Surprised not to see rent control mentioned here as well, but it's yet another example of redistributing resources in ways that end up hurting cities rather than simply allowing the free market to build more abundant housing.
This keeps getting stated as fact. Is it fact? Placing controls on the profitability of unimproved land and buildings reduces the profit of landlords. It might as a second-order effect also reduce the construction of new housing. But that would’ve been very much on how the rent control was structured.
There are many places in the world that have very successful rent stabilization policies. They typically don’t just cap rent increases stupidly, but they provide strong tenant protections and pair these policies with a component that’s designed to incentivize new housing supply and investment. The US does things in a clumsy way, and something like a “blanket 5% cap” is definitely clumsy. Better examples include Germany’s Mietpreisbremse, which includes a pile of exemptions for new construction and major modernization, or the Swiss and Austrian policies.
There are basically two bad equilibria here. In one, there is a limited housing supply that can’t (or doesn’t) grow much, and the result is that landowners just gradually increase rents and collect a windfall. This makes long-term projects like raising a family completely unworkable unless you’re lucky enough to own property and buy it when it’s cheap. It also incentivizes landlords to collude by restricting supply even more, since there’s little benefit to new builds and improvement when you can simply *not* invest and collect a forever-increasing rent. The other bad equilibrium is when rents are highly restricted and so new investment and building drops to zero.
There’s an assumption that if you just “let the free market work” you’ll wind up avoiding the bad place. I’m not convinced that’s true. As evidence I’d offer the recent RealPage lawsuits around price collusion.
Very light-touch rent-control can perhaps smooth out economic shocks without disincentivizing construction too much. But that VAST majority of real-world rent-control regimes are terrible, and get you outcomes like Stockholm's twenty-year waiting list and massive black market in illegal sublets.
Keep your head in the sand. Montgomery County MD’s “thoughtfully designed” rent control has destroyed new building. This is one of Mamdami’s worst issues.
Immigration may not be zero sum, over the whole economy, but it sure feels zero sum locally sometimes. Maybe people can accept that as a tradeoff if it is done right, but it has been done the opposite of right. It really doesn't help the case that the government has decided to ignore its own laws on this on illegal immigration. California has even gone so comically far as to pass laws restricting employer use of e-verify to check immigration status.
And this also extends to legal visa programs. By law, H1-B visas are restricted to jobs where there is a labor shortage and it is not possible to hire a citizen. But then tech companies are laying off thousands of US citizens while continuing to employ and even apply for more H1-Bs in the same job. Every one of those visa applications is obvious and provable fraud by the hiring company. How can they say with a straight face that they can't find US citizens for those roles, when a week ago they employed those very citizens in those same jobs? But the government looks the other way.
It seems like the only time the government sees the need to obey the letter of the law is when millions of illegals flood the border filing false asylum claims. Apparently we have to let all of them in, and also pay for their rent and food, because that's just what the law says. No matter that they are obviously lying to take advantage, we just have to let them in because that's the law.
There is a cap of 85,000 new H1b visas. Last year big tech employers Meta, Alphabet and Meta added less than 2000 H1b employees, and the biggest employer was Amazon with 4644. As for layoffs, Alphabet had none, Meta 3400 and Amazon and Microsoft about 15,000 each. In previous layoffs about 30-40% of laid off tech workers were immigrants, and there isn’t a reason to think that has changed. Do you know that the laid off workers were citizens? I don’t think H1b program would reduce layoffs of workers, though if all existing H1bs were rescinded the employers would lose lots of there workers and some with specific skills (like Taiwanese experts at TSMC in Phoenix) that aren’t available in the national workforce and shutting down projects would hurt many American workers as well as the companies.
FAANG is the wrong place to look for H-1B abuse. Those companies hire internationally not because they're looking for cheap labor to displace American workers but because they need tens of thousands of extremely talented people, and while the US does produce an outsized share of them, the US has only 4% of the world's population and for that reason can't produce enough. Restricting themselves to hiring only local talent would just mean hiring fewer and doing less.
H-1B abuse does exist in the IT industry, but you have to look elsewhere to find it, mostly in "body shops" who provide contract labor. The FAANG companies do use a little of this (not much), but it doesn't show up in their employee numbers because those people are employed by the contract agencies. Most of that contract labor is used elsewhere, though. The FAANG companies just don't use much contract engineering labor (though they use a *lot* of contract labor for janitorial and food services; that's not H-1B).
Your core point that H-1B abuse isn't big enough to move the needle is still largely correct, but if you want to find it the top tier tech companies' employee rosters are not the place to look.
Bingo. I've worked at tech startups, Google and MSFT, and the people there on H1-Bs are both as talented as the native born Americans and as expensive to employ. Preventing those people from immigrating simply hurts the US, period.
The objection is most typically to the relatively high percentage of visas going to outsourcing companies, which have been used to replace existing US workers at lower salaries.
I'm confused on this. H1Bs have zero to do with outsourcing. H1Bs are explicitly NOT outsourcing. Removing H1Bs entirely would, if anything, increase outsourcing. Didn't read the link because I don't have a NYT subscription.
That’s incorrect. About 21% of H1bs are employed by IT tech outsourcing companies - that’s nearly a third of the 65% of H1bs who are in tech positions. These are jobs specifically meant for outsourcing.
They are used by US companies to outsource work, including work that cannot be done overseas.
Outsourcing firm contractors generally are not more expensive to employ, and the firms they work for are not the firms who hired them, so there are no fees.
The Disney replacements worked for Cognizant and HCL, if I am remembering correctly.
You are correct that the body shops are worse, but hiring an H-1B when there are domestic workers available is H-1B abuse too and FAANG companies do it every day. Also I think you're correct that it isn't big enough to move the needle in an economic sense, but in a public opinion sense it's catastrophic. When the government allows companies to commit fraud in order to bring in foreign workers while they are being laid off from the same jobs, people are going to see red. A democratic government can't be seen to favor foreigners over its own citizens and hope to maintain legitimacy.
It's not a matter of hiring foreign engineers instead of American engineers. They hire all they can find, regardless of origin, and still can't hire enough.
You're obviously not in the industry. It was like that for a while, but not for the last couple of years. Plenty of data on that here: https://layoffs.fyi/
I'd argue that H1-B visa holders are a great benefit to the country's tech industry even if they reduce the opportunity of native born Americans to work at any single company. Assume that perhaps 40% of STEM workers in the Valley are H1-B (it seems that high in the Gang of Four).
==> They're selected from a world-wide pool of talent, and so increase the average skill level available in the country.
==> They increase the raw numbers of people above any given level of skill, allowing more companies to start and/or grow in any given area. This increases US GDP, and increases the size of the overall job market in that area.
==> The increased numbers of people in any given scientific area in the country allows for networking effects that increase the productivity of all people working in the area.
Overall, H1-B immigration is a big net positive for America and even for native born Americans who might find themselves with more competition for a given job, but with vastly more job opportunities overall.
Another way of viewing this is that the H1-B visa holders will be productive no matter where they end up. They might stay in India or China, or emigrate to the UK, Canada or Australia, and work for your competition. Or they could end up in the US, and work for your own company. Isn't the latter obviously better for *you*?
I doubt this is the case because otherwise we would see major global tech companies being founded in India, but there aren't any. But I do think your overall point here that this benefits the US may well be true. But that's not really what I'm arguing here. My point is that the law says this visa category is specifically only to be used as a way to address a critical labor shortage, and it is not being used this way. The whole industry is committing obvious fraud here and the government has looked the other way and refused to enforce a law that was written to protect US citizens. Regardless of whether this behavior actually benefits the country, it is illegal, and it is part of a larger pattern of the government ignoring its own immigration laws when it is convenient.
“In addition to employers exploiting the H-1B program while laying off tens of thousands of employees, outsourcing firms once again dominated the H-1B visa program in 2022, even among the top 30 H-1B employers. For more than 15 years, leading lawmakers from both parties have criticized outsourcing firms’ exploitation of H-1B and offered bipartisan fixes, yet the abuse continues unabated. Thirteen of the top 30 H-1B employers were outsourcing firms, and they were issued a total of 17,534 visas for new H-1B workers (21% of the total annual cap).”
Meta has around 80,000 employees total. For them to hire over 1000 H1-Bs in a single year is absolutely massive (even more so when you consider that H1-Bs are only in a subset of job categories at Meta). But really that's beside the point. If they laid off 3400 American engineers, and another 30,000 are available that were previously employed by MSFT/AMZN, then how can they claim that there are no available Americans to hire?
“Additionally, H-1B workers who are petitioned for or employed at an institution of higher education or its affiliated or related nonprofit entities, a nonprofit research organization, or a government research organization, are not subject to this numerical cap.”
“The H-1B1 program provides for the temporary employment of nonimmigrant aliens in specialty occupations from Chile and Singapore, limited to 1,400 nationals of Chile and 5,400 nationals of Singapore.”
Cap-exempt hires brought the number to 141K in FY2024. 119K in FY2023. Numbers for FY2025 are about 115K. These are initial approvals, not visas issued, and there’s a small one percent overhead for people applying concurrently.
