We Need an Abundance Agenda
Some scarcity comes from technical limits, but most of it is self-inflicted
By Will Rinehart
At a recent checkup, my father’s primary doctor asked him if anything was giving him problems. While the doctor was talking about physical ailments, my dad said: “The biggest stressor in my life is that me or my wife have to spend half of the day on the phone dealing with these medical supply companies.”
It wasn’t a stint in the hospital, physical therapy or a new dietary regimen that was bothering my dad. What was bothering him were ongoing supply chain problems that he and my mom were then navigating.
Although it is not as common to hear about it on the news as it was during the height of the COVID-19 pandemic, supply constraints still grip the medical field. Saline solution, tubes, vials, pipettes, ventilators, defibrillators, amoxicillin and Adderall are all in short supply. In total, some 34 product categories currently are listed in critical need, according to the Food and Drug Administration. What’s more, the agency expects these conditions to continue into the near future.
Meanwhile, when people moved during the pandemic, limited housing became a national issue. According to current estimates, at least 5 million homes need to be built.
Long-lasting shortages in the United States were unheard of before COVID-19. But in the last two years, scarcity has gripped countless industries. Baby formula, timber, paper products, butter, computer chips, meat and poultry, passenger cars as well as trash trucks and other commercial vehicles have all been on backorder. The same goes for many other items, including fiber optic cables, electronics, jewelry, clothing, pet supplies and garden items.
As this long list makes clear, disruptions to production and trade directly translate into material deprivation and hardship. But they also bring into focus another important issue: that we are living at a time of artificial scarcity.
It doesn’t need to be that way.
After the pandemic hit the U.S., new, groundbreaking vaccines were developed, tested and out to the public in less than a year. So, why does it take a decade or more to do the same with cancer drugs? Even today, nearly three years since the pandemic began, the number of physicians needed to treat our population remains in short supply. As Robert Orr uncovered in careful research, the federal government deliberately crafted and implemented a plan to limit the supply of doctors.
Policymakers, the commentariat and others in positions of power are waking up to the fact that scarcity is a serious public policy problem. While some of that scarcity comes from technological limitations which will require innovation, a good deal of it is self-inflicted. What is needed is a reversal of the policies that created these scarcity trends. What is needed is an agenda based on abundance.
Scarcity, Enrichment and Slow Decline
Scarcity is the true state of nature. For almost all of our recorded and unrecorded history, scarcity has been the bane of human existence. Only recently, in the last 200 years or so, have we been able to build abundance.
Scarcity used to cause all kinds of inadequacies. Malnutrition, famines, disease and early death were common. Today an injury might require a cast or perhaps outpatient surgery, but 300 years ago it would often lead to permanent disfigurement or even death. All of these ills were created by scarcity.
To take one particularly bad time, the 14th century, France experienced serious famine in 21 growing seasons. Sometimes these famines would last for two or three years. The Great Famine, from 1315 to 1317, was one of the worst, killing one out of every 10 people.
Then two decades later, when children of that era came to adulthood, the Black Death swept through the population, decimating cities and the countryside once again and this time killing up to half of all people. It is now thought that the two are connected. Malnutrition and hardship early in life meant the population was susceptible to disease as they grew to adulthood.
France might be affluent now, but on the eve of the Industrial Revolution, as Adam Smith pointed out, the country was poor. In “The Wealth of Nations,” he wrote that laborers “of both sexes appear there publickly [sic], without any discredit, sometimes in wooden shoes, and sometimes bare-footed.” It is difficult to imagine the good life living, even in Paris, during winter without shoes.
The Industrial Revolution changed all that, radically reshaping life and bringing with it an explosion of wealth and income. Since the 1800s when the Industrial Revolution fully kicked off, the average person has experienced a real income increase of 1,550%. The U.S. figure is even higher. As of today, we are 2,100% wealthier than we were in 1800.
