Abundance

by Ezra Klein

The world has changed. Not just the virtual world, that dance of pixels on our screens. The physical world, too: its houses, its energy, its infrastructure, its medicines, its hard tech. How different this era is from the opening decades of the twenty-first century, which unspooled a string of braided crises. A housing crisis. A financial crisis. A pandemic. A climate crisis. Political crises. For years, we accepted homelessness and poverty and untreated disease and declining life expectancy. 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. For years, we failed to invent and implement technology that would make the world cleaner, healthier, and richer. For years, we constrained our ability to solve the most important problems. Why?

This book is dedicated to a simple idea: to have the future we want, we need to build and invent more of what we need. That’s it. That’s the thesis. It reads, even to us, as too simple. And yet, the story of America in the twenty-first century is the story of chosen scarcities. Recognizing that these scarcities are chosen—that we could choose otherwise—is thrilling. Confronting the reasons we choose otherwise is maddening.

But some of this reflects a kind of ideological conspiracy at the heart of our politics. We are attached to a story of American decline that is centered around ideological disagreement. That makes it easy to miss pathologies rooted in ideological collusion. Over the course of the twentieth century, America developed a right that fought the government and a left that hobbled it. Debates over the size of government obscured the diminishing capacity of government. An abundance of consumer goods distracted us from a scarcity of homes and energy and infrastructure and scientific breakthroughs.

Progressivism’s promises and policies, for decades, were built around giving people money, or money-like vouchers, to go out and buy something that the market was producing but that the poor could not afford. The Affordable Care Act subsidizes insurance that people can use to pay for health care. Food stamps give people money for food. Housing vouchers give them money for rent. Pell Grants give them money for college. Tax credits for child care give people money to buy child care. Social Security gives them money for retirement.

An uncanny economy has emerged in which a secure, middle-class lifestyle receded for many, but the material trappings of middle-class success became affordable to most. In the 1960s, it was possible to attend a four-year college debt-free but impossible to purchase a flat-screen television. By the 2020s, the reality was close to the reverse.

California’s problems are often distinct in their severity but not in their structure. The same dynamics are present in other blue states and cities. In this era of rising right-wing populism, there is pressure among liberals to focus only on the sins of the MAGA right. But this misses the contribution that liberal governance made to the rise of Trumpism. In their book Presidents, Populism, and the Crisis of Democracy, the political scientists William Howell and Terry Moe write that “populists don’t just feed on socioeconomic discontent. They feed on ineffective government—and their great appeal is that they claim to replace it with a government that is effective through their own autocratic power.”

Some thought that the dislocations of the pandemic, combined with the rise of videoconferencing, would finally sever the link between place and innovation. It’s undeniable that white-collar employees are more likely to work remotely, and some have used this opportunity to move to smaller and cheaper cities while clocking in for firms based many miles away. But America’s superstar cities still draw many of the country’s most talented workers. While remote and hybrid work have stabilized at a much higher level than before COVID, it is notable that in August 2023, the videoconferencing company Zoom announced that they were demanding employees be in the office at least a few days each week.

Fischel’s explanation begins with trucks and buses, which forever changed the spatial geometry of the city. Before big, gas-powered vehicles took over the streets, it was easy to keep the different functions of the city separate. If you didn’t want to live near a manufacturing plant or the masses of workers who worked in it, you could always live (or build) somewhere else. Trucks and buses changed that. “The truck liberated heavy industry from close proximity to downtown railroad stations and docks,” Fischel writes.33 Factories could now be located anywhere. Buses liberated urban workers, too.

Homelessness has been particular grist for conservatives who see, in California’s homelessness crisis, the roosting of liberal licentiousness. “Failure to enforce basic standards of public behavior has made one of America’s great cities increasingly unlivable,” wrote Heather Mac Donald, of the Manhattan Institute.44 Mac Donald is mistaken. San Francisco is eminently livable, which is why the average apartment sells for more than a million dollars. If San Francisco were unlivable, and people ceased to want to live there, the price of homes would plummet, and so too would the ranks of the homeless.

