1. The goal of Woke 2 is to establish social equality, achieve material and spiritual progress, and construct a vibrant civic life for the people.
2. Defund the fire department.
3. Abolish needle exchanges, and encourage smoking fentanyl instead—it’s much safer.
4. Art museum board members should prostrate themselves and apologize for their collections weekly; the rest of us are allowed to not think about it.
5. Implement Police 2. Every year, the citizens vote to divide the policing budget between Police 1 and 2 depending on who's been doing their job and respecting people's rights.
6. We need a Serano-style dissolution of binaries more than a Woke 1-style intensification of them.
7. Access to Ozempic should be massively expanded.
8. Access to Methadone should be massively expanded.
9. Access to Tylenol should be massively curtailed.
10. People should be able to do what they want to their bodies, including injecting hormones to change their gender. Even if it’s just for fun.
11. Happy pride but some of the new flags are kinda ugly.
12. Comic book people, and adults who read young adult novels, have shown over the last decade that they are incapable of being responsible members of a coalition. They are like babies; they are not welcome in Woke 2.
13. Property must be democratically contestable. A world where fossil fuels stay in the ground is richer, because the negative externalities are greater than the value provided by burning the fuel. The left should be willing to say: “If you want a world that is wealthy, you should destroy fossil fuel infrastructure.”
14. IE—the left is a kind of vigilante short-fund destroying the net-welfare-negative business models—coal plants, Turbotax, land title insurers, etc—and redistributing the surplus to the world.
15. Uber did the world a favor by destroying the exploitative taxi medallion monopoly. Absentee medallionlords extracted rent from immigrant taxi drivers, forcing them to work 17 hour shifts, often for a loss. Uber remains exploitative. But their cut is smaller, the market is bigger, and at least some proceeds go to the efficiency of the system.
16. Free public transit, but only for the rich.
17. Legalize direct auto sales, and we can destroy the "dealership owner class," the furthest right social bloc in the country.
18. Mandatory labelling for nepo babies. This includes disclosure requirements for legacy admissions.
19. Elementary schools should have classes on comparative phonology, so people can pronounce names and words from other cultures.
20. Abolish single family zoning. But also, abolish commercial zoning. Home businesses and living in an office are both radical praxis now.
21. It’s fascist that you can’t operate a restaurant out of your apartment.
22. Legalize Korean sunscreen.
23. There was a deviant Woke 1 tendency to be suspicious of interracial marriage. Woke 2 is suspicious of people married to people of the same race instead.
24. National payment processing network run by USPS.
25. Voting age to 16 but only for local elections.
26. A CDL should be required to drive a large pickup truck or SUV.
27. Individuals liable for environmental crimes should be sentenced to exposure to the materials they polluted with.
28. Having ever made a land acknowledgement is retroactively considered to have deeded the land to local native groups.
29. We need public access to surveillance cameras.
30. There must be a defense of abortion rights that is ready for artificial wombs—IE, it must not rest on “viability of the fetus.”
31. If you live outside activist spaces, for better and worse, Woke 1 is over. It is no longer possible to be cancelled without having committed at least two felonies. If you still feel victimized by Woke 1 we must recommend, unfortunately, that you go to therapy about it.
32. IE—Woke 1 is our generation’s Vietnam: some of the population was traumatized by it and will spend the rest of their lives acting like they’re still there.
33. Public access TV funding should be quadrupled, and dedicated mostly to "day in the life" TikToks of midlevel bureaucrats.
34. Woke 2 does not pick niche semantic or ideological battles on matters of basic moral decency.
35. The tax benefits of marriage should decrease with age gap.
36. Performers in pornographic films must have the right to bring a representative to the set, with the right to stop a scene at any time.
37. “Unconscious bias” is out, promoting intergroup contact is in.
38. Collecting statistics for diversity and inclusion in a statistically defensible way should generally fall under safe harbor provisions.
39. We must speak about Israel’s actions in Gaza as we do any other genocide.
40. The justice system is plagued by a dozen interlocked crises. These are intensified by the total lack of visibility into it; to improve it, we must seek truth from facts.
41. Public defender offices should have the ability to bring credibility hearings to disbar police officers who habitually lie in court.
42. Ranked Choice Voting has already won. It’s time to make Liquid Democracy real.
43. Cigarettes should be illegal.
44. Disposable vapes should be illegal.
45. Mango Juul pods should be brought back.
46. High quality, rapid-turnover air filtration in schools and cafeterias will improve educational outcomes and prevent conflict over the smell of food.
47. Interacting with the state should feel easy and light. But the state should be powerful.
48. Woke 2 is about desegregation.
49. The problem with Woke 1 isn’t that it “went too far”—it’s that its tactics stalled out before it was able to achieve its ends.
50. The point of Woke 2 is, again—social equality, and material and spiritual progress. When a tactic or an aim no longer serves those goals, it is not Woke 2. Woke 2 is always on the move.

Background

In the 21st Century, the visions of governments are carried out through software. When those capacities aren’t available as existing packages, the unique needs of the state require unique software. Unfortunately, acquiring custom software frequently involves total failure, years- or decades-long delays, massive cost overruns, or poor quality.

Typically, governments choose between building a solution in-house or commissioning one from an outside contractor. Insourcing requires extensive in-house expertise that not every state or local government will be able to acquire; outsourcing often requires years of paperwork and uncertainty. Paradoxically, overseeing the outsourcing of a large software project requires the exact expertise in project management that stymies insourcing attempts. In recent years, cooperative purchasing has become a popular third option, in which states or municipalities join together on a single contract. These agreements lighten the administrative burden of procurement, but contractors still often fail to deliver.

