why I’m anti-YIMBY
Scott Alexander posted this last month, arguing that building more in an area doesn’t necessarily decrease local prices because it can cause more people to move in.
I see 3 levels of argument here, based on 1st, 2nd, and 3rd-order effects:
More building means more supply, which by supply-demand curves means prices decrease. (YIMBY is here)
Local demand isn’t fixed: prices are determined by an equilibrium between people coming and leaving. Building more changes the character of the area (which probably makes it suit current residents less) but the equilibrium of quality vs cost is unchanged. (Scott is here)
Building more in expensive areas causes people to move which causes jobs to move, which causes more housing to be unused in low-cost areas, which means housing costs don’t decrease significantly on a national level either. (I’m here)
Position (3) has long been my view, and I thought I’d write a post explaining it a bit.
The problem in America isn’t a lack of aggregate housing, it’s houses not being where people want to live. Building more in those areas might seem like an obvious solution, but it wrongly assumes “where people want to live” is constant. If we instead consider that it could change, we need to consider what makes people move from an area with cheap housing to an area where it’s expensive.
You can just ask people that, and they’ll tell you: jobs. OK, so why are there better jobs in the expensive areas?
If you ask an economist, they’ll probably say something about improved economic efficiency from people being closer together. I don’t buy it, because it contradicts what I observe directly:
Many people can work as well remotely.
Programmers don’t become more productive when they move to Silicon Valley or Seattle or NYC.
Factories in America aren’t built in the middle of cities. Boeing doesn’t make aircraft in the middle of NYC, that would be stupid.
Yes, people in NYC and Silicon Valley get paid more on average, but I reject the assertion that wages reflect productivity or competence. If wages were high simply because aggregation improved efficiency, then we’d see a stronger correlation between density and wages, but the correlation of wages with housing prices and with wealth is stronger. In my experience and the experience of people I know, the dominant factor is how close you are to money. Wages in NYC are high because there are wealthy investors and corporate executives there.
Why, then, are those rich people in NYC? Because:
It has luxury services. (Amazon/etc made this less important.)
Other rich people are there, which is good for networking.
The nice parts are expensive enough to keep poor people out. (More applicable in expensive suburban areas than in NYC, where exclusion involves more private schools and secure apartments.)
In this model, building more housing in Silicon Valley or NYC just leads to more competition for about the same total income from “good jobs”, with that number determined by the amount of money there. That makes things better for rich people buying luxury services in expensive cities, and worse for other people. If you make housing cheap enough for many poor people to move in, the rich people might even leave because of that, decreasing the number of good jobs.
The solution, then, is not to build more in high-demand areas—it’s to force demand to be spread out more.
When you say “force demand to spread out more”, what policies do you propose, and how confident are you that this is both easier to accomplish than the YIMBY solution and leads to better outcomes?
My default (weak) assumption is that a policy requiring more explicit force is more likely to produce unintended negative consequences as well as greater harm if unpopular. So a ban on A has a higher bar to clear for me to be on board than a subsidy of B over A. My initial reaction to the sentence “force demand to spread out more” is both worry at how heavy-handed that sounds at first blush, as well as confusion as to what the upside of this is over the YIMBY solution, besides preserving the utility of some currently-exurban houses/land that would otherwise go unused. That’s good, but I don’t see why it’s so good that it justifies not pursuing greater density instead, since as you say the money is already in the city.
I don’t want to get into reasons for desirability of suburban vs high-density areas, which is a topic of its own, but clearly a lot of people prefer to live in lower-density areas than NYC.
Here are some actions I support based on the above model:
More antitrust action. I think America has oligopolies that are bad for consumers anyway, and corporate consolidation means more centralization of corporate leadership in a few top cities—and then every layer of managers wants to live close to the layer above them. I support breaking up many big companies.
If a department/subsidiary of a company is localized to a region, the management of that department/subsidiary should be legally required to live and work in that region, rather than where the top corporate leadership is. (Apart from that being partly zero-sum competition, I think companies act largely according to the desires of management, so forcing middle management to do things it doesn’t want to can improve overall welfare.)
Remote work being an option should, in some cases, be legally required. I think management sometimes forces workers to come to an office just for its own self-gratification.
Why do you believe this? I definitely became a better developer when I moved to NYC. How do you know that everyone else didn’t either?
