Abundance

by Ezra Klein

California has spent decades trying and failing to build high-speed rail. It has the worst homelessness problem in the country. It has the worst housing affordability problem in the country. It trails only Hawaii and Massachusetts in its cost of living.21 As a result, it is losing hundreds of thousands of people every year to Texas and Arizona.22 What has gone wrong?

In the 2024 election, Donald Trump won by shifting almost every part of America to the right. But the signal Democrats should fear most is that the shift was largest in blue states and blue cities—the places where voters were most exposed to the day-to-day realities of liberal governance.

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. We call for a correction. We are interested in production more than consumption. We believe what we can build is more important than what we can buy. Abundance, as we define it, is a state. It is the state in which there is enough of what we need to create lives better than what we have had. And so we are focused on the building blocks of the future. Housing. Transportation. Energy. Health. And we are focused on the institutions and the

Why doesn’t Toronto or Atlanta or New York or Barcelona or Los Angeles or Berlin have a major entrant in the industry? Why not build your AI behemoth in Maui or Bali? These companies are feeding digital data to algorithms running on off-site server farms. In theory, this arrangement should be possible anywhere. In practice, the frontier of ideas is best breached by people who know each other well and work with each other closely and who move between different companies with different cultures and specialties smoothly.

As the economist Raj Chetty and his team have covered in several papers, upward mobility is in structural decline in the US. In 1940, a child born into an American household had a 92 percent chance of making more money than her parents. But a child born in the 1980s has just a 50 percent chance of surpassing their parents’ income.23 In forty years, the American dream went from being a widespread reality to a coin toss.24 Mobility, Chetty found, is a product of place.

In many blue states, voters exhibit the same split political personality, but in reverse: they are symbolically liberal but operationally conservative. In much of San Francisco, you can’t walk twenty feet without seeing a multicolored sign declaring that Black Lives Matter, Kindness Is Everything, and No Human Being Is Illegal. Those signs sit in yards zoned for single families, in communities that organize against efforts to add the new homes that would bring those values closer to reality.

The Austin metro area led the nation in housing permits in 2022, permitting 18 new homes for every 1,000 residents. Los Angeles’s and San Francisco’s metro areas permitted only 2.5 units per 1,000 residents.31 In our political typologies, it is liberals who embrace change and conservatives who cling to stasis. But that is not how things work when you compare red-state and blue-state housing policies.

What came next is what really put the clamps on housing supply: zoning as a form of anti-growth regulation. It is this form of zoning that still governs cities and suburbs today.

In 2020, with home prices at record levels, the Petaluma Plan reached its logical end point. For the first time in the history of the state, California—which, as late as the 1960s, was growing twice as fast as the rest of the country—shrank. The state is dominated by Democrats, but many of the people Democrats claim to care about most can’t afford to live there. In the same progressive zip codes where homeowners press signs into the soil of their front lawns bearing the message Kindness Is Everything, affordable housing can’t be found—and homelessness is endemic.

So what does explain homelessness? The availability and cost of housing.

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. The way to think about homelessness, they write, is to imagine a game of musical chairs. With ten chairs and ten people, everyone will find a chair when the music stops. That will be true even if one of the players is on crutches. With nine chairs, someone will inevitably be left out. That’s when individual life circumstances begin to predict homelessness. 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.

In the ’70s, rising inflation and slowing home building turned the homes people did own into the center of their wealth. But how do you protect the value of that asset? You can insure a home against fire, but you can’t insure it against rising crime rates or local schools slipping in quality or a public housing complex being built down the block. To manage those risks, you need to control what happens around your home. You do that through zoning and organizing. You do it through restricting how many homes and what kinds of homes can be built near you. You do it by making the minimum allowable lot sizes bigger and the parking requirements more expansive because both those rules ensure that only wealthier people will be able to buy into your community. You do it through organizing at planning meetings to defeat proposals for apartment buildings—they’ll change the character of the neighborhood, and think of the traffic!—and refusing to expand sewer systems to areas where developers might want to build new homes.

