The GDP Is Too Damn High

One thing I've been thinking about a bit is the way that institutions fight over the territory of our lives.  I think the best way to explain my thought is by example.

Once upon a time the Church held a near-monopoly on sexual gratification.  For devout Catholics, the only sexual gratification that was permitted was sex within a Church-sanctioned marriage.  The effect of this was that people might be drawn into the Church for reasons that had little or nothing to do with spirituality.  If you lived in a traditional Catholic area, you might give the outward appearance of being a devout Catholic, with the goal of obtaining access to sexual gratification.  The Church exacted a kind of tax on you—an actual tax, in the case of tithing, but also a tax in the form of requiring you to conform your behavior to the dictates of the Church.  To some extent this functioned to promote social welfare, since it acted as a constraint on antisocial behaviors like lying and stealing.  It also provided for some degree of redistribution of wealth.

Today, in the United States, it is the market that plays the role traditionally played by the Church.  Sexual gratification isn't strictly allocated by wealth, but there is a definite correlation.  Certainly if we are speaking of long-term sexual commitments, the rich have continued to obtain them while poor and middle-class communities have by and large learned to do without.

Note the full sweep of this parallel.  Men (and to a lesser degree women) participate in the rituals of capitalism for reasons that have little to do with a desire for the things that the market explicitly provides.  They are like cynical worshipers, except that instead of paying a "tax" in the form of avoiding sin, attending church services, etc., they pay a "tax" by accumulating far more wealth than they otherwise would.  They "go to market" not just to obtain toothpaste and diced tomatoes and movie tickets, but to obtain sex and affection.  They dare not stray from the dictates of the market, for the same reason that a member of a traditional Catholic society would not have dared to question the divinity of Jesus.

You may think that I am exaggerating, but I don't think I am.  Imagine if a scientific study reliably established that peak sexual success is obtained at an income of about $150,000 per year, and that anyone earning over $1 million a year essentially can't get laid no matter what.  Do you think that we would observe men working their asses off for big bonuses?  (We might observe the opposite.  During yearly evaluations, bankers would heap derision on themselves, in the hopes of keeping their bonuses small and thus preserving their ability to get laid.)  Would anyone want to run a hedge fund?  Would anyone even want to play professional football?  And I think the same would be true, to a lesser extent, if sexual success merely leveled off at $150,000 and everyone knew it.

The world I am describing might be a worse world than the one we live in.  There are some positive social effects from the hypertrophied economy we have built.  It could be our insatiable appetites are the only chance that poor societies have to pull themselves out of poverty.  And technological advance may be much faster than it would otherwise be, with all kinds of spillover effects for our quality of life and our knowledge of the world around us.  The market gives and it takes away.  It is possible that income inequality would be worse in a low-GDP world because tax revenues would be so much lower.  (But then, a lot of inequality is probably market-driven in the first place.  This is not an easy question to answer, and probably not an important one to think about.)

Anyway my point is really that the market has accomplished its enviable place atop the pantheon of our institutions without most people really noticing it.  The Church was fairly blatant in its efforts at monopolization, and the state loudly proclaims its primacy within its sphere (protesting too much, I think).  But the market is content to let its assumptions and its prejudices seep into our lives until we don't recognize them as alien from ourselves, and then we grind away at work to feed its parasitic appetite.

A Little Data on Commute Times

(Actually removing the post entirely because I am pretty certain I've misunderstood the data.  Will write a full post once I figure it out.)

A Necessary Nutrient

In the United States, I believe it is illegal to sell salt unless (A) it contains added iodide, or (B) the package bears a label indicating that it does not supply iodide, "a necessary nutrient."  This policy strikes me as clever, because almost everyone consumes salt.  It would have been far less effective to impose similar requirements on, say, pickled beets.  People crave salt and seek it out—it is one of the most fundamental ingredients in just about all food, probably more common than any other ingredient aside from water.  It is so fundamental that when the British tried to tax it, Gandhi led a march to the sea in protest.  So if you want to make sure people get iodine in their diet, salt is a pretty well-chosen medium.  And indeed I believe iodine deficiency is almost unknown in this country.  (Iodine deficiency can cause goiters and developmental deficits.  Iodine deficiency is common in societies that don't eat much seafood and that don't have pro-iodine policies like ours.)

Now, I suspect that few people would have any patience for the following arguments.

"The government's policy shows an anti-salt bias."

"Society simply has no legitimate interest in preventing goiters or developmental deficits."

"Society has no right to interfere, however mildly, with individual choice when it comes to iodine consumption."

