In summer 2023, American progressivism was spending big and riding high. Despite razor-thin majorities in Congress, Democrats had spent the last two years enacting hundreds of billions of dollars in new subsidies—for green energy, public transportation, domestic manufacturing, scientific research, and more. This progressive pork was now in the hands of Democratic President Joe Biden to distribute as his administration saw fit.
Yet when California Gov. Gavin Newsom looked upon the piles of fresh federal cash, all he could do was despair.
“We’re going to lose billions and billions of dollars in the status quo,” he
State Capacity Statism
The abundance agenda and libertarianism have a significant natural overlap. Nevertheless, the former’s goals are higher growth and “more stuff” generally, not a smaller state.
That goal has created an odd-bedfellows coalition of big-government liberals and small-government libertarians and conservatives, all interested in some pruning of the regulatory state. But the progressive members of this coalition want that pruning to unleash the best big government has to offer.
If free markets or small government institutions are seen as an impediment to higher growth and empowered, competent government, then they too have to go.
Klein’s “everything bagel liberalism” is a useful framing for discussing the problems of excessive process and special interest carve-outs. He first deployed it in the context of all the cost-increasing regulations attached to affordable housing development in San Francisco. The development he profiled managed to escape a lot of these regulations by relying exclusively on private money.
Nevertheless, Klein’s column made it clear he wanted the government to play a significant role in solving the state’s affordable housing problems, and indeed, its problems generally.
“Government needs to be able to solve big problems. But the inability or the unwillingness to choose among competing priorities—to pile too much on the bagel—is itself a choice, and it’s one that California keeps making,” he wrote. That’s a far cry from the libertarian view that government will inherently get bogged down with needless process and/or get captured by special interests.
Even where liberal adherents of the abundance agenda support getting rid of government regulation on market actors, it’s often part of a larger political project of making progressive policies work and progressive-dominated regions more powerful.
The abundance agenda in many ways started as an effort to liberalize zoning regulations on new housing construction in expensive coastal metro areas. A large part of that was early YIMBY activists and writers correctly understanding that restrictions on market supply are driving up market prices.
At the same time, this focus on zoning speaks to a progressive anxiety that blue America is losing people, power, and influence to places where housing costs are cheaper.
“The population center of gravity keeps shifting to places where they let houses get built is something everyone understands. The political economy consequences of that are dire,” says Yglesias. “Do you want to concede that the overall model in Texas is just better or do you want to zero in on how much of that excess growth is caused by housing elements and then do something about it?”
The libertarian political project is to shrink the state generally, not just reduce permitting times for federally approved infrastructure projects.
Many activists and policy wonks who support the abundance agenda argue it’s often undesirable and certainly a waste of time for anyone to pursue those larger changes to the nation’s political economy.
That’s the view taken by Alec Stapp, co-founder of the Institute for Progress. Stapp got his start working on the big questions of tech policy, such as antitrust and privacy regulations.
“It’s trench warfare,” he says. “Both sides are really well-funded. They’ve been having these arguments for decades. Has legislation been passed? Have rules and regulations changed? Not really.”
Stapp launched his institute with the goal of sidestepping those bigger policy fights in favor of focusing on the “inputs to innovations,” such as high-skilled immigration and federal science funding.
“Lots of people talking about should we give [the National Institutes of Health and the National Science Foundation] more billions of dollars or take away their funding,” says Stapp. Instead, his group asks: “For any given budget, whether it’s a little smaller or a little bigger, how are they spending it?”
That could well be the best way to be an effective policy entrepreneur. But it requires one to make peace with a state far larger and more intrusive than any libertarian could be comfortable with.
Even some abundance-agenda adherents who share the goal of freer markets and a less intrusive state have nevertheless embraced the idea that the modern world requires us to have a better functioning government before we can have a smaller government.
“Our governments cannot address climate change, much [less] improve K-12 education, fix traffic congestion, or improve the quality of their discretionary spending. Much of our physical infrastructure is stagnant or declining in quality,” wrote Cowen in a 2020 blog post advocating “state-capacity libertarianism.”
“Those problems require state capacity—albeit to boost markets—in a way that classical libertarianism is poorly suited to deal with,” he continued. “Even if you favor education privatization, in the shorter run we still need to make the current system much better. That would even make privatization easier, if that is your goal.”
Old-school libertarians have criticized this notion. David R. Henderson of the Hoover Institution perceptively replied to Cowen that “the latent power that a large-capacity state would have could more easily be drawn on than the power that a small-capacity state would have.”
“Even if large-capacity libertarians wouldn’t want the state to throw people in prison for producing, distributing, or using drugs,” Henderson warns, “they might not get their wish.”
The Liberaltarian Moment?
The liberaltarian movement never quite panned out. Will the abundance agenda be a similar flop? It’s always tough to read the tea leaves, but there’s reason to think a “liberalism that builds” might be a stickier concept.
The pandemic era’s trifecta of huge spending, high inflation, and empty shelves has reinforced the notion that you can’t just spend your way out of material deprivation. Center-left policy wonks and lay policy enthusiasts are increasingly hungry for ideas about how to grow the pie, not just subsidize and redistribute it.
Pandemic-era migration from blue to red America has made clear the role liberal states’ homebuilding regulations are playing in pricing people out. That has helped keep liberalizing zoning reforms on the top of the agenda at the state and local level.
Lastly, the success of congressional Democrats and the Biden administration at squeezing through big spending bills has, ironically, removed one source of friction between the big- and small-government sides of the abundance agenda. Like it or not, those billions in subsidies have already been approved. That’s one less point to argue about.
Provided it does stick around, where will an abundance agenda lead us?
One optimistic view is that an abundance agenda will succeed in smashing the veto point–riddled institutions of the 1970s. The inherent inefficiencies of government will mean that its schemes will still flounder, while private capital is at last unshackled to build our housing- and energy-rich future.
Or perhaps Henderson’s pessimism is on point. Abundance-agenda liberals (and a few useful-idiot libertarians) will succeed in making a more effective state only to see it slide its interfering tentacles into more and more areas of the economy and individuals’ lives.
Maybe the abundance agenda will be truly transcendent, as in Reinhardt’s energy-rich utopia. With the problems of material scarcity basically solved, questions about government control versus private initiative will become hopelessly archaic. Taxation will still be theft, of course. But when energy is too cheap to meter, who’ll even notice the state pirating a few electrons?
Most likely, we’ll end up somewhere in the middle, with the abundance agenda adding another pro-growth, deregulatory spice to the “everything bagel” of Democratic governance. Regulations will become less burdensome, but they won’t disappear. Progressive politicians will have to be more mindful of the costs of permitting procedures and “Buy American” rules, but they won’t get rid of them entirely.
That seems to be the direction where Newsom’s California is headed. After complaining bitterly about CEQA, the governor unveiled some incredibly mild tweaks to the law. They weren’t earth-shattering stuff by any means, and they won’t fix the state’s failures to build.
But directionally, they’re deregulatory. Perhaps real abundance starts on the margins.