Abundance

by Ezra Klein

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.

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.

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. A counterforce is emerging, but it is young yet.

The words “supply side” are coded as right-wing. They summon memories of the curve that the conservative economist Arthur Laffer jotted on a napkin in the 1970s, showing that when taxes are too high, economies slow and revenues, paradoxically, fall.1 This led, in part, to decades of Republican promises that cutting taxes on the rich would encourage the nation’s dispirited John Galts to work smarter and harder, leading economies to boom and revenues to rise.

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.

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. 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.

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. We have settled on a metaphor for growth that erases its most important characteristic.

The nostalgia that permeates so much of today’s right and no small part of today’s left is no accident. We have lost the faith in the future that once powered our optimism. We fight instead over what we have, or what we had.

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

Too often, the right sees only the imagined glories of the past, and the left sees only the injustices of the present.

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.”23

If liberals do not want Americans to turn to the false promise of strongmen, they need to offer the fruits of effective government.

American policy has been focused on enacting what the historian Lizabeth Cohen calls “A Consumers’ Republic.”31 It has been remarkably successful. Catastrophically successful. We have a startling abundance of the goods that fill a house and a shortage of what’s needed to build a good life.

There is an old finding in political science that Americans are “symbolically” conservative but “operationally” liberal.30 Americans talk like conservatives but want to be governed like liberals. The Tea Party–era sign saying “Keep your government hands off my Medicare” is perhaps the most famous example of this divided soul. Americans like both the rhetoric and reality of low taxes, but they also like the programs that taxes fund. They thrill to politicians who talk of personal responsibility but want a safety net tightened if they, or those they know and love, fall.

As the cost of rent rises, so too does the number of homeless. As the vacancy rate plummets—meaning that the housing market is tight, with too many buyers and too few sellers—homelessness rises.

If you live in a city with too few homes, poverty and drug abuse and unemployment and mental illness make it likelier that you will be among those who end up without a home. But the cause of homelessness isn’t the poverty or the addiction or the unemployment.

“One of the most consequential conflicts in postwar America was between two systems of values,” writes Jake Anbinder in “Cities of Amber.” “An older growth politics which extolled the benefits of metropolitan development, and a newer antigrowth politics which rejected the idea that such development improved society.”61

The cost of trying and failing to implement the degrowth vision would not merely be missing our climate targets by a few tenths of a percentage point. It is to deliver a future of populist authoritarians who drill and burn their way back to a false prosperity. It is to discredit parties that care about climate change and empower strongmen who will give people what they have always wanted: the gift of abundant energy.

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.

Behind these procedures, Bagley suggested, were two very real concerns: legitimacy and accountability. How can a government as powerful and vast as that of the United States maintain legitimacy? How could it maintain accountability to citizens?

The system we developed is unique. Decisions that are often made by bureaucracies in other countries are made by judges in our country. Robert Kagan, a law professor at the University of California, Berkeley, calls it adversarial legalism. “It is only a slight oversimplification to say that in the United States, lawyers, legal rights, judges, and lawsuits become functional equivalents for the large central bureaucracies that dominate governance in the activist states of Western Europe,” he writes.84

Americans were asking the government to do more than it ever had but they were not willing to give the government the trust and authority it needed to do it. But reformers could not simply devolve power to state and local governments. Liberals had just seen, in the fight against Jim Crow, that you could not trust the states, much less the localities, to do what the federal government asked. And so they turned to the courts, which had, under Chief Justice Earl Warren, become newly beloved by liberals. Adversarial legalism was a way of reconciling the government we wanted with the suspicions we harbored.

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.

“Legitimacy is not solely—not even primarily—a product of the procedures that agencies follow,” Bagley writes. “Legitimacy arises more generally from the perception that government is capable, informed, prompt, responsive, and fair.”89 And that is where government is failing.

Liberalism acted across many different levels and branches of government in the 1970s to slow the system down so the instances of abuse could be seen and stopped. Now it will need to act across many different levels and branches of government to speed up the system. It needs to see the problem in what it has been taught to see as the solution.