“At the core of American housing policy is a secret hiding in plain sight,” she writes. “Homeownership works for some because it cannot work for all. If we want to make housing affordable for everyone, then it needs to be cheap and widely available. And if we want that housing to act as a wealth-building vehicle, home values have to increase significantly over time. How do we ensure that housing is both appreciating in value for homeowners but cheap enough for all would-be homeowners to buy in? We can’t.”

America in the 1950s and ’60s was paradoxically the richest superpower in world history and functioned as a kind of mass-industrial conspiracy to kill its own residents. The toxicity of growth triggered a reaction among intellectuals and, later, within government.

To read President Richard Nixon’s State of the Union address from 1970 is to tumble into a politics very different than our own, where Republicans talked in ways that even few Democrats dare speak today:

The great question of the seventies is, shall we surrender to our surroundings, or shall we make our peace with nature and begin to make reparations for the damage we have done to our air, to our land, and to our water? Restoring nature to its natural state is a cause beyond party and beyond factions. It has become a common cause of all the people of this country. It is a cause of particular concern to young Americans, because they more than we will reap the grim consequences of our failure to act on programs which are needed now if we are to prevent disaster later. Clean air, clean water, open spaces—these should once again be the birthright of every American. If we act now, they can be. We still think of air as free. But clean air is not free, and neither is clean water. The price tag on pollution control is high. Through our years of past carelessness we incurred a debt to nature, and now that debt is being called.

Indeed

The climate crisis demands something different. It demands a liberalism that builds. The Infrastructure and Investment Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act add up to about $450 billion in clean energy investments, subsidies, and loan guarantees. This is how the scale of such bills is normally described in Washington: by a price tag. The more money, the bigger the bill. That is an incomplete measure, at best. If we could build faster, the numbers could rise. If we could build cheaper, the money would go further. That $450 billion is only an estimate. Many of the subsidies in these bills are open-ended. They will go to as many projects as can use them. These bills could spend trillions of dollars if we can build that infrastructure fast enough. They could spend far less than $450 billion if projects become too hard to permit. They could waste tens or hundreds of billions on projects that are never completed. What matters is not what gets spent. What matters is what gets built.

The US has contributed as much to rail technology as any other country in the world—or more than any other country. Americans invented the air brake47 and led the world in rail construction at the end of the 1800s. California businessmen helming the Central Pacific Railroad Company built all but a few hundred miles of the western portion of the Transcontinental Railroad in the 1860s. The project spanned nearly 1,800 miles. It took just six years to finish. These days, six years is roughly the amount of time it takes California to realize that its bullet train needs to be pushed back by another decade. In the time California has spent failing to complete its 500-mile high-speed rail system, China has built more than 23,000 miles of high-speed rail.48

What has taken so long on high-speed rail is not hammering nails or pouring concrete. It’s negotiating. Negotiating with courts, with funders, with business owners, with homeowners, with farm owners. Those negotiations cost time, which costs money. Those negotiations lead to changes in the route or the build or the design, which costs money. Those negotiations lead to public disappointment and frustration, which leads to loss of money that might otherwise have been approved if the project were speeding toward completion.

“People are losing trust and confidence in our ability to build big things. People look at me all the time and ask, ‘What the hell happened to the California of the ’50s and ’60s?’ ”51 But it’s not just California. Democrats today are as searing in their criticisms of public sclerosis as any Republican. John Podesta, the graybeard who oversaw the rollout of the Inflation Reduction Act for Joe Biden, bemoaned that “delays are pervasive at every level of government—federal, state, and local. We got so good at stopping projects that we forgot how to build things in America.”52 Brian Deese, then the director of Biden’s National Economic Council, noted in April 2022 that the Empire State Building was completed in a little over a year and said that government needs to “demonstrate that America can build—fast, as we’ve done before, and fairly, as we’ve sometimes failed to do.”53

the United States is notable for how much we spend and how little we get. It costs about $609 million to build a kilometer (about 0.6 miles) of rail here. Germany builds a kilometer of rail for $384 million. Canada gets it done for $295 million. Japan clocks in at $267 million. Portugal is the cheapest country in the database, at $96 million. All those countries build more tunnels than we do,54 perhaps because they retain the confidence to regularly try. The better you are at building infrastructure, the more ambitious you can be when imagining infrastructure to build. We looked into it, and it turns out that all those countries also have governments. So the problem cannot simply be government. Nor is the problem unions—another favored bugaboo of the right. Union density is higher in all those countries than it is in the United States.