In just the last 100 years, life has gotten measurably better. Today’s workplace is about 30 times safer than it was a century ago. At the turn of the 20th century, a worker would be on the job upwards of 60 hours during an average week. Today that number is just under 35 hours. In 1920, 28% of American youth aged 14 to 17 were in high school. Today, that number is over 90%. During the same 100-year period, life expectancy has increased from just over 53 years to just under 79 years.
Rightly so, Deirdre McCloskey calls this change the Great Enrichment.
Increasingly though, the Great Enrichment is being challenged by the Great Stagnation, a slowdown in growth rates. Beginning after World War II and continuing into the early 1970s, the productivity growth rate grew about 2% per year. But for some reason (or some confluence of reasons), it slowed down to 1% per year beginning in 1971. The United States and other wealthy countries just aren’t growing like they used to.
The decline from 2% to 1% might not seem like much, but like interest paid to savings account depositors, growth compounds over time. Today, households bring in about $70,000 in income every year. Had the U.S. grown at 2% per year over the last half century, the median household would be close to $150,000 in income.
Using more sophisticated models than simple linear extractions, researchers estimate that the missing growth in the last 50 years comes to about $11 trillion in lost annual GDP.
If not for the Great Stagnation and 50 years of 1% growth, Americans would already live in an era of abundance.
The Causes of Decline
While there is substantial evidence documenting the slowdown in the 1970s, there is little agreement on what exactly caused this economic stall-out. Two of the biggest possible culprits come in the form of energy prices and the expansion of the regulatory state.
J. Storrs Hall’s “Where is My Flying Car?” is a book-length treatise on how these two forces interact. Over 20 chapters, Hall’s book explains what happens when energy usage fails to expand. It means that we don’t get technical innovations like flying cars.
In a blog post that adds some context to the book, he explains,
We have had a very long-term trend in history going back at least to the Newcomen and Savery engines of 300 years ago, a steady trend of about 7 percent per year growth in usable energy available to our civilization. Let us call it the “Henry Adams Curve.” The optimism and constant improvement of life in the 19th and first half of the 20th centuries can quite readily be seen as predicated on it. To a first approximation, it can be factored into a 3 percent population growth rate, a 2 percent energy efficiency growth rate, and a 2 percent growth in actual energy consumed per capita.
The Henry Adams Curve, named for the novelist and historian who wrote about these trends in his 1907 autobiography, is a rough approximation of the old path of U.S. energy usage. From 1800 until 1970, actual energy consumption in the United States grew at a brisk pace, following the trend that Hall computed. But in the 1970s, this consumption plateaued.
Why is this important? Because there is an “extreme interconnectedness of energy and economic systems,” as one researcher has framed it. In other words, there is a clear connection between energy consumption and economic growth, and the flatlining in the 1970s helps tell us why growth slowed at the same time. The way modern economies produce, package and consume energy isn’t advancing like it once did. So, if we are going to punch out of our economic rut, we should look to punch out of our energy consumption rut.
Some of this flatlining since the 1970s is due to hard technical limitations. Energy goes into personal homes, for heating and lighting offices and other buildings, for transportation as well as for industry. Moving up the curve means consuming more of everything, but there are limits to the number of cars a household can own and the size of a home they can afford. The United States is one of those rare countries that is already on the far edge of energy consumption. If we have hit a limit, then perhaps there is an upper limit to energy consumption, if not economic growth.
However, the flatlining of the Henry Adams Curve also has come as a result of regulation. In fact, most of the slowdown is the result of bad decisions rather than tough challenges. For instance, nuclear power should have been the primary source of electricity for the U.S., and it was on track to be that way, as Hall has explained. Yet, changes in the regulatory structure of energy generation in the 1970s stymied that upgrade. Today, the U.S. gets about 20% of its electricity from nuclear, while France, which went on a nuclear-plant-building spree in the 1970s, gets over 77%. It shouldn’t have been like this.
What’s more, energy isn’t the only industry being held back by excessive permitting and ill-considered government processes. Nearly every sector in the economy faces challenges because of the layers of permission needed to operate. All combined, this needless regulatory crust creates a system of vetocracy, or rule by veto. As I explained earlier this year, “A good part of the rise in housing costs and home prices can be accounted for by these veto forces. Rail and other infrastructure projects face decades-long delays. Vetocracy restricts projects throughout the United States,” and any agenda aiming to make the future more innovative must tackle this phenomenon.
