Programmers don't become more productive when they move to Silicon Valley or Seattle or NYC.
Why do you believe this? I definitely became a better developer when I moved to NYC. How do you know that everyone else didn’t either?
correlation of wages with housing prices and with wealth is stronger.
I think this is just recursive? Of course wages are higher in places with more wealth. Higher wages causes more wealth. And housing prices can follow, just cause of supply+demand (there’s a higher supply of dollars, so people are willing to spend more of them).
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Anyway, it’s incredibly effective to take very talented people, and put them together on the same team. They build on each other’s talents, and it becomes multiplicative in a lot of cases. I like the story about the IBM black team as an example (though admittedly it may be apocryphal).
Achieving this requires gathering them, which requires paying them well, which means you need somewhere like SV or NYC where that can happen.
I mostly don’t think remote work is nearly as effective. It massively reduces the compounding effects of having smart people work closely together. But this is just based on my personal experience so far.
Programmers don't become more productive when they move to Silicon Valley or Seattle or NYC.
Why do you believe this? I definitely became a better developer when I moved to NYC. How do you know that everyone else didn’t either?
"programmers" is too large and diverse a group to meaningfully discuss. For this purpose, it's sufficient to say "_SOME_ programmers become more productive when able to interact in-person with other workers and experts, which are currently concentrated in a few cities". And that is a pretty easy claim to make ... (read more)
Scott Alexander posted this last month, arguing that building more in an area doesn't necessarily decrease local prices because it can cause more people to move in.
I see 3 levels of argument here, based on 1st, 2nd, and 3rd-order effects:
Position (3) has long been my view, and I thought I'd write a post explaining it a bit.
The problem in America isn't a lack of aggregate housing, it's houses not being where people want to live. Building more in those areas might seem like an obvious solution, but it wrongly assumes "where people want to live" is constant. If we instead consider that it could change, we need to consider what makes people move from an area with cheap housing to an area where it's expensive.
You can just ask people that, and they'll tell you: jobs. OK, so why are there better jobs in the expensive areas?
If you ask an economist, they'll probably say something about improved economic efficiency from people being closer together. I don't buy it, because it contradicts what I observe directly:
Yes, people in NYC and Silicon Valley get paid more on average, but I reject the assertion that wages reflect productivity or competence. If wages were high simply because aggregation improved efficiency, then we'd see a stronger correlation between density and wages, but the correlation of wages with housing prices and with wealth is stronger. In my experience and the experience of people I know, the dominant factor is how close you are to money. Wages in NYC are high because there are wealthy investors and corporate executives there.
Why, then, are those rich people in NYC? Because:
In this model, building more housing in Silicon Valley or NYC just leads to more competition for about the same total income from "good jobs", with that number determined by the amount of money there. That makes things better for rich people buying luxury services in expensive cities, and worse for other people. If you make housing cheap enough for many poor people to move in, the rich people might even leave because of that, decreasing the number of good jobs.
The solution, then, is not to build more in high-demand areas - it's to force demand to be spread out more.