is a sufficient level of housing to build, and that the problem is that the USA's many metros are structured to prevent housing? It seems like you're just arguing that US metros are bad at building housing, which is also what Matt Yglesias is arguing. "Change my mind about housing, but don't mention Tokyo" is like saying "Change my mind about gun possession, but don't mention Switzerland." You can't test the effect of allowing new housing unless you're willing to look at cities that do, in fact, allow it. Tokyo and NYC both attract tons of new residents But Tokyo's housing rents have been stable, while NYC rents keep rising. Why? Tokyo has permissive housing construction laws. NYC makes building new housing almost illegal. Yes, dense cities are attractive, and that makes them get more dense over time. But it only makes them more expensive if you forbid new housing to keep up with the new residents. Tokyo! But I’m like the 10th person to bring it up… As I wrote on the original post (not even edited in! it’s been there the whole time!): I worry someone will bring up Tokyo as a counterexample. But I think Tokyo managed to build its way to low housing prices in the context of the rest of Japan also having good housing policy. Even if that isn’t true, Tokyo on its own is a quarter of the Japanese market, so it might be able to exhaust the entire pool of Japanese house-seekers by itself! That is, yes, you’re all correct that cities are only expensive in the context of more demand for city housing than the (NIMBY-constrained) city housing market can currently supply. You are all correct that if this problem were solved at the national level, then city housing would be cheap, and every additional city house would make it cheaper. My claim is that marginal changes - like Oakland building an extra 10,000 units, but everyone else staying the same - will most likely increase Oakland prices. Yes, if Oakland unilaterally built 50 million units, that would soak up the entire excess demand and probably lower prices everywhere (including Oakland). Yes, if the entire US switched to good housing policy at the same time, that would probably lower prices everywhere (including Oakland). But if we don’t do any of that stuff, and just build another 10,000 houses in Oakland, I think it would probably increase prices in Oakland. Some other people brought up that Japan has a declining population, and it’s much easier to have low house prices when your population is declining (compared to some previous time when number of houses presumably matched number of people), but ddd pointed out that people continue to migrate from the Japanese countryside to Tokyo, so its population continues to increase. Also, Mike (I’m stitching together two comments here): In a country with a declining population, you would expect that fewer homes are being built per capita because there's little to no competition for existing homes. But it's exactly the opposite! Japan builds far more homes per capita than the US does, despite their declining population […] As a result, the average Japanese home is very new and the average house is torn down and replaced after a relatively short 30 years. They're living in nice new homes for cheaper. 5. Comments Accusing Me Of Not Understanding Economics Maximum Limelihood Estimator writes: I think you're making a very common mistake here of confusing supply/demand with *quantity* supplied or quantity demanded. (This is very common! we teach students about this in micro 101 because it's so easy to make!) What you're seeing is that the quantity supplied is correlated with housing prices (true!). But this is very different from establishing that the supply curve--i.e. the amount of housing that would be produced at any given price, and what moves up/down when we regulate/deregulate supply--is positively correlated with price. Figuring out what supply curves look like is a lot less intuitive and requires some high-grade econometrics, which is why economists had to set up a whole commission just to study this particular problem (the Cowles Commission). In terms of resources for understanding how these concepts are different, a micro 101 textbook will cover this distinction. For the econometrics side of this, I've heard good things about Scott Cunningham's *Causal Inference Mixtape*, although I haven't personally used it. My claim is that increasing density within a city shifts the demand curve for housing within that city, because of increasing desirability. MLE later gets more on point: The effect you're discussing here is kind of real in a sense. When the marginal utility of housing increases for *other* people, density arguably becomes more desirable for me, which is kind of like the demand curve shifting up. These are called bandwagon goods and discussed here: http://econfac.bsu.edu/research/workingpapers/bsuecwp200804gisser.pdf In theory, the bandwagon