On building cities from scratch, good governance, and how we’ll live in 2050 with the Founder and Executive Director of the Charter Cities Institute.
Mark Lutter is the Founder and Executive Director of the Charter Cities Institute, a nonprofit building the ecosystem for charter cities. Before this he worked as Lead Economist for a fund investing in early stage charter cities. He has a PhD in economics from George Mason University and a BS in Math from the University of Maryland, College Park.
Alex: [00:00:00] All right today, we've got Mark Lutter. He is the founder and executive director of the charter cities Institute, which is building the ecosystem for charter cities. We'll learn about those in a second. Before this, he worked as lead economist for a fund investing in early stage charter cities. He has a PhD in economics from George Mason university and a BS in math from the university of Maryland college park.
We talked building cities from scratch good governance and how we'll live in 2050. I hope you enjoy.
Awesome. So, Mark, thank you again for doing this, really, really great of you.
Mark: [00:00:37] Yeah, thanks for reaching out.
Alex: [00:00:38] You know, usually when, when people talk about building , they mean a new app or some software and maybe a real building if they're being literal, but you're, you're working on building new cities, which is crazy. Where did this all start for you?
Mark: [00:00:52] So where I started is, I had actually, I guess, just graduated from college at the time I wanted to be an economist. And I went to a talk where there was a guy named Michael Ben Naughton, who is a Dutch lawyer who married to, uh, a Somali clan, one of the large ones in Somaliland, wanting to build a Freeport in Somaliland.
And this was just mentioned as a throwaway line in a talk I attended. And I was like, Oh, this is a great idea. Um, building like new cities, fruit for it to just kind of resonated with me. I went down a rabbit hole. There was a small community of people at the time my not and had passed. But, uh, editor of his book was living in Mexico, a guy named Spencer Macola.
I went to live with him for stay with him for about three weeks over the summer. I emailed him and he invited me to stay and I said, okay, well, weird old man invited me on the internet, uh, to Mexico. Great. So went down to stay with him introduced to a small community of people, interested in these ideas.
And then went to do my PhD in economics at George Mason and kind of realized that there was, I think, a gap in terms of like serious academic kind of, not really academic, but serious policy type discussion on charter cities that was really missing that decided to, to fill with the charter cities Institute.
Alex: [00:02:04] Got it. So to start with the basics, because this was a new concept to me, not too long ago, and it's probably a new concept to anybody that might be listening. What's like the basic elevator pitch, if you will, for charter cities?
Mark: [00:02:14] Sure and well, I guess let me just rewind a second. So fun fact now Dubai ports world, which is arguably the largest port oper in the world that one of them. Is investing $400 million to build the port in Somaliland, as well as creating a special economic zone, or maybe they're calling it a free trade zone model on the Jebel Ali free trade zone, which is relatively free trade. It is a pretty good zone. So it is not entirely insane to want to build a Freeport in Somaliland, cause it's actually happening. So the principle, the basic idea is open environment. Governance is one of the, if not the most important determinants of economic development and economic outcomes through our well-governed country, you will probably do relatively well. If you are for the government country, you will probably do relatively poorly.
There have been studies that show when a Honduran crosses the border into the U S their income increases by a factor of 10 or more. Right. A hundred per capita incomes, $2,500 a year in the U S it might be 20,000, $30,000 a year, which isn't high by American standards, but it's much higher than what they would have been able to earn in Honduras.
And so institutions matter. The challenge is not everybody can migrate and increasingly high income countries are becoming more nationalistic and restrictive of migration. So then how can you transform institutions in countries that are currently struggling to allow them to have a strong economic growth?
And you can try on the national levels and sometimes that works, but that often is very difficult to form the political coalition that can get those reforms implemented because a lot of parties might lose from those reforms, even if they're net beneficial, right? The politically connected parties might lose from those reforms, and then two, there's also the possibility that those reforms are rolled back. And so charter cities, the idea is what is a type of reform that can be implemented that can be sufficient for sustained economic development. In a way that does not for the existing political equilibrium. And a new city development where nobody really lives that's a relative Greenfield site can get much deeper reforms and nationally possible and might be able to kind of form a sufficient baseline force of sustained economic growth. And one example of this is China. China over the last 40 years has been arguably the greatest humanitarian miracle in human history, if not one of them. They lifted about eight hundred million people out of poverty. And their strategy was largely special economic zones combined with urbanization over what are called special economic zones. And China are much closer to what might be thought of as charter cities in terms of scale, in terms of level of authority.
