Back in Brazil: more impressions

Another thing that calls my attention in Brazil (or rather, in Rio de Janeiro) are the crazy traffic jams. All day long, traffic moves painfully slowly. Really. There is no rush hour. Every hour is rush. The reason is not hard to understand: there are way too many buildings for too few streets and poor options in mass transportation.

Thinking about this, I came across this excellent text. It is in Portuguese, so for those who can’t read it, I’ll summarize. Basically, zoning laws in Rio de Janeiro through the 20th century were completely crazy, following a very nasty relationship between politicians and real state companies. A company wanted to build taller buildings and profit, the city hall would not oppose, especially when a luxurious apartment was waiting for the mayor. The result is that old neighborhoods like Tijuca and Botafogo simply have no space on the streets for so many cars.

But what is the problem with many tall buildings? That’s what New York is all about, and I simply love the Big Apple! Well, that’s true, but NY has something that Rio doesn’t: a great mass transit system. Rio has four subway lines. Or three. Wait, maybe it’s just one. Here is the thing: on paper, Rio has four subway lines, which already makes no sense, since it only has lines 1, 2 and 4. Line 3 was planned but never built. Line 4 is just an extension of line 1, and line 2 trains enter line 1 (!). Although the system was privatized in the 1990s, it is very clear that it maintains a very suspicious connection with the state government. Sergio Cabral, Rio’s former governor, and presently in jail, was married to a lawyer who defended the Metro company. It is also clear that bus companies subsidize politicians who maintain their interests. In sum, Cariocas are hostages to a terrible public transport system that favors a criminous relationship between big companies and politicians.

Rio ends up representing very well a problem we see all over Brazil: people believe this is capitalism. Because of that, they vote for socialist parties. It should be painfully obvious from the examples of USSR, Cuba, Venezuela, Nicaragua, North Korea, China, Vietnam, Eastern Europe, and so many others that socialism simply doesn’t work. But here is the thing: people in Rio (and actually in Brazil and Latin America in general) suffered and suffer so much under crony capitalists that they can’t help but thinking that socialism might be the answer.

Hear, World! Socialism failed, just like Mises predicted. But as long as people suffer under crony capitalists, it will still be appealing, be it in a poor neighborhood or a college campus in the US, be it in a poor country in Latin America. The job is not done. Freedom isn’t free. We still have a long way to go freeing people from evil.

Nightcap

  1. Why are economists wrong so often? Peter Coclanis, Aeon
  2. Civilization and urbanization Nick Nielsen, Grand Strategy Annex
  3. Rethinking how imperialism works Joseph Stieb, War on the Rocks
  4. Social warfare Mary Lucia Darst, NOL

Rent isn’t a four-letter word

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Inspired by the publication this week of NYU scholar Alain Bertaud‘s critical new book Order without Design: How Markets Shape Cities (MIT press), Sandy Ikeda‘s pre-book development series Culture of Congestion over at Market Urbanism, and London YIMBY, here is a note on housing reform.

Classical liberals see the economic solution to housing as relatively simple: increase supply to better meet demand. By contrast, the political economy of housing is almost intractably complex. The reason for this is that there are endless externalities associated with new housing: access to light, picturesque landscape, open space and uncongested roads just for starters. These gripes and grievances are the bread and butter of local politics. Unlike consumer product markets, housing cannot be disentangled from these social, political and legal controversies. A successful market-based housing policy must establish institutions that not only encourage housing supply growth but navigate around these problems while doing so.

Policy reform proposals that deliberately favour increasing owner-occupied single-family homes, as tends to be the focus among market liberals in the UK (and to some extent in the US), are currently self-defeating. As justified as they were in the past to achieve a more market-friendly political settlement, they are now a barrier to achieving plentiful, affordable housing. This is because every new homeowner becomes an entrenched interest, a potential opponent to subsequent housing development in their area. They impose more political externalities than renters. I propose we cut the link between support for home ownership and housing supply policies. This would free up policymaking to focus on expanding provision by all available market-compatible means.

This should include greater encouragement of institutional landlords, especially commercial enterprises. Commercial landlords have more incentive and capability to expand supply on estates that they own, while long-term renters (unlike homeowners) have an interest in keeping rental costs low. The lack of private firms dedicated to supplying housing in England compared to much of the rest of the world is startling and yet often overlooked even by friends of free enterprise.

Continue reading

Nightcap

  1. History of “blackface” not what you think Robert Cherry, RealClearHistory
  2. Luck and the improbable career of Ralph Bramel Lloyd Michael Adamson, RealClearHistory
  3. The Habsburg Empire as a warning for US, EU Todd Buchholz, RealClearHistory
  4. The de-civilising process Adrian Wooldridge, 1843

Nightcap

  1. The renewed relevance of neoconservatism Rachel Lu, the Week
  2. The idea of a Muslim world is both modern and misleading Cemil Aydin, Aeon
  3. Democratic socialism threatens minorities Conor Friedersdorf, the Atlantic
  4. The world economy’s urban future Parag Khanna, Project Syndicate

Eye Candy: Countries whose capital is not their largest city

NOL map countries capital cities.png
Click here to zoom

Not much to add here. There doesn’t seem to be any correlation of any kind (colonialism, economic development, etc.). Still, I thought it was cool…

Eye Candy: the US Asian population, circa 2010

NOL map US Asian population
Click here to zoom

“Asian” is a pretty broad term. Racial classifications are, perhaps, the dumbest thing in the world.

Imagine seeing something like this in the press today, or this as an advertisement. There’s been lots of progress in this country, it’s just hard to see sometimes.