effect could be so strong that parts of the demand curve are upward-sloping. Solutions like this are not, technically, prohibited by the laws of mathematics, just the laws of economics. (And arguably of physics--see paper for conditions where these kinds of bandwagon effects imply the amount of housing in the city would have to be negative). In practice, this effect exists but just can't overcome the normal, non-weird economics that says "making more of a good makes the prices fall." Again, I claim the existence of Manhattan vs. Conanicut shows that sometimes it does. I cannot find the words “housing”, “real estate”, or “land value” anywhere in that paper. Alex Poterack writes: There's two things going on here: confusing shifts in demand with movement along the demand curve, and getting causation backwards. You're assuming density causes prosperity, rather than prosperity causing density. There are ways the former can happen, but the bigger thing is that, for a wide range of historical reasons, you can make a lot of money in NYC and SF, so lots of people want to live there, so they get very dense. This is the prosperity shifting demand right, so at any given price, more people want to live there; this drives prices up, and they go higher the more fixed supply is. If you built a bunch of housing in Oakland, lots of people would move there because it's cheaper, which is movement along the demand curve; it's still the same number of people who want to live there at any price. Now, it's possible that the increased number of people living there makes the city more prosperous (this is the phenomenon of induced demand), which would shift demand right, but there are way more differences between NYC/SF and Oakland than just the density, so I don't think it would shift demand enough to offset this. In particular, if it's just a small increase in small, it's also a small increase in density, so there's almost no shift in demand (but there is movement along the curve). I still think this is missing my point, but I present it here in case anyone else is enlightened by it and wants to try further to convince me I’m making this mistake. 6. Comments By Famous People Who Potentially Have Good Opinions Scott Sumner is an economist and blogger; he writes: It is certainly the case that building more housing can make a city more desirable, and that this effect could be so strong that it overwhelms the price depressing impact of a greater quantity supplied. But studies suggest that this is not generally the case. Texas provides a nice case study. Among Texas’s big metro areas, Austin has the tightest restrictions on building and Houston is the most willing to allow dense infill development. Even though Houston is the larger city, house prices are far higher in Austin: Houston pretty much describes the “Oakland with more housing” outcome that Alexander views as somewhat far-fetched. Only in this case, it’s Austin with more housing. Alexander seems too quick to accept the, “If you build it they will come” idea—that you can build more housing and thereby boost demand so much that prices actually rise. I started the post with a graph of about 50 cities, showing a positive correlation between density and price. I’m having trouble seeing how Sumner’s point isn’t just “if you remove 48 of those cities and cherry-pick two, the relationship is negative”. My attempt to place Austin and Houston on the original graph, using Sumner’s data plus a few other things available online. Why weren’t they on there already? Maybe because the graph is metro areas and Sumner was talking about Austin and Houston as cities, but I’m not sure and agree this is confusing. Everyone knows Austin is more expensive than Houston because Austin is a trendy tech and culture hub and Houston isn’t (and relatedly, because Austin’s median family income is 50% higher than Houston’s). Unless someone wants to claim that its failure to build housing helped turn it into a trendy tech and culture hub, I don’t think there’s much point to this comparison. It’s true that Houston’s bigger size didn’t let it leapfrog over Austin to become a trendy tech and culture hub, which goes against some of what I claimed in the first part of this post. But I never claimed there would be a perfect 1-1 correlation between city size and trendiness, or that you could never find a pair of cities where one was bigger but the other was more trendy. Just that there would be a correlation. Moving on: Here’s the problem with this argument. It mixes up population change due to economic effects such as the benefits of agglomeration, with population changes due to regulatory changes such as less strict zoning. If you look at things this way, then the stylized facts work against Alexander’s argument. Over the past 50 years, increasingly strict zoning has reduced housing construction on big cities like New York and San Francisco. As