The more organized groups you have, Olson says, the more fights over distribution you’ll have, the more lobbying you’ll have, the more complex regulations you’ll have, the more bargaining you’ll get between groups, and the harder it will be to get complex projects done. Affluent, stable societies have more negotiations. And that means they have more negotiators. There’s great good in that. It means people’s concerns can be voiced, their needs can be met, their ideas can be integrated, their insights can be shared. It also means that it becomes difficult to get much of anything done. This is why 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.

“There are a million veto points,” he said. “There are a lot of mouths at the trough that need to be fed to get anything started or done. So many people can gum up the works.”62 That’s particularly true in richer areas. There’s a reason so much of the housing construction in Washington, DC, since 2000 has happened in the city’s Southwest, rather than in Georgetown. When richer residents want something stopped, they know how to organize—and they often already have the organizations, to say nothing of the lobbyists and access, needed to stop it. These dynamics help explain the curious finding that ends Syverson and Goolsbee’s paper. After looking at the states with the highest construction productivity, they note that the more productive states don’t seem to gain market share in the construction industry. That doesn’t make much sense if you assume that the difficulties of construction are primarily the organization of manpower and materials. It makes more sense if you assume that the frictions are in navigating local regulations, community considerations, neighbors’ qualms, and politicians’ interests. Developers are often fixtures in the local political scene. They have to be.

One of Olson’s insights is that a complex society begins to reward those who can best navigate complexity. That creates an incentive for its best and brightest to become navigators of complexity and perhaps creators of further complexity. “Every society, whatever its institutions and governing ideology, gives greater rewards to the fittest—the fittest for that society,” Olson writes.67 A young country that is still in its building phase creates opportunities for engineers and architects. A mature country that has entered its negotiations phase creates opportunities for lawyers and management consultants.

Nader and his Raiders believed in government. They defended it from conservative assault. When they criticized it—when they fought it, sued it, restrained it—they did so to try to make it better. But those same laws and processes were available for anyone else to use, too. You can bog clean energy projects down in environmental reviews. You can use a process meant to stop the government from building a highway through your town to keep a nonprofit developer from building affordable housing down the block.

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? These fears reflect, in part, the age in which the rules were written. The 1946 Administrative Procedure Act, which governs much of the federal government’s bureaucratic workings, was adopted “to soothe the jangled nerves of legal and business communities alarmed by the New Deal and the muscular wartime exercise of state power.”83 Then came the buildup of procedural architecture in the ’70s, when liberal lawyers, inspired by the courtroom heroics of the civil rights movement, turned to the legal system to make sure that the government actually worked on behalf of the people. 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.

Olson predicted that a thriving, successful society would become more complex to navigate over time. There would be more groups and voices and laws and processes. Those who succeeded would be those best suited to operating at the nexus of that complexity. In the economy, that might be management consultants and financiers. In politics, it will be lawyers. There is nothing wrong with lawyers. There might be something wrong with a country or a political system that needs so many of them and that makes them so central to its operations. That might be a system so consumed trying to balance its manifold interests that it can no longer perceive what is in the public’s interest.

