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01 / 05
Open Societies and Closed Minds | Podcast Highlights

Blog Post | Democracy & Autocracy

Open Societies and Closed Minds | Podcast Highlights

Marian Tupy interviews Matt Johnson about historicism, progress, and how tribalism and the “desire for recognition” are testing the foundations of open societies.

Listen to the podcast or read the full transcript here.

Today, I’m very lucky to speak to Matt Johnson, who recently had a fascinating essay in Quillette titled “The Open Society and Its New Enemies: What Karl Popper’s classic can teach us about the threats facing democracies today.”

So Matt, could you tell us who Karl Popper was and what this big book is about?

Popper is mainly known for his scientific work, especially his ideas around falsifiability. He published a book called The Open Society and Its Enemies in 1945. He started writing it right after the Nazi annexation of Austria. It’s a very powerful and clarifying set of principles for anybody interested in liberal democracy and the broader project of building open societies around the world today.

So, why talk about liberal democracies and openness? It is our conjecture here at Human Progress that openness is very important. Have you ever thought or written about the connection between openness, liberal democracy, and the scope and speed of human progress?

That’s been a major theme of my work for a long time. I think there is a strong connection between the development of liberal democracy and open societies throughout the 20th century and human progress. Liberal democracy, unlike its authoritarian rivals, has error correction mechanisms built in. It allows for pluralism in society. It allows people to cooperate without the threat of violence or coercion. There’s also the economic element: Liberal democracy facilitates free trade and open exchange because it’s rule-based and law-bound, which are important conditions for economic development.

Human Progress also assumes that there is some directionality in history. We can say that living in 2025 is better than living in 1025 or 25 AD. But you begin your essay by raising the dangers of what Karl Popper called historicism, or a belief in the inevitability of certain political or economic outcomes. Can you unwind that for us? What is the difference between acknowledging the directionality of human history and historicism?

Popper regarded historicism as extremely dangerous because it treats human beings as a means to an end. If you already know what you’re working toward—a glorious worker state or some other utopia—then it doesn’t matter how much pain you have to inflict in the meantime. You’re not treating your citizens as ends whose rights must be protected; you’re treating them as raw material, as characters in this grand historical story.

The second concern is that historicism is anti-scientific because you can hammer any existing data into a form that fits your historicist prophecy.

Marx wrote that the unfolding of history is inevitable. In his view, leaders were just responsible for making that unavoidable transition easier. That’s the central conceit of historicism. If you take a Popperian view, you’re much more modest. You have to ground every policy in empirical reality. You have to adjust when things don’t work. You’re not just birthing a new paradigm you already know everything about. You don’t know what the future holds.

Stalin would say, anytime there was a setback, that it was all part of the same plan. It was all just globalist saboteurs attacking the Soviet Union, or it was some part of the grand historical unfolding that moving toward the dictatorship of the proletariat. There’s no sense in which new information can change the course of a government with historicist ideas.

That differs from a general idea of progress. We have a lot of economic data that suggests that people have escaped poverty at an incredible rate since the middle of the 20th century. We’ve seen democratization on a vast scale around the world. We’ve seen interstate relations become much more tranquil and peaceful over the past several decades. I mean, the idea of Germany and France fighting a war now is pretty much inconceivable to most people. That’s a huge historical victory, it’s unprecedented in the history of Western Europe.

So, there are good reasons to believe that we’ve progressed. And that’s the core difference between the observation and acknowledgment of progress and historicism, which is much less grounded in empirical reality.

Right. The way I understand human progress is backward-looking. We can say that we are richer than we were in the past. Fewer women die in childbirth. Fewer infants die. We have fewer casualties in wars, et cetera. But we don’t know where we are going.

Yeah, absolutely. There were moments during the Cold War that could have plunged us into nuclear war. It makes no sense to try to cram every idea into some existing paradigm or prophecy. All we can do is incrementally move toward a better world.