I think this is just recursive? Of course wages are higher in places with more wealth. Higher wages causes more wealth. And housing prices can follow, just cause of supply+demand (there’s a higher supply of dollars, so people are willing to spend more of them).
——
Anyway, it’s incredibly effective to take very talented people, and put them together on the same team. They build on each other’s talents, and it becomes multiplicative in a lot of cases. I like the story about the IBM black team as an example (though admittedly it may be apocryphal).
Achieving this requires gathering them, which requires paying them well, which means you need somewhere like SV or NYC where that can happen.
I mostly don’t think remote work is nearly as effective. It massively reduces the compounding effects of having smart people work closely together. But this is just based on my personal experience so far.
“programmers” is too large and diverse a group to meaningfully discuss. For this purpose, it’s sufficient to say “_SOME_ programmers become more productive when able to interact in-person with other workers and experts, which are currently concentrated in a few cities”. And that is a pretty easy claim to make—at least xepo and I assert it to be the case for ourselves.
I’ve done a lot of hiring, engineer evaluations, and related attempts at productivity-measurement for a very large software company. I can say with certainty that there was good evidence that the enforced shift to WFH was a step-change loss in productivity, only some of which has come back. I will also say that it’s NOT evenly distributed—some teams and individuals did recover quickly (and even benefitted). The median and mean was quite negative, though. Standard caveats: measurement is based on imprecise proxies, and Goodhart may have made it even more variable: it was a visible excuse for a performance drop, rather than trying to game the metrics to look good.
I think the net value added per programmer-hour of some open-source projects where everyone works remotely is far higher than anything done at an office for a corporation. Do you disagree about that?
I don’t know how I’d evaluate that without specific examples. But in general, if you think price signals are wrong or “more misleading than not” when it comes to measuring endpoints we actually care about, then I suppose it’s coherent to argue that we should ignore price signals.
I wouldn’t say that “in general” but there are some situations where I do think price signals mean little. For example:
prices of expensive modern art
prices of expensive clothes
valuations of some startups
salaries of many CEOs
America today has large income inequalities, but income inequality < wealth inequality < power inequality. One thing the items on the above list have in common is LARPing by the ultra-wealthy.
Can we measure this somehow? Seems like something someone would have already studied. For all the perceived value of open source, does it actually generate a lot of economic value? Probably, seems likely, but until it’s quantified we’re just arguing intuitions.
My own guess is that open source provides about average value, and the real high value adds come from engineers building things you’ve probably never heard of, like some obscure performance improvement or new feature that increases conversion rates half a percent for some large organization and thus produces tens of millions of dollars in revenue for one FTE quarter worth of work. And for this kind of work, maybe it really does help to be in person, because it requires knowing a large amount of context about the business in order to be able to effect the necessary changes in the code, whereas open source depends more on things that are overdetermined, and so just a matter of someone smart working on them, and thus less coordination is needed.
Sure, there are studies on programmer productivity with remote vs office work, but they don’t all agree, and measuring programmer productivity is notoriously difficult. (Do you use lines of code? Commits? What?)
Here’s one from Baidu that seems decent. According to this, “64% of developers said they were more productive working remotely, compared with 55% in 2021”. But bringing up such studies with xepo didn’t seem like it would be productive, considering the strong statements they made based on their personal feelings.
On priors I think you should strongly expect in-person co-working to produce much fatter right-tails. Communication bandwidth is much higher, and that’s the primary bottleneck for generating right-tail outcomes.
The Baidu study shows slightly longer right tails for individual productivity with remote work, and IIRC others have shown longer tails for remote work as well.
Or did you mean right tails for overall project results?
Yes, right tails for things that better represent actual value produced in the world, i.e. projects/products/etc. I’m pretty skeptical of productivity metrics for individual developers like the ones described in that paper, since almost by construction they’re incapable of capturing right-tail outcomes, and also fail to capture things like “developer is actually negative value”. I’m open to the idea that remote work has better median performance characteristics, though expect this to be pretty noisy.
Oh, I actually think those studies are probably accurate for the thing they’re measuring, which is ”short-term individual developer productivity”. But they don’t really account for “long-term productivity” nor “team productivity”, both of which I think benefit a lot from being in the office. You get an uptick in people’s ability to focus, but downtick in people’s ability to communicate, and both education and coordination are dependent on the latter.
