Sam Bowman | What’s holding back progress (and how to fix it)

[00:00:00] Sam: There's a lot of overcrowding in most cities — a lot of people who live with their parents or who live with flatmates who would much rather not do that. So I've already talked about the economic problems, but also lower birth rates, which are going to be a huge problem for lots of reasons.

Italy has one of the lowest birth rates in Europe, certainly Western Europe, and it has huge rates of people still living with their parents. And as you say, you just can't have a relationship like that, right? Not as an adult. This is about people doing the thing that they want to do, not us compelling anybody. We're compelling people not to have kids right now. I want to stop compelling people.

[00:00:38] Beatrice: Welcome to the Existential Hope Podcast. I'm here today with Sam Bowman, who is the editor of Works in Progress, which we want to hear more about. And actually, maybe let's just start there. Why don't you introduce yourself and what Works in Progress is?

[00:00:51] Sam: Great, thanks very much for having me on. It's delightful to be here. I run and helped set up a magazine that focuses on what we call new and underrated ideas to improve the world. Those can be in science, in technology, in economics. And the things that we are looking for are — if I can use a slight bit of jargon — high-leverage ideas. So basically small things that could actually happen that might have a large impact.

To give you two examples: we are really interested in getting houses built, making it easier for houses to be built, especially in rich, prosperous cities. And we'll get on in a minute to why we care so much about that. But what we're really interested in is places that are already doing that, or places that have done that, because so often people in the world of, kind of, yimbyism — and we're in that world, although I'm not sure I love the term — so often people in that world say it's really important to build more houses, now go off, politician, and figure out how to do it. And really the hard bit is figuring out the politics of getting houses built. So we're interested in cities that have actually done it: how did they do it, and what can we and the rest of the world learn from them?

Another example from science that I think is super cool is the idea of gene drives. This is the use of genetic modification via CRISPR to insert a gene into the population of some animal species. And the reason you might want to do that is because you can, for example, stop mosquitoes from being able to transmit malaria. Or you could — and this might sound a little alarming to some people, but bear with me — wipe out a population of rats in a city by making the males infertile, but not the females. People might not like that because that's playing God and everything. If you hate rats as much as I do, then you like the sound of that. But this technology exists. The real question is: could we do it? What would the problems, what would the risks be? So we like to find ideas like that.

And we're very interested in kind of under-explored areas. We actually don't write very much about AI — not because AI is not interesting, it is — but because there are tons of people doing a really good job of writing about it and talking about it. We are really interested in the slightly less explored areas, and that's what we try to do at Works in Progress.

[00:03:17] Beatrice: Great. And yeah, it's a great magazine. I actually want to ask: how come you chose to do a magazine? Were you thinking this is the best way to reach out with the ideas, basically?

[00:03:27] Sam: Yeah. So there are a bunch of reasons. The main thing is that I have worked at think tanks for a long time in my career doing kind of policy work. And something that I think is true of some think tanks is that they're using fairly outdated ways of getting their ideas out there — that kind of maybe made sense before the internet and before social media and before sites like Substack made it really easy to build an audience, but I think make less sense now. Like white papers and big reports and things like that. They do have value, don't get me wrong. I'm not saying they're all bad, and there are think tanks that do a fantastic job — I'm a really big fan of the Institute for Progress, for example. But my view is that persuasion relies on people paying attention to you and being interested in what you have to say.

And I think that the format of a kind of interesting long read is a really good way of getting people to be interested, but also of giving them substantive information and arguments. What I think of what we're doing as being is a sort of exchange with our readers where they give us their consideration and their time and their attention, which we take very seriously. And in exchange we try to give them both good facts, a well-written story, hopefully an interesting, entertaining story sometimes, and an argument that they might find useful, they might think is true. But the rule we have is: will a reader who isn't persuaded by this piece be glad that they read it even if by the end they don't find it persuasive? And if the answer is yes, then we'll publish it. If the answer is no, then it's not good enough and we'll either cut it or something like that.

So the goal really is to find these ideas and find these ways of thinking about the world, ways of understanding the world, and make them such that people want to read them. And I think we have a growing audience. I think people really like what we're doing. We now have a new print edition, so we've been an online magazine for some time.

Another reason to have done a magazine format rather than a kind of standard news site is that when you have the standard news site kind of rolling coverage, it's really easy to get sucked into current affairs — what did the president say today, or whatever. And that has a place, I'm not saying it's bad. But that means that you lose focus on lots of other things that are really important, but just will never be front of mind for people on the news agenda. So being able to not aim to do an article a day or an article every two days, but instead say once every couple of weeks or months we'll put something out in our own time — you definitely lose some audience because people do actually really like the news and people do really care about that for understandable reasons. But I think at the same time, you get to focus on things that are genuinely important and wouldn't be focused on otherwise.

[00:06:29] Beatrice: And how would you compare it to a Substack? Like a monthly Substack or something like that?

[00:06:37] Sam: It's quite similar. I think of Substacks as competitors — not in a kind of "we don't like them" way, but just as there is some trade-off. Like if you're reading a Substack, you're not reading Works in Progress. Whereas if you're on TikTok, there probably isn't quite as much substitutability between those two things.

But I think the best Substacks are usually quite personal. They're usually like a single person writing in quite a personal voice. And I think they often are fairly isolated elements of a person's thinking. They often can spread their big idea across many months of writing, which is great. I have a Substack and I find it useful for that. But it can be really useful to work and try to make the kind of single piece that brings together your argument and your ideas and your facts. So that's one reason that a magazine article is a good thing to write even if you write a Substack.

Another is that a lot of people just don't have either the time or the disposition to write a Substack. You have to build an audience. If you start a Substack and you write for it twice, you could write two of the best articles in the world, but probably 20 people will subscribe to you, because volume is a really big important thing, and a lot of people just aren't going to do that. So another thing that we can do that a Substack can't is give those people a really big platform. Like we are building the audience and we'll find the people.

I think maybe the third thing that we can do that a Substack can't is be a sort of trusted intermediary. And this is true of any high-quality media title: we'll check the facts, we'll make sure that this person is legit. You can trust that when we publish something, there isn't going to be some crazy sleight of hand or nonsense. And I think that will probably become increasingly important. I think AI makes it obviously very easy to create plausible-sounding stuff, which has some good elements and also some bad elements. And I think as that stuff becomes more and more easy to produce, the role of the kind of trusted intermediary — not quite gatekeeper, because I don't want to stop people from seeing things — but like accreditation, endorsement, I think will come to be really important. And that's something that hopefully we can do as well.

[00:09:16] Beatrice: Yeah. And you definitely carved out quite a unique space for yourself, which is great. So I think, yeah, one of the main reasons that I wanted you on the podcast is: I worked at Foresight for a few years now, and we focus a lot on science and technology, and what can we do to advance these? And one of the things that has become very evident to me is just that it's not necessarily the tech or the science itself that is the bottleneck — it's all these other things just around it. And so when technology isn't the bottleneck, what are the bottlenecks? Could you give some examples maybe?