The Abundance Agenda in Practice
An agenda of abundance would confront the twin problems of artificial scarcity and technological scarcity. For starters, this means addressing the housing crisis. The game plan here is well-trodden. Cities and states need to deregulate land use, which would allow denser housing and mixed-use neighborhoods to develop on their own. After World War II, Tokyo built its way to abundant housing, and U.S. cities can, too.
Another central part of the abundance agenda would aim to upgrade our energy system. Building an electricity transmission line needs to be easier, geothermal permitting should be simplified and the next generation of nuclear reactors, which are safe to operate, should be ushered through the approval process rather than subjected to layer upon layer of regulatory obstacles.
To directly combat the problem of technological scarcity, an abundance agenda would need to be focused on ensuring an abundance of capable minds. That means that immigration reform has to be a key part of this. As my colleague Josh Smith has suggested, there are a range of options on the table. Policymakers could automatically make a U.S. college degree into a work visa for foreign students, expand the H-1B visa program and use immigration-generated fees to promote retraining for native-born Americans.
How we regulate transport also needs a major overhaul. Among other things, the Jones Act needs to be abolished, ports and railways need to be automated and commerce in space must be encouraged and nurtured.
Finally, there are a host of smaller changes that need to be implemented. More modest fixes include allowing people to purchase better sunscreens, giving all patients access to ordering prescription glasses online and making telehealth services available to everyone—permanently. And that is just a small fraction of an ever-expanding list.
It remains uncertain if the public and policymakers will actually advance an abundance agenda.
Still, there are reasons to be hopeful. Recent polling conducted by my organization, The Center for Growth and Opportunity at Utah State University, finds that people aged 18–29 are—among all age groups—the most optimistic about the future. It is also clear that young people want to own a home and build successful careers.
Making the right kind of arguments for the abundance agenda could be a winning ticket for future politicians. In fact, politicians today may already be jumping on board. Earlier this year, for example, Democrats and Republicans came together to pass the CHIPS Act, which will pump $52.7 billion into domestic semiconductor manufacturing. It is a landmark bill that came about because both sides wanted to counter China. It’s not a bad reason, and it may be the impetus to passing more abundance items like the ones my colleagues at The Center for Growth and Opportunity have outlined for Congress.
Looking to the Future
I recently told my dad, by some reckonings, this is the year George Jetson was born. “I always wanted a flying car,” he responded.
Truth be told, we aren’t far off the timeline. “The Jetsons” is set 40 years in the future, and in the next decade, a new generation of vertical takeoff and landing aircraft, also known as eVTOLs, is set to take the skies.
“The Jetsons” was a world where robots, floating cities and flying cars were the backdrop to life. If we are smart enough to work toward abundance, we can soon live in a world of flying cars as well as one with bountiful medical supplies.
But abundance offers more than just cool new stuff or even better access to necessary things. By creating substantially more wealth, an abundance agenda means more resources to solve big problems. And by creating a substantially wealthier society, abundance means more opportunities for more Americans of all stripes to pursue their professional and personal goals.
The best part is that we already have everything we need to make this new world a reality. Going forward, the only question is whether we will settle for continued stagnation or make the kind of decisions that take us toward a more abundant future.
The choice is ours. So let’s roll up our sleeves and get to work.
This essay is the first in an ongoing series entitled The Abundance Agenda. At a time of slow economic growth and social and political dysfunction, it’s clear that the way to a better and more prosperous future for the United States can be found in a wide range of pro-abundance policies touching on many areas, from energy to philanthropy. In this Discourse essay and the essays in the series that follow, we’ll make the case that abundance is not just about economic growth, as important as that is. An “abundance agenda” is also necessary if we are to effectively tackle the great social, environmental and even political challenges our country faces and is essential if we are to successfully promote human flourishing.