The Pew Research Center has aggregated decades of polls tracking the public’s trust in government. The high mark on the chart is in 1964, when 77 percent of the public believed that the government would do the right thing all or most of the time. Confidence plummets from there. In the ’70s, after Watergate, it sits in the 30s. It rebounds into the 40s in the ’80s and briefly brushes the 60s after 9/11, but the downward trend is undeniable. By 2023 it sat at 16 percent.90 This is not, in our view, attributable solely or even mainly to cumbersome government processes. But the collapse in trust across the same decades that so many processes were being built to affirm that government could be trusted should make us question whether we have yoked the state to a failed theory of legitimacy.

The raft of environmental laws in the 1970s, they said, represented a “Grand Bargain” of sorts.94 “The quid pro quo for a cleaner environment was that development would become slower and more expensive due both to permitting and to the litigation that often ensued. In many respects, this has turned out to be a good deal. Apart from greenhouse gases, which effectively have been unregulated, every major air pollutant has decreased significantly over the past five decades, from carbon monoxide and sulfur dioxide to airborne lead and others. Surface water quality has similarly improved substantially since the 1970s.”95 But that bargain has broken down. The problem we faced in the 1970s was that we were building too much and too heedlessly. The problem we face in the 2020s is that we are building too little and we are too often paralyzed by process. And this is not just the view of a few law professors.

What is needed here is a change in political culture, not just a change in legislation. 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. Nothing about this is easy, and it is not always clear how to strike the right balance. But a balance that does not allow us to meet our climate goals has to be the wrong one.

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. Neither side focuses on what scholars call “state capacity”: the ability of the state to achieve its goals. Sometimes that requires more government. Sometimes it requires less government. But it always requires a focus on what the state is trying to achieve and what is in its way. In the absence of that focus, absurdity reigns.

Liberals lament that private developers want to build profitable developments when what is needed most is affordable housing. But even aside from how much housing is built, one way to make housing more affordable is to make it cheaper to build. The problem is many liberal jurisdictions have layered on rules and regulations that make housing pricier even when it is constructed—and that, of course, makes it less affordable. In San Francisco, a 2023 state report found that it took 523 days, on average, to get clearance to construct new housing, and another 605 days to get building permits—and that’s for the projects that aren’t killed by community opposition during the planning process.14 A project needs to be quite profitable to make it through that gauntlet—and it needs to be acceptable to its wealthy neighbors—and that pushes developers toward luxury condos.

them leave. “There’s tons of money that goes into homelessness, particularly in Los Angeles,” Marston says. “My budget was almost a billion dollars. But the money comes with such confined requirements that it’s almost impossible to spend. If you give me a billion dollars and the ability to spend it, it would be a different story.”25 It is hard to hear Marston’s story without being reminded of Nicholas Bagley’s argument that liberalism has become obsessed with procedure rather than with outcomes, that it seeks legitimacy through rule following rather than through the enactment of the public’s will. Homelessness in Los Angeles is a catastrophe. The public is furious at the sluggish, ineffective response. And the lead agency on homelessness is spending its time filling out audit forms and making sure each dollar is spent in strict accordance with the specific demands of funders.

Call this “everything-bagel liberalism.” The everything bagel is, of course, the best bagel. But that is because it adds just enough to the bagel and no more. It does not, actually, pile everything atop the bagel. In the Oscar-winning movie Everything Everywhere All at Once, there is an attempt to create a true everything bagel, and it becomes a black hole from which nothing can escape. The same is true for public projects. When the government adds the right number of goals, standards, and rules, much can be accomplished. When it adds too many, the project can collapse under its own weight, as has happened to high-speed rail in California.

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.

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.

“The public servants responsible for the interminably drawn-out modernization efforts are neither lazy, stupid, nor malicious,” Pahlka writes. “I’ve met hundreds of them, and they are overwhelmingly dedicated, conscientious, and often quite creative. IRS employees managed to send monthly child tax-credit payments to nearly forty million families and to mail out over $800 billion in stimulus checks during the pandemic, all while relying on systems that were never designed to change so quickly or handle such enormous volume.” The problem is that the systems they are updating have become “complex beyond our ability to imagine,” as has “the complexity of all the rules these public servants need to follow to do that updating.”47

What Pahlka and her team found, again and again, was that the rules and regulations that governed California’s unemployment insurance system and that had been written into its code had just kept growing. That made the code more complex and harder to update. It made new hires harder to find and harder to train. It made backlogs harder to clear. “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.