[00:09:55] Sam: Sure, totally. And by the way, before I start: science and technology in the long run are basically the bottleneck, right? Like in the long sweep of human history, it's science and technology, it's technology ultimately that drives living standards forward. But there's a lot in that, right?

I think there's a really useful way of thinking about economic growth, which is to think about growth as being frontier growth — so the limits of our knowledge and expanding the limits of our knowledge — and catch-up growth, where you aren't the person who has the limits of the knowledge and you're trying to catch up. You're trying to adopt what the frontier is doing, or you're trying to — just, maybe sometimes it's literally you're trying to adopt the technology they've got. Or sometimes it's not technology in the sense that we usually think about it: it's like a business model or a structure of a company or something like that.

And so tangibly, I think a lot of the developed world, which we often fairly lazily think of as being at the frontier — no country is at the frontier. The US is one of the most technologically advanced countries, it's one of the richest countries, but there are still loads and loads of businesses and people in the US that are not doing things as productively as they could be doing for various reasons. And every other country in the developed world is further behind than the US is.

And one of the really big constraints is where people can go and who people can combine with. This is driven by housing constraints in cities. Most prosperous cities and countries are quite a lot richer per person than the rest of the country. If you took London out, the average GDP per capita in the UK is lower than Poland's. Now, that's not that interesting or useful as a fact, because taking London out is taking out 10 million people and taking out the 10 million most productive people. So yeah, of course if you cut off the top 20% of a country, it's not that surprising that it's poorer than another country where you haven't done that.

But this is true across the world. There are cities in Ireland, Canada, the US — most European countries have this, and certainly most developing countries have this — where cities are a lot richer than the rest of the country, because they are huge pools of talent. They are huge pools of people, and that allows businesses to set up there that are much more sophisticated than businesses that could be set up in much more sparsely populated places. And it also allows people to combine with each other and come up with new ideas, so it also drives forward frontier growth.

And so when we don't build enough housing in cities like that, what happens is people are prevented from moving who would have moved otherwise, who haven't changed their skills. They might change their skills once they get there, but a person could have exactly the same skill set and be stuck in, say, rural County Cork, which is where I'm from, and just moving with the same set of skills to Dublin or London and doing a job that maybe wouldn't have existed in their hometown — they can earn much, much more money and they can produce much, much more value or output for the economy.

So one of the things holding back growth in many places is the fact that we have these really productive economies and we don't let people plug into them. And as a result, those people are poor. Everybody's poor.

So that's housing. Transport infrastructure I think is another really important part of that, because obviously you need transport infrastructure for people to get around. In many cases it isn't actually more housing that you need — it's easier ability for people to move around that you need — because you could have incredibly sprawling places where it takes hours to get from one place to another. On a map or from space they look like a city, but when you actually get there, they are functionally as far apart as they could be, maybe hundreds of miles apart, because it just isn't practical for people to travel back and forth every day.

So better transport infrastructure, more roads, more free-flowing roads, railways, underground, trams, sometimes buses — that can be a really important part of allowing cities to grow or allowing cities to become more integrated economically.

And then a kind of final element that I think is important in a lot of countries is energy, which isn't to do with people but is to do with physical production, and also with a lot of digital production. Obviously AI relies on a lot of energy. But energy is the one common component to almost all production — it's an important component to almost all production that we do.

And my kind of argument or my way of thinking about countries that are rich relative to the rest of the world and rich relative to history, but not rich relative to the richest countries and not rich relative to what they could be — is that they have a lot of catching up to do. And that catching up requires the sort of basic economic building blocks of what they're doing to be easier to use and more plentiful.

So people are by far the most important resource in any economy, but also energy — and I think less important than people. If I had to choose to either fix cheap energy or fix cheap housing and transit, I'd definitely go for the second one. But energy is still really important, and especially as certain technologies like AI or advanced manufacturing, which can be very energy intensive, become more and more significant for various reasons — some economic, some geopolitical — solving energy appears to be a really important part of catching up as well.

It is important to stress that all of those things also relate to scientific and technological advancement, right? Most breakthroughs happen in clusters of certain industries or in university departments that are basically clusters of people. It's very rare to get a big breakthrough except in like agriculture in the countryside — it's not unheard of, but it's rare. And allowing people to locate with each other allows for more knowledge exchange. So not just catch-up, but also frontier growth can come from this.

But my contention is that we could have dramatically more economic growth in a very short space of time simply by fixing housing, transport, and energy in the developed countries of the world — far more growth than we could ever hope to get in such a short space of time from technological advancement, as important as that is in the long run.

[00:16:59] Beatrice: Yeah, that's so interesting. I think if people hear this, these are quite surprising things — or they're not intuitive maybe. If you actually start thinking about them, I think that's not what people would have expected you to say: like housing, or transport, or energy maybe. Yes. And yeah, we're in San Francisco right now, which I think is like the epitome of these problems that you mentioned. Like housing is so expensive here and it's so difficult to build anything. Yeah, transport — you need to have a car.

[00:17:33] Sam: And when you are in a car here, you can spend hours getting from place to place. The quality of roads here is absolutely staggeringly bad. I mean, I was on the bridge across the bay yesterday and it genuinely took about 35 minutes to get across the bridge. You could probably walk it faster — you could certainly walk it faster than that.

I do think though that San Francisco is in some ways a good counter-example to my position, because it is dysfunctional in lots of ways. It has a really dysfunctional housing market. It has really bad urbanism. It's really low-density. The centre of San Francisco is filled with drug addicts and homeless people and criminals. It's a very unpleasant place — parts of San Francisco, at least. And by the way, I say that with much love. I do like San Francisco a lot, but there are very unpleasant bits. Yet it has been the centre of the global economy and of global progress and global technological advancement for at least a few decades, and in some ways longer than that.

So it could be that what I'm saying is wrong, and it could be that life finds a way. And if you've got this sort of economic pull, then people come in. But my contention, my kind of claim, is that we could have much more advancement if San Francisco alone was able to grow and was able to flow freely. It would certainly grow and become a much larger place. And the companies that are here and the entrepreneurs that are here, I think would like to recruit many more people and they would be able to do so more cheaply — still on high wages, but not on quite as high wages. So there'd be more money for them to spend and they'd be able to do more stuff.

And in some ways I do actually think the single biggest thing that anybody could do anywhere would be fixing housing in the San Francisco Bay Area, because it would be like steroids for the tech sector and for the AI industry and so on. But I could be wrong, and it could be that adding all those people does nothing and it turns out that what I believe is basically not true. I suspect that's not true, but I'm open to it.

[00:19:46] Beatrice: And the reason you think San Francisco might be the — how do you say — the exception, or like the counter—

[00:19:54] Sam: —example?

[00:19:55] Beatrice: Yeah, it's just because it's had this pull for a while, and so the tech companies are already here and so it's just become this hub?

