Abundance

Introduction: Beyond Scarcity

Overview

This chapter opens by contrasting a future of abundant, clean energy with our recent past of technological stagnation and political nostalgia. It argues that our current economic slowdown isn't just a statistical blip but a crisis of optimism, where both the left and right fight over a shrinking pie. The solution, it proposes, is for liberalism to embrace a bold, building-oriented agenda that uses technology and proactive government to create a state of "abundance"—not of indiscriminate consumption, but of the fundamental building blocks of a good life.

The Political Crisis of a Slowing Future

The text observes a profound loss of faith in the future. While digital technology advanced rapidly, the physical world—our energy, transit, and housing systems—stagnated. This slowdown fuels a politics of nostalgia and zero-sum conflict. The chapter points to Aaron Bastani’s "Fully Automated Luxury Communism" as a rare example of utopian thinking that is useful because it connects the pursuit of a just society directly to the development of transformative technologies like AI, clean energy, and advanced biotech. The argument is that to solve problems like climate change and inequality, we must invent and deploy new solutions, not just redistribute the existing, insufficient resources.

Government, Markets, and the Direction of Innovation

It challenges the simplistic view of government as either the problem or the solution. The market alone will not develop all the technologies we need, particularly those with massive social benefits but uncertain or non-commercial returns. Government must steer innovation toward public goods, like clean energy and disease cures. However, government can also be a barrier, as illustrated by America’s decades-long failure to build new nuclear power—a failure of political risk assessment, not private sector will. The chapter asserts that technology is never neutral; it comes "equipped with a program for social change." Therefore, a political vision that fails to harness technology for social good is itself a failure.

The Failure of Liberal Governance in Practice

The authors, self-described liberals, turn a critical eye on their own political coalition. They argue that the ineffectiveness of liberal governance, particularly in places like California, has directly contributed to the rise of right-wing populism. Despite total Democratic control, California exemplifies failure in building infrastructure, solving homelessness, and making housing affordable, leading to an exodus of residents. Voting patterns in the 2024 election showed the most dramatic shifts toward the right in deep-blue urban counties, a clear signal of voter frustration. The authors contend that to defeat dangerous populism, liberals must prove they can govern effectively and deliver tangible improvements in people's lives. Redistribution is necessary but insufficient without growth and building.

Defining the "Abundant Society"

The envisioned future is summarized by the word abundance. This is explicitly not a call for a "consumer's republic" of endless stuff, which the authors see as a catastrophic success. Instead, they draw from historian David M. Potter to define abundance as a dynamic state of having enough of what we need to build better lives. They advocate a shift in focus from consumption to production—to creating abundance in the foundational elements of society: housing, transportation, energy, and health. This "Abundant Society" is the core vision the book will sketch out, focusing on the institutions and people required to build it.

Key Takeaways

• Our political crisis is rooted in a stalled physical world and a loss of collective optimism about the future.
• Achieving a just society requires actively inventing and deploying new technologies, not just redistributing existing resources.
• Government must play a strategic role in directing technological development toward public goods, but is often its own worst obstacle.
• The failure of liberal governments to deliver effective governance and build essential infrastructure has fueled populist backlash.
• The answer is to pursue a state of "abundance" focused on producing ample housing, clean energy, efficient transit, and advanced healthcare, moving beyond a politics centered solely on consumption and redistribution.

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Chapter 1: Grow

Overview

America’s story has long been told as one of open frontiers, but its real prosperity was built in its cities. This chapter explores the painful contradiction at the heart of modern life: our most dynamic economic engines are also increasingly inaccessible, and the very policies meant to protect communities have created a deep crisis of affordability and opportunity.

It begins with a national myth. The idea of the western frontier as the source of American growth and character obscured a simpler truth: for most, getting ahead meant moving to a city. Today, that tension has crystallized into a severe housing crisis. Superstar cities like New York and San Francisco, which drive the innovation economy, have become so expensive they lock people out. This isn't a mystery of economics; it's a shortage of supply. The U.S. builds far too few homes, leaving a third of adults house poor and forcing workers into impossible choices between opportunity and affordability.

This crisis is especially damaging because cities matter more than ever. Even in a digital age, physical proximity is irreplaceable for sparking ideas and innovation. Industries cluster in places like Silicon Valley because breakthrough creativity thrives on dense, trust-based networks. Yet while cities remain engines of innovation, their role as engines of mobility has stalled. Research shows where you grow up profoundly shapes your economic chances, and historically, people moved to richer cities to get ahead. Now, soaring housing costs mean a lawyer might gain from moving to New York, but a janitor would be financially crushed. The escalator into the middle class has broken down.

Surprisingly, much of the blame falls on politically liberal cities. A "symbolically liberal but operationally conservative" mindset prevails, where residents support progressive ideals but fiercely oppose new housing in their own neighborhoods. The primary tool for this opposition is zoning. What began a century ago as a way to separate factories from homes has evolved into a powerful mechanism for existing homeowners to block new construction and preserve scarcity. The story of this shift is epitomized by California, where models of explosive postwar growth gave way to policies actively capping development, making communities wealthier, whiter, and more exclusive.

The human cost of these restrictions is starkly visible in the homelessness crisis. While individual factors like addiction or job loss determine who is most vulnerable, the root cause is a brutal shortage of affordable housing. It’s a game of musical chairs where there simply aren't enough chairs. Policies that eliminated cheaper housing options have left the most vulnerable with nowhere to go.