In his paper “State Capacity: What Is It, How We Lost It, and How to Get It Back,” Brink Lindsey puts it well: What is needed most is a change in ideas: namely, a reversal of those intellectual trends of the past 50 years or so that have brought us to the current pass. On the right, this means abandoning the knee-jerk anti-statism of recent decades, embracing the legitimacy of a large, complex welfare and regulatory state, and recognizing the vital role played by the nation’s public servants (not just the police and military). On the left, it means reconsidering the decentralized, legalistic model of governance that has guided progressive-led state expansion since the 1960s, reducing the veto power that activist groups exercise in the courts, and shifting the focus of policy design from ensuring that power is subject to progressive checks to ensuring that power can actually be exercised effectively.58

Beyond merely regulating technology, the state is often a key actor in its creation. An American who microwaves food for breakfast before using a smartphone to order a car to take them to the airport is engaging with a sequence of technologies and systems—the microwave, the smartphone, the highway, the modern jetliner—in which government policies played a starring role in their invention or development. 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.

Strengthening and expanding America’s high-skilled immigration program would be a good way to pull the Karikós of the future into the U.S., where they could cook up the next life-saving breakthrough. Doubling the H-1B visa cap, especially while raising the average wage for visa holders, could be transformative for American science and technology,52 Neufeld said. “We’d have more, and more meaningful, inventions, which would increase productivity, and make the US as a whole richer.”

American science funding has become biased against young scientists and risky ideas. What is most obvious is that American science is getting older. In the early 1900s, some of the most famous scientists—Einstein, Heisenberg, Schrödinger—did their breakthrough work in their twenties and thirties. Indeed, their youth may have been critical to their paradigm-busting genius. But these days the twentysomething scientist is an endangered species. The share of NIH-funded scientists who are thirty-five years old or younger declined from 22 percent in 1980 to less than 2 percent by the 2010s.54 American science also seems to produce far too many papers that don’t create new knowledge while overlooking researchers with promising new ideas.

Washington played almost no role in supporting innovation before the 1900s, outside of a few programs that subsidized research in farming, agriculture, and defense. But just as World War II reshaped borders and rules around the world, so too did it reshape the US innovation system.

Today NIH, along with the NSF, are irreplaceable. If these institutions had never been created or expanded, the lives of millions, even billions of people around the world would be shorter than they are today, and people would be sicker. If they disappeared tomorrow, the world would instantly be worse.63 But it is precisely because the NIH stands above every bioscience institution in significance that we should scrutinize the way it shapes the practice of science in America and around the world.

Requirements for paperwork surged. “All of a sudden,” one NIH administrator wrote at the time, “a whole series of ‘thou shalts’ and ‘thou shalt nots’ were written down.”70 One 1960s Science editorial—the headline: “More Paper Work, Less Research”—complained that turning scientists into clerks would “cost the nation millions of dollars in lost time from research.”71 It was a move reminiscent of blue states creating so many rules around permitting and environmental regulations that it became impossible to build necessary housing and energy. The instinct to make science democratically responsible has gunked up the scientific process.

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. “We are very much in danger of falling behind because we are so bloatedly inefficient,”

The second problem coming out of the growth of the NIH is that the onerous process of applying for grants has put a premium on status-seeking rather than pure science.

“grantsmanship”—the ability to write winning project proposals.77 “There is a hidden curriculum for navigating grants, and it is critical for success as a scientist today,” Azoulay said. “But those skills are weakly correlated with scientific potential, and they might be negatively correlated.”78 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.

The final common criticism of the NIH might be the most important piece of the Karikó Problem. While many discoveries depend on high-risk research that departs from the herd—like embracing the potential of mRNA while others rush toward DNA—modern science too often plays it safe.