This isn’t just a failure of politicians, it’s a failure of accountability among the people who embrace populist thinking. Zero-sum economics is seductive because it offers moral absolution: if the world is a fixed pile of resources, then someone else must be to blame for why you don’t have more.
The villains change across ideologies, but the mental shortcut is the same.
What gets avoided is the hard work: building institutions that function, investing in capacity, accepting tradeoffs, and owning the fact that prosperity comes from competence, not grievance. Zero-sum stories don’t just fail economically — they fail because they teach people to outsource responsibility
Populism is fundamentally the politics of scapegoating: right-wing populists blame foreigners (or sometimes LGBT people) while left-wing populists blame the rich.
I wonder how Japan, China, S Korea, Taiwan, Iceland, etc all made it without waving in millions of poorly educated non-native speakers?
How does Australia harvest its grapes and produce wine without relying wholly on immigrants and is able to employ English speaking foremen?
The answer is they have better labor conditions and more capital investment (automated harvest and vine maintenance). America is only starting to do this now, decades behind Australia and Europe, and of course they are using European machines….because why would you set up an American company to machine-automate harvest when there are millions of illegal immigrants working cheaply under the table?
Saying a supply of cheaper, informal labor willing to toil under poor conditions doesn’t affect the civilian workforce is like saying it doesn’t impact the capital investment plans in, say, vineyard management. There are obvious tradeoffs between capital and labor and between legal labor and illegal labor
Of course we could live without immigrants, especially illegal immigrants if we chose to, though it might not be best for the country or its capitalists. And of course every productive worker (whether citizen or immigrant) should be a net add, though that depends in part on the generosity of benefits, the incentives for work and tax paying habits.
Maximizing the benefit for the country- having a good supply of legal immigrants with minimal benefits, good incentives to work, and our having the ability to deport(or not renew visas for) the unproductive or criminal immigrants and the ability to expand housing for them would be wise. That is not what is on the table as a policy. Training the domestic labor force so they have the skills and education to be productive would also be wise. Also not on the table.
Why would I go through the risk and trouble of investing in an EV startup when cheap subsidized Chinese EVs are available? Why would I go through the risk and trouble of training and educating a domestic workforce when cheap illegals are available?
We need to change the incentives to get companies to be more proactive in training and apprenticeships for high school graduates. Reducing supply of labor and increasing wages is one way. Subsidizing those efforts is another. Labor is always going to compete with capital and also with overseas/outsourced production. Taxing imports and not taxing exports (replace corporate income tax with gross domestic receipts tax, with deductions for domestic labor and CGS, and not taxing foreign receipts). There are lots possible policies and tradeoffs.
Global competition and free trade in labor and capital is good- probably best for the country in theory. But the country is not a person, nor a voter. We need to balance the welfare of our citizens against economic theory and profit incentives. Create too much friction and the danger is the economy, industry and workers become uncompetitive. No friction can also be bad. And remember we have guilds in medicine, academica, childhood education, etc that create lots of frictions and inefficiency. We could increase frictions so that low skilled labor fare better while reducing frictions in high paid guilds so that more people get to share in those opportunities.
I don’t have the answers, but what we are doing now isn’t working.
The US has more jobs to do than we have people to work those jobs. If we don't have immigration or work programs, then we pay more with either money or time. If the price of haircuts double people will just get less haircuts. If the DMV doesn't have enough applicants, you just wait in line for longer. If things can't be built in a timely manner, then financing costs mean less things get built overall.
Yes, let’s hold up Australia, China’s gas tank, as some sort of model for the rest of the world. Gee, I wonder why ever did all those car manufacturers stop making things in Australia when they had such an amazing handle on their costs?
Australia is extremely reliant on immigrant labor. They just do it smarter. They offer a one year working visa to anyone under 30, but only from selected countries. They also require you to speak English and show that you have some money to get it. This is a working only visa that does not allow you to bring family and is not intended to be a path to permanent citizenship. And they don't have the idiocy of birthright citizenship. Contrast this with the US where everything seems to be there as a foothold for permanent migration. In the US, even refugees fleeing natural disasters end up being permanent migrants.
Perhaps when new immigration was banned Australia was reliant on the immigrants _already_ present in the country (who were after all also essentially banned from _leaving_ Australia)?
Many of those countries *do* have a lot of immigrant labor from decidedly poorer countries. (Even Japan, which has historically been very adverse to immigration.) They generally are more selective, so fewer of the immigrants poorly educated. But an actual part of the answer is "You can do that, but things would cost more". Despite what people say, you can easily get an American to be a janitor, it would just cost two or three times what you're now paying. The better pay for the janitor would come out of someone else's consumption. Despite all the moaning, everybody in the US agrees that maximizing our consumption is the goal. And we succeed at that. If you look at the CIA World Factbook chart of "per capita GDP corrected for local costs of living" https://www.cia.gov/the-world-factbook/field/real-gdp-per-capita/country-comparison/, the US comes out ahead of all the countries you listed. And the ones that are ahead of the US all have *lots* of immigrant workers.
I think you're right about colonialism, but I wish you'd explain how British rule in India fits in. I've read that wealth obtained from India had a lot to do with making Britain a preeminent power in the 18th and 19th centuries. If that's true, I suspect it's because the Raj was not just extractive (though it was that) but also positive-sum. But I'd love to see a knowledgeable explanation
Pre colonial India did not export minerals or other natural resources other than tea and spices. Their main exports were hand woven textiles. The British colonizers dismantled that industry and instead exported the cotton, jute and other natural resources to supply their own factories. They also imposed high taxes on land, the bureaucracy they established and on agricultural output (up to 50% tax rates) which lowered Indias growth to be even with population growth. On the other hand, Britain got cheap raw materials and tax revenue as well as distribution of Indias other exports.
I don’t think Noah said colonization was a positive for the colonized, only that resource extraction is not what caused the negative results.
While it is fashionable amongst the academic Left to say Britiain dismantled an Indian cloth industry, comparative experience of artisanal production in the face of industrial that is not colonial does not tell a different story. The future Indians didn't have production that was competitive. They also like to assert the colonial powers 'kept' the colonies in low-value agri production, ignoring that this is in fact the economic default unless and until one can develop industrialised commercial agriculture, which itself needs the institutions to support such.
the real damage to colonies of the 19th century is in poor governance models and standards under essentially para-military rule that did not set good models for real industrialisation - that needs good rule of law, and capital accumulation. Not in extraction but in piss-poor governance by the often third-raters sent to colonial rule and engaging in corrupt profiteering.
Cash crops during the colonial period would change depending on market shifts and technological change. The cotton--that fed Europe's textile mills, for example, displaced indigo--the blue dye--and was largely an American export, until the US Civil War, which shifted back to India.
India pre-East India Company, was a major textile producer, with locally sourced cotton and dye production. Multi-color sarongs (dhotis) were the main product, which were carried to Southeast Asia, and there traded for spices from the Moluccas, and Chinese silk and porcelain.
Britain initially *imported* fine grade Indian calicoes and chintz *until* the Industrial Revolution picked up steam, and created a flood of cheaper British cloth. *Then* they used taxation and other controls to destroy non-UK producers.
The opium trade is an interesting case. IIRC the majority of India-based opium merchants who stood to make money on selling opium to China were native Indians, and they were happy to support British efforts to push China to open itself.
Even more interesting is that China's voracious demand for opium wasn't even about its use as a drug!
Rather it was that the Qing state had such poor state capacity that they didn't even mint their own standardized coins, and its merchants thus used Spanish pieces of 8 instead: when those became much rarer after the Latin American wars of independence, the Chinese merchants increasingly used opium as a quasi-currency.
China, like pretty much any country before or after, wanted gold & New World silver for its chinaware, silks and tea. The Portuguese, Dutch and British traders wanted to *trade* other goods; especially cotton fabric produced in India (and later in Europe). But the Ming banned this--for reasons like what you stated.
The Portuguese won themselves their little entrepot at Macau because of their willingness to pay cash on the barrel; trading to Lisbon and later to Spanish Manila. The Dutch traded textiles aggressively and were banned by the Ming accordingly; and resorted to smuggling from their base on Taiwan. Then both were supplanted by the British, who used their gunboats and opium to open the China market wide open.
Overall I would recommend Yaw Boadu (a Ghanian expatriate) digestable series of reviews of colonial histories (https://yawboadu.substack.com/: mostly African but not only).
As Yaw rightly points to the applied history, the abstraction of European states doing X isn't in correspondence with actuals - which particularly for the late 19th c. but not uniquely - were heavily driven and triggered by local operators esp. colonial military officers seeking personal ego/glory and dragging the state in after them via power logic -whereas e.g. the London governments of UK quite rationally tried to have a policy of "avoid direct rule, only do trade and defend turf against other imperial power plays [i.e. other Europeans]" - as direct rule tended to become drains on treasury, the London power center understood much better its state interest. But humans are humans and short-term ego plays (see Trump) oft override rational interest.
