2025-11-14 09:01:46
I recently attended the excellent Kilkenomics festival in Kilkenny, Ireland. If you ever get the chance to go, I recommend it. Putting comedians and economists on the same stage doesn’t sound like it makes sense, but it’s surprisingly effective; they balance each other out quite well. And Ireland is a wonderful country, of course.
But I did notice one thing at the festival that made me a little sad. Since I’m American, the festival organizers stuck me on two panels about the United States — one about the economy, the other about Trump and politics. All throughout those panels, the comedians made jokes at America’s expense — how Americans don’t have health care, how everyone is poor, how guns and violence are everywhere, and so on. The crowd ate it up. But whereas in the past this would have felt like friendly teasing, now it felt strained and a little desperate.
Europeans have good reason to be mad at the United States right now. Donald Trump has scaled back U.S. aid to Ukraine, cut military aid to the Baltic states, expressed friendship and sympathy for Russia, and in general has done lots of things to indicate that the transatlantic alliance isn’t as firm as it used to be. Trump has slapped tariffs on Europe for no good reason, and has threatened much worse. And Trump’s vice president and other MAGA figures have demonstrated an unhealthy obsession with European immigration.
After all of that, it’s natural for Europeans to want to fire back. And compared to what Trump is doing, jokes about American health care and guns are pretty weak tea.
But at the same time, this catechism of America’s supposed problems often feels like a type of cope — a way that Europeans can avoid confronting their region’s own challenges by telling themselves that “Well, America is worse!”. In fact, I often encounter this same list of criticisms on Twitter, and in casual conversation with Europeans. It includes the following claims:
Americans don’t have health care
America is a poverty-ridden, deeply unequal country with no social safety net
American politics is dominated by rich plutocrats
Americans are uneducated
America is full of guns and violence
One problem with this litany is that most of it isn’t true; some of these problems were always exaggerated, and many of them have been effectively addressed since the 1990s. But a bigger problem is that these criticisms are deeply pointless. Even if all of these things were true, it wouldn’t reduce Europe’s need to address its own deep-seated set of problems.
On Twitter or other social media, commentary about national strengths and weaknesses almost always takes the form of head-to-head comparisons. The question isn’t “How can America and Europe solve their problems?”, it’s “Which is better, America or Europe?”. This rapidly becomes a zero-sum game, with each country’s partisans trying to win bragging rights by proving that the other is doing worse.
If you were starting from scratch and picking a system to emulate, this kind of head-to-head comparison might make sense. For example, in the Cold War, lots of newly decolonized countries had to pick which system to emulate, American-style capitalism or USSR-style communism.
But those days are over. First of all, almost every country on Earth already has its basic legal and institutional arrangements in place. But more fundamentally, there’s just not that much difference between the European and American systems. Both are basically capitalist economies, with fairly high levels of taxation, robust social safety nets, and fairly efficient public services.
For example, a lot of people think America doesn’t do a lot of social spending. That’s wrong. The U.S. is similar on this scale to the Netherlands or the UK:
America’s fiscal system is also highly redistributive. Fisher-Post and Gethin (2025) estimated tax progressivity — the amount that the government’s tax and transfer system redistributes income — and they found that the U.S. is about as progressive as Europe:
The U.S. also has a reputation for being a lot friendlier to business and capitalism than Europe. But measures of “economic freedom” tend to put the U.S. at about the same level as North European countries like Germany or Sweden. Here are some numbers from the World Bank in 2019:
And what differences do exist between the American and European systems are often due more to historical accident and institutional path-dependence than to any deep difference in philosophies about how economies ought to be run. European countries do not consider themselves “socialist”, as some Americans would like to believe. Nor are their governmental systems very different; many European countries have presidents.
I’m not saying Europe and America are exactly the same; there are some important differences, and we’ll talk about these in a bit. But the bigger point is that these are broadly similar systems; whether you chose to build your country on the “American model” or the “European model”, it would end up looking pretty similar.
It’s not useless to contrast European policies and institutions with American ones. But thinking of Europe versus America in terms of a zero-sum competition is an activity with extremely limited utility, and plenty of downsides.
The most obvious point here is that even in the age of Trump, Europe and America are allies. If the U.S. does poorly, this will ultimately make Europe poorer and less secure. So when Europeans crow “Haha, look how bad America is!”, whether true or false, it’s what the kids call a “self-own” — they’re simply bragging about things about which they ought to be apprehensive. (Naturally this also applies to Americans who brag about “Europoors” and such.)
Even more fundamentally, pointing out America’s shortcomings — even if they’re real — doesn’t do anything to help Europe solve its own problems.
Every country and region in the world has challenges and shortcomings. Europe is no exception. Back in August, the Wall Street Journal had an article summarizing some of Europe’s woes, entitled “Europe is Losing”. Some key excerpts:
[T]oday Europe, particularly Western Europe, finds itself adrift, an aging continent slowly losing economic, military and diplomatic clout…The continent’s economies have been largely stagnant for about 15 years, likely the longest such streak since the Industrial Revolution, according to calculations by Deutsche Bank. Germany’s economy is 1% bigger than it was at the end of 2017, while the U.S. economy has grown 19%…Europe’s proportion of the global economy is now likely the lowest since the Middle Ages, according to the Maddison Project…
In the past 15 years, a key engine of European growth—manufactured exports—has been hobbled by events beyond its control, including U.S.-led trade wars, China’s mercantilist policies and Russia’s invasion of Ukraine, which sent European energy prices skyrocketing…But Europe’s lack of economic dynamism has deeper roots, too. Taxes and regulations have risen inexorably; the volume of EU regulations has doubled since 2010. Sprawling rules protect old buildings, incumbent firms and aging consumers, limiting the creation of new infrastructure and industries…
Red tape in Britain is so bad that it took electricity firm Scottish Power 12 years to get permits for a high-voltage transmission line across Scotland. A project to build a new tunnel under the Thames river outside London has so far spent $340 million just on planning permits—documents that total 359,000 pages. Games Workshop, a fast-growing gaming company, is facing delays to build a new parking lot on its headquarters because a single bat lives there…
Energy is another problem. In Germany, industrial electricity costs three times as much as in the U.S.; in the U.K., four times as much. Britons now consume less electricity per person than the Chinese, and Germany’s overall electricity consumption is lower than it was before the Berlin Wall fell. Yet Germany has banned nuclear energy, and the U.K. has scrapped new offshore oil and gas exploration. Policymakers across Europe have laid out ambitious renewable energy plans…But the transition is proving painful…
Europe’s economic slide has been accompanied by shriveling military prowess. The continent’s share of the world’s military power is also at its lowest since the Middle Ages, after decades of focusing on welfare spending instead of defense. Though European leaders are now vowing to take defense more seriously in the face of a revanchist Russia, they are struggling to build up their forces.
Basically, Europe’s problems include:
Stagnating living standards
The Russian military threat
Expensive energy
Overregulation that makes it hard to build anything
Structural fiscal deficits
These problems tend to compound each other. Stagnating GDP makes it hard to fund Europe’s welfare states and pensions, and also to defend against Russia. Expensive energy makes European industry uncompetitive, which makes it hard for Europe to build the energy infrastructure that would bring costs down again. And so on.
On paper, Europe is committed to building green energy and electrifying its economy — both to power its industries and sustain its living standards, and also to fight climate change. But in practice, the region’s anti-development regulations and broken grid interconnection system are preventing the transition. The Financial Times reports:
Electrification has been stuck stubbornly at about 22 to 23 per cent of final energy use for more than five years, according to industry body Eurelectric. That’s roughly the same as the US but means that Europe has been rapidly overtaken by China, which is approaching a 30 per cent share…
Instead of abundant cheap, renewable power, energy costs are still between two and five times higher in Europe than in the US or China. European industry is flailing in response…
One of the main barriers to electrification in Europe is energy taxation…According to Eurostat, taxes on electricity have…increased faster than those on gas in recent years...Another challenge is the lack of incentive to improve the grids…The commission is working on new rules with the aim of speeding up permitting and grid connections (such is the backlog that in the Netherlands — often a canary in the coal mine for EU issues — some will only get grid connections in the mid-2030s)…[F]ragmented national concerns and slow efforts to rollout interconnectors between states have hindered progress [on a unified energy market]…Other challenges [include] the cost of solar installations, which are roughly four to six times higher in the EU than, say, Australia[.]