As a counterpoint, consider that ~every major tech company is constantly pushing for people to be back in the office. I know the reddit groupthink about this is that managers are just being dumb, but I think it’s more likely that the individual devs don’t see the impact that working-remotely is having on the productivity of the company over time.
I am confused by your number 3. Edited for what I think you mean, and using NYC (high cost) and Tulsa (low cost) to make your example more vivid:
”Building more in [NYC] causes people to move [to NYC because now it’s cheaper to live there,] which causes jobs to move [to NYC], which causes more housing to be unused in [Tulsa, which causes housing costs to drop in Tulsa].”
If my understanding is correct, then housing prices drop in NYC, and housing prices drop in Tulsa. Therefore, housing prices drop on a national level. But you say,
″...which means housing costs don’t decrease significantly on a national level …”
But clearly they do.
Unless you’re saying that the average American’s housing cost doesn’t drop. That’s possible; it’s just Simpson’s Paradox. Housing is cheaper in NYC than before, and housing is cheaper in Tulsa than before. But housing is more expensive in NYC than Tulsa. Because you now have a higher population ratio NYC:Tulsa, the average housing cost might not drop.
But I would argue that kind of “housing costs don’t decrease” is misleading. If the price of both types of housing drop, and that leads people to choose more expensive housing because it’s now more affordable, that’s not the cost increasing. That’s people spending more money for a higher quality/quantity of product.
For instance, suppose the quantity of all types of housing increases 50%, and the price per square foot drops 33.3%. Now, everyone gets 50% more square feet for the same price as before. The total expenditure on housing is the same, but housing is definitely cheaper. Any apartment size that was $1500 before is $1000 now. Any house size that was $3000 before is $2000 now.
Substitute “in New York instead of Tulsa” for “50% more square feet” and it’s obvious the cost has dropped, which makes the quantity demanded increase.
The fact that people spent 100x as much on face masks in 2020 doesn’t mean that the cost of face masks increased 100x. People just bought 100x as many of them because the benefits increased by 100x. It’s the total amount spent on face masks that increased 100x.
It seems to me that your argument conflates two different senses of “cost.” One, cost per unit of housing; second, total amount spent on housing. If the first decreases, the second can increase, decrease, or stay the same. But it’s the first that’s the important one for the argument. Because the issue is, does building more housing change the cost per unit.
Having said all this, it’s possible that I’ve misunderstood your argument.
The price in NYC is set by the equilibrium of people coming and leaving. Building more in NYC doesn’t mean the price goes down any significant amount.
In Tulsa, what you see before price decreases is new construction completely halting. Prices get pinned at the cost of new construction even when there’s very little.
Here’s the basic sequence:
More construction starts in NYC. (NYC population has dropped recently, but we’re using it as a standin for “all 1st-tier cities”)
Adam works in Tulsa for MegaCorp, which has headquarters in NYC. With the new construction happening, Adam’s boss decides to move Adam to NYC so he’s easier to manage, or maybe his whole department moves to NYC so his boss can move to NYC and be closer to executives. Adam doesn’t want to move but has little choice. (Alternatively, Adam loses his job and finds that such jobs have moved from Tulsa to NYC.)
Adam’s house in Tulsa goes up for sale, which reduces construction in Tulsa by 1 house. Adam had a good job, and with him leaving the average income in Tulsa goes down.
Why didn’t Adam’s bosses move him to NYC before the new construction? Because, I assume, the bosses knew Adam and his colleagues wouldn’t move because rent is so expensive. Or, which amounts to the same thing, they knew they couldn’t attract enough talent in NYC because of the high housing prices.
This implies Adam and his colleagues DO have a choice. It’s just that the new, lower housing prices in NYC provide enough incentive to make the move that Adam chooses to make the move, although perhaps reluctantly.
It seems that your argument, therefore, depends on housing prices being lowered in NYC. Otherwise, why wait for new housing before making the move?
You’re assuming a perfectly liquid market here. There can be a lot of friction when trying to move in a bunch of people or buy a bunch of office space in one place. New construction can avoid that issue.
If there is no friction, and things are perfectly liquid, then the amount of price change required to cause big moves is very small.
Also, if income is lowered in Tulsa, housing prices must drop, because you have fewer dollars chasing the same amount of housing.
