The SpaceX IPO, valuing a motley collection of dubious business at over a trillion dollars, marks the abandonment of the Efficient (financial) Markets Hypothesis, one of the zombie ideas I criticised in the wake of the Global Financial Crisis. Not only do financial markets fail in the task of valuing assets accurately, but the institutional structures that are supposed to make them work have given up trying.

This was prefigured by the rise of Bitcoin and other forms of crypto. Revealingly, no one any longer uses the term “cryptocurrency” – these assets are never used as currency in ordinary transactions, and even their illicit uses seem to have faded. Rather, Bitcoin is valuable solely because it is valued. As I pointed out back in 2018, (free from paywall here) once this logic is accepted, it can be applied to financial assets more generally, and particularly to stock markets.

For quite a while, financial institutions like Goldman Sachs held out against crypto. But the rewards became too great to ignore and the crypto industry too politically powerful. Crypto moved from the netherworld it once inhabited to the respectability of exchange traded funds.

The extension to stock markets has been happening for a while, with meme stocks like GameStop, and then with massive valuations of AI stocks. But meme stocks are a sideshow, and the future of AI is unclear enough that it’s possible to make a case.

It’s only with SpaceX that we can see the complete abandonment of any pretence at rationality. In the case of SpaceX, I was struck by Dave Karpf’s observation that Musk’s wealth in 2020 was “only” $24 billion. Everything of value in his career (Tesla cars, batteries, Starlink) had been achieved by then, and everything he has touched since then has been a disaster (Xitter, Cybertruck, robotaxis, Starship). Yet his wealth has multiplied 50 times over).

In support of the IPO, Goldman Sachs has put its name to the claim that the company will grow 100 times over by 2030. This is patently absurd. Nothing in Musk’s ragbag of assets has this kind of potential.

Starlink, the pre-2020 bit of the business, has been successful enough, but satellite-based Internet is never going to be huge. And there is plenty of downside risk, as Europe and China try to develop alternatives. Given that Starlink’s satellites have a life of only five years, the business could well be in sharp decline by 2030. Starship, by contrast, seems unlikely to succeed in getting humans to the Moon, and won’t make much money even if it does. Talk of Mars, data centres etc is a joke.

The AI part of the business is barely even a joke. Not only is Grok an also-ran in the LLM stakes, but Musks’ promotion of racism, terrorist riots and sex crimes leaves him, and the company open to huge liability, at least in Europe, where Trump can’t protect him.

The comprehensive corruption of the financial system confirms me in the view that the USA is one big grift. Not just the financial system, but politically and militarily as well. But that’s a topic for another day.

One my betes noires has been in the news lately. Jonathan Haidt has been annoying me since at least 2012, when I was critical of his bothsidesism on the culture wars.

At the time, he was a concern troll, posing as a liberal worried about other liberals who were, he claimed, misunderstanding Republicans. Whereas liberals thought of Republicans as bigots and misogynists, concerned with preserving their own position in racial and gender hierarchies, Haidt explained that they actually had their own set of values, based on order, purity, honour and loyalty. The wheels started falling off that one when Donald Trump, the antithesis of all of these things, came along and received the unqualified support of the supposed believers in purity.

Haidt responded by reinventing himself a free speech advocate, concerned about cancel culture and the coddling of young minds. He hung out on the “Intellectual Dark Web” with Bari Weiss and Stephen Pinker. Now that Weiss is busy suppressing reporting of Trump’s crimes, the IDW appears to have shut up shop.


Haidt’s next reinvention was an almost complete backflip. Despite having no relevant research background (as discussed his previous focus was on adult voters, followed by a shift to scolding college students) he suddenly became an authority on the effects of smartphone use on teenagers. His concerns about freedom of speech suddenly went out the window, replaced by a fear that the speech teens encountered on their phones was making them depressed as miserable.

Haidt’s work writings on this topic inspired the Australian government to pass legislation aimed at banning access to social media platforms for people under 16. It’s been mostly ineffective, but for the minority of kids who have left social media, a notable impact has been reduced access to news.

