- We Need an Abundance Agenda
- Feeding 8 Billion People Has Never Been Easier
- The Greatness of Growth
- Testing Freedom
- A Successful Abundance Agenda Must Address Americans’ Anxieties
- Time to End the Manufactured Shortages in K-12 Education
- The Abundance Agenda: A Radical Response to Populist Protectionism
- Why We Need To Achieve Housing Abundance
- Getting to Housing Abundance in the Shadow of History
- Making Transportation Faster, Cheaper and Safer
- General-Purpose Technologies Are Key To Unleashing Economic Growth
- Zoning Out American Families
- Abundance Is About More Than Stuff
- Prometheus Unbound
- High Anxiety, Low Abundance
- An Abundance Agenda Promotes Social Mobility
- The Role of Sound Monetary Policy in an Abundance Agenda
- The Abundance Agenda: Energy, the Master Resource
While some correctly point out that there are still areas of scarcity in our country, Americans generally live in a land of plenty, some might even say excess. Indeed, we have managed to acquire a level of wealth unimaginable to all but our most immediate ancestors.
Today, in the United States and throughout the developed world, even the very poor live materially better than the average person did 100 years ago. From hygiene to food, medicine, education, transportation, entertainment and leisure time, most of us lack very little.
But in recent decades, this prosperity has raised other questions and worries. Do we have too much? Are income disparities and wealth concentration harming social mobility and creating greater divisions among social classes? Is the growing obesity problem that afflicts so many in the rich world making the cost of healthcare unsustainable? Are our consumerist habits destroying the environment? And has the proliferation of streaming services and online entertainment left us more and more isolated, unhappy and disengaged from our country, our communities and even our families?
The solutions to many of these problems are counterintuitive. On the surface, it might seem that tackling environmental issues or dealing with the social ills caused by consumerism requires less economic growth, not more. And there is ample precedent for this view: Even before Henry David Thoreau decamped to Walden Pond, there has always been a strain in American thought arguing for a simpler, less cluttered life.
But meeting societal challenges—whether they involve the health of the planet or the health of individuals—will require more growth and more wealth as well as more professional opportunities and a higher standard of living. In other words, we need abundance to address our social problems, not just our economic ones.
Meeting Big Challenges
As Will Rinehart recently pointed out in an essay for Discourse, abundance is very much about access to goods and services. Especially during the COVID-19 pandemic, Americans became painfully aware of shortages of everything from masks and defibrillators to doctors and nurses. And there have been other shortages not necessarily tied to COVID: housing, infrastructure, baby formula and pet supplies, to name a few.
We need greater economic growth—in other words, greater abundance—to deal with these various scarcities. But thinking of abundance as simply accumulation—storehouses of stuff that used to be scarce, or greater material wealth more generally—misses the big picture. Abundance also is human creativity in action, the pursuit of goals that will make the world a better place—whether through innovations in healthcare, farming, energy, education or the environment.
To put it another way, while GDP is a useful and important statistic, capturing the amount of goods and services traded in the economy, it fails to measure many of the things economic activity creates. It measures how much we spend, but not how much our health, environment and knowledge have actually improved as a result. Tyler Cowen refers to this idea—GDP and the societal benefits it creates—as “Wealth Plus.” On a broad societal level, pursuing economic growth means we are also cultivating people’s talents, discovering innovations that improve our health and environment and tackling the challenges our society faces, both big and small. And this is where a strategy to promote abundance can sometimes seem counterintuitive.
Take the environment. Yes, wealthy countries can be wasteful. And since the industrial revolution the developed world has enormously damaged the environment. But wealthy countries also are leading the way in fixing these problems, developing and deploying cleaner energy technologies from nuclear power to solar and other renewables. What’s more, better education has helped people in the developed world to become more aware of and concerned for their environment. That’s why the environmental movement began in rich societies and is largely still confined to them. For those living in poorer countries, environmentalism is a luxury that most cannot afford.
Or take access to food. Yes, Americans and others in the rich world are grappling with high rates of obesity that have in turn contributed to high rates of “lifestyle diseases” such as diabetes, heart disease and cancer. But the U.S. is also home to the green revolution and its progeny, which, starting in the 1940s, began producing more nutritious strains of cereal crops such as wheat and rice that have saved more than a billion people in the developing world from starvation. In fact, while starvation is tragically still a problem in some poorer parts of the world, it is much less of a problem than it was 50 years ago. And while many Americans may struggle with obesity and the diseases it can cause, they also are living an average of 30 years longer than they did at the beginning of the 20th century, the result of a revolution in nutrition as well as public hygiene and healthcare, all brought about by greater wealth.
To continue to meet these and other similar challenges, we will need even more wealth, not less. And that means having a “stubborn attachment” to economic growth.
An Abundant Life
Economic growth also means more opportunities for individuals to reach their potential and use their talents. Yes, we may be bowling alone more than we once did, but greater scarcity won’t bring us back together. In fact, scarcity and the economic anxiety that comes with it are likely to drive us farther part.