This brings us to another big name in your piece: Frank Fukuyama. Tell me how you read Fukuyama.

Fukuyama is perhaps the most misread political science writer of our time. There are countless lazy journalists who want to add intellectual heft to their article about some new crisis, and they’ll say, “well, it turns out Fukuyama was wrong. There are still bad things happening in the world.” That’s a fundamental misreading of Fukuyama’s argument. He never said that bad things would stop happening. He never said there would be an end to war, poverty, or political upheaval. His argument was that liberal capitalist democracy is the most sustainable political and economic system, that it had proven itself against the great ideological competitors in the 20th century, and that it would continue to do so in the future.

I think it’s still a live thesis, it hasn’t been proven or disproven. I suppose if the entire world collapsed into totalitarianism and remained that way, then yeah, Fukuyama was wrong. But right now, there’s still a vibrant democratic world competing against the authoritarian world, and I think that liberal democracy will continue to outperform.

You use a phrase in the essay I didn’t quite understand: “the desire for recognition.” What does it mean, and why is it important to Fukuyama?

The desire for recognition is the acknowledgment that human desires go beyond material concerns. We want to be treated as individuals with worth and agency, and we are willing to sacrifice ourselves for purely abstract goals. Liberal democracies are the only systems so far that have met the desire for recognition on a vast scale. Liberal democracies treat people as autonomous, rational ends in themselves, unlike dictatorships, which treat people as expendable, and that’s one of the reasons why liberal democracy has lasted as long as it has.

However, there’s a dark side. Because liberal democracy enables pluralism, people can believe whatever they want religiously and go down whatever political rabbit holes they want to. And, oftentimes, when you have the freedom to join these other tribes, you find yourself more committed to those tribes than to the overall society. If you’re a very serious Christian nationalist, you might want society organized along the lines of the Ten Commandments because that, in your view, is the foundation of morality. So, pluralism, which is one of the strengths of liberal democracy, also creates constant threats that liberal democracy has to navigate.

I noticed in your essay that you are not too concerned. You note that democracy is not in full retreat and that, if you look at the numbers, things are not as dire as they seem. What is the argument?

If you just read annual reports from Freedom House, you would think that we’re on our way to global authoritarianism. However, if you take a longer historical view, even just 80 years versus 20 years, the trend line is still dramatically in favor of liberal democracies. It’s still an amazing historical achievement. It’s getting rolled back, but in the grand sweep of history, it’s getting rolled back on the margins.

Still, it’s a dangerous and frightening trend. And you’re in a dangerous place when you see a country like the United States electing a president who is expressly hostile toward the exchange of power after four years. So, the threats to democracy are real, but we need to have some historical perspective.

So, we are more liberally democratic than we were 40 years ago, but something has happened in the last 15 to 20 years. Some of the trust and belief in liberal democracy has eroded.

How is that connected to the issue of recognition?

In the United States, if you look at just the past five or six years, there has been a dramatic shift toward identity politics, which is a form of the desire for recognition.

On the left, there was an explosion of wokeness, especially in 2020, where there was a lot of authoritarianism. People were shouted down for fairly anodyne comments, and editors were churned out of their roles. And on the right, there’s this sense that native-born Americans are more completely American than other people. All of these things are forms of identity politics, and they privilege one group over another and drive people away from a universal conception of citizenship. That’s one of the big reasons why people have become less committed to pluralism and the classic American idea of E pluribus unum.

Have you ever thought about why, specifically after 2012, there was this massive outpouring of wokeness and identity politics? Some people on the right suggest that this is because America has begun to lose religion, and, as a consequence, people are seeking recognition in politics.

I think it could be a consequence of the decline of religion. I’ve written a lot about what many people regard as a crisis of meaning in Western liberal democracies. I think, to some extent, that crisis is overblown. Many people don’t need to have some sort of superstructure or belief system that goes beyond humanism or their commitment to liberalism or what have you.