And so Shenzen, which was one of the first four declared in 1980, right. It was larger than 20 square kilometers. They had a lot of authority, it was basically everything, but like, Defense rail and post surface or something. That was devolved at the city level. And at the time it was a few fishing villages, about a hundred thousand people, basically a swamp across from Hong Kong.
And now it's uh, right, the hardware capital of the world, 20 million people in the greater metropolitan area. It a huge success. And part of the reason they chose Shenzen instead of Shanghai, which is the official commercial capital is because right, there are a bunch of capitalists in Shanghai. And the communist did not want to empower their enemies where Tenzin was a sufficient backwater, that it was politically viable to implement those reforms in transit.
So that shows kind of the political dynamic as well as how they can set the seeds for this long-term economic growth.
Alex: [00:05:31] Got it. So an example of people might really be able to understand would be for charter cities would be maybe something like Hong Kong or Singapore, like Dubai, right.
Mark: [00:05:39] Yeah. Yeah. Hong Kong, Singapore, Dubai, Shenzhen we typically describe as kind of prototype Charter cities. They have a lot of elements there.
Alex: [00:05:45] Okay. So first of all, why start from scratch? Like is bureaucracy so entrenched that it makes more sense to just build from the ground up?
Mark: [00:05:53] Well, yes. And there are currently 75 million new urban residents annually.
So new urban spaces have to be built for these people anyway. So the fact that there is a demand for these new urban spaces means that, okay, why not just combine with this demand for a new urban spaces? With a set of reforms that are probably good. And then two is yes. In many of these countries that bureaucracy is that screwed up.
And it's one of the examples is so What's his name? Uh, Steve jobs, who was the other founder of Apple? Um, Steve. Yep. Yeah. Uh, and right. He pitched, I believe it was HP on the Apple one computer five times and they turned him down five times and then he went to found Apple, which is now one of, if not the most successful company in the world, at least according to the market cap.
And right. HP is a profit interest of company. It is presumably run by very competent people. It, and even there, they missed an innovation and talent that could have allowed them to catch the personal computing wave. And if you compare that to governments, which typically don't have as a quick feedback mechanisms, they don't have as strong incentive structures.
And oftentimes governments often end up with cultures of, of kind of bureaucracies that are very damaging to, I don't know, like efficiency or long-term output or something like that. And so the basic answer is yes. Starting your own thing. It can in a lot of circumstances lead to better outcomes.
And I think in, in low income countries that are at the urbanizing starting kind of new administrative structures can, can raise for that. And I think it's key also to mention that these aren't independent, they should be aligned with the national plan. They should still be under the general jurisdiction of a government that they are outside of to a certain extent.
And so one way to think about this is. Um, right. Like third-world democracies often tie their hands to promote like long-term values. So a central bank, the standard advice is an independent central bank because other, if it's not independent and the politicians will put pressure on it to increase the money supply and you might get infection.
Similarly you want an independent court system, not one that's directly influenced by the electorate because you want them to be stable and to be able to form kind of opinions and a body of case law over time. And so similarly we view charter cities as a tool that can be used by governments that have these national plans and national goals, but might not be able to achieve them because of internal constraints and some political constraints to use this and say, all right in line with our national plans.
We're going to say this area is a charter city. They have are, have the legal authority to have a separate set of rules and laws. We're going to form a government in partnership, maybe with the city developer, maybe with international organizations like the UN world bank. And that was it. Minister the city to help us achieve our national plans.
We still have some oversight. It's still part of our, our, our sovereignty, but it's it's, it has a sufficient local control to be able to renew, respond to the needs of residents and businesses and hopefully accelerate economic growth.
Alex: [00:08:51] So broadly speaking, and I I'm guessing this differs from place to place, but what are like the biggest challenges that need to be made in governance? Are there any really big ones that tend to come up a lot?