Solutions

The model we propose—“Government to Government Sales”—is simple: First, a state or municipality solves a problem it has by building a solution in-house. Then, others with the same need buy it from the first, with adaptions as necessary. This approach combines the economies of scale of a shared approach with the aligned incentives of an in-house project.

Procedural Aspects of the G2G Model

G2G sales are contracts with governmental units, rather than private companies. As a result, it’s usually possible to avoid an RFP process entirely, as many state procurement statutes specifically exclude such deals.¹ A G2G contract can be structured as an intergovernmental agreement, with the selling party offering services to the other party. In some cases, it may be advantageous to structure it as a consortium.

Notably, because the state government selling the software will also have the entire bureaucracy associated with using it, it may be possible in some cases for them to sell not just the software, but also the operation of it, allowing the purchasing state to outsource their entire department.

Case Study in G2G Process — Unemployment Insurance

Unemployment insurance is one of the most procedurally complex uses of custom software in government. Many states, however, are using decades-old systems that require extensive manual input. At the start of the COVID-19 pandemic, unemployment benefit cases surged. Among 27 states using systems based on COBOL, there were widespread issues in providing reimbursements in time, leaving overall consumer spending 4.4% lower than non-COBOL states. This alone mapped to a $181B decrease in GDP.² The states with legacy systems had rarely continued to invest in them—Colorado, for example, had a single COBOL programmer on staff.³

On the other hand, unemployment insurance systems are expensive to produce or modernize. As a result, the US Department of Labor encouraged the creation of intergovernmental “consortiums,” to build systems shared between states. Several are listed below:

ReEmployUSA’s has rolled out so far in Maine, which has been politically difficult, with complaints that the portal contains features based on Mississippi’s restrictive benefit laws, and has failed to pay out claims at all.⁴ In contrast, SCUBI has been somewhat more successful—possibly due to similarities between South and North Carolina’s needs.

iUS, however, is the most interesting. Idaho constructed the system for its own use for $7.2m—far less than any of the other systems, and $2.8m below budget—with a team of 12. The project took under 3 years—far less than the 9 for the original version of ReEmployUSA. In Idaho, it appears to have been an unmitigated success, with thousands of hours of labor and millions of dollars saved annually by the new system.⁵ Alone, this is a story of how insourcing with a capable and dedicated team can have large savings compared to an RFP process. With a consortium structure in place, however, Idaho is intent on selling the underlying technology to other states as well. In both legal and technical terms, iUS represents a model for other states as they expand their IT cost centers towards a G2G model.

Talent and Capacity

As in the iUS case, states frequently insource major new capacities, and projects that are insourced are frequently more successful than ones sent to bid.⁶ However, most projects are still sent out to bid. As development appears to be a cost-center, software is often underfunded, causing stagnation and underinvestment in maintenance. As a result, states frequently fail to retain technical talent and expand their best technical teams to serve additional areas.

In contrast, the G2G approach should be sticky and spread virally—revenue-generating departments invite both political support and imitation. Further, as revenue increases, teams responsible for successful products should be able to increase quality and enter the market for other types of software needed by the state. In other words, a market dynamic of robust competition can be built entirely within the state.

Further, G2G cases, by nature of choosing an already-tested solution, decrease risks for procurement shops. Eliminating RFPs avoids bid risk, and having further adaptions built by the original team—rather than a 3rd party contractor with little knowledge of the structure of the system—is a common industry practice for ensuring quality remains high.

Though the G2G sale appears unusual, it’s not without precedent. For example, cloud.gov and login.gov are projects of the General Services Administration that sell to other federal agencies on a cost-recoverable basis.

Recommended Actions

CIOs and tech teams are the most critical movers in realizing G2G development models. They alone are capable of structuring products to suit multiple use-cases, massaging procurement shops into cooperation, and championing their products. There are numerous other roles to be played, however, in facilitating a G2G transformation.

Governors should direct their treasuries to prepare guidance for treatment of revenue for G2G sales. They should also consider an inventory of marketable and adaptable internal software assets. They may consider instructing procurement officials to bring the sale of those assets into their mandates. Further, one of the key difficulties in buying G2G software lives in cases of non-aligned legal structures between states—governors have a key role to play in pushing legislatures to harmonize laws in cases where it’s more reasonable than making major changes to software.

Procurement officers should consider lightening their workloads by soliciting information from other states on their systems before issuing an RFP. In the long term, procurement offices should transform into offices with both a buying and selling mandate, and they should advocate for a commensurate expansion of responsibilities.

NASPO should add questions to their annual survey on which states are able to sell G2G, and which are able to buy without an RFP. Similarly, they should add legal guidance on G2G purchasing to the 4th edition of their procurement guide. NASCIO should also adjust their annual surveys in order to better track involvement in G2G projects.

State Legislatures should ensure that their codes allow non-RFP buying of other states’ items. Concretely, they should ensure that when adopting the ABA Model Procurement Code, they include section 10-205 Alternative A. They should also ensure that appropriations aren't a blocker to purchases.

Federal funders also have roles to play—they should consider whether mandating a G2G approach, or considering them, may help improve certain types of acquisition. GSA should also consider whether their cooperative purchasing programs can be adjusted to facilitate G2G sales.

Conclusion

While G2G sales may appear unusual, they sidestep fundamental principal agent problems between contractors and the state, while allowing successful teams to scale up. This “market-within-the-state” approach avoids both the excesses of 90’s-style outsourcings, and the unaccountable, monolithic state-sector that preceded it. Though there are difficulties for states, they pale in comparison to the trillions in maladministration that they can help avoid by bringing high quality solutions to bear on their problems.

