Book review: "Abundance"

In which Ezra Klein and Derek Thompson offer a whole new way of thinking about political economy.

“We aspire to more than parceling out the present.” — Ezra Klein and Derek Thompson

“It doesn’t matter if a cat is black or white, as long as it catches mice.” — Deng Xiaoping

I’ve been waiting a long time for this book. Late in 2021, Ezra Klein wrote a New York Times op-ed titled “The Economic Mistake the Left Is Finally Confronting”, in which he called for a new “supply-side progressivism”. Four months later, Derek Thompson wrote an article in The Atlantic titled “A Simple Plan to Solve All of America’s Problems”, in which he called for an “abundance agenda”. Many people quickly recognized that these were essentially the same idea. Klein and Thompson recognized it too, and teamed up to co-author a book that would serve as a manifesto for this new big idea. Three years later, Abundance has hit the stores. It’s a good book, and you should read it.

The basic thesis of this book is that liberalism — or progressivism, or the left, etc. — has forgotten how to build the things that people want. Every progressive talks about “affordable housing”, and yet blue cities and blue states build so little housing that it becomes unaffordable. Every progressive talks about the need to fight climate change, and yet environmental regulations have made it incredibly difficult to replace fossil fuels with green energy. Many progressives dream about the days when government could accomplish great things, and post maps of imaginary high-speed rail networks crisscrossing the country, yet various progressive policies have hobbled the government’s ability to build infrastructure.

This is a story that many center-left commentators and researchers have been zeroing in on for about a decade now. I myself have written several posts in this vein. It’s also the theme of a recent book called Why Nothing Works, which is on my short list to read — in fact, some reviewers view Abundance and Why Nothing Works as companion volumes. (I strongly recommend this review of both books by Mike Konczal.)

Why have people been zeroing in on the idea of abundance right now, when these problems were already getting severe two or three decades ago? I think there are four basic motivating forces that have all come together at the same time.

First, there’s the housing shortage, and the YIMBY movement that has arisen to fight it. The orthodox progressive alternative — putting ever more onerous requirements on developers to subsidize rental properties, while throwing more public money at the problem — has failed spectacularly. And the anti-gentrification movement, which believes that building new housing raises rents, is simply wrong about how the world works. Economics is what it is, and the only way to make housing more affordable is to build a lot more of it.

Second, there was the experience of Covid. The U.S.’ initial failure to provide its people with enough Covid tests or face masks left the widespread impression of a dysfunctional and failing nation, but the successful effort to create and distribute vaccines very rapidly created a burst of hope that America’s dysfunction could be overcome.

Third, there’s the challenge of climate change. The average American doesn’t place a high priority on climate issues, but progressives do, and the 2010s were filled with grand plans like the Green New Deal that promised big government action to replace fossil fuels with more sustainable technologies. That effort hasn’t entirely failed, but it has proven much harder going than expected. Gallingly for progressives, the biggest thing blocking the greening of American energy hasn’t been the fossil fuel lobby or small-government conservatives, but progressive environmental laws that have allowed NIMBYs to sue solar plants and transmission lines into oblivion.

And finally, there’s the challenge of China, which Americans of both parties have (very belatedly) recognized as a major threat to their way of life. The contrast between China’s ability to build anything and everything with incredible speed and massive scale, and America’s seeming inability to build anything at all, has provided a terrifying wake-up call for progressives and conservatives alike.

Klein and Thompson discuss all of these challenges in detail. Of the five concrete items they want Americans to have more of — housing, green energy, transportation, technological innovation, and health care — four are clearly downstream of those pressing recent challenges.

Why does America not have enough housing, green energy, transportation, technological innovation, or health care? The typical progressive explanation is to blame lack of funding and the obstructionism of small-government conservatives. But while Klein and Thompson do acknowledge that this is sometimes part of the problem, they marshal powerful evidence that an even bigger obstacle is progressives getting in their own way.