"If people are left to their own devices, decentralized decision-making will lead to the optimal amount of iodine deficiency.  Government intervention is distortionary."

Now consider social norms that link companionship to sex.  The human drive to have sex is incredibly strong and basically drives large sectors of the economy.  (If wealth had zero effect on sexual success, I think our society would look very different and might not exist at all.)  I would guess that a high percentage of marriages and other long-term relationships are formed largely due to sexual considerations.  In other words, in our society sex is a powerful force that contributes tremendously to the elimination of loneliness and social isolation, just as the desire for salt contributes tremendously to the elimination of iodine deficiency.  But this effect is contingent on some linkage between sex and companionship, and this linkage is disappearing as sex becomes more and more orthogonal to companionship.  Meanwhile the complete liberalization of sex is seen as not just inevitable but desirable, something to be celebrated.  The norms that traditionally linked sex to companionship are seen as misogynistic, sex-negative, or simply outdated.  And so we are steadily removing the iodine from the salt, as it were, and the two will increasingly have to stand on their own.

I recognize that our society long had a pathological and bigoted approach to sex-regulation, so it is appropriate to have reservations about society sticking its nose in.  To cite a well-known example, the Catholic Church basically made all forms of sexual gratification, including masturbation, sinful unless they were conducted within Church-sanctioned and -controlled institutions, which were limited to heterosexual people having procreative sex (so, still no masturbation or blow jobs, even inside of marriage).  The Church forced its adherents to confess all illicit sex to Church officials, imposing a kind of police state that would rapidly detect any deviation from the Church-enforced norms.  Celibacy (including abstinence from masturbation) was imposed on anyone who was gay, single, or divorced (and remarriage after divorce was forbidden).  Sex was incredibly dangerous for any woman who couldn't safely give birth.

No one is suggesting a return to that Stasi-like social organization.  In fact, I wouldn't even suggest a particularly tight link between sex and companionship.  People should be free to have casual sex, just as people should be free to use iodine-free salt.  But if the question is whether social norms should be deployed at all to link sex with companionship, then I think the answer has to be yes.  Sex is simply too powerful a human urge for us to declare it to be immune from "taxes," so to speak.  It would be like refusing to tax income.  Or refusing to link salt with iodine consumption.

You might say that if people are left entirely free to choose their sexual activities, with no pressure one way or another, they will achieve whatever level of sex and companionship they like.  I'm skeptical.  There is no straightforward market for companionship, and a lot of people report loneliness and social isolation, an odd result if there is a well-functioning "market."  In any case, we don't accept the argument that a laissez-faire approach will lead to the "right" amount of iodine deficiency.  And it seems likely to me that we will achieve significantly higher levels of companionship if we allow it to piggy-back on sex than if we don't.

I don't really know what this implies, specifically, for social norms.  I am very skeptical, though, of arguments that society will get better and better as sexual norms fade away.  The old institutions of monogamy, pair-bonding, and family seem tremendously valuable, and I would rather purge them of their old bigotry than abandon them entirely.

Rambling About Cities and Transportation Costs

A few weeks ago I visited a client's offices, which are within walking distance of my own office.  However, I was running late, and I chose to take a taxi.  Big mistake!  It ended up taking me 40 minutes to go 1.25 miles, a distance I could easily have covered in 25 minutes walking.  (Walking is slow because of stoplights etc.  For this particular trip, there is no subway that could meaningfully reduce travel time relative to walking the whole way.)

This got me thinking.  Big, dense cities seem to have the following characteristic:  people are simultaneously slowed down and pushed closer together, with ambiguous effects on travel time.  This has interesting consequences for transportation in a city.

The biggest winner from the strange "physics" of city travel is grade-separated mass transit.  Subways are not that fast in absolute terms.  They also have the disadvantage that their travel route is inflexible—I have to walk about 10 minutes at each end of my commute.  But subways have the crucial advantage that they are about as fast during rush hour as they are during off-peak hours.  Cars are much faster during off-peak hours, and they can take you directly from point to point.  But these advantages are reduced or eliminated by (A) rush-hour traffic, and (B) reduced distances.  (So for instance, late at night I sometimes take a taxi home, spending about $25 but saving about 25 minutes in travel time.  When traffic is light, cars are incredibly fast relative to subways.)