For example, one can imagine a state or provincial government with a bureau for issuing identity documents signing a contract to take over those responsibilities for other states, or a country deciding to rent out certain aspects of its legal infrastructure to its neighbors.¹ Using this "G2G (Government-to-Government) Sales" model provides an efficient and tested service to one state, with little administrative overhead, and a new revenue stream to the other, offsetting tax revenue and boosting growth.

There's a kind of dogma that says that states are inherently less efficient than businesses, and there's something to the idea that states aren't often suited to competing head-to-head with the private sector—but there's not much evidence that it's the source of capital that affects efficiency. Rather—businesses are more often provided the incentives and competition that allow them to become near-perfect players in their spaces. By replicating a system of competitive dynamics within the state sector, it should be possible to approximate the dynamics that lead to efficiency in the private sector, without reproducing some of the more pernicious principal agent problems that contracting entails.

The trivial case for such a G2G model is that you get economies of scale, cost savings, and so forth, but there are some less-obvious positive outcomes that are worth expanding on.

Competition Allows Efficiency

The first is that you get a real sort of competitive pressure on the bureaucracy. Today, when someone in charge of the State Department of Road Maintenance does an excellent job, their department won't get any bigger. Instead, it'll likely get smaller as they succeed in saving costs, perversely costing them political leverage. On the flip side, if they do a terrible job, and costs balloon, there's no good option for the state other than trying to improve the organization. As a result, bad organizations don't die, and good organizations don't win. If an exceptional Department of Road Maintenance could take the contract for Delaware and New Jersey, and a bad one had to worry about getting replaced by Pennsylvania's, it's likely that road maintenance would get substantially more efficient.

A second is that you get an experimental basis for iterating on bureaucracies. In the US, we've long understood policy experimentation as part of the "laboratory of democracy," where sufficiently successful bills are bubbled up to a national level. Much of the current structure of the United States government, however, is located not in laws, but in an "Administrative State," where—for reasons of efficiency and expertise—laws establish regulation-making and -enforcing bodies responsible for specific issues and tasks, rather than establishing rules themselves. Despite this, public administration has become routinely ignored in the US in favor of public policy. (The problems of trying to solve such problems using an approach designed from the top down action rather than iteratively while on the ground should be clear to anyone who has read certain classics in the cognitive sciences).

While you can replicate a policy easily, replicating a bureaucracy isn't as easy. Administration markets provide a venue through which bureaucracies can be allowed to scale up and down, letting successful approaches spread more widely. As a result, we should be able to once again treat bureaucracies as a place in which wisdom can be refined through comparison, much as we do with laws today. ²

A Market Based Approach

Private sector operators may be nervous about administration markets, as they fear increasing the size of the state sector will crowd out and shrink the private sector. However, in a G2G model, profits in the state sector go to the state, allowing taxation to be decreased. In 1964 the Nobel Laureate James Meade demonstrated that growing the state sector in this manner can in fact allow the private sector to also increase, because the associated drop in taxation allows for an increase in private sector activity. We should not, therefore, consider administration markets to be “anti-market.”

In fact, I believe administration markets are in most cases the most suitable way to adapt market mechanics to solving government problems.

A previous attempt at a similar goal is found in the "policy markets" suggested by Robin Hanson. However, a "policy market" is actually a betting market for speculating on the results of a policy, not a market for policies themselves. While betting markets may provide better information on expected outcomes under certain conditions, nobody has yet found a high-quality way to include them in the policy-making processes. And finally, policy markets continue the emphasis on policy over administration.

You can also contrast the "administration market" approach I'm advocating with the sort of faux-privatizations championed in the West during the 80s to mid-00s, in which an inefficient unitary bureaucracy is replaced by an inefficient, unitary, unaccountable, privately-owned bureaucracy. I don't mean to say that privatization is never an appropriate solution; only that it's unlikely to succeed in certain cases, such as:

Where competition or benchmarking is impossible either across regions or time, making the vendor no better than a unitary state bureaucracy

• because upfront capital outlays and customization result in lock-in, preventing the vendor from being swapped out in the case of underperformance,
• or because the problem is a natural monopoly where real competition is impossible.

Or where it's intractable for efficiency reasons, as

• the procurement processes impose a rigid specification that massively decreases efficiency (as in Waterfall)
• or the challenges of defining the problem clearly enough to outsource it need even more capacity than doing it in-house (ie, Coasean Hell)

The list of actual failures in such privatizations is numerous and well documented, and I think that for some of these two cases, the proper choice is to allow competition between agencies in nearby states.

Logistics of Administration Markets

Administration markets present obvious logistical challenges—ensuring the bureaucracy is neutral between the parties it serves, and harmonizing standards to allow cross-state work—but this isn't wildly different than the logistical challenges behind a privatization. Routine commerce relies on a wide variety of theoretically-insoluble but practically-solvable agreements—trade deals, shared dispute resolution mechanisms, and so forth. I believe an administration market's challenges should be qualitatively similar, and that the benefits should be large enough that all parties will be incentivized to find solutions.

I write as if this is a novel approach, but there are many great successes that already follow similar logics. The state of Delaware, for example, is in large part funded by its role as the efficient legal arena of choice for a wide variety of companies—hence, the "Delaware Corporation." Many standards are already outsourced—local equivalents outsource their drug certification to the FDA, or their airplane certification to the FAA, by allowing reciprocal approvals. It is merely an expansion of this logic to proceed fully to government-to-government sales of administrative capacity that I am arguing for.