[00:20:03] Sam: So I think the — I don't want to get too cute and give loads of layers of "oh, it supports me in this way and it doesn't support me in this way." One of the big things that I think San Francisco definitely shows us is that economic geography has a mind of its own. There are definitely cities that would be a better place to have the global tech industry. There are cities where it makes much more sense, it'd be easier to build, it wouldn't have the same kind of problems that San Francisco has. If we were God and we were designing where the global tech industry should be, I don't think we would pick San Francisco of recent years. But that's not how it works. We don't sit down and plan it, and industries don't go to wherever is theoretically optimal for them to go to.

Path dependence matters a lot. The existence of Stanford means that you get the early semiconductor industry, and the early semiconductor industry means you get software, and software means that you get the internet, and the internet means you eventually get the things that lead us to AI. And none of this has been planned. None of this necessarily has been optimal. And none of this is ideal, but it's really difficult to transplant a sector from one place to another.

People have tried to move San Francisco to Miami or to Austin. Like occasionally there's "oh, we're moving, everybody's leaving San Francisco" — it never works, because the gravity that is here is just too strong and it's too difficult either to transplant or to successfully replicate elsewhere.

And I think that tells us that lots and lots of attempts to do economic development are on a hiding to nothing, because often an attempt to do economic development is about building an industry in a place that it doesn't exist and doing that sort of God-like — or attempting to do God-like — planning.

And by the way, I have no principled objection to that. If it works, great — knock yourselves out. It just very rarely works. And that implies that the best thing to do is to just say, okay, we've got a really successful city in London. It'd be really nice if Liverpool or Manchester were as rich and successful as London — we should do whatever we can to make them. But we're not going to be able to replicate that very easily. So let's just say, okay great, we have a really strong successful economy in San Francisco or in London. Let's make it easier for people to move to that, rather than trying to move that to other people.

And that kind of gets you to this — as you say, it sounds quite mundane to talk about housing. Like it's not a sexy subject. I definitely get AI FOMO when I talk to my friends who work in the AI industry — like I'm talking about bricks, you guys are building God. But I think that actually, if you think of it in terms of people and moving people around, it's much easier to allow people to move to where they actually want to go than it is to inject — basically try to move people away to places they don't want to go.

[00:23:22] Beatrice: Oh, there's actually such an interesting example. I'm from Sweden and there was this tech company in Sweden, Northvolt — I don't know if you've heard of it. Yeah. And they basically tried to build this huge factory in northern Sweden where no one wants to live. And the government invested so much money and tried to make everyone go there. And then it didn't go well, the company, and now it's like the city and everything is done so much to make this happen. And now it's like a shell of a — yeah.

[00:23:54] Sam: Look, the ultimate example of this is TSMC, the company in Taiwan that makes semiconductors. They don't design them — Nvidia designs them, or lots of companies do, but Nvidia is the one that makes GPUs. But TSMC is basically the only company in the world that can actually make them, and nobody on the planet except Taiwan — nobody would choose Taiwan to be the place that makes semiconductors, because there are obvious political tensions around that. It's very possible that the entire global economy crashes because someday the Chinese government decides it wants to take Taiwan by force, and the US is either unable to or unwilling to defend it, and suddenly global access to semiconductors dries up. Nobody wants that to happen, right?

Except maybe the Taiwanese, because it gives them some sort of insurance policy against being invaded. And the US government has put tens or even hundreds of billions of dollars towards trying to replicate what happens in Taiwan in the US. I think that's a very good idea. By the way, it probably won't surprise listeners to hear that I am not a massive fan of giant government subsidies for trying to build new industries. I think it usually doesn't work. It's usually pointless. In this case I think if you can do it, you should do it, because there are really important strategic resilience points. But even with essentially unlimited money, it's really hard. Maybe it'll succeed because it's so important — it's COVID vaccine or Manhattan Project level important for the US to do this. And ultimately, when the US really needs to do something, it usually does manage to do it. But that should show how difficult it can be to do it, like even when nothing matters more right now than doing that. And even then it's really difficult, partly because semiconductors are really difficult to make. But it's the ultimate example of how difficult it is to transplant complex economic ecosystems from one place to another.

[00:26:09] Beatrice: Yeah. And so if we think about why it becomes so hard to build — for example, are there any recurring patterns? Why does this keep happening?

[00:26:23] Sam: Yeah. We actually have an article in the new issue of Works in Progress — the first print edition — that goes into the history of zoning laws, what this article calls the Great Downzoning. And this is really interesting and really important, because even if you're not interested in history, understanding why these rules came in the first place is the key to fixing them. It is exactly like Chesterton's fence. It is only when we understand why these rules came in and why these rules persist that we can start to understand how to change them in ways that are actually politically acceptable. As I say, I'm not willing to be the person who just says, "oh, a politician should just figure this out," because then it won't happen.

So where do zoning rules come from? And by the way, just to be clear, my basic hypothesis is that we don't build enough houses because we have lots of regulations that stop us from building. Some of them are around zoning, which are rules about you can't build up or you can't build on this field or whatever. There are other rules as well, about the design of the building and things like that, that are also important. Or in the US they have rules about you having to use union-employed staff to make the building, which drives up costs. So it's not all zoning, but zoning is a really important part of it.

And what this article points out is that before the existence of the motor car, there was a huge amount of movement into cities from the countryside. In the 19th century, cities suddenly boom — some cities in the UK grew by 10 times in a hundred years. Chicago grew by something like a thousand times, from obviously a tiny number. But essentially it was like doubling every few years. It was unbelievably fast growth.

And this is true all across the Western world — Europe and the US — people are moving into cities. And what's happening is parts of the city, residential areas that are relatively prosperous, relatively nice leafy suburbs, basically never remain so, because the influx of people always means that anywhere that's nice, it becomes quite profitable to take a family home and turn it into apartments or subdivide it — take the rooms and turn them into tenement rooms. And the people who lived in these places didn't like that, because their nice area — which was properly safe and clean and didn't have much disease; urban disease was a huge problem in the 19th century — was becoming a slum. And there was this just never-ending process of places becoming slums that had been nice.

And so originally what happened was there were loads of private agreements — private covenants, restricted covenants they're called — that would basically say all the homeowners in this area agree that you're not allowed to subdivide, or agree that you're not allowed to build up. In the US, a lot of these were racial, by the way — a lot of these were about you're not allowed to allow East Asian, Chinese people, or Black people in some cases into the area. You're not allowed to sell to them or rent to them. In Europe it was not racial, it was entirely class, income. Basically these homeowners wanted to protect their area — in some ways completely legitimately, as it's entirely legitimate to want to not have, like, 10 families crammed into the house next door to you if they're going to bring disease and things like that. In other ways, very illegitimately, which obviously relates to things like race.

Anyway, these rules emerged over time for various reasons I won't get into. These rules stopped being enforceable. It relates basically to things like they used to have a single owner — all the land used to be owned by one person who would enforce this in order to maintain the value of the area. Then once that started to fracture and people started to own their own plot, you started to get a free-rider problem where basically nobody is actually willing to bring a lawsuit because it's too expensive and everybody else benefits from the lawsuit. So anyway, this falls apart.