A major turning point came in the 1970s. For the first time, the cost of a home began its steep, permanent climb relative to income. With inflation, the fixed-rate mortgage turned owner-occupied housing into a primary vehicle for building wealth. This created a powerful new incentive: homeowners, with their life savings tied to one asset, became politically motivated to support rules that restrict supply and guarantee their home's value. This politics of scarcity created an inherent conflict—housing cannot be both a reliable investment and universally affordable.

This anti-growth impulse was also fueled by a legitimate and noble reaction to the environmental devastation of the postwar era. Faced with toxic rivers, lethal smog, and rampant sprawl, a powerful bipartisan movement led to landmark laws like the Clean Air Act. But in places like California, the California Environmental Quality Act (CEQA), designed to assess environmental impact, was transformed by the courts into a potent legal weapon against all kinds of development, strangling housing construction under a blanket of litigation.

Grassroots "highway revolts," where communities organized to block disruptive urban projects, perfected the tactics of saying "no" to growth. The liberal political movement thus developed a divided soul, caught between its legacy of building a better society and a new, reactive politics focused on stopping change to protect local environment and community character. The result is an America where the gates to opportunity are increasingly guarded, not by lack of ambition, but by the very rules meant to make our communities livable.

The Myth of the Frontier vs. The Reality of Cities

The chapter opens with the famous, possibly apocryphal, advice to “Go West, young man,” attributed to Horace Greeley. The irony is that Greeley himself built his fortune not on the frontier but in New York City. This contradiction mirrors a national narrative: America lionized the western frontier as the source of its prosperity and character, but in reality, mass mobility and status were far more often achieved by moving to urban centers. The frontier’s closure sparked a deep-seated fear that America’s explosive growth would end without open land, a worry that even surfaced as an explanation for the Great Depression.

The Modern Housing Crisis

That historic tension finds its current expression in a severe housing crisis. While cheap homes can still be found in rural areas, the dynamic “superstar cities” that drive the modern economy—like New York, San Francisco, and Boston—have become prohibitively expensive. This is a straightforward issue of supply and demand. America’s rate of home construction has plummeted since the late 1970s, failing to keep pace with population growth, especially after the Great Recession. The U.S. now has fewer dwellings per capita than most other developed nations.

The consequences are profound. Nearly a third of American adults are “house poor.” More insidiously, high costs in innovation hubs distort lives and the economy, forcing workers into brutal commutes and locking them out of opportunity. Economist Ed Glaeser’s research shows that by the year 2000, moving to New York City meant taking an effective pay cut for most people, as soaring housing costs erased the wage premium. Cities have shifted from being escalators into the middle class to being penthouses for the already wealthy.

The Enduring Economic Power of Cities

This is particularly damaging because cities matter now more than ever. A paradox lies at the heart of the modern metropolis: even as technology has demolished the cost of communicating and transporting goods over long distances, physical proximity has become more valuable. The economy today is driven by ideas, innovation, and services, not just physical goods. These intangible commodities are created collaboratively, in dense ecosystems where people spur each other’s creativity through competition and connection.

This is why innovation clusters are so stubbornly localized. New York dominates finance; Silicon Valley leads in technology. Attempts to replicate these hubs elsewhere largely fail. Even industries that seem purely digital, like generative AI, are concentrated in tiny geographic areas because breakthrough ideas require deep, trust-based, in-person networks. As Zoom’s CEO admitted when recalling remote workers, “Trust is a foundation for everything. Without trust, we will be slow.” Firms willingly pay exorbitant rents and salaries to be in these hubs because the cost of being elsewhere—in lost talent, knowledge, and serendipity—is higher.

Cities as Engines of Mobility—Now Stalled

Cities play a dual role: they are engines of both innovation and mobility. While the rich can still afford access to innovative hubs, high housing costs have catastrophically undermined the mobility function. Most jobs are in the local service sector—nurses, teachers, firefighters, line cooks—and these roles see better pay in dynamic cities. Crucially, research by Raj Chetty shows that place is a powerful determinant of economic mobility. A child born poor in a high-innovation area has a far greater chance of rising economically, and even of becoming an inventor themselves.

Historically, this is how inequality was reduced: lower-wage workers moved from poorer regions to richer, higher-opportunity cities. But studies show that this convergence of incomes across states, which was powerful from 1880 to 1980, has now stopped. As housing costs in superstar cities exploded, the math changed: a lawyer might still gain from moving to New York, but a janitor would see over half their paycheck consumed by rent. Consequently, lower-income workers began moving away from opportunity, turning a historical engine of equality into a driver of inequality.

The Liberal Policy Failure

Surprisingly, the blame for this policy failure falls heavily on political liberals, particularly in blue cities and states. There exists a “symbolically liberal but operationally conservative” mindset in affluent urban enclaves. Residents proudly display progressive yard signs while fiercely opposing new housing construction through restrictive zoning and community opposition. This has made cities like San Francisco and Los Angeles among the most difficult places in the nation to build, pushing out lower-income and minority populations and fueling a crisis that has benefitted more permissive states like Texas.

The tool enabling this is zoning—a concept that spread rapidly in the early 20th century. Originally a response to the new mobility brought by trucks and buses, which threatened to mix industrial and residential areas, zoning has evolved into a powerful mechanism for existing homeowners to preserve the character of their neighborhoods by blocking new density. The result is that communities actively prevent the housing supply from growing, even as demand skyrockets, choosing stasis over the change their proclaimed values would necessitate.