The obviousness of such an expansion begs the question of why it hasn't happened much yet. I submit only that, due to the greater risks involved, governments evolve at a much slower rate than corporations, and so innovations that allowed distributed workforces in the corporate world decades ago are only now being adopted in earnest by governments.

Further, while I've focused on the case for agglomerating local bureaucracies into larger ones, there are likely similar benefits going the other way—when a job is too big for one state, it doesn't always need to be forced into total centralization. Many bureaucracies that today exist on a unitary federal or international level could easily instead be several competing regimes operating under a membership model. For example—if the US Department of Education, instead of switching hands every administration and suffering ongoing bureaucratic whiplash, instead consisted of several organizations arranged by the states, which individual governors could enter their states into or leave on an ongoing basis, we would surely have better side-by-side data on outcomes.

Administration Markets and Talent

One of the clearest benefits in scaling up bureaucracies and making them more dynamic is that it makes them more attractive workplaces for skilled talent. An organization whose leadership faces competitive winds is less likely to turn to petty tyranny, and allowing skilled practitioners the ability to share their expertise beyond their local area should be broadly appealing.

As globalization has progressed, local governance has suffered from an evaporative cooling effect, as bright and ambitious people have increasingly moved to large cities and centers of industry. This has facilitated decades of massive economic growth, but it's also exacerbated the never-stellar record of local governments, especially in smaller towns. While some reactionary localists argue the only fix is to revert to a more local world, there would be a huge human cost.

Instead, administration markets should make it possible to agglomerate and spread local agencies over wider areas. Much as SaaS startups have reduced the headcount necessary to start a company, a semi-delocalization of local government could reduce the total number of people necessary to run a town while increasing its capacity for governance and its conformance to best practices. Given the small number of potential candidates for office in any small town, shrinking the number of local seats would increase responsiveness, as it would become easier to vote people out. Dissatisfaction with individual agencies would be translated into a supplier decision, rather than an extended saga of bureaucratic reform. And finally, towns with particularly good institutions (which surely exist) would then be able to extend those further afield, increasing revenue and retention.

COVID-19 and the Case for Administration

When I wrote a first draft of this piece in the Summer of 2019, my belief was that there was a general crisis in the administrative capacity of the American state, and likely similar ones across much of the West. This is not a novel thesis, but it has been somewhat fringe for some time.

The actual response of the US government to recent circumstances has been so laughably bad that I see no need to summarize it. I had expected that while the state was largely in autopilot, it was capable of mobilizing to a competent wartime governance in a case of emergency. This was wrong.

If there is hope for an improvement in the state's condition, it will involve more thought towards the question of building a robust American administrative state. The US has been angst-ridden about the role of its bureaucracies for centuries due to distinctively American concerns about their lack of an effective theory of representation, the courtly character of bureaucracy, and efficiency. This has resulted in an emaciated state that struggles to perform its basic duties. My belief is that whether under the banner of administration markets or G2G sales, the solutions I've outlined are distinctively suited to addressing those concerns.

I've tried to enumerate the many immediate ways administration markets strengthen the administrative state—among them, by increasing efficiency, producing economies of scale, promoting alignment of interest in contracting, enabling competition where it would otherwise be impossible, providing an experimental basis for bureaucracy, making possible changes in the scale of governance, and facilitating the attraction of high quality talent. The form however, strikes me as a sort of structural organizational change that arises only very seldom, and leads to major—and likely positive—changes in the structure of a society.

Housing leftists will often argue YIMBYs are secretly far right. I’ve not been convinced—the community leans progressive, queer, and polyamorous. YIMBYs will similarly try to shoehorn the conflict onto a single axis, and argue that housing leftists are actually NIMBYs, focused on keeping their leafy suburbs isolated and wealthy. This also doesn’t make sense—housing leftists are resolute proponents of public housing, and like YIMBYs, they’re almost all young enough that owning housing is far beyond reach.

That these groups colocate in online space leads me to think that despite these protestations, their underlying worldviews may not be so deeply divergent that they’re irreconcilable.¹ I hope to convince you that there is a way forward that unravels the sources of their conflict.

The Perceptual Origins of the Impasse

One thing that’s interesting about the conflict between YIMBYs and housing leftists is that the camps are geographically concentrated. YIMBYs are deeply concentrated in Northern California and the Pacific Northwest, and while they show up in other places, they don’t have nearly the cultural sway.² Housing leftists, in contrast, hold much more power in East Coast cities. While this is partly cultural, it seems that it also reflects different realities. Activists in places like New York have much more experience of a certain pattern through which displacement plays out—a low-zoned residential area with poorer residents is upzoned, massive structures go up, the existing residents are displaced.³ In contrast, in places like San Francisco, those massive structures largely don’t go up—the existing built environment is maintained, people continue to move in, and the residents are displaced largely through ever-rising rents built on pure scarcity of housing.⁴

These diverging phenomena lead to a natural association, in cities like New York, of construction with rising costs and displacement—and the opposite association, in places like San Francisco, of blocking construction with rising costs and displacement. Further—YIMBYs associate anti-market behavior with these consequences, while housing leftists associate market behavior with them. This dispute over the basic causes and effects involved in unaffordable housing results in a deep impasse, which is basically intractable without examining how the same phenomenon manifests in different ways in different contexts.

One way to move beyond this impasse is to take a look at how both groups diverge from mainstream American views on housing policy. Both tend to be in favor of increased rates of taxation, especially on landowners, in some form or another. Neither camp is particularly endeared to government-backed mortgages. Crucially, both hold that housing should be made more affordable—which seems uncontroversial, except that ‘protecting home values’ is a sacrament for many American politicians, and the value of real estate cannot both increase and decrease. Most tellingly, both hold that wealthy neighborhoods should be upzoned—a belief so far from political safety that it’s rarely touched.