a result, their populations have increased by less than in cities with less strict zoning, such as Houston. If Alexander were correct, then the price gap between the tightly controlled cities on the coast and the more laissez-faire cities of Middle America should have shrunk over time. Instead, the price gap has widened. New York and San Francisco were always more expensive than other cites, but with tighter zoning and less new construction the gap has become far wider. During the last fifty years, there was also deindustrialization and demographic sorting. This is just the Austin vs. Houston story all over again. Alexander is implicitly viewing this outcome as a “problem” for the city that builds more housing. They must sacrifice so that the rest of the country can gain. But in his scenario, Oakland is better off. Indeed if it were not better off, then why would more people choose to live in Oakland? In order for it to be true that building more housing boosts housing prices, it must also be true that the quality of existing houses (including neighborhood effects) rises by more than enough to offset the increase in supply. That means the new housing construction must make Oakland such a desirable place to live that the amenity effect overwhelms the quantity effect [...] Of course, economic change always has winners and losers. Here’s how I would describe the impact of allowing more housing construction in Oakland, in the unlikely event that this did raise housing prices: 1. America would benefit. 2. Oakland would benefit. 3. Poor people in America would benefit, in aggregate. 4. Affluent people in America would benefit, in aggregate. 5. Homeowners in Oakland would benefit. 6. Some renters in Oakland would benefit (from a more economically dynamic city.) 7. Some renters in Oakland would suffer from higher rents. In the much more likely case where new housing construction would lower prices, the impact described in #5 and #7 might reverse. Either way, there is no defensible argument for not building more housing in Oakland, regardless of the impact on price. If building more housing reduces its price, then there is a strong argument for allowing more housing construction. If building more housing raises its price, then the argument for more construction is even stronger. I agree with all this. Jeremiah Johnson is a co-founder of the Center for New Liberalism, host of the Neoliberal Podcast, and a YIMBY activist (not to be confused with Jeremiah “Liver-Eating” Johnson, who killed 300 Native Americans and ate their livers). He writes: Here's why you're wrong in a single sentence: Demand causes high prices, not new units. Prices are high in SF and NYC because those are desirable places to live for a huge number of people. People all over the country and the world would live there if they could, and prices reflect that. The fact that the densest cities are the most expensive is true. But the high prices are not caused by density - rather, the density and the high prices are both a consequence of crushingly high demand […] There's a feedback loop, but what matters here is the elasticity, which is less than one. We can measure this empirically. New housing lowers prices via the mechanism of adding supply, which is basic economics and how we expect markets to work. New housing could raise prices if it also made the city a more desirable place to live and shifted people's preferences, such that there was more demand to live there after the new housing is built. If you think it's unclear which of these effects would dominate, luckily we have empirical data that over and over and over shows adding housing supply does indeed lower prices on a local level. This is a fairly well established result that replicates well. edit: I'm actually thinking about drawing out the weighted DAG graphs here to make the conceptual stuff easier, but it would be pretty long. I'd love to do this as a guest post. I’m skeptical of the empirical results because they don’t match the much stronger “Manhattan vs. Conanicut island” empirical results, and if I try to think about why, the best explanation I can think of is that the Manhattan experiment has been going on longer (ie long enough for Manhattan’s extra residents to found businesses and institutions that attract new people). I’ve told him he can try pitching this guest post to me; in either case, I would be interested in seeing the graphs. Several other people also posted this graph that Johnson helped make famous: Hopefully by now you can predict my objection: the places in the southeast corner are mostly unfashionable red state Sun Belt cities; the places in the northwest corner are mostly trendy liberal coastal cities. My conclusion is that trendy liberal coastal cities are both more NIMBY and more desirable, and if you use this to draw any conclusions about housing policy you’ll just end up confused. But maybe I