Perhaps your argument is that, with lots of new housing built in NYC, prices drop in NYC and Tulsa, but consumers of housing are not necessarily better off because (for instance) they might be “forced” to move from Tulsa to NYC, making them less happy than they would have been otherwise, despite the lower housing prices in both cities.
But that’s a completely different argument.
I may have erected a straw man here. But to that argument I would respond by noting that any kind of change makes some people worse off and some people better off, but market-based change almost always (in theory) results in more positives than negatives. The drop in price of word processors means that Adam may lose his job at the typewriter factory, but economic theory says that in the absence of anything unusual, the change is a benefit to the world as a whole.
This is especially true when changes are an increase in the abundance of a beneficial consumer good, like housing space.
That is my argument. That’s the whole point! I just also don’t think that it means prices necessarily go down in Tulsa (because people leaving for NYC shows up mainly as less construction, and prices in Tulsa are pinned to construction costs there) or necessarily go down significantly in NYC (because the price changes involved may be very small, or maybe there’s just reduced friction for companies moving because of new construction rather than an actual price decrease).
I think you are underselling the networking advantages of cities.
Most people are eventually part of a couple or family. Most couples make compromises in terms of one or the other taking not-the-best position for their career because they want to live in the same area as their spouse. In a big city (my experience is London) their are enough jobs in enough industries close together that a typical couple can both usually pursue their ideal careers (or close) without being in different places.
Add into this that your job might change. If you live in Boeing town: population—high, employers—one, then you work at Boeing, and if you stop working at Boeing you move house and your children change schools etc. If you live in a big city and you are a career-ist you can do the whole “monkey bars” thing where you keep jumping between companies as you think you can do better, all without moving home every 2-3 years.
To be clear, when I talk about “high-wage areas” with expensive housing, I am not talking about US cities in general. I’m talking specifically about particularly expensive places like NYC and London.
I don’t think London is expensive or has high wages because it’s productive. I think that’s because rich people brought money to London from elsewhere because:
their property rights are secure there (relative to Russia/etc)
there were lots of high-end stores
they could get luxury services like butlers and high-touch financial management
there were other rich people there to network with
Now that you can get some services and goods online, and there’s more international competition for those rich people, you see whole sections of London where rich people have houses that just seem dead to ordinary people on the street, with luxury stores that are closed most of the time, houses that are occupied 1⁄3 the year and have private chefs when they’re occupied, and so on.
You make a convincing case that their are forces that encourage very rich people to congregate relatively close together, I don’t think its the main force behind what is going on but I can see that it exist. Other forces also exist, like those I outlined above. Mine is not a productivity argument, and you could if you wanted even lump my suggestion under “there were other rich people there to network with” where “network” here means “marry” and “rich people” here means “people with a career, not a job.”
I think a good portion of your argument hinges on whether this kind of networking is overall positive-sum for the economy or whether it’s zero-sum or negative-sum.
Do you agree that this is a major crux?
My argument only relies on rich people having reasons of some sort for living in expensive areas that aren’t economically justified from a global perspective. But I would say that social networking between rich people is a net negative on the margin because it crowds out more objectively considered deals, and leads to more collusion and trading of eg board seats.
Yeah, or adversarial collaboration-style. I’d be especially curious about (1) what would change your mind (same for the YIMBY proponent) (2) empirical data
So to summarize:
(1) YIMBY policies, if enacted, would be to increase national average incomes by allowing more people to concentrate in high wealth producing areas
(2) the policies would essentially be to disempower local authorities to control land user or zoning, except in a very deterministic way where all projects are automatically approved if local authorities don’t respond by deadlines
(3) you acknowledge that it would increase national incomes and well being for many people
But...your objection is that because capitalism is inefficient/the inequality is not merit based we shouldn’t do this because...
I simply can’t make a connection here, I don’t see any worked examples proving you’re correct about capitalism, and there’s pretty strong evidence that you don’t know what you’re talking about.
The evidence is simple : if companies “close to the money” paying more for services (financial, software, etc) were getting less value per dollar than getting those services elsewhere, over time they will be outcompeted and lose to companies that hire remote workers from cheap areas or on site workers from cheap areas.
It’s the efficient market hypothesis repeated again. Monopolies and oligopolies make the market less efficient but don’t disprove it.