Reframing the Conflict

To understand this situation, we need to move from Karl Marx’s classic dialectic of “Capital vs Labor,” to Henry George’s understanding of the situation—a three-way battle between Capital, Labor, and the third input to production—Land. In George’s understanding, land—as something in infinitely inelastic supply, not created by any human—is distinct from capital goods—which, in response to more demand, can have their production increased. A consequence of this is that regular modes of ‘competition’ fail for land—there is no cost of production, and with fixed supply, the price raises to the level of its utility for the last-user for whom it makes sense. The consequence of this logic is that all rent paid for land itself (as opposed to rent for use of a building) has many characteristics usually associated with a monopoly; it is a sort of extortion by a party who took no act to create the land, in order to conduct any normal economic activity.⁵

In the paradigmatic East Coast cities, landowners and capitalists have made a sort of peculiar coalition—to maximize rent on land by coordinating investment into only the zones with the lowest rents relative to their potential value—which, due to a century of redlining and white flight, are usually inhabited by the poor and minorities. This is seen as pro-market by housing leftists, but in some sense, it’s not particularly: it allows the selective use of market forces, but only concentrated in a way that drives construction totally to one area. An upzoning of say, Boston’s Seaport area is ostensibly pro-market. But the continued underzoning of Back Bay rowhomes is clearly not. Both of these are part of the same overriding strategy, which allows housing supply onto the market only at a rate too slow to provide a real decrease in housing costs, and only in ways that create net value in land. It splits the proceeds of this bargain between concentrated capital, which profits from development in a constrained environment regardless of how good they are at construction, and the existing lay-landowners, who in return parlay political favor towards the project.

In contrast, San Francisco (and much of California) is much more tightly under the control of landowners alone. The result is that in many cases, almost all development is blocked. This creates a sort of artificial scarcity that lifts the value of existing homes over time, with extremely little necessary capital investment. There is something resembling a coalition between the landowners and labor—landowners are willing to back certain proposals which have benefits for existing renters, or which stick the cost for services on large corporations rather than landowners—but considering the actual situation of labor in the city, it’s still not exactly a winning position for labor. It’s worth noting that policies like designating that new construction consist of some percentage of means-tested below-market-rate units can fit this pattern—in exchange for handing a few units to the needy, construction costs increase, the units coming onto the market are decreased and market rate is maintained at a steady level, to the benefit of existing landowners.

In both of these cases, the profit comes from those who haven’t yet covered their implicit short-position in housing—millennials, the poor, and minorities—and it goes to those who own land—the suburban professionals that constitute the so-called “Upper-Middle Class,” as well as real-estate holding companies like Trump Organization. The discourse on housing myopically focuses on conflict between millennials and the poor, while conveniently ignoring the wealthy boomers who profit from it.

A fundamental problem in the housing debate is that the limited forces of the YIMBYs and housing leftists are unable to provide enough power to create the world either of them imagines. Instead, they squabble to form a coalition with landowners—who, as kingmakers, will take a massive share of the profits. YIMBYs are liable to succeed only in making San Francisco into a city which partakes in slow-motion displacement campaigns in targeted neighborhoods—the Sunset will stay wealthy and aloof even as construction booms in Outer Mission. Meanwhile, housing leftists could find themselves having turned New York into a city which blocks all new construction—with all the San Franciscan problems that comes with.

Searching for a way out

The way out—to the degree that the discourse can find one—must go through a three-factor analysis. There must be agreement on a coalition between labor and capital, whose interests are aligned in seeking taxation from landowners rather than workers or productive activity. This is an extremely controversial proposal—while it’s obvious that the Republicans are the party of a coalition between capital and land, many ignore that the Democrats are equally beholden to landowners. For example, the Democrats are likely to win the House back in November through opposition to the caps on the State and Local Tax deduction included in the Trump tax bill. As Gregory Meyer writes in yesterday’s FT:

Ninety-six per cent of any tax cut resulting from repeal would go to the highest 20 per cent of US households by income, according to an analysis by the Urban-Brookings Tax Policy Center. More than half would accrue to the top-earning 1 per cent.

In the purest sense, making housing truly affordable is at odds with state intervention to prop up real estate prices—again, housing cannot both get more expensive and more affordable. One aspect would necessarily look like a push towards land-value taxation—a move from expecting that productive industry and wages provide the fuel for society, towards expecting that landowners provide it. In reality, LVT as a concrete policy has failed over and over, and we would do better to start moving towards policies with the same effect more amenable to the citizenry. We should draw inspiration from Pittsburgh’s “split-rate taxation,” which for decades resulted in unusual economic success as it charged a six-times higher rate on land than on structures, from Philadelphia’s adoption of deferred property-tax reappraisals following construction of new structures, and support for ADUs and by-right zoning. We should tap into the distinctly American belief that one should have the freedom to act as they desire to promote by-right zoning, into the suburbanite’s hatred of empty lots to oppose policies which provide favorable tax treatment of them, and into the socialist’s hatred of speculators in order to justify crackdowns on the use of American real-estate for money-laundering.

Mostly though, I’d like to ask that the YIMBYs and the housing leftists take the time and discourse to think hard about what it would take to build a positive vision of what the housing policy of a more beautiful future could look like.

Thanks to John Backus, John Williams, Mark Mollineaux, Michelle Chan and Omar Rizwan for their helpful comments on this essay.