Europe’s expensive energy and overregulation have also made it completely incapable of meeting the competitive challenge from Chinese manufactured exports, which are beginning to hollow out Europe’s traditional industries. Germany used to make a bunch of money exporting industrial machinery to fuel China’s rapid industrialization; now, with Germany’s competitiveness imploding and China subsidizing its industries, the flow has reversed:
That’s only one example. There are many more:
Germany’s industrial backbone is facing an unprecedented challenge. Once the leader in high-end manufacturing, the country has witnessed a five-year decline in industrial production, which threatens up to 5.5 million jobs and 20% of gross domestic product (GDP), according to a recent report by the London-based Centre for European Reform (CER)…
The speed at which China has caught up with Germany is perhaps most evident in the auto industry. German carmakers have been criticized for a lack of innovation, a slow transition to electric vehicles (EVs) and not predicting fierce competition from Chinese brands like SAIC Motor and BYD. Those issues have led to threats of tens of thousands of layoffs and domestic plant closures…
Chinese chemical giants, for example, have significantly increased their output in recent years…[driving] down the profit margins of German producers like BASF…Even in the European Union…China grew its share of chemicals exports in the decade to 2023 by 60%, while Germany’s share fell by more than 14%…
Germany’s mechanical engineering sector…is also facing stiff competition from Chinese rivals. While Germany’s market share of industrial machinery exports declined slightly to 15.2% from 2013 to 2023, China’s share grew by more than half (from 14.3% to 22.1%).
If Germany can no longer compete with Chinese industry, what hope does the rest of Europe have?
This is all the more frustrating because China is vanquishing Europe in industries in which Europe should have a fundamental comparative advantage. Europe’s long-standing and deep concern for the climate, and its determination to switch to green energy, should make it a leader in producing batteries, solar panels, and electric vehicles — except China reigns supreme in all three industries, and Europe is primarily a consumer, writing China IOUs in exchange for shipments of green technology.
Bashing America will not help Europe solve any of these issues. Pointing out the fact that America has higher inequality than Europe will not help Germany build a single electric car. Decrying U.S. gun violence will not bring down British electricity prices by one penny. Taunting America over the chaos of its politics will not let France install a single air conditioner.
Focusing on these things will only serve as a distraction — a way for Europeans to rally a tiny scrap of civilization pride, even as the fundamental basis for that pride erodes out from under them. It is, in short, a cope. And it is not helpful.
And it’s especially unhelpful because there are some cases — not all, but a few — in which becoming a little more like America would actually help Europe solve some of its problems. No, putting guns on the streets and electing Trump-like leaders would not be a good idea. Privatizing health care wouldn’t be a good idea.
But in order to build new industries — battery and drone industries to fight Russia, an EV industry to be independent from China, a space industry to be independent of SpaceX — Europe will have to loosen its regulations around things like factory construction, mining, mineral refining, hiring and firing, and so on. That might exacerbate inequality at the top of society, because it would allow a few entrepreneurs to get very rich building these new industries. And it could lead to increased carbon emissions in the short term, before the green energy buildout gets big enough.
Those things would make Europe a little more like the U.S. in certain uncomfortable ways. If Europeans insist on continuing to buck up their spirits by painting a lurid picture of America as a plutocratic hyper-capitalist hellhole, it could make them avoid some very sensible and necessary policies.
So anyway, even if Eurocope were totally right about America, it would be counterproductive for Europeans to keep pointing the finger across the Atlantic whenever anyone suggests that Europe itself has grave challenges. But in addition, Eurocope is broadly wrong about America — or at least massively exaggerated in most areas.
My general sense is that Eurocope draws its mental image of America from the 1990s and 2000s — and especially from the Bush era, when tensions between Europe and the U.S. ran high over the Iraq War. But in the decades since Europeans formed their stereotypes of America, much has changed.
For one thing, most Americans now have health insurance. Elderly Americans were always covered by Medicare, but since the passage of the Affordable Care Act (Obamacare) in 2009, most other Americans have insurance too:
This improvement basically came from giving people a way to buy insurance that didn’t involve getting a corporate job.
And among the remaining uninsured, most are young people, who tend to need insurance much less. In other words, some percent of America’s remaining uninsured people are choosing to voluntarily forego insurance, despite universal availability and significant subsidies thanks to Obamacare.1
Nor are Americans paying a ton of out-of-pocket expenses for their health care. They used to, but thanks to policy changes, these days they no longer do. In fact, these days, Americans pay a lower percent of their health care costs than British or Swedish people:
The U.S. does have lower life expectancy than Europe, but this is primarily a function of obesity and drug/alcohol abuse; ironically, Americans’ higher purchasing power allows them to consume more unhealthy stuff that kills them. It is not a function of the relative quality of the American health care system.
To be clear, the U.S. health system is still worse than Europe’s in many regards. As the Commonwealth Fund’s international comparison shows, America ranks near the top in the quality of service, but lags badly in access, equity, and administrative efficiency. The U.S. has plenty more health reforms to do before its system rivals the best in the world on all fronts. But it’s simply not true that Americans “don’t have health care”.
As for America being a hyper-capitalist country that leaves its poor people to rot in the cold, that has not been true for a very long time. In recent years, America has gotten a lot less laissez-faire. With the shift of the tax burden to the rich, and the expansion of social services for the poor and working class — SNAP, various health care programs, the EITC and CTC, Section 8 housing assistance, and so on — America has become much more progressive since 1990. This is from a study by Lindert (2017):
In fact, some recent studies go farther. Blanchet et al. (2022) find:
Contrary to a widespread view, we demonstrate that Europe’s lower inequality levels cannot be explained by more equalizing tax and transfer systems. After accounting for indirect taxes and in-kind transfers, the US redistributes a greater share of national income to low-income groups than any European country.
As you can see from the chart earlier in this post, America spends a lot more on social welfare than it used to. The reason America still has higher inequality than Europe is mostly due to “predistribution” — basically, pretax wage inequality — rather than a reduced willingness to provide for the poor or redistribute from the rich.
Other Eurocope tropes have never really been true. America’s education system takes a lot of flak, but on international comparisons Americans generally do just fine. On the PISA test — generally considered the best international test — White and Asian Americans clobber their European counterparts, while Hispanic Americans do about as well as Israelis and Black Americans do about as well as Romanians or Ukrainians:
That’s a picture of a very unequal education system, but overall a very effective one. Americans are not dumb.
Nor is the U.S. plutocratic oligarchy. That should be more than apparent from the way businesses have been impotent to stop Trump’s tariff rampage. But also, there’s evidence showing that middle-class Americans tend to get their way in politics (contrary to one high-profile study that got thrown around a lot in the 2010s but turned out to have serious flaws).
Not all Eurocope tropes are false, of course. America is a very violent, high-crime nation compared to European countries. The U.S. is much more unequal. Americans work more, and have much worse public transit.
But many of the standard Eurocope beliefs are simply no longer accurate. In the 1990s, 2000s, and 2010s, Americans realized we had problems with poverty and patchy health insurance, and we acted to address those problems — even though doing so was politically tortuous.
Europe would be well-advised to do the same. Countries are always more effective when they focus on self-improvement over comparisons with rivals. Europe has a lot of work to do in order to dig themselves out of their hole of economic stagnation and military weakness. It’s time to stop making excuses and get started.