Mark: [00:09:03] Yeah. So, I mean the first one is just getting the political bonds from the host country to create the concessions. Then that tends to be very challenging. After that, let's say you have a concessions in place. And this, again, as you mentioned, is, is very context specific.
It depends on the country. But it typically is not taxes, so, right. Like you can do a charter city as a tax Haven, but that's not really adding a lot of value to the world. And it's also very difficult than the scale, right? The optimum number of tax savings, I don't know, like five or 10. Right. And then at that point they're just competing with other tax savings.
Versus if you look at industrialization, right? The optimal amount of industrialization is like everybody's industrialized because industrialization is just like generally Uh, so I, the tax arbitrage is probably not the best place. So we tend to think approximately like the world bank doing business index is approximately right.
In terms of making it very easy to register a business and keeping it very easy to hire people, making it very easy to fire people, making very easy to pay taxes, right. This broad set of, of like economic liberalization. It depends on the host country, what the constraints are. But in addition to what might be called this, like, Liberal and libertarian ish approach to policy.
You want to pair that with a strong government? And so the government, the, and this is the city government, the charter city government needs to be able to provide public goods. So they need to be able to do things like build roads, build schools they, you probably want to regulate air pollution, various DirecTV.
So a fine particulate matter is much worse than anybody thought it was. It leads to substantial declines in living standards and life expectancy leads to substantial declines in cognitive ability. And so you probably want to regulate that more aggressively. On the other hand, there's some things that you might not want to regulate as aggressively.
Uh, but you have to kind of balance it out with the long-term development goals of the city, also in line with what the development goals of the host country are.
Alex: [00:10:54] That makes sense. And you touched on this for a second and again, it might be contextual, but. You know, one of my, one of my favorite books of all time, it's called the death and life of great American cities by Jane Jacobs.
And the reason I bring it up, it talks at length about these otherwise kind of mundane things like sidewalks and parks and how they actually have this pretty large effect on a broader scale when it comes to cities. So is there anything you think needs radical change from modern from modern day cities? As far as infrastructure goes.
Mark: [00:11:21] Yeah. I mean, I, I just moved to a condo in DC after being in the suburbs for a year during COVID and I think we should ban cars and I say that half truck, but we should probably have about half as many cars on the road today. If not fewer. If you just look at the amount of space they take up, it's absurd.
If you look at the actual injury rate and death toll, it's an absurd if you look at the pollution it's, it's, it's absurd. And so, right. If you look at cities that have effectively banished ours from near city center are severely restricted, their use like Amsterdam or like Oslo. Those are very nice cities to be in and to be around.
So I think, and this doesn't necessarily sort of applies to charter cities, particularly because with charter cities in low income countries, right, most people will not be able to afford cars. And so you do need more effective public transportation systems. Did you need a density? That's walkable. It's kind of like most cities in Europe.
The old town gold part of the city is very walkable. It's very dense because they were all built before cars. And similarly, at least in lower income parts of the world. If cars, if there's one car per every hundred residents or one car perfect 50 residents, right? You want to make it accessible for the average person who doesn't have easy access to a car.
So you do want that level of walkability and denseness. Uh, but I think that also applies to, to high income countries as well. It's just much more pleasant. It will probably do a bunch of positive externalities in terms of less pollution in terms of less accidents. In terms of more people feeling safe, walking out on the street.
I mean, it's, it's like. In the suburbs. Right? You can just say your kids going around and play in the streets, but most cities you can't do that because they're cars. And so I, that would probably be my main thing and how to, I think, transform existing cities. That's probably some other things, but that's, that's what comes to mind.
Alex: [00:13:04] Got it. I'm actually I'm from around DuPont circle, so I know exactly what you're talking about. Um, yeah, so, so at a more macro level, right? Where do charter cities make the most sense geographically, because if we're using any of the examples we talked about earlier, it seems like they usually do pretty well as ports. Although I guess most cities tend to, but what does that look like from your perspective?
Mark: [00:13:24] Yeah. So in terms of thinking about where charter cities should, like, I guess be built and could do the most good, the metrics we look at are what is the urbanization rates? So if, for example, some people talk about charter cities in Europe.
