America’s Democrats should embrace “abundance liberalism”
Two new books contain much to commend them
Think of America as a vast economic experiment. The country left the covid-19 pandemic full of stimulus, and with a roaring stockmarket. Which places managed to channel this vigour into new companies, houses, power stations and intellectual property? And which let rents and prices surge instead?
Three years on, early results make painful reading for Democrats. Red states have comfortably outgrown blue states. The gap is particularly striking among the largest: Florida and Texas have left California and New York in the dust. In last year’s presidential election, some of the sharpest swings against Kamala Harris could be found in city centres, where the party has had its tightest political control—and free rein to put ideas into practice.
On economics as well as politics, therefore, the left must work out what has gone wrong. Two new books—“Why Nothing Works” by Marc Dunkelman of Brown University and “Abundance” by Ezra Klein and Derek Thompson, a pair of journalists—suggest an answer: that excessive regulation has hurt America by blocking housebuilding, infrastructure and innovation. The books crystalise ideas that have been swirling around newspaper columns, think-tanks, city-council initiatives and social media.
Online supporters say that they are “abundance-pilled”, adopting a trope from “The Matrix” (in which the protagonist takes a pill to escape his humdrum computer-simulated existence). And the serious label for these ideas, especially in their left-leaning incarnation, is “abundance liberalism”. For his part, Mr Dunkelman argues that progressives must move away from so-called Jeffersonian instincts, which favour localism, diffuse power and plentiful vetoes, and towards Hamiltonian ones, which point to centralising power in order to get things done.
Lingering over both accounts is the spectre of Robert Moses, an all-powerful bureaucrat who from the 1920s to 1960s built the bridges, roads and tunnels that undergird modern New York, and is the subject of Robert Caro’s cutting biography, “The Power Broker”. Today’s regulatory mess began to emerge in the 1970s in large part as an immune response to the domineering methods of Moses and his imitators, who chopped through neighbourhoods with motorways, leaving urban blight behind.
Nowadays “You could have Robert Moses come back from the dead and he wouldn’t be able to do shit,” complains Michael Skelly, a businessman quoted by Mr Dunkelman. Mr Skelly spent nearly a decade attempting to connect wind farms in Oklahoma to the Tennessee Valley grid, but was unable to do so despite the support of the Obama administration. That, abundance liberals would argue, reflects a colossal overcorrection from Moses’s time. Rules offering local communities vetoes on housing and infrastructure projects have tied the hands of governments and businesses, hindering efforts to tackle America’s housing shortage, speed up its transition to green energy and build high-speed rail.
This diagnosis suggests that the Democrats should shift onto economic terrain more commonly associated with the political right. The first change would be to switch attention from the demand-side to the supply-side of the economy. Throughout the 2010s many progressives, including Mr Klein, complained that America’s economy was understimulated after the global financial crisis of 2007-09, hurting its recovery. Support for higher spending survived into the pandemic, when the Biden administration juiced the economy, stoking inflation, and then persisted as the deficit drifted above 6% of GDP in 2023. An abundance-pilled approach would instead focus on making supply inputs, such as energy, housing, transport and skilled workers, plentiful and cheap.
The second change—shifting from a focus on redistribution to one on growth—might be more difficult. Democrats have long sought to improve the lot of the downtrodden, whether they are poor, from an ethnic minority or suffering as a consequence of deindustrialisation. Notoriously, the Biden administration saddled its signature semiconductor initiative with fiddly requirements to favour minority-, veteran- and female-owned businesses. Now California is struggling to build a high-speed rail line in part because federal funding is tied to measures to tackle air pollution in poor communities. Abundance liberals are happy to forgo these sorts of policies: economic growth must first be secured before it can be redistributed.
Power, broken
Such an agenda would make America’s liberals more liberal in the British sense of the term. But there is one place where abundance types are woollier: on how far the state, rather than the market, should orchestrate economic growth. What animates them most is reviving the government’s ability to act. Messrs Klein and Thompson agonise about how the Biden administration sabotaged its industrial policy with red tape; Mr Dunkelman marvels at how the New Deal-era government built megaprojects like the Tennessee Valley Authority, a dam network still in operation.
Anxiety about Moses-like overreach is not the only reason to be cautious about such an approach. Insulated from competitive pressure, even the best-intentioned public bureaucracies have a habit of atrophying, as, for example, NASA has done in recent decades. And there are risks, too, in relying on a centralised bureaucracy when DOGE-style destruction will only ever be one election away. Ultimately, the right balance between a market- and state-led approach will differ from case to case: high-speed rail probably does require state direction, whereas the private sector can do the heavy lifting when it comes to homebuilding. Abundance liberals are correct to focus on the supply-side of the economy. The danger is that, in doing so, they replace bureaucratic kludge with overactive government. ■
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