Initially the colonial powers from Europe made their money from trade. The Portuguese would buy--and later produce--cinnamon and cloves in the Moluccas; Then transport them to Lisbon, where they produced fabulous profits. Spices from the Moluccas, silks and chinaware from Guangzhou, rubies and sapphires from Ceylon.
Later, the British in Bengal and Dutch in Java--both with high population density--produced more in rents & taxes than merely in trade goods. Both the Dutch and British in the East Indies farmed out most of the trading and territorial management to their respective East India Trading Companies. That were worth over $10 *trillion* in todays's money, and paid annual dividends on the order of 18%.
Thanks for all the helpful comments. I guess the reason why India made Britain rich, while the Spanish-American colonies did not do the same for Spain, is that the Spanish gave priority to digging up or melting down precious metals and sending them to Spain, while the British gave priority to trade. Does that seem about right?
California High Speed Rail has so far completed 80 miles of guideway and track and has partially built another 35 miles of the 119 miles authorized for the first phase of construction in the Central Valley to connect Merced and Bakersfield. It has also completed 58 structures (bridges, viaducts, etc.) and has another 30 or so partially built, as well as clearing environmental review for nearly all of the almost 500 miles of the full project to connect LA and San Francisco. In the course of all this it has spent $3.5B of Federal grant money, $4.8B of bond funding (out of a total of $9.8B authorized by Prop 1A), $2.5B of cap-and-trade revenues designated for pollution-reducing projects, and only $1.2B of California's general fund revenues (about 0.1% of California's cumulative general fund spending since the project was authorized in 2008).
Costs per mile of HSR are extremely high in the US compared to most European nations (although Britain is also very expensive comparatively) and I agree that both the planning and execution of the CAHSR project has been done badly on a bi-partisan basis (Jerry Brown and Arnold Schwarzanegger were both huge boosters). But making this a huge hobby-horse for discontent about spending or trying to claim it is a "progressive" problem akin to MAGA not knowing how international trade, or immigration, or "resources" work is boring and off-point. Making project management and environmental review more efficient is something we all need to work toward, but there is no political party or politician on earth that will not "brag" about huge construction projects creating a lot of construction jobs.
I have heard of the railway system in California that is not working but I would like to know why it is not working. One of the reasons for the increase of wealth in the 19th century was the railway systems which enabled people to travel to work, as well as move location if they wanted to.
We certainly need a way of resolving income problems. That so many are poor is a disgrace for the rest of us. Britain is currently moving into a European redistribution mode of high tax and high distribution but it may take a generation to resolve the issues of homelessness and bad health.
It's not working because the railroad has tradeoffs. People in the path will lose their houses, workers will die in construction, the environment will be damaged, etc. The Democratic party has basically decided that these are things that are not allowed. So as a consequence, the railroad isn't being built, or only at a painstakingly slow pace. One of the major reasons that NY can't build subway today is because they can't build it like they used to. The system was build mostly by tearing up the street and excavating down, which is massively cheaper than tunneling, But it is extremely disruptive to any businesses and residents on that street during the construction. 100 years ago the government would have said "too bad, the train is getting built", but the government of NY today has decided that it will not accept the tradeoff, so now it is entirely a legacy system that would be prohibitively expensive to build if done by today's standards.
I wouldn't even give them credit for failing to execute. They haven't even got to the point that they admit to themselves that these tradeoffs are necessary.
Well yeah - even benchmarked against not-too-cheap EU infra spend, the US is across the board just catastrophically bad in terms of capital expenditure efficiency and time to build. Although there are examples of almost as bad (e.g. the Germans and building elec grid, not quite ending up as expensive as US, but in delays certainly at very American levels of paralysis)
The primary objective is not to build a railway. There are many competing objectives and a huge pile of money to ladle out. building a railway is maybe number 5 on the list of objectives, if that.
Same thing for our homeless problem. The last thing they want is to actually reduce homelessness, as it would cut off the siphon of money funding the complex.
It is not particularly hard to see: the rail line is being built not following any strong actual economic logic for a high-speed rail which by comparative examples (Japan, Europe generally, France early days) must be starting out connecting high-usage hubs to be competitive with alternatives.
The California high-speed rail is not doing this at all, it's got a line that's traced for short-termist political reasons to not-key-not-rational-for high speed rail, and not connecting from get-go (if it were ever to become operational) high-demand hubs at a service speed that would be competitive (note Noah speaks to the High Speed Rail, not to "railway system in California": The California High Speed Rail Authority has not managed to create any high-speed rail whatsoever despite billions of dollars in spending, but brags about how many jobs that spending has created. It’s all redistribution and no production.")
It also needs to be built on timely and capital effective basis.
California is essentially doing the exact opposite of all this - and waiving some combination of Generating Jobs and Climate Change! flag to distract / justify for what's a clearly bungled and economically-irrational approach.
And the HSR was routed to optimize political favors instead of geology. They sold it on connecting SF and LA (and San Diego next) but ignored the Tehachapi Mountains and Diablo range which would require long expensive tunnels and started building in the central valley were land is cheaper and faster to acquire but still too much. And it won’t ever be cost competitive with cheap airline flights between these metro areas.
yeah, what I was alluding to on short-termist political reasons.
The whole thing is a political boondoggle rife with economic innumeracy.
and I love high-speed trains, absolutely prefer them over flights when abroad as more travel efficient where they have been done on a transport logical basis.
but done as a climate-dreaming essentially purely political basis without any grappling with the myriad of factors that make Infra build in the US an expensive catastrophe and laddled on with Lefty Everything Bagelism what one ends up with is a self-discrediting effort.
Of course rest-of-world does show that if one is focus and logical, one can make a high-speed rail line work. Fuck - Morocco - lower-middle-income country has pulled this off for God's sake (okay with French partial trade-financing subsidy for the French kit). Built in logical start-to-finish between it's mega Port city where big new FDI is going into industrial platforms - Tangiers across from Gibralter down to Casablanca. I have taken it once - actually brilliant and on my ride, chock full of both locals (business class was full up) and foreigners (tourists and biz people going to their factories in Tangiers)
Also looking at build out in Europe if one rewinds to more like 80s-90s and which network lines were working well.
Pouring federal money into fixing Amtrak NE corridor would make vastly more sense given anyway the airports are maxing out on slots (certainly I greatly prefer Union Station to Union Station then going through Lauguardia hell)
Indeed, the very _concept_ of high-speed rail in California didn't match up with either of the most well-known examples of high-speed rail built in the 20th century.
Japan's Shinkansen was built in what was then a relatively poor country where trains were still the main means of intercity travel. It was badly needed because Japan's legacy railways were full to capacity and were additionally limited by being narrow-gauge. Since new standard-gauge railways (the word "Shinkansen" literally means "New Main Line") were completely incompatible with legacy rail anyway, the Japanese sensibly decided to future-proof them by making them as flat and as straight as possible.
The French LGVs were by contrast built two decades later in a much richer country that already had a high level of car ownership, and were designed explicitly to lure travellers away from cars and airlines (to reduce France's dependence on foreign oil: the same reason why France was building tons of nuclear power plants at the same time). They were assisted in this by the fact that the original LGV Sud-Est (from Paris to Lyon) passed through benign terrain, to the extent that the line has no tunnels at all!
Hmm. Neither Spanish nor Italian nor Japanese terrain is especially forgiving when it comes to crossing mountains. Spain is currently building "the Basque Y" which crosses the Cantabrian mountains. Austria has been building major tunnels in the Alps. Californian mountains shouldn't be worse than that, and California is richer than almost any other jurisdiction on Earth.
"And it won’t ever be cost competitive with cheap airline flights between these metro areas."
Hmm again. Madrid-Barcelona was once the most frequent domestic (as in, not crossing any Euro border) flying route in Europe. The trains have almost completely overtaken air traffic there.
It turns out a lot of people don't want to spend hours in airport terminals far away from the city itself, getting to them and back again, plus being limited in what they can bring on board. Flying distances < 600 or 700 km comes with so much additional hassle that a direct high speed line between the same cities usually wins on comfort alone.
Plus, with competition allowed (no monopoly on train services), the ticket costs aren't that crazy.
Because he’s not criticizing Trump or progressives. He’s criticizing zero-sum thinking, a very natural (and bipartisan) human cognitive flaw. Not everything is about American electoral politics.
The funny part about progressives is they're terribly zero sum most of the time, until a politically inconvenient situation occurs where there's truly a distribution problem and then they plug their ears and just insist it will all work out.
Like the student loan forgiveness thing. Someone has to pay for that!
Because the progressive movement has become almost as insane as the MAGA movement. It’s not liberals anymore, it’s total nut cases running progressive thought. They may not be as nasty as MAGA, they may intend well, but their impact is terrible, maybe not as bad as MAGA, but nevertheless Noah is right to call it out. He gives very clear evidence and cases demonstrating this.