Even when the checks do get written, the things progressives want tend not to get built. And even when they do, the cost ends up being so exorbitant that the money doesn’t go very far. California’s high-speed rail, hyped so much over decades and given billions of dollars in funding, still doesn’t exist. “Affordable” (i.e. subsidized) housing often costs half again as much to build as privately built housing. Biden’s programs to build nationwide systems of electric vehicle chargers and rural broadband ended up producing almost zero chargers and almost zero broadband.

Meanwhile, Texas, a red state known for its fiscal conservatism and its libertarian attitudes toward private business, has blown past blue states like California in terms of both green energy and affordable housing — a galling result for any progressive who can bear to look at the data. It’s specifically the well-funded blue-state and Democratic party initiatives that can’t seem to get things done.

Klein and Thompson identify three big categories of progressive policy — all of which were enacted in the early 1970s — that stymie progressive goals.

The first is procedural environmental laws. Instead of just making laws that say “don’t build things that encroach on endangered species”, like the developed nations of Europe and Asia do, America also makes laws that allow anyone and everyone to sue developers to force them to prove in court that they’re following all the relevant substantive laws. This legal requirement — which typically only applies to developments that receive government support — adds huge delays, uncertainties, and costs to most projects, even those that don’t end up getting sued.

The second progressive own goal is contracting requirements for government projects. Sometimes these take the form of requirements that the government use minority-owned or woman-owned contractors. When racial discrimination of this sort is outlawed (such as by a California ballot proposition in 1996), progressives often turn to requirements they think will accomplish the same goal, such as mandates to use small business contractors. But this adds vast amounts to the price tag, because it prevents contractors from achieving the scale needed to drive down costs. Other contracting requirements add costs directly, by forcing developers to provide various expensive community benefits in exchange for government support.

The third thing progressives get wrong is outsourcing. You might think progressives would like to have big-government bureaucrats do everything, but in fact they tend to outsource government functions, either to progressive nonprofits or to consultants. This ends up adding lots of costs, because nonprofits and consultants don’t have any incentive to save the taxpayer money.

Notice how all three of these progressive policies end up hobbling government more than they hobble the private sector. Procedural environmental laws typically only apply to projects that the government has a hand in. Contracting requirements apply specifically to government procurement. And outsourcing robs the government of the state capacity that it needs to be effective.

American progressivism has the reputation of supporting big government, but in practice it often just tries to use government as a pass-through entity to write checks to various “stakeholders”, while preventing it from actually being able to do anything other than write checks. This is a problem that European and Asian countries, with their powerful bureaucracies, simply don’t have to nearly the same extent. America’s progressivism is uniquely libertarian in nature, and its conception of the proper role of the state is uniquely legalistic instead of bureaucratic.

Basically, Klein and Thompson call for a return to the older tradition of a progressive state that gets things done instead of just paying people out — more FDR and less Ralph Nader. But in doing so, they also articulate an alternative vision of political economy — a fundamentally different way of thinking about policy debates in America.

Currently, most American policy debates are framed in terms of ideology — small government versus big government. Instead, Klein and Thompson, like the YIMBY movement that inspired them, want to reframe debates in terms of results. Who cares if new housing is social housing or market-rate housing, as long as people have affordable places to live? Why should cutting burdensome regulation and hiring more bureaucrats be seen as alternatives, instead of complementary approaches? And so on.

This is only one way that Klein and Thompson would have us focus on outputs instead of on inputs. Progressives love to focus on the number of dollars the government spends on high speed rail or green energy; Klein and Thompson would have us focus instead on how much actually gets built as a result of that spending. Progressives obsess over specifying which procedures government and the private sector have to follow whenever they build something; Klein and Thompson would rather we focus on the outcomes instead.

Interestingly, this reminds me a little of the debate over corporate culture in Japan. Traditionally, Japanese managers focus on how many hours their employees are working, instead of how much work they’re actually getting done. The result is astonishingly low levels of white-collar productivity. In recent years, there has been a push to shift to a more results-oriented culture. Klein and Thompson are essentially arguing for something similar in the U.S., but for government instead of big business.