In a true insurance system, this would cause a problem, because the exit of healthy people from the risk pool would raise premiums for everyone else until the system collapsed from adverse selection. Under Obamacare, however, government subsidies make up for reduced “subsidies” from healthy young people paying into the system. Health insurance isn’t really insurance in the traditional sense.
2025-11-12 05:16:48
As expected, Zohran Mamdani has won the New York City mayoral election. Most of the commentary about Mamdani has centered around either his Muslim religion, his leftist ideology, or some intersection of the two. This is only to be expected. The GOP electoral victory in 2024 left the Democratic party without any obvious leader, and Mamdani is a charismatic guy who ran a slick, competent campaign and inspired a lot of people. It would be an exaggeration to say that Zohran is now the de facto leader of the progressive movement or of the Democrats as a whole, but he’s definitely soaking up a ton of attention, and his success is widely seen as an indicator of where the left in general is headed.
Mamdani’s Muslim religion and his stance on Israel will certainly soak up a lot of attention and controversy. But ultimately his leftist ideology will probably be more important to how he governs as mayor. Back in June, I argued that Mamdani’s socialist roots have given him some bad instincts about how to run a city:
Essentially, Zohran’s instinct for improving affordability is to provide a bunch of free services at the city level — free buses, city-run grocery stores, and so on. That will not work very well. If he’s successful, the quality of those services is likely to be poor, drawing criticism and backlash far out of proportion to their actual economic significance. But many of the plans are unlikely to be implemented in the first place, given the need to win approval from statewide agencies like the MTA.
Meanwhile, Zohran’s housing and education policies are likely to be contaminated by bad ideas from the progressive information-bubble. Mamdani’s attack on elite public schools is based on the common but mistaken idea that these schools worsen racial gaps; in fact, they are a vehicle for discovering and giving a boost to talented minority kids. Zohran’s housing policy is based on subsidizing “affordable” homes, but — as we’ve seen in California — this will make housing harder to build overall, while increasing construction costs, and will ultimately not lead to a big boost in supply.
It’s therefore easy to envision a pretty depressing scenario for Mamdani’s tenure in office. Identity, foreign policy, and ideology might soak up tons of attention, stirring general nationwide fear about the direction of the Democratic party, while distracting from NYC’s real material concerns. And the failures of a few economically minor but symbolically important socialist initiatives could draw widespread condemnation, painting Mamdani’s whole tenure in office as a failure. This would basically parallel what happened to Chesa Boudin, San Francisco’s leftist district attorney, or (more loosely) to Chicago’s socialist mayor Brandon Johnson.
And that would be a shame, because New York City has some serious problems that Mamdani really should be addressing. NYC is America’s flagship city — in some sense, its only real city. But its tentpole industry is slowly abandoning it, leaving the future of its economic base in doubt. And it’s beset by ruinously high costs, leading to a slow degradation of public infrastructure and services. These are problems that socialist approaches will simply never fix — but if NYC is going to thrive, someone has to fix them.
2025-11-10 07:47:28
My first book, Weeb Economy, came out in March of this year, but only in Japanese. Since then, a bunch of people have been asking me for an English translation.
Half of the book was a series of translated posts from my blog, so those are already in English. The other half was a new part that I wrote in English and had translated into Japanese by my excellent translator, Kataoka Hirohito. So while I’ll eventually republish the whole book in English, what I can do right now is to publish my English-language first draft as a series of posts on this blog.
In this first installment, I discuss:
Why 2008 was a pivotal turning point for the Japanese economy (and not in a good way)
Why economic stagnation actually presents Japan with a golden opportunity
Why Japanese policymakers should stop focusing so much on macroeconomics, and focus more on development economics
Why a multi-strategy approach to development is better than a single strategy
How Japan has already been attacking its productivity stagnation by improving the performance of its big corporations and by encouraging more startups
When I lived in Japan in the mid-2000s, it still felt very much like “the future”. 3g flip-phones with grainy cameras were far more advanced than anything I had encountered in the U.S. Japanese people had LCD or plasma TVs, while most Americans were still using old cathode-ray machines. Their kitchens had automatic rice-cookers and other appliances I had never seen, and their laptops were higher-performance and far more durable than the ones I had used in the U.S. Their toilets were like something from a spaceship, and their showers could dry clothing. Some people even had digital SLR cameras that could shoot movie-quality video — a miraculous technology I had never even dreamed was possible.
And the cities! Giant screens adorned the sides of buildings, like something out of science fiction. There was always a train station within walking distance that would take me anywhere I wanted to go. The trains were clean and fast and they ran on time, and they even had electronic screens that told you when the train would arrive at the next station. Japanese cars and even motorcycles glided along quietly, where in America they roared and grumbled. Even in the U.S., of course, the most revolutionary, futuristic car — the Toyota Prius — was a Japanese model.
In the 21st century’s opening decade, Japan felt like it had embraced that new century while America was still lingering in the 20th. William Gibson, the celebrated creator of the cyberpunk science fiction genre, wrote this in 2001:
The world’s second-richest economy, after nearly a decade of stagflation…still looks like the world’s richest place, but energies have shifted…yet it feels to me as though all that crazy momentum has finally arrived…[T]onight, watching the Japanese do what they do here, amid all this electric kitsch, all this randomly overlapped media, this chaotically stable neon storm of marketing hoopla, I’ve got my answer: Japan is still the future, and if the vertigo is gone, it really only means that they’ve made it out the far end of that tunnel of prematurely accelerated change. Here, in the first city to have this firmly and this comfortably arrived in this new century - the most truly contemporary city on earth - the center is holding…Home at last, in the 21st century.
Now realize that the Japan of my earliest memories — the early and mid-2000s — was a full decade and a half after the famous bursting of Japan’s economic bubble. I am not hearkening back to the go-go days of the 1980s. By the time Koizumi Junichiro was in office, Japan’s “lost decade” had come and passed, full employment had been restored, and the country had returned to slow but steady economic growth. Despite the overhang of the bubble era, Japanese per capita incomes, measured at international price levels, grew by a respectable 20% between 1990 and 2007:
This was slower than the U.S. or West Europe, but that was mainly due to Japan’s more rapid population aging, which was increasing the percentage of retirees. In terms of GDP per worker, Japan kept pace with other rich countries over this time period, and even outgrew the United States:
And this growth was being felt by regular Japanese people. It wasn’t just fancy gadgetry and big screens. Japanese houses were getting steadily bigger, growing from the tiny “rabbit hutches” of the postwar period into something similar to what Europeans enjoyed:
Japanese people were eating better, too, as local chefs and entrepreneurs took advantage of imported food to create the world’s best restaurant scene, and big new grocery stores like Aeon revolutionized home cooking. Gyms, cafes, and all kinds of public spaces were improving in quality and quantity. Culturally, Japan still felt at the cutting edge, with a vibrant street fashion scene, a golden age of anime and manga, a burst of musical creativity, and an explosion of online culture driven by websites like Niconico.
Given all this, it’s reasonable to ask whether Japan’s so-called “lost decades” after the bubble era were really lost at all. Japan’s catch-up growth had ended, and its living standards were still a bit below the very richest countries like Switzerland or Singapore, but it was solidly within the first rank of nations, and it was still upwardly mobile. It was innovative and vital, at the cutting edge of both technology and culture. And it had accomplished all of this without the kind of deep wrenching disruptions that America experienced after its own real estate bust.
But in the years since 2007, it feels like that Japanese future has been lost. Living standards grew only 6.5% between 2007 and 2022.:
And even that meager amount of growth was entirely due to increased labor input — women, old people, and young people going to work — rather than to productivity increases. In fact, Japanese workers produced less per hour in 2019 than in 2007, falling well behind other advanced nations:
Why did Japan stagnate starting in 2008? It’s not clear. Potential culprits include the global financial crisis, the big earthquake and nuclear accident of 2011, the subsequent shutdown of nuclear power, rapid aging, the retirement of the Baby Boom generation, and the ramping up of Chinese competition. Perhaps it was all of these combined. But whatever the reason, 2008 was the turning point.
