Sam Bowman is the co-founder and editor of Works in Progress, and a prominent Neoliberal who wrote ‘A neoliberal agenda for the 2020s’. He was kind enough to agree to answer five questions I thought would elicit interesting answers, and he didn’t disappoint! This will be the first in a (hopefully) monthly series on All That is Solid, where I ask five questions to different people I think have interesting things to say. Enjoy!
All That is Solid: Works in Progress just published an excellent piece by you, John Myers, and Ben Southwood on the importance of building more housing in the Western world. Can you talk me through the political mechanism by which housing shortages can be addressed? Lots of the polling I’ve seen on housing doesn’t fill me with optimism – One YouGov poll showed that 58% of people think that we wouldn’t need to build on the Green Belt to address the housing shortage, and another showed that a plurality of people oppose building housing in their local area. How can people who support building more houses win the political argument?
Sam Bowman: I think the answer is to buy off people opposed to new housing. My view, which I outline in the article you mention, is that the costs of not building enough housing are absolutely enormous. If that’s true, and building more homes would create a lot of extra welfare and wealth overall, then it should be possible to design a policy that allows us to do that and uses some of the extra net wealth to buy off people who would otherwise lose out – in this case, homeowners in desirable areas who object to more housing near them.
The mechanism I favour to do this is what my colleagues and I call “street votes” – allowing individual streets to vote on their design and density rules. A street that votes to allow denser development should become more valuable, because (for example) you can now build extra stories to allow three homes on plots where only one home was previously allowed. This would channel a lot of the pent-up demand for additional housing to existing homeowners, but crucially it would only do so for the homeowners that compromised by letting more development take place on their street.
Although this works via democracy, I think it facilitates the sort of bargaining over trade-offs that we often associate with markets. It aims to tightly align the decision-making with the people who mostly lose out from new development – the people immediately close by to it, on the street it takes place on (with rules to mitigate other effects beyond that). This means that the people who benefit can, in effect, “buy” the votes of the people who lose, via the expectation of higher property prices for places that vote for more density. In effect, the mechanism allows the future owners of the additional housing to compensate the current homeowners, who are now the decision-makers, for the loss of amenity they may experience from greater density.
This should also mean that extra housing goes where demand is greatest, rather than today, where it goes wherever political opposition is lowest, which can often be remote and low-value places to live. Though I talk about streets, this kind of mechanism could be used to build more densely on other kinds of land too – disused alleys, car parks, and wasteland that often exists behind streets in cities.
I think this is an underrated approach to politics in general: figure out who the interest groups are blocking some net-improving reform, and then use some of the benefits we’d get from that reform to buy them off.
ATIS: Julia Galef has talked about being a ‘high-entropy thinker’, meaning someone who has varied opinions that are difficult to predict. Can you give me an example (or some examples) of an opinion you hold that someone familiar with your writing and previous work might not expect you to hold? Are there any situations where you think that market mechanisms are suboptimal where many of the other fellows at the Adam Smith Institute might disagree with you?
SB: There are a few different ways to answer this question, because I think different groups of people would have different expectations about me. So, depending on who you are, these opinions might seem surprising, or totally predictable:
I am pretty strongly pro-international aid, having opposed it when I was younger in the belief that it made recipient countries’ governments worse for their people. My view is that aid spending today, at least as the UK does it, is largely used for things like health interventions and poverty reduction, which are significantly welfare-enhancing. Although there is still waste, I think the good significantly outweighs the bad, and I think attempts to cut aid are just as likely to cut good projects as bad.
I take quite a draconian view of crime and punishment, and think crime rates in the developed world are shockingly and unacceptably high. I think crime carries lots of additional costs, like making everyone in an area fearful and driving people away from places that could otherwise be prosperous and nice to live. I think this applies to low-level harassment that often isn’t even considered criminal – harassment of women on the street is extremely common, makes their lives extremely unpleasant, and goes virtually unpunished. Obviously, reducing crime rates involves more spending on police, but I also hold the unfashionable view that longer jail sentences for relatively minor crimes by repeat offenders are desirable – not because I expect these to deter people, but because they would detain criminals who would otherwise be likely to commit more crime. I don’t support the death penalty because I don’t think it has clear deterrent effects, but if I believed it did deter a significant number of murders I would support it.
I think there are potentially quite a lot of things that have society-level positive or negative externalities that it’s impractical to expect organisations other than the state to subsidise or tax. Obviously, carbon emissions are an example, but I also think subsidies for innovation and entrepreneurship are likely to be desirable (given that the intellectual property system does not allow innovators to capture many of the benefits they create for society), and probably also for families to have more children. On these kinds of issues, I think the more difficult and interesting questions are how to do these kinds of subsidies.
ATIS: You have a substack called Consumer Surplus, where you write about ideas and products you think are likely to make people’s lives better. Can you tell me about an idea that doesn’t obviously lend itself to a political ideology that you think would make a lot of people’s lives better if it was more well-known?