But in any case, this is a huge idea, and one that America desperately needs in these trying times. For half a century, we assumed that America was this golden goose — the greatest industrial nation in the world, blah blah — that would reliably pump out massive amounts of stuff, and that we were all essentially just the custodians of this cornucopia. The fetish for ideology, for proceduralism, and for numbers on a page all reflect this bedrock assumption. But over that half century we forgot about feeding the goose, and now we’re waking up to the fact that we’re not the greatest industrial nation in the world anymore, and all the rules we devised for divvying up that bounty are worse than useless when the bounty dries up.

There is much work still to be done in order to explain the new output-oriented perspective. It has been a long time since progressives thought in those terms. You can see this in some of the critiques that are already being leveled against Klein and Thompson’s book. For example, law professor Zephyr Teachout expresses confusion about whether Klein and Thompson want big-government or small-government solutions:

[T]he vision they lay out could either fit a broad deregulatory agenda, like that of the “shock doctors” of the 1990s, or an FDR vision of rural electrification: both were driven by a hunt for vitality…[I]t would be very easy to take their critique as a muffled call for deregulation writ large; if they are not careful, the ambiguity could be used by big financial interests to make abundance a bible for a Ronald Reagan–style deregulatory juggernaut…There’s some language that casually evokes economies of scale hinting at a Chicago School efficiency and consumer welfare framework of economic productivity, but also some praise of Bidenomics, which directly confronted and rejected the efficiency paradigm…I still can’t tell after reading Abundance whether Klein and Thompson are seeking something fairly small-bore and correct (we need zoning reform) or nontrivial and deeply regressive (we need deregulation) or whether there is room within abundance for anti-monopoly politics and a more full-throated unleashing of American potential.

This confusion vividly reveals how accustomed Teachout is to thinking of policy debates in terms of ideological procedure — big versus small government, industrial policy vs. deregulation, Chicago School versus antitrust, etc. She’s sitting there puzzling over the color of Deng Xiaoping’s cat.

Klein and Thompson’s answer to Teachout’s question is that it’s the wrong question. If deregulation produces more housing, then deregulate. If building more social housing produces more housing, then build more social housing. Why not both? The point is not what legal philosophy you embrace in order to get more housing. The point is that you get the housing.

Progressivism should not be a ritual to be followed; it should be a tool to getting real stuff that makes life better for the middle class and the working class of America. That is the big insight at the core of Abundance, and of the movement behind it. And it’s an insight that legalistic, theory-oriented progressives will take a long time to understand, if they ever do.

But here we get to my main criticism of Klein and Thompson’s book. While they do a good job of explaining their philosophy of government, they are often vague and overly nonconfrontational when it comes to the ideological motivation behind that philosophy.

Throughout their book, Klein and Thompson take great pains to specify that the goals of progressive obstructionism are good, and that they only disagree with the methods. It’s littered with statements like “Every one of these is a worthy goal,” and “Each individual [obstructionist] decision is rational.” But is this really true? If San Francisco outsources critical city functions to politically friendly nonprofits, is that actually a worthy goal, or just corrupt? If federal funding is saddled with onerous reporting requirements that prevent anything from getting done, is that rational, or just plain stupid?

Klein and Thompson never spare the opportunity to pull a punch. I suspect this is because of the personalities of the authors. Thompson — who, I should mention, is the man who got me my first paid op-ed gig, at The Atlantic — is the nicest of nice guys, and not the type to bash the opposition. Klein can be a little more hard-edged at times, but ultimately he’s a big-tent coalition builder — the kind of guy who ends the meeting by saying “OK, so we all know what we need to do.”

But in this case, as at times in the past, Klein has brought a gavel to a knife fight. Progressives didn’t just adopt anti-growth attitudes because they were reacting to the excesses of Robert Moses. Anti-growth attitudes are motivated by more than just NIMBYism and fear of change. There are deep class resentments involved.

Deng Xiaoping — perhaps the most pro-abundance leader of all time — understood this all too well. He famously declared:

Our policy is to let some people and some regions get rich first, in order to drive and help the backward regions, and it is an obligation for the advanced regions to help the backward regions.

