Abundance

when government works well

Over the course of the twentieth century, America developed a right that fought the government and a left that hobbled it

And so writes the back cover of Abundance.

If you’ve spent much time on the politically homeless corners of Twitter, you’ve probably heard about this book already. As did I. And somehow, somewhere, I made the decision to buy it.

In many ways, the book reflects problems that most people already agree exist.

• We can’t afford homes.

• There isn’t enough clean energy being generated.

• Governments operate on outdated systems and technologies.

And it proposes a novel but not entirely new way of thinking about them.

Broadly, I resonate a lot with this book and what it has to say about progress. But before diving in, there are three disclaimers I want to give.

1. One of the biggest criticisms of Abundance is that the people who support it tend to be bad political actors. And I won’t deny that that is true in many cases. But I also think it’s important to separate the *idea* of Abundance from its real world political proponents.

2. There are some ideologies that, naturally, Abundance comes into conflict with. But w.r.t most others, there isn’t a conflict and believing multiple are correct is possible. Abundance isn’t an end-all-be-all, but rather just one way of thinking about things.

3. This is a criticism of American, and to an extent Canadian, ways of thinking. It doesn’t, and shouldn’t be taken, to represent the rest of the world.

And with that, we can proceed.

One Thesis, Many Ways

There are many ways to state the key argument of Abundance.

Progressives have great goals. But they’ve forgotten how to achieve them.

The government is too focused on process, and not focused enough on results.

There is not enough state capacity.

They all center around the same concept: government needs to be better at getting stuff done.

The problem we face in the 2020s is that we are building too little, and we are often paralyzed by process.

Take the example of San Francisco. By most metrics, it should be one of the best places to live in the world. It has an amazing climate, plentiful energy resources, and an economy the size of a small country. Yet turn on Fox News, and “if you vote Democrat, your city will turn into San Francisco” is used as an attack every time someone even slightly left-of-center runs for office. And although there are of course nuances, by and large the attacks on topics ranging from homelessness to affordability to congestion are correct.

For another example from the same part of the US, consider the California High Speed Rail project. Originally approved for $33 billion in spending in 2008, the project was supposed to open in 2020 from Oakland to Los Angeles. And yet in 2025, the agency responsible for the project is unsure if it will ever be able to finish a small portion of that from Merced to Bakersfield (where?!), let alone the entire line.

These examples aren’t isolated. We are missing state capacity.

At an abstract level, to understand why we can return to the quote at the start.

The right doesn’t believe in big government. They perceive it to be ineffective and inefficient. Looking at the way many regions in North America are governed and you’d be tempted to agree. But this is a self fulfilling prophecy. When you think government is doomed to fail, you strip away any investment - be it financial or political - into it. And so it actually does fall short.

The left, largely as a reaction to the right, defends the current system of governance at all costs. Some may push for what seems like change or reform, but it’s often just more of the same. More community consultation. More process orientation.

The result of all this is that no one asks the question: how can we make government better?

And so, government ends up falling short. “Lack of state capacity,” we can call it.

That’s the high-level theory. Diving to a more concrete grounding now, we can also consider a few key drivers of missing state capacity.

A Focus on the Demand Side

A demand side solution, instead of making more of something, tries to better provide access to what we already have. While the book doesn’t explicitly condemn demand side fixes, it does flag their exclusive presence as problematic. Fundamentally, subsidizing demand is a bit of a cat and mouse game - the more you subsidize, the more demand goes up, the higher prices go, so the more you need to continue to subsidize.

Consider a classic example: rent supports, which involve subsidizing rent payments. In the short term, this is effective as it means more people can afford rent. But in the long-run? More people affording rent means more demand for housing. Unless new housing is created, rent prices will increase. So to keep it accessible, governments will need to subsidize rent even more. And the cycle continues.

Appeal to All

Politically, it’s popular to make everyone happy. Of course it is.

So, discussions about land acquisitions for infrastructure projects drag on. Court battle after court battle, as private landowners refuse to sell their land to the government to build on. And so the project stalls.