This doesn’t mean Japan has stagnated in every regard. Its big cities continue to build themselves up, and its restaurants and shops have continued to improve. But when I go back to Japan each year, I can clearly feel the loss of that futuristic vitality that I felt 17 years ago. Japan’s consumer electronics are no longer the cutting edge, having long ago been supplanted by Apple and various other brands. Its auto companies have been caught flat-footed by the switch to battery EVs, and are now — like most Western brands — are in danger of losing the global market to innovative Chinese competitors.
America’s household appliances have caught up and surpassed Japan’s — plenty of American homes now sport Instant Pots, air fryers, sous vide cookers, video doorbells, smart speakers, and so on. Japan still has much better toilets, and there have been some locally specific innovations such as better air purifiers. But for the most part, Japanese homes still feel like they’re stuck in 2007. And that’s not even considering furniture, which tends to be much higher-quality in the U.S.
This does not mean Japan is a bad place to live, or that it’s no longer a rich country. Far from it. In fact, the amenities of life — the safety and friendliness, the visual beauty, the infrastructure, the unparalleled retail experience, and so on — make it extremely pleasant in ways that richer countries often fail to match. And if, like me, you’re a foreigner with an American salary who works remotely and sets his own hours, Japan can feel like a paradise. (In fact, this will be important for my argument in a bit.)
But for average Japanese people, life in Japan is hard to afford. Average real wages have actually decreased since 1996:
The situation is actually not quite that bad, since it involves substantial composition effects — falling labor hours, the retirement of highly paid Baby Boomers, the entry of more part-time workers into the labor force, and so on. In fact, hourly wages have increased by a modest amount. And the rise of women’s employment since 2002 has taken some financial pressure off of many families by adding a second income, just as it did in the U.S. in the 1980s and 1990s.
But the shift to dual-income households can only happen once. Ultimately, stagnant productivity and low overall growth will continue to make life a slog for the average Japanese family. The weak yen, which is caused in part by Japan’s slow growth, will continue to make imports expensive. And as the percentage of the elderly continues to steadily increase, Japan’s working-age citizens will have to toil more and more simply to afford the same standards of living — unless productivity can be raised.
Because being “the future” isn’t just about having fancy gadgets and cool screens on buildings. Technological progress — the development of new products and better production processes — is the ultimate font of a nation’s quality of life. If Japan can reclaim the mantle of “the future” — if it can reach the technological cutting edge across a wider array of products — it can secure an easier, more fulfilling life for its people.
Ultimately that is why I want the Japanese future back.
2025-11-08 09:52:30
Hi, everyone! I’m overdue for a roundup post.
First, I have a lot of podcasts for you! Here’s me arguing with the noted right-wing Frenchman Pascal-Emmanuel Gobry about high-skilled immigration:
And here’s Razib Khan interviewing me about Japanese politics:
Here’s an interview I did with the Media Summit podcast, about various media-related topics:
And here is an episode of Econ 102, discussing the future of American manufacturing.
OK, I know that was a lot. So without further ado, let’s move on to this week’s list of interesting things!
In the 2000s and 2010s, America generally saw slow growth, low levels of business investment, and low business dynamism. We also saw increasing levels of corporate concentration, at least at the national level. A bunch of economists put two and two together, and hypothesized that growing monopoly power was choking off the economy. This wasn’t actually the impetus behind Lina Khan and the “neo-Brandeisian” antitrust movement, but it was probably the reason why very few economists stood up and criticized Khan’s policies.
In the last few years, however, a new wave of research has been coming out, suggesting that the market power picture is a lot more complicated than it once seemed. For example, Albrecht and Decker (2025) found that at the industry level, there was no correlation at all between price markups (an indicator of monopoly power) and business dynamism. In fact, industries where companies mark up their prices more tended to have slightly more new businesses enter the industry. This suggests that the story a lot of people were telling in the 2010s — that big powerful companies were blocking startups from taking off — wasn’t true.
Another interesting paper is Creanza (2025), which studies what happened when a whole bunch of American companies merged around the turn of the 20th century. This wave of mergers helped spur popular concerns about monopoly power. But Creanza finds that it also led to greater innovation at the corporate level. Basically, big industrial companies tended to have big industrial research labs that made a lot of discoveries:
This paper studies the Great Merger Wave (GMW) of 1895–1904—the largest consolidation event in U.S. history—to identify how Big Business affected American innovation. Between 1880 and 1940, the U.S. experienced a golden age of breakthrough discoveries in chemistry, electronics, and telecommunications that established its technological leadership….I show that consolidation substantially increased innovation…The establishment of corporate R&D laboratories served as a key mechanism driving these gains…[L]ab-owning firms enjoyed a productivity premium…Overall, the GMW increased breakthroughs by 13% between 1905 and 1940, with the largest gains in science-based fields (30% increase).
This is not a new idea. A lot of economists, including John Kenneth Galbraith, Joseph Schumpeter, and William Baumol have theorized that an upside of market power is that big profitable companies are able to afford big expensive labs, and that as long as there’s some competition, the whole economy can benefit from the resulting innovation. Bell Labs (pictured at the top of this post) is certainly the most famous example of a big, powerful company that plowed money back into useful research. In fact, two of this year’s Econ Nobel winners, Philippe Aghion and Peter Howitt, won the prize for a theory saying that oligopoly enhances innovation. So it’s interesting to see Creanza find some historical data in support of this classic theory.
In fact, we can see this effect happening in AI today. Three big companies with a lot of market power — Google, Meta, and Microsoft — have been instrumental in driving the AI boom. In fact, many of the fundamental advances that power modern AI were made in Google’s labs. But those three companies have also benefitted from strong network effects that give them extraordinary market power and high profits — Google in search ads, Meta in social networks, and Microsoft in PC operating systems. All three companies have been targeted and even villainized by Lina Khan’s new antitrust movement. But perhaps without their market power, we wouldn’t have the AI boom that’s now the main thing sustaining our economy.
The antitrust push of the last decade may have missed some very big and important parts of the story.
In recent decades, there has been a big shift from active to passive investing. Why spend all that time and effort picking stocks, when you can just buy an index fund or an ETF and automatically do as well as the market average — without spending any effort or paying any fees?
This logic is incredibly powerful, and it’s why passive investing has inexorably taken over from active investing:
But what if everyone in the market starts doing this? If there are no stock-pickers — only people who click a button that says “buy ETF” — who will do the research required to figure out if each stock is actually worth buying? And if everyone is buying or selling the same stocks at the same time, isn’t that somehow dangerous? What about corporate governance? If a few asset managers like Vanguard and Blackrock own all the companies, doesn’t that reduce competition? Etc. etc.
Those are long-standing concerns about passive management, and they get debated back and forth. But now we have a new potential drawback to worry about: underinvestment. Kontz and Hanson (2025) reason that when stocks become more correlated, they become riskier — the classic concept of “beta”. Riskier stocks are cheaper, because risk is bad. When stocks are cheaper, it’s harder for companies to sell their stock to finance business expansion. So Kontz and Hanson argue that because passive investing increases correlations, it suppresses real investment, because it makes it harder for companies to sell their stock.
That’s a plausible story, but I think it’s questionable how important it is for the overall economy. Passive investing really took off around 1995. But corporations’ cost of borrowing actually fell from 1995 through 2021:
That’s probably mostly due to things like interest rate cuts and new institutional money entering the market. But it suggests that even if passive investing is making it harder for companies to sell their stock, it’s not the big driving factor in America’s real investment drought.
Still, something to keep in mind.