However, I also think that we’re inclined toward religious belief. We search for things to worship. People don’t really want to create their own belief systems; they would rather go out there and pick a structure off the shelf. For some, it’s Catholicism or Protestantism, and for others, it’s Wokeism or white identity politics. And there were elements of the woke explosion that seemed deeply religious. People talked about original sin and literally fell on their knees.

We also live in an era that has been, by historical standards, extremely peaceful and prosperous, and I think Fukuyama is right that people search for things to fight over. The more prosperous your society is, the more you’ll be incensed by minor inequalities or slights. The complaints you hear from people today would be baffling to people one hundred years ago.

I also think the desire for recognition gets re-normed all the time. It doesn’t really matter how much your aggregate conditions have improved; when new people come into the world, they have a set of expectations based on their surroundings. And it’s a well-established psychological principle that people are less concerned about their absolute level of well-being than their well-being relative to their neighbors. If you see your neighbor has a bigger house or bigger boat, you feel like you’ve been cheated. And this is also the language that Donald Trump uses. It’s very zero-sum, and he traffics in this idea that everything is horrible.

You raised a subject that I’m very interested in, which is the crisis of meaning. I don’t know what to make of it. Everybody, including people I admire and respect, seems to think there is a crisis of meaning, but I don’t know what that means.

Is there more of a crisis of meaning today than there was 100 years ago or even 50 years ago? And what does it really mean? Have you thought about this issue?

You’re right to question where this claim comes from. How can people who claim there is a crisis of meaning see inside the minds of the people who say that they don’t need religion to live a meaningful life? There’s something extremely presumptuous there, and I’m not sure how it’s supposed to be quantified.

People say, well, look at the explosion of conspiracism and pseudoscience. And there are people who’ve become interested in astrology and things like that. But humanity has been crammed with pseudoscience and superstition for as long as we’ve been around. It’s very difficult to compare Western societies today to the way they were a few hundred years ago when people were killed for blasphemy and witchcraft.

And look at what our societies have accomplished in living memory. Look at the vast increase in material well-being, the vast improvements in life expectancy, literacy, everything you can imagine. I find all that very inspiring. I think if we start talking about democracy and capitalism in that grander historical context, then maybe we can make some inroads against the cynicism and the nihilism that have taken root.

Science | Agriculture

New Law Lets EU More Quickly Greenlight Gene-Edited Crops

“In a long-awaited step, the European Parliament yesterday passed a law that allows the expedited approval of many gene-edited crops without the rigorous review required for traditional transgenic varieties…

Scientists and seed companies hope the law will lead to faster adoption of crops with improved disease resistance, heat tolerance, and nutrition…

Under the rules, as finalized this week, approval will be faster for crops whose gene edit seems modest enough that it could have been made through conventional breeding—a simple base change in an existing gene, for example, rather than the addition a nonplant gene. Stricter oversight will remain for transgenic engineering or more substantial gene editing.”

From Science.

The Economist | Democracy & Autocracy

Global Democracy Is in Better Shape than You Think

“Grumbling about the health of democracy can sound abstract. But its decline shows up in wars, coups, contested elections and curbs on civil liberties across the world. EIU, our sister organisation, has tracked that slide since 2006. But the latest update to its democracy index suggests a modest break in the trend: the scores of nearly three-quarters of countries held steady or improved over the past year, and the global index rose by 0.02 points—one of the biggest increases since 2012…

The most improved region was Latin America and the Caribbean. After nine years of decline, scores rose in more than half the region’s countries, helped by higher political participation. That trend may happen elsewhere, too. Asia and sub-Saharan Africa have young populations, and recent protests in Nepal, Kenya and Madagascar have drawn large numbers into politics.”

From The Economist.

Blog Post | Housing

The End of the Housing Affordability Crisis

The decline of housing affordability has been a policy choice.

