Time to Invest in Polish Real Estate?

DISCLAIMER: I am probably the last person you should listen to for advice about major investments. Please do lots and lots of your own research before buying anything big. Please take this post in the entertaining thought experiment style it is intended.

I’d like to start with an interesting story about Poland’s most famous daughter, Marie Curie, and her family:

1927 Solvay Conference. Marie is in the first row, between M. Planck and H. A. Lorentz

Marie was born in 1867 in what was then the Russian part of partitioned Poland. (Russia, Prussia, and Austria had carved up Poland into pieces back in the 1700s.) Her mother, father and grandfather were teachers–unsurprisingly, her father taught math and science. When the Russians decided to shut down science laboratories in Polish highschools, her father simply brought all of his equipment home and taught his kids how to use it instead.

Because of the Russian occupation and interference in the local schools, the Poles began operating their own, underground university known as the Flying University (there’s a name for you). As a woman, Marie couldn’t attend the official colleges in Warsaw, but was accepted to Flying U.

Marie’s sister wanted to study medicine in Paris, but unfortunately their parents and grandparents had lost all their money supporting Polish nationalist uprisings, and the girls were left to support themselves. So Marie and her sister had an agreement: Marie would work and send money to Paris while her sister studied, and then her sister would work and send Marie money while she finished her education.

Marie went to work as a governess for some distant relatives, and fell in love with one of the young men of the family, Kazimierz Żorawski, future mathematician. Unfortunately for the starry-eyed couple, his parents rejected the match on the grounds that Marie was penniless.

Żorawski went on to become a professor of mathematics at Krakow University and later Warsaw Polytecnic. Marie went to Paris, married Pierre Curie, won two Nobel prizes, and founded the Radium Institute at Warsaw Polytecnic. A statue of Marie was erected here, and as an old man, Żorawski would come and sit before the image of his young love.

You didn't seriously think we'd make it through this post without a polandball comic, did you?Poland has had a rough couple of centuries. According to Wikipedia:

An unsuccessful attempt at defending Poland’s sovereignty took place in 1794 during the Kościuszko Uprising, where a popular and distinguished general Tadeusz Kosciuszko, who had several years earlier served under Washington in the American Revolutionary War, led Polish insurrectionists against numerically superior Russian forces. Despite the victory at the Battle of Racławice, his ultimate defeat ended Poland’s independent existence for 123 years.[57]

Poland was unfortunately situated for both WWI and WWII, losing 1/5th of its population in the latter. The aftermath–occupation by the Soviets–wasn’t much better, as Ian Frazier recounts in his book, Travels in Siberia:

As Russia retook Poland, many Poles once again wound up in the gulag. Some who had lived through the Nazi occupation said Hitler was nothing compared to this, and they now wished they had fought on Hitler’s side. A prisoner who had survived Dachau hanged himself when he was shipped to Kolyma. Gulag prisoners who knew the novel Uncle Tom’s Cabin regretted that fate had put them in thsi time and place, and not in slavery in the American South, a hundred years before. As Negro slaves, they reasoned, at least they would have lived someplace warm, and would have been whipped and branded but not worked to death outright. In 1945, news reached the camps that the United States now possessed the atomic bomb. According to Solzhenitsyn, this unexpected development gave hope to many prisoners, who began to pray for atomic war.

But despite all of these troubles, Poland remains one of the world’s better countries–it’s ranked 36th out of 188 nations on the Human Development Index, and has an average IQ of 99, the same as its neighbors, Germany and Finland.

Despite this, Poland is ranked only 68th in per capita GDP ($27,700, lower than Puerto Rico, which isn’t even a country,) and has had a net negative migration rate (that is, more people have left than arrived) for most of the past 60 years. (Poland lost a net of almost 74,000 in 2015, most of them to other EU countries.)

In sum, Poland is a country with high human capital whose economy was probably artificially depressed by Communism, but has been steadily improving since 1990.

Net immigration increases the number of people in a country*, putting pressure on the local housing market and raising land prices. Net emigration decreases pressure on housing, leading to lower prices.

*Assuming, of course, that fertility rates are not collapsing. Poland’s fertility rate is slightly lower than Japan’s.

