The “supply-side progressives” have made themselves a force in political circles—or at least among nerdy policy wonks at think tanks—these past few years.
No, they’re not liberals who’ve come to adore tax cuts for the nation’s highest earners. Instead, as faithful and thoughtful members of the center-left, they’ve diagnosed a serious problem in the way their side of the aisle approaches economic policy: Left-wing governments tend to subsidize the demand for things like housing, energy, and health care, while restricting the supply of those very things through onerous regulations and the threat of lawsuits. The red tape doesn’t merely drive up prices and prevent the private sector from fixing problems, but it also hobbles the government’s own efforts to build things.
Ezra Klein and Derek Thompson’s new book Abundance is a readable entry-level summary of this view, nicely illustrating the key concepts—and going on some rants about Democratic governance that conservatives will cherish—but stopping short of detailed policy proposals. Readers on both the left and the right will find much to enjoy and to quibble with, seeing as Klein and Thompson support both deregulation and big-spending government projects, in the service of making the basics of life, well, abundant.
It’s often said that economics is the study of how humans make decisions amid scarcity. A central theme of Abundance is that sometimes scarcity results from the decisions we make. We don’t have enough housing in the most successful big cities, we don’t have high-speed rail, we aren’t making enough progress on clean energy, and we aren’t making as many health care breakthroughs as we could because we chose a path leading to that situation.
Housing is one of the cleanest examples of the supply-side liberal agenda. The left is very concerned about “affordable housing” and happy to spend taxpayer money subsidizing it. But when it comes to making housing affordable by building enough of it, the biggest problems are found in lefty big cities—economic powerhouses with sky-high housing prices, not enough homes to go around, and an array of zoning and environmental regulations preventing further building. As Klein and Thompson pointedly note, the “lawn-sign liberals” of San Francisco may be saying all the nicest things, but the right-wingers in Texas are the ones building enough housing for people to live in. Perhaps relatedly, some of Donald Trump’s biggest 2024 gains were found in urban areas.
Even government and nonprofit efforts are caught up in the red tape. Klein and Thompson discuss Tanahan, a housing facility for the chronically homeless in San Francisco that cost far less than most similar projects, and the complicated road it took to completion. It used private money because government grants would have triggered too many rules and obligations, and it also relied heavily on the support of “city and state officials who streamlined zoning and cut deals to make it possible.” Other efforts easily wind up trapped in a maze of contracting rules, zoning prohibitions, and cost overruns.
Meanwhile, clean energy is an area where supply-side progressivism clearly differentiates itself from the basic free-market economics that libertarians and many conservatives have long espoused. Klein and Thompson explain that to deal with the environmental problems of the past—think smog—America created a complicated maze of regulations that energy and infrastructure projects must navigate and, to top it off, let loose Nader’s Raiders to stop development in the courts. Now these very “veto points” prevent the building of clean energy and infrastructure projects, including nuclear power and high-speed rail.
In other words, we need to deregulate for Big Government’s sake! In the authors’ view, a true revolution in energy is needed—a billion machines swapped for environmentally friendly versions, much cleaner electricity and transmission lines to carry it, etc.—and government spending won’t be effective if every project is overpriced and behind schedule.
Klein and Thompson insist that the problem isn’t government itself, but that American governance in particular is too heavy on process. When these restrictions are swept away, government-funded building can go quite quickly, as when Pennsylvania Governor Josh Shapiro famously turbo-charged the rebuilding of the I-95 bridge that collapsed in 2023.
One might reasonably ask, though, how often political leaders will feel such a strong urgency to get projects finished. As my Manhattan Institute colleague Judge Glock has pointed out, onerous regulations on infrastructure projects are partly a function of the public’s demand for the projects themselves. When the electorate overwhelmingly wants something to be done, it gets done; it’s much easier to hold up mundane projects with limited, uncertain, or far-off benefits, a category a lot of modern infrastructure projects, including those devoted to clean energy, fall into.
Klein and Thompson are also particularly big on government investment in science R&D, which has declined over time as a share of the nation’s economy. They chide Democrats for loading the CHIPS and Science Act with unrelated priorities (including “equity” plans, naturally) and criticize the current science-funding process for playing it too safe, avoiding long-shot projects that could lead to spectacular advancements. And yet again they don’t see government itself as the problem: iPhones are packed with technologies the government had a role in developing, they note, from the Internet to GPS. They want to see more utopian thinking, more investment in “meta-science” to study which types of funding are most effective, and in general more money.
They also want more investment in the capacity to deploy technology once it’s invented. During the pandemic, America did very well in this regard when it came to getting vaccines out. Its unemployment system, by contrast, performed embarrassingly poorly, with ancient technology making it difficult to change benefit formulas on the fly.
In general, the authors argue, policymakers should seek out bottlenecks to progress and try to eliminate them. Sometimes the bottleneck will be government regulations, and supply-side progressives can team with conservatives to roll those back. Other times, government will need to be more active in the solution, either fixing things itself or funding the private sector to do so.
Progressivism of this kind faces some obstacles. One is simply political: Those of us on the right don’t place as high a priority on many of these projects, for instance, and will naturally have more skepticism that the government can pick the right research to invest in or the right building projects to fund. Meanwhile, many on the left are skeptical of deregulation or even economic growth in general. There are agreements to be had, certainly, but it’s less clear that a unified “abundance agenda” will have the votes.
Another obstacle is financial: With the Social Security and Medicare shortfalls looming and the federal budget consistently running sizable deficits already, how much taxpayer money can we really invest in all this, even assuming we want to?
Because the book is such a general overview of these topics, it never really tells us exactly how much money we’re talking about. But all this abundance sure sounds expensive.