Summary: Americans have enjoyed extraordinary gains in material abundance, yet housing in recent decades stands out as a stubborn exception. Home prices in many parts of the United States have risen faster than incomes, placing growing pressure on renters and first-time buyers. The problem is not an inevitable market failure but the predictable result of supply constraints—especially land-use regulations—that can be reformed to increase affordability.


Americans have seen tremendous advances in the availability and abundance of material goods. As Marian L. Tupy and Gale Pooley from the Cato Institute have shown, the most basic necessity of food became eight times more affordable over the 100 years up to 2019, relative to average wages (the food inflation after 2019 set us back a little bit, but the long-run trends are still quite favorable). This increasing abundance is not limited to food alone, as a wide variety of finished goods have become much more affordable in recent decades.

These positive trends are well known for goods and even some services, such as cosmetic surgeries, but a common objection, both on social media and in real life, is: What about housing? That is a fair question, considering that Americans spend about 25 percent of their pre-tax annual income on housing, which has been a fairly constant share of their income for most of the past 125 years. Given the large share of the budget that housing costs represent, and the failure of housing to decline as a share of the budget as other necessities did, it is worth investigating the problem further.

On housing, the critics do have a point: Housing costs across the US and many other nations have quickly outpaced income growth in recent years. While we shouldn’t be nostalgic for the housing of the 1950s—houses were about half the size of today’s and had fewer amenities we now consider standard, such as air conditioning—nostalgia for the housing of 30 years ago might be justifiable.

Since 1994, two common measures of housing prices, the Case-Shiller Index and the US Department of Housing and Urban Development’s Median Sales Price data, have increased faster than most measures of income, including median family income and average wages. And unlike the change since the 1950s, the recent increase in housing prices can’t be primarily explained by houses getting bigger: The median square footage of new homes sold has increased only 16 percent since 1994 and has even been falling in the past decade.

Even more so, to the extent housing has become more expensive relative to wage growth in recent years, the trend could worsen over the next 30 years—unless we quickly change policy to allow the supply of housing to increase.

It may seem puzzling that housing could remain roughly the same share of income on average in the US, even as housing prices have increased faster than incomes in recent decades. This seeming puzzle can be resolved by thinking about two different kinds of households: renters and homeowners. While renters and homeowners may certainly be different in many ways—renters tend to be younger, poorer, and so on—there is a fundamental difference in how they experience increases in the price of housing. Renters are typically subject to new market-rate rents on a regular basis, often annually. However, if homeowners remain in the same house they are generally insulated from these changes, with only insurance and property taxes possibly increasing annually, not their principal and interest on the mortgage.

These intuitions are borne out in the data. According to the BLS Consumer Expenditure Survey, in 1984 the share of income that renters spent on housing was about 30.4 percent, which rose over the next four decades to 34.4 percent. Homeowners saw the opposite pattern, with the share of their income spent on housing falling from 27.7 percent in 1984 to 22.6 percent in 2024. The overall average has been fairly stable, but the experience of renters and homeowners has diverged.

The Facts of Housing Unaffordability

Historically, the rule of thumb in the United States is to spend no more than 30 percent of income on housing—though as we saw above, on average Americans spend less than that. But averages can obscure cost burdens for some households. According to an analysis of the Census Bureau’s American Community Survey data by Harvard’s Joint Center for Housing Studies (JCHS), fully one-third of US households spent over 30 percent of their income on housing, and 16 percent of households spent over half of their income on housing in 2024. The number of cost-burdened households has been steadily rising in recent years, as the price of both homes and rentals has increased faster than incomes in most of the US.

We can see the problem of rising home values relative to income by looking at another rule of thumb: Home prices should be in the range of three and five times a household’s annual income. In 1994, out of the United States’ 387 metropolitan statistical areas (MSAs), 263 had median home prices that were less than three times the median household income (the data once again come from Harvard’s JCHS). Only 12 MSAs in 1994—mostly in California and Hawaii—had ratios above 5.0.