The Rise of Anti-Growth Zoning

The evolution of zoning from a tool for orderly development into a powerful mechanism to restrict growth is traced through two California cities. Lakewood, built on farmland after WWII, became a symbol of explosive, welcomed growth, with tens of thousands of homes erected in just a few years. In stark contrast, Petaluma, decades later, pioneered the opposite approach with its 1971 Plan, which capped annual housing growth and established an urban boundary. This model of actively limiting supply was widely adopted.

The result is that California, and much of America, has become "more Petaluma than Lakewood." Construction rates have plummeted since the mid-20th century, even as populations grew. From New York to New Jersey, communities enacted laws—like large-lot zoning, apartment bans, and sewer moratoriums—designed to curb new housing and preserve existing character, often with the effect of making communities wealthier and whiter.

Homelessness as a Housing Problem

The severe homelessness crises in cities like San Francisco and Los Angeles are a direct, if unintended, consequence of these restrictive policies. Research by Gregg Colburn and Clayton Page Aldern systematically debunks common explanations for regional homelessness differences, such as poverty rates, unemployment, mental illness, or drug use. Instead, their data reveals a lockstep relationship: homelessness rises with housing costs and falls with vacancy rates.

They analogize the housing market to a game of musical chairs. Individual vulnerabilities (like addiction or job loss) determine who loses out when the music stops, but the root cause of widespread homelessness is the shortage of chairs—the lack of affordable housing. Policies that functionally eliminated lower-cost housing forms, like boarding houses, through zoning and building codes, have left the most vulnerable with nowhere to go but the streets.

The 1970s Turning Point

A fundamental economic shift occurred in the 1970s, transforming the homeowner's relationship to their property. For the first time, the number of years of median income needed to buy a home began a steep, permanent climb. As inflation rose, the fixed-rate mortgage became a powerful wealth-building tool, turning owner-occupied housing into a much larger portion of household net wealth.

This created a new and precarious financial reality for homeowners. As economist William Fischel notes, a home is a dangerously concentrated investment—one's life savings are tied to the fortunes of a single neighborhood. To protect this primary asset, homeowners have a strong incentive to control their surroundings, leading them to politically support rules that restrict new supply and maintain scarcity, thus guaranteeing their home's appreciation.

The Politics of Scarcity

This dynamic creates an inescapable conflict, as writer Jerusalem Demsas argues: housing cannot be both a reliable wealth-building vehicle for owners and be affordable for all. The system inherently pits existing homeowners ("incumbents") against newcomers. In the 1970s, this material self-interest was often wrapped in more publicly palatable language about traffic, neighborhood character, and environmental protection.

The movement was also fueled by a legitimate, noble reaction to the downsides of unchecked postwar growth—the "ugly America" of pollution, sprawl, and decay cited by President Lyndon Johnson. The anti-growth impulse was, in part, an environmental and aesthetic corrective. However, these well-intentioned efforts to preserve community and beauty merged with financial self-interest and, following civil rights laws, became a new method of exclusion, ultimately creating the severe affordability and homelessness crises seen today.

The Environmental Backlash and the Cost of Growth

The staggering technological progress of the mid-20th century carried a dark and literal toxicity. The chapter describes an America that was both a global superpower and a "mass-industrial conspiracy to kill its own residents," citing lethal smog events, rivers running with industrial dyes, and the infamous 1969 Cuyahoga River fire. This palpable degradation of air, water, and land catalyzed a powerful intellectual and political reaction.

Rachel Carson’s Silent Spring gave form to growing anxieties, helping to spawn a mainstream environmental movement. This energy coalesced into the first Earth Day in 1970, a massive demonstration that underscored the issue's broad appeal. The political response was swift and, notably, bipartisan. Between 1966 and 1973, nearly a dozen major federal laws were passed, including the Clean Air Act, Clean Water Act, and the National Environmental Policy Act (NEPA). President Richard Nixon, in his 1970 address, framed environmental repair as a universal cause and followed through by signing key legislation and creating the Environmental Protection Agency.

The Unintended Weapon: CEQA

The story then zooms in on California to illustrate how well-intentioned environmental law could morph into a powerful tool against development itself. Governor Ronald Reagan signed the California Environmental Quality Act (CEQA) in 1970, a bill initially perceived as modest. Its transformative power was unlocked by a 1972 state Supreme Court ruling in Friends of Mammoth v. Board of Supervisors. The court decided CEQA applied not just to government projects, but to any private development requiring public permits—which meant almost everything.

The consequences were immediate and sweeping. CEQA review became a mandatory, litigious step for countless projects. In the Bay Area alone, tens of thousands of proposed homes were subjected to environmental litigation in the early 1970s. The law, designed to assess environmental impact, had become a de facto brake on housing construction and growth.

The "Highway Revolts" and the Politics of "No"

This regulatory shift coincided with a grassroots urban movement against the physical manifestations of growth. The chapter revisits the Interstate Highway System, not as an uncontested achievement, but as a catalyst for community destruction. Figures like Lewis Mumford and Robert Caro’s portrait of Robert Moses highlighted the damage. In response, "highway revolts" sprang up as citizens organized to block roads from cutting through their neighborhoods. These fights forged the tactics and coalitions that would later oppose other forms of development.

California, once the symbol of explosive growth, became the poster child for its downsides. The pejorative term "Californication" emerged to describe the soulless sprawl and "moral bankruptcy" associated with unchecked development. Anti-growth sentiment sometimes veered into a defensive misanthropy, where newcomers were framed as a "swarm of locusts" devouring the landscape. The core question became: how could communities legally and politically say "no" to more people and more building?

