Abundance: Book Review

Abundance, Ezra Klein and Derek Thompson, 2025. Progress is expected, but institutions must work efficiently: “for liberals, recognizing when the government is failing. It means for conservatives, recognizing when the government is needed” (p. 226).

Introduction: Beyond Scarcity. “For years, we failed to invent and implement technology that would make the world cleaner, healthier, and richer. For years, we constrained our ability to solve the most important problems. Why” (p. 3). Why choose scarcity? It is difficult to build new houses in rich cities. There was mass house building after World War II, although the environment was damaged. Then, regulations were passed and decisions by government and individuals became difficult, in part over ideological disagreements. Conservatives favored tax cuts based on “supply-side economics” and favored unregulated free markets. Bill Clinton announced that big government was over. Progressives gave people money or vouchers to people who couldn’t afford them, like Obama Care and Food Stamps. “The problem is that if you subsidize demand for something that is scarce, you’ll raise prices” (p. 8). Since 1950 both home prices and health insurance rose much faster than incomes. Ditto attending college. Then came Covid which brought on various crises, including inflation. California is Democratic, but unable to build a high-speed rail or solve house affordability.

Chapter 1: Grow. In 1950 the US could still build homes. By the late 1970s home building lagged population growth. After the Great Recession the housing market crashed. “Cities are the absence of physical space between people and companies. … A century ago, the American economy produced primarily physical goods. Now we make ideas and services. … America lost its primacy in semiconductor innovation because much is learned in the making of things” (p. 25), which happened in Taiwan. “Cities are engines of creativity because we create in community” (p. 26). Each city is unique: New York in finance versus Silicon Valley in technology, Goldman Sachs versus Meta and OpenAI. Cities motivate innovation and mobility. Rich firms can afford to locate in expensive cities. Income inequality began rising in the 1970s.  

No American city had zoning rules before 1900. Then, Los Angeles started dividing the city into zones for industry and residential, followed by New York. Trucks meant industry did not have to locate near ships or railroads. Zoning can be a form of anti-growth regulation. Home building was rapid after World War 2 for returning veterans and their growing families. Zoning often meant population grew more rapidly than housing. California is Democratic, but the people it claims to help can’t afford to live there. “California has about 12% of the nation’s population, 30% of the nation’s homeless population, and about 50% of its unsheltered homeless population” (p. 38). Causes could be social services, liberal drug policies, or mental health. They say none of these. Rather it’s because of availability and cost of housing. Boarding houses, for example, became functionally illegal, apparently because of a perverse view of city planning. Apparently, they thought those who couldn’t afford housing would leave. From the 1970s, wages stagnated, inflation rose, and housing prices continued up. Housing became a hedge against inflation, using the 30-year mortgage. Then add zoning.

“The problem the New Deal faced was straight-forward. People had too little and they needed much more. But by the time Johnson took office, the difficulties of deprivation had been joined by diseases of affluence. … 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” (p. 48). Environmentalism became important as pollution, pesticides, and more were taking a toll on the environment. The result was regulation: National Environmental Policy Act, Clean Air Act, and Endangered Species Act, which established the Environmental Protection Agency. That included environmental impact reports. That added costs and time.

The Interstate Highway System. “The most charitable thing to assume about the highway bill is that they hadn’t the faintest notion of what they were doing” (p. 54). They described “Californication” as growth with not concern for community or conservation.

Chapter 2: Build. About half the land is used to feed ourselves, agriculture, mostly livestock. It’s related to deforestation, mass extinction, drought, and water scarcity. “Energy is the nucleus of wealth” (p. 62). Pollution is a problem of dirty energy. Governments now stop projects through regulations. Thanks Democrats. The Republican response is to claim government in inefficient and should be scrapped. Through the 1960s there was construction productivity, which has reversed itself. Much of it was paperwork, causing delays and increasing costs. West Germany and Japan, the World War 2 losers, were the productivity winners. Organization for collective actions like the Sierra Club or Chamber of Commerce can work in either direction. The more organization usually means more slowdowns and higher costs. Home construction is mainly done by small firms: “firms are allowed to build on less land, and are subject to more land use regulations” (p. 85). Fewer architects, more lawyers and consultants.

Nader’s Raiders. Nader thought the government reckless beginning with road deaths after the Interstate Highway, blaming car makers for resisting safety improvements while they blamed drivers. With his rising fame he developed a team using expertise and advocacy. That included strip mines, oil refiners to dump toxic waste, and promote environmental laws like the Clean Water Act. This promoted “democracy by lawsuit.” This was a perspective that government was the source of these problems. This process could stop building, beginning with highways, then against affordable housing by government or nonprofit. Republicans wanted to make government less effective, so more lawsuits and process were fine. “Liberal government had become process-obsessed rather than outcome-oriented. Accountability was also important. Judges became decision-makers. Legal thinking became the “default thinking in politics.”   

The Green Dilemma: renewables or doubling down on oil. Both are a “project permitting nightmare.” The Green New Deal requires massive infrastructure initiatives, giving existing standards and procedures. The clean environment means more expensive and slower.