A lot of people expected Donald Trump to offer to sell Nvidia’s Blackwell chips to China as a concession in the recent China-U.S. trade talks. Nvidia’s CEO, Jensen Huang, had certainly been pressing hard for such a move, which would make his company a lot of money. But in the end, Trump held firm and refused to sell China the chips:
Greenlighting the export of Nvidia’s Blackwell chips would be a seismic policy shift potentially giving China, the U.S.’s biggest geopolitical competitor, a technological accelerant. Huang—who speaks to Trump often—has lobbied relentlessly to maintain access to the Chinese market.
As they prepared to meet Xi, top officials including Secretary of State Marco Rubio told Trump the sales would threaten national security, saying they would boost China’s AI data-center capabilities and backfire on the U.S., the officials said…
Faced with nearly unified opposition from his top advisers, Trump decided not to discuss the advanced Nvidia chips during his Oct. 30 meeting with Xi…Trump’s ultimate decision marked a victory for Rubio and other Trump advisers over Huang, leader of the world’s most valuable public company.
Was this a good outcome? The typical argument against export controls is that they spur China to create its own domestic chip supply chain, and reduce their reliance on America. Basically, the idea is that if we don’t do export controls, our companies can make money selling chips and chipmaking equipment to the Chinese, while at the same time keeping China dependent on our products. But if we stop selling chips and equipment to China, the argument goes, they’ll unleash their mighty innovation machine and learn how to make everything themselves, thus removing any leverage we might have had over them.
This was never a very compelling argument. If you want to keep China hooked on American products for strategic reasons, it’s probably a bad idea to scream “HEY CHINA, WE’RE SELLING YOU CHIPS AND EQUIPMENT SO YOU’LL STAY HOOKED ON OUR PRODUCTS, FOR STRATEGIC REASONS!!”. China’s leaders, being smarter than, say, a gerbil, will refuse to take this bait, and will work hard on developing their own indigenous chip supply chain anyway. Which is exactly what they’ve been doing for over a decade now.
It therefore seems fairly obvious that selling China chips and equipment will simply speed them along in their quest not only to become independent in semiconductors, but to dominate the global market for semiconductors. They will simply reverse-engineer both chips and equipment, while also using the equipment we sell them to make a bunch of chips.
This fairly obvious realization was exactly why we implemented export controls in the first place. And there continues to be evidence that those export controls are working as designed — not destroying China’s chip industry, but slowing it down substantially. For example, China is having trouble replicating ASML’s chipmaking equipment, as Brandon Weichert reports:
Apparently ASML DUV machines that China has to make their chips recently broke down. They called the Dutch company for help repairing it. ASML sent some techs. They discovered that the Chinese broke the machine when they disassembled it and tried to put it back together…The reason Chinese techs disassembled their older ASML DUV machine is because they are desperately trying to evade the US sanctions imposed upon them for the newest ASML-type machines. By disassembling their older one & trying to reassemble it, Chinese techs learn…They are trying to reverse-engineer what they have as a means of figuring out how to indigenously build their own, more advanced versions, to end-run the US sanctioned machines. But they can’t figure it out, apparently.
Meanwhile, China’s Huawei, which has reportedly suffered from low yields on its 7nm chips due to U.S. export controls, is now downplaying the importance of making 7nm chips at all. Everyone made a big deal about it back when Huawei’s supplier SMIC managed to make a 7nm chip at all, and the pro-China crowd boasted that export controls were ineffectual, but SMIC’s progress appears to have stalled:
Despite concerted efforts by China to bolster domestic semiconductor production in defiance of US trade policy, new evidence uncovered by Canadian research outlet TechInsights suggests SMIC, the Middle Kingdom’s top chip manufacturer, remains generations behind the rest of the world…TechInsights confirmed that the Kirin X90…in Huawei’s Matebook Fold was fabbed on SMIC’s now two-year-old 7nm N+2 process. The findings debunk rumors the SoC would be fabbed on a homegrown 5nm process node…SMIC has been rumored to have developed an even more sophisticated 5nm process node also using DUV technology. However, as TechInsights points out, chips based on the tech remain elusive.
Meanwhile, China’s technologists themselves seem pretty upset about the export controls, and admit that they’re holding back the country’s AI industry. Here are a couple of quotes:
Here’s a more detailed story about Tencent’s struggle to make cutting-edge AI models under export controls.
So anyway, export controls are definitely holding back not just China’s chipmaking industry, but its AI industry as well. Those industries won’t be destroyed, but they’ll probably keep lagging behind the U.S., especially if the chip controls are tightened. And as long as those industries lag, China may be a little bit more reluctant to start a major war.
If I were in charge, I would keep the export controls in place, and tighten them up as much as possible.
Tourists are becoming a problem for Japan. Tourism keeps rising and rising, pouring revenue into the country but also putting a huge strain on the urban infrastructure of Kyoto and Tokyo (the most popular destinations). The roads and trains simply can’t handle that many people. Meanwhile, many tourists from the U.S. and other Western countries are badly behaved, straining Japanese society. Overcrowding contributes to that problem, by making tourists too numerous to police.
And yet forcibly cutting down on tourism would deprive Japan’s long-stagnant economy of needed revenue (and foreign exchange earnings). Plenty of neglected cities, like Nagoya, actually want more tourists. The Japanese government has tried various measures to nudge foreign travelers away from Kyoto and Tokyo and toward those neglected areas. The effectiveness of those measures, however, has been very patchy.
But Kyoto recently enacted a policy that promises to counter overtourism in a particularly elegant and efficient way:
Desperate to thin out tourist crowds here, the city government will slap visitors with an accommodation tax of up to 10,000 yen ($68.3) per person per night, starting March 1…Officials explained that the 10,000-yen levy will apply to hotel stays costing 100,000 yen or more per night…After the revision, the city’s lodging tax revenue is projected to roughly double, from approximately 5.91 billion yen this fiscal year to 12.6 billion yen next fiscal year.
This is a Pigouvian tax! The city’s congestion problem is an externality. And when you have an externality, you want to tax it. Hotel fees can be set to balance the city’s desire for tax revenue with its desire to reduce overtourism.
Several modifications to this policy immediately suggest themselves. First, Japanese people travel from city to city for business, and the government probably doesn’t want to tax this. So the full hotel fee should apply only to reservations made from foreign bank accounts.
Second, it’s pretty easy to stay in Osaka and commute to Kyoto, so hotel fees should be coordinated regionally.
Region-specific hotel fees accomplish multiple objectives:
They reduce overtourism.
They raise tax revenue for city governments.
They redirect tourists toward cities without fees, which need the tourism revenue more.
It solves three problems at once, with very little downside.
Earnings gaps between Black and White Americans have begun to narrow. But a new paper by Ru, Kaushal, and Muchomba claims that essentially all of this improvement has been due to highly selective immigration:
Our results show remarkable earnings parity between 2nd-generation Black immigrants and non-Hispanic Whites, with Black women leading the progress. The gap is falling for 1st-generation Blacks but remains stubbornly high for native Blacks. Underlying the extraordinary performance of 2nd-generation Blacks is their exceptionally high and escalating educational attainment.
Here’s a chart showing 1st-generation Black immigrants, 2nd-generation kids of Black immigrants, White Americans, and Black Americans with no recent immigrant ancestry:
As you can see from that chart, Black immigrants earn about as much as native-born Black Americans. But 2nd-generation Black Americans earn about as much as White Americans.
There are several important implications of this finding.
First, selective immigration is very important. The kids of Black immigrants to America move up in the world because they’re highly educated. Selecting for immigrants that value education is therefore a way of reducing racial gaps in America — in addition, of course, to the substantial contributions they make to America’s economy.
Second, fears of segmented assimilation — the idea that the kids and grandkids of Black immigrants will end up with economic trajectories similar to those of native-born Black Americans — seem overblown.
