Can future-oriented growth restore government capability and solve scarcity?
It's interesting the way some books arrive at the appropriate moment. This book had its genesis in articles written by the two authors a few years ago for their respective publications in the US, The Atlantic and The New York Times, and in Abundance they argue that liberalism has not only lost the ability build and deliver projects, but liberals and progressives have prevented building necessary things such as housing, renewable energy and public transport in the US through legislation, rules and regulation. For example, environmental regulation stops replacing fossil fuels with green energy and local zoning prevents housing developments. Basically, ‘To have the future we want, we need to build and invent more of what we need.’
One has to be careful about terminology. In Australia and Europe ‘liberalism’ generally means limited government and less intervention, which in the US would be called libertarianism, but the book is about the US, where ‘liberalism’ means civil liberty, social justice and regulation of industry. In the US, liberals and progressives are left or centre-left and opposed to conservatives on the right or centre-right (although these days the centre in the US is much diminished). Klein and Thompson say ‘a politics of abundance … asks what it is that people need and then organizes government to make sure there is enough of it … sometimes governments has to get out of the way, as in housing. Sometimes it has to take a central role.’
The majority of the book looks at the problems and issues involved in the social and political economic issues of housing, energy, health, and innovation. The problems of slower development and less delivery are well-known, and the outcome is various forms of scarcity: too little new housing, energy, medicines, infrastructure and technology. Klein and Thompson say ‘For years, we knew what we needed to build to alleviate the scarcities so many faced and create the opportunities so many wanted, and we simply didn’t build it.’
Klein and Thompson focus on the supply-side of the economy and believe economic growth should be revived before it is redistributed. They show the Biden administration loaded the CHIPS and Science Act with requirements to favour minority, veteran and female-owned businesses, and its industrial policy became hamstrung with red tape. They believe the major challenges of the twenty-first century, like the housing and climate crises, require a reorientation in ideas and a renewed emphasis on economic growth.
One of the strengths of the book is its use of current relevant research on the issues. The authors are across contemporary thinking on these, and for those who are not engaged with policy debates this will be a valuable introduction. For those who follow these issues, there might not be much in the way of new information, however, that does not detract from the overall usefulness of these chapters [1].
There are many examples of the problems. They start with the housing crisis, where housing scarcity is due to restrictive zoning, regulations, requirements, and community veto, which collectively prevent housing from being built where it is most needed and raise house prices. In the US, cities and states with Democrat Party (i.e. progressive) administrations build so little housing that it has become unaffordable, while Texas, a state known for fiscal conservatism and a libertarian attitude toward business, has led in building both green energy and affordable housing. Exclusionary zoning laws and the right to appeal development proposals have prevented building of new housing in states run by progressives.
California features in the examples. In one the only way to build a new social housing project in San Francisco with 145 studio apartments for chronically homeless people was to reject government funding and rely on private philanthropy, because that did not come with costly requirements to employ minority-owned or woman-owned contractors and meet onerous building standards. Another is California’s failure to build high-speed rail, after decades of development and billions of dollars in funding, in part because federal funding was tied to measures to reduce air pollution in poor communities, which determined where work started.
Progressive policies have reduced the ability to build because environmental laws (in the US) allow anyone totake developers to court add delay, uncertainties, and cost to projects. The role of the National Environmental Policy Act is the most important issue here. While this legislation may have originally been intended to reduce pollution and prevent new fossil fuel power plants opening, they are now used to prevent new housing, solar farms and transmission lines, as permitting across state lines runs into the localism that also stops housing projects. The abundance approach emphasises enabling supply of these economic inputs such as energy, housing, transport and skilled workers, and making them plentiful and cheap.
Klein and Thompson advocate focusing on outcomes and outputs instead of processes, procedures and inputs, on how much actually gets built as a result of government spending rather than the amount of spending. They say the ‘big government-small government divide is often more a matter of sentiment than substance’ and their solution is to break through coordination problems.
The book also discusses funding for research in health and science. The first problem here is the process of grant application and assessment, which has ended up with a lot of ‘safe’ research on well-understood topics that does not produce breakthroughs. Not funding research with a high risk of failure also excludes new ideas that could lead to major new treatments or inventions. The second problem is that research funding has become process-driven, with up to half researcher’s time and money going on applying and reporting, rather than actually doing research. The third problem is the poor track record of turning inventions into products and industries in the US, where solar cells and microchips were invented but production is now in China and Taiwan. ‘The US needs a plan to build what it invents.’