Europe is a very urbanized country. That has a defining population. So why do you need new cities? The U S is still growing, but right now you're on the, as quickly as we were growing in 50 or a hundred years ago. So the demand for new cities isn't quite as high. So there's 75 million new urban residents.
Most of them are in Africa and Asia. Additionally, we want to look at where trade patterns are occurring. So where are, where are, is the kind of natural growth East Africa is probably a good place cause it's getting heavy investment from the Chinese as well as Indians, as well as kind of the Arabs, particularly in the Arabian peninsula.
Uh, Qatar just announced a $2 billion fund to invest in Subsaharan Africa. So you look at where the existing trends are. Relativity positive. You look at where there is rapid urbanization. You look at where the countries are amenable to this type of governance reforms, right? You don't want a high degree of political instability because these are 30, 40 year projects.
So you need the kind of security that comes with that, that, that, to, to attract investment. To attract residents to attract businesses over a very long time horizon, but because they need to kind of be able to plant roots and trust that that entity as a, as a unit will be there 10 years, 20 years et cetera.
And so you need to be able to acquire a lot of land and be able to ensure that you can work closely with the local officials as well as the local community, because our cities are they're business projects in the sense that they need to generate a financial return. To attract investment, but there are also political projects in the sense that uh, they need the support of the local community and of the elected officials.
Otherwise they won't get off the ground or can be very easily destroyed in their early phases.
Alex: [00:15:19] So on, on the topic of governance, moving into that a little bit COVID is very much like still at the forefront. It seems. Like, uh, you've had some thoughts on the failures of a pandemic response in this general complacency, if that's the right word to use, especially earlier on what were like the root causes of that, as you see it?
Mark: [00:15:39] That's a big question. Um, I think, I don't know a few things one, right? And this isn't really charter stays rated. Exactly. But it's this general, I would say back of competition. So if you are a company and you become complacent, you will go out of business. The government has the privilege of not going out of business, unless things really, really, really go bad.
And that allows for a much higher degree of complacency too, is we've reached this point of kind of right, like late stage growth where the growth is. It does high anymore. And what happens is insurance groups start fighting over rent. So they create barriers, entry in their interest groups, and then they just fight over the rents.
But the barriers to entry is the kind of, I don't know why that maintains them as we are the experts. Right. And so because of that, they basically disqualify anybody who doesn't have those potentials and expertise. And until there actually is a sufficient. Exogenous shock that serves as a challenge to those expertise.
Everybody kind of buys it because the system appears to be working. So for example, if you look at like who was rated top in pandemic response, right? The U S was almost ready to top in pandemic response, despite the fact that in retrospect, that was obviously not true, right? Our biomedical response was extremely good.
We developed. Vaccines extremely quickly. We threw a bunch of money at it and we develop new vaccines that might help, like they have role in there. They're not already MRA, malaria vaccines getting tested. So this might be actually a substantial boost to kind of uh, biotech innovation. But at the same time, if you look just right in March of last year and late March of last year, you had senior public officials in the U S saying, don't wear a mask.
And then it flipped you had Uh, we did not do for our associates first. We did not do a human challenge trials. You had major parts of the media. This was in February of last year when COVID was starting to appear in the U S of like, and New York health officials, those tweeting like Oh, like anti racist, anti Asian racism is the real virus.
Like come celebrate the Asian new year. And it's just like, okay, there's a deadly virus out. Like maybe the deadly virus is actually the real virus, not like racism. Uh, and, and so I think it was this, this kind of one lack of competition and lack of actually having. Their expertise, meaningfully questioned.
And then two, I think it was also right this burgeoning culture war where most of the people in the professional class have been to see their, um, Kind of enemy as people in, like, I don't know. In fact I already put like Trumpians yeah, right. The kind of people are typically thought of as low status, rural Trump voters who aren't very smart, et cetera.
And because they saw that population as their primary enemy, they focused all of the report on them rather . Than actually trying to solve the relevant problem on hand.
