Is ‘Supply-Side Liberalism’ Still Relevant?

[IMPORTANT: Make this 4 times longer with much more detail]

Insider Your all-access pass to FP Is ‘Supply-Side Liberalism’ Still Relevant? A new book from Ezra Klein and Derek Thompson could be a lost manifesto for a second Democratic administration. By Cameron Abadi , a deputy editor at Foreign Policy , and Adam Tooze , a columnist at Foreign Policy and director of the European Institute at Columbia University. Sign up for Adam’s Chartbook newsletter here . The cover of Abundance by Ezra Klein and Derek Thompson. Simon & Schuster My FP: Follow topics and authors to get straight to what you like. Exclusively for FP subscribers. Subscribe Now | Log In Economics United States Cameron Abadi March 21, 2025, 3:12 PM Comment icon View Comments ( 0 ) As Democrats in the United States seek a new political and economic agenda in opposition, the new book Abundance by Ezra Klein and Derek Thompson has emerged as a template. The authors advocate for a program that they call “supply-side liberalism,” with an emphasis on pro-growth policies that expand production of housing, energy, and innovation in general—and a more effective and efficient state playing an instrumental role along the way. With Republicans dismantling the federal government, is the book’s diagnosis still relevant? Do the authors offer a new synthesis for U.S. liberalism, or do they just take the side of one faction against the other? And who do they argue should decide what gets produced in a more growth-oriented United States? As Democrats in the United States seek a new political and economic agenda in opposition, the new book Abundance by Ezra Klein and Derek Thompson has emerged as a template. The authors advocate for a program that they call “supply-side liberalism,” with an emphasis on pro-growth policies that expand production of housing, energy, and innovation in general—and a more effective and efficient state playing an instrumental role along the way. Ones-and-tooze-functional-tag_8f63c9 Prefer to listen? To hear this entire conversation, and more episodes in the weeks ahead, follow Ones and Tooze wherever you get your podcasts. Trending Articles 5 Key Questions About Signalgate The biggest outstanding questions we have about the Signal group chat scandal. Powered By Advertisement 5 Key Questions About Signalgate X With Republicans dismantling the federal government, is the book’s diagnosis still relevant? Do the authors offer a new synthesis for U.S. liberalism, or do they just take the side of one faction against the other? And who do they argue should decide what gets produced in a more growth-oriented United States? Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze . What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter . Cameron Abadi: Abundance offers new ways of thinking about the state’s capacity to encourage growth and innovation—but with Republicans currently attempting to dismantle the state entirely, how relevant are debates about state capacity? Do Democrats actually need to be thinking much more defensively, trying to save the state rather than making it more efficient in the ways this book describes? Adam Tooze: Yeah, I’m with you on this. I really had to steel myself to read this. Because it’s a very readable book: It’s easygoing, it’s interesting, it flows. But it seems like it’s a blast from the past. I was involved in extended conversations—some people may have heard the podcast that I did with Ezra, which I think was in 2021—when this was gestating, and it took me back. And in the current moment—in the state that we’re in in 2025, with the pressures that particularly we’re under at Columbia University—it just seemed like a message in a bottle, somehow. I think of it as like a lost manifesto for a second Democratic administration. And I think for Klein in particular, it must have been anguishing finishing this and then putting it into the incredibly slow-moving process of book production, because he was one of the most—very much to his credit—prescient major commentators on the disaster of the Biden-Harris sequence in 2024. He was brave, he was out front, he was calling for then-U.S. President Joe Biden to go. Then he was calling for a convention, or at least, discussing the options. And obviously, this is not just any old journalist. This is one of the most influential voices in the Democratic camp in the United States, who clearly was talking to people at the very highest levels, including in the White House. So, he must have seen this disaster coming, and therefore, in a sense, the obsolescence of the book that he was writing—because this should have been the manifesto, and it would have been relevant if that were the world that we were in. But the Democrats managed to do just about everything conceivable to ensure that that didn’t happen. The authors are now making a sturdy effort to present the book as relevant. And I’ve heard Klein pitch this as the backdrop to thinking about populism, because scarcity is the fuel that populism feeds off, and they want to offer abundance as an alternative. They’re not going there, but another way—I think—of reading this book is that this is what the Department of Government Efficiency (DOGE) would be like if you were doing it right. The authors are all about reforming and thinking about government at quite a comprehensive cultural-political level, but of course, in a much more constructive way than DOGE. They even have an entire chapter on the National Institutes of Health (NIH) and its problems. On the one hand, it’s a complex celebration—but also criticism. And then the broader historical framing of the book is about the legacies of reformism and liberal politics in the United States since the 1960s. This was when America was trying finally to get its house in order, and in some way at least address the stain, the shame, and the disaster of chattel slavery and its long consequences in Jim Crow. That is what is now being mobilized against, I would argue, free speech on campuses like Columbia’s. And the lever is NIH funding and the big government apparatus of science. So this book really speaks to the world that we’re in, but it does so in a future that has not turned out to be ours. I find it quite painful to read, I must admit. Sign up for Editors’ Picks A curated selection of FP’s must-read stories. Sign Up By submitting your email, you agree to the Privacy Policy and Terms of Use and to receive email correspondence from us. You may opt out at any time. Enter your email Sign Up ✓ Signed Up You’re on the list! More ways to stay updated on global news: FP Live Enter your email Sign Up ✓ Signed Up World Brief Enter your email Sign Up ✓ Signed Up China Brief Enter your email Sign Up ✓ Signed Up South Asia Brief Enter your email Sign Up ✓ Signed Up Situation Report Enter your email Sign Up ✓ Signed Up View All Newsletters CA: The book describes a broad liberal camp with two opposing forces: the authors’ own growth-minded state-capacity faction and a more accountability-minded, anti-abundance faction. But are they being too dismissive of their