This ideology is a descendant of that of Henry George—a Philadelphian, educated in Quaker institutions, and a some-time typesetter, who, upon moving to San Francisco in his early 20s, found himself morally appalled by the land-use policy, and saw fit to write about it. In all respects, this description fits me as well, and it feels, in some sense, a sort of destiny that I share these ideas—as he did 140 years ago in “Progress and Poverty,” the best-selling book in the US in the 1880s after the Bible.

Basically speaking, the central appeal of Georgism (at least in its 1880s form) is that it reconciles the understandings that socialists put together about industrialization and poverty with the beliefs of what we would now call libertarians on how the markets develop, without advocating anarchy, primitivism or authoritarianism. The tool of choice in doing this is the Land Value Tax (LVT); a tax on the value of land, excepting the value of improvements, which in orthodox Georgism is to become the only tax assessed by the government, and to capture the vast majority of the value of the land. I am not a single taxer, and I will admit that this sounds like a bit of a non-sequitur at first. However, I believe it makes far more sense than it has any right to, for such a simple program, and upon reflection, there is a nugget which contains a way forward that is usually ignored.

Instead of a sweeping exposition that tries to encapsulate every Georgist dogma in one go, I’d like to provide something akin to a set of koans, or perhaps an expanding brain meme, with a few of the most important takeaways.

1. Because land can’t be created, an LVT is the only tax that’s non-distortionary and doesn’t create deadweight loss.
2. I hear you saying ‘what about artificial islands’—unfortunately, the sea is also land. Those are the rules of Georgism. So are mineral and oil deposits, and so forth—as no human created them, and they are in fixed supply, they’re land. (Whether Bitcoin is land has been hotly debated; the answer remains unclear.)
3. Space Georgism. Space is also land. It may seem that the land value tax no longer applies when we’re in the infinity of outer space, but it's not so—let’s say our first space station can locate itself wherever it wants to; all locations are more or less equivalent. It stops somewhere. For the second space traveller, the incentive is different. The best place to locate by far is near the first spaceship, which affords opportunities to trade, socialization, the ability for the inhabitants to gain through specializing, and so forth. Over time, we may find ourselves with a large fleet of spaceships, all thriving in the economies of proximity. It’s likely that the center will have those specializations which need coordination most intensely, and the edges those which can be done relatively flexibly. If we were to export the earthly notion of ownership to our space colony, we would reproduce the incentive for squatting—an early arrival could stake claim to a big piece of the sky, and wait there as others arrived, contributing nothing, costing others as they found themselves forced to traverse this span in order to engage in communication or trade, profiting massively from speculation while producing nothing in turn.
4. Land is not capital. Where you can think of capital as stored up human labor, land is not that. Buildings are capital, as is tooling, but land deserves to be thought of as a separate input to production, on equal footing with labor and capital.
5. All taxation is theft, except for taxes on land, where to not tax away the value of private ownership and redistribute the proceeds, is to facilitate the theft of the birthright of all mankind.
6. There is an orthodoxy in common economic thought that says that wages drop to the level of subsistence. However, this doesn’t explain the indefatigability of deep poverty, and why it doesn’t waver in the face of say, wage stickiness, minimum wage increases, social programs, and so forth. While wages likely do drop to subsistence under an employment monopsony in a rural area, in a modern city it’s much more coherent to think about the level of subsistence rising to the level of wages, and the greatest portion of that by far is going to be increasing land rent.
7. Land is not as hard to appraise the fair market value of as one might think, as the value of a plot is typically very similar to that of those around it. The plot under a house can be worth little more than the sale value of the property minus the cost of construction, and no less than the sale value plus the cost of demolition, which leaves a reasonably tight band. Land appraisal for taxation is done regularly and with little controversy in much of Asia, Australia, and even Pennsylvania, where many municipalities use split-rate taxation, charging property taxes on land at rates as high as 28 times that on structures.
8. Even in the densest cities, land is generally worth more than the buildings on it.
9. If you’ve been paying extremely close attention, you may notice that taxing away all land value would make property prices fall towards zero, as the rent summed to the full value of the property would leave the market unable to act as a pricing function. This is easily solved; leaving a portion of that rent to landowners allows the market to continue to provide accurate pricing information.
10. Rent-seeking on the essentials of human existence knows no bounds except the sum of all the profits of human exertion.
11. Contrary to rumors spread by neoliberal think tanks, the exceptional rise and growth of the Asian Tigers (Singapore, Hong Kong, Taiwan and South Korea) in the 20th Century shouldn’t be laid solely at the feet of market-oriented reforms (which have been seen around the world, to mostly unremarkable effect) but to their unique embrace of land value capture.
12. You may remember the learning in school about the requirements to voting in the early American states: one had to be White, Male, and a landowner. The first two were surely emphasized, but the third is in many ways as important; the monopolization of land has been, for centuries, America’s Other Original Sin; where slavery translated into Jim Crow and then the carceral state, centuries of theft of native land were followed by the broken promise of 40 Acres and a Mule, mortgage discrimination and redlining. We may not be able to right the historic wrongs, but the least that we could do would be to end the ongoing theft of land value.
13. A popular platform these days among those who would actually like to end poverty is that of the Universal Basic Income. But a UBI, placed into today’s society, would disappear in a poof of rising rent. This is a fundamental flaw of the ‘UBI pilots’ that claim to test its effectiveness through a basic income for a small fraction of the population; they find individual-sized successes, and assume they scale—but if $1000 a month were given to every San Franciscan, contingent in their remaining in the city, we would see landowners continuing to block increases in density, and as many would find themselves on the streets as before.
14. A land value tax transforms underutilized lands in urban areas from objects to speculate on with little overhead, into hot potatoes which must be utilized to their utmost limit in order to pay the ground rent; this would lead to high quality, dense, infill development, discourage sprawl and blight, and make speculative ownership unprofitable. This also has massive ecological benefits.
15. An axiom of American thought on real estate is that housing is a good investment; that its price must go up. The reality is that while the value of the housing stock has increased massively over the last 70 years, the land hasn’t changed at all, and the change in the buildings has been underwhelming in comparison. The real value has come in the monopolization of other economic activity—at its base, the growth must come out of the pockets of those who do not own land. Every person is born with an implicit short position on a stream of food and shelter for the length of their life; the gains in housing are net-zero for the country at best, but they show up as profit because the deepening short position of non-landowners is left off the national balance sheet.
16. From another angle—an axiom of American local politics is that one should strive to ‘increase home values.’ It is often missed that this is more or less identical to the proposition of ‘make housing less affordable.’ Contrary to popular belief, housing is like other commodities in that it is better for the economy for it to be cheap than expensive.
17. The squeezing of the middle and lower classes at every moment for the ability to make land rent constantly pushes them to false economies. Were this pressure relieved, and those classes able to invest their efforts in the same ways that upper classes do, would the growth produced not pay for the loss of land rent many times over in social benefit?

