Can I make a request for more (or any really) posts about Africa?
It seems to be the last hope for demographics in the 21st (not to mention cultural things like how it is transforming Christianity) and I feel like I know very little about the economics of what's happening in a massive region.
A recurrent theme recently has been that "obvious" demographics stuff is baked in. It was obvious Japan would collapse in the 90s because of demographics. It was obvious China's one child policy would create massive headwinds. It is obvious that America's anti-immigration policy does the same.
But for all those policies I remember AT THE TIME nobody thought it was obvious.
So what's the story on Africa? Are we going to look back in 30 years and say it was obvious it was going to overtake South Korea and Taiwan?
+1 I'd also be very much interested in that. There are those who say that almost all the high growth that was seen in many African countries since 1-2 decades would be eaten by equivalent population growth. However, looking at GDP per capita (PPP) e.g. for Kenya -- where I happen to live -- shows a steady increase over that time frame: https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2020&locations=KE&start=2000
Did the survey, offered some opinions and suggestions.
I'd like to see you do some Latin America stuff... actually, I think you should do a Latin America tour. You like Asia, but their is a lot more world to see!
I responded to the survey. Please note that my comments apply to sub stack and Twitter taken together. I love both. I have been taking extended Twitter breaks lately, but still check in every day to search for tweets from you, Krugman and Daniel Negranue.
Krugman has a very nuanced understanding of economics and a very simplistic understanding of politics (not that mine is particularly nuanced either). Thus, he reminds me of my dad. Thus, I like him.
He is partisan. I can see how moderates might have trouble with his tone(and insistence). I find his explanations of economic phenomena to be compelling.
The problem is his perceived partisanship makes it difficult to trust his explanations. I can find the data info from other sources. So why bother. He is they type of guy who will never go against the team or admit being wrong… big turnoff.
Traditional finance would have to be in a pretty bad state to learn anything from crypto. Proof of work isn’t the only technical flaw; essentially the whole thing is. The only good idea is that maybe you should use a database that keeps history by default, but we’ve had those since the 70s.
Popularity in tech has nothing to do with the ideas making sense - you can see this from IBM ads which have been 100% nonsense buzzwords about “5G AI cloud” for years.
I think it's more interesting than that. DAOs and other crypto stuff works more like idealized econ contract theory than any real legal contracts do. So it'll be interesting to see crypto implement game-theoretic stuff that real contracts can't...
Yes, this! But also, even if real contracts can do something, whether it’s enforceable is another question. Especially when considering “small people” without much legal backing, or cross-country transactions (very common for large parts of the world). No issue there with smart contracts.
Yeah, American consumer finance might actually be that bad until we get FedNow and more programmable bank accounts. But, like, this is real money. Getting it wrong might actually be worse than not doing it, and they've built a system with no recourse if you make a mistake. (or a Macedonian teenager hacks you)
I did use crypto for its actual best use case the other day - buying weird nootropics off the internet - and the fees ended up at $10 to transfer $50. Maybe people need to learn about TransferWise?
Also crypto is going to make 10,000 people insanely rich and they're gonna do... interesting things with their money. Also a generation of tech people is gonna stop making other tech and make crypto stuff. See? It matters!!
That's not the best use case. The best use case is circumventing draconian currency controls, which TransferWise does nothing to help with. That's what I've use it for. I'm deeply sympathetic to small developing countries having currency controls to prevent vast flows of money from western hedge funds and whatnot sloshing in and out in minutes/hours/days. But I've also seen lots of "normal people" affected by it. Even something as simple as "I sold my car and would like to use that money to pay bills back in Europe" becomes somewhere between hard to impossible. And usually people resort to the black market to make it happen. (For some reason it is all run by gold sellers; I don't know why.)
Remittances are another area where I see them being used reasonably well. The traditional remittance networks work smoothly but are anything but low-fee, especially since you were quite often sending it to unbanked relatives back in the village. Obviously converting from crypto to fiat isn't flawless but P2P exchange is pretty cheap (I've done it with Binance).