But suppose you convince me that in fact EMH is incorrect in this scenario. Ok, now what? We live in capitalism, it’s the rule, it’s the best of the bad systems so far found. This is not the time to abandon it. Or rather, selectively abandoning it in only the case of housing makes no rational sense.
Like if you were convinced that capitalism needs a reform, that’s fine, but your article should be “how capitalism is broken and here’s how to fix it” not something about YIMBYs. It’s a total non sequitur. Any reforms or fixes need to patch all of capitalism, zoning policy is completely unrelated.
I might point out that in a communist system, the local committees in tier 1 cities refusing to allow enough housing would be replaced. You see what China does in those cities, it’s build build build.
China builds a lot more buildings than they need, because the metrics around house buildings are easy to measure and the local committees goodhard around building a lot of things whether they are needed or not.
Regarding (1), what I disagree about is that people concentrating in high-wage areas would increase productivity or average incomes, because I don’t think the reason wages there are high is mainly because wealth is produced there. My view is that wealth is concentrated there by ownership of assets elsewhere, and sometimes control of deliberately maintained chokepoints (eg Apple’s app store) for other parts of the economy. I do not acknowledge (3) and I’m not sure why you think I do.
That’s like saying “fish don’t have worms because fish without worms would outcompete the ones that have worms”. But in reality, most fish have worms.
My view is that because of inefficiencies of the current system, the actions of YIMBY activists are counterproductive. I don’t aspire to patch all of capitalism, just to convince some people not to spend their limited efforts on actively making things worse because they imagine an idealized system that’s easier to understand than what exists.
The situation in China is different in more ways than that, so it’s hard to make such direct comparisons.
This is vacuously true because of the underspecified word “many”. Otherwise, I don’t see how it’s meaningfully true. Programmers can work well remotely, but most employed people are not programmers.
It might be nice to include suggestions (and measurements, where it’s been tried) about moving housing demand to low-cost areas. There’s always a big question in economics about how and why supply/demand/price curves change, and it’s usual to take them as pretty static. If you believe it’s a first-order impact that they can be changed, it falls on you to explain how.
My first question, of course, is “why not both”? Seems like YIMBY laws (forced relaxation of restriction on building in popular areas) allow more housing to be built (BOTH more square footage AND more families in given areas), which is a good thing, even if prices rise—that’s an indication that the housing is even more valuable, presumably because of increased network effects.
Here are some suggestions.
What kind of feedback are you interested in receiving for this article?
implications of this model I hadn’t thought of
a counterargument more competent than the YIMBY articles I’ve seen
people saying they changed their mind about something
I think it would be helpful if you supplied specific YIMBY articles and quoted from them to illustrate your disagreements. As it is, I have so many “what do you mean by this, exactly”-type questions about your original article that I wouldn’t know where to start.
If there are some particular things you think need clarification, that would be good to know too.
I think of Matt Yglesias and Noahpinion as being canonical examples of YIMBY pundits, but I’d prefer not to link to them.
Well, it’s hard to know what specifically you’re objecting to if you won’t link to them. Citing the arguments you’re criticizing is a pretty basic norm of discourse, unless you want to make an argument that these arguments are so well known that the source doesn’t matter. But I don’t think that is the case here, and even if it were, you still have to lay out your version of those arguments cleanly and clearly.
The part that I’m most skeptical of is your claim about the dynamics of job creation. You offer a vision in which a fixed number of rich people create a fixed number of jobs, which they can take with them if they leave a city. Workers compete for this fixed number of jobs, and this is what motivates them to move into big cities. That’s a rejection of econ 101, and if you’re rejecting econ 101, it makes me feel discouraged that we will have a productive discussion. What has led you to this zero-sum view of the economy?
While the title says “anti-YIMBY” what I’m trying to do here isn’t counter specific pro-YIMBY arguments, but rather to lay out an opposing position. If there are specific pro-YIMBY arguments that people then feel effectively counter that position, I can respond to those in that context.
Every notable economist situationally rejects econ 101.
It’s not that I started out with this view due to some natural tendencies, if that’s what you’re wondering. I was initially more of a libertarian and had more faith in the people running the economy. What changed my mind was observation. Getting close enough to big investors and powerful executives to see how dumb they really were. Seeing how much of the work at corporations is fake. Seeing the moral mazes. Seeing how much wealth concentration there really is. Seeing how much of the economy is driven by the whims of the ultra-wealthy, and by providing luxury services to the people who provide luxury services to them. And so on.