Third, America is a land of opportunity for Black immigrants, but not nearly as much so for Black people whose families have been here a long time. This means that the “ADOS” concept — meaning Black Americans whose ancestors were slaves — is probably a useful one. It defines the group of people who most need help from the government. For example, affirmative action programs targeted at Black people in general are likely to award college spots to the kids of elite African immigrants. Instead, in the interest of maximum efficiency and fairness, they should probably be targeted at ADOS specifically.
2025-11-07 09:30:24
One thing I notice when I talk to young people these days is that they don’t use social media very much — or at least, not the kind that we Millennials used a lot in the 2010s. Zoomers don’t want to connect on Twitter, or Facebook, or even Instagram. Instead, they just use phone numbers, like we did in the 2000s.1 When they have discussions online, it’s usually in DM groups, or Discord channels, or subreddits. But mostly, when they use the internet, they’re just watching TikTok or other short-form video content.
These trends are very real. For example, here’s an excerpt from a recent article in Chief/Marketer about how online conversation is fragmenting:
According to a new report from PartnerCentric, which surveyed nearly 1,000 Americans of all ages in May 2025, 41% of Americans—and 48% of Gen Z—are actively planning to spend less time on social networks in 2025…16% of Americans quit at least one social media platform so far in 2025; among Gen Z, that number ticks up to 18%.
“Gen Z is essentially voting with their thumbs—nearly half are dialing back on social platforms and [35% are] layering on screen-time blockers,” says Stephanie Harris, CEO and founder of PartnerCentric.
Facebook and Twitter/X are no longer where young people go to find out what’s happening in the world:
I wrote about the trend away from “town square” social media and toward small-group discussion three years ago, in a post called “The internet wants to be fragmented”:
Since I wrote that post, two big trends — the rise of generative AI and the spread of TikTok-like short-form video content to every online platform — have only intensified the exodus from traditional social media. Derek Thompson and James O’Sullivan have both written excellent long-form articles about how algorithmic content is turning social media into a more passive medium, more akin to TV than to the Facebook and Twitter that we remember from the 2010s.
A lot of people wring their hands and lament these shifts, but I’m overjoyed. I’ve always believed that humanity isn’t meant to be thrown all together in one or two big rooms; we evolved to thrive in small groups and self-selected communities. I blame “town square” social media for at least part of America’s political chaos, and for at least part of the increasing unhappiness among young people. The early internet of moderated, fragmented forums and person-to-person communication seems like it was obviously superior to the rancor of the 2010s. So I think it’s good we’re moving back to something more like the internet we enjoyed in the 2000s.
AI content and short-form video will ultimately help accelerate this healthy trend, I believe. Passive TikTok-watching may rot our brains a bit, but so did Saturday morning cartoons in the 1980s, and we 80s kids turned out fine.2 “Push media” — TV then, TikTok now — lets us consume in private. And paradoxically, despite the centralized nature of algorithms and TV production companies, I think private consumption helps us become more distinct individuals — it frees us from the constant censorious criticisms of strangers that we encounter every moment that we spend in a “town square”.
So I’m optimistic that technology is helping to solve a problem that technology created — that mass social media was merely a passing phase, an experiment that we tried and rejected. Anyway, here’s my post from 2022 about internet fragmentation, which I think still resonates in the age of AI and TikTok.
Five years ago I was sitting around drinking a beer with my college buddy Dayv. I was scrolling through Twitter and watching people get mad at Donald Trump’s latest outrage, and I said “You know…fifteen years ago, the internet was an escape from the real world. Now the real world is an escape from the internet.” “Tweet that!”, Dayv said, so I did. That banal observation became my most popular tweet of all time, and the quote has now been posted ad infinitum on content mills all over the web.
Why did such a bland observation resonate with so many people? It’s easy to see why the internet now feels like a place we need to flee from. The smartphone physically attached the internet to our persons; now we take the internet wherever we go, and its little colored icons are always beckoning, telling us to abandon whoever we’re talking to or whatever we’re working on and check the latest posts. But what’s harder to remember is why the internet used to be an escape from the real world.
When I first got access to the internet as a kid, the very first thing I did was to find people who liked the same things I liked — science fiction novels and TV shows, Dungeons and Dragons, and so on. In the early days, that was what you did when you got online — you found your people, whether on Usenet or IRC or Web forums or MUSHes and MUDs. Real life was where you had to interact with a bunch of people who rubbed you the wrong way — the coworker who didn’t like your politics, the parents who nagged you to get a real job, the popular kids with their fancy cars. The internet was where you could just go be a dork with other dorks, whether you were an anime fan or a libertarian gun nut or a lonely Christian 40-something or a gay kid who was still in the closet. Community was the escape hatch.
Then in the 2010s, the internet changed. It wasn’t just the smartphone, though that did enable it. What changed is that internet interaction increasingly started to revolve around a small number of extremely centralized social media platforms: Facebook, Twitter, and later Instagram.
From a business perspective, this centralization was a natural extension of the early internet — people were getting more connected, so just connect them even more. Why have everyone make their own websites when everyone’s homepage could just be their Facebook page? Why try to track people down in IRC chat rooms when you could just talk to anyone directly on Twitter? Putting everyone in the world in touch through a single network is what we did with the phone system, and everyone knows that the value of a network scales as the square of the number of users. So centralizing the whole world’s social interaction on two or three platforms would print loads of money while also making for a happier, more connected world.
It certainly did the former. Facebook became an all-conquering corporate behemoth, and Twitter managed to stay profitable and secure from competition in spite of being notoriously poorly managed. But almost immediately after the great centralization of the 2010s, I started noticing that something was wrong with the internet I had come to know and love.
It started with the Facebook feed. On the old internet, you could show a different side of yourself in every forum or chat room; but on your Facebook feed, you had to be the same person to everyone you knew. When social unrest broke out in the mid-2010s this got even worse — you had to watch your liberal friends and your conservative friends go at it in the comments of your posts, or theirs. Friendships and even family bonds were destroyed in those comments.
At first Twitter seemed less bad than the Facebook feed, since you didn’t have to reveal your real identity if you didn’t want to. But Twitter was far more extreme in the way it threw everyone in the whole world together. Your family and friends might fight on Facebook, but at least you didn’t have to get deluged with angry comments from random anonymous Nazis or communists or weirdos mad about video game journalism.
The early 2010s on Twitter were defined by fights over toxicity and harassment versus early-internet ideals of free speech. But after 2016 those fights no longer mattered, because everyone on the platform simply adopted the same patterns of toxicity and harassment that the extremist trolls had pioneered. By 2019 you could get mobbed by angry librarians, or Saturday Night Live fans, or history professors. The only defense against an angry mob was to get your own angry mob. Twitter felt like a prison, and in prison you need a gang to survive.
Why did this happen to the centralized internet when it hadn’t happened to the decentralized internet of previous decades? In fact, there were always Nazis around, and communists, and all the other toxic trolls and crazies. But they were only ever an annoyance, because if a community didn’t like those people, the moderators would just ban them. Even normal people got banned from forums where their personalities didn’t fit; even I got banned once or twice. It happened. You moved on and you found someone else to talk to.
Community moderation works. This was the overwhelming lesson of the early internet. It works because it mirrors the social interaction of real life, where social groups exclude people who don’t fit in. And it works because it distributes the task of policing the internet to a vast number of volunteers, who provide the free labor of keeping forums fun, because to them maintaining a community is a labor of love. And it works because if you don’t like the forum you’re in — if the mods are being too harsh, or if they’re being too lenient and the community has been taken over by trolls — you just walk away and find another forum. In the words of the great Albert O. Hirschman, you always have the option to use “exit”.
From Twitter, however, there seemed to be no exit. Where would you go? If you were a journalist, Twitter was the source for all the most up-to-the-minute news. If you were a regular person who disagreed with journalists and wanted to yell directly in their faces, Twitter was the only place you could do that. If you wanted to mix it up in the neverending scrum of political and cultural affairs, Twitter was where you could get the largest audience for that, and feel like you had the largest impact. It was easy to clone Twitter — right-wingers tried several times, with Gab, Parler, and Truth Social — but it felt like the network effect of the original just couldn’t be overcome. So you went back day after day, to endure the toxicity of the dunk-mobs and throw yourself once more into the fight.