Poles have emigrated to countries like Germany and the UK because of their stronger economies, but if Poland’s economy continues to improve relative to the rest of Europe, Brexit goes forward, etc., Poland may become a more attractive employment destination, attracting back its migrant diaspora.

All of which leads me to suspect that Polish land is probably undervalued relative to places with similar long-term potential.

 

Predictions for the Political Future

Looking back to 2005, I wonder what I would have predicted for the political trends of 2015. Of course it is tempting to inflate my success score (I did sort of predict 9/11 a couple of years before it happened, so at least I have that,) but here’s my attempt to be honest:

1. A variety of issues like abortion and the Middle East will remain prominent. Check.

2. Gay marriage is guaranteed, sooner or later. Check.

3. Transgender issues will never break into the mainstream, because there just aren’t that many trans people. Nope. Transgender issues have become oddly prominent.

4. Increased concern for the environment/global warming/alternative energy/peak oil. Nope.

5. Democrats focus on poverty/labor issues of the Occupy Wall Street variety. Nope. That’s been abandoned for anti-racism.

6. Internet feminism will be a growing political force. I give this a sort-of check, because internet feminism actually got much bigger than I expected, and then slid into anti-racism, which I didn’t expect. I should have, though. People were talking about it.

7. I was concerned at the time with over-criminalization/over-regulation destroying the country, but wouldn’t have predicted that anyone but me would care about these things. I’ve since discovered that I can always bond with my Republican relatives by complaining about over-regulation of small  businesses, and the Black Lives Matter movement has at least noticed some aspects of the over-criminalization.

8. I did not predict the demise of libertarianism due to the rise of SJWs pushing anti-racism on the left and the the alt-right / neoreaction response.

9. I did not see ISIS coming.

 

So I got to thinking, what do I predict for the future? Can I do better? I’m going to write down my predictions for 2025 now, so I can check back in a decade:

1. The government attempts to cut prison population by, say, 25%, between now and then. This is not to say that they will succeed, but that this will be their goal. The easiest methods will be paroling/releasing inmates, cutting sentences, and legalizing drugs, but there will also be some push to just arrest fewer people.

2. In a related move, schools will attempt to equalize punishments by race. It won’t work.

3. Large numbers of African-Americans moved out of slums in places like Detroit and into suburban neighborhoods in places like Seattle. This will result in lower crime in Detroit and higher crime in Seattle, triggering more white flight.

3. By 2025, government will have begun reversing its imprisonment policy to deal with a 1980s-style crime wave.

4. California’s budget will eventually collapse, though probably not within ten years. A large % of people in the state will be working (and living) “under the table”, so to speak, both to protect their wages from taxation and because complying with tax laws and other regulations is a huge pain in the butt. Those who can’t work under the table will increasingly move out, driving up land prices/rents in nearby states. Without taxes, there will be no money for pensions, police, schools, infrastructure, etc. Collapse will end with the Feds moving in to take over the place and sort out the mess.

5. More generally, over-regulation and taxation will continue placing an enormous burden on businesses, especially small businesses, continuing the ossification trend that will make America an increasingly unattractive place to do business.

6. Sometime in the next decade, a 2008-style economic downturn and aftermath; pensions collapse generally.

Looking further out:

7. Increased violence in “El Norte” as Latin American drug and gang violence becomes rooted in the area.

8. The % of whites with IQs over 140 continues to decline; black IQ appears to be declining faster. High-IQ Americans will increasingly come from immigrant backgrounds.

9. Abortion, the Middle East, etc., will continue being issues just like they are now.

10. The Left fractures as Muslim groups grow powerful enough to insist on toleration for cousin marriage, polygamy, and Sharia law, and no longer support leftist ideological things like female empowerment, abortion, or gay marriage. The necessary compromises will make no one happy.

11. The current SJW-style racial narrative will move on to other topics as the growing Hispanic population starts throwing its weight around. Hispanics aren’t big on voting, but when they do vote, they’ll make a pretty solid ethnic block, and they won’t really care about black issues. Blacks will have trouble competing with Hispanics on the labor market and will get displaced from Hispanic neighborhoods. Hispanics will not have the same fear of looking racist in their dealings with blacks as whites have, and will be pretty open about this.

12. NRx as we know it will probably also be gone, as prominent bloggers get bored and move on to other projects.

 

ETA: I meant to ask: What are your predictions?