So, NIMBY legislation gets passed. Housing projects are paused while consultation after consultation happens, only for the entire project to eventually get cancelled.

So, environmental regulations become weaponized by special interests. Although when they were introduced in the 70s they were well intentioned, today they can hold projects up for years as local groups push for review after review after review.

All these things sound really great. Consultation with the local community is amazing!

But through this, we forget about what we’re actually trying to accomplish.

We need not look to the United States to see evidence. Just in Toronto, Bathurst Street, a corridor that carries 35,000 transit riders a day, was supposed to have transit priority lanes installed from the Waterfront to Eglinton. To no ones surprise, rounds and rounds of community consultation yielded heavy opposition from organized homeowner coalitions. And surprise, a few weeks later, half the project was cancelled.

Trying To Do Everything

Closely related is the concept of infrastructure as general policy. When a government initiative becomes a vehicle to accomplish as many policy aims as possible, nothing ends up happening.

Returning to San Francisco, Abundance cites a case of housing contracting rules that seek to accomplish far more than just building housing. Known as 14B, the regulation initially required there be a preference for minority or female owned contractors. But when the state banned such requirements, the city instead changed them to preference small contractors with under $12 million in revenue.

It’s no surprise then, that today the majority of relevant contractor types in San Fran are almost exactly that size. And knowing the construction industry… economies of scale matter. Bigger contractors can buy better tools, develop better worker training programs, conduct better quality control, acquire better expertise, and so forth.

The forced use of these small contractors drives costs up, with housing prices correspondingly increasing - even though the whole point of the housing construction initiative was to bring them down.

But there’s more. A review by the Arts Commission is required, for design purposes. Then a review by the Office of Disability, which sounds great until you realize it’s just a duplicate of the already existing ADA regulations. And countless others.

Per local builders, demonstrating compliance alone can add six to nine months to a project’s timeline.

Yes, you read that right. Not even complying. Just demonstrating.

Thinking closer to home, we can also see this through “Buy Canadian” requirements that are frequently imposed on government contracts. In many cases, Canadian suppliers are far from the best value ones - so procurement contracts end up costing more, for less.

Another example is when infrastructure is used as a job creation tool. Now having jobs be a by-product of building is awesome. But when job creation becomes the primary goal (which happens quite often), it creates a perverse incentive structure. More employees are hired (because job creation!), so the project costs more and more. While this is good for employment, it’s awful for actually building the infrastructure. Higher costs and longer project times mean in the long run, we can build less.

The New York Times reported, for instance, that a subway project in New York involves four times as many workers as comparable builds in other developed nations. So the gripe about a bunch of people standing around at a construction site doing nothing? It’s not wrong.

(Admittedly, the reality is that this is often the only way to gain political support for these projects. So even if normatively I think it’s really bad, I also understand why it happens.)

Ability

The fourth area, and perhaps the broadest, is a general hollowing out of government over the last few years. Part of it has been driven by a push for “less government.” When public sector salaries are substantially lower than the private sector, it becomes harder to attract and retain the best talent.

(I would posit that this isn’t the fault of the public service. Largely, public servants function at the will of political leaders - it’s these politicians who set the tone and lead down this path.)

Here’s the thing. Government is not doomed to this. In many places, there IS state capacity. Research from NYU, for example, found that governments in most of the rest of the world (including developed countries) are able to build transit infrastructure for a fraction of the cost of North America. Even at home, as we saw with the development of COVID-19 vaccines and their subsequent rollout, government can get stuff done when they commit to it (more on COVID vaccines later).

Abundance in Practice

You know how a textbook is often structured like “theory”, then “applications?” Well, we’ve reached the applications stage of things.

First, the elephant in the room: housing. In much of the western world, housing has become an asset. It’s something you invest in, and you hope the value of it goes up over time. These aren’t greedy corporations or money-hungry machines - most housing investors are everyday people and these homes represent a big portion of their retirement savings.

Like with any good, the more housing there is the cheaper it gets. Supply and demand.

Naturally then, this pits people against one another. Homeowners who want less homes, vs prospective homeowners who want more homes.