There is not a fixed market on stupid economic ideas. Every ridiculous illegal, corrupt, illogical idea that Trump comes up with, doesn’t reduce the same kind of stupid ideas on the left. Although Trump has been stealing stupid ideas from Elizabeth Warren and Bernie Sanders lately, so maybe he believes that.
The only political force capable of unseating Trump are the Democrats, but in order to do so, they need to lower the status of their progressive wing and its ideology, which acts as a voter repellent on swing/centrist voters.
The American voter shouldn't be forced to choose between "Let's massacre some Danish soldiers in Greenland because MAGA!" and "Don't you dare define a woman as a biological female, bigot! Start saying 'pregnant people'!"
Both of these political opposites are freaking bizarre and ~ 80 per cent of the real population (as opposed to the terminally online activists) subscribes to neither.
Redefining a language that a billion people speak isn't "being left alone to live our lives". That is maximalist-position activism, and the reaction is inevitable. Neither 'pregnant people' nor enforcement of bizarre 'xir/xem' pronouns in various social settings is a realistic way towards political victories.
But I understand that you may be embarrassed about the activist class that constantly speaks in your name while having 0 mandate to do so. You cannot do anything about them, realistically. This is the Internet and they have a megaphone.
It actually is. All we need you to do is shut up and not jump in to loudly 'correct' us or others who are treating us like people. Didn't your mother ever tell you that if you can't say something nice, don't say anything at all. Not verbally harassing and insulting people is like the bare minimum of civility.
Pregnant people is because there are dudes with beards and bass voices who get pregnant.
This is how you lose elections forever. If this is the hill that the Western Left is ready to die on ... well, so be it. Wholesale denial of reality such as "pregnant people" does not go very far in politics, and current Trump administration is directly downstream from that. AFAIK the slogan about Kamala being for they/them was the most efficient one in the entire campaign.
"you to do is shut up ... don't say anything at all"
Yes, this was the winning formula that made trans activists (now it seems that you are actually one) into the Gengis Khan of the Left, emerging out of nowhere just a few years ago and conquering the entire territory just like that. Progressives are docile and will shut up when told so by a group that is high enough on the victimization ladder. This is why you were able to dominate them so easily.
Only it does not generalize beyond the Left and its Bluesky universe. The rest of the population is unlikely to obey in the same manner and twist themselves into pretzels because of loud demands.
Just going to point out that the 'emerging out of nowhere' thing has a lot to do with the right wing media deciding, and we can point to a specific meeting in 2017, to make trans people the bogeyman that gay people had ceased to be.
Since then, there's been about $1.2 billion spent in Europe to demonize us, and the trump campaign alone spent $215 million on anti-trans ads.
When we ask you to shut up about us, this is the context in which it is happening. Gigantic ad campaigns designed to make people hate us so the conservatives can get tax cuts.
As he makes quite clear overall, the Proggies demarches are enabling of Trump (being both ineffective economically and wasteful) and derive from quite similar zero-sum thinking.
I have worked for the same manufacturing company for 30 years. Tariffs have absolutely hurt manufacturing. 2024 was a record sales year for our company. 2025 was the first year in our company’s 50 year history that sales decreased from the previous year. During the Biden years our company was steadily adding workers. Now we have an indefinite hiring freeze.
We received a letter from a long term supplier last week that they are closing their manufacturing facility in South Carolina due to pressure from tariffs.
I suspect a lot of anti-immigrant sentiment in the US is driven not by competition for jobs (as many MAGA voters are retirees or business owners, or if employed expect to retire within the next decade), but by competition for road space and parking space. Certainly if you listen to NIMBYs (the local-scale equivalent of anti-immigrant activists) you'll find that parking and traffic congestion will figure heavily in their concerns.
In fact I'd argue that Trumpist madness may to a large degree be a case of "end-stage car culture" as the suburban sprawl ponzi scheme approaches its point of collapse. The MAGA clamor to reduce the US population via mass deportations is highly likely to be about yearning for what I'd call "Fahrensraum", ie space in which to drive one's car without getting stuck in traffic.
Noah falls into his own trap, the economists trap, of viewing statistics in the aggregate.
Yes, immigration boosts gdp or employment statistics. But what does it do for the individuals underneath those numbers? It suppresses their wages, prevents them pressing for rises, enables businesses to find someone who will do the work for less, or for compromised benefits. It applies to tech engineers fighting H-1B migrants as surely as it applies to laborers fighting illegals.
The energy in the immigration debate isn't because its bad for the country's statistics, its because its bad for _me_!!!!
1. If you are competing with the immigrants, then it is bad for you. Businesses are not incented to raise your wage and will take advantage.
2. What people _think_ is the important determinant. If immigration was an unalloyed good and all agreed, we would not have this strenuous debate.
The studies showing benefits, show benefits only for people economically "above" the immigrants (ie most of us who read substacks), and for aggregate statistics. They do not examine, they do not question, the effect on people competing or "below" the immigrants.
It depends on who you are. Generally, if you're doing low-end service work, immigration is neutral because the immigrants consume low-end services. If you're doing high-end work, the immigrants tend to lower your cost for things, so you come out ahead. But I suspect there's a middle zone of workers, people whose output the immigrants don't consume so much, but who can be trained to do the work, and those people lose out.
But the same thing is true of all economic changes, there will be people who lose out even if the change makes the aggregate richer. As Megan McArdle says, "While progress makes humanity better off in the long run, that doesn't preclude the possibility that some people will be permanently worse off for the rest of their lifespan."
I wish that Noah, when discussing immigrants, made clear whether he meant all in the first generation, legal who have not yet become citizens, those here illegally, or all.
One thing it highlights for me is that calling something capitalism or socialism feels outdated when we’re wrestling with zero-sum biases on both sides. We need frameworks that focus on positive-sum production and growth instead of fixed pies.
All #MAGA & TrumpliKKKins care about is culture war. Now, those folks have plenty of grievances, and Trump is gifted a exploiting grievances--it's his only gift--but he's done absolutely nothing to address any of those grievances. As you show, he's made things worse. Short of blue waves in November & 28, I don't see how we get out of this mess.
Analysis of the BEA "Produced Assets" numbers shows that GDP scales with capital, not labor. Accordingly, every immigrant that enters the U.S. and does not bring about $300,000 in capital with them (or the equivalent in human capital, such as an engineering degree from MIT) makes existing Americans poorer. This is what the electorate is reacting to.
Surprised not to see rent control mentioned here as well, but it's yet another example of redistributing resources in ways that end up hurting cities rather than simply allowing the free market to build more abundant housing.
Great point.
This keeps getting stated as fact. Is it fact? Placing controls on the profitability of unimproved land and buildings reduces the profit of landlords. It might as a second-order effect also reduce the construction of new housing. But that would’ve been very much on how the rent control was structured.
When just 2% of economists polled agree that putting rent controls would make people better off I think we can treat it as fact
https://www.cato.org/commentary/economists-reject-biden-harris-rent-control-plan#
There are many places in the world that have very successful rent stabilization policies. They typically don’t just cap rent increases stupidly, but they provide strong tenant protections and pair these policies with a component that’s designed to incentivize new housing supply and investment. The US does things in a clumsy way, and something like a “blanket 5% cap” is definitely clumsy. Better examples include Germany’s Mietpreisbremse, which includes a pile of exemptions for new construction and major modernization, or the Swiss and Austrian policies.
There are basically two bad equilibria here. In one, there is a limited housing supply that can’t (or doesn’t) grow much, and the result is that landowners just gradually increase rents and collect a windfall. This makes long-term projects like raising a family completely unworkable unless you’re lucky enough to own property and buy it when it’s cheap. It also incentivizes landlords to collude by restricting supply even more, since there’s little benefit to new builds and improvement when you can simply *not* invest and collect a forever-increasing rent. The other bad equilibrium is when rents are highly restricted and so new investment and building drops to zero.
There’s an assumption that if you just “let the free market work” you’ll wind up avoiding the bad place. I’m not convinced that’s true. As evidence I’d offer the recent RealPage lawsuits around price collusion.
Very light-touch rent-control can perhaps smooth out economic shocks without disincentivizing construction too much. But that VAST majority of real-world rent-control regimes are terrible, and get you outcomes like Stockholm's twenty-year waiting list and massive black market in illegal sublets.
https://www.bbc.com/worklife/article/20160517-this-is-one-city-where-youll-never-find-a-home
Keep your head in the sand. Montgomery County MD’s “thoughtfully designed” rent control has destroyed new building. This is one of Mamdami’s worst issues.
It's a pity that no one has offered any better solutions. Personally I'm all for the government just building condos and giving them away.
Immigration may not be zero sum, over the whole economy, but it sure feels zero sum locally sometimes. Maybe people can accept that as a tradeoff if it is done right, but it has been done the opposite of right. It really doesn't help the case that the government has decided to ignore its own laws on this on illegal immigration. California has even gone so comically far as to pass laws restricting employer use of e-verify to check immigration status.
