Abundance is a timely and insightful book offering a fresh perspective on the developments that led to the Trump revolution while presenting a vision for the future. Its outlook on economics and politics is both creative and, I must say, one I strongly share.
The authors begin with the premise that crises often precipitate paradigm shifts in policy—shifts that both political parties typically embrace. The Great Depression and World War II led to the New Deal: the creation of social safety nets like Social Security, investment in public goods such as highways, and major funding for public education and research. The upheavals of the 1960s and the stagflation of the 1970s resulted in an era of greater freedom and environmental awareness—bringing about civil rights legislation, deregulation, same-sex marriage rights, the founding of the EPA, and the Endangered Species Act.
By the late 2010s, however, frustration was mounting in Middle America, driven by growing inequality, income disparity, the pandemic, the perceived incompetence of the state (as seen in Iraq and Afghanistan), and anxiety over China’s rise. This discontent fueled political polarization and led to extremism on both the right and the left. Trump claimed that America was overextended and exploited by immigrants and foreign nations. Meanwhile, Bernie argued that oligopolistic practices and economic exploitation were to blame and called for broader opportunity-sharing. Despite their differences, both advocated for rebuilding America’s strength. The public, yearning for confident leadership, responded. Obama captured this spirit with “Yes We Can.” Biden emphasized, “Build Back Better.” Trump’s version was, “Yes, I Can.” In contrast, Kamala Harris remarked that there was little she would have done differently than Biden—a comment that failed to inspire. With some hesitation, a narrow majority elected Trump. Many now express buyer’s remorse.
Klein and Thompson argue that the current dysfunction is the product of flawed decisions made by both parties. Republicans embraced the mantra that “government is the problem” and “cannot pick winners.” At the same time, Democrats pushed regulatory agendas focused on equity and environmental impact—efforts that, while well-intentioned, often stifled innovation and entrepreneurship.
However, history shows that public research and policy have been powerful engines of growth. DARPA (the Defense Advanced Research Projects Agency) laid the groundwork for technologies such as weather satellites, GPS, drones, stealth technology, voice interfaces, the personal computer, and the internet—technologies that gave the US a significant edge. The public sector funded research, development, and initial commercialization in these cases, while the private sector deployed and scaled the technologies.
The National Institutes of Health financed the Human Genome Project and research on mRNA vaccines, gene editing, and other medical breakthroughs. Public investments enabled the development of these technologies, which were later scaled by private firms, often with continued public support. This public-private partnership has also driven the introduction of penicillin and many other transformative innovations.
The authors stress that innovation is a continuous process. A breakthrough—typically credited to an individual scientist—is just the beginning. Progress requires sustained support and development. Unfortunately, in recent decades, the US has excelled at discovery but struggled with deployment, while other countries have taken the lead in scaling innovations. For example, US scientists invented solar cells, but China now dominates its production.
As the nation faces the dual challenge of combating climate change and overhauling its infrastructure, its ability to build is hampered by overregulation. A striking example is California’s high-speed rail project, which has repeatedly failed while similar projects move forward in Europe and China.
The central message of Abundance is that we need to rethink our approach to economics and policy. Economists and policymakers must better understand the innovation-to-deployment pipeline, recognize the importance of investing in education, research, and development, and work to reduce bureaucratic obstacles that hinder progress.
Similarly, streamlining regulatory barriers will enable entrepreneurs to implement new technologies. Streamlining is not easy—many regulations were introduced for good reasons: to ensure scientific rigor, protect the environment, and maintain quality of life. However, excessive caution comes at a cost, and these constraints can become paralyzing. We need thoughtful and timely regulatory reform. Policy evaluation must include a benefit-risk assessment and be done periodically.
We must also trust and empower young scientists, providing them the resources to explore bold new ideas. Rethinking zoning laws, allowing for increased housing density, and accelerating the permitting process are key steps toward enabling infrastructure development that fosters growth and reduces greenhouse gas emissions.
We need to develop institutions and mechanisms that allow all members of society to enjoy abundance. Harnessing the potential of artificial intelligence and leverage new insights from psychology and education may revitalize the education system and ensure broader inclusion in the modern economy. Creativity and ingenuity must be devoted to reduce inequality and alienation, and these efforts may require significant transfer of wealth towards the less fortunate, not tax reduction. Openness to the world remains essential. The US has long benefitted from its extraordinary capacity for research and innovation—driven by talent from across the globe attracted by the American education system. That pipeline must remain open and strong. US industries rely on global knowledge and collaboration, and those ties should be deepened, not weakened. Rather than succumbing to fear and scarcity, we should lay the groundwork to cultivate Abundance here and abroad.
Very much nails it on the importance of continuous innovation as a process that overcomes the costs of gradualism by shaping and designing markets that can be sustainable in affecting change—building, but not destroying.
Great summery of recent 100 years history. Too much credit to Obama
Zeev
David, many thanks! I have ordered the book. The topic of innovation, policy, and development deserves more attention from economists, and they need to be considered together. This is still a big challenge. Justus
Well done, David – this sounds like a book that I should read. In these very difficult and often shocking times, it is heartening to know that someone has a positive plan for a better future which makes some sense of our present chaos! Thank you. Janet
David, thank you for this summary. The disruptive connotation of innovation often leads to half hearted decisions. Those who see innovation as a continuous improvement process are better off. I hope that lawmakers will not strengthen the perceived fear of disruption linked to innovation but see this process as an evolutionary development.
It’s easy to say “we need to ….”. This assumes that there is an aggregate, a one-tribe we. But there are very few actions that don’t negatively affect some people, however many others they may benefit. If we set up a floating wind farm, some peoples’ views will be “harmed” and the power pylons must run from the beach to the locations of major use. If we streamline regulations, a lot of perhaps useless regulators will lose their jobs, and they are likely to be unionised. Funding research creates future benefits but means that the money won’t be spent on “now”, for example, on homeless shelters. We have empowered local communities, but that means that they can block the wind farms – the NIMBY phenomenon. To deal with these things requires two things. First, an understanding of the nature of the choices that need to be made. And second, a sufficient community spirit that people will indeed do things for the good of the community as a whole. How to get there from here is a difficult question to answer. Sometimes, as in Switzerland, both things seem to apply to some considerable extent. But this is a small country with a total population only a little larger than that of New York City and with a strong national culture that is easier to reinforce at this modest scale, both in terms of population and geography. It is hard to think of much larger places that have advanced along this path. It is also hard to see political parties that make it a central plank of their platform to explain all this. That would be the key that unlocks the doors.
I agree with you George and aware of all the limitaitons of implementations of policies “we need to do.” Working with multiple organizations, that especially care about the environment, I realized that constraints on growth and development became axiomatic. The purpose of my blog is to promote the idea of the book and introduce common objectives associated with pursuing simultaneously sustainability, growth, and equity. That’s the reason that I teach classes on sustainable development. It is a challenging but essential poltical agenda. I know that not everything is feasible, but I’m very optimistic about establishing less restricting zoning, and our challenge as economists is to make the case for more refined and sound environmental regulation. When economists cannot compute the cost of regulation in a way that they understand what’s behind the regulated technology, then trade-off considerations are frequently ignored.
Wow! Well put!