The other big consequence of "city physics" is that land values are higher and more dependent on location.  Living a mile further from your job is not a big deal in a small city where it means perhaps an extra 5 minutes and 25 cents in gasoline per day.  But living a mile further from the subway station is a very big deal—that's maybe an extra 25-30 minutes of commuting per day, sometimes in very unpleasant conditions.  The effects are much larger for retail businesses—being a mile further from your customers would essentially destroy a lot of New York City businesses, but in small cities everyone drives anyway, and it makes only a small difference.  As a result, land values in small cities are "low amplitude."  Sure, some areas are going to be more expensive than others, but the differences will generally be muted.  In New York City it's not uncommon to see a very expensive neighborhood within half a mile of a slum.  (Though even slums are relatively expensive.)

And this, in turn, has consequences for inequality.  Below a certain level of income, small cities are terrible, because car travel is prohibitively expensive and very few jobs or stores are within walking distance.  This is one reason places like Ferguson, Missouri are hellholes for poor people.  But at a surprisingly low income, the situation reverses itself and small cities become much better for lower-middle-class people.  Once you can afford a car, basically, you are likely to be far better off in a small city.  If you can drive, then you can work anywhere in the city at relatively low cost.  Housing is cheap.  You can go to the park or the wilderness without paying insane amounts to live near them.  Retail goods and services are cheap, with a few exceptions.  (Nail salons are apparently quite cheap in New York relative to smaller cities, though this might not be for the best of reasons.  Also, while food is generally less expensive in small cities, certain kinds of ethnic food would be hard to find.)  And by the way, cars are not that expensive.  In New York City you pay about $1,400/year for a Metrocard.  A car probably costs more than $1,400/year in a small city, but not by a tremendous amount.  Certainly a couple that shares a car in a small city is not going to pay much more than they would pay for transportation in New York City.  And of course housing should more than make up for the difference.

Manufacturing jobs are also much more plentiful in small cities than in New York, because modern factories use a lot of space and can't profitably be located in areas where land is expensive.  Schools are a mixed bag.  Some schools in New York City are excellent, but overall the public schools are either horribly expensive (via the cost of living in a good school district) or mediocre at best, and the private schools are also very expensive.  That said, if you have high-school aged kids who are extremely good at taking tests, New York City's magnet schools are probably better and cheaper than almost any other option.

So what are big cities good for?  Basically, they are good for very poor people, very rich people, and gay people.  Very poor people, because cities do a lot of redistribution and don't require a car to get around.  Very rich people, because cities support high-paying jobs and abundant opportunities for consumption and socializing.  (And so poor people, again, because the presence of all those rich people creates a lot of low-skill jobs as servants etc.)  Gay people, because big cities are tolerant and contain enough other gay people to offer a lot of potential matches.  (As the country becomes more tolerant, medium-sized cities will become more and more competitive, and I expect big cities' allure for gays to decline.)

But here's the thing.  The pattern of development that is appropriate for a big city is very different from the pattern of development that is appropriate for a small- or medium-sized city.  Qualitatively different.  This is a huge problem, because (A) before cities become big, they generally go through stages during which they are small- or medium-sized, and (B) it is tremendously expensive to retrofit a city with the infrastructure that a big city requires.  This is not just a matter of building subways, though that is important.  It involves lot size, house size, building height, parking lots, parks, the size and variety of retail stores, etc.  Some of those things are relatively easy to fix, but some are prohibitively expensive.  One that I didn't mention, but that is prohibitive by itself, is street layout—cities somewhat counter-intuitively need to devote more space to streets, and need the streets to be laid out in a tight, interlocking grid.  But re-routing streets doesn't just cost a lot in construction terms, it requires re-allocating land ownership (the new streets have to go through what is currently private property, and lots will be bisected or worse by the new streets).

My view is that the government should consciously set out to develop a few more big cities along the lines of New York and Chicago (and it should probably spend money making both of those cities, especially Chicago, more urban).  This could be done in a few ways, all of them expensive and risky.  The government could simply build subways in the middle of nowhere (this has the advantage of being quite cheap), zone for density, and then subsidize the rapid development of a new city.  Alternatively, the government could select a few medium-sized cities, rezone large swathes for density, and then spend a bunch of money adding subways and other big-city infrastructure.

I somewhat prefer the former option because starting from scratch allows a tremendous amount of flexibility, and the politics seem much less complicated.  (Just dealing with the suburbs of an existing medium-sized city would be very taxing.)  But if we are going to enjoy the benefits of urbanism at a reasonable cost, we need more than our handful of legacy urban centers, and we can't rely on natural growth to deliver.  At best we can hope for the gentrification of a few old, somewhat-dense cities (like Philadelphia and Baltimore), all of which are in the eastern part of the country and none of which is truly equipped to be a New York-style urban center.