Anyone who looks at the North American economy is faced with a puzzle: Why are so many things that logically should be there, not there?
Among the absent goodies are affordable homes for young buyers and expanded pipelines that could bring low-cost energy to new markets. High-speed railways, solar power plants and electric-vehicle recharging stations are also notable for their relative scarcity.
The more you think about these missing pieces, the odder the situation seems. It’s not as if people don’t know how to build homes, construct pipelines or do other practical things. In many cases, the technology is well-known, the money is available and the market demand is clear.
Somehow, though, we seem to have lost the ability to get things done. Sure, we file reports, we hold community meetings, we do environmental reviews. However, we don’t actually build stuff.
Ezra Klein and Derek Thompson want to remedy that. Their new book, Abundance, has created a buzz among progressive policy wonks in the United States because it paints an enticing new vision for Americans—a vision in which the powers-that-be stop shuffling paper and instead start constructing the neat new things that can make life better for everybody.
Some of the most onerous restrictions occur in places that pride themselves on being open-minded. The gap between rhetoric and reality is staggering.
It’s a vision that is equally appealing in Canada. When Mark Carney talks about fast-tracking environmental reviews for energy projects and getting the government back into the business of building homes, he sounds much like Klein and Thompson. In different ways, all of them are addressing the same frustration: the sense that our desire to protect everyone from everything may have gone too far, and that bureaucracy is stalling progress, often for dubious reasons.
The most glaring example of this economic paralysis is the housing crisis. As we all know, Canada and the U.S. suffer from a severe lack of affordable homes. Yet, astonishingly, both countries have somehow managed to build fewer homes over the past decade than they did way back in the 1970s, when they had only a fraction of their current populations.
Why has the housing industry spent half a century throttling back its output despite growing demand? One big reason is that cities have imposed restrictive zoning laws and other measures designed to protect existing communities. These rules discourage new construction.
Some of the most onerous restrictions occur in places that pride themselves on being open-minded. The gap between rhetoric and reality is staggering.
“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,” Klein and Thompson write. “Those signs sit in yards zoned for single families, in communities that organize against efforts to add the new homes that would bring these values closer to reality.”
Klein and Thompson are both noted progressives, but they’re not afraid to call out their ideological brethren on such hypocrisy. That is a refreshing change. Historically, complaints about too much red tape have been a right-wing obsession.
One of the great achievements of Abundance is demonstrating why all of us should be concerned about regulatory overreach. It describes how well-meaning but bumbling policymakers deter useful projects in areas ranging from scientific research to high-speed rail.
Klein and Thompson blame much of this on what they call “everything-bagel liberalism”—the tendency to appease special-interest groups by saddling any new initiative with a crushing load of worthwhile but extraneous extra goals.
Abundance argues that liberals need to shake themselves out of their comfortable stupor. Many are still stuck in the ways of an earlier generation of progressive politics.
How does this work? Imagine you are a mayor who wants to build low-income housing. In some jurisdictions, you can do so only if you employ the required number of small local contractors as well as meet quotas for minority-owned and woman-owned firms. In addition, you may have to ensure that the contractors provide child-care facilities for their workers’ kids and require that all the materials used in construction meet stringent criteria for sustainability and ethical sourcing.
There is nothing wrong with any of these requirements in isolation. Put them all together, though, and project costs soar and building times lengthen. Progress slows to a crawl.
Abundance argues that liberals need to shake themselves out of their comfortable stupor. Many are still stuck in the ways of an earlier generation of progressive politics, when improving the social safety network simply involved writing new rules.
That style of politics won’t work at a time when a warming world demands massive investment in new power sources and new infrastructure. “The climate crisis demands something different,” Klein and Thompson declare. “It demands a liberalism that builds.”
Hear, hear. It is easy to see why Abundance has sparked so much enthusiasm. It envisions a muscular, can-do style of governing that actually gets stuff done. It suggests that leaders stop agonizing over the minutiae of who gets what and instead start asking if increased supply could remedy whatever problem is at hand. If so, Klein and Thompson recommend that political leaders become “bottleneck detectives”—people who identify obstacles to increased production and clear them away.
All of this is persuasive. It’s only fair, though, to note where the book comes up short. Notably, it offers no guide to how much oversight an advanced economy actually needs.
As Klein and Thompson acknowledge, increased regulation has delivered undoubted benefits. Our air and water are far cleaner than they were back in the 1970s. Similarly, our cars are much safer and medical disasters like thalidomide aren’t quite so common. So when do good rules start becoming too many rules? That is not a question they tackle in any detail.
They also have little to offer on the practical matter of how governments can overcome vested interests to achieve agreement on what must be done. But maybe that is asking too much. What makes Abundance stand out is the way it is changing priorities and shifting vibes, especially in discussions on the left of the political spectrum. This is a noteworthy book, and if it simply succeeds in making it respectable to build things again, it will have accomplished a wonderful thing.
Ian McGugan writes about markets and economics. His work has appeared in the Globe and Mail, the New York Times and Bloomberg/BusinessWeek. He was founding editor of MoneySense magazine.
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