18. George wrote this one best, so I quote him: “Where the conditions to which material progress everywhere tends are most fully realized—that is to say, where population is densest, wealth greatest, and the machinery of production and exchange most highly developed—we find the deepest poverty, the sharpest struggle for existence, and the most of enforced idleness… If there is less deep poverty in San Francisco than in New York, is it not because San Francisco is yet behind New York in all that both cities are striving for? When San Francisco reaches the point where New York now is, who can doubt that there will also be ragged and barefooted children on her streets?”

    Was he wrong?
    

19. A developed society is not one where everyone makes $15 an hour, but one where anyone can live a life without fear or want, on $15 a day.

20. Capitalism cannot survive with private ownership of land value, for it becomes ouroboros.
21. Marx, in conflating land with capital, and then arguing against capital accumulation, was acting as a stooge for the landlords.
22. It is rare to find those who treat wage slavery as as great an issue as the more literal kind. Those who do too often fail to solve its great locked room mystery—how can the employer be the killer, if they offer the workers the best opportunity they can find? But the landlord is also in the room.
23. People have a tendency to appraise the degree to which a policy is “radical” by how poorly thought out it is. Physically redistributing land would be agreed by all to be an incredibly radical move. Redistributing the value, by taxing the great majority of it away, would be more effective at reaching the same ends; why not grant it the designation of radicality?
24. When you think about it, didn’t the “The Rent is Too Damn High” guy have a point?
25. It should be clear to anyone why taxing income at too high a rate is harmful, although people will of course disagree what that rate is. It's probably clear to most people that taxing construction at too high a rate is also harmful, and may leave people without safe homes. Careful analysis will show that taxing those things at lower levels, though not terrible, is still on the margin harmful, although the returns from collective reinvestment of tax revenue can make up for it. Taxing land is unique, in that the sole effect is to reduce the price the land can be sold for. Instead of discouraging a productive activity, taxing land discourages holding land for speculation—an activity that not only produces no value, but actually prevents productive uses of land.
26. https://mobile.twitter.com/nzsd/status/983124932619128832
27. To properly tax land value, remove restrictive zoning, and transfer some of the burden of governance from labor and capital to land wouldn’t solve everything I’ve described here—but can it be denied that it would help a lot?
28. It is often assumed that an increase in wealth must mean an increase in the cost of living. The mechanisms of this effect are rarely specified with any level of detail; on close inspection, most of them are about increases in the price of highly desirable land.
29. Technological unemployment isn’t real. Unemployment caused by the increases in housing costs that make it unaffordable to mobilize labor certainly is.
30. Following a century of housing discrimination, and residential segregation that has increased even in the 50 years since the Fair Housing Act, with white housing assets at a high—perhaps a Land Value Tax, which could transfer that value back to the people evenly, is the closest we might come to reparations.
31. Subsistence farming was, through the mid 1800s, a workable approach to life all around the world. Were land equally divided, it would remain so, although most would choose better options. Were people equal shareholders in every piece of land in their country, they should do as well still, with the proceeds of industrialization added to the bounty they could already draw from the land. That they are not is the origin of poverty.
32. “The Earth is the equal birthright of all mankind” is not a controversial idea—until you try to bring it into practice.
33. Georgism is an accelerationism, as it attempts to unchain capital—not from the restraints of humanity, but those of land, which eats cake in the stands as it watches capital and labor fight over crumbs.
34. This moment—San Francisco, 2018—is the perfect soil in which a new Georgism can grow, as unlike every other culture in the last century, there is a society that possesses capital, and sells labor, but for which land is only ever a cost.

When relaxing these constraints, things get dicier. Given an unbounded possibility space for solutions, and a lack of self-evidently perfect solutions, the time to come up with an optimal response can easily be exponential in the number of concerns involved, which is to say that assuming P≠NP, we must choose between thinking until the heat death of the universe, or caring about the time it takes to formulate a response. This is not to say that rationality consists solely of exhaustively searching problem spaces; only to point out that almost any decision-making problem operating on open problem-spaces must contend with the speed at which it's able to produce answers.