Key Takeaways

• The severe environmental costs of postwar industrialization triggered a powerful, bipartisan regulatory response that permanently changed how America manages growth.
• Laws like the California Environmental Quality Act (CEQA), through judicial interpretation, evolved from environmental review tools into potent legal instruments that could halt or slow private housing and development.
• Grassroots opposition to disruptive projects like urban highways provided a model for organized anti-growth activism, blending concerns over community, aesthetics, and conservation.
• The liberal political movement developed a "divided soul," torn between its New Deal legacy of building and a new, reactive politics focused on stopping or heavily regulating development to protect environment and community.

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Abundance

Chapter 2: Build

Overview

This chapter explores a fundamental contradiction at the heart of addressing climate change. Typically, conservatives champion human adaptability while liberals seek to preserve systems, yet conserving our stable climate now demands radical, transformative action, not inaction. This political paradox leads to an examination of solutions, beginning with a critique of "degrowth," a philosophy that calls for rich nations to abandon economic growth. While intellectually ambitious, the chapter argues degrowth is politically impossible, as it would impose collective scarcity and likely provoke a fierce backlash, empowering populists who promise a return to fossil-fueled abundance.

The narrative then pivots to a more viable path: energy itself. It frames energy as the nucleus of all wealth and argues the core problem isn't growth but dirty energy. With the plummeting costs of solar, wind, and emerging technologies, we can now decouple human development from emissions. This technological optimism, however, is immediately met with the colossal practical challenge of implementation. Decarbonization requires "electrifying everything," which means building a clean energy grid at a pace and scale akin to constructing the entire existing U.S. system all over again every fifteen years.

This herculean build-out exposes a deep, systemic failure in American society. The traditional liberal toolkit of writing rules and allocating money is insufficient; success is now measured in physical projects completed. The decades-long, faltering effort to build high-speed rail in California serves as a devastating case study. The primary barriers aren't engineering challenges but endless political negotiations, environmental reviews, and litigation—a process where time is money and delays erode public will.

This sclerosis is a uniquely American problem. Since the 1970s, productivity in the U.S. construction sector has stagnated, making infrastructure far more expensive to build here than in peer nations. The explanation lies in the nature of affluent, stable democracies, where organized interest groups naturally accumulate, creating countless "veto points" for large projects. The system has evolved to reward those who can navigate this complex web of regulations and community concerns—often lawyers and consultants—over those who actually build.

This shift is rooted in the rise of "adversarial legalism" in the 1960s and 70s. While consumer and environmental activists like Ralph Nader won vital protections through lawsuits, they also established litigation as a primary tool for controlling government action. This bred a "procedure fetish" within American liberalism, where governmental legitimacy became tied to following exhaustive processes rather than achieving tangible outcomes. This legalistic mindset is reflected in a political class dominated by lawyers.

Now, this legacy creates a profound green dilemma. The very environmental laws and permitting processes designed to stop polluting projects are the same ones paralyzing the construction of critical green infrastructure. Whether it's an oil pipeline or a major wind farm, developers face the same nightmarish gauntlet of reviews and potential lawsuits. The old bargain—a cleaner environment in exchange for slower development—has broken down when the development in question is essential for planetary survival.

The chapter concludes by looking for ways forward, pointing to legislative models for fast-tracking critical projects, similar to mechanisms used for military base closures. But ultimately, it argues that no single law can fix the problem. What's required is a fundamental cultural and political shift. Where 20th-century liberalism learned to slow systems down to prevent harm, 21st-century liberalism must learn to speed systems up to build the clean future we urgently need.

The Political Paradox of Climate Action

The chapter begins by observing that climate change scrambles traditional political allegiances. Typically, it is political conservatives who express faith in human adaptability to profound change, while liberals seek to preserve existing systems. Yet, to conserve the stable climate that has underpinned all of human civilization requires radical, transformative action—not inaction. Allowing uncontrolled emissions would lead to catastrophic warming, dismantling the planetary systems we depend on.

A Critique of "Degrowth"

The text examines the "degrowth" movement, a philosophy popular in some leftist circles which argues that climate change is a symptom of humanity's fatal pursuit of endless economic growth. It posits that rich nations must embrace economic stasis while poorer nations grow more slowly. The chapter argues degrowth is less a climate plan and more a sweeping anti-materialist critique of modernity itself, targeting Cartesian dualism and capitalism as root causes.

While intellectually ambitious—its proponents compare its required philosophical shift to the Copernican or Darwinian revolutions—the chapter finds it politically and practically untenable. Its specific policy proposals, like curtailing meat production or advertising, target things people demonstrably want. The political fury unleashed by even modest rises in energy costs, from the French "yellow vest" protests to electoral backlashes worldwide, demonstrates the impossibility of imposing the rapid, collective scarcity degrowth demands. The cost of failure would not just be missed climate targets, but a potent backlash empowering populist authoritarians who promise a return to fossil-fueled abundance.

Energy: The Nucleus of Wealth and the Path Forward

The narrative then pivots to energy, framing it as the fundamental driver of human well-being and the core inequality on the planet. For most of history, energy poverty meant burning biomass, leading to deadly indoor air pollution—a problem that has historically plagued societies before they become wealthy enough to afford cleaner alternatives.

