Expectations and Applications

How do expectations affect economic decisions? The recent “inclusionary zoning” imbroglio at Toronto City Hall offers an interesting case study.

On October 22, 2021, the City’s Planning and Housing Committee approved the Inclusionary Zoning amendments, which would go up to vote in City Council on November 9th.

This news was seen as a surprise to many developers, as evidenced by the flurry of activity in the three weeks leading up to the November 9 City Council meeting. Dozens of new Condominium Approvals were being submitted per week; a huge increase, as the trend had been for only a handful of these applications per week.

The new rules go into effect in September 2022. This date must also have been a surprise to developers, because the day after the vote there was an immediate drop in the number of new Condo Approval applications being submitted per week.

As part of my work with UrbanToronto.ca, I have access to all the city planning and permitting data as they come in. This lets me chart and quantify this surprise. (If you’re interested in getting a summary of this data sent to your inbox daily, check out the New Development Insider. This report was first published there!)

Before delving into the charts, a bit of background info:

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Study Guide to the Jordan Peterson – Robert Murphy Podcast

This week, Jordan Peterson released an interview titled, “Is Property Theft?”, with Austrian economist Robert Murphy. The conversation was fast and exciting, with a lot of references to books, articles, and other ideas from Austrian economics thrown in.

Since this is likely to be the first introduction to Austrian economics for many people, I am taking it upon myself to release a “study guide” of sorts for this interview. Here I will give citations, references, and other explanations for that may have gone by too quickly for the audience.

As a table of contents, I will use the time stamps from the original video as they appear on YouTube. Almost all of the links will take you to a free book, article, or lecture. That’s one of the great things about Austrian economics: there are a lot free learning resources.

A word of warning: the first few sections are much longer than others, as they provide a lot of necessary background information. Feel free to skim the information as needed on a first pass, and come back to it later for more details.

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The Impossibility of Economic Calculation, in One-Syllable Words

More economics in one-syllable words, this time Economic Calculation in the Socialist Commonwealth by Ludwig von Mises. Here is a two-paragraph summary:

Cash is the one thing that all of us in the world want. This trait of cash is what lets us use it with math: if the cash I pay to build a good is less than the cash I will get when I sell it, I can make the choice to build the good in a clear way. For cash to have this trait, though, it must trade among all goods in the world, and each trade must be a free choice. This way, each price lets us know how much a thing is worth to all the folks in the world.

But in a world where all a large chunk of the goods are owned by one group, then that group can’t trade what it owns with things that it also owns to get a cash price. It would be mad. Since these goods can’t be priced in cash, we can’t know how what they’re worth to the world! Thus, to use math to learn if our yield to build a thing is good or bad would be vain. This is bad!

And a longer, section-by-section summary of the whole essay:

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Mises’ Bureaucracy, in One-Syllable Words

Bureaucracy, by Ludwig von Mises, summarized in one-syllable words:

Folks on both the left and the right claim to hate the thing this book is named for.

The word has a rude tinge to it. Folks gripe that they are slow, with lots of faults in how they’re run. And look who they’re run by: lots old guys . “We want change,” they say.

But no change comes. Strange, right?

So do these folks even know what it is that they’re mad at? I don’t think they know. But I know what’s got their goat. Read on to find out.

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Human Action in One-Syllable Words

Human Action by Ludwig von Mises — in one-syllable words (inspired by the summaries of famous philosophical works by Jason Brennan). Here is a short summary, before launching into a part-by-part treatment:

You can choose. With this true face, we can use just our wits to learn some more true facts: like you act in time, you have doubt about fate, and that you give up your least liked piece of a thing to get more of what you want. If you live with a group that you trade with, you should each own the goods you use to make things with and trade them for cash. The cash math will help with your growth plans. If you don’t, your group will break and rot. If any bank makes fake cash and lends it out, it will cause a boom and bust. Folks are blind to these facts; you must help them see.

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Understanding the Fed’s Bond ETF Program

Yesterday, the Federal Reserve did something it’s never done before: purchasing exchange traded funds (ETFs) that are invested in corporate bonds. As a brand new program, this has generated a lot of confusion on behalf of the public. Why is the Fed buying bonds? Who is the Fed helping by buying corporate bond ETFs?

I’ll try to answer these questions (and more) in this article.

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The Collected Works of Ludwig von Mises

It always struck me as strange that such a great and important thinker as Ludwig von Mises, whose last posthumous work was published in 2012, did not have a dedicated and comprehensive anthology. Since I personally have a significant interest in “what Mises said” on this or that topic, it also frustrated me that there was no simple online resource available where I could do this—despite so much of Mises’s works being available online.

Thus, I’ve used my time during the COVID-19 lockdown to create this compendium: over 8600 pages, 36 separate volumes, 200 megabytes.

