Ezra Klein and Derek Thompson. Abundance. New York: Avid Reader Press, 2025.
In this provocative new book, journalists Ezra Klein and Derek Thompson challenge liberals to refocus their political thinking. The authors state their thesis clearly in the Introduction: “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.” It sounds like a no-brainer, at least until they explain how this approach differs from the standard party messaging from both the left and the right.
The politics of scarcity
Klein and Thompson want liberals to pay more attention to the supply of things people need, like housing, energy, and health care. Conservatives have talked more about the supply side of the economy than liberals have, but that term has a specific—and limiting—meaning for them: “Supply-side economics was about getting the government out of the private sector’s way. Cutting taxes so people would work more. Cutting regulations so companies would produce more.” But conservatives have exaggerated how much the private sector could meet the need for public goods like affordable housing, universal health insurance, public transportation or a pollution-free environment. The market delivers what consumers are willing and able to pay for, not necessarily what people need. Cheap manufactured goods, yes; affordable health care, not so much.
For their part, liberals have tended to focus on the demand side, especially helping low-income citizens afford what richer people have the money to buy.
… [W]hile Democrats focused on giving consumers money to buy what they needed, they paid less attention to the supply of the goods and services they wanted everyone to have. Countless taxpayer dollars were spent on health insurance, housing vouchers, and infrastructure without an equally energetic focus—sometimes without any focus at all—on what all that money was actually buying and building.
Subsidizing demand without increasing supply creates shortages and higher prices. “Too much money chasing too few doctors means long wait times or pricey appointments.” Some people get subsidized health care or housing, but other people just get higher costs, more debt, or less availability.
Since conservatives tend to want a smaller government than liberals think a modern society needs, liberals have become the defenders of larger government. The authors want to shift the debate away from the size of government toward the capacity of government. “Whether government is bigger or smaller is the wrong question. What it needs to be is better.”
Neither side of the political spectrum has had a realistic formula for economic growth. Supply-side conservatives have exaggerated how much tax cuts for the wealthy can stimulate growth from the top down. Demand-side liberals want to use progressive taxation to divide up the existing “pie” of wealth and income more equitably. Some on the left are suspicious of growth itself because of its environmental impact. The authors stress that growth does not have to mean more of the same—more fossil fuel production, more pollution, more climate change. “The difference between an economy that grows and an economy that stagnates is change.” The book is based on an underlying optimism that abundant clean energy and other emerging technologies can unleash a new productivity revolution and provide more for all. Otherwise, we will perpetuate an ugly politics where no one can have more unless someone else gets less.
Initiatives like the Inflation Reduction Act to promote clean energy and the CHIPS and Science Act to promote America’s semiconductor industry are steps in the right direction, although they are too new to have demonstrated their cost-effectiveness. One worrisome feature is the mixture of goals liberals are trying to achieve simultaneously. An application for CHIPS funding asks the applicant to address environmental issues, jobs for the disadvantaged, gender equality, access to child care, investments in mass transit, etc., etc. The main point of the initiative may get lost among the multitude of liberal causes.
Urban housing
The book tells many stories about ineffective Democratic leadership, especially in blue-state cities with large Democratic majorities, like San Francisco. The urban housing crisis is a prime example of the failure to create abundance.
Klein and Thompson say that cities should play two main roles, as “engines of innovation and engines of mobility.” The physical distance between people doesn’t matter as much as it once did for some things, like selling and shipping goods, but gathering together in cities still contributes to cooperative innovation.
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.
Historically, urban growth has been central to social progress. Newcomers have been drawn to the economic opportunities in cities, and many of them have achieved upward mobility there. But recently, cities have been failing as engines of mobility because they are short on affordable housing and other necessities. Ironically, the richest of cities have the biggest homelessness problem.
Because the cost of housing has risen much faster than incomes, those who already own urban homes want to protect their investment by preserving the character of their neighborhoods. Here they are assisted—maybe over-assisted—by environmentally conscious liberals. Zoning restrictions that mandate large lots make developers build fewer but pricier homes. The authors criticize the “lawn-sign liberals” who support kindness and equality in the abstract, but use environmental laws and other regulations to block affordable housing proposals. Organized and educated liberals can impede new projects with endless litigation.
In California, the biggest obstacle to sheltering the homeless is not lack of public funding, but the complex rules and restrictions that make the money very hard to spend.
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.