> That's not the best use case. The best use case is circumventing draconian currency controls, which TransferWise does nothing to help with.
Nah, I wanted an example that's legal, just disliked by payment processors.
It's not great for running an illegal money transmitter. It's expensive - once you find the guy in the other country, the fees would be a lot lower if you wired to his offshore bank account. And unless you're using Monero, the law has all the time in the world to come after you, since none of the transactions will ever go away.
Noah, can you do a bit on South Korea's social problems? While it is turning into a cultural powerhouse, so many exports are about it's socioeconomic problems like Squid game, Parasite and Extreme Job. There's also the Hell Joseon ideology and Spoon Class theory and gapjil etc. Would love to read your perspective.
This is a great Substack and I'm happy to be a subscriber. I'm surprised more people haven't done likewise -- yet. This may be like the Hollywood model in the olden days -- start small and through word of mouth build into an impressive hit.
Can I request a look at South Korea's housing affordability problem?
Unlike California, Korea builds lots of skyscrapers. Yet Seoul's housing has somehow become as much of a crisis as San Francisco's.
Do Korea's troubles mean zoning isn't the only way to screw up your country's housing? Or does it mean Seoul has zoning problems too, just different ones?
I'd love an article from you looking at housing affordability issues, Korean-style.
New York has a housing problem even with skyscrapers. Just because part of the city is dense doesn’t mean that enough building is happening throughout the larger development area. That said, I don’t know enough about south korea to say for sure that they aren’t building enough. I can only say that I’ve looked into it for several cities around the world and most of them aren’t building enough regardless of how dense they are currently.
Disclaimer that I'm not at all familiar with South Korea, but:
You can look at housing zoning restrictions as basically limiting the number of people that are allowed to live in a given area of land. Lots of areas in the US are clearly setting that number way too low, and it would be good to not artificially set that number so low. But technology and psychology also limit that number! We can only affordably build skyscrapers so high, and most people don't want to live in giant apartment buildings. If the entire population of the USA wanted to live in a short commute of downtown NYC, it'd probably be simply impossible no matter how many resources we threw at it. Plus, those resources aren't actually infinite and deploying them takes time. The price of a new house can't sustainably be less than the cost of building it plus buying the land that it sits on.
It sounds plausible to me that South Korea is running into that higher number where building nice new apartments in the limited space is just expensive and lots of people want to live there.
That is all to say, prices are affected by supply and demand. Zoning can limit supply (leading to increased prices), but so can technology and psychology, while demand can go arbitrarily high. If demand outstrips supply then the prices will be high.
Mumbai has twice the population of Seoul in the same land area. And the construction tech level in Mumbai is lower.
The upper limit, wherever it is, is well above Seoul.
It may be that Seoul's problem may be that its original development policy was based on empty greenfield land, and now that they're re-developing midrises into highrises and so on they need to update the rules. That's a plausible hypothesis! But I don't know if it's true.
I'm hoping that Noah can be lured into finding out the truth and telling the rest of us.
The psychology element is also relevant here I think - people want to live in Seoul because they can have a nice life there (or an okay life where they make lots of money), but they presumably don't want to live in a really bad apartment, even if it would save them a lot of money.
The supply-demand curve can be morphed into a 3-dimensional plane, where demand and supply both vary with quality. The price for a given apartment is at the point where supply and demand intersects with the quality of that apartment. I'd wager that at the same quality level, the demand in Mumbai is higher than the demand in Seoul, so they can build cheap-but-shitty apartments in Mumbai while the same apartments in Seoul would sit mostly empty (and are thus not built in the first place).
Can I make a request for more (or any really) posts about Africa?
It seems to be the last hope for demographics in the 21st (not to mention cultural things like how it is transforming Christianity) and I feel like I know very little about the economics of what's happening in a massive region.