And the people who ran Twitter on the corporate side had no intention of changing this at all. They may have talked a good game about “free speech” — everyone does — but what they really wanted was to keep making money. They tinkered at the edges of the platform, but never touched their killer feature, the quote-tweet, which Twitter’s head of product called “the dunk mechanism.” Because dunks were the business model — if you don’t believe me, you can check out the many research papers showing that toxicity and outrage drive Twitter engagement.
The company’s hapless, incompetent management couldn’t figure out any better model, so they clung doggedly to what they had. They steadfastly resisted anything that would smack of community moderation — dropping blocked users’ comments from thread view, allowing users to remove replies from their threads, etc.
Caught between the easy profitability of network effects and growing anger over toxicity, the big social media platforms turned to centralized moderation. Unsurprisingly, this didn’t work. Not only was it an impossible task for the moderators themselves, but it meant that the management of the company was basically required to take an editorial slant. That effectively wrecked the image of the social media companies. And because Twitter’s editorial slant leaned slightly left-of-center, this made conservatives especially mad. Facebook, realizing the impossibility of the task, finally just decided to move its feed away from news entirely; Twitter, of course, couldn’t do this.
As this situation persisted, I began to notice a trend. People were taking their discussions about news, politics, and public affairs off of Twitter and into much smaller forums — first to Twitter DM groups, then to WhatsApp, Signal, and Discord. They still maintained their Twitter accounts and said a few things in public, but their honest opinions more and more were said in the privacy of a trusted group of friends and ideologically aligned acquaintances (and the occasional economics blogger who comes off as ideologically tolerant enough to be admitted to both right-wing and left-wing groups). Slowly, people seemed to be rediscovering the truth that the old internet had taught us — that discussions work better when you can pick and choose who you’re talking to.
Then Elon Musk came along.
Musk is a meteor crashing into the ossified dinosaur-world of Twitter, wreaking havoc on its community and its norms (if not yet its basic functionality). Nowadays if you go on Twitter, you’ll find it absolutely absorbed by Musk’s latest move — today, it’s arbitrarily banning journalists who criticized him, yesterday it was banning an account that tracked his private jet. Tomorrow it will be something else.
It remains to be seen whether Musk’s right-leaning centralized moderation will be enough to cause an exodus of the generally left-leaning journalists who give Twitter its reputation as the mainstream media’s “assignment desk”, or cause advertisers to abandon the platform, or result in a more general move to alternative sites. If core users in general do decide to leave, expect the platform to decline pretty abruptly.
But what’s interesting is that even the people who do expect this sort of exodus don’t seem to believe that there will be another single, unified platform that just replaces Twitter. The look and functionality of the original is simple to replicate, but no one seems to think that everyone will just move to New Twitter; everyone seems to expect that if and when Twitter does decline, the future is fragmented.
Because maybe, just maybe, we’ve learned our lesson. Maybe we’ve realized that the internet simply works better as a fragmented thing.
Centralized social media, as Jack Dorsey wrote, was a grand experiment in collective global human consciousness. It was a modern-day Tower of Babel, the Human Instrumentality project from Neon Genesis Evangelion. Yes it was a way to make some people rich, but it was also an experiment in uniting the human race. Perhaps if we could all just get in one room and talk to each other, if we could just get rid of our echo chambers and our filter bubbles, we would eventually reach agreement, and the old world of war and hate and misunderstanding would melt into memory.
That experiment failed. Humanity does not want to be a global hive mind. We are not rational Bayesian updaters who will eventually reach agreement; when we receive the same information, it tends to polarize us rather than unite us. Getting screamed at and insulted by people who disagree with you doesn’t take you out of your filter bubble — it makes you retreat back inside your bubble and reject the ideas of whoever is screaming at you. No one ever changed their mind from being dunked on; instead they all just doubled down and dunked harder. The hatred and toxicity of Twitter at times felt like the dying screams of human individuality, being crushed to death by the hive mind’s constant demands for us to agree with more people than we ever evolved to agree with.
But human individuality would not die. Instead it is centralized social media that is dying. Social media network effects are strong, but not infinitely strong. A recent survey found that only a third of U.S. teens use Facebook at all, down from over 70% just half a decade ago. And even before Musk’s takeover, the fraction of teens on Twitter had declined from 33% to 23%.
In place of centralized social media we see a few things rising. First, there’s TikTok and YouTube; although these do have some comment features, overall they’re far more similar to television, radio, and traditional one-way push media, with content driven by algorithms instead of user sharing. Second, Snapchat and Instagram, which are geared much more toward personal interactions and less toward public discussions. And though they weren’t included in the survey, my general sense from both anecdotes and overall usage trends is that chat apps — WhatsApp, Signal, Discord, etc. — are becoming more popular.
What these rising apps and platforms all share is fragmentation. Whether it’s intentional self-sorting into like-minded or community-moderated groups, or the natural fragmentation that comes from a bunch of different people watching their own algorithmically curated video feeds, these apps all have a way of separating people based on who they want to talk to and what they want to be exposed to.
This is how we restore the old internet — not in its original form, but in its glorious, fragmented essence. People call Twitter an indispensable public space because it’s the “town square”, but in the real world there isn’t just one town square, because there isn’t just one town. There are many. And the internet works when you can exit — when you can move to a different town if you don’t like the mayor or the local culture. This doesn’t mean we need a world where nobody talks to anyone we disagree with — instead of thick walls, we need semipermeable membranes. And a fragmented internet, where people can try out multiple spaces and move from forum to forum, is perfect for providing those membranes. Disagreement in society is necessary for progress, but it’s most constructive when it’s mediated by bonds of trust and affinity and semi-privacy. Our boundaries will always rub up against each other, but we need some boundaries.
Perhaps someday the human race will be ready to become one collective consciousness. But the experiment of the 2010s shows that this day is not today. Let the internet once more be an escape — a place where you can find your people and be happy. Let us learn to speak a thousand different languages once again. Let the Tower of Babel fall.
This includes chat apps like WhatsApp and Signal that are linked to phone numbers.
…Right??
2025-11-04 20:23:10
I’m traveling to Ireland today for the Kilkenomics festival. This is a very strange but very fun festival in a picturesque little town called Kilkenny, in which Irish comedians and international economists and econ writers go on stage together. The econ people talk seriously about econ, and the comedians crack jokes. It’s a lot of fun, and it’s basically the kind of thing that only Irish people could think up. When I went two years ago, I wrote a fun post about how Ireland got rich:
Other than its startling economic success, another interesting thing about Ireland is the emotions it inspires in Americans. Even though most Americans don’t have an actual ancestral connection to the Emerald Isle, we all grow up steeped in stories about Irish immigration in the 1800s. So lots of Americans, consciously, think of Ireland as “the old country”, and have an almost inexplicable emotional connection to it. Bill Clinton famously claimed to be part Irish, despite no record of any familial connection; I feel it too, despite the fact that my ancestors are all from East Europe.1
Anyway, this strange emotional connection reminds me a little bit of weeb culture, which is a bit of an obsession of mine. So when the pseudonymous blogger Cartoons Hate Her offered to write me a guest post about how she’s a “weeb for Ireland”, I thought this would be a perfect time to publish it.
Perhaps you’ve heard of a “weeb” or weeaboo, basically a Japanophile (usually a white person)2 who has an outsized interest in Japanese culture. Weebs have been documented as existing as far back as the 1800s:
Modern-day weebs are typically white men obsessed with anime and other components of Japanese pop culture. Weebs have been stereotyped as neckbeardy, creepy, and cringey, but there may be benevolent weebs who truly just love Japanese pop culture.