And so as these rules break down — to preserve the areas and to keep them nice in some ways that I think most modern people would agree are legitimate, like it's nice not to have disease in your area; and also nice in ways that we would hopefully all say are terrible and should not be allowed at all — the demand grew for local government to do this instead. The demand grew: "we can't do this privately, we can't do this via contracts anymore. We need local government to have some rules about, we just don't want our family neighbourhood turning into a slum."

And that is seemingly the origin of these rules. And why this matters is that it tells us that the reason we have these rules today is, at least in large part, about preserving some character of an area or preserving the nature of an area and making the area that you live in retain features that you like about it — rather than about some sort of general desire to restrict house building.

Some people think that the reason we have these restrictions is that people think the value of their home will fall, and so there's a kind of big collective conspiracy to stop houses from being built. I don't think there's actually much evidence for that. I don't think it makes much sense. For one thing, almost all political parties campaign and promise to build more houses. If there was a general nationwide feeling that they didn't want houses to be built to preserve the value of their homes, why would political parties go up and say, "hey, guess what? We're not going to build any houses, we're going to demolish some, and all you homeowners are going to get even richer"? That doesn't happen. People I don't think actually really understand supply and demand well enough for that to even be possible even if they did want it.

Anyway, so what this suggests, I think, is that people are interested in preserving the nature and pleasantness of the area that they live in. And they are often very concerned — often rightly — that new housing in their area will make their area less nice. It might make it higher crime if people come in who are maybe younger, or whatever. It might mean more congestion on the roads. It might mean more pollution. It might mean more noise. Depending on who comes in, et cetera.

It's really important to understand that because, once we know that, then we can say: okay, now we know what you care about, now we know what you want. How can we design rules that allow us to build more housing, at least in some places, that don't do those things? What can we do so that the great majority of people's objections that are pretty reasonable can be met or dealt with in some way, that still allows us to get houses built? We'll talk about what that might look like in a minute.

Elsewhere, I think it's a similar impulse that's taken on a life of its own. So when it comes to building railways and transit and big infrastructure projects, and when it comes to building things like nuclear power plants — primarily nuclear, because gas and coal and things like that have lots of problems to do with the environment that nuclear doesn't have — the objections that people have are similar. They're not exactly the same, but they're about preserving nature, and they look to the 19th century and the era of industrialisation, and they see that in many ways that was very bad for the environment. There were periods where it was very bad, and they don't want that, and they want to preserve nature. And as people have gotten richer, they've become more and more attached to the preservation and protection of nature.

And that has now come to crazy conclusions where you may not do anything. You can't even disturb a nesting bird — like literally, you can't disturb nesting seagulls if you want to build a nuclear power plant in the UK, which is a really big problem because they need to build them by the sea, and there happen to be a lot of seagulls there.

But the common cause is, I think, a desire to preserve things — often good things that are legitimate — that has become really inflexible, and has become immune to trade-offs and immune to kind of negotiation or cost-benefit analysis. Sorry, that's a very long way of saying that, but I think it's very important because by understanding where these problems come from, that's how we can begin to solve them.

[00:35:15] Beatrice: Yeah. And I guess one part of that, in a very simplified version, is just that people are also afraid of change or they might not like change locally?

[00:35:26] Sam: And they're entirely entitled to that, right? If I move into an area that is really good for kids and is really nice for my kids to play outside, I think it's fair for me to say I don't want that to change. Where you live is important, not just for economic reasons but also for family reasons and social reasons and things like that. And I think it is entirely reasonable for people to have some stake in their area — externalities, the concept in economics. Your behaviour and your actions can affect lots of other people. We often think of that as being about pollution, but there are lots and lots of things that we do that have externalities.

The trouble is when externalities are dealt with in a kind of all-or-nothing way, where we say you may not ever pollute in any way — which would mean we have no industry, we have no production — or we say you may not ever build in a way that changes an area that's good for families or kids. Really what we want is to be able to say there are some projects where the loss is worth it. And what we need is mechanisms that allow people — not necessarily the state or central government, but people — to identify where those places are, and for that to be where the building happens.

[00:36:55] Beatrice: Yeah. And because this seems fairly obvious when you think about it — at least to us today — that the world changes and so regulations that were set up a hundred years ago might not make sense today. Are there ideas for this? Are we updating how we do regulation and policy?

[00:37:16] Sam: In some places, yes. The best kind of idea that I have heard of for dealing with these problems is really local decision-making. So there are basically two schools of thought about how to fix this, and there's some truth to both of them, but some weakness to both of them.

One school of thought says you want to go higher and higher. So one school of thought — which is, for example, the approach that pro-housing people in California have just had some success with — is to go, instead of saying the city has to approve this housing, to the state and say, okay, the city basically doesn't factor in the wishes or interests of people who don't live in the city but who would live in the city if more things were built. But the state will, because it's looking at the whole state. So the state government of California and the politicians who've been elected to run it — they will make decisions that are more broadly representative and include the kind of people who want to live in, say, San Francisco.

This is called preemption. It's about moving the decision up to a higher level of government and forcing housing on places against their will. This often doesn't work because people generally across the state of California, let's say, are like, "this is going to affect me as well. I don't live in San Francisco, but I do live in Palo Alto or I do live in LA, and I don't want my area to change." So a crude approach often fails.

The success that we've just had in doing this has been to identify focused areas. So in this case, with the law SB 79, to say areas around railway stations, transit stations, and certain bus routes — they get the housing, they will become upzoned, but nowhere else will. So that way you cut out loads of people who would object, and they're like, "nah, it doesn't affect me, fine." So that's worked. It's very impressive. And it's very cool that they've managed to do that. To be honest, I was just congratulating the people who were involved in it yesterday.

My approach is different. Instead of what you might call focused pain, which is what they're doing, I believe in essentially focused benefit or focused decision-making, where you say very small groups of people — neighbourhoods — can decide themselves to upzone themselves if they want. And the reason that they might do that is that the benefit of upzoning yourself is that you'll get much higher land values. If you own a property that has a single-family home on it and you suddenly get permission to build an apartment block on it, the value of your land will rise a lot — like it will double or triple, depending on where you live, obviously. There is actually a really big incentive for people to do this.

And this is where you may get people who like the area being nice for kids, or like the area being low-density — but do they like it to the tune of $2 million? No, because they could take the $2 million and then move to another area that's equally nice. And so I think that is a model that has a lot of potential. It's not by any means the only model we should do, but I think it's one that does have a lot of potential.

And this happens already in Israel, for example. There's a model by which the residents of apartment buildings can vote to demolish their apartment building and then rebuild it at a higher density. And the deal is they add new units effectively — they make their apartment more dense, but they get new units themselves. It's a whole new building. They get a new home, usually bigger homes. So they don't get money — it's not the land value that they're getting, it's that they sell off the new units and that pays for the whole redevelopment.

Something similar has happened in South Korea with very dramatic results. There is an example in Japan of something called land readjustment, which is where landowners can basically collectively decide to allow projects on their land and they all get a share of the project and they all give up a share of their land — but by collective decision-making. So rather than it being like one person who gets all the benefit and all the other people who are left out and annoyed, you do it on a collective basis.