A recurrent theme recently has been that "obvious" demographics stuff is baked in. It was obvious Japan would collapse in the 90s because of demographics. It was obvious China's one child policy would create massive headwinds. It is obvious that America's anti-immigration policy does the same.
But for all those policies I remember AT THE TIME nobody thought it was obvious.
So what's the story on Africa? Are we going to look back in 30 years and say it was obvious it was going to overtake South Korea and Taiwan?
Will do!
+1 I'd also be very much interested in that. There are those who say that almost all the high growth that was seen in many African countries since 1-2 decades would be eaten by equivalent population growth. However, looking at GDP per capita (PPP) e.g. for Kenya -- where I happen to live -- shows a steady increase over that time frame: https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2020&locations=KE&start=2000
Aye aye
Did the survey, offered some opinions and suggestions.
I'd like to see you do some Latin America stuff... actually, I think you should do a Latin America tour. You like Asia, but their is a lot more world to see!
I'll try!
I responded to the survey. Please note that my comments apply to sub stack and Twitter taken together. I love both. I have been taking extended Twitter breaks lately, but still check in every day to search for tweets from you, Krugman and Daniel Negranue.
Thanks!!
I hate Krugman, but I will have to check out Negranue.
Why do you hate Krugman?
He is a little irrational. A bit to partisan for my tastes.
Krugman has a very nuanced understanding of economics and a very simplistic understanding of politics (not that mine is particularly nuanced either). Thus, he reminds me of my dad. Thus, I like him.
Yeah. But his tweets tend to the latter. And if he does the former, someone else I follow will link.
I am the exact opposite. I have a simplistic view of economics and a nuanced view of politics.
He is partisan. I can see how moderates might have trouble with his tone(and insistence). I find his explanations of economic phenomena to be compelling.
The problem is his perceived partisanship makes it difficult to trust his explanations. I can find the data info from other sources. So why bother. He is they type of guy who will never go against the team or admit being wrong… big turnoff.
Why do you think YIMBY-ism is "triumphing?"
They're getting pro-hoisong bills passed.
Traditional finance would have to be in a pretty bad state to learn anything from crypto. Proof of work isn’t the only technical flaw; essentially the whole thing is. The only good idea is that maybe you should use a database that keeps history by default, but we’ve had those since the 70s.
Popularity in tech has nothing to do with the ideas making sense - you can see this from IBM ads which have been 100% nonsense buzzwords about “5G AI cloud” for years.
I think it's more interesting than that. DAOs and other crypto stuff works more like idealized econ contract theory than any real legal contracts do. So it'll be interesting to see crypto implement game-theoretic stuff that real contracts can't...
Yes, this! But also, even if real contracts can do something, whether it’s enforceable is another question. Especially when considering “small people” without much legal backing, or cross-country transactions (very common for large parts of the world). No issue there with smart contracts.
Yep, this is why DAOs get us closer to Jean Tirole world
Yeah, American consumer finance might actually be that bad until we get FedNow and more programmable bank accounts. But, like, this is real money. Getting it wrong might actually be worse than not doing it, and they've built a system with no recourse if you make a mistake. (or a Macedonian teenager hacks you)
I did use crypto for its actual best use case the other day - buying weird nootropics off the internet - and the fees ended up at $10 to transfer $50. Maybe people need to learn about TransferWise?
Also crypto is going to make 10,000 people insanely rich and they're gonna do... interesting things with their money. Also a generation of tech people is gonna stop making other tech and make crypto stuff. See? It matters!!
That's not the best use case. The best use case is circumventing draconian currency controls, which TransferWise does nothing to help with. That's what I've use it for. I'm deeply sympathetic to small developing countries having currency controls to prevent vast flows of money from western hedge funds and whatnot sloshing in and out in minutes/hours/days. But I've also seen lots of "normal people" affected by it. Even something as simple as "I sold my car and would like to use that money to pay bills back in Europe" becomes somewhere between hard to impossible. And usually people resort to the black market to make it happen. (For some reason it is all run by gold sellers; I don't know why.)