And this also extends to legal visa programs. By law, H1-B visas are restricted to jobs where there is a labor shortage and it is not possible to hire a citizen. But then tech companies are laying off thousands of US citizens while continuing to employ and even apply for more H1-Bs in the same job. Every one of those visa applications is obvious and provable fraud by the hiring company. How can they say with a straight face that they can't find US citizens for those roles, when a week ago they employed those very citizens in those same jobs? But the government looks the other way.
It seems like the only time the government sees the need to obey the letter of the law is when millions of illegals flood the border filing false asylum claims. Apparently we have to let all of them in, and also pay for their rent and food, because that's just what the law says. No matter that they are obviously lying to take advantage, we just have to let them in because that's the law.
There is a cap of 85,000 new H1b visas. Last year big tech employers Meta, Alphabet and Meta added less than 2000 H1b employees, and the biggest employer was Amazon with 4644. As for layoffs, Alphabet had none, Meta 3400 and Amazon and Microsoft about 15,000 each. In previous layoffs about 30-40% of laid off tech workers were immigrants, and there isn’t a reason to think that has changed. Do you know that the laid off workers were citizens? I don’t think H1b program would reduce layoffs of workers, though if all existing H1bs were rescinded the employers would lose lots of there workers and some with specific skills (like Taiwanese experts at TSMC in Phoenix) that aren’t available in the national workforce and shutting down projects would hurt many American workers as well as the companies.
FAANG is the wrong place to look for H-1B abuse. Those companies hire internationally not because they're looking for cheap labor to displace American workers but because they need tens of thousands of extremely talented people, and while the US does produce an outsized share of them, the US has only 4% of the world's population and for that reason can't produce enough. Restricting themselves to hiring only local talent would just mean hiring fewer and doing less.
H-1B abuse does exist in the IT industry, but you have to look elsewhere to find it, mostly in "body shops" who provide contract labor. The FAANG companies do use a little of this (not much), but it doesn't show up in their employee numbers because those people are employed by the contract agencies. Most of that contract labor is used elsewhere, though. The FAANG companies just don't use much contract engineering labor (though they use a *lot* of contract labor for janitorial and food services; that's not H-1B).
Your core point that H-1B abuse isn't big enough to move the needle is still largely correct, but if you want to find it the top tier tech companies' employee rosters are not the place to look.
Bingo. I've worked at tech startups, Google and MSFT, and the people there on H1-Bs are both as talented as the native born Americans and as expensive to employ. Preventing those people from immigrating simply hurts the US, period.
The objection is most typically to the relatively high percentage of visas going to outsourcing companies, which have been used to replace existing US workers at lower salaries.
Most famous example of this is Disney. https://www.nytimes.com/2015/06/04/us/last-task-after-layoff-at-disney-train-foreign-replacements.html
I'm confused on this. H1Bs have zero to do with outsourcing. H1Bs are explicitly NOT outsourcing. Removing H1Bs entirely would, if anything, increase outsourcing. Didn't read the link because I don't have a NYT subscription.
That’s incorrect. About 21% of H1bs are employed by IT tech outsourcing companies - that’s nearly a third of the 65% of H1bs who are in tech positions. These are jobs specifically meant for outsourcing.
They are used by US companies to outsource work, including work that cannot be done overseas.
Here is a non-paywalled legal journal article about the Disney situation. The H1b portion starts on page 135. https://digitalcommons.law.ou.edu/cgi/viewcontent.cgi?article=1198&context=fac_articles
They are more expensive to employ because of the various fees you have to pay.
Outsourcing firm contractors generally are not more expensive to employ, and the firms they work for are not the firms who hired them, so there are no fees.
The Disney replacements worked for Cognizant and HCL, if I am remembering correctly.
My experience with H1B is hiring directly, not any kind of firm. And to hire directly, they are more expensive.
You are correct that the body shops are worse, but hiring an H-1B when there are domestic workers available is H-1B abuse too and FAANG companies do it every day. Also I think you're correct that it isn't big enough to move the needle in an economic sense, but in a public opinion sense it's catastrophic. When the government allows companies to commit fraud in order to bring in foreign workers while they are being laid off from the same jobs, people are going to see red. A democratic government can't be seen to favor foreigners over its own citizens and hope to maintain legitimacy.
It's not a matter of hiring foreign engineers instead of American engineers. They hire all they can find, regardless of origin, and still can't hire enough.
You're obviously not in the industry. It was like that for a while, but not for the last couple of years. Plenty of data on that here: https://layoffs.fyi/
I was at Google for 15 years. Left in October for a Silicon Valley start-up.
(https://www.linkedin.com/in/shawnwillden)
Also, unemployment in tech is under 2.5%, so it doesn't seem like there are a lot of domestic workers available for these positions.
That’s incorrect. Unemployment in tech is currently running around 4.5%, higher for entry level.
About 80% of H1bs are for entry level.
I'd argue that H1-B visa holders are a great benefit to the country's tech industry even if they reduce the opportunity of native born Americans to work at any single company. Assume that perhaps 40% of STEM workers in the Valley are H1-B (it seems that high in the Gang of Four).
==> They're selected from a world-wide pool of talent, and so increase the average skill level available in the country.
==> They increase the raw numbers of people above any given level of skill, allowing more companies to start and/or grow in any given area. This increases US GDP, and increases the size of the overall job market in that area.
==> The increased numbers of people in any given scientific area in the country allows for networking effects that increase the productivity of all people working in the area.
Overall, H1-B immigration is a big net positive for America and even for native born Americans who might find themselves with more competition for a given job, but with vastly more job opportunities overall.
H1bs are at least three DIFFERENT things.
About 35% are non-tech jobs, such as healthcare.
About 21% are for tech outsourcing companies.
About 44% are tech jobs for individual companies.
Another way of viewing this is that the H1-B visa holders will be productive no matter where they end up. They might stay in India or China, or emigrate to the UK, Canada or Australia, and work for your competition. Or they could end up in the US, and work for your own company. Isn't the latter obviously better for *you*?
I doubt this is the case because otherwise we would see major global tech companies being founded in India, but there aren't any. But I do think your overall point here that this benefits the US may well be true. But that's not really what I'm arguing here. My point is that the law says this visa category is specifically only to be used as a way to address a critical labor shortage, and it is not being used this way. The whole industry is committing obvious fraud here and the government has looked the other way and refused to enforce a law that was written to protect US citizens. Regardless of whether this behavior actually benefits the country, it is illegal, and it is part of a larger pattern of the government ignoring its own immigration laws when it is convenient.
Around 20 to 40% of H1b visas go to contracting/ outsourcing companies, not employers.
See https://www.epi.org/blog/tech-and-outsourcing-companies-continue-to-exploit-the-h-1b-visa-program-at-a-time-of-mass-layoffs-the-top-30-h-1b-employers-hired-34000-new-h-1b-workers-in-2022-and-laid-off-at-least-85000-workers/#:~:text=In%20addition%20to%20employers%20exploiting,of%20the%20total%20annual%20cap).
“In addition to employers exploiting the H-1B program while laying off tens of thousands of employees, outsourcing firms once again dominated the H-1B visa program in 2022, even among the top 30 H-1B employers. For more than 15 years, leading lawmakers from both parties have criticized outsourcing firms’ exploitation of H-1B and offered bipartisan fixes, yet the abuse continues unabated. Thirteen of the top 30 H-1B employers were outsourcing firms, and they were issued a total of 17,534 visas for new H-1B workers (21% of the total annual cap).”
This is not a good use of these visas.
I'm surprised the number is that small!
Meta has around 80,000 employees total. For them to hire over 1000 H1-Bs in a single year is absolutely massive (even more so when you consider that H1-Bs are only in a subset of job categories at Meta). But really that's beside the point. If they laid off 3400 American engineers, and another 30,000 are available that were previously employed by MSFT/AMZN, then how can they claim that there are no available Americans to hire?
Some of that is incorrect. The 85,000 cap is just for a subset of H1bs.
H1bs are unlimited for universities, government research, and non profits.
There is also a separate cap of a few thousand for specific countries.
Not according to the government, there is a hard cap of 65,000 regular H1b visas and 20,000 advanced degree H1b visas.
https://www.uscis.gov/newsroom/alerts/uscis-reaches-fiscal-year-2026-h-1b-cap
Nope. My statement is according to the government, and it matches your link. The 85,000 is for the regular cap plus the masters cap.
There are no caps on H1bs for government research, universities, or non profits. See https://www.uscis.gov/working-in-the-united-states/h-1b-specialty-occupations under the H1b cap tab
“Additionally, H-1B workers who are petitioned for or employed at an institution of higher education or its affiliated or related nonprofit entities, a nonprofit research organization, or a government research organization, are not subject to this numerical cap.”
There are additional quotas for Chile and Singapore. See https://www.dol.gov/agencies/whd/immigration/h1b1#:~:text=Overview,a%20new%20Labor%20Condition%20Application.
“The H-1B1 program provides for the temporary employment of nonimmigrant aliens in specialty occupations from Chile and Singapore, limited to 1,400 nationals of Chile and 5,400 nationals of Singapore.”