We are used to understanding the battle lines of American politics as cleaving liberals who believe in a strong, active government from conservatives who doubt it. The truth is far more complicated. Liberals speak as if they believe in government and then pass policy after policy hamstringing what it can actually do. Conservatives talk as if they want a small state but support a national security and surveillance apparatus of terrifying scope and power. Both sides are attached to a rhetoric of government that is routinely betrayed by their actions. The big government–small government divide is often more a matter of sentiment than substance.

Since 1960, federal government spending has risen more than fivefold—and yes, that’s accounting for inflation.33 But the size of the federal civilian workforce has barely budged. It was slightly fewer than 2 million people in 1960 and it’s slightly over 2 million people today. In countries like China and Singapore, civil service is held in high esteem, and the brightest graduates compete in nationwide tests to win government jobs. In the United States, the word “bureaucrat” is tossed around as an epithet. Republicans have spent decades demonizing government, and they have largely won the argument. The dominant belief is that anything that can be outsourced or privatized should be. Government is bloated. The private sector is efficient.

Government cannot do everything itself. But it needs enough know-how to oversee the projects it is doing.

The challenge of updating government technology is the challenge of updating, harmonizing, or terminating the functions of these old systems. And all of it must be done while following procurement and contracting rules that no private technology company would ever impose on itself.

“Lawmakers often have good intentions, but they continually add policy layers with too little understanding of (and, sometimes, regard for) how what they add will interact with the layers that are already cluttering the delivery environment,” she concluded.51 For government to do more—or even for it to just do what it is already doing—sometimes it first needs permission to do much less.

Liberals have chosen to trust elected politicians and government workers less and trust regulatory and judicial processes more to ensure that government delivers. That may have made sense in a past era, but given the problems we face now, it is a mistake. Whether government is bigger or smaller is the wrong question. What it needs to be is better. It needs to justify itself not through the rules it follows but through the outcomes it delivers.

In our first chapters, we recounted the many ways that America has gotten in the way of building what we need to flourish in the twenty-first century, from homes to clean energy. But the pandemic was a different kind of challenge. Here was a problem we couldn’t regulate, or subsidize, or merely build our way out of. No number of masks for shoppers or plastic dividers in restaurants could do what the vaccines did. The end of the health emergency required the summoning into existence of something fully new. To defeat COVID, it wasn’t possible to build our way out of the problem. We had to invent our way out.

If progressives underrate the centrality of invention in their politics, conservatives often underrate the necessity of government policy in invention. “The government has outlawed technology,” the investor and entrepreneur Peter Thiel said in a debate with Google CEO Eric Schmidt in 2014, echoing a popular view among techno-optimists and libertarians that government laws mostly block innovation.

Elon Musk is now a vociferous critic of progressive policy. But he has also been a beneficiary of it. In 2010, when Tesla needed cash to launch its first family-friendly sedan, the Model S, the company received a $465 million loan from the Obama administration Department of Energy.17 His rocket-launching company, SpaceX, has received billions of dollars from NASA under Democratic and Republican administrations. Musk has become a lightning rod in debates over whether technological progress comes from public policy or private ingenuity. But he is a walking advertisement for what public will and private genius can unlock when they work together.

Federal science spending is so fundamental to the overall economy that a 2023 study found that government-funded research and development have been responsible for 25 percent of productivity growth in the US since the end of World War II.18

After several years of trial and error, they finally broke through in the early 2000s, by creating an mRNA therapy that could enter the cell without sending the immune system into a frenzy.

If mRNA was failing to impress the scientific establishment, its reception in the private sector was a different story. In the US, Karikó and Weissman’s work caught the attention of a brash group of postdoctoral researchers, professors, and venture capitalists. They had started a company whose name smushed the words modified and RNA: Moderna. In Germany, Ugur Sahin and Özlem Türeci, a married couple with backgrounds in immunotherapy research, also saw huge potential in Karikó and Weissman’s work. They founded several companies, including one to research mRNA-based treatments for cancer: BioNTech.