Alex: [00:18:24] That makes a lot of sense. And if we're taking that from maybe a, a country level down to a state level, or even even a city level, it seems like we're seeing a lot of movement out of places like New York and California into some cities in Texas and Florida a little bit.
Do you see the problem when it comes to inflow and outflow States, cities, whatever else do you see the problem in places people are leaving as being bad regulation or too much regulation, maybe a mix of both?
Mark: [00:18:51] Yeah, I would say a mix of both, at least in the U S it's also taxes to a certain extent. Right.
If you're doing remote work and you're making a few hundred thousand dollars a year, then you want to somewhere nice. And if you have an IPO and you're gonna have a few hundred million dollars, or even a few billion dollars of equity, right? Like then moving to a low tech state, is that early tens of billions of dollars decision.
In addition it's partially regulations in this partially just the. Environment in terms of, if you had, I think, I believe her name is Lorena Gomez, who is, was a a state Senator in California who tweeted out, fuck Elon Musk. Elon Musk responded message received. And then he opens his next factory in Austin.
He moves space X to starbase which was already kind of happening, but you don't want to be people where they are actively antagonistic. I believe it was. AB five, which was the regulation to basically like ban gig workers, which effectively was targeted at Uber and Lyft. And you saw it, they didn't put a lot of thought into it.
They passed it. And then a bunch of journalists realized like, Hey, I'm a journalist, I'm a freelancer now I can't work. And so they've wrote in like an exemption and it was just clearly like a bullshit targeting the tech industry, which is just interesting because it's like, you like the people who are great jobs, you should like the people who are on the forefront, but there is at least in California and particularly in Silicon Valley.
In San Francisco, that's brought anti-tech bias, particularly among the elected elites. That is right. Just makes it a unpleasant place to do to live. You don't want to live somewhere where the political class is actively trying to undermine you. And, and I think in, in. And New York, it's a little bit different.
Like new Yorkers largely made peace with their finance industry. Like they probably had these fights a hundred years ago in the finance industry or 120 years ago. And the finance industry was kind of more in its infancy, but now they kind of, that's a very well established part of New York. So my guess is that part of it is in a pandemic.
Like people like pay higher prices in cities for the amenities in a pandemic. There are no amenities. So you want to move somewhere where it's generally cheaper. And then two is I mean, you are seeing some serious, like quality of life and governance issues in San Francisco. Violent crime appears to be substantially up.
You hear stories about cars getting broken into I've seen people are like there's human feces on the ground. I've seen people shooting up in broad daylight. I, before the pandemic, I was going to walk down market street in the financial district, which is one of the like, right. That is like the main street.
I mean, if it was a Thursday or Friday night at 7:30 PM, so dark, but 7:30 PM. This is not baked. And it was with two of my female friends and they did not want to walk. Because, right. Like they not feel comfortable doing them. And so this is like the technology capital of America in the financial district of it.
And one of the, kind of most, I don't know, dominant streets and women feel unafraid to walk down at 7:30 PM at night on a Thursday or Friday, it's just completely absurd. Right. That's a serious quality of life issue. And in New York you're seeing that like, A little bit, not nearly as much, but like, I think you're starting to get some hints of it.
So there are these like general governing issues that are presenting as well.
Alex: [00:21:54] So inflow outflow, back to charter cities. What's the draw for people? You talked a little bit about taxation before and how, you know, maybe making it a tax Haven, isn't the proper way to go about it, but is it like affordability, employment opportunities, does it depend?
Mark: [00:22:09] So at CCI, we're focused at chart on charter cities, in emerging markets. And for them it's mostly going to be employment opportunities, right? It's the same reason. People from Cuba get on a boat and risk their lives to go in Miami people from Honduras chunk of costs across the desert to try to get to the U S it's because people will do a lot at risk, a lot at a chance of meaningfully improving their lives.
And the idea like the, the, the draw for Turner cities, is this going to offer you and your kids a better future? And you need to be, I think of carefully about how you actually instantiate that. First you typically think you start with an anchor tenant, so figure out what industry. Many low-income countries too are, have resource extraction, but often very little processing or manufacturing, sir, perhaps you set up like processing.
