Matthew Yglesias runs a Substack called Slow Boring where he routes every problem in American political economy through zoning reform. His latest piece asks why Silicon Valley hasn’t done more for most Americans, and his answer is: not enough apartments near Cupertino.
Facepalm.
Paul Krugman had pointed out that tech generates a negative externality by producing billionaires who corrupt democracy. True.
Yglesias called this “puzzling” and used it to change the subject to housing density.
The problem is that Yglesias doesn’t seem to know the history of the examples he’s citing. Yup, I said it. HISTORY. Pull up a chair because I’m about to open a can of whoop-history on Yglesias.
He invokes Chicago in 1900, Detroit in 1920, the California Gold Rush, and Shenzhen. My God. He pulls all of that to our attention without appearing to notice that every one of these is a well-documented case study in the exact failure mode he’s ignoring.
Imagine being the guy who says Germany 1938 is a great example of how broken windows can fuel the economy.
Yeah, that bad.
The Fabian Society was founded in 1884 specifically because the industrial boomtowns Yglesias romanticizes were producing spectacular wealth for owners and squalor for everyone else. It’s like Krugman was so right that he didn’t even have to use history to know it, but if he had it would cement his point. Meanwhile Yglesias responds by walking through a minefield of his own examples and stepping on every one.
Here’s what Yglesias says, and what Fabians discovered over a century ago. Like telling you water is wet, I present the hopefully obvious.
What Yglesias Says vs. What the Fabians Would Say
| Dimension | Yglesias (Slow Boring) | Fabian Critique |
|---|---|---|
| Why hasn’t tech helped most Americans? | Housing constraints prevented a megacity from forming around Silicon Valley | Private capture of publicly-funded innovation prevented democratic benefit |
| Proposed mechanism for shared prosperity | Build denser housing near tech campuses so service workers can “sell shovels during the gold rush” | Graduated taxation, public ownership stakes, municipal enterprise, democratic governance of technology |
| Role of the state | Get out of the way — remove zoning restrictions | Capture monopoly rents, fund universal public goods, regulate concentrated power |
| Who creates value? | Tech founders and employees, radiating outward through spending | Public universities, government-funded research, workers, infrastructure — tech founders captured value others created |
| What “the boom” looks like | Population growth, construction, rising property values — Shenzhen, 1900s Chicago | Rising wages, universal healthcare, public education, democratic workplace governance — postwar Britain |
| The billionaire question | Not addressed — Krugman’s point about political corruption is replaced with a housing supply argument | Billionaires are a policy failure. Concentrated wealth is concentrated political power. That’s the point. |
| Historical model invoked | Industrial-era boomtowns (Chicago, Detroit) — workers flocking to capital | The very boomtowns that produced child labor, tenement squalor, and Pinkertons — prompting the Fabian movement in the first place |
| Utopian vision | Apartment towers in Marin County (cites Star Trek: Picard) | Star Trek’s actual economy: no money, no landlords, replicators are public goods |
| What’s invisible | Ownership. Power. Democratic control. Who decides what gets built and for whom. | Nothing — these are the starting questions |
| Treatment of Krugman’s argument | “Puzzling assertion” — dismisses the political corruption claim and pivots to housing | Krugman understated it. The corruption isn’t an externality. It’s the business model. |
If that’s not enough, let me just reiterate Shenzhen is government-owned land, state-directed investment, party-controlled development. It’s literally the Fabian model, as the state captured the land value. Yglesias inverts reality and cites it as his evidence for removing zoning restrictions.
Similarly, “selling shovels during the gold rush” is famous precisely because the miners with shovels went broke. It proves Yglesias wrong. Levi Strauss and Sam Brannan got rich by being smart while hard workers went broke and died as nobodies, sure. But the real lesson is in the cruelty, like the man who built the university at the center of Silicon Valley who got rich through government fraud and genocide. That’s the real Stanford harm Yglesias is romanticizing, and it’s still there.
But what do I know. I’m not on Substack.