However, if you ask rationality how to hold a conversation, or design something in an unbounded problem-space, you will likely have issues. In regular conversations, as opposed to what happens on Twitter dot com, it is imperative to produce replies in real time, usually beginning sentences before knowing exactly how they end. Given that even slight delays can ruin a response, conversations are hard to explain as revolving around rational methods of becoming right and using that knowledge to take the correct action.

There are many domains that straddle the line between the improvisation of conversation, and the slow decision-making of, say, Chess. For these, we may make plans. Rational types particularly like making plans. However, they sometimes fail to acknowledge that carrying out a plan is seldom an act that looks the same as their plan. They will often cling to the Mohist delusion that, if they create the best plan, and follow it exactly, they can have an ideal result. Some will allow that their plans will not totally solve the issue, and some improvisation will be necessary. However, it is rare to see them consider that their plan provides little or no value, and the activity's success is dominated by their ability to act in a moment.

I don’t want to say that correct knowledge is an impediment to solving these unbounded problems, although it can certainly be a distraction. There are certain ways in which it can be applied—to eliminate sets of possibilities that are impossible, or to suggest directions for further movement. However, beyond the low-hanging fruit, seeking correct knowledge comes with an obvious time cost. If you are sitting in an endless ocean of possibilities, is it better to try to systematically light the areas around you, or shine your light near and far for glimpses of bright reflections?

Dewey’s first claim is that museums shape our beliefs about what art is, and convince us that art is primarily about ‘looking,’ or about physical objects. Instead, Dewey claims we should be looking at not the physical work (an urn, a painting) but the experience of engaging with it. For an urn, this may mean the experience of carrying water; for a painting, it means the experience of looking. If we’re examining the experience produced, rather than the form, we can compare the qualities of different works on a level playing field, even across mediums.

I want to be specific about a distinction between experience and recognition. Imagine that you’re in a dark room, and lightning strikes. A portrait of Abraham Lincoln on the wall is illuminated for a sharp instant—just long enough for you to see it. In that instant, it is in your mind, it has been recognized, but no time has passed to allow inspection or reaction. This is to say, you have perceived the painting, but: you do not experience it in that instant. If we unfreeze time there’s an unfolding—it ‘hits you,’ and then you begin to process it, both compositionally, and in terms of what it means for this room to have a portrait of Abraham Lincoln. The moment frozen in time is recognition; the unfolding afterwards is the experience.

This is all to say: all experiences take place over time, and no experience can be instantaneous. For music and movies, what this means is very clear, but it remains true with, for example, paintings—though they are, physically, static objects, they’re experienced through the exploration of the composition over time.

There’s one more categorical claim we can make about experiences: they have order. We can take a movement from Holst’s The Planets, and have an orchestra play it backwards, but it doesn’t really stand up as a piece—it’s interesting, and it maintains many of its qualities, but as it stretches past about the first 30 seconds, it begins to feel directionless and odd.²

Almost universally, people enjoy music when played forwards more than backwards, even though the notes are the same, the information content is the same, and so forth. Obviously, we can’t put a book in reverse order by mirroring the direction of the letters, but it’s easy to imagine there’s a reason that it is more common for people to tell stories beginning at the start, and ending with the end, than starting with the end and proceeding with a series of ‘previously’s.

We might look at narrative to find an explanation of this phenomenon, as we have many ‘theories of narrative’, which explain the orderings that are enjoyable in stories. The most popular in the west is Freytag’s Pyramid: Exposition → Rising action → Climax → Falling Action → Denouement

But there are many others—Jo-ha-kyū, for example: begin slowly → speed up → end swiftly

Kishōtenketsu: Introduction → development → twist → conclusion

Though these models individually are very imperfect, they all have a certain sort of asymmetry—most time is spent on a building motion, with a short plateau and a short unwinding.³

Dewey explains this by analogy to the experiences of a living creature. I’ve translated this to a rough and sketchy evolutionary-psych explanation—

1. Creatures, animal and human, are always struggling to maintain their evolutionary fitness. They continually slip in and out of the state of being comparatively evolutionarily fit— they get hungry, they eat; mates are found, mates slip away; they are threatened by predators, they escape.
2. These dramas happen at the micro-scale (a bird spots a worm and then catches it) all the way up to the hyper-macro scale (a mate is won over through a multi-year effort to increase status in the tribe). Fitness is a continuous scale, which we can understand as a growing and shrinking delta between a complete unity with the environment—that is, the ideal state for the creature—and the actual state of the creature.
3. Narratively-satisfying emotion is produced by the rhythm of that delta growing and shrinking over time, as equilibrium is lost by new challenges, and actions are taken in order to restore it.

This pattern of need → effort → fulfillment → satisfaction is found in the vast majority of the experiences that any living creature will have. ⁴

This explains the third facet of experiences that are desirable—they generally come to a kind of consummation, with the desires and tensions of the work being fulfilled. We largely judge experiences not on the basis of whether they’re enjoyable, but whether they’re fulfilling. This is why people get very upset over what they perceive as unsatisfying endings to games and TV shows (ex, the last episode of LOST), even though they’ll happily engage with works that produce uniformly low-quality experiences (Facebook, for example).

That satisfying experiences come from the process of taking actions that have the effect of improving fitness, may be unintuitive. Most hold the model that comfortable creatures are happy, and uncomfortable creatures are unhappy. Dewey’s model suggests that if you're the process of evolution, it’s better to reward the creature for doing its best to improve its station, not whether it happens to be comfortable at a given time.⁵

I haven’t yet explained how, for example, an abstract painting can feel compelling—to do so, we must also develop a model of mapping between the base associations of living to stimuli, which I hope to address in another post. I have, however, provided an explanation of some aspects of the shared structures common to all successful aesthetic experiences.