Cap-exempt hires brought the number to 141K in FY2024. 119K in FY2023. Numbers for FY2025 are about 115K. These are initial approvals, not visas issued, and there’s a small one percent overhead for people applying concurrently.
This isn’t just a failure of politicians, it’s a failure of accountability among the people who embrace populist thinking. Zero-sum economics is seductive because it offers moral absolution: if the world is a fixed pile of resources, then someone else must be to blame for why you don’t have more.
The villains change across ideologies, but the mental shortcut is the same.
What gets avoided is the hard work: building institutions that function, investing in capacity, accepting tradeoffs, and owning the fact that prosperity comes from competence, not grievance. Zero-sum stories don’t just fail economically — they fail because they teach people to outsource responsibility
Populism is fundamentally the politics of scapegoating: right-wing populists blame foreigners (or sometimes LGBT people) while left-wing populists blame the rich.
Populism is the politics of solutions that, to paraphrase HL Menken, are simple, obvious, and wrong.
https://josephheath.substack.com/p/populism-fast-and-slow?triedRedirect=true
They fail for the same reason they are popular: the enable people to outsource responsibility.
I wonder how Japan, China, S Korea, Taiwan, Iceland, etc all made it without waving in millions of poorly educated non-native speakers?
How does Australia harvest its grapes and produce wine without relying wholly on immigrants and is able to employ English speaking foremen?
The answer is they have better labor conditions and more capital investment (automated harvest and vine maintenance). America is only starting to do this now, decades behind Australia and Europe, and of course they are using European machines….because why would you set up an American company to machine-automate harvest when there are millions of illegal immigrants working cheaply under the table?
Saying a supply of cheaper, informal labor willing to toil under poor conditions doesn’t affect the civilian workforce is like saying it doesn’t impact the capital investment plans in, say, vineyard management. There are obvious tradeoffs between capital and labor and between legal labor and illegal labor
Of course we could live without immigrants, especially illegal immigrants if we chose to, though it might not be best for the country or its capitalists. And of course every productive worker (whether citizen or immigrant) should be a net add, though that depends in part on the generosity of benefits, the incentives for work and tax paying habits.
Maximizing the benefit for the country- having a good supply of legal immigrants with minimal benefits, good incentives to work, and our having the ability to deport(or not renew visas for) the unproductive or criminal immigrants and the ability to expand housing for them would be wise. That is not what is on the table as a policy. Training the domestic labor force so they have the skills and education to be productive would also be wise. Also not on the table.
Why would I go through the risk and trouble of investing in an EV startup when cheap subsidized Chinese EVs are available? Why would I go through the risk and trouble of training and educating a domestic workforce when cheap illegals are available?
We need to change the incentives to get companies to be more proactive in training and apprenticeships for high school graduates. Reducing supply of labor and increasing wages is one way. Subsidizing those efforts is another. Labor is always going to compete with capital and also with overseas/outsourced production. Taxing imports and not taxing exports (replace corporate income tax with gross domestic receipts tax, with deductions for domestic labor and CGS, and not taxing foreign receipts). There are lots possible policies and tradeoffs.
Global competition and free trade in labor and capital is good- probably best for the country in theory. But the country is not a person, nor a voter. We need to balance the welfare of our citizens against economic theory and profit incentives. Create too much friction and the danger is the economy, industry and workers become uncompetitive. No friction can also be bad. And remember we have guilds in medicine, academica, childhood education, etc that create lots of frictions and inefficiency. We could increase frictions so that low skilled labor fare better while reducing frictions in high paid guilds so that more people get to share in those opportunities.
I don’t have the answers, but what we are doing now isn’t working.
The US has more jobs to do than we have people to work those jobs. If we don't have immigration or work programs, then we pay more with either money or time. If the price of haircuts double people will just get less haircuts. If the DMV doesn't have enough applicants, you just wait in line for longer. If things can't be built in a timely manner, then financing costs mean less things get built overall.
The US currently doesn’t have more jobs than people. See https://mises.org/power-market/us-now-has-more-unemployed-people-job-openings
Yes, let’s hold up Australia, China’s gas tank, as some sort of model for the rest of the world. Gee, I wonder why ever did all those car manufacturers stop making things in Australia when they had such an amazing handle on their costs?
😂 What about Chihuahuas? What about lollipops?
Australia is extremely reliant on immigrant labor. They just do it smarter. They offer a one year working visa to anyone under 30, but only from selected countries. They also require you to speak English and show that you have some money to get it. This is a working only visa that does not allow you to bring family and is not intended to be a path to permanent citizenship. And they don't have the idiocy of birthright citizenship. Contrast this with the US where everything seems to be there as a foothold for permanent migration. In the US, even refugees fleeing natural disasters end up being permanent migrants.
If Australia is extremely reliant on immigrant labor, how did they manage when their borders were sealed as part of their Zero Covid policy?
I don't know. But what I do know is that 30% of the population are immigrants, so they are very dependent on immigrant labor.
Perhaps when new immigration was banned Australia was reliant on the immigrants _already_ present in the country (who were after all also essentially banned from _leaving_ Australia)?
Many of those countries *do* have a lot of immigrant labor from decidedly poorer countries. (Even Japan, which has historically been very adverse to immigration.) They generally are more selective, so fewer of the immigrants poorly educated. But an actual part of the answer is "You can do that, but things would cost more". Despite what people say, you can easily get an American to be a janitor, it would just cost two or three times what you're now paying. The better pay for the janitor would come out of someone else's consumption. Despite all the moaning, everybody in the US agrees that maximizing our consumption is the goal. And we succeed at that. If you look at the CIA World Factbook chart of "per capita GDP corrected for local costs of living" https://www.cia.gov/the-world-factbook/field/real-gdp-per-capita/country-comparison/, the US comes out ahead of all the countries you listed. And the ones that are ahead of the US all have *lots* of immigrant workers.
Taiwan has a lot of foreign works in fields like elder care. Mostly from poorer countries like Indonesia…
I think you're right about colonialism, but I wish you'd explain how British rule in India fits in. I've read that wealth obtained from India had a lot to do with making Britain a preeminent power in the 18th and 19th centuries. If that's true, I suspect it's because the Raj was not just extractive (though it was that) but also positive-sum. But I'd love to see a knowledgeable explanation
Pre colonial India did not export minerals or other natural resources other than tea and spices. Their main exports were hand woven textiles. The British colonizers dismantled that industry and instead exported the cotton, jute and other natural resources to supply their own factories. They also imposed high taxes on land, the bureaucracy they established and on agricultural output (up to 50% tax rates) which lowered Indias growth to be even with population growth. On the other hand, Britain got cheap raw materials and tax revenue as well as distribution of Indias other exports.
I don’t think Noah said colonization was a positive for the colonized, only that resource extraction is not what caused the negative results.
While it is fashionable amongst the academic Left to say Britiain dismantled an Indian cloth industry, comparative experience of artisanal production in the face of industrial that is not colonial does not tell a different story. The future Indians didn't have production that was competitive. They also like to assert the colonial powers 'kept' the colonies in low-value agri production, ignoring that this is in fact the economic default unless and until one can develop industrialised commercial agriculture, which itself needs the institutions to support such.
the real damage to colonies of the 19th century is in poor governance models and standards under essentially para-military rule that did not set good models for real industrialisation - that needs good rule of law, and capital accumulation. Not in extraction but in piss-poor governance by the often third-raters sent to colonial rule and engaging in corrupt profiteering.
I'd say the real damage was the tens of millions dead in imposed famines, which I'll note is not mentioned.
Don't forget opium.
Cash crops during the colonial period would change depending on market shifts and technological change. The cotton--that fed Europe's textile mills, for example, displaced indigo--the blue dye--and was largely an American export, until the US Civil War, which shifted back to India.
India pre-East India Company, was a major textile producer, with locally sourced cotton and dye production. Multi-color sarongs (dhotis) were the main product, which were carried to Southeast Asia, and there traded for spices from the Moluccas, and Chinese silk and porcelain.
Britain initially *imported* fine grade Indian calicoes and chintz *until* the Industrial Revolution picked up steam, and created a flood of cheaper British cloth. *Then* they used taxation and other controls to destroy non-UK producers.
The opium trade is an interesting case. IIRC the majority of India-based opium merchants who stood to make money on selling opium to China were native Indians, and they were happy to support British efforts to push China to open itself.
Even more interesting is that China's voracious demand for opium wasn't even about its use as a drug!
Rather it was that the Qing state had such poor state capacity that they didn't even mint their own standardized coins, and its merchants thus used Spanish pieces of 8 instead: when those became much rarer after the Latin American wars of independence, the Chinese merchants increasingly used opium as a quasi-currency.
China, like pretty much any country before or after, wanted gold & New World silver for its chinaware, silks and tea. The Portuguese, Dutch and British traders wanted to *trade* other goods; especially cotton fabric produced in India (and later in Europe). But the Ming banned this--for reasons like what you stated.