Over time, planners did exactly that: Zoning and building codes required homes to be built with ever more features and amenities. Minimum parking requirements were added and maximum residency limits appeared. Some of this was done to upgrade housing stock or protect health and safety. Some of it was done to eliminate entire forms of housing that gave the poor or the unlucky a continued toehold in richer neighborhoods. Does it really “protect the roomers” to move them from a boarding home without parking spaces to a tent beneath the overpass?

One of the main aims of federal housing policy has been to make possible the thirty-year fixed-rate mortgage, a peculiar financial device that wouldn’t survive a day in the economic wild. What lender in their right mind would hand out thirty-year loans on fixed terms to virtually anybody with a job? But the federal government backed those mortgages and made the interest payments on them into large tax deductions, and so they became the cornerstone of the American housing market. But they became something else, too: a hedge against inflation.

CEQA became a potent weapon against the construction of new homes. “Between 1972 and 1975, twenty-nine thousand proposed homes in the Bay Area—roughly a fifth of the region’s total housing production at the time—were subject to environmental litigation,” Anbinder writes.74

The term “ticky-tacky” comes from a song recorded by Malvina Reynolds and covered by Pete Seeger, describing the soulless, same-same tract housing covering the hills of Daly City, just south of San Francisco.

China can build tens of thousands of miles of high-speed rail in the time it takes California to fail to build hundreds of miles of high-speed rail. China does not spend years debating with judges over whether it needs to move a storage facility. That power leads to abuse and imperiousness. It also leads to high-speed rail.

Glaeser and his colleagues go on to look at the size of the firms involved. It turns out that big home construction companies are much more efficient than small home construction companies. No surprise there. But the market in home construction is dominated by small firms: more than 60 percent of employment in single-family home construction is in firms with fewer than 10 employees; in manufacturing, most employees work in firms of more than 500 people.66 Why is home construction in America dominated by such small firms? The researchers pick through the data and find that firms are allowed to build on less and less land, and are subject to more and more land use regulations, in ways that choke off their ability to grow and scale their work across cities and states.

In 2019, Bagley published an incendiary article in the Michigan Law Review, which he later turned into a policy paper for the Niskanen Center. “The Procedure Fetish” argued that something had gone wrong inside government, inside liberalism, inside Bagley’s own profession. Liberal legalism—and through it, liberal government—had become process-obsessed rather than outcomes-oriented. It had convinced itself that the state’s legitimacy would be earned through compliance with an endless catalog of rules and restraints rather than through getting things done for the people it claimed to serve.

In the Democratic Party, every presidential and vice presidential nominee from Walter Mondale to Kamala Harris attended law school (Tim Walz, in this respect, was an almost radical break with tradition). When you make legal training the default training for a political career, you make legal thinking the default thinking in politics. And legal thinking centers around statutory language and commitment to process, not results and outcomes.

But what makes Tahanan notable isn’t its aesthetic. It’s the way it was built. Tahanan went up in three years, for less than $400,000 per unit.1 Affordable housing projects in the Bay Area routinely take twice as long and can cost almost twice as much. “Development timelines for affordable projects in San Francisco have typically stretched to 6 years or longer and development costs have reached $600,000 to $700,000 per unit,” reported the Terner Center for Housing Innovation at the University of California, Berkeley.2 San Francisco cannot dent its housing crisis at the speed and cost at which it is building affordable units now. But if the pace and price of Tahanan were the norm, the outlook would brighten.

It is damning that you can build affordable housing so much more cheaply and swiftly by forgoing public funds. Shouldn’t things happen faster when they are backed by the might and money of the government?