Chapter 3: Govern. There are regulations at the local, state, and federal levels, often not in sync. Building affordable housing with public money means public requirements. Modular housing without public funds is one answer. Liberal policies often hamstring projects. “Neither side focuses on what scholars call ‘state capacity’: the ability of the state to achieve its goals” (p. 105). Houston has no zoning, making building easier and has the lowest homelessness rate of any major city ($17-$19,000) a unit. Median house cost is $300,000 versus $1.7 million in San Francisco. There are green building requirements, raising costs: “tradeoff denial versus climate denial. … In Singapore, almost 80% of the population lives in public housing” (p. 110). California has too many goals.

Biden passed the CHIPS and Science Act to focus on domestic manufacturing of semiconductors, which was invented in America, but lost dominance to Taiwan. Again, too many goals including minority, veteran, and female owned businesses—plus more. California’s high-speed rail pipedream, ditto.

It Should Not Be This Hard to Serve the Public. “Republicans have spent decades demonizing government” (p. 116). California’s high-speed rail fired consultants, not the best designers and engineers—a bad ideology “to keep it small,” and “layers of sediment.” BART in San Francisco hired a French company to do their rail, which came in under budget and early.

Philadelphia’s I-95 bridge collapsed and rebuilding should have taken months. Governor Shapiro declared an emergency and “work commenced the moment the fire department the scene—the same day” (p. 125). The bridge reopened in 12 days.

“Liberals have chosen to trust elected politicians and government workers less and trust regulatory and judicial processes more” (p. 127).

Chapter 4: Invent. Katalin Kariko of Hungary became a scientist, then fled to the US after selling her car and stuffing the cash into her daughter’s teddy bear. Her research focused on messenger ribonucleic acid (mRNA): “mRNA was a frail courier: a single-stranded molecule that ferried information from the nucleus to the part of the cell that made new protein. Upon accomplishing this, mRNA disintegrated” (p. 129). Her research focused on how mRNA could turn human cells into producers of proteins to fight disease and repair organs. Leonardo da Vinci: “Experiments never err, only your expectations” (p. 130). The NIH and other funders rejected all her grant requests. She left academia and 2020 saw the COVID pandemic. Unrealistic ideas were funded, while mRNA research was not. Progress in medicine happened over centuries, but slow progress in cancers, Alzheimer’s and schizophrenia.

Kariko teamed up with immunologist Drew Weissman. They eventually found an mRNA therapy to enter the cell without the immune system attacking it. They joined a group and started a company using modified and RNA: Moderna and focused on cancer in BioNTech. Then COVID and China furnished the genetic sequence January 11, 2020. Within 48 hours Moderna completed their mRNA vaccine and shipped it for clinical trials in late February. The vaccine was approved by the end of the year and soon shipped out in mass. In 2023 Kariko and Weissman receive the Nobel Prize in Physiology or Medicine.

Kariko had never received any money from the Federal government for her research. “At the highest levels, American science has become biased against the very thing that drives its progress: the art of taking bold risks. … American science has accumulated a set of processes and norms that favor those who know how to play the system, rather than those who have the most interesting ideas—a Kariko Problem” (p. 140).  

“Invention—the act of solving problems by bringing new products, systems, and ideas into existence—is the basis of human progress. … There is widespread agreement that scientific research and invention are the key drivers of economic growth and improvements in human well-being … but researchers do a poor job of communicating its importance to lawmakers, and lawmakers do a poor job of making science policy a major focus” (p. 133).

The Great Science Slowdown. More information plus tools to organize and analyze, but progress may be slowing down and basic science less productive. Simpler problems are solved first as knowledge grows. New developments are more challenging. “The unsolved problems are typically harder than the solved ones” (p. 144). Immigrants at 14% of the population account for 23% of patents (1990-1216). H-1B visas are issued to high-skilled foreign workers, but the number is capped. Kariko Problem: “American Science funding has become biased against young scientists and risky ideas” (p. 146). The NIH became biased against risky and novel research: risk aversion (rather than risk seeking). 

Before the 20^th century science was largely done by entrepreneurs, like Thomas Edison. Later was the DuPont Experimental Station which developed synthetic rubber, nylon, and Kevlar. There was funding from private philanthropy like the Rockefeller Foundation. After World War 2 started, engineer Vannevar Bush told Roosevelt: “America was technologically unprepared to take on the Axis Powers” (p. 149). Roosevelt created the Office of Scientific Research and Development (OSRD). That included the Manhattan Project, radar, malaria treatment, an early influenza vaccine, and early computing. Bush promoted basic research and established the National Science Foundation (NSF) and National Institute of Health (NIH). Politicians created “more paperwork, less research” (p. 153). Kariko noted the importance of marketing and status: grantsmanship” (p. 155). Funding is peer reviewed. A Gila monster hormone in its venom was used for Ozempic (“lizard spit”). COVID tests used polymerase chain reaction, based on a hot springs bacteria thriving in boiling conditions. CRISPR is gene-editing with the potential to cure genetic diseases. NIH director was Francis Collins who instituted for riskier research and younger scientists.