And right here in the US, Houston did a kind of interesting twist on this, where rather than saying specific parts of the city are going to get upzoned, they said the whole city is going to get upzoned — it's going to be easier to build across the whole city. But if you don't want your area to change, then you can have a vote and you can opt out of that. And about 20% of the city did that, but that meant that 80% of the city got upzoned. And Houston has since densified a lot, building an enormous number of houses after this. And they managed to do this without the kind of political battle they would have had if those 20% areas had housing forced on them.

So it's a slightly different way of doing it, but the idea is really: split out the people who really don't want it, or split out the people who really do want it because they'll get money from it. And one of the things that Works in Progress is doing is trying to catalogue stories like this and understand them, and hopefully build a kind of load of case studies that will allow people to do this in their own city.

[00:42:59] Beatrice: Yeah. Actually it's — so it makes me feel, okay, so how can we speed things like this up? Do you feel like — is this largely a Western world problem, right?

[00:43:13] Sam: Yes.

[00:43:13] Beatrice: It's —

[00:43:14] Sam: Yes.

[00:43:14] Beatrice: Yeah. Is there a realisation — does the Western world know that they're sick in this way?

[00:43:24] Sam: I think the Western world knows that it's sick. I think the Western world definitely knows that it has a lot of problems. I think that it doesn't really know how many of those problems are made worse by a few common causes. I wrote, I co-authored an article a few years ago called "The Housing Theory of Everything." And our argument was that loads of problems stem from housing shortages.

So I've already talked about the economic problems, but also lower birth rates, which are going to be a huge problem for lots of reasons — partly because of the number of elderly people we need to look after as society ages because of low birth rates. I think also just on a human level, low birth rates are a problem if people would like to have more children but they can't because they can't afford it or they can't find a place to live that's suitable. There's a huge human cost to that that doesn't show up in economic statistics, but is really important. And housing shortages are a huge part of that.

Environmental effects — climate change is made worse by people living in sprawling cities because they drive a lot rather than in denser ones. I am, incidentally, to be clear, not against cars. Lots of people who like housing and cities have a big problem with cars. I think cars are great. I think everybody should be able to own a car if they want to own a car — great, good for you. However, it is just the case that people, even people who own a car and who like cars, like living in dense, walkable areas. Not everybody — and if you don't like that, then there'll be plenty of homes for you as well. I'm in favour of building homes of all shapes and sizes. But just looking at the type of housing that gets highly priced and highly valued, it's housing in dense, walkable areas — it's like Brooklyn brownstones, and it's the really lovely old parts of Boston, that are really different in terms of how one is living compared to many other parts of America.

Again, nothing against suburbia — it's great in many ways, it's quite good if you're raising children, having a garden is great. But people really want the housing that we're not really building. And the happy benefit of that is that their CO2 emissions are much lower if they live in that kind of way, because they get public transport, which is more efficient and often electricity-driven. They're healthier because they're walking more. I would say they often have a much, much nicer life because they're around people that they like.

So there are loads of benefits to building more that we don't see. I do want to be careful because I don't want to sound like a crank and claim that all our problems will be solved if we did this. I don't think that. Climate change would still be a really big problem. But it would help. And economic growth is such a kind of master key — it allows you to do, when you have economic growth, you can solve loads of other problems. When you have growth, you can build prisons and put criminals in prisons — so growth helps you solve crime. When you have growth, you can do public service reform and you can buy off people with big redundancy packages and make your public services more efficient. When you have growth, you can invest in research and development and maybe improve the quality of batteries or something like that.

Growth really does allow you to solve loads of other problems. And my view is that the very weak economic growth that most Western countries have experienced over recent decades is like the core cause of all the other problems we've got.

[00:47:09] Beatrice: There are several things I want to latch on to. I'll start with one, which is — you were on another podcast basically where you were talking about a really undervalued way to get people excited about building new buildings. And it's just aesthetics, or that's one of the most common things that make people oppose new buildings. Yeah, because what you were talking about — the cute areas of Boston, and I was just there and I was like, oh, this is so nice — but then when you think about what people see when it's new buildings, it's like this very unique aesthetic. Do you want to expand a bit on why this is?

[00:47:48] Sam: Yeah. So I think — and obviously this is somewhat subjective, but a lot of people would agree with me — that buildings we built up to about a hundred years ago, or maybe up to 80 or 90 years ago, were built in a style that is much easier to like than a lot of buildings that have been built since, let's say, the 1940s.

There are many reasons for that. I think one reason is that the taste of the people who design buildings and the taste of people who approve buildings has changed and has become more avant-garde and more interested in self-referential things — doing things that are shocking or doing things that are progressive in the artistic sense of pushing the discipline forward, rather than doing things that they used to do a hundred years ago.

Pastiche is like a dirty word to artists and to architects. But actually most normal people like pastiche. Most normal people don't care if something is authentic or not, or they don't care if it's artistically progressive. They just care if it looks good. And one of the things I think is interesting about architecture is it's one of the very few art forms that you don't really have a choice in experiencing. You don't really have to listen to music you don't want to. You don't really have to watch films you don't want to. You can change the channel if something's on TV that you don't want to look at. But with architecture, with a building, it's often very inconvenient to not see a building, especially if you live near it.

One of the factors is, I think, this change in taste among people who decide what buildings look like. Partly it's also to do with economics — it's cheaper to build big glass towers than it is to build big stone towers. It's actually not as much cheaper as people assume. Mass production of ornament is something we have a long history of doing cheaply. But that is a factor — I don't want to rule that out.

And anyway, the upshot of this is most people have a pretty rational expectation that a new building, a new development near them, is not going to look very good and might look really bad. And it might also be built in a way that's not particularly human-friendly, so it might be built in a way that doesn't have much at the street level, so people walking by are just walking past anonymous flat panes of glass rather than stuff that has different shapes, has stuff to look at, has doorways that they can go by.

There's a lot of interesting work by the group Create Streets in the UK that looks at what do people actually like from buildings. And it's not all about stuff being traditional versus stuff being new. There are specific features that you tend to find in newer styles that you don't find in older styles that often tend to be quite alienating and quite anonymous. I think people have a basically pretty rational expectation that a new building is going to look worse and it's going to look bad, and it might make the area uglier and less nice to be in. And so if that's true, then that's a reason they might object, in the same way they'd object to a new development because it might make the area more noisy or more polluted or congested or something.

[00:51:28] Beatrice: They probably don't want to live —

[00:51:29] Sam: They probably don't want to live next to it. Yeah. I live in an area in London that has some really old, really beautiful Georgian and Victorian buildings. And some of it was heavily bombed in the war, and what was built in place of the stuff that was bombed is ugly. There are streets where on one side you have stunning Victorian homes, and on the other side you have incredibly ugly, badly made, badly built flats. And it's entirely understandable that people would say, "if you're building this stuff, I don't want that. I'm going to object." And if you don't do that — if you give them, actually no, we're going to build something really beautiful, something really nice to walk by every day — then I'm not saying that will turn everybody into a pro-housing person, but I think it will weaken their opposition and make them more accepting of it.