The central argument emerges: the problem is not energy use or growth itself, but dirty energy. The technological miracle of our time is that we now have clean alternatives. The costs of solar and wind power have plummeted, making them not only viable but often the cheapest sources of new electricity. This decouples human development from fossil fuels. Evidence shows that countries like France and the UK now emit far less carbon per person than they did decades ago while being richer, primarily by changing their energy sources.

The chapter fosters a sense of optimism about human ingenuity, citing advancements in nuclear fusion and the perspective that future generations will look back on our era of simply burning fuel as primitive. Clean, abundant energy could enable vertical farming, large-scale desalination, and even direct air capture of carbon.

The Daunting Scale of the Build-Out

This technological optimism is immediately tempered by the colossal practical challenge of implementation. To decarbonize, we must "electrify everything"—replacing roughly one billion fossil-fuel-powered machines (cars, furnaces, stoves) in the US with electric versions. This requires not only consumer adoption but a parallel revolution in electricity generation and transmission.

The US grid must be not only fully cleansed of fossil fuels but also massively expanded. Princeton models suggest needing to build the equivalent of the entire existing US grid again every fifteen years until 2050, using wind and solar. This would require installing the equivalent of two massive new solar farms every week for thirty years.

This build-out faces immense political and logistical hurdles: sourcing vast amounts of land, overcoming local opposition ("not in my backyard"), and constructing thousands of miles of new high-voltage transmission lines to connect renewable-rich areas to population centers—a task at which the US has a poor track record. The chapter concludes this section by framing the core challenge: American liberalism has long measured success by achieving European-style social welfare, but the new imperative is a physical and industrial mobilization on an unprecedented scale.

The Shift from Rules to Rails

The chapter contrasts the traditional liberal policy toolkit—writing regulations and moving money through tax credits—with the new imperative of the climate era: physically building things. Landmark bills like the Inflation Reduction Act contain hundreds of billions in clean energy incentives, but their ultimate success isn't measured by dollars appropriated. It’s measured by physical infrastructure completed. The money is an open-ended promise; the real constraints are the nation's ability to build fast and cheap. A project's final cost and societal benefit hinge entirely on whether steel is driven into the ground or if the effort gets bogged down in process.

California's Cautionary Tale

The decades-long, faltering effort to build high-speed rail in California serves as a central case study. Despite immense political favor—championed by Presidents and Governors, and approved by voters—the project has become a symbol of national failure. Its scope has shrunk from a visionary LA-to-San Francisco line to a less useful Merced-to-Bakersfield segment, while costs have ballooned and timelines have stretched into the 2030s. This stands in stark contrast to America's own history of rapid construction, like the Transcontinental Railroad, and to modern China, which has built over 23,000 miles of high-speed track in the time California has struggled.

The Real Work Isn't Engineering

A visit to the Fresno construction site reveals that the primary barriers aren't technical. The core challenges are political and legal: years of environmental review, protracted eminent domain negotiations with individual landowners, seasonal moratoriums imposed by freight railroads, and constant litigation. Each negotiation consumes time, and in construction, time is money—with delays adding 2-5% to costs annually. This erodes public confidence and political will, creating a vicious cycle where delays make projects more expensive, which then fuels further skepticism and delay.

A Systemic, Not Partisan, Failure

This sclerosis is acknowledged across the political spectrum. Democrats like Governor Newsom and Biden administration officials lament the loss of building capacity, while data shows it's a uniquely American problem. International comparisons reveal that the U.S. builds rail infrastructure at a far higher cost per mile than peer nations like Germany, Canada, and Japan. This inefficiency cannot be blamed simplistically on "government" or "unions," as those other nations have robust versions of both. The problem is specific to the American context.

The Construction Productivity Puzzle

The issue is systemic and historical. Since around 1970, productivity in the U.S. construction sector has stagnated or fallen, even as it soared in manufacturing and the broader economy. Economists Austan Goolsbee and Chad Syverson confirmed this isn't a statistical illusion or due to underinvestment. Industry veteran Ed Zarenski points to the explosion of overhead: multiple rounds of pre-bid estimates, extensive safety protocols, and a massive increase in reporting and compliance paperwork that requires more office staff per job.

The Organizations of Affluence

The chapter turns to economist Mancur Olson’s theory to explain this stagnation. In stable, affluent societies, organized interest groups (from community associations to environmental advocates) slowly accumulate and gain power. While these groups drive valuable social progress, they also create countless "veto points" for large projects. Construction, especially public infrastructure, is uniquely exposed to this dynamic, as it must navigate a thicket of community concerns, regulations, and negotiations. This is not about corruption, but about the legitimate—and multiplying—demands of a complex democracy. Affluent, organized communities are particularly adept at using these processes to block or reshape projects.

Key Takeaways

• The climate crisis requires a liberalism focused on physical building, not just legislation and funding, where success is measured in completed projects.
• California's high-speed rail project exemplifies a national failure to build, where endless negotiations and legal challenges, not engineering, are the primary obstacles.
• U.S. construction productivity has mysteriously collapsed since the 1970s, making infrastructure vastly more expensive here than in peer nations.
• This sclerosis is largely explained by the accumulation of organized interest groups in a stable society, creating countless veto points that slow or halt complex projects.