I understand that this is your aim. I guess what I am saying is that it does not seem like a good aim to me relative to the aim of countering specific, quotable arguments and generally making an effort to contextualize your arguments in some specific strain of discourse. I.e. cite something and respond to something.
One important reason why is that your argument is not specific or evidence-backed or carefully defined enough to agree or disagree with it, without asking you lots of additional clarifying questions. The effort of anticipating and addressing those clarifying questions is the basic work an author is expected to do. Participating in an ongoing conversation is very helpful in this regard, because the prior work does a lot of the heavy lifting of defining, giving evidence, structuring arguments, and motivating the importance of the issue.
These are basic expectations that just about any reader worth having is going to bring to your work. It’s not obligatory to do that, but if you don’t, then your writing will have the appearance of being draft-quality work that’s more a process of getting your thoughts together, and it’s unclear why you’d expect an audience to seriously engage with that. Yet your tone here seems to imply that you do, in fact, expect readers to take your article seriously. My independent observation is that you have more work to do in order to provoke the kind of conversation that it seems you’re hoping to have, and I would bet that choosing one or more specific previous works to critique would be a good way to move toward that goal.
Can you say more about your experirences that led you to have your view of job creation? It’s not often that I talk to people who’ve had the chance to personally observe the behavior of big investors and powerful executives sufficient to overturn the fundamentals of economics. It might be interesting to hear some of those stories—it’s hard for me to envision how the personal observations of an individual could provide such powerful evidence against basic market economic principles that they’d overturn one’s whole worldview. I haven’t had this experience, and nobody I know has either, so from my point of view you are an individual with a very unusual point of view based on very unusual experiences.
Most of them are covered by a NDA, and with Guidepoint I can’t even say who I was hired by. And of course, insulting specific people I’ve worked with isn’t good business sense.
Here is a comment I made explaining why a post by Bill Gates is dumb. I have heard much dumber things than that, in conference calls and on Zoom, by people responsible for deciding what to do and by very wealthy investors deciding their investment plans.
Yes, there are public articles that say dumb things—here’s a search that will find some examples. But until you experience it in person, you naturally want to fool yourself into thinking it’s just some kind of act, that people don’t really think like that.
I also have some acquaintances in Amazon who were around for the PowerPoint ban, and got to hear about executives who were literally incapable of reading or writing memos with complex concepts. Why do you think PowerPoint slides with 5-word phrases are so common? Because that is all that many executives are able to understand about non-interpersonal object-level things.
I’d also suggest reading Moral Mazes.
The whole point of capitalism is that the people who have and direct money are the ones who can make good decisions about how it should be used. When you see firsthand that high-level decision-making is a farce, where does that leave you?
I actually don’t see capitalism as being fueled primarily by good decision-making in the C suite. Instead, I think that there’s significant uncertainty around decisions at all levels of the company, and many limitations to their courses of action. Many, many businesses fail because of this.
But an existing company has been selected for having lurched its way to having robust demand, to an extent that all that uncertainty and confusion can be tolerated. There’s an incredibly powerful market signal saying MAKE THIS PRODUCT, and the company can survive and even thrive as long as it does a passable job.
But for the same reason, I don’t think that most good-paying jobs are attached to the person of wealthy individuals, and I don’t think there’s a finite number of them either. Jobs pop up in businesses that are set to fail as well as longstanding successful businesses. CEOs can’t just pack up a company and move it at the drop of a hat, much as they’d like it if they could. There’s lots of money out there looking for founders to invest in, and those founders need teams, and when those teams are successful, new companies grow, creating new jobs. And the winners get bought out, and big companies spin off little companies, and on and on. I think this is a pretty typical, mainstream view of economics.
It’s really hard for me to imagine what experiences could have lead you to think there’s just this static, finite number of jobs that rich people can take when they decide to move to a different town because too many poor people moved in. Even if most CEOs are very dumb (and I still don’t think that’s likely to be true), the zero-sum model doesn’t follow, and again—I don’t really understand the details of your zero-sum model well enough to fully understand what it is you’re proposing.