So if they extract Palm oil, then you set up Palm oil across and plants, right. And that gets instead of them doing it unfortunately or South Africa. And you're now doing it in, in the host country. And that gets the basic population five, 10,000 people living there. And then after that, because you have a good governance system, right?
You get the flywheel started, then things start happening. It's easier to register a business. You have a better education system. So you track more people uh, you start targeting other industries. And that, that, that just continues until you grow into a fully functioning city that can hopefully demonstrate to the host country, as well as the region.
Like, Hey, this works, maybe you guys should adopt some of these policies. And, and start implementing these to get things off the ground. Got it.
Alex: [00:23:34] So you wrote this really thought provoking piece on your site. It's called decline is a choice. And if the answer to a lot of our problems, this might be an oversimplification, but if the answer to a lot of our problems is building in the literal sense or the figurative sense, how do we encourage innovation institutionally?
Mark: [00:23:52] Yeah. So I think this is tricky. I think with the charter cities Institute, we've had some success in kind of rethinking what development looks like. I'm also on the board of the new science foundation, which was just launched yesterday, run by Alexi goosy. Who's a, I don't know, for lack of a better way to put, I haven't asked if this is an inappropriate description, but I'll say it a crazy Russian scientists, um, And he is looking at how to reinvent scientific institution.
And so the approach is generally right. You look at what Elon Musk did or the Collison brothers have done with Stripe, right? They want to increase the GDP of the internet. You know, I'm responsible, I'm a multi-planetary civilization. You start with this really, really big goal. And you work your way back and you identify incremental steps and you can do this with the company, or you can do this with a nonprofit, but like, how do you then get these incremental steps if you want to re like reinvent development.
Okay. We want to accelerate the development of charter cities. So what does that look like? And it's like, basically build the ecosystem, identify projects that might not be full charter cities, but our charter seat asks me to have some certain elements. Work with them, build relationships with them, publicize it.
When they hit certain milestones, start building up the understanding of what charter cities are, build that relationship and international development community to leverage their network and their resources for charter cities. And then that builds up momentum that builds up a set of best practices that can be used to implement charter cities with new science it's he is starting with a summer fellowship with, I think like 10 people.
You rent a lab and get them all together. All right. You, you give him a little bit of money. They're all relatively junior in their career. You may allow them to do things that their school there that might not let them Dukes are a little bit more risky, but with higher payoffs, Then you get two or three of them are successful and you see that success within a year.
And then you go back to your spurs and say, look, I'm good at spying coulombic greatness environment, give me more money. You're run again with 30 people. And then you start running in multiple parts of the country. And then right. You might branch out from biology to also food physics or something like that.
Right? Like, I don't know exactly. But that's how you start, right? Like you have this idea and then you start demonstrating proof of concepts to then put pressure on existing institutions to start changing. And you can think of that in a wide variety of, of different, I guess, areas of life. You can think of that in.
The government, like what our foreign policy establishment is broken. Right. If you look at the, like a lot of our generalists that want to stay in Afghanistan and they're like, we need to defend women's rights. And it's like, yes, women's rights are important, but we shouldn't occupy country for generations because of that.
Like we have lost it over it. Yeah. Withdraw. And if you look at, for example, the original cheerleaders of the Iraq war, most of them are in higher positions of power than they were when they were cheerleaders. And that's a sign of a fundamentally broken system, right? When people are majorly involved in our biggest foreign policy mistake in a generation or two.
They should be kicked on the street and working at McDonald's or something like that. And honestly, like working at McDonald's is at least honorable these people. I don't think many of them have that much honor. But ha so how do you actually replace that? You basically need to create a new network within new set of ideas.
So Trump, for all this philosophy, he had certainly very many flaws. He was actually arguably our most kind of isolationist president. And I spacious maybe not the right word, but like non-interventionist right. But he couldn't even staff as administration. And then you look at Obama. Obama was also non-interventionist and in the Atlantic interview, he did, when he left, he prided himself on resisting his advisors, like impulse to go to war it's like, why is he resisting his advisors?
This is like hire advisors who tell him the advice that he needs to hear. Not like you should be resisting your advisors on that margin. And the fact is there just, isn't currently a talent pool of non-intervention as people who can staff administration who can actually form a new coherent foreign policy.