There have been many problems with Prop HHH, but the real problem predates it: the way that taking advantage of public money layers on requirements, delays, and additional goals, slowing down construction and raising costs. HHH is designed to provide some, but not all, of the money for developments. Defenders of HHH are quick to point out that the average cost per unit includes around only $134,000 of HHH funds.18 The program is designed to seed projects that can find other financing, too. That sounds good: by leveraging outside money, the taxpayer’s dollar can go further. In reality, it means affordable housing projects need to line up four or five or six different funders, cobbling together tax credits and philanthropic donations and state and local incentives.

Every one of these is a worthy goal. But so too is building a lot of affordable housing quickly and cheaply. Los Angeles is failing, and failing badly, at doing that. Given that failure, does it make sense to be asking for special air filtration systems for developments near freeways when the alternative, for many of the would-be residents, is a tent beneath the freeway? To pose the question sounds callous. But to refuse to pose the question, given the need for more housing, is cruel.

Each individual decision is rational. The collective consequences are maddening. We hire skilled, dedicated people to do the public’s work and then make it impossible for them to do that work well. We ask people to work on society’s hardest problems—often making much less than they could make in the private sector—and then rob them of the discretion and agility they need to solve them. And then we wonder why so many of them leave.

It is impossible to read these bills and guidelines and not notice that the additions are rarely matched by deletions. Process is enthusiastically added but seldom lifted. You can imagine a version of the CHIPS bill that lifted immigration rules to make it easier for skilled semiconductor workers to come to the United States. That would have been the most direct way to address the shortage of skilled workers hindering the construction and operation of the fabs. You could have imagined rules exempting the semiconductor fabs from NEPA or giving them some kind of fast-track process.

Meanwhile, the university scientists who worked outside these labs mostly relied on funding from private philanthropies, such as the Rockefeller Foundation.

“So many really, really intelligent people are wasting their time doing really, really uninteresting things: writing progress reports, or coming up with modular budgets five years in advance of the science, as if those numbers have any meaning. Universities have whole floors whose main job is to administer these NIH grants. Why are we doing this? Because they’re afraid that I’m going to buy a Corvette with the grant money?”75 The rules exist for a reason, Doench acknowledged. Some scientists in the past probably abused their funding. But just as environmental laws passed in response to twentieth-century problems created a crisis of building in the twenty-first century, the paperwork cure in science is sometimes worse than the disease.

To be a bottleneck detective is to recognize that wise policy begins with an investigation rather than an ideology that tries to force the same key into a variety of ill-fitting locks. Making progress in these industries requires first that we want to understand: How does this industry actually work?

This policy—a promise to buy a certain number of early products to accelerate their invention—is called an “advance market commitment,” or AMC. An AMC is particularly effective when the world needs an abundance of a brand-new technology that is currently too expensive.

The breakneck deployment of wind and solar infrastructure and battery manufacturing has been slowed by outdated permitting and procurement rules that split the Democratic coalition. A difficulty that Biden and Harris had in trying to run on their record in 2024 was that few communities were yet seeing benefit from all this construction their policies were meant to spark. The infrastructure bill, for instance, included $7.5 billion to build a national network of 500,000 electric vehicle charging stations; by March 2024—more than two years after the bill passed—only seven new chargers were up and running.22

We considered calling this book “The Abundance Agenda.” We could have easily filled these pages with a long list of policy ideas to ease the blockages we fear.

This is where the shortcomings of a list of policy proposals become clear. It is easy to unfurl a policy wish list. But what is ultimately at stake here are our values. How do we weigh the role that the current inhabitants of a community should have in who enters that community next? How do we balance the interests of a town against the interests of a country? Changing the processes that make building and inventing so hard now requires confrontations with whether the systems liberals have built really reflect the ends they’ve sought.

To pursue abundance is to pursue institutional renewal. One of the most dangerous political pathologies is the tendency to defend whatever your enemies attack. Decades of attacks on the state have turned liberals into reflexive champions of government. But if you believe in government, you must make it work. To make it work, you must be clear-eyed about when it fails and why it fails.