He understood that unleashing growth would lead to a few people and places getting spectacularly rich. And he offered the same bargain that abundance liberals in the West have always offered — redistribution as a palliative for inequality.¹

To some, that deal is not good enough. Leftists believe that “every billionaire is a policy failure”, even if the policies that allow a few people to be billionaires result in the masses getting cheap food and clothing. The Warrenite progressives and labor-left types who are stepping up to criticize Abundance are not so extreme, but it’s clear that a lot of their skepticism comes from concern over the relative power of different social classes.

In her book review, Zephyr Teachout offers antitrust as an alternative to the abundance agenda:

If we just…took on the real bureaucratic behemoths of today—the private equity cartels and the monstrous platform monopolies like Google and Meta—we would unlock far more innovation and creativity and vitality…My view then, and now, is that to transform a bloated corporate feudal system into a dynamic one, we need to break up feudal power[.]

Paul Glastris and Nate Weisberg, who have another negative review² of Abundance (also in the Washington Monthly), also label it as a “centrist” alternative to anti-corporatism:

[A]bundance liberals are almost completely silent on the alliance between corporate behemoths and antigovernment politicians that is the biggest threat to the world of plenty they envision, not to mention the republic.

Why are all these critics of abundance liberalism talking nonstop about monopolies and corporate power? It’s not as if Klein and Thompson think antitrust is bad. Part of it is just because these are Elizabeth Warren types who are ensconced in a very small elite thought-bubble, who have somehow convinced themselves that A) bashing corporations is a populist crusade that will lead people flooding into the streets,³ and B) breaking up Google and Meta would somehow make the average American rich.⁴ That’s part of it.

But part of it has got to be class resentment. There are a number of elite progressives who simply don’t like the idea that in an America of growth and abundance, a few techbros would be very rich. Redistribution isn’t enough to make this bargain palatable — rich entrepreneurs must be cut off from the sources of their wealth, through antitrust, regulation, wealth taxes, or whatever tools are available.

Abundance liberalism just doesn’t care about that stuff; zero-sum status struggles like that are simply not a goal. What matters to the abundance agenda is that regular people — the middle class, the working class, and the poor — have a less onerous life. If that means rich people have to give up some of their wealth, then fine, but if it means that rich people get richer, that’s also fine.

Klein and Thompson either didn’t come prepared for this ideological fight, or made a conscious decision to avoid it. But it’s probably unavoidable. In order to make the abundance agenda the new “political order” of America, its proponents are going to have to make a forceful ideological argument for why enriching the average American is Job #1, rather than one job among many.

Those arguments are out there. They include humanitarian appeals, and appeals to dignity. They include appeals to national unity and solidarity, and the idea of an America where anyone can get ahead. They include the idea that abundance is a form of freedom, and that all Americans deserve that freedom. At times in the 20th century, these arguments won out over those who were more concerned with class warfare and power than with material well-being.

But these arguments must be made forcefully, instead of quietly relegated to the background. If abundance liberals are going to win, they need to get tough.

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1. Though it was Hu Jintao who actually made good on that promise, at least to some extent.

2. This article, by the way, is incredibly bad. It makes a blizzard of bad arguments — repeating the discredited Left-NIMBY claim that market-rate housing doesn’t reduce rents, blaming corporate developers for high rents, blaming private utilities for the lack of new electrical transmission, and so on. Glastris and Weisberg also willfully ignore most of what Klein and Thompson actually write — they offer state capacity as an alternative to the abundance agenda even though Klein and Thompson spend much of their book talking about the need for higher state capacity. Many of their arguments recapitulate Klein and Thompson’s arguments, but then somehow paint this as a criticism of Klein and Thompson. One gets the impression that Glastris and Weisberg didn’t actually read the book they were reviewing, but simply skimmed pieces of it and decided it must all just be about deregulation.

3. A prominent progressive thinker recently argued to me that Luigi Mangione showed that there’s popular rage against corporations, and that this rage could be harnessed by the antitrust movement. I laughed out loud.

4. It would not.