That's not based on kind of. Idiotic impulses that we've had over the last 30 years. And so you need to create that network and then you need to hope for kind of the right opportunity to start putting these people in positions of power. So you can start reforming what the American system looks like.
Alex: [00:27:36] Definitely. So last one, and I guess in, in the same suit, this is sort of a big question, but turning to the future generally. What do you think the urban landscape looks like say 50 years from now? I mean, population seems inevitable, but what are some of the things we need to focus on to get maybe the best possible outcome?
Mark: [00:27:55] Yeah. So that'd be, I guess, book charter cities, again, we're undergoing the last organization in human history. Once this happens once, like people move to cities, de urbanization, it happens, but it's pretty rare. And if the urbanization is happening, we there's much more important things to worry about.
And, and basically if we are able to put institutions and physical infrastructure in place prior to the urbanization, We will get much better outcomes. And if we try to do that post or mutation, post urbanization, it's just much more difficult. And so this is kind of like a order of magnitude change in difficulty where if you do it early, it's much easier to do it later becomes much more difficult.
So we need to think very hard and carefully about doing it now and doing it early or else we're going to be stuck with a kind of massive problem with a lot of people living in very bad conditions with that are very, very difficult to change. Um, and then if we think also about kind of high-income countries, what does that look like?
I mean, I do, we are seeing a move to uh, like a kind of demand for walkable areas. There is increasing evidence that air pollution PM 22.5 is very, very bad. So we will probably see increased restrictions and regulation on cars and maybe the emergence of more next with CFOs. I mean, we're already seeing that.
In in 50 years or up to 20, 50 or 50 years. But either way, by that time, we will almost certainly have self-driving cars. So that will dramatically change the city landscape. You will probably see supersonic jets being commonly used at that point. And that's going to change the urban landscape. It would likely lead to increase the kind of rural up superstar cities, because you'll be able to go from point a to point B without kind of a layover.
So that will increase superstar cities. So I, and I don't know, maybe it's just kind of boring, but my general prediction and this in high-income countries is that cities, the trends of a vast, probably 20 years are going to continue. Right. More superstar cities. Uh, more like, I guess one trend is like less kind of suburbanization and a little bit more density inside, which requires a kind of successful YIMBY movement.
I think the last thing to mention, and this is kind of the, the, the, maybe the wrench, but does like virtual reality or augmented reality have an impact on abomination. And people were talking about this in the two thousands. They were like, Ms. Skype, people are not going to want to like meet in person as much.
We can have more remote work, actually increase the benefits, right. That led to a major move in conferences. And also the rise of superstar cities. Because when people talk to each other on Skype they end up wanting to meet in person because there is just shaking hands and looking somebody in the eye.
Value a valuable human experience. However, it's very easy to imagine. Virtual reality, augmented reality, getting specialty good that actually serves as a substitute and not a compliment to in-person. And if that happens that we might see a little bit of Deere realization as people move and choose to live in cities by, um, with different kinds of criteria rather than bigness.
So one paper I saw recently. Is that a lot of like right. Power couples and economics. This is the two body problem where if you have two economists at where do they decide, how do they decide where to live? And they almost always end up in a city because they need a labor market where both of them can apply their skills.
And if they're both quite talented, then it has to be barged. Right? If you have two people, like, I don't know, an economist and a physicist. They're not going to find jobs in a small town. They might find jobs in like New York or foster in DC or whatever. But with remote work, even if one of them can remote work, right.
That becomes then much easier because that opens up a huge range of new alternatives. And it's, it's quite easy. Like there, I find myself, I prefer working in person, but then if you have a spouse, Right. Like you can remote work or maybe you can remote work that becomes a substantial change in the dynamics of where you look forward to find a home.
And that, that trend also could continue to set. It's just, I don't know, jumble of a lot of different trends.
Alex: [00:31:43] Wow, that time just flew by. But you know, I know you're a busy guy, so I really appreciate appreciate you doing this. This was awesome.
Mark: Sure. Yeah. Thanks for inviting me and have a good afternoon.
Alex: You too.