[00:52:20] Beatrice: Yeah, I definitely think it would change, because just from a very anecdotal impression, that's my impression — basically that when people think of new buildings, they think of things that they think are ugly. So we're at the tyranny of the architects, like the avant-garde.

[00:52:40] Sam: And to be fair, a lot of architects really hate when I say this, because they point out that there are a lot of really well-designed modern styles, there are some really nice modern buildings. A lot of projects don't really have an architect — like they have a person whose job is to be the architect, but they're more like just doing the bare minimum. And they would argue, "oh, if you actually had a proper architect, then they'll do something nice." Now, I don't agree actually, because I think that you look at the big projects that do have proper architects and I think they still often look pretty bad. But I do think it's worth highlighting what people who disagree with me on this say.

And something that is, I think, actually quite an interesting trend is that more and more new developments do have a lot of pleasant features. There is in fact, I think, a shift going on. And I think we're at the beginning of a mindset shift where a lot of new developments being proposed in London — not perfect, but they're way better than things that were built even 10 years ago.

You look at the development by Victoria that was built about 10 to 15 years ago — it's glass spikes. And it's extremely ugly. It won an award — a RIBA award for ugliest building. There is no shortage of architects involved in that. They were trying to do something that, maybe for an architect — I don't think there are many architects who would say it was successful. But it's hard, right? It's really hard to do stuff that is artistically progressive and artistically good. It's actually easy to do stuff that is — again, I'm using the artistic sense of progressive — not challenging, doesn't move the thing forward, just copies stuff that existed before. And I understand professionally why that's embarrassing and lame and why you wouldn't want to do that. I understand that. But I'm afraid the rest of us don't care about the avant-garde challenges in your industry. The rest of us just want nice things to look at and we don't care if this is a pastiche. Pastiche is good as far as I'm concerned.

[00:54:51] Beatrice: Yeah. Yeah. And that's actually — yeah, let's get into that. But I just — I think I heard you say that you were shocked that people cared so much about what it looked like, but then I thought that Works in Progress, you guys are famously very aesthetically designed.

[00:55:11] Sam: Thank you. Yes. I've been on a journey — if I can indulge myself and talk about my own journey. When I was younger, I very much had a very economistic view of things. I am a philosophical utilitarian. I have always had — I don't like things that are too airy-fairy, woolly. I often roll my eyes when people start to talk about the meaning of this and things like that. I like things to be hard, cold facts. And that's, I think, obviously good because I wouldn't think that if I didn't think it was good. But you can take that too far and you can overlook things that do actually matter, like beauty and design and things like that.

And I have had the fortune of working with people with real appreciation for art and things like that. I've always loved literature, I've always loved music, so there are some forms of art I've never had any problem with. I don't really enjoy theatre, I don't really appreciate fine art, although I try. And I've just come to appreciate architecture, thanks to people that I've gotten to know.

But luckily, there isn't really — you can be a cold-hearted economist and be a person who doesn't care about aesthetics at all, and still think that this is important because it gets people to do the thing that you want to happen. If other people care about it, that's enough. But yeah, I've definitely — and I think Works in Progress has helped me quite a bit understand how important aesthetics and design are, because we started with a very designed website. Nobody knew who we were, but people came and they saw the care that we had put into the website, and they saw that we really cared about every element of it. It could have so easily just been like a WordPress page or something like that. It runs on WordPress, but you can't see that. And that made me realise that often design says something about you and says something about things that people can't see, and about like how considerate you are. And understanding that is — okay, yeah, it is actually worth being very careful with this and it is worth thinking about this a lot.

[00:57:45] Beatrice: Yeah.

[00:57:45] Sam: Yeah.

[00:57:46] Beatrice: Yeah. I think we actually used your website as inspiration when we were redoing our website, so yeah. It's the best.

[00:57:53] Sam: I'm delighted to hear that. Yeah. And you have got a great website, yeah.

[00:57:58] Beatrice: I'm going to try to tie a few threads together that we've been talking about, because for example you said that people like pastiche, and to me it's like you probably like what you grew up with in terms of culture and things like that. Which, you know, also connects to the point about this being like a Western challenge that we're dealing with. And I was talking to someone — so we're at the Progress conference right now — and I was talking to someone yesterday who had gone over all this data basically on young people and what they think about the future. And they had asked the question of whether they think the world will be better than it was before.

[00:58:44] Sam: Yeah.

[00:58:45] Beatrice: And it's so low. It's shocking. Like the numbers of Gen Z and what they think about the future — I think the US was like the best, the highest, and it was like only 30% that thought it was going to be better. And then Europe is even more depressing. I think France was like 9% or something like that. It's so gloomy. And so that makes me think there needs to be some cultural shift, obviously. And so yeah, we have this — for example, there's the progress movement that I feel like you guys are part of. We're to some extent part of it. Is there — do you think we need anything else in terms of movements, or just a broader umbrella type of thing? Because maybe the progress movement is capturing some lines, but yeah. Do we need something more or something broader?

[00:59:39] Sam: Yeah. So I basically think that we need two things, and I am trying to do these two things, so I'm not just saying other people should do this.

One is we need totally invisible ways of getting a bit of growth that don't require very much political capital and are basically pump-priming growth. So I think housing is a really good area for this, where you can design housing policies, I think, that don't actually need a lot of political fighting and will get you more housing. And I think you will get more growth from that.

And I think there are a few other areas — this is why I stress high-leverage changes, where you can do a small change and you'll have a big impact — because I think that the context of economic growth is really what gives people confidence in the future. And it's a self-fulfilling prophecy. One of my favourite politicians of the last half-century is a guy called Roger Douglas, who did Thatcherite reforms in New Zealand, but times five. In New Zealand everybody knows him. He's a very interesting and very inspirational man. Incidentally, he was from the Labour Party, so he did a lot of these market reforms from a kind of left-wing party, which I think is quite interesting.

But he has this expression that you have to let the dog see the rabbit — which is a dog racing expression — and it means that people very rarely vote for promises of growth, but they will vote for continued growth. If they can feel growth, then they're much more optimistic and they're much more willing to say, let's continue doing things, let's do more things that will grow the pie. Because we can see where this is going and we can see what this feels like. It's when you get what we've had in most Western countries — sclerosis and stagnation for a long period of time — that people forget that things can get better. And they end up basically just — life becomes a zero-sum game. And we know what that can lead to in policy terms.

So one thing we need is just stuff that doesn't require you to win an election, that will get growth and hopefully make it easier to get people to believe in growth again.

Another thing that I think is on the opposite end is elites — people who spend all their time, or most of their time, or a lot of their time, talking about politics and talking about these kinds of ideas. We need them to prioritise growth above everything else. In the UK there are like a dozen things that people would say are the most important thing — like climate change, geographical inequality where some parts of the country are poorer than others. There are lots and lots of things that people would say are the most important priority. Net zero is one of the really big ones. None of that is relevant if you don't have growth. Good luck trying to do anything meaningful on regional inequality if you don't have growth. Good luck trying to do anything meaningful on net zero that doesn't involve completely immiserating your country if you don't have growth.