SB: A few things come to mind:
Cooking from scratch for yourself can be quick, cheap, delicious and nutritious, and unless you value the time you’d spend cooking at over $100/hour it will easily pass a cost-benefit test compared to many alternatives. A lot of people who think they “can’t cook” refuse to follow recipes, and instead think cooking is some kind of creative process, rather than following simple rules and learning a few techniques that will eventually make the process easy and even enjoyable. My suggestions are to rely on one or two recipe writers – eg, Fuchsia Dunlop for Chinese cuisine, and Kenji Lopez-Alt for general American food, Delia Smith or Jamie Oliver for more general Western food – and to focus on doing a few recipes repeatedly over a few weeks so you really get the hang of them.
Savings that aren’t invested are losing enormous value over time – both from inflation (which invested money is effectively hedged against) and from the opportunity cost of whatever gains you might have made in the market. It is also very simple to invest in low cost, broad index funds that track the market as a whole, and it is very sad that people feel so daunted by it that they put it off (I’ve written a bit about my approach here). Similarly, in normal times, changing your electricity supplier (in the UK) to a cheap company is a very quick and painless way of saving a few hundred pounds a year.
It really pays to shop around online. I use a combination of Hot UK Deals, Google Shopping, and Amazon with the Camelizer Chrome plugin, which tracks product prices and emails you when they go below a certain level. I think I end up saving a lot of money.
ATIS: You voted Remain in the 2016 EU Referendum, but recently you’ve adopted a tone that suggests that you think Remainers ought to accept the result and be critical of the EU when it makes mistakes. Can you talk me through your thoughts on Brexit now? Tyler Cowen argued recently that maybe Brexit isn’t the mistake he thought it was. Do you have any sympathy for that position?
SB: I think Brexit was definitely a mistake overall, but it wasn’t a decision without benefits. The EU is a pretty rotten institution, and on lots of important issues it is utterly dreadful - like the Digital Markets Act, which is going to pointlessly make a lot of the internet much worse by banning “self-preferencing” and other useful conduct by digital platforms, and which was voted through by the European Parliament by 666 votes to 16. So is the useless and wasteful GDPR, which probably damages competition for the sake of a bizarre, abstract idea of “privacy” that doesn’t really resemble the concerns that most people have. Most of the Brexit “opportunities” are negative – being outside further bad moves by the EU. And though I expect the UK’s equivalent regulations to be a bit better, I don’t think they’ll be that much better. I doubt this effect will outweigh the simple economic cost of being outside the Single Market.
I was always fairly happy for the UK to leave the EU’s political institutions but to remain in the Single Market. I thought that that was unlikely to happen in the event of a Leave vote – I predicted before the vote, fairly accurately, that the pro-Leave side would become a popular “strong horse” and the sort of wishy-washy Leave I was happy with was very unlikely to happen. The economic costs of Brexit have mostly been masked by Covid, but I still expect the UK’s trend growth to fall over the coming decades, and for the UK economy to be outgrown by Germany and France, and end up closer to Italy in ten or twenty years’ time.
Having said all that, I think it’s pretty pointless to relitigate those arguments. My side lost, and outside of a few fanatics, I don’t think there’s much appetite to re-run the argument. And the monomaniacal lunacy of the really diehard pro-EU people – represented by the “FBPE” crowd on Twitter – is extremely off-putting to anyone who has any self-awareness, which makes me think their cause is likely doomed for the foreseeable future. So I think we have to treat Brexit as a sunk cost for now, and focus on whatever good policy reforms are most likely to actually happen – that’s much more likely to be stuff like housing and tax reform than re-entering the EU.
ATIS: Finally, you wrote a great review of Stuart Ritchie’s book Science Fictions: Exposing Fraud, Bias, Negligence and Hype in Science, where you talk about a few changes that policymakers and politicians might be able to implement as a way of helping to address the replication crisis and other problems in scientific research. But what should ordinary people who are interested in evidence-based policy do to make sure they’re not being fooled by fraud or bias? Should we downgrade our confidence in our own views about policy, or is that not necessary?
SB: I think anyone who would ask that question of themselves – and it’s a good question – is more likely to be at risk of underweighting their own judgement and overweighting the claims of credentialed experts than the other way around. Collective expert failure isn’t that uncommon, and I think intelligent laypeople are more at risk of being excessively deferential to experts in these scenarios than they are of not being deferential enough in the times when experts are correct. Covid has been a great example of this – at the beginning of the pandemic, the UK’s official plan was to infect everyone with the virus and hope to get herd immunity that way. There was a huge amount of elite deference to this even though it was obvious that this would mean incredibly high death rates even from the original strain of the virus, and obviously later this approach was abandoned.
I think one way this tendency can manifest itself is in overreliance on fairly weak empirical evidence, like econometric or psychological studies that are underpowered, find small effects, or fail to really isolate the thing they’re trying to investigate. Occasionally I see quite weak studies that don’t make much sense cited unquestioningly and framed as the “evidence-based” position, contrasted against the “theory” position, which it is implied is obviously just wrong because the evidence disagrees. Ritchie’s book is a good read for understanding some of the ways in which an academic study can be deficient, but it often becomes clear just from reading a paper that its authors are inferring far too much than is justified from their actual data.
So I think deference to expertise and to shoddy academic evidence because it has the appearance of empiricism is an important pitfall for most intelligent people who are already trying to avoid ideological dogmatism. As well as academic expertise and research, I think we have other useful tools for understanding the world, like price theory, casual empirical analysis (which many of the most important insights in science, such as Darwin’s, are based on), or general “judgement” as measured by things like the Good Judgement Project or Metaculus.
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