Possibly because recognition of this failure is spreading, Haidt has gone back to the “coddling” theme in a commencement address at NYU, for which he was roundly booed. Haidt appears not to have noticed that, far from protecting students from views that might upset them, NYU is busy suppressing speech by students that offends the administrators and of course the Trump Administration.

The kind of concerned punditry of which Haidt is an exponent never goes out of style, even if the topics of concern change from time to time. Given his ability to leap from one topic to the next with a fine disregard for consistency, I expect he will be around to annoy me for a long time to come.

Among other things, the unlamented former autocrat Viktor Orban was one of the leading proponents of pro-natalist policies, and more open than most about the racist underpinnings of his view. However, like others who have tried to raise birth rates, he wasn’t particularly successful. To understand why not, it’s useful to consider the question: how many babies do we want. In particular, since their choices are the relevant ones, how many babies do young women want?

Photo: Filip Mroz via Unsplash

Three distinct concepts are relevant here: the ideal number (a normative answer to a survey question), the intended/expected number (what respondents plan to have or think they will actually have), and the actual number (completed fertility). These diverge in systematic and informative ways.

Start with the ideal. Across most high-income countries, around 50-60% of young women report an ideal family size of two children, with a smaller group preferring 3 and another, smaller group preferring 1, Only a small number see childlessness, or large families of four or more children, as ideal. This has been relatively stable for decades, despite large changes in education, labour markets and gender roles. In Australia, Europe and North America, the modal response is still two, with a minority favouring one or three, and very few choosing zero as an ideal. However, there has been a gradual decline in the mean ideal family size over time, with more women reporting an ideal size of one or zero.

Next, consider intentions When young women are asked how many children they intend (or expect) to have, the number is consistently lower than the ideal, typically by about 0.2–0.5 children on average, and the gap is larger for the youngest cohorts. That is, as ideal family size has declined, expected family size has declined slightly faster. Most importantly it has been below replacement, at least since the 1990s. Expectations are also more sensitive to circumstances. They fall when housing costs rise, when career paths become more uncertain, and when partnership formation is delayed. In other words, expectations embed a constraint set: they are a forecast conditional on anticipated economic and social conditions.

Two further patterns are worth noting. First, the gap between ideal and expected fertility is larger for more educated young women, reflecting steeper career–family trade-offs and later partnering. Second, the share of young women expecting to remain childless has risen, even though very few state childlessness as an ideal.

Finally, actual fertility. This is where the big drops have shown up. Completed fertility for recent cohorts in most OECD countries is now around 1.5–1.7 children per woman, and period TFRs are often lower still, especially after the post-GFC and pandemic shocks. Australia has moved from around replacement (near 2) in the late 2000s to roughly 1.6 or below in recent years. For women currently in their twenties, completed fertility will almost certainly end up below both their stated ideals and their early expectations, unless there is a substantial reversal of current trends. For a while it seemed as if births were merely being postponed, but this does not seem to be be the case any more.

In short, when young women are asked how many babies they want, they still mostly say two. When asked what they expect, they say something less. And what actually happens is less again. For policy, the distinction matters. If the objective were to raise fertility, measures that relax constraints—housing affordability, childcare, predictable career paths, and support for combining work and parenting—are the natural levers.

Changing society to make it more child-friendly is difficult but feasible. Given the massive monetary and labour cost of raising children, no subsidy is going to have a significant effect on ideal or planned numbers. But the removal of constraints like the absence of childcare can reduce the gap between palnned and actual births.

Other constraints are harder to fix. Most importantly, plans for having children commonly anticipate a stable life partnership, which cannot be guaranteed. The same is true of fertility problems. Finally, for some parents, the experience of having a first child is traumatic as a result of health problems, postpartum depression or the failure of the transformative experience of parenthood to offset the loss of freedom it entails. The result, often, is a decision to stop at oen

With better institutions and economic policy, it might be psssible to reverse the increase in the gap between intentions and outcomes that has occurred this century. That might raise births by between 0.2 to 0.3 children per woman. That’s not enough to push fertility above replacement. But it would rule out the collapse scenario we see in places like South Korea, where the combination of patriarchal norms and a modern economy makes childbearing an unappealing choice for most young women.