Abundance

by Ezra Klein

Forty years ago, your parents cooled their bedrooms with joules dredged out of coal mines and oil pits. They mined rocks and burned them, coating their lungs in the byproducts. They encased their world—your world—in a chemical heat trap. Today, that seems barbaric. You live in a cocoon of energy so clean it barely leaves a carbon trace and so cheap you can scarcely find it on your monthly bill.

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.

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.

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.

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. We say that we want to save the planet from climate change. But in practice, many Americans are dead set against the clean energy revolution, with even liberal states shutting down zero-carbon nuclear plants and protesting solar power projects. We say that housing is a human right. But our richest cities have made it excruciatingly difficult to build new homes. We say we want better health care, better medicine, and more cures for terrible diseases. But we tolerate a system of research, funding, and regulation that pulls scientists away from their most promising work, denying millions of people the discoveries that might extend or improve their lives.

But these well-meaning laws to protect nature in the twentieth century now block the clean energy projects needed in the twenty-first. Laws meant to ensure that government considers the consequences of its actions have made it too difficult for government to act consequentially. Institutional renewal is a labor that every generation faces anew.

Tax cuts are a useful tool, and it is true that high taxes can discourage work.

But Democrats, cowed by the Reagan revolution and frightened of being seen as socialists, largely confined themselves to working on the demand side of the ledger.

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.

Regulations were assumed to be wise. Policies were assumed to be effective. Cries that government was stifling production or innovation typically fell on deaf ears.

The problem is that if you subsidize demand for something that is scarce, you’ll raise prices or force rationing.

Keep the government out of it. Let the market work its magic. That’s fine for goods where access is not a matter of justice. If virtual-reality headsets are expensive, well, so be it. It is not a public policy problem if most households cannot afford a VR headset.

But giving people a subsidy for a good whose supply is choked is like building a ladder to try to reach an elevator that is racing ever upward.

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.

For years, the central problem in the American economy was demand.

Democrats made clear that they preferred the risks of a hot economy, like inflation, to the threat of mass joblessness.

But solving the crisis of the pandemic economy created a new crisis for the post-pandemic economy: too much demand.

The conversations we had with the Biden administration’s economists were different from the conversations with the Obama administration’s economists, even when they were the same people.

They needed more chips so there could be more cars and computers.

The CHIPS and Science Act dangled tens of billions of dollars to restart semiconductor manufacturing in America.

The difference between an economy that grows and an economy that stagnates is change. When you grow an economy, you hasten a future that is different. The more growth there is, the more radically the future diverges from the past.

An economy can grow because it adds more people. It can grow because it adds more land or natural resources. But once those avenues are exhausted, it needs to do more with what it has. People need to think up new ideas. Factories need to innovate new processes. These new ideas and new processes must be encoded into new technologies.

When productivity surges, what we get is not more of what we had, but new things we never imagined. Imagine going to sleep in 1875 in New York City and waking up thirty years later.

When you passed into slumber, nobody had taken a picture with a Kodak camera or used a machine that made motion pictures, or bought a device to play recorded music. By 1905, we have the first commercial versions of all three—the simple box camera, the cinematograph, and the phonograph. Now imagine dozing off for another thirty-year nap between 1990 and 2020. You would wonder at the dazzling ingenuity that we funneled into our smartphones and computers. But the physical world would feel much the same. This is reflected in the productivity statistics, which record a slowing of change as the twentieth century wore on.

We have lost the faith in the future that once powered our optimism. We fight instead over what we have, or what we had.

“What if everything could change?” he asks. “What if, more than simply meeting the great challenges of our time—from climate change to inequality and ageing—we went far beyond them, putting today’s problems behind us like we did before with large predators and, for the most part, illness? What if, rather than having no sense of a different future, we decided history hadn’t actually begun?”

It is equally important to imagine a just—even a delightful—future and work backward to the technological advances that would hasten its arrival.

We aspire to more than parceling out the present. New technologies create new possibilities and allow us to solve once-impossible problems.

The market cannot, on its own, distinguish between the riches that flow from burning coal and the wealth that is created by bettering battery storage.

The market will not, on its own, fund the risky technologies whose payoff is social rather than economic.

That is not a failure of the private market to responsibly bear risk but of the federal government to properly weigh risk.