The Portuguese won themselves their little entrepot at Macau because of their willingness to pay cash on the barrel; trading to Lisbon and later to Spanish Manila. The Dutch traded textiles aggressively and were banned by the Ming accordingly; and resorted to smuggling from their base on Taiwan. Then both were supplanted by the British, who used their gunboats and opium to open the China market wide open.
The India exporting tea did not start until the British introduced tea in an attempt to cut off the Chinese monopoly
Overall I would recommend Yaw Boadu (a Ghanian expatriate) digestable series of reviews of colonial histories (https://yawboadu.substack.com/: mostly African but not only).
As Yaw rightly points to the applied history, the abstraction of European states doing X isn't in correspondence with actuals - which particularly for the late 19th c. but not uniquely - were heavily driven and triggered by local operators esp. colonial military officers seeking personal ego/glory and dragging the state in after them via power logic -whereas e.g. the London governments of UK quite rationally tried to have a policy of "avoid direct rule, only do trade and defend turf against other imperial power plays [i.e. other Europeans]" - as direct rule tended to become drains on treasury, the London power center understood much better its state interest. But humans are humans and short-term ego plays (see Trump) oft override rational interest.
Initially the colonial powers from Europe made their money from trade. The Portuguese would buy--and later produce--cinnamon and cloves in the Moluccas; Then transport them to Lisbon, where they produced fabulous profits. Spices from the Moluccas, silks and chinaware from Guangzhou, rubies and sapphires from Ceylon.
Later, the British in Bengal and Dutch in Java--both with high population density--produced more in rents & taxes than merely in trade goods. Both the Dutch and British in the East Indies farmed out most of the trading and territorial management to their respective East India Trading Companies. That were worth over $10 *trillion* in todays's money, and paid annual dividends on the order of 18%.
Thanks for all the helpful comments. I guess the reason why India made Britain rich, while the Spanish-American colonies did not do the same for Spain, is that the Spanish gave priority to digging up or melting down precious metals and sending them to Spain, while the British gave priority to trade. Does that seem about right?
Spanish silver caused inflation in its own country, and caused financial crisis in China. Check out Charles Mann’s 1493.
California High Speed Rail has so far completed 80 miles of guideway and track and has partially built another 35 miles of the 119 miles authorized for the first phase of construction in the Central Valley to connect Merced and Bakersfield. It has also completed 58 structures (bridges, viaducts, etc.) and has another 30 or so partially built, as well as clearing environmental review for nearly all of the almost 500 miles of the full project to connect LA and San Francisco. In the course of all this it has spent $3.5B of Federal grant money, $4.8B of bond funding (out of a total of $9.8B authorized by Prop 1A), $2.5B of cap-and-trade revenues designated for pollution-reducing projects, and only $1.2B of California's general fund revenues (about 0.1% of California's cumulative general fund spending since the project was authorized in 2008).
Costs per mile of HSR are extremely high in the US compared to most European nations (although Britain is also very expensive comparatively) and I agree that both the planning and execution of the CAHSR project has been done badly on a bi-partisan basis (Jerry Brown and Arnold Schwarzanegger were both huge boosters). But making this a huge hobby-horse for discontent about spending or trying to claim it is a "progressive" problem akin to MAGA not knowing how international trade, or immigration, or "resources" work is boring and off-point. Making project management and environmental review more efficient is something we all need to work toward, but there is no political party or politician on earth that will not "brag" about huge construction projects creating a lot of construction jobs.
Very well written piece. Thank you
I have heard of the railway system in California that is not working but I would like to know why it is not working. One of the reasons for the increase of wealth in the 19th century was the railway systems which enabled people to travel to work, as well as move location if they wanted to.
We certainly need a way of resolving income problems. That so many are poor is a disgrace for the rest of us. Britain is currently moving into a European redistribution mode of high tax and high distribution but it may take a generation to resolve the issues of homelessness and bad health.
It's not working because the railroad has tradeoffs. People in the path will lose their houses, workers will die in construction, the environment will be damaged, etc. The Democratic party has basically decided that these are things that are not allowed. So as a consequence, the railroad isn't being built, or only at a painstakingly slow pace. One of the major reasons that NY can't build subway today is because they can't build it like they used to. The system was build mostly by tearing up the street and excavating down, which is massively cheaper than tunneling, But it is extremely disruptive to any businesses and residents on that street during the construction. 100 years ago the government would have said "too bad, the train is getting built", but the government of NY today has decided that it will not accept the tradeoff, so now it is entirely a legacy system that would be prohibitively expensive to build if done by today's standards.
Well - it is not working because the Californian Democrats and Government (synonymous at present) were unable to execute trade-offs.
this is a self-imposed penalty - Noah has touched on this stuff before of course - but also Yglesias, Klein - and the Niskanen Center people.
It's painful of course to see shambling on in waste of credibility and capital.
I wouldn't even give them credit for failing to execute. They haven't even got to the point that they admit to themselves that these tradeoffs are necessary.
Other European cities have tunneled for new metros at a fraction of the NYC cost, of course.
Well yeah - even benchmarked against not-too-cheap EU infra spend, the US is across the board just catastrophically bad in terms of capital expenditure efficiency and time to build. Although there are examples of almost as bad (e.g. the Germans and building elec grid, not quite ending up as expensive as US, but in delays certainly at very American levels of paralysis)
The primary objective is not to build a railway. There are many competing objectives and a huge pile of money to ladle out. building a railway is maybe number 5 on the list of objectives, if that.
Same thing for our homeless problem. The last thing they want is to actually reduce homelessness, as it would cut off the siphon of money funding the complex.
It is not particularly hard to see: the rail line is being built not following any strong actual economic logic for a high-speed rail which by comparative examples (Japan, Europe generally, France early days) must be starting out connecting high-usage hubs to be competitive with alternatives.
The California high-speed rail is not doing this at all, it's got a line that's traced for short-termist political reasons to not-key-not-rational-for high speed rail, and not connecting from get-go (if it were ever to become operational) high-demand hubs at a service speed that would be competitive (note Noah speaks to the High Speed Rail, not to "railway system in California": The California High Speed Rail Authority has not managed to create any high-speed rail whatsoever despite billions of dollars in spending, but brags about how many jobs that spending has created. It’s all redistribution and no production.")
It also needs to be built on timely and capital effective basis.
California is essentially doing the exact opposite of all this - and waiving some combination of Generating Jobs and Climate Change! flag to distract / justify for what's a clearly bungled and economically-irrational approach.
And the HSR was routed to optimize political favors instead of geology. They sold it on connecting SF and LA (and San Diego next) but ignored the Tehachapi Mountains and Diablo range which would require long expensive tunnels and started building in the central valley were land is cheaper and faster to acquire but still too much. And it won’t ever be cost competitive with cheap airline flights between these metro areas.
yeah, what I was alluding to on short-termist political reasons.
The whole thing is a political boondoggle rife with economic innumeracy.
and I love high-speed trains, absolutely prefer them over flights when abroad as more travel efficient where they have been done on a transport logical basis.
but done as a climate-dreaming essentially purely political basis without any grappling with the myriad of factors that make Infra build in the US an expensive catastrophe and laddled on with Lefty Everything Bagelism what one ends up with is a self-discrediting effort.
Of course rest-of-world does show that if one is focus and logical, one can make a high-speed rail line work. Fuck - Morocco - lower-middle-income country has pulled this off for God's sake (okay with French partial trade-financing subsidy for the French kit). Built in logical start-to-finish between it's mega Port city where big new FDI is going into industrial platforms - Tangiers across from Gibralter down to Casablanca. I have taken it once - actually brilliant and on my ride, chock full of both locals (business class was full up) and foreigners (tourists and biz people going to their factories in Tangiers)
Also looking at build out in Europe if one rewinds to more like 80s-90s and which network lines were working well.
Pouring federal money into fixing Amtrak NE corridor would make vastly more sense given anyway the airports are maxing out on slots (certainly I greatly prefer Union Station to Union Station then going through Lauguardia hell)
Indeed, the very _concept_ of high-speed rail in California didn't match up with either of the most well-known examples of high-speed rail built in the 20th century.
Japan's Shinkansen was built in what was then a relatively poor country where trains were still the main means of intercity travel. It was badly needed because Japan's legacy railways were full to capacity and were additionally limited by being narrow-gauge. Since new standard-gauge railways (the word "Shinkansen" literally means "New Main Line") were completely incompatible with legacy rail anyway, the Japanese sensibly decided to future-proof them by making them as flat and as straight as possible.
The French LGVs were by contrast built two decades later in a much richer country that already had a high level of car ownership, and were designed explicitly to lure travellers away from cars and airlines (to reduce France's dependence on foreign oil: the same reason why France was building tons of nuclear power plants at the same time). They were assisted in this by the fact that the original LGV Sud-Est (from Paris to Lyon) passed through benign terrain, to the extent that the line has no tunnels at all!
You can read more about the different national traditions of high-speed rail at Alon Levy's blog at https://pedestrianobservations.com/2021/05/30/the-different-national-traditions-of-building-high-speed-rail/ .