By the time the coronavirus outbreak shut down the city of Wuhan in China, Moderna and BioNTech had spent years fine-tuning their technology, which explains how they solved the mystery of SARS-CoV-2 with such speed. It turned out that mRNA offered the perfect key to pick the lock of the virus that caused COVID. Coronaviruses are named after a crown, or “corona,” of proteins that surrounds the virus particle, like spikes around a ball. Synthetic mRNA therapies send detailed instructions to a person’s cells to make duplicates of the distinctive “spike protein,” which the immune system trains itself to attack. Later, if the same person confronts the full-blown virus, the body recognizes the spike protein again and blitzes it with the precision of a well-trained military, reducing the risk of severe illness.

The idea that the NIH has become deeply biased against risky and novel research—and too fixated on funding only those projects that are practically guaranteed to succeed—is so widespread that it has become “the biggest cliché in science,” said Azoulay, the MIT economist.

We have—even if by accident—designed a system that often privileges the game of performing the act of science over the actual practice of science.

In 2017, longtime NIH director Francis Collins acknowledged, in an email to the libertarian venture capitalist Peter Thiel, that NIH needed “to liberate young scientists from training periods that are much too long” and that “some of the ways in which we support” biomedical research are “outdated.”88

If the DARPA model holds a lesson, it is that the agency works because it empowers program managers to pursue their most radical ideas with an open-ended budget and vast connections throughout science and industry.

The lesson, which the US seems to have forgotten in the last few decades, is that implementation, not mere invention, determines the pace of progress.

Tinkering, embodiment, scaling: these are examples of what Mokyr calls microinventions, or the incremental improvements needed to turn a new idea into a significant product. These microinventions are often more important than the original breakthrough.

The election of Ronald Reagan in 1980, however, decimated the solar revolution in America. Driven by a conservative ideology that favored free markets and limited government intervention, Reagan dismantled much of the solar infrastructure built up over the previous decade. For secretary of energy, he appointed James Edwards, a dentist with no expertise or interest in developing nascent energy technology.26 Solar R&D spending under Reagan fell by over 60 percent his first year in office.27 Some of the dismantling was painfully literal: in 1986, Reagan removed the solar hot-water panels installed on the White House roof by Jimmy Carter.

There is an idea in manufacturing history known as Wright’s law, which says that some things get cheaper as we learn to build more.35 The theory is named after Theodore Wright, an American aeronautical engineer who served as vice chairman of NASA’s predecessor, the National Advisory Committee for Aeronautics.36 In the 1930s, Wright recognized that the cost of building airplanes had declined with an eerie consistency since World War I: for every quadrupling of total aircraft production, unit costs consistently fell by about one-third. In 1936, Wright proposed that some products enjoy a kind of virtuous cycle of building and learning.

Nearly one hundred years ago, the economist John Maynard Keynes offered an elegant answer in his 1926 book The End of Laissez-Faire. “The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all,” he wrote. If technological progress requires money or resources that are beyond the scope of any one company, and government does nothing, progress slows down.

Operation Warp Speed is the oddest political orphan. A program named after Star Trek has disappeared into its own kind of black hole. A policy that stimulated the economy more than the Apollo program, and which may have saved more lives than the Manhattan Project, has almost no loud champions in politics. Even its scarce champions seem intent on taking the wrong lessons from its success. In an essay for the Wall Street Journal, the University of Chicago professor Casey B. Mulligan, who had served as chief economist for the Trump White House, claimed that “the urgent lesson” from Operation Warp Speed was that “too much government hinders private innovation.”67 But OWS increased government spending by billions of dollars. With an urgency typically reserved for war, the federal government directed the development of vaccines from their testing to the final transport. It’s odd to claim that a program that expanded government powers succeeded by proving that one should never expand government powers.

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? From that question can emerge an agenda for overcoming the barriers to growth.