Fast-forward to 2024, when there were 114 MSAs above the 5.0 ratio of median home prices to income, and those were scattered all over the country. Instead of being in just California and Hawaii, they were also in previously affordable states such as Montana, Wisconsin, North Carolina, and Arkansas. In 2024, the number of MSAs with price-to-income ratios below 3.0 had dwindled to just 32, many of them in the dying Rust Belt. And you don’t even need to go back to 1994 to see the dramatic change. As late as 2019, there were still well over 100 MSAs with a price-to-income ratio below 3.0.

While the majority (241 MSAs) are still within the suggested range of three to five times a household’s income, many are pushing toward the upper end of that range. Given the trend—the median ratio crept up from 2.65 in 1994 to 4.27 in 2024—it is not unreasonable to expect the ratio to continue to increase, absent any changes in policy.

The challenge of housing affordability is not unique to the United States. Using the home-price-to-income ratio from the Organisation for Economic Co-operation and Development (OECD), since 1994 the US saw home prices increase by 20 percent more than incomes did, meaning that housing is more expensive in real terms. Some other countries were in a much worse situation: Australia, Canada, and the United Kingdom all had over 80 percent increases in the ratio of housing prices to income. Not every country followed the same pattern, though. In New Zealand, the price-to-income ratio rose by 126 percent between 1994 and 2021. The ratio declined to 80 percent in 2024. And Japan’s price-to-income ratio fell by 25 percent from 1994 to 2024. However, even Japan has recently seen a modest increase in the ratio, by about 14 percent in the past decade. We’ll look at New Zealand and Japan in more detail below.

The Fix for Housing Affordability

But something can be done. While there have been several political solutions proposed, most of those focused on the demand side, such as subsidies to homeowners or renters. Those kinds of solutions are suboptimal because they increase demand, which will only further increase prices if supply does not also increase. The real problem is on the supply side: There is not enough new housing being built in the places people want to live and of the size people want. What is preventing additional building? In most of the US, it is land-use restrictions such as zoning and other policies that limit the density of new homes. Australia and countries across Europe have implemented similar policies that limit the construction of housing in various ways, primarily in the first half of the 20th century. Price increases did not show up immediately, because in most places restrictions were not binding constraints; there was plenty of land in favorable locations until recent decades.

A major restriction on the supply of housing comes in the form of single-family zoning, which prevents multifamily housing (everything from duplexes to skyscraper apartments) from being built in residential areas. A 2019 analysis by the New York Times found that about 75 percent of residential areas in US cities are reserved for single-family homes. In some cities that figure may reach over 85 percent. Of course, most families probably aspire to eventually own a single-family home, but the zoning laws force most land to be dedicated to this form of housing for everyone. That contributes to making housing unaffordable for many younger families today.

Land-use restrictions limit supply in ways that go beyond merely proscribing that most lots be reserved for single-family homes. For example, regulations will often require lots to be of a minimum size, which is counterproductive because land area is often the most expensive part of the property in urban settings, and the regulation forces families to purchase more land than they want. Regulations also set a maximum amount (a common range is 40–60 percent) of the lot that can be covered by the building itself, essentially forcing homes to have large lawns. Again, many families might want a large lot with a large lawn, but these regulations require it for everyone. The problem is that the less land dedicated to the home itself, the less land there is for other homes in the same area. These rules preclude single-family home types that were common in the past in large American cities, such as row houses or townhouses, which typically occupy most of the small lots they sit on.

Zoning Reforms Work

Would reforming land-use regulations really increase the supply of housing and make it more affordable? The available evidence indeed suggests it would.