The Navigators of Complexity

The construction industry's fragmentation into small, local firms isn't an accident of history but a direct result of the regulatory environment. Builders must become experts in the specific political and legal landscape of each locality, navigating a maze of zoning rules, community hearings, and relationships with officials. This hyper-local knowledge doesn’t scale, preventing the emergence of large, efficient national homebuilding firms. As economist Ed Glaeser’s research shows, this stands in stark contrast to manufacturing, where productivity once grew in parallel with construction but now far outpaces it, in part because a large manufacturer can operate from a single location and sell globally. The system, as Mancur Olson observed, begins to reward those who master its complexity—not necessarily those who build things, but those who can navigate the rules surrounding building.

The Rise of Adversarial Legalism

This shift toward rewarding navigators of complexity is powerfully illustrated by the transformation of American liberalism in the 1960s and 70s. While often remembered for its ambitious government programs, this era also saw a profound loss of faith in government's competence, led by figures like Ralph Nader. His exposé of auto industry safety failures and his subsequent "Raiders" movement successfully pushed for vital consumer and environmental protections, like the Clean Air and Clean Water Acts. However, their primary tool became litigation against the government itself, creating a powerful new model of "democracy by lawsuit."

Environmental groups like the Sierra Club Legal Defense Fund and the Environmental Defense Fund achieved historic victories by suing agencies to force stricter enforcement. While these lawsuits yielded immense public health benefits—drastically cutting pollution and saving hundreds of thousands of lives—they also constructed a new layer of procedural government. The very laws designed to halt destructive projects became weapons available to anyone, including those wishing to block new, clean infrastructure.

The Procedure Fetish

This legalistic mindset became ingrained in the state itself. Law professor Nicholas Bagley argues that American government, and liberalism in particular, developed a "procedure fetish." It came to believe its legitimacy was derived from scrupulously following an ever-expanding catalog of rules, hearings, and judicial reviews rather than from delivering results. This framework, which law professor Robert Kagan calls "adversarial legalism," is uniquely American—a way to reconcile demands for a powerful government with deep-seated public distrust. Instead of empowering large, expert bureaucracies as in Europe, the U.S. outsources much of its governance to courts and lawyers.

The political class reflects this shift. Lawyers, who make up less than 1% of the population, constitute over a third of the House and half of the Senate. When legal training becomes the default for political leadership, governing becomes centered on process and statutory interpretation, not outcomes. The consequence is a government that is often impeccable in its procedures yet incapable of action, eroding public trust rather than bolstering it.

The Green Dilemma

This legacy now directly conflicts with the urgency of the climate crisis. The same legal architecture that successfully slowed polluting projects in the 1970s is now paralyzing the green infrastructure build-out required today. As legal scholars J.B. Ruhl and James Salzman point out, whether you propose a new oil pipeline or a major wind farm, you face the same "environmental impact assessment and project permitting nightmare."

The old "Grand Bargain"—a cleaner environment in exchange for slower, more expensive development—has broken down. The problem is no longer stopping bad projects but starting good ones at the necessary speed and scale. Projects like the massive Chokecherry wind farm in Wyoming face a gauntlet of over sixty federal permitting programs plus state and local reviews, leading to timelines stretching nearly two decades. America has become a global leader in the cost and delay of public construction, a problem that now afflicts solar arrays and transmission lines just as it does highways.

Key Takeaways

• Regulations Fragment Industry: Local land-use rules and political complexity force homebuilding into small, local firms, stifling productivity gains and scaling.
• Lawsuits Reshape Governance: The consumer and environmental movements of the 1960s/70s, led by figures like Ralph Nader, achieved crucial protections but established "adversarial legalism"—using lawsuits as a primary tool to control government action.
• Process Over Outcomes: American government, particularly liberalism, became obsessed with procedural legitimacy, creating a system that is often more focused on following rules than on achieving tangible results.
• Lawyers Dominate Politics: The legalistic system rewards legal training, making lawyers disproportionately dominant in political leadership and entrenching a process-oriented mindset.
• The Climate Crisis Clashes with Old Laws: The extensive environmental permitting and litigation processes designed to stop destructive projects are now the biggest obstacle to building the clean energy infrastructure required to address climate change, creating a fundamental dilemma for environmental progress.

Legislative Models for Fast-Tracking

The text points to existing models for circumventing bureaucratic delays. It cites the independent base-closing commission, which streamlined military base closures, and President Biden’s 2024 action to exempt semiconductor facilities from certain environmental reviews. The proposal is to adapt similar fast-track mechanisms for critical green infrastructure projects, effectively updating environmental laws for the urgency of the climate crisis.

The Necessity of a Cultural Shift

Ultimately, the argument concludes that no single law can untangle the systemic blockages. The deeper need is a fundamental change in political culture. Where 1970s liberalism successfully acted to slow systems down to prevent abuse, a new imperative requires acting to speed systems up to meet existential threats. This involves re-evaluating long-held beliefs, recognizing that procedural solutions can sometimes become part of the problem, and accepting that a balance which fails to meet climate goals is an unacceptable failure.

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Chapter 3: Govern

Overview

This chapter presents a stark examination of why well-intentioned governments, particularly in progressive cities and states, so often fail at their most basic tasks, from building affordable housing to administering benefits and repairing infrastructure. It begins with a bright spot: the Tahanan housing project in San Francisco, which was built far faster and cheaper than typical projects by using private capital to bypass the labyrinth of regulations tied to public funds, aided by government streamlining. This success, however, only highlights the dysfunction of the normal system.