Find it under the Free eBooks section of this website, or simply click here. This version was last updated May 12th, 2020.

The list of titles of the collected works include:

Title	CTRL+F	Pages of the PDF
A Critique of Interventionism	KZ01	4-143
Bureaucracy	KZ02	144-272
Economic Freedom and Intervention	KZ03	273-585
Economic Policy: Thoughts for Today and Tomorrow	KZ04	586-682
Human Action (Scholar’s Edition)	KZ05	683-1635
Interventionism: An Economic Analysis	KZ06	1636-1764
Liberalism	KZ07	1765-1973
Liberty and Property	KZ08	1974-2028
Marxism Unmasked	KZ09	2029-2154
Memoirs	KZ10	2155-2303
Money, Method, and the Market Process	KZ11	2304-2658
Nation, State, and Economy	KZ12	2659-2883
Notes and Recollections, with the Historical Setting of the Austrian School	KZ13	2884-3068
Omnipotent Government	KZ14	3069-3421
Planned Chaos	KZ15	3422-3465
Planning for Freedom (and other essays)	KZ16	3466-3658
Profit and Loss	KZ17	3659-3718
Selected Works Vol I	KZ18	3719-4151
Selected Works Vol II	KZ19	4152-4608
Selected Works Vol III	KZ20	4609-4929
Socialism: An Economic Analysis	KZ21	4930-5524
The Anti-Capitalistic Mentality	KZ22	5525-5613
The Clash of Group Interest and Other Essays	KZ23	5614-5650
The Free Market and Its Enemies	KZ24	5651-5769
The Theory of Money and Credit	KZ25	5770-6306
The Ultimate Foundation of Economic Science	KZ26	6307-6451
On the Manipulation of Money and Credit	KZ27	6452-6676
The “Austrian” Theory of the Trade Cycle	KZ28	6677-6689
Economic Calculation in the Socialist Commonwealth	KZ29	6690-6780
Money and Inflation	KZ30	6781-6874
Epistemological Problems of Economics	KZ31	6875-7123
Entries for the Encyclopedia Britannica	KZ32	7124-7134
Theory and History	KZ33	7135-7529
Human Action (Liberty Fund Edition, volumes 1-3)	KZ34	7530-8442
A Critique of Bohm-Bawerk’s Reasoning	KZ35	8443-8451
Glossary (“Mises Made Easier”)	KZ36	8452-8602

Three Short Stories on Housing Economics

Originally published on Notes on Liberty.

Do you love housing economics but have struggled to get the basic ideas across the younger generation? Yes, you get excited about reading 60-page reports, but kids these days have better things to do.

That’s why I wrote these three, action-packed, short stories which you can read to any child (or child at heart).

So without further ado, here are three stories about how the supply of housing affects the prices of housing.

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The Economic and Political Dynamics of Zoning

Originally published on Mises.org

Ludwig_von_Mises[1] Both economic decisions and political decisions involve choices and tradeoffs. The difference is that economic decisions are ultimately informed and rely upon monetary prices, revenues and costs. Political decisions, meanwhile, do not depend on market outcomes—they can be based on love, legacy, favors, or establishing power relations.

Zoning is the practice of governments controlling the type, size, and population density of buildings. (Zoning should not be confused with building codes, which control the building materials and other design aspects of buildings.) The purpose of zoning has been to create separate regional “zones” of building types: broadly, these categories typically include residential, industrial, retail, and parks. The zones are then broken down into more minute categories, like low, medium, and high density homes, different kinds of retail businesses, and so on.

Zoning is a type of government intervention into economic decision making: it the practice of the state (whether it is the municipality, subnational, or national level) intervening in the affairs of private individuals in where and what they can build. By intention, zoning is a limit on the supply of housing. In effect, it is a limit on the quantity of the stock of housing; that is, it acts like any other quota or prohibition.

While many economists, from Rothbard himself, to even those in the mainstream, recognize the deleterious effects of zoning, there does not exist a single, thoroughgoing Austrian analysis on the subject. The purpose of this piece is to be that analysis. It is broken up into two sections: the politics of zoning, and the economics of zoning.

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Rethinking the Yellowbelt: Report Release

After a full year of research, the largest, most comprehensive report on the economics, politics, history, and policies of zoning in Toronto is available for download.

The full report is available both on the Housing Matters website, and quickly downloadable here: Rethinking the Yellowbelt.

The “Yellowbelt” refers to the portion of the city that’s zoned exclusively for detached homes. The report goes into detail explaining when and why such a zone came into existence, where it spreads in the city, who is hurt by the existence of this zone and how; and what it will take to change the system.

A summary of the report follows. Of course, the report itself goes into much more detail.

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