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.

Continue reading “Human Action in One-Syllable Words”

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.

Continue reading “Three Short Stories on Housing Economics”

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.

Continue reading “The Economic and Political Dynamics of Zoning”

Toronto city councillors want to make housing even less affordable. Ontario’s stopping them

Originally published in the Financial Post. 


Building more homes just became easier in two of the most densely populated areas in Ontario: Toronto’s downtown core and its “midtown,” a small strip of land centred at Yonge St. and Eglinton Ave. For anyone interested in finding a place to live in those areas, this is great news. Continue reading “Toronto city councillors want to make housing even less affordable. Ontario’s stopping them”

Nudge of the Week: Design Matters

Last week, there was tragedy on Southwest flight 1380, when an engine explosion led to a broken window in the fuselage and the death of a passenger.

While the pilot, Captain Tammie Jo Shultz, was able to land quickly to prevent further injuries, the sudden depressurization could have led to many more injuries. Especially as photo evidence shows that, despite clear instructions at the beginning of the flight, many passengers were not covering both their nose and mouth with the oxygen mask

The problem, in my view, is that there is nothing obvious about the design of the mask that indicates it should go over both the nose and mouth. Its circular opening reassembles a cup.

In order to prevent misuse, misuse has to be more difficult to achieve that proper use. In this case, perhaps a more triangular shape would better indicate an orientation that would cover the nose as well.

Emergency situations, especially when life and death are involved, are very stressful. Stress makes people more likely to lose focus and make mistakes. Designing in a way that actively prevents error can save lives.

Nudge of the Week: How to Avoid the “Too Good to be True” Bias

If you’re selling something that’s cheaper than what your competitors are offering, consumers are going to assume that it’s not going to be as good. People are used to thinking that if they want a good product, you have to pay a more money for it.

But as we know from the computer industry, it’s possible for something to get better and also cheaper. So what’s the lesson? Detail exactly what your specifications are. Computers list all their components, so that making comparisons between models is easy.

If you’re offering something cheaper and better, make sure to detail what it is that’s allowing you to sell for less than your competitors.

Nudge of the Week: Dark Patterns

There is definitely an ethical component to nudging. A good and ethical nudge is designed to help someone make a decision they want to make themselves. A bad and unethical nudge makes it harder for a person to do what they want.

Unethical nudges used to be called “shoves”, but the term gaining more steam is “dark patterns“. Examples abound, from tiny companies you’ve never heard of to places like LinkedIn and Amazon.

The rule of thumb for determining whether a nudge is “dark”, is by simply thinking whether you would be happy if your local supermarket made you do the same thing. Would you be happy if whenever you went grocery shopping, the manager put items she thinks you might like in your basket when—you weren’t looking? What if they made you walk through a tedious and deceptive maze every time you tried to leave?

Don’t nudge anyone with methods you don’t want to be nudged with yourself.

Nudge of the Week: How to fix Indecision

Indecision is a problem everyone faces. Recently, some have taken to call it “choice paralysis,” with the explanation being that it’s “too much choice” that leaves us paralyzed and afraid to make a mistake.

My explanation is that choice paralysis has two separate causes: first, a lack of information about the products; and second, a lack of information about our own preferences.

For an example of the first case, think of the familiar situation of deciding what to get at a Chinese restaurant. A thick menu, written in a foreign language, leaving you unsure what anything actually is. You know you want something that isn’t spicy and doesn’t have fish guts in it. But the menu is not helping you decipher this information.

A high-end coffeeshop might face the same problem. While experienced customers might confidently ask for a tall-blonde-mocha-chai-latte-with-two-pumps-of-vanilla, someone new to the experience might try to individually decipher all 85,000 different combinations of roasts, toppings, and sizes.

The telltale sign of this sort of indecision is that the decision-maker is asking a lot of questions. Questions that are not answered simply by looking at the menu. The solution here is simply to design a more informative menu. The key here is to break up the decision making process into a series of steps (“first, choose a size. Second, choose a roast. Third, choose how much foam,” or “first, choose your meat. Second, choose your veggies. Third, choose how spicy,” etc.).

The second type of indecision, which is caused by the decision-maker not knowing what they want, can be witnessed in fast food restaurants when someone is struggling between the Coke or the Cherry Coke. They know what both are, but they can’t decide which one they want at this moment. The reason for this is because they actually value both things equally. 

Think about it. If the choice was between Coke and cyanide, would they struggle as much with the decision? No, because a thirsty person would get a lot more out of life with the Coke than the cyanide. So the only logical reason a person would struggle with such a decision is because both choices are equivalent.

Thus in this situation, any choice will do. So if you recognize someone in this situation, you can try to create some dichotomy between the two options. For example, if you know the person likes to change things up, you can remind them of what they picked last time so they choose the opposite thing this time.

Nudge of the Week: Mitigate bad news with good news

When you give people good news in spite of bad news, this lessens the impact of the bad news.

One example from Rory Sutherland: when a plane doesn’t pull up to the gate, this is generally considered to be bad news because you now have to take a bus, and who wants to sit in a bus after hours of being in a train?

Back to Sutherland’s story: a plane he was riding stopped of the gate. Instead of simply directing people to get on the bus, the pilot added new information: that the bus will take the passengers directly to passport control, so that now they don’t have to walk all that way while carrying their luggage.

But it’s always been true that the bus takes you to passport control directly. The pilot simply reminded the passengers of the story, and this way of framing the situation really helped the passengers feel better.