Noah Smith, himself a big fan of anime and Japan, wrote a great article about weebs and provided a nuanced portrayal of the weeb mindset, arguing that most of them are simply cultural enthusiasts with no creepy motivations, and that the “anime pfp” Nazis you’ve probably seen on Twitter aren’t emblematic of your average weebs. #NotAllWeebs.
But anyway, I came to the devastating conclusion that I am a weeb. Not about Japan, but about Ireland and Irish culture. My obsession has gone back at least thirty years. And like a weeb, I’m confident that no matter how obsessed I am with Ireland, I’m getting the obsession all wrong and don’t really know what I’m talking about.
I don’t even know where my Ireland obsession began, but it was far enough back into my childhood that I don’t really remember. A while ago I wrote about my obsession with Victorian orphans and associated literature when I was in elementary school. I’m guessing that I discovered a vague sense of “Irish culture” around that time.
On the bright side, my need to be obsessed with a culture that wasn’t my own was better channeled into Ireland than whatever I was doing in 1996:
Anyway, a big part of my Ireland obsession awakened with the concept of Irish dancing. My school was heavily Jewish and Italian, but we did have a few Irish-American kids, and many of them got to leave class early for Irish dancing lessons, where they’d curl their hair into flawless copper ringlets and wear regal green velvet dresses and grown-up makeup. I was jealous of them, but even more jealous when one of them brought in a VHS tape of the iconic Riverdance Irish dancing program. Something about the music and dancing just hooked me. I had a similar reaction when I watched the Irish dancing scenes in Titanic when Rose slums it in steerage (Why does it never feel that way when I fly economy on Delta?)
I asked my parents to enroll me in Irish dancing classes. They laughed and refused because we weren’t Irish and I was a terrible dancer who couldn’t even be bothered to figure out the Macarena for our school spring concert. So I would practice my own version of “Irish dancing” in my room. One St. Patrick’s Day, my family attended some kind of cultural festival in our hometown where, much to my seething envy, a bunch of kids got to perform Irish dancing. I bided my time until my big moment: later that year, when I attended a Santa Meet and Greet at the mall, I took it upon myself to use “meeting Santa onstage” as an excuse to begin an impromptu Irish dancing performance to the unnervingly off-beat, “Simply Having a Wonderful Christmastime” playing on the speakers.
I can only remember this moment as I saw it from the eyes of an eight-year-old: I had absolutely killed it.
I could have sworn I heard a parent ask if I was professional and if I was hired to perform. Like, I know for a fact that I looked like an idiot and there’s no chance anyone believed I was a hired dancer, especially given that I was wearing a pink GAP puffer coat with a groovy smiley face flower on it, and not an Irish dancing costume, but I genuinely remember someone saying this. Maybe they wanted to help me maintain my delusion. Maybe they just couldn’t think of any other reason why a child would start performing bad Irish dancing at the mall. But I swore they said it.
The obsession continued. I begged my parents to let me dye my hair ginger red (they also said no to this one.) Sometimes, when our backyard looked especially green and misty, I would pretend I was “in Ireland.” I eagerly looked forward to St. Patrick’s Day every year and ignored the naysayers who insisted it was a corny American thing. When I was twelve, I developed a crush on one of the geekiest boys in our class just because his last name was Gallagher. We never dated, but I dated other Irish boys. It’s not that I only dated Irish guys or even that they were my main type, just that being visibly Irish probably helped them level up by 2 points on the 1-10 scale. This phenomenon possibly explains why Sabrina Carpenter dated Barry Keoghan. On the bright side, my husband should feel very good about himself that I consider him a solid 10 without any Irish heritage, although he could pass in a Collin Ferrell way.
Speaking of heritage: unlike your typical white weeb, I am at least part Irish, but not Irish enough to justify my weebishness. I’m half Ashkenazi Jewish (to all of you on right-wing antisemite Twitter, congratulations on your keen “noticing,” and I haven’t even posted nose). My other half is loosely “WASP” but it’s more of a collection of random Northwestern European ethnicities—English, Scottish, French, German, Swedish, and, well, Irish.
I actually didn’t know I was Irish until adulthood, when my mom began exploring her ancestry on Ancestry.com and later 23 and Me. For many years in my teens, I wanted to be Irish, but didn’t think I was. Can you imagine how I felt when I discovered that I was actually part Irish after all this, with an entire lineage of family members with the last name Kennedy? It must have been like Rachel Dolezal discovering she’s actually 1/16th Nigerian. Suddenly, my excitement about St. Patrick’s Day felt slightly less embarrassing because at least I could claim some Irish heritage to back up my shamrock-induced soyface.
This continued into my thirties. I recently binge watched Say Nothing and listened to the associated audiobook. I am obsessed with House of Guinness. If it’s Irish, I’ll watch it. There was a month where I listened to two songs by the Cranberries on a loop basically all day. Whenever we pass by an Irish pub I tell my husband we have to go there “at some point” despite barely drinking alcohol. When it was time to name our daughter, I had a bunch of names picked out: Nora, Bridget, Fiona, and I even flirted with Siobhan for a while, my excuse being that I “liked Succession.” I have since channeled all of those names into Sims characters and I can’t deny creating ten-generation Sims legacies of Irish people. I love chunky cable knit fisherman sweaters, although I prefer cotton over the traditional wool. I have a favorite Spotify playlist called “Celtic folk music,” and I play it nearly every day when I’m making breakfast. Sometimes, when I wear a particularly woodsy-looking midi dress with a pair of lace-up boots I take a walk with my baby while listening to “Rocky Road to Dublin” on my AirPods. My husband, despite initially finding this obsession a bit weird, has come around to it, often playing “Galway Girl” by Ed Sheeran whenever I walk into the room.
I completely understand that this is not “really” Irish culture. I understand that I don’t really get it. I know that if I actually showed all of this to an Irish person, they’d probably laugh at me, or maybe even be offended (can you culturally appropriate the Irish if you’re part of a slightly less white subgroup? More at 11.) This is why I’m so embarrassed. Not embarrassed enough not to write a whole article about it, but still a little bit embarrassed. I feel like those people who say they love Chinese food because they love their local Chinese restaurant in their suburb of Cleveland and exclusively order wonton soup. I don’t need anyone to remind me that I’ve gotten the Irish all wrong. I know I have. But I want to enjoy my version of Irish culture—not sell it to others, profit off it, or claim it as my own—no matter how silly it is.
My warmth toward my imagined concept of Irish culture has extended to things that aren’t actually Irish, but feel Irish-coded. Ireland, at least in my demented mind, has come to represent a particular vibe: cozy, friendly, warm, moody, misty, mysterious…I can’t fully explain it, but it just makes sense in my head. It’s like those people who see the number 4 and immediately know it’s orange.
Much to my surprise, despite looking zero percent Irish, and marrying a man who looks zero percent Irish, my second child came out looking like she belongs on a billboard below big green letters that say “Travel to Dublin.” My mom recently went to Ireland on a trip, and knowing how I feel, brought me back a tiny green wool cable knit cape for her.
At this point you may be wondering if I’ve ever been to Ireland. The answer is no. I may still go one day, but I have concerns that it might ruin the whole thing for me. I’m painfully aware that my idea of “Irish culture,” is similar to a weeb’s idea of “Japanese culture” in that it’s mostly based on movies and music. I know a little bit about Irish history, and I’ve read and watched content on The Troubles, but I don’t know enough to be confident in my overall understanding of Ireland or Irish culture. If I went to Ireland for real, I imagine there would be a rude awakening, plus a lot of irritated Irish people who found me unfathomably annoying. In an effort to save the good people of Ireland from any further plight and injustice, I will be suspending any visits to Ireland until further notice.
In fact, an Asian American friend of mine even confessed that she feels it too!
Note: I disagree with CHH here. Weebs are actually disproportionately Black or Asian in America! See my original post on this.