Clean energy
On the more positive side, clean energy is an example of the contributions science and technology are making to a more abundant future. This view is in stark contrast to the more familiar pessimism about running out of energy. The authors imagine a world fifty years from now, when “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.”
Klein and Thompson make a good case for a government role in technological development, especially in areas where commercial applications and business profits take time to appear. Given the American role in inventing solar energy in the 1950s, the U.S. could have become the leading solar-powered nation. Jimmy Carter was an early promoter, putting solar panels on the White House roof in the 1970s. The election of Ronald Reagan nipped our solar revolution in the bud, with leadership passing to Germany and, more recently, China. China now makes about 70 percent of the photovoltaic panels, and the scale of their manufacturing has brought costs down by about 90 percent. “After a long hiatus, solar energy has taken off again to become America’s fastest-growing electricity source, partly thanks to subsidies passed in the Inflation Reduction Act of 2022.”
Clean energy subsidies are controversial—President Trump and Congressional Republicans seem determined to end them—but they make economic sense. If dirtier forms of energy impose social costs that buyers and sellers aren’t paying for, while cleaner forms bring social benefits that buyers and sellers aren’t rewarded for, it makes sense for society to tax the first and subsidize the second.
Some of the energy abundance will come from “building out the renewable energy that we have already developed.” More will come from developing new technologies that do not exist yet or have yet to demonstrate their profitability. Government-funded R & D is especially useful there.
One reason the world will need this abundance is the huge energy demands of Artificial Intelligence systems. Here the authors welcome AI’s contribution to higher productivity, but they do not discuss the trickier questions surrounding it. Will AI resemble previous technological revolutions in eventually creating as many jobs as it destroys? Or will it aggravate the social distribution problem by dividing society into more technically sophisticated workers and masses of unemployed? The authors concentrate on a few “building blocks of the future”—housing, transportation, energy, and health. Missing from the list is the new forms of education workers will need to adapt to an even higher-tech world.
A new progressivism?
As I have been reading this book, I have also been reading Frank Bruni’s The Age of Grievance, a book about our increasing political polarization. Bruni explains the ugliness of our politics partly by drawing on an argument from political economist Benjamin Friedman in his 2005 book, The Moral Consequences of Economic Growth:
[Friedman] cast his gaze backward at a few centuries of American and European history to argue that economic stagnation and pessimism are welcome mats for repression, for authoritarianism, for all manner of closed thinking and ungenerous impulses. We’re mean when we’re lean. And when we’re fat and happy? Friedman observed that robustly growing, optimistic societies are more likely to expand rights to more people and show a stronger commitment to democracy.
In Abundance, Klein and Thompson make a similar point when they talk about the need for a “possibility of progress.” Obviously, progressive politics requires that possibility. But so does politics in general, if politics is to be more than “a mere smash-and-grab war over scarce goods, where one man’s win implies another man’s loss.” People who think that America’s best days are behind us, and that today’s problems are insurmountable, are inclined to hold onto what they have and disparage others whom they suspect of trying to take what is theirs.
Historically, each of our major political parties have had its own conception of progress. Republicans have celebrated wealth creation through free markets, unencumbered by Big Government. Democrats have called for distributing the benefits of capitalism and democracy to more people by progressive taxation, equal rights and liberal social programs. During the post-World War II period of rapid economic growth, the two conceptions of progress could coexist and compromise without as much of the political polarization and rancor we experience today.
Since the Reagan Revolution of 1980, the economy has not delivered the kind of broad-based economic gains associated with the postwar era. Economic growth has been slower, and the gains have gone more to the very wealthy. Many voters have become disenchanted with both parties, but for somewhat different reasons.
For Republicans, dramatic reductions in tax rates for taxpayers in the highest brackets have not generated as much economic growth and broad-based prosperity as promised. That has put the G.O.P. in the position of continuing to support generosity toward the rich, while demanding more austerity for the rest of us. Under the influence of MAGA, the party especially embraces the politics of scarcity, warning that progress for immigrants or historically disadvantaged groups may only come at the expense of the white working class.
Klein and Thompson believe that the right’s new “politics of scarcity…has left room for liberals to embrace what Republicans have abandoned: a politics of abundance.” Assuming, of course, that liberals do not succumb to their own politics of scarcity, believing that economic growth is incompatible with environmental protection, or that helping the have-nots depends entirely on taking from the haves. What the authors want is a new kind of liberalism, a “liberalism that builds.”
Beneath the Surface 