That standard process for publicly funded projects is revealed as a costly tangle of overlapping rules, from local hiring mandates to separate design reviews. Each regulation addresses a legitimate concern, but collectively they create paralyzing delays and exorbitant costs, as seen in the Proposition HHH disaster in Los Angeles, where units for the homeless ended up costing nearly double the median home price in Houston. The analysis identifies a core ideological blind spot, where the liberal commitment to using government for social good becomes self-defeating. By loading every initiative with a host of secondary goals—equity, sustainability, labor protections—governance devolves into "everything-bagel liberalism," where the primary mission is swallowed by a black hole of process and compliance.

This pattern extends beyond housing. Ambitious federal efforts like the CHIPS Act risk being undermined by piling numerous social engineering tasks onto industrial policy, while California’s high-speed rail project was distorted by federal conditions that prioritized air quality goals over building a viable route first. A major cause of this failure is a hollowed-out state that lacks the in-house expertise to manage complex projects, instead relying on expensive consultants who often mislead it. The digital realm shows this decay in its most advanced form, where sedimentary chaos in government technology—ancient systems with decades of bureaucratic layers piled on top—led to the catastrophic collapse of California’s unemployment system during the pandemic.

Yet, the chapter argues this fate is not inevitable. The spectacularly fast rebuild of Philadelphia’s collapsed I-95 bridge stands as a powerful counter-example. By declaring an emergency and suspending the normal rulebook, officials were empowered to hire directly, work around the clock, and make swift decisions, reopening the vital artery in just twelve days. This success poses a damning question: if government can be so effective and celebrated in a crisis, why does it accept a normal state of paralysis for everything else? The underlying takeaway is that for the state to build and serve effectively, it must often be permitted to do less—to simplify, remove obsolete rules, and rebuild its core capacity to execute.

The Tahanan Exception: Speed and Savings Through Private Capital

The chapter opens with the story of Tahanan, a permanent supportive housing project in San Francisco that was completed in 2021. Its significance lies in its dramatically accelerated timeline and reduced cost: three years and under $400,000 per unit. In a region where such projects typically take six years and cost $600,000-$700,000 per unit, Tahanan stands as a stark outlier. The key to its success was the use of a $65 million private grant from the Schwab family, which came with strict cost and time conditions. This private financing allowed the developers to bypass the dense web of regulations tied to public funds.

However, private money alone wasn't enough. The project also benefited from supportive government actions that streamlined the usual bureaucratic hurdles. A state law authored by Senator Scott Wiener fast-tracked its approvals, bypassing local discretionary review and securing entitlements in just four months. It also utilized modular construction to save time and money. Yet, even this hybrid approach revealed internal progressive conflicts, as some local unions opposed the modular method despite the factory being unionized.

The Costly Tangle of Public Funding

The narrative then contrasts Tahanan’s path with the standard, torturous process for publicly funded affordable housing. Using public money triggers a cascade of well-intentioned but costly and time-consuming requirements. In San Francisco, the Local Business Enterprise (14B) ordinance mandates the use of small, local contractors, which excludes larger, potentially more efficient firms and creates bottlenecks as a few qualified small contractors are over-subscribed. Compliance with this and other rules—local hiring, separate design reviews by the Arts Commission, additional disability reviews—can add six to nine months and millions in costs.

These delays have compounding financial consequences, such as missing financing deadlines and incurring penalty fees. The chapter argues that each individual review or standard addresses a legitimate concern, but their collective weight cripples the primary goal: building housing quickly for those in desperate need.

Ideological Blind Spots and the Houston Comparison

This leads to an examination of a core ideological confusion. The common left-right divide over "big" versus "small" government is portrayed as misleading. In practice, liberals who rhetorically champion an active state often enact policies that hamstring its capacity to deliver, while conservatives who decry big government enthusiastically support a vast security state.

This liberal blind spot is evident in housing. When presented with Tahanan’s model, some commentators dismissed solutions like loosening zoning, favoring instead a massive expansion of fully public "social housing." The chapter counters this by pointing to Houston, a city with minimal zoning, which issues vastly more housing permits than expensive coastal cities. As a result, Houston has far lower housing costs and homelessness rates. The high costs and delays in liberal cities like San Francisco and Los Angeles inherently steer development toward only the most profitable luxury projects, undermining the goal of affordability.

The Prop HHH Disaster: "Feeding the Beast" of Regulation

The failure of Los Angeles's Proposition HHH is presented as the quintessential case study. Voters approved $1.2 billion to build housing for the homeless, but by 2024, units were costing an average of $600,000 each—nearly double the median home price in Houston. The problem was not a lack of will or funding, but the structure of that funding.

Because HHH only covered part of a project's cost, developers were forced to assemble a complex patchwork of four to ten additional funding sources, each with its own conflicting rules and priorities. This caused constant, costly restructuring of projects. Officials like former City Controller Ron Galperin argue that the inflated costs from complying with myriad regulations—prevailing wage mandates, elevated sustainability standards, special consultations—effectively consume the public subsidy. The system prioritizes perfect, auditable compliance over tangible results, leaving agencies like the Los Angeles Homeless Services Authority buried in paperwork rather than solving the crisis.

"Everything-Bagel Liberalism" and the Paralysis of Added Goals

The chapter crystallizes this failing with the concept of "everything-bagel liberalism." It describes a governing philosophy that seeks to load every initiative with numerous secondary goals: equity benchmarks, environmental upgrades, aesthetic reviews, community concessions, and labor protections. While each goal is worthy individually, piling them all onto single projects creates a "black hole" of complexity, cost, and delay that can prevent the primary objective from being achieved at all.

