Abundance for Workers by Dani Rodrik

Dani Rodrik highlights the enormous social and political costs of viewing the goal of production solely as consumption.

Advanced economies’ most glaring failure, reflected in divided societies and polarized politics, has been their inability to deliver adequate numbers of good jobs for non-college-educated workers. Those who produce abundance are those who need it the most.

CAMBRIDGE – The surest way for policy advocates to lose a progressive audience is to start talking about the economy’s supply side, the importance of incentives, and the dangers of excess regulation. These ideas are traditionally associated with conservative agendas. Ezra Klein and Derek Thompson’s new book Abundance aims to change all that.

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

Klein and Thompson rightly underscore that it is improvements in supply that are the source of broad-based posterity in the US and other advanced economies. As productivity rises, low- and middle-income families reap the benefits of cheaper and more varied and plentiful goods and services. Increasingly, however, the US economy’s ability to build things has been hobbled, Klein and Thompson argue, by environmental, safety, labor, and other regulations, and by complex and time-consuming local permitting rules.