Hmm. Neither Spanish nor Italian nor Japanese terrain is especially forgiving when it comes to crossing mountains. Spain is currently building "the Basque Y" which crosses the Cantabrian mountains. Austria has been building major tunnels in the Alps. Californian mountains shouldn't be worse than that, and California is richer than almost any other jurisdiction on Earth.
"And it won’t ever be cost competitive with cheap airline flights between these metro areas."
Hmm again. Madrid-Barcelona was once the most frequent domestic (as in, not crossing any Euro border) flying route in Europe. The trains have almost completely overtaken air traffic there.
It turns out a lot of people don't want to spend hours in airport terminals far away from the city itself, getting to them and back again, plus being limited in what they can bring on board. Flying distances < 600 or 700 km comes with so much additional hassle that a direct high speed line between the same cities usually wins on comfort alone.
Plus, with competition allowed (no monopoly on train services), the ticket costs aren't that crazy.
I don’t get why you often start out criticising Trump’s latest policies and end with bashing progressives consistently
Because he’s not criticizing Trump or progressives. He’s criticizing zero-sum thinking, a very natural (and bipartisan) human cognitive flaw. Not everything is about American electoral politics.
The funny part about progressives is they're terribly zero sum most of the time, until a politically inconvenient situation occurs where there's truly a distribution problem and then they plug their ears and just insist it will all work out.
Like the student loan forgiveness thing. Someone has to pay for that!
Someone who has money, which is kind of the whole problem to begin with, in terms of repayment.
Because the progressive movement has become almost as insane as the MAGA movement. It’s not liberals anymore, it’s total nut cases running progressive thought. They may not be as nasty as MAGA, they may intend well, but their impact is terrible, maybe not as bad as MAGA, but nevertheless Noah is right to call it out. He gives very clear evidence and cases demonstrating this.
There is not a fixed market on stupid economic ideas. Every ridiculous illegal, corrupt, illogical idea that Trump comes up with, doesn’t reduce the same kind of stupid ideas on the left. Although Trump has been stealing stupid ideas from Elizabeth Warren and Bernie Sanders lately, so maybe he believes that.
indeed the cross pollination between Trump and Warren with Trump having the sheer talent of making dumb ideas even dumber is something to behold.
I get it quite well.
The only political force capable of unseating Trump are the Democrats, but in order to do so, they need to lower the status of their progressive wing and its ideology, which acts as a voter repellent on swing/centrist voters.
The American voter shouldn't be forced to choose between "Let's massacre some Danish soldiers in Greenland because MAGA!" and "Don't you dare define a woman as a biological female, bigot! Start saying 'pregnant people'!"
Both of these political opposites are freaking bizarre and ~ 80 per cent of the real population (as opposed to the terminally online activists) subscribes to neither.
Love how trans people constantly get kicked in the teeth on stuff like this when we just want to be left alone to live our lives. Thanks. /S
Redefining a language that a billion people speak isn't "being left alone to live our lives". That is maximalist-position activism, and the reaction is inevitable. Neither 'pregnant people' nor enforcement of bizarre 'xir/xem' pronouns in various social settings is a realistic way towards political victories.
But I understand that you may be embarrassed about the activist class that constantly speaks in your name while having 0 mandate to do so. You cannot do anything about them, realistically. This is the Internet and they have a megaphone.
It actually is. All we need you to do is shut up and not jump in to loudly 'correct' us or others who are treating us like people. Didn't your mother ever tell you that if you can't say something nice, don't say anything at all. Not verbally harassing and insulting people is like the bare minimum of civility.
Pregnant people is because there are dudes with beards and bass voices who get pregnant.
This is how you lose elections forever. If this is the hill that the Western Left is ready to die on ... well, so be it. Wholesale denial of reality such as "pregnant people" does not go very far in politics, and current Trump administration is directly downstream from that. AFAIK the slogan about Kamala being for they/them was the most efficient one in the entire campaign.
"you to do is shut up ... don't say anything at all"
Yes, this was the winning formula that made trans activists (now it seems that you are actually one) into the Gengis Khan of the Left, emerging out of nowhere just a few years ago and conquering the entire territory just like that. Progressives are docile and will shut up when told so by a group that is high enough on the victimization ladder. This is why you were able to dominate them so easily.
Only it does not generalize beyond the Left and its Bluesky universe. The rest of the population is unlikely to obey in the same manner and twist themselves into pretzels because of loud demands.
Just going to point out that the 'emerging out of nowhere' thing has a lot to do with the right wing media deciding, and we can point to a specific meeting in 2017, to make trans people the bogeyman that gay people had ceased to be.
Since then, there's been about $1.2 billion spent in Europe to demonize us, and the trump campaign alone spent $215 million on anti-trans ads.
When we ask you to shut up about us, this is the context in which it is happening. Gigantic ad campaigns designed to make people hate us so the conservatives can get tax cuts.
As he makes quite clear overall, the Proggies demarches are enabling of Trump (being both ineffective economically and wasteful) and derive from quite similar zero-sum thinking.
In any case, the Left needs to get its house in order so there’s not another Trumpthernic reaction, as there was to Biden and the idpol warriors.
Because if he reversed the order people would stop reading and his peers might cancel him.
True, but I don't think the complaint is about the order.
I have worked for the same manufacturing company for 30 years. Tariffs have absolutely hurt manufacturing. 2024 was a record sales year for our company. 2025 was the first year in our company’s 50 year history that sales decreased from the previous year. During the Biden years our company was steadily adding workers. Now we have an indefinite hiring freeze.
We received a letter from a long term supplier last week that they are closing their manufacturing facility in South Carolina due to pressure from tariffs.
I suspect a lot of anti-immigrant sentiment in the US is driven not by competition for jobs (as many MAGA voters are retirees or business owners, or if employed expect to retire within the next decade), but by competition for road space and parking space. Certainly if you listen to NIMBYs (the local-scale equivalent of anti-immigrant activists) you'll find that parking and traffic congestion will figure heavily in their concerns.
In fact I'd argue that Trumpist madness may to a large degree be a case of "end-stage car culture" as the suburban sprawl ponzi scheme approaches its point of collapse. The MAGA clamor to reduce the US population via mass deportations is highly likely to be about yearning for what I'd call "Fahrensraum", ie space in which to drive one's car without getting stuck in traffic.
Not space for cars. Space for living. Being able to have a yard, a deck, personal green space.
The demand for that is going up, not down. Thus the huge exodus to exurbs with remote work.
Noah falls into his own trap, the economists trap, of viewing statistics in the aggregate.
Yes, immigration boosts gdp or employment statistics. But what does it do for the individuals underneath those numbers? It suppresses their wages, prevents them pressing for rises, enables businesses to find someone who will do the work for less, or for compromised benefits. It applies to tech engineers fighting H-1B migrants as surely as it applies to laborers fighting illegals.
The energy in the immigration debate isn't because its bad for the country's statistics, its because its bad for _me_!!!!
Except none of that is actually true, that's the point. People THINK that's what happens but time and time again it's proven false.
There are two issues dismissed here:
1. If you are competing with the immigrants, then it is bad for you. Businesses are not incented to raise your wage and will take advantage.
2. What people _think_ is the important determinant. If immigration was an unalloyed good and all agreed, we would not have this strenuous debate.
The studies showing benefits, show benefits only for people economically "above" the immigrants (ie most of us who read substacks), and for aggregate statistics. They do not examine, they do not question, the effect on people competing or "below" the immigrants.
So, basically, this isn't a real problem, it's an issue with which viewpoints get platformed in the media?
It depends on who you are. Generally, if you're doing low-end service work, immigration is neutral because the immigrants consume low-end services. If you're doing high-end work, the immigrants tend to lower your cost for things, so you come out ahead. But I suspect there's a middle zone of workers, people whose output the immigrants don't consume so much, but who can be trained to do the work, and those people lose out.
But the same thing is true of all economic changes, there will be people who lose out even if the change makes the aggregate richer. As Megan McArdle says, "While progress makes humanity better off in the long run, that doesn't preclude the possibility that some people will be permanently worse off for the rest of their lifespan."
I wish that Noah, when discussing immigrants, made clear whether he meant all in the first generation, legal who have not yet become citizens, those here illegally, or all.
Really enjoyed this, Noah.
One thing it highlights for me is that calling something capitalism or socialism feels outdated when we’re wrestling with zero-sum biases on both sides. We need frameworks that focus on positive-sum production and growth instead of fixed pies.
All #MAGA & TrumpliKKKins care about is culture war. Now, those folks have plenty of grievances, and Trump is gifted a exploiting grievances--it's his only gift--but he's done absolutely nothing to address any of those grievances. As you show, he's made things worse. Short of blue waves in November & 28, I don't see how we get out of this mess.
Analysis of the BEA "Produced Assets" numbers shows that GDP scales with capital, not labor. Accordingly, every immigrant that enters the U.S. and does not bring about $300,000 in capital with them (or the equivalent in human capital, such as an engineering degree from MIT) makes existing Americans poorer. This is what the electorate is reacting to.