But I think I’ve talked a lot about housing on my Substack already. So instead, I want to focus on a few other areas.

Environmental Reviews

In the mid to late 1900s, there were a series of successive environmental disasters that led to (understandably) the introduction of dozens of pieces of permitting legislation. They require extensive reviews of builds by dozens of agencies for everything from noise to rainwater to heritage preservation to social impact.

Now don’t get me wrong. Environmental reviews are important. But for one, the fact that there are so many of them means they drag on for years. By the time a project is approved, market conditions have changed significantly and oftentimes it no longer even makes sense to proceed with construction.

Second, they often overlap extensively. The same thing will be checked by several agencies with almost identical requirements and specifications. This takes time and resources.

Additionally, these reviews are often weaponized to stop projects. “Weaponized by who?” you may ask? Well, just about everyone. From environmental activists who it seems would prefer no one ever built anything at all, to local homeowners who don’t want to give up their land, to neighboring businesses concerned about noise impacts.

Much of the legislation allows for lawsuits as a key mechanism to stop development - lawsuits that turn into appeals and more appeals and more appeals. Combined with what can be described (politely) as a slow judiciary, this drags on forever. And courts, in the end, often end up siding with the plaintiffs.

The irony of all this is in the types of projects that most often get held up.

For one, clean energy. As the world transitions away from fossil fuels, new energy sources are needed. We need to build solar farms, wind farms, hydroelectric plants, and yes, nuclear plants. What more, we need to move the energy to where its needed. The best place for solar in the US, for example, is in flyover country. But where the power is needed? Along the coasts. We need new transmission lines to get the electricity from A to B.

Another is rail infrastructure. Returning to California High Speed Rail, local opponents sued on everything from clean air to noise impacts to eminent domain cases. At one point, there was a case related to the impact on pollution stemming from tree removal.

Seriously.

In all this, we seem to have forgotten about the ENVIRONMENTAL BENEFITS OF OPENING A HIGH SPEED RAIL LINE??!!? Or a new solar farm replacing a choking coal plant!?!?

This is a focus on process, not results.

We worry so much about the impacts of doing something, we forget about the harms of not doing it.

Organized Groups

Another key driver is the rise of organized groups. These can be everything from local residents associations to labor unions. Because while individuals may lack the resources to derail major projects, these groups don’t face that problem.

They have donors. They have lawyers. They have PR teams. If they don’t want a project built, they have the means to stop it. And oh do they have reasons to not want a project built.

Pollution impacts.

Construction traffic.

Emergency vehicle access.

Noise from operations.

Heritage buildings.

Impact on local residents.

Views of the lake.

Shadows cast by the sun.

Gentrification and displacement.

The fact that, heavens forbid, someone may make a profit off of it.

In real terms, this usually means any one group can say no and derail everything. But for the project to proceed, everyone needs to say yes.

And that happens about as often as you think it does.

Again, the concerns raised are usually not wrong. Compared to project benefits though, they mostly become marginal.

“Ah! We can redesign the project to mitigate the harms!” proponents claim.

But when you have a list of complaints that long, by the time you’ve worked to accommodate every one of them, the project has either dragged on so long it’s functionally dead or it has been diluted so much the benefits have disappeared.

More cynically, that’s exactly what many of these groups want.

To make matters worse, the cycle compounds. When we don’t do stuff, when governments fail to build these projects, it projects an image of incompetence.

So now, people are even less inclined to support these projects.

Imagine if California High Speed Rail had opened by now, shuttling people at 300 km/h across the state. Imagine the political momentum we’d have for High Speed Rail everywhere else.

Instead, people look at California, and go, “look what happened when they tried it.” Everyone nods in agreement, and we never get a high speed railway.

Science

The third area Abundance deep dives into is science. Now I'm not an expert on this - in fact, I know next to nothing. But I think the insight they provide is interesting.

Historically, governments have been massive funders of science research. After all, the return on most research is quite uncertain, and often takes decades to pay off. Many scientific innovations don’t go anywhere at all, and others, even if successful, aren’t (and shouldn’t be) commercialized. It simply does not make financial sense to a for-profit entity.