And the trouble is that because very few elites do prioritise growth in that way, it's very hard for there to be any unpopular movement that would get you the big stuff that would also get you a lot of growth. You can't do it all via sneaky little tricks that nobody really notices.

So I think you need a kind of elite bargain. I think you need people on both sides, or on all sides, to say: we have to do this. We don't like each other, but we're not going to opportunistically attack you if you're in government and you do these unpopular things, if we think there's a good chance that they'll get growth. Because we all accept we have to do this. We all accept that this is just table stakes for this country not going off a cliff.

And there's an economist called Stephan Dercon who has argued that this is what happens in developing countries that do manage to grow — that basically the elites in those countries say, "we're fed up with being a poor country. We're just going to agree that we have a cross-party consensus that we need to do these things to get growth." And we'll keep fighting all the other issues — politics doesn't stop happening — but we're going to agree on these ones.

I think you had something like that in Ireland when Ireland grew. I think you had something like that in South Korea when that grew, and in some other countries as well. And in countries where you don't get that, where you just never get out of the barrel — your orders are like crabs in a barrel, pulling each other down every time one tries to escape.

And that's a different challenge altogether. That's a challenge of persuasion, of culture, of status, of making it high-status to believe in growth and to argue for growth, and making it a joke to prioritise, let's say, net zero over growth. And that's not easy, but I think it's important. And that's the cultural shift I would say is most important.

[01:04:47] Beatrice: Yeah, makes sense. Fair enough. If you don't feel it, it's hard to believe that it's possible, maybe. Yeah. So what's the sort of existential hope scenario here? If you think about what happens from now, are there a few things that you think we sort out, and what happens basically?

[01:05:09] Sam: So the realistic, optimistic scenario is that countries manage to pass laws that either via focused pain — the California way — or focused benefit — let's say the South Korean way, or maybe it will become the British way — manage to get loads of houses built. What happens then is that in some parts of these countries, you get huge amounts of growth and huge amounts of houses. Hopefully stuff like infrastructure as well, which I haven't gone into quite as much but is obviously very important. Loads of people move into those places and loads of people spread out as well.

So there's a lot of overcrowding in most cities — a lot of people who live with their parents or who live with flatmates who would much rather not do that. So you'll get a lot of reshuffling of where people live and how people live and stuff like that. You'll probably get a lot of couples forming, some couples breaking up because they actually didn't want to be together but it was just inconvenient to break up. But hopefully one-bedroom apartments or two-bedroom apartments become cheaper, so people decide to move in with each other.

And I think basically what happens is three things, or three steps: these cities become very large. I think New York City could become maybe 40 million people. The San Francisco Bay Area, which is at the moment about 10 million people, I think could become like 30 million people — it could become like Tokyo. New York City could become like the Pearl River Delta in China. London — I think London could be at least twice as big as it is, so instead of 10, 20 million people. And I think you'll see this in lots and lots of places.

I think that gets you a huge amount of growth. The people who move there all get pay rises, they plug into a much more prosperous economy. Startups and companies in those places get much bigger access to labour, they can hire more people, you get more companies forming. And in the long run you get more combinations of people — people who would have lived in Bristol and Leeds, both living in London and going for beers together and saying, "hey, you know what? We've got this idea, we should set up a company that does this." Or scientists who would have been in Newcastle, doing something similar. So you get more innovation. And I think that gets you a very large amount of economic growth — maybe not AI boom level, maybe not 30% economic growth, but like 10 to 15%. You catch up with a lot of the growth we have not had over the last 10 or 15 years, which would be really nice, especially in a place like Britain, which really hasn't had much growth at all.

And I think you start getting more family formation. I think you start getting people having kids younger because they want to. It's really important. This is about people doing the thing that they want to do, not us compelling anybody. We're compelling people not to have kids right now. I want to stop compelling people.

[01:08:19] Beatrice: That was like another nightmare statistic he shared with me yesterday: that in Spain, the median age for moving away from home was 31.

[01:08:29] Sam: Yeah.

[01:08:29] Beatrice: And you can't have that many kids if you move away at 31.

[01:08:32] Sam: Totally. Italy has a similar problem, right? Italy has one of the lowest birth rates in Europe, certainly Western Europe, and it has huge rates of people still living with their parents. And as you say, you just can't have a relationship like that, right? Not as an adult.

So I think that's what happens. And what happens hopefully, with the kind of really optimistic goal, is within that context of change, positive change, growth, stuff being built that people like — people saying "hey, the city feels better than it did 10 years ago. It's bigger, it's prettier, there's a lot more tax money, so it's cleaner, it's safer" — that people rediscover the spirit of growth that we have had for a long time. Like we have had for centuries an unusual belief that the world is improvable, and that the world does change and can change and for the better, which is a very unusual belief by historical standards. People throughout almost all of history used to think that the world was fixed and static. And it's really only since the scientific revolution and the era before the scientific revolution that that began to change.

And I don't think we've lost that. I think it's weaker now than it was 50 years ago, but it's still there. But if we can drive that forward, then I think you get a far more pragmatic approach to fixing our problems than we have.

So yeah, in my small way, trying to understand what Japan does to allow railway projects to get built is my attempt to create 20% extra global economic growth and change world culture in an optimistic and pro-growth way. And who knows if it will succeed, but it's fun. And I think it's surprising how much you can actually achieve via this kind of work and via ideas.

[01:10:32] Beatrice: Yeah. And it ties back to hopefully — that's how, if people come together, that's how we get to the science and tech frontier again. Yeah.

[01:10:40] Sam: This is really key. There was an article written in the Financial Times recently that slightly wound me up, I'll say. It argued, "oh, Build Baby Build" — by the way, I don't say Build Baby Build, that's a naff expression — but this Build Baby Build approach is wrong. Growth happens because of technology and new ideas. And that's like half right. Yes, growth does happen because of technology and new ideas. But building things also gets you growth, and it gets you more technology and new ideas. It's so important to understand that there is no trade-off between these things. It's the closest thing to a free lunch we have.

And it isn't because housing is magic. Like, what I'm saying can sound a bit like "everybody thinks their area is the most important area." As it happens, I've chosen housing because I think it's important — not the other way around. I didn't care about housing at all 10, 15 years ago. It didn't even seem relevant to me. But once you understand that it's actually about people, that people are the ultimate resource, then you realise — oh okay, now I realise where people are matters for everything to do with their lives and our lives.

[01:11:51] Beatrice: It's the yeah, it's a very basic infrastructure needed.

[01:11:53] Sam: Yeah.

[01:11:54] Beatrice: I want to take us on just one detour before we wrap up, if that's okay.

[01:12:04] Sam: Yeah.

[01:12:05] Beatrice: Which is — there was recently, obviously, this DOGE thing here in the US.

[01:12:09] Sam: Yeah.

[01:12:09] Beatrice: And it didn't go very well, is the short version. It feels like — the story around that, I feel like it was "we need to, the systems have gotten too complex, we need to make things more efficient." Do you think that did damage to this type of movement overall, or do you think it brought attention to the issue?