One example of reform is New Zealand’s largest city, Auckland, which in 2016 reformed residential zoning to allow for more intensive housing—duplexes, triplexes, townhomes, and the like—on most residential land. This process is referred to as “upzoning.” The results were staggering: As documented in a paper published in the Journal of Urban Economics, construction boomed, with permits doubling in five years. The economists who studied this reform found that rents were 26–33 percent lower than they would have been without it. Rents kept skyrocketing in the rest of New Zealand but stabilized in the parts of Auckland that were upzoned. As mentioned above, New Zealand is notable for seeing its home-price-to-income ratio fall after 2021: As rents stabilized and incomes continued to grow, the ratio declined.

Another example comes from Houston, the fourth-largest city in the US. Houston has long been known as the shining example of a major US city that never adopted citywide zoning, even though some neighborhoods have private deed restrictions that incorporate features similar to zoning. But despite eschewing traditional zoning, Houston still has land-use regulations of various sorts. For example, like most cities, Houston prescribed a minimum lot size of 5,000 square feet. Because people would’ve been paying for more land than they needed, alternate forms of housing such as townhomes were less likely to be built.  First in 1998 and then in 2013, Houston reduced the minimum lot size to just 1,400 square feet in parts of the city. As Mercatus Center economist Emily Hamilton shows, there was a boom in construction following the reforms. Despite adding over 1 million people between 1970 and 2020, Houston still managed to have median home prices below the national average.

If Houston and Auckland demonstrate the power of local reform, Tokyo shows what is possible when a nation treats housing as essential infrastructure rather than a matter set by local competing interest groups. As urban scholar André Sorensen details in The Making of Urban Japan (2002), the country stripped municipalities of the power to block code-compliant projects, effectively turning zoning into a national “right to build” rather than a discretionary local negotiation. The results of this policy choice are astonishing. According to a 2016 analysis by the Financial Times, the city of Tokyo consistently builds more new housing each year than the entire state of California or the whole of England, despite having little empty land to spare. By removing the “veto points” that plague Western cities, Tokyo has achieved the status of a growing, vibrant mega-city where rents have remained flat for decades.

Allowing the Market to Increase Supply Keeps Housing Affordable

As families become richer and the population grows, there is increasing pressure on housing prices in desirable locales. The natural market response to increasing prices is to increase supply. Unfortunately, in much of the US and the rest of the developed world, governments have put artificial barriers in place to prevent this market response. While the housing shortage was created by the political process—through the establishment of zoning and other land-use regulations—the solution does not need to come from governments in the form of subsidizing demand. Instead, to unleash the forces of the market and human initiative, governments need to ease regulations on supply.

Land-use regulations are not the only interference in the market process that makes housing less affordable. Some forms of trade policy and protectionism can also harm home prices. For example, the National Association of Home Builders (NAHB) estimates that recent tariff increases for lumber and other inputs can add at least $10,000 to the average price of a home. Even more costly are building regulations, which the NAHB estimated could exceed $90,000 for a typical home in 2021 and were around 40 percent of the cost of multifamily housing such as apartment buildings. While not all of these regulations could be eliminated immediately, the best thing governments can do to address the affordability issue in housing is to figure out how they can get out of the way.

Bloomberg | Population Growth

Paraguay’s Policies Are Enabling Lower Inflation and Higher Growth

“Wedged between South American heavyweights Argentina and Brazil, Paraguay has long been ignored by the international community. Small, landlocked and poor, it was often seen as just a fly-over country.

So it’s a little surprising — to both those in the capital and in the region — that the country of 6.1 million people is suddenly having a moment…

Though roughly the size of California, Paraguay’s $47 billion economy is about 1% of the Golden State’s. But rapid growth and economic reforms in recent years helped the country win investment-grade credit status from Moody’s Ratings in 2024 and from S&P Global last year…

Last century, it was run as a dictatorship for 35 years — one of the longest in the region, whose fall in 1989 was followed by a tumultuous transition to democracy. But Paraguay’s embrace of sound fiscal and monetary policies after its 2003 financial crisis is now paying off, with single-digit inflation and annual growth averaging around 4% over the past two decades.”

From Bloomberg.