But as of late, a few problems have emerged. For one, we’ve become too risk averse. The focus is on publishing papers that are in line with and comply with standard scientific orthodoxy. There is less boundary pushing, and less out-thereness. Part of it may be due to the fact that science is becoming more stable. But the other is that increasingly, this is what government funding programs look for. They want to make investments that are high certainty, even if low return.

You know those memes that are like “US government spent $250,000 to study whale poop,” or something to that effect? We actually need more of those. Because that is how we learn about the world. And despite the silliness of it all, whale poop might just lead to the discovery of the next Penicillin.

99.9% of whale poop studies won’t go anywhere. But that 0.01% is where the next Penicillin likely lies.

(Fun fact: the book actually spends a while talking about how Penicillin was discovered. It’s quite a cool story, and not that different from the whale poop example).

And then, there’s the bureaucracy. Much like when it comes to infrastructure or building, science has become swamped in red tape. One estimate found that almost half a researcher’s time is spent in filing grant applications, updating providers about project statuses, and pursuing funding channels. This is largely driven by the increased complexity of accessing such funding - the need to provide more and more information, share more and more updates, and submit more and more documentation.

This is partially a good thing. After all, it encourages transparency and accountability in the funding process. But it also means that less science is being done. There is a balance that needs to be struck here to allow scientists to get back to doing science - even if it means sometimes, grant money goes to waste. Because the alternative of paying leading researchers to fill out paperwork all day is even more wasteful.

The third challenge they identify is a missing focus on implementation. The “real” success of science is not in the initial breakthrough, but in the ability to roll it out widely, reliably, and at scale. Technologies that exist in the lab but not in the real world are functionally useless.

The book cities the example of the light bulb. Although its initial invention was important, it wasn’t that a certain combination of materials could produce light which ultimately led to a lit-up society. It was the ability to source, produce, manufacture, and distribute it widely and at a cost people can afford.

This misguided focus can be seen in many places, but no where is it clearer than in solar energy. The foundation of this technology was developed in the United States. But after coming up with it, the Americans largely abandoned the concept. After all, at the time gas prices were falling, and the climate was not at the forefront of peoples’ minds.

It was not until European and Chinese researchers and manufacturers got in on the action and figured out how to make the technology en masse that prices for solar became competitive with those of fossil fuels. Today, 70% of the world’s solar panels are made in China, and since China started manufacturing, prices have fallen by 90%.

As the authors quote John Arnold, “America has the ability to invent. China has the ability to build. The first country that can figure out both will be the superpower.”

Abundance In Crisis

Despite all this, there is a silver lining. Hope is not lost.

Because, we’ve seen that the government is not doomed to fail. Science is not doomed to fail. When we put our minds to it, we CAN do great things.

During COVID-19, Operation Warp Speed defied all expectations and got a working vaccine developed, approved, and distributed within a year. In a field where usually this takes decades, it was a truly unprecedented development. How did it happen?

Within days, the virus was sequenced with the information being shared with laboratories across the world. The government provided expedited funding to multiple vaccine candidates spanning across companies and technologies. This, of course, included investment in MRNA, which at the time was seen as an unproven, untested science.

Meanwhile, before any vaccine was ready, they had begun to coordinate distribution and logistics. Everything from vials to shipping routes to cold storage began planning right away. The government enlisted the Department of Defense along with dozens of private companies who had expertise in doing just this. IT systems were set up, vaccination sites established, and so forth. There was no “this is the responsibility of a different level of government” nonsense. Everyone did what they had to do.

As soon as a candidate was ready, approvals were expedited, with overlap between stages and unheard-of coordination amongst government agencies. And as soon as they were approved, the vaccines flew out the door.

Consider another example. When a bridge along Interstate 95 (the American East Coast’s primary highway) collapsed, the government machine came together to get it rebuilt. Anyone familiar with how these things normally go knows they can take years (it took, if I recall correctly, six years to build the exit overpass near my house - and that isn’t even counting planning time).

The bridge was replaced in twelve days, from start of planning to opening.