Remittances are another area where I see them being used reasonably well. The traditional remittance networks work smoothly but are anything but low-fee, especially since you were quite often sending it to unbanked relatives back in the village. Obviously converting from crypto to fiat isn't flawless but P2P exchange is pretty cheap (I've done it with Binance).
> That's not the best use case. The best use case is circumventing draconian currency controls, which TransferWise does nothing to help with.
Nah, I wanted an example that's legal, just disliked by payment processors.
It's not great for running an illegal money transmitter. It's expensive - once you find the guy in the other country, the fees would be a lot lower if you wired to his offshore bank account. And unless you're using Monero, the law has all the time in the world to come after you, since none of the transactions will ever go away.
Noah, can you do a bit on South Korea's social problems? While it is turning into a cultural powerhouse, so many exports are about it's socioeconomic problems like Squid game, Parasite and Extreme Job. There's also the Hell Joseon ideology and Spoon Class theory and gapjil etc. Would love to read your perspective.
This is a great Substack and I'm happy to be a subscriber. I'm surprised more people haven't done likewise -- yet. This may be like the Hollywood model in the olden days -- start small and through word of mouth build into an impressive hit.
Can I request a look at South Korea's housing affordability problem?
Unlike California, Korea builds lots of skyscrapers. Yet Seoul's housing has somehow become as much of a crisis as San Francisco's.
Do Korea's troubles mean zoning isn't the only way to screw up your country's housing? Or does it mean Seoul has zoning problems too, just different ones?
I'd love an article from you looking at housing affordability issues, Korean-style.
New York has a housing problem even with skyscrapers. Just because part of the city is dense doesn’t mean that enough building is happening throughout the larger development area. That said, I don’t know enough about south korea to say for sure that they aren’t building enough. I can only say that I’ve looked into it for several cities around the world and most of them aren’t building enough regardless of how dense they are currently.
Disclaimer that I'm not at all familiar with South Korea, but:
You can look at housing zoning restrictions as basically limiting the number of people that are allowed to live in a given area of land. Lots of areas in the US are clearly setting that number way too low, and it would be good to not artificially set that number so low. But technology and psychology also limit that number! We can only affordably build skyscrapers so high, and most people don't want to live in giant apartment buildings. If the entire population of the USA wanted to live in a short commute of downtown NYC, it'd probably be simply impossible no matter how many resources we threw at it. Plus, those resources aren't actually infinite and deploying them takes time. The price of a new house can't sustainably be less than the cost of building it plus buying the land that it sits on.
It sounds plausible to me that South Korea is running into that higher number where building nice new apartments in the limited space is just expensive and lots of people want to live there.
That is all to say, prices are affected by supply and demand. Zoning can limit supply (leading to increased prices), but so can technology and psychology, while demand can go arbitrarily high. If demand outstrips supply then the prices will be high.
Mumbai has twice the population of Seoul in the same land area. And the construction tech level in Mumbai is lower.
The upper limit, wherever it is, is well above Seoul.
It may be that Seoul's problem may be that its original development policy was based on empty greenfield land, and now that they're re-developing midrises into highrises and so on they need to update the rules. That's a plausible hypothesis! But I don't know if it's true.
I'm hoping that Noah can be lured into finding out the truth and telling the rest of us.
The psychology element is also relevant here I think - people want to live in Seoul because they can have a nice life there (or an okay life where they make lots of money), but they presumably don't want to live in a really bad apartment, even if it would save them a lot of money.
The supply-demand curve can be morphed into a 3-dimensional plane, where demand and supply both vary with quality. The price for a given apartment is at the point where supply and demand intersects with the quality of that apartment. I'd wager that at the same quality level, the demand in Mumbai is higher than the demand in Seoul, so they can build cheap-but-shitty apartments in Mumbai while the same apartments in Seoul would sit mostly empty (and are thus not built in the first place).