Sputnik started a rocket race to space plus research in general in 1978. The Defense Department established the Advanced Research Projects Agency, DARPA. Advances included the internet, GPS, personal computers, and self-driving cars; also investing in Moderna. Domain managers paid scientists to work together on their own projects. ARPANET became the first internet in 1969: trusting individuals over bureaucracies. Bell Labs was started by AT&T in 1925. Results included the first transistor, first solar cell, fiber optics, and principle of lasers.

Chapter 5: Deploy. Alexander Fleming discovered Penicillium in 1928 which killed bacteria. Bacteria were the most common cause of death in the US, including from bacterial pneumonia during the 1918 influenza pandemic than the virus. Howard Flory at Oxford researched penicillin in more detail, including testing the effectiveness on people during World War 2. Penicillin went from a discovery to medicine that saved millions in the 1940s.

The Eureka Myth. “The 10,000-year story of human civilization is mostly the story of things not getting better: disease not being cured, freedoms not being extended, truths not being transmitted, technology not delivering on its promises. Progress is our escape from the status quo of suffering, our ejection seat from history—it is the less common story of how our inventions and institutions reduce disease, poverty, pain, and violence while expanding freedom, happiness, and empowerment” (p. 171).

Lithium iron phosphate batteries 30 years ago at UT, but they were manufactured in China at scale. “We are stuck between a progressive movement that is too afraid of growth and a conservative movement that is allergic to government intervention. … Invent, but don’t implement” (p. 173).

Back to Fleming and Flory who didn’t have the resources to make penicillin to scale during World War 2. America did under Vannevar Bush and the Committee on Medical Research. CMR turned it into a medical product using “corn steep.” That required millions of dollars to produce 10 million units a month per plant. Then distribution. “Surgeries became safe, childbirth less deadly, and war wounds less lethal” (p. 175). Implementation determines progress---that’s “tinkering, embodiment, scaling” (p. 176).

Volta invented the battery in 1800. Then incandescent lamp in 1841. Edison found a useful filament, then built a system of generators to make power, wires to carry it, and meters to measure usage. Bells labs invented the silicon-based solar cell in 1954. The Navy used them to power the Vanguard satellite. When OPEC stopped supplying oil and the government looked to alternative energy. This research was stopped by Ronald Reagan in 1980. The Germany took over, paying companies to make panels and consumers to buy them. Then China made them cheap in the 2000s with subsidies, investing for the long run. Not the US.

Wright’s Law (engineer Theodore Wright): some things get cheaper when they learn to build them. Gordon Moore of Intel stated Moore’s Law that the number of transistors on a chip will double every two years. “America had the ability to invent. China has the ability to build. The first country that can figure out how to do both will be the superpower” (. 182).

Operation Warp Speed made the COVID vaccine the fastest vaccine development and distribution ever. Government money had been spread to three vaccine platforms: synthetic mRNA, replication-defective live-vector, and recombinant-subunit-adjuvanted protein, using upfront money. They used 27 manufacturers plus included additional materials like special glass from Corning, needles, and syringes. Then distribute to thousands of sites to administer the vaccines. For us, it was Austin Public Health. Republicans were in power and could have bragged, but there were many anti-vax Conservatives.

Artificial intelligence can do tasks effectively (or not), which required investment and energy. It can be used for espionage and hacking, plus the wrong code (or in the wrong hands) could devastate the planet.

Conclusions: Toward Abundance. “Politics is a way of organizing conflict, and so our attention is naturally drawn to divisions. … The Democratic and Republican parties do not merely disagree over the details of tax policy. They disagree over the legitimacy of elections, of institutions, of the structure of American government. … Political order: aa constellation of ideologies, policies, and constituencies that shape American politics. … The New Deal order rose in the 1930s and collapsed in the 1970s. The neoliberal order rose in the 1970s and declined in the 2010s. … The New Deal order brought the agreement that the federal government must take an active role in managing the American economy and protecting workers. … It continued under Dwight Eisenhower” (p. 203).   

“In the 1970s, the New Deal order collapsed beneath the weight of crises it could not contain—stagflation and the Vietnam War” (p. 204). The collapse of Communism and civil rights in the US. The Great Recession led to reregulating the financial sector. Free trade did not work with China. After 2010 a slow economy demonstrated inequality and fueled resentment. Bernie Sanders and Donald Trump focused on change, but different perspectives. There’s been failing institutions and a flailing public. Right-wing populism seeks power, increased scarcity, and signals government is corrupt—the populist strongman is the answer. Zoning in liberal states increased costs.

“With the CHIPS and Science Act, [Biden] announced America’s intention to invest billions in scientific discovery and billions more to build advanced computer chips. … Trump understood the dark side of competition, but he never understood the possibilities of cooperation [like Covey’s win-win]. … Elon Musk focused on slashing what government does rather than reimagining what it can do” (p. 210). California liberals want to build houses, but not “recklessly.” That means additional requirements that add costs and time involved or makes it impossible. It should be easier to build homes.