should take this same lesson to heart myself. Dense cities are mostly trendy liberal coastal cities; uninhabited tundra in North Dakota isn’t. Maybe the demand is just for trendy liberal coastal cities, and once you attain that status, extra density doesn’t matter that much. Maybe Oakland has already maxed out its “trendy liberal coastal city” status, and even if it became Manhattan-sized, it wouldn’t get any trendier, or would get trendier only with a long time lag. There are a few very trendy small coastal villages in California (think eg Sea Ranch); maybe these (rather than North Dakota) are the natural control group for San Francisco. I think they are still cheaper than SF, but maybe not by very much. Cameron Murray is a housing economist whose work some other commenters recommended; he also writes the blog Fresh Economic Thinking. He very kindly showed up and wrote: I think you are in general right that agglomeration effects are real, which is why bigger cities have higher value to residents. I agree that people move locations. But I think you can go a step further. If one city is growing faster and densifying, surely those people are not demanding homes in other cities and those cities build slower. This is part of the spatial equilibrium story that further makes claims about “build density and get cheap homes” less plausible. 7. My Final Thoughts + Poll Thanks to everyone who commented on this post and helped me refine my thoughts. I’m willing to concede the following points: It might be that only attracting the sort of educated people who found companies, universities, etc will make housing prices go up. Less educated people will take more jobs than they create and not ratchet up the city’s desirability level. (I’d previously told commenters talking about “gentrification” that it was irrelevant to the mechanism I was talking about here, but maybe it isn’t - maybe “gentrifiers” are the people creating more jobs and institutions than they consume, and so homes that attract them in particular will increase demand more than they increase supply? Maybe this discussion does reduce to the gentrification discussion?)
Inline links: https://substackcdn.com/image/fetch/$s_!_tzy!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fdac57667-98e2-40ff-bc78-7f3568efab8d_237x162.png, writes, writes, https://substackcdn.com/image/fetch/$s_!PkSC!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd8f1265d-d113-4d13-87cb-0d1985389b4d_1000x750.jpeg, source, Tom Thought, https://substackcdn.com/image/fetch/$s_!86gT!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5788a8dd-c5ee-4111-be67-9c1533f7410b_335x172.png, Infinite Scroll, writes, Last House On The Left, writes, writes, quotes, Under-occupied Developments In China, writes, China’s Ghost Cities Are Finally Stirring To Life After Years Of Empty Streets., https://substackcdn.com/image/fetch/$s_!AAuI!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5d6a6159-a16f-45e3-b15a-e62cb2c73336_1200x900.jpeg, this list of real estate prices across Chinese cities, Paul Botts, https://www.researchgate.net/publication/345092218_Housing_Vacancy_Rate_in_Major_Cities_in_China_Perspectives_from_Nighttime_Light_Data, Tang Poetry, writes, ddd pointed out, Mike, Maximum Limelihood Estimator, gets more on point, http://econfac.bsu.edu/research/workingpapers/bsuecwp200804gisser.pdf, writes, writes:, far higher in Austin, https://substackcdn.com/image/fetch/$s_!tAF8!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F03f2b338-da84-4d85-b71c-0ce2e02e10e1_685x559.png, https://substackcdn.com/image/fetch/$s_!mLwn!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9cf942da-5716-49e8-a177-20140681e7fc_573x421.png, Center for New Liberalism, the Neoliberal Podcast, Jeremiah “Liver-Eating” Johnson, Johnson helped make famous, https://substackcdn.com/image/fetch/$s_!tg5t!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc490a60a-3e97-4b73-9806-79bb967b5172_608x550.png, Sea Ranch, some other commenters, Fresh Economic Thinking, wrote
Your Book Review: Autobiography Of Yukichi Fukuzawa
June 21, 2024 · Original source
For over two centuries, the sole point of contact between Japan and Europe had been an artificial island in Nagasaki called Dejima. The Dutch had occupied the island since 1641, exercising a carefully monitored monopoly in trade. As a result, the few Western books that entered Japan were generally written in Dutch. Any Japanese person who wanted to learn Western science therefore needed to gain fluency in that language (which, given the limited opportunities for interaction between the two groups, was not so easy).
Soon after Perry’s arrival, Fukuzawa’s older brother tells him that Japan needs more people to study Western science. He asks Fukuzawa: “Are you willing to learn the Dutch language?”
It is worth noting at this point that not everyone in Japan was thrilled at the prospect of studying Dutch.