Abundance for Workers: How Ezra Klein and Derek Thompson’s Book “Abundance” Shifts Focus to Economic Supply

Web Editor

July 6, 2025

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Introduction

In Cambridge, advocates for policy changes risk losing the attention of progressive audiences when they start discussing the supply side of economics, the importance of incentives, and the dangers of excessive regulation—ideas traditionally associated with conservative agendas. Ezra Klein and Derek Thompson’s new book, “Abundance,” aims to change this perspective.

The Traditional Focus on Demand-Side Policies

Klein and Thompson point out that the left has traditionally focused on demand-side solutions. A key principle of the New Deal in the United States and social democracy in Europe is Keynesian management of aggregate demand to ensure full employment. Another aspect is public transfers to mitigate the impact of unemployment, poor health, and old age.

The Power of Supply-Side Improvements

Klein and Thompson correctly emphasize that supply-side improvements are the source of widespread prosperity in the United States and other advanced economies. As productivity increases, low- and middle-income families benefit from cheaper, more varied, and abundant goods and services.

Regulatory Hurdles Limiting Economic Growth

However, the authors argue that regulations and rules, such as environmental, safety, labor, and local permitting regulations, have increasingly limited the US economy’s ability to build things. While these norms and regulations may have good intentions, they can be counterproductive.

Examples of Regulatory Challenges

Klein and Thompson provide revealing examples. The California high-speed rail project has been delayed for years, far exceeds its budget, and has seen its length significantly reduced. President Joe Biden’s infrastructure plan promised 500,000 electric vehicle charging stations nationwide; only seven were built in the first two years of the program.

The Vision of Progress in “Abundance”

The authors envision a future with renewable energy, affordable and safe nuclear power, desalinated water, vertically farmed produce, lab-grown meat, life-saving drugs delivered by autonomous drones, and space factories meeting our needs without human labor. With AI shortening the workweek, everyone can enjoy more vacation time without sacrificing their living standards.

A Consumptive Utopia

Klein and Thompson are right to shift progressive attention towards economic supply. However, their utopian vision remains consumer-focused, saying little about workers as producers. They emphasize the abundance of goods and services generated by the economy rather than who builds them.

The Importance of Work

When asked about well-being and life satisfaction, work consistently ranks first, along with community contributions and family ties. For economists, work provides income but is otherwise negative (“disutility”). For ordinary people, work is a source of pride, dignity, and social recognition.

The Social Costs of Job Loss

Job loss often leads to reduced individual well-being, multiplying income losses. Social effects magnify these costs: persistent unemployment in communities leads to rising crime, family breakdown, drug abuse, and increased authoritarian values. The rise of far-right populism in the US and Europe has been linked to job losses from trade crises, automation, and fiscal austerity.

Housing: A Key Example

Klein and Thompson’s example of housing productivity stagnation is partly due to safety regulations and labor standards. While some regulations reducing workplace injuries are restrictive, they have significantly decreased deaths and non-fatal injuries in construction since the 1970s, improving overall worker well-being.

Balancing Efficiency and Worker Well-being

Klein and Thompson’s arguments align with economists advocating for automation and free trade, which have been efficient according to conventional criteria but harmed many workers. A focus on responsible employment would make us more tolerant of regulations sacrificing some efficiency for better worker outcomes, especially those without college education.

The Progressive Agenda: Balancing Worker and Consumer Benefits

The real challenge for progressives is to create an agenda that benefits both workers and consumers. This requires a distinct approach to innovation, investment, and regulation. Unions, worker representatives, and collective bargaining should be essential components of abundance, not obstacles.

Key Questions and Answers

  • What is the main argument of “Abundance” by Ezra Klein and Derek Thompson? The book shifts the focus of progressives from demand-side policies to the supply side of economics, emphasizing productivity improvements and innovation.
  • How do regulations impact economic growth? While well-intentioned, excessive regulations can limit productivity and hinder the ability of the economy to build necessary infrastructure.
  • What is the significance of work for individual and societal well-being? Work provides income, pride, dignity, and social recognition, contributing significantly to overall well-being.
  • How can progressives balance the needs of workers and consumers? By focusing on responsible innovation, investment, and regulation that prioritize worker well-being alongside productivity and abundance.

Author: Dani Rodrik, Professor of International Political Economy at Harvard Kennedy School, former President of the International Economic Association, and author of “Prosperity for All in a Fractured World: A New Economics for the Middle Class, the Global Poor, and Our Planet” (Princeton University Press, November 2025).

Copyright: Project Syndicate, 1995 – 2025  www.project-syndicate.org