More Is Less?

REVIEW: ‘Abundance’ by Ezra Klein and Derek Thompson

Abundance is having a moment. Microsoft is investing in nuclear energy. Gavin Newsom axed environmental review for new housing in California city centers in an effort to make it easier to build more and different types of housing (and perhaps make it easier to get elected in a national race). This “more is more” outlook has a libertarian and a liberal strain. While libertarians emphasize market forces and liberals emphasize government investment, both advocate a society of builders. Ezra Klein and Derek Thompson make a pitch for the latter variety in their book, Abundance, wherein they highlight a vision for a liberal “supply-side” economics. Though the authors present an effective vision of housing policy reform and a refreshingly positive political vision for the liberal party in its brief 222 pages, they overlook key economic realities that would unlock abundance. They also misdiagnose the practical barriers to getting the left to latch onto this vision.

Let’s begin with what works in their book, namely housing policy. Their argument occurs within a context of building momentum for reform, with more people realizing that significant changes are needed on the local and state level to incentivize more housing supply. Not only Gavin Newsom in California, but a strange coalition of journos, policy wonks, and politicians is reassessing the rules around how people can use their own land. This movement emphasizes enforcing only the minimum-needed rules on land use while allowing a variety of different styles and types of homes. The authors make a compelling case that the homelessness crisis is directly linked to unaffordability and that housing subsidies are ineffective at increasing the actual housing supply. They rightly critique policies that merely subsidize demand without actually increasing supply because they kick the can down the road while creating price inflation.

Unfortunately, this section works for the same reasons much of the rest of their argument falls apart. If we roll back strict laws around building, what is the source of the abundance that would result? It would be the developers who are motivated to turn a profit and complete the projects needed to sell units. Competition in areas where rules are relaxed would be fierce, and prices would fall. They cite the housing boom in Austin, where, despite a hot labor market, rental prices have fallen. They also favor government-funded housing, which I argue lacks both the flexibility and creativity market forces provide, but their overall argument sings when they discuss the artificially low housing supply. They also promote strong industrial policy and government investment in clean energy, but the underlying economic factors are so different in those cases that unlocking new abundance would be elusive.

The first practical hurdle the authors fail to clear is how they frame the opposition to the abundance agenda. Abundance works rhetorically because its opposite, scarcity, sounds so unappealing. We will put aside for now the fact that scarcity is an economic reality and is not necessarily in opposition to growth. But as a foil, scarcity works well. The political movement the authors highlight on the left is the degrowthers, those who want everyone to consume less to preserve nature without human involvement. The Sierra Club is one of the most powerful forces promoting this vision, with annual revenue in 2023 of $173 million. Klein and Thompson argue that convincing people to consume less is a losing battle. For climate policy, they want full steam ahead (or rather no steam ahead) on new technology and deployment of renewable energy, not limiting energy consumption to reduce carbon emissions.

But the authors sidestep a much more powerful force on the left that opposes their project—identity politics. The backbone of the party has become those who see all issues through the lens of identity groups that have been harmed by past injustice and who want to force all outcomes to align with equity frameworks. They oppose an abundance mindset because they see one group succeeding being necessarily at the expense of others. This is exemplified by President Joe Biden vowing to nominate a black woman to the Supreme Court or those who argue that the outcome of every policy should be put through an intersectional lens before enactment. Even the Sierra Club, the poster child of degrowthers, highlights on their website, “environmental justice can’t be separated from social justice.” What some have called the omni-cause crushes all issues into a zero-sum game.

Grievance politics creates a huge problem for the abundance agenda. Klein and Thompson do not do nearly enough to counteract that philosophy. In fact, they sometimes embrace it in this book. When discussing the frontier mindset of early America, they need to remind the reader of stolen land. This reference makes the case that the authors have not fully grappled with the current state of the party. Without a clear takedown of that philosophy, talk of abundance will be easily overwhelmed by infighting between interest groups. A clearer conception of the good that they are pursuing would be more effective to counteract identity politics.

On a more basic level, for liberal supply side economics the authors promote, we might ask: Who is the supplier? Who provides the value? For Klein and Thompson, the answer is government. They want the government to invest in new technologies, explore alternate power sources, and build new housing. They want to scale back inhibitors of government actions. The size of the government, they argue, matters less than its strength. They cite the moonshot theory of Mariana Mazzucato, who argues government investment to get us to the moon created a boost in many new technologies. But we must also consider that for every moonshot there were also experiments like highways cutting through poor neighborhoods, which destroyed businesses and tight community networks. Klein and Thompson aptly criticize the myth of the individual entrepreneur, which erases the contributions of iteration and production, but they omit the source of the coordination.

Some of the friction in our system, which is so frustrating to the centralized planner, is to avoid the tyranny of the majority faction against which Madison warned. If only the United States had the power to act boldly, they think. But to whom should we give that power, and who will bear the cost of their choices? Rolling back undue rules that tend to pile up would be a victory, but not quite for the reasons Klein and Thompson argue. Without decentralized human involvement in these decisions, mere production does not translate into actual goods. The challenge after removing the roadblocks to building is then to ensure that federal and state governments do not fill the void with something people don’t actually want. The abundance agenda will flourish only when it centers on the human person and economic realities. Otherwise we are left with cold, lifeless production imposed from above.

Abundance
by Ezra Klein and Derek Thompson
Avid Reader Press, 304 pp., $30

Noah C. Gould is the alumni and student programs manager at the Acton Institute and a contributor at Young Voices. His writing has appeared in National Review, the Detroit Free Press, and elsewhere.