By contrast, more wealth will mean more leisure time for relaxing, socializing and, yes, even bowling, this time with friends. Greater wealth also brings more time for what economists call “household production” and doing things with our families, such as cooking, gardening and home projects. And more time means more opportunities for learning and volunteering, activities that greatly enhance not only one’s own life, but often the lives of others.
Economic growth also leads to more and better job opportunities, at all levels of society. This helps Americans of all stripes, but it is particularly important for those from poorer backgrounds. As former President Obama has said, “The best anti-poverty program is a job.”
More and better jobs also mean more people working. This seems obvious, but it’s not quite as straightforward as it sounds. Right now, with an unemployment rate of 3.4%, we are at what economists call “full employment.” But, as with GDP and economic activity, the unemployment rate doesn’t give a complete picture of the labor market. For instance, the labor force participation rate (people of working age who are either employed or looking for work) is only 62.4%, roughly five points lower than it was at the beginning of the millennium. Today’s low labor force participation rate means a lot of nondisabled adults have, for whatever reason, decided not to work or even look for work. But, as recent history shows, creating more jobs, and hence more opportunities, ultimately means more competition for workers. That translates to better salaries and benefits and more appealing types of work, which in turn will coax some people off the sidelines and back into the labor force.
Getting more working-age people into the labor force means more people making and creating and, in doing so, helping to solve societal problems. At a minimum, someone working is creating wealth—for themselves and their employers as well as for investors. But many workers do more than that, helping to create and distribute products and services that greatly improve and, in many cases, save lives. This outpouring of human energy and creativity ultimately makes the world a more prosperous, charitable and peaceful place. It speaks to individual purpose—Jefferson’s “pursuit of happiness.”
But people get much more than a paycheck and even a sense of accomplishment from a job. For instance, employment is often a gateway to community, something most of us crave and need, especially in this lonely, social-media-fueled age. And employment gives people meaning and purpose as well as opportunities to pursue life goals. Not surprisingly, those who suffer “deaths of despair” are often unemployed or underemployed.
Work also helps people flourish in the sense that they grow professionally, providing them with a form of continuing education. Most learn new skills on the job, and unlike their salaries, these skills are retained when workers move to their next job. So, on a societal level, a growing labor force is a force multiplier, since this virtuous cycle obviously reinforces itself if there are more people working and more job openings available.
Taking the Long View
To get to this place. we need to take the long view about what economic growth is, both how it is achieved and how it is sustained. As Cowen puts it, Wealth Plus doesn’t mean short-term gains in pursuit of a statistic such as GDP, nor does it mean working 14-hour days and destroying your personal life or, for that matter, the environment. A more sophisticated view of economic growth needs to go deeper and consider sustainability. It means putting a premium on caring about the future—and not squandering the present.
At the societal level, a commitment to growth will help us sustain the things we have enjoyed for most of our nation’s history: relative stability, peace and prosperity. These benefits can be easily—and sometimes quickly—lost. Indeed, during periods of scarcity, social peace has often broken down, making way for demagogues. From Revolutionary France to Weimar Germany, history has taught us that desperate people generally make bad decisions, decisions that can lead to societal ruin.
But while growth helps nurture social peace and prosperity, it also depends on them. So, in addition to promoting abundance through various economic and other policies, we need to preserve and nurture the political and social institutions that in turn promote growth and prosperity. But to do this, we must ask: Do our legal, political and cultural institutions—the formal and informal rules that structure our interactions—support economic growth? Do they preserve democracy and rights? Throughout most of American history, we have benefited from strong institutions: property rights, the rule of law, a stable currency, low levels of legal and political corruption and a growing cultural and constitutional commitment to human rights. While some of these institutions have remained strong, polarization in the pursuit of short-term political gain (among other factors) has in recent years degraded others.
Recent research confirms what common sense tells us: Strong liberal institutions are necessary for abundance. For instance, according to a 2015 paper by Italian economists Concetta Castiglione, Davide Infante and Janna Smirnova, nations with robust legal institutions are more likely to deliver economic growth. They also show that as societies grow wealthier, they tend to demand greater protections for the environment. Conversely, American economists Michael Greenstone and Kelsey Jack find that environmental quality is poor in developing nations due to weak property rights and less income to spend on improving environmental quality.
Good institutions lead to not only more growth, but more sustainable growth. And they help us channel the resulting wealth in more productive ways, both for individuals and for society as a whole. It’s a virtuous circle that sustains a virtuous cycle, and it has made us not only one of the richest nations on earth, but also one of the most generous.
In spite of what we’re often told, it is perfectly natural to want more and better things. But everything else that arises from abundance—the chance for a better education or a more rewarding career, the time to volunteer or care for a loved one, the means to tackle seemingly intractable social or environmental ills—is just as important as fighting scarcity. In other words, abundance is about more than money or material gain; it’s about building a healthier and more productive society of happier and more prosperous individuals.