Some of the most interesting parts of the book are on successful programmes run by governments during crises or emergency situations. Two examples are the development of penicillin in World War 2 and the rollout of vaccines during the COVID pandemic. Both show that the ‘mythology of invention’ as ‘eureka moments’ of discovery is wrong. Klein and Thompson argue ‘Politics should take technology more seriously. Innovation can make impossible problems possible to solve, and policy can make impossible technologies possible.’
The fortuitous discovery of penicillin in 1928 is often cited as one of the most important scientific developments of all time. However, ten years later there was no method to manufacture penicillin in bulk and only a handful of patients had been treated, some of whom died. In 1941, the U.S. government was looking for medical technology that would be useful during the World War, and they picked up the UK invention of penicillin and created a large team of scientists, technologists, and engineers to develop methods of mass production and distribution. The number of lives saved since the 1940s may be ‘hundreds of millions, if not billions.’ The lesson of penicillin is that ‘implementation, not mere invention, determines the pace of progress.’
The second example is Operation Warp Speed, which shortened the development time for a new vaccine from 10 years to 10 months in 2020. Again, this took a large team of many specialists, but the success of the programme was due to the removal of barriers to development such as extended trials and grant funding processes. Solving the science of mRNA, organising clinical trials, manufacturing and distributing the vaccine was all done by industry, but the government funded and coordinated the process, bought the vaccines, then provided them for free. The pandemic and its aftermath provide another lesson on the importance of government capability, from managing test kit distribution to vaccine deployment.
It is not until the penultimate chapter that the book gets to the solution to the problems. In a section called ‘The Bottleneck Detective’ the authors argue is that government has to identify and remove the barriers to progress that have been created over the last few decades, ‘to recognize that wise policy begins with an investigation rather than an ideology.’ Sometimes this is about removing restrictions, sometimes it requires new programs, sometimes prizes or incentives like advanced market commitments will work (i.e. committing to buy a new product to accelerate its development, like vaccines or green cement).
Although it is clear there are coordination problems in research grants, public administration, rules and regulations on energy, infrastructure and housing, the problems are distinct and different in each case, and they each have vested interests that will oppose any reforms. Can committing to future-oriented growth be the solution? Can government’s ability to act be restored? What is the right balance between a market- and state-led approach?
One problem with the book is it focuses exclusively on the United States and how these issues are playing out between blue Democrat and red Republican states, where the economies of red states like Texas and Florida have grown significantly faster over the last few years than blue states like California and New York. Abundance is directed at progressives in the US, and wants to make it easier for the federal government there to do big things. That is understandable because, firstly, the authors are American, and secondly, how these issues managed in the US is highly specific and particular to that country. On the other hand, it's not like other places in Europe and Australia don't have similar difficulties in resolving these issues.
A second problem is a lack of detail on how, and how much, Klein and Thompson want to change regulations affecting infrastructure and housing developments. It is one thing to acknowledge the trade-offs required, but they do not go into details about how or which environmental laws should be amended and how NEPA should be revised. They say ‘What is needed here is a change in political culture, not just legislation.’ A change to less regulation and more growth is a challenge to the degrowth movement’s objectives, NIMBY objections to more housing in affluent suburbs, and conservationists opposing solar and wind farms. The ‘book has offered a critique of the ways that liberals have governed and thought over the past fifty years. It also reflects an opportunity open to liberals now.’
The Abundance agenda of ecologically friendly economic growth, regulatory reform, more public investment in housing, infrastructure and technological progress, is an attractive idea. It will not appeal to anyone on the further extremes of the left or the right. Critics on the left will argue this undermines social democracy and the welfare system, and deregulation favours corporate interests. Critics on the right will argue it is anti-market, that building state capacity is about big government and managing the economy. Neither are accurate.
There is, however, is something of a disconnect in Klein and Thompson’s agenda, and how to reconcile the deregulatory emphasis of Abundance with increasing government’s ability to develop policy and deliver projects will be an ongoing debate. They conclude ‘What we are proposing is less a set of policy prescriptions than a new set of questions around which our politics should revolve. What is scarce that should be abundant? What is difficult to build that should be easy? What inventions do we need that we do not have?’ Their answer is to confront the reasons for scarcity, to increase supply, and to turn away from a politics of scarcity toward a politics of abundance.
Ezra Klein and Derek Thompson, 2025. Abundance: How We Build a better Future, Avid Reader Press/Simon & Schuster.
[1] Two other books recently published on the issues in the US raised in Abundance are Why Nothing Works: Who Killed Progress—and How to Bring It Back by Marc Dunkelman, which mainly looks at building and infrastructure projects, and Stuck: How The Privileged and the Propertied Broke the Engine of American Opportunity by Yoni Appelbaum, on the decline in social mobility.