It is not just that the politics we have will affect the technologies we develop. The technologies we develop will shape the politics we come to have. A world where renewable energy is plentiful and cheap permits a politics that is different than a world where it is scarce and pricey.

The corollary is also true: to have no program to harness technology in service of social change is its own form of blindness.

There are people seeking complementary reforms in that coalition, such as James Pethokoukis, author of The Conservative Futurist; the economist Tyler Cowen, who has called for a “State Capacity Libertarianism”;18 and the array of policy experts organized in the Niskanen Center.

It is more interesting to ask, as we will, why it is often easier to build renewable energy in red states than in blue states despite Republican opposition to the cause of climate change.

Liberals should be able to say: Vote for us, and we will govern the country the way we govern California! Instead, conservatives are able to say: Vote for them, and they will govern the country the way they govern California!

In the American political system, to lose people is to lose political power.

There is a word that describes the future we want: abundance. We imagine a future not of less but of more. We do not subscribe to the seductive ideologies of scarcity. We will not get more or better jobs by closing our gates to immigrants. We will not turn back climate change by persuading the world to starve itself of growth. It is not merely that these visions are unrealistic. It is that they are counterproductive. They will not achieve the futures they seek. They will do more harm than good.

We take inspiration from People of Plenty, the historian David M. Potter’s brilliant 1954 book on how abundance shaped American thought and culture. “If abundance is to be properly understood, it must not be visualized in terms of a storehouse of fixed and universally recognizable assets, reposing on shelves until humanity, by a process of removal, strips all the shelves bare.”

It is not clear if Horace Greeley, the newspaper editor and liberal presidential candidate, ever uttered the advice so famously attributed to him. What is clear is that he never followed it.

The tension between Greeley’s life and his legacy echoes that of the country he loved. Americans have long lionized the frontier. But our futures have largely been made in our cities.

“More Americans have changed their status by moving to the city than have done so by moving to the frontier.”

But economies are not bounded by land. Ideas, and the technologies and companies and products they power, draw the outer borders of growth.

The telegraph and the telephone and email and teleconferencing made further mockery of space. It is now faster to FaceTime family across the continent than to rouse a neighbor across the street.

But technology eroded their obvious advantages.

This, Glaeser writes, is “the central paradox of the modern metropolis—proximity has become ever more valuable as the cost of connecting across long distances has fallen.”

The iPhone made Apple, based in Cupertino, California, into the most valuable company in the world even though two-thirds of the phones are assembled in Foxconn factories in Shenzhen, China.12 Microsoft and Alphabet mostly sell bits of intangible code. Tesla’s value lies in the software and battery advances that have taken electric vehicles from the automotive equivalent of granola to the sleek, fast cars of the future. We do not trade in the fallacious belief that manufacturing and innovation are distant domains. Taiwan started out manufacturing commodity semiconductor chips that Intel cared little about. Over time, its lead in production allowed it to develop advanced chips that American companies cannot yet replicate and that American policymakers fear falling into Chinese hands. America lost its primacy in semiconductor innovation because much is learned in the making of things—a theme to which we’ll return.

The rising returns to innovation are a result of the same technological forces that should have decimated the city. As distance collapsed, markets expanded.

Omnipresence is yet easier for digital products, where all that’s needed is a download or the quick flash of an advertisement across a browser screen. Less than half of Apple’s revenue comes from North America.13 Slightly more than half of Alphabet’s revenue is international.14 The same holds for Tesla.15 Cities are engines of creativity because we create in community. We are spurred by competition. We need to find the colleagues and the friends and the competitors and the antagonists who unlock our genius and add their own.

What each offers is a specific gift of the ecosystems of people and practice it has nurtured. Once deep communities of interest and industry form, they are difficult to dislodge, and they prove nearly impossible to replicate. New York leads the world in finance. San Francisco and Silicon Valley lead the world in technology. New York has tried hard to take Silicon Valley’s crown. But if you look for multibillion-dollar technology companies in New York, you will find few of them. Where New York City has seen technological success is where code serves finance: Bloomberg is a multibillion-dollar technology business built around providing data to financial firms. Banks like Goldman Sachs and JPMorgan Chase now employ thousands of software engineers.17 The same is true, in reverse, in San Francisco. There are successful banks and investment firms, but they mostly serve technology companies.