This is why I think it would be really helpful for you to make an effort to plug into a larger conversation. I appreciate and sort of believe that you’ve had experiences that would be convincing evidence of some of your claims, if only you could share them openly. But given that you can’t, you could at least look for what evidence is out in public—beyond just one letter by Bill Gates—and try to make a real case for some of the components of your worldview. If you are correct, then we all could learn from you, but it is very hard to open myself to updating my worldview very much based on the arguments and evidence you have gathered here.
Those investors tend to invest specifically in locations near themselves. That’s a big part of the centralizing dynamic I’m trying to explain.
It’s easier to get bought out when you’re located closer to the buyer. And mergers often lead to the purchased company moving.
Rather than saying US executives are “dumb” I’d say that they’re specialized in things that society doesn’t want them specialized in, like playing political games with other executives. Also, my experience is that “normal” people are far more impressed by MBA-speak and MBAs than engineer-speak and engineers.
You mean...longer posts with more links in them? Here? Or what?
It’s not really possible to do studies on this, so all I could do is point at a bunch of anecdotes, and then readers could still just say that’s cherry-picking. So, people have to estimate base rates from their personal experiences, which are biased but known not to be adversarially picked. Or, readers could assume that what’s reported by journalists/pundits is a consensus and thus more reliable. All I felt that I could do was set up a framework for people who already had evidence from their experiences.
That’s certainly understandable. At the same time, I kind of have other things to do, such as actually thinking about technology.
Is it possible that the disconnect is that you‘re valuing technical ability over being good at people+management? Most high level executives don’t need to understand these things in detail, because they have other people they trust that do understand it.
Powerpoints need to be 5-word phrases because that’s how you should communicate with crowds. And it’s not simply about reducing complexity to the lowest common denominator (though that is part of it). It’s more about how getting any team of more than a few people to do anything at all together means getting them all on the same page. And simplicity increases the likelihood that everyone will have the same take-aways, and so have the same goal.
Two motivated intelligent individuals have some decently high chance of miscommunicating about meaningful topics — increase the number to 20 and now you‘re almost guaranteed it. Put it in a presentation where everyone’s only half listening and things are even worse.
Relatedly, Bill Gates’ article wasn’t that bad. Sure, there’s some inaccuracies if you’re reading it strictly. But it’s not meant to be read strictly. It’s basically marketing material aimed at a very large crowd, which, as discussed above, requires using phrasing that gets the point across, not phrasing that is scientifically accurate when dissected.
Is a farce compared to what? It seems like you’re comparing capitalism to some ideal that has never actually been realized. And you can’t actually know if your ideal is feasible or even better in practice unless it’s been tried.
There are inaccuracies in the article, period. It would be embarassing for an engineer to make the mistake of conflating Celsius and Kelvin when comparing boiling point ratios, as in the claim that sodium’s boiling point is 8x higher than that of water. Bill Gates’ audience is going to have a number of technically savvy people in it, he knows it, and this alone is a college freshman/high school-level mistake. There are others.
My update on reading the article is, in fact, to downgrade my perception of Bill Gates’ technical expertise beyond the world of computer software and hardware, and to trust his ability to communicate science less.
That said, nobody needs to be an expert in every subject, and it might be that Gates’ wealth and diverse interests and fame simply put him in a position to try and interpret areas of science he’s not able to understand adequately. He’s unusual for a billionaire founder/CEO figure, and I personally wouldn’t update too much on his mistake here as evidence about the ability of other CEOs to understand their company’s specific technology to a level of depth adequate to run the business well. But I would put some probability mass into “CEOs are, in general, shockingly bad at understanding the technologies and products their company sells and they also don’t have the ability to tell who in their company does understand what their company is selling.”
No, they don’t. They are unable to tell the difference between technical competence and BS. That’s why Elon’s companies are relatively successful despite his autism and mediocre understanding.
US corporate executives are now selected largely for skill at “moral mazes” and I don’t think “being good at people+management” is an entirely accurate description of that. They’re good at dealing with similar people, who—being similar—are also not good at actually doing things.
Amazon banning Powerpoint worked out pretty well for it. Maybe all the theorizing about it actually being good was just justification.
I’d like to believe that, but no. It was not simplification for the common people. It was an accurate overview of how Bill Gates actually understands the technology involved and why he likes it.
I’m not suggesting copying the Chinese government, but China is doing a better job at a lot of stuff than the USA now—the USA seems to be largely coasting on past success while institutional quality declines.