This is contrasted with a more pragmatic focus on "state capacity"—the actual ability to get things done. The critique is that liberal governance has become obsessed with procedure and legitimacy-through-process, rather than outcomes. The result is a cruel irony: in trying to guarantee that every project is perfect, the system ensures that far too few projects get built, leaving the most vulnerable to suffer. The section concludes by noting that even ambitious federal initiatives, like the CHIPS Act to rebuild semiconductor manufacturing, risk being burdened by this same tendency to attach too many conditions, potentially undermining their core national security and economic goals.

The Burden of Policy Overload

The CHIPS Act funding guidelines illustrate a recurring pattern in federal policy: the piling of numerous worthy social and equity goals onto what is, at its core, an industrial project. The application process asked companies to detail plans for diversity in hiring, supply chain inclusion, child care, environmental responsibility, and community investment. While Commerce Secretary Gina Raimondo defended these as essential to project success—arguing you cannot build fabs without attracting new workers via child care—the text questions whether this scattergun approach is effective. It imposes complex social engineering tasks on semiconductor firms and, crucially, avoids any discussion of trade-offs. The legislation added layers of process but deleted nothing, such as failing to streamline immigration for skilled workers or fast-tracking environmental reviews, which were later addressed only after significant delays.

This dynamic is not unique. California’s high-speed rail project was distorted by similar well-intentioned federal conditions. To secure Recovery Act funds, the state prioritized construction in the poorer, more polluted Central Valley to meet air quality improvement criteria, rather than starting in denser coastal corridors where ridership and financial viability would be stronger. The result is a project whose route undermines its long-term success, demonstrating how layering multiple policy goals can compromise the primary objective.

The High Cost of a Hollowed-Out State

A core obstacle to effective governance is the systematic understaffing and outsourcing of state expertise. Since 1960, federal spending has skyrocketed while the civilian workforce has remained stagnant. This has created a culture where government is seen as inherently bloated and inefficient, leading to a reliance on external consultants. California’s High-Speed Rail Authority began with just ten employees, outsourcing crucial planning to a web of consultancies that consistently underestimated the project's cost and complexity. This left the state “financing and overseeing a program it did not have the capacity to plan, manage, or even truly understand.”

Conversely, success stories highlight the value of in-house expertise. When BART brought more engineering work in-house for its new rail car project, it delivered faster and nearly $400 million under budget. Research supports this, showing that increased staffing in state transportation departments significantly reduces construction costs. The lesson is that government doesn’t need to do everything itself, but it must possess enough internal know-how to competently oversee and manage its projects.

Sedimentary Chaos in Government Technology

The digital infrastructure of the state is a tragic case study in accumulated complexity. Jen Pahlka’s experience trying to fix California’s collapsed unemployment insurance (EDD) system during the pandemic reveals a “sedimentary” technological mess. The core system ran on a 1980s IBM mainframe using the antique COBOL language, with subsequent layers haphazardly tacked on by different contractors over decades. The EDD had spent ten years just procuring a modernization contract, which was then slated to take eleven more years to execute.

This byzantine structure, governed by rigid procurement and anti-fraud rules, created catastrophic inertia. A backlog thought to be 230,000 applications was actually 1.2 million. Hiring thousands of new, untrained workers (as demanded by overseers) made the backlog worse. The system was flagging applications for manual verification over minor data mismatches—catching almost no fraud—while sophisticated fraud using stolen identities sailed through. Despite this, officials were terrified of loosening the broken rules for fear of blame. The solution was a complete shutdown of new applications. Pahlka concludes that lawmakers continually add new policy and compliance layers without understanding how they interact with—and paralyze—the existing systems.

The I-95 Rebuild: A Case Study in Empowered Action

The dramatic collapse and reconstruction of the I-95 bridge in Philadelphia presents a powerful counter-example. Governor Josh Shapiro signed an emergency declaration that suspended normal rules: no environmental impact studies, no lengthy bidding process, and no strict procurement protocols. This empowered officials to act with speed and discretion. They hired known contractors on the spot, worked union labor 24/7, and made on-the-fly decisions—like paving in light rain—that violated standard procedure but accelerated progress.

The bridge reopened in just twelve days. The success demonstrated that when leaders are empowered to prioritize and make calculated risks, government can build big things quickly and effectively. Shapiro noted that the key was allowing managers to “be decisive, take ownership and make a call… not defer and delay.” The public and political response was overwhelmingly positive, posing a sharp question: if this process is so celebrated in an emergency, why is the normal, sclerotic process acceptable for everyday governance?

Key Takeaways

• Policy Trade-Offs Are Ignored: Well-intentioned social and equity goals are routinely layered onto core projects without acknowledging the costs, complexities, or trade-offs involved, often hampering the primary objective.
• State Capacity is Critical: Government cannot effectively oversee complex projects or services without sufficient in-house expertise. Chronic understaffing and over-reliance on consultants lead to higher costs, delays, and loss of institutional control.
• Complexity Begets Paralysis: Technology and regulatory systems accumulate like sedimentary layers, rarely with old layers removed. This creates incomprehensible complexity that makes updating systems nearly impossible and stifles innovation.
• Empowerment Enables Effectiveness: The I-95 rebuild proved that suspending normal bureaucratic rules and empowering leaders to exercise judgment can lead to spectacularly fast and successful outcomes, suggesting that standard processes are overly risk-averse and sclerotic.
• The Need for Subtraction: For government to do more, or even to function adequately, it often first needs permission to do less—to simplify, remove obsolete rules, and streamline ossified processes.

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