Normal rules about when construction can be done were lifted. The endless cycles of procurement were skipped. Many environmental reviews were bypassed. Rules about preservative construction were waived. A livecam was setup to monitor progress, 24/7.

Many argue that it’s this bridge repair that actually saved Governer Josh Shaprio’s (who oversaw the reconstruction) political career. Lesson? State capacity is popular.

We can do great things when we want to.

And the times in which we’ve done that seem to have a common trend.

Think about examples of great state capacity.

Apollo was developed during the space race with the USSR.

The New Deal was introduced post Great Depression.

A splurge of deregulation occurred post 1970s economic crises.

Regardless of whether or not these actions are good, it’s clear that our government is best at getting something done during times of crisis.

But why?

Climate change is arguably a crisis, so could we use that to loosen permitting regulations and build out a clean energy grid? Illness is arguably a crisis, so could we use that to realign scientific innovation towards outcomes and widespread access? Housing affordability is arguably a crisis, so could we use that to loosen restrictive zoning regulations?

Turning [crises] into national priorities is, and always has been, a political choice.

Many Questions, Few Answers

Thus far, we’ve been talking about problems.

Now the book does provide a few potential solutions. One such example is scientific funding that prioritizes delivering results, instead of just rewarding effort. Others, like lifting zoning restrictions and reducing community consultation on projects, are heavily implied.

But on net, the authors don’t provide too many specific policy solutions or any indication of how they can be pushed forward. They even admit as much in the conclusion.

And I think that that’s okay. The Abundance issue goes beyond just specific policies. It’s about a mindset shift, one that recognizes that we cannot continue to prioritize special interests, be they purportedly environmental, social, or otherwise, above nation building projects that will lead to substantial quality-of-life improvements for millions of people across the country. It’s about creating state capacity, a government that doesn’t get hobbled by frivolous lawsuits and excessive consultation, but rather puts boots to the ground and starts getting stuff done.

This book is not a policy paper. There will be plenty of opportunities for that to come (and to be honest, most of these policies are already out there). Rather, it’s the foundation for one.

Abundance is not easy. But we are seeing progress, including here at home.

The rise of the YIMBY movement has recently led to the legalization of sixplexes in much of Toronto.

Mark Carney is working with provinces from coast to coast to deliver on much-needed infrastructure project.

Admittedly, much of the Abundance movement we see remains in the rhetoric stage. Political leaders will talk nice things about state capacity or the need to nation-build. But when it comes to putting their money where their mouth is, progress often falls short. After all, it’s one thing to badmouth special interest groups. But when they come out masquerading as a socially noble cause, it becomes much harder to say no.

And this brings us to the ultimate political challenge in making Abundance happen. It’s always more politically attractive to not prioritize long-run, national-building projects.

These projects take years. By the time the new homes you approved, the new clean energy grid you built, or the new subway you tunneled opens, you’ll be long out of office. The benefits are so long run that the political calculus becomes untenable. Comparatively, the harms of construction, of trees being cut down to clear a path, of properties being expropriated, start today.

So yeah. It’s hard.

But we’ve reached a point where we need it.

To stop climate change, we NEED to build a new clean energy grid.

To stop thousands of people from dying on our streets every year, we NEED to invest in better road design and communities.

To end the homelessness epidemic, we NEED to build more homes and drive housing prices down.

To combat the world’s deadliest diseases - today and tomorrow, we NEED to invest in a more efficient, risk-rewarding science system.

Fundamentally, Abundance is not neo-liberalism. It’s not about less government and totally free markets. It’s also not traditional progressiveness.

Rather, it’s an ideology of smart government. It says we need a government that can intervene properly, effectively, and efficiently. One that can get things done.

As the final pages of the book turn, we’re left with a concluding thought that should be the political mantra for the next decade and beyond.

We want more homes and more energy, more cures and more construction… Abundance is liberalism, yes. But more than that, it is a liberalism that builds.

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Images

https://www.reddit.com/r/ProfessorFinance/comments/1m27umr/shortage_of_housing_subsidize_demand/

https://x.com/CaHSRA/status/1768726425857827220