[01:12:32] Sam: I think DOGE did do quite a lot of damage, but not to this movement specifically. I think DOGE was very destructive. I think it probably did cure people of the misapprehension that this is easy — this is very hard. And one of the big problems I think that we see again and again is that when you set yourself quite an ambitious target and you don't know how you're actually going to achieve that, you end up trying to achieve it in really destructive, crappy ways. So DOGE ended up cutting malaria anti-malaria funding, ending up cutting some of the best money that is spent anywhere in the world, because you can't actually find the stuff that you really care about.

I don't think any of them set off and said, "okay great, we're going to save a few million dollars by letting millions of children die in the developing world." I don't think anybody — maybe a couple of sociopaths thought that, but I don't think the majority of them thought that or thought in that way. And as it happens, I think ultimately that's being reversed.

But the trouble was they got there and all the stuff that they imagined would be easy to cut turned out to be really hard. And this was actually the easy stuff to cut. You see it with immigration enforcement in the US at the moment where — and by the way, completely reasonably — a lot of people are very unhappy about illegal immigration. That's a completely legitimate thing to be unhappy about and to want to change. But the approach has been big headline, dramatic arrests of people and deportations of people. And it turns out it's actually hard to find the people that the public is worried about — criminals and drug dealers and that — but it's easy to find little old ladies who go to church on Sunday.

And if you have to find somebody, and the easy people are there, then you end up going for them. And that is not really — and I don't want to get into US politics too much — but it's an example of how it's actually very difficult to do some of these things.

I think about the immigration one quite a lot because I think for the next government in Britain — it's very likely that Reform will win, and I think they'll come in on a very anti-immigration platform, which is what the public wants. And I fear that they might find that they haven't actually prepared for how to do that in a way that isn't wildly destructive. By the way, I think it's very possible to do this. I just don't think it's possible to do it easily. And I fear that they come in and then actually realise, "oh God, we have no idea what to do about the NHS, for example. Or are we really going to let 20 universities go bankrupt?" By the way, they probably should, but I'm not sure electorally they're willing to do that.

And then they either end up cutting the only immigration that is easy to cut — which in this case is probably higher-skilled, higher-wage people who are coming in via legitimate channels, who I would say are the last people you want to get rid of — or they just can't deliver what they said they would. And the public says, "wow, this system is broken, like nobody will do the thing that we want, even the people who campaigned on this."

So all of this is to say that I think it's very unwise to commit yourself to certain outcomes before you understand how you're going to achieve those outcomes. It sounds like a good idea — it's like a commitment device, "oh we'll figure it out because we've forced ourselves, we'll tie ourselves to the mast." But more often than not, it makes you end up doing really crappy and substandard things that probably don't even achieve your goal.

My view is that the alternative is to build new institutions, build new ways of doing things — sometimes literally new institutions, sometimes new rules, new laws — and introduce those parallel to the existing ones and allow a slow shift over. So less applicable in the immigration example, but a really good example is childcare. I think childcare is way too expensive. And I think it's partly because it's very highly regulated, and I understand why it's highly regulated, because I have a toddler in a nursery, and basically nothing would ever make me feel like "yeah, it'd be really good if you paid less attention to my child. Oh, you know what, it would be good if you had more children per staff member." There is very little opportunity for politicians to roll back rules after they've been introduced.

But at the same time, I definitely wouldn't say I want a nanny for my child. I personally do not actually want the maximum amount of attention for my child. I would probably actually be happier with a little bit less attention if it was cheaper. But fixing and reforming childcare regulations is really hard, for obvious reasons.

What France did was, rather than try to fix the rules and have this big fight with parents, they just created a new thing. They just created a new category of childcare and said, "if childminders want to be this, they can," and the rules are slightly less strict, and it's entirely voluntary. They weren't moving anybody into a new system they don't want to be moved into. But it turned out it was just a better system. So people just voluntarily moved over and a large — actually I think a lot of the market, if not all of it, moved into this new category. And they didn't have to fight about it. And they were able to see what worked as it went along.

And that, I think, is actually similar to what we do in markets, where we rarely see companies that are failing fix themselves. We usually just have a new company set up and we slowly switch — or sometimes quickly switch — to the new company.

So my view is: yes, DOGE has done damage to the idea that you can reform government. But I think it has also shown people that if you want to reform government, you need to be very careful — and not slow, to be clear. Careful means planning. It doesn't mean not doing it or doing it slowly, or even doing it in an unambitious way.

So yeah, I think there are definitely ways to fix and reform government and cut spending and things like that. But understanding that vested interests proliferate everywhere — it's not just businesses doing lobbying or voter blocs trying to enrich themselves. It's departments of people who don't want to all be laid off, or it's needy people who rely on something and who are sympathetic and who we all like — old people. They are a vested interest. We will all be old people someday.

And giving thought to what those interests are, and understanding how can we make it such that they're okay with what we're doing — either by creating something new, or by buying them off, or by doing something else — I think it's all possible. But not by going and knocking down the front door. By thinking a bit more carefully about how to do it.

[01:19:32] Beatrice: Yeah. I love the childcare example. And yeah, it seems great. And also people have in general much better access to information these days. I'm sure they can make informed decisions, and if there's something that's cheaper and just as good they will go for it. Yeah. That was a hopeful note to end on. Are there any other final examples that you're seeing out there that give you hope right now, that we're moving in the right direction or that you think are really interesting?

[01:20:06] Sam: I think the thing that excites me is the idea that I, and we, and people who care about this are really just scratching the surface of what we can do. We were able to publish an article about how Madrid built triple the size of its metro in 10 years for a tiny fraction of the cost — 60 million pounds per mile instead of a billion pounds a mile, which is what London and New York spent on subways. And they added like 120 miles of subway — like it was huge. And we did a piece on how they did it with lessons. And all the lessons are not obvious, but they are like, "oh okay, yeah, we could do that."

There are things like: use the same station design. Don't try to do a new design. This is my anti-architect thing again — I've unintentionally been very anti-architect in this conversation. But just use the same design. Doesn't matter if they all look the same — you'll save a ton of money. But by doing that, do make sure that the way it's paid for is paid for locally by the local government, not by the national government, because then local voters will be really interested in keeping the costs down. And local politicians, it turns out, will start campaigning on keeping costs down, which doesn't happen for infrastructure projects when they're paid for nationally, because the costs are too diffuse.

And like, that by itself is cool. That's a really interesting way of understanding things. But I just didn't know very much about the Madrid Metro project before we ran that article. And I believe there are probably similar articles to write about Athens and how Athens built one of its metro lines. And there are, I'm sure, lots of examples that I just have not even heard of yet. And I think building up this body of knowledge will make it clearer and clearer what the playbook is for cities to do this.

The one thing — actually I won't say that. The one thing that I think is a really big challenge is that there are very few examples of places where it's gotten really bad and then they've fixed it. But that's up to us to do.

[01:22:19] Beatrice: Yeah. The next challenge. Yeah. But we'll end it there and leave that as a challenge to the listeners.

[01:22:24] Sam: Great. Thanks for having me.

[01:22:26] Beatrice: Thank you so much for coming. It was a great talk.