opponents? Do they offer a plausible synthesis that reconciles these opposing political forces in liberalism, or is this just a swinging of the pendulum within liberalism? AT: The book has three major points of focus—the research complex with a focus on the NIH, infrastructure, and housing. And maybe we should stand back and say, why are they talking about these things? They’re talking about these things because their basic thesis is that America, American society, and progressive politics in particular should operate on the front foot. It should operate toward the future, and it should operate toward a qualitatively improving expansion of the available resources for U.S. society—and by that, they mean families and people. It’s a kind of a humanist project, right? And they argue that we’ve been locked in an increasingly constricting, self-defeating system of constraints for which they then provide a history, and where they—on those three axes, at least—point to the problem. I don’t really think you could say they offer solutions, but they alert us to problems in those three areas. With regard to science and infrastructure, I think the account is a little thin. It’s about sclerosis, in a sense. It’s the accumulation of more and more conservative checks and balances. On the housing side, which is the most fleshed out bit, the authors offer quite an interesting story; whether you find it convincing or not is another question. And there’s some empirical research that says that housing is ultimately driven by the cost of housing—and the huge gap between the cost of housing in blue New York or California and red state Texas. Houston is the example they cite over and over again, and it’s a factor of four or five times. So, I think the average house in Houston is about $300,000. And the average home in the hot spots of growth such as New York and California in blue states is more than a million dollars and heading toward $1.5 million, $1.6 million, $1.7 million in the Bay Area. So, this is the problem. How do we explain how we got there? With regard to housing, their argument is that it isn’t just demand. The conventional economist’s argument would be that it’s fundamentally a demand-driven story. But the authors argue that deep down, the basic problem is supply. We just aren’t building enough houses and apartments in the blue-state areas. And the logic they offer for this is quite tricky. Housing specialists would have to adjudicate how convincing this is, but it starts with a reform story. It starts with the New Deal and the creation of the publicly subsidized standard mortgage in the United States. The public subsidy for private ownership of housing in the United States is gigantic, and the entire mortgage market is rigged toward that. We don’t have to get into the details—we could talk about that on some other episode. But what that does is suck initially middle-class and then increasingly prosperous working-class assets and savings into the housing market. And this is, from a financial point of view, very bad news, because it’s extremely risky to have such a one-sided commitment to an asset that’s not diversified, that’s exposed to lots of local risks. And so, then the story goes: OK, if you’ve built a home-owning middle class, how are they going to defend their asset? Well, you can’t financially defend an asset of this type. So, what you do is use legal means to defend this asset and ensure that its value remains the same. And this becomes particularly pressing in a world of inflation from the 1970s onward, where more money is pouring into housing as a nest egg. But how do you insure your nest egg against what the Americans call blight—which is decay, infrastructure failure, the “wrong type” of people moving in? The authors don’t really address the issue of race head on, but of course, it lurks in the background always in American stories like this. Their answer is that you use law. And then the story jumps all the way back to the 19th century in Alexis de Tocqueville and the common observation that the United States is a society held together by law. And then the next question is: What laws do you mobilize if what you want to do is to protect housing assets against the “wrong people” moving in or the “wrong type” of building construction going on around you? They cite three elements of law. The first is urban zoning, which has a history that accumulates from the beginning of the 20th century onward. This is initially a reform project, which becomes more restrictive and really binding in many parts of the United States. These are rules about what kind of buildings can be built in what areas, and what they classically do is require large gardens or even estates around the houses—in the suburbs, you see this quite a lot. It meant you have to own acres. Or in the cities, it’s restrictions on the height of buildings. Then, you have the civil rights movement of the 1960s, which makes courts into heroes and focuses the attention of progressive activism on legal means as the main way forward. And then environmentalism enters the story from the 1960s onward, which was a first suburban movement in the United States. Environmentalism in its modern form is a U.S. invention, culminating in the first observation of Earth Day in 1970, which is the biggest environmental demonstration in history. And it’s a reaction to the one-turn destructive growth of the United States in that period. I’m old enough to remember what growth in the United States was like in the early 70s, and it was dirty and polluting and dangerous and nasty—and environmental protections come into place from that. This apparatus of assets unduly focused on housing, the legal bias of U.S. progressivism, the handles of environmental protection, and zoning create a matrix within which progressive politics in the United States has increasingly entangled the business of building buildings. And that is the kind of nitty-gritty of the Abundance story, about how progressive politics mills together from the 70s onward to create the basis through which NIMBYism—“not in my backyard” politics—is mobilized. So NIMBYism is mobilized in defense of this core asset of home ownership. It’s a materialist argument, compounded by a political culture argument, compounded by an ironic twisting of various reform projects. And undoing that, rethinking progressive politics to enable us to move past this—this is the project of the book. Whether or not Klein and Thompson succeed—I think it’s an open question—this diagnosis is what the book is offering. And it’s a historical account; it’s a social scientific account at some level. It’s also a cultural demand that progressivism and liberalism back itself out of this of Bermuda Triangle of constraints that it has constructed since the 1970s. And implicitly, what they’re saying is: Recognize the political economy that underpins this—which in blue states, anyway, consists of the dogged defense of incumbent interest in real estate against the construction of new property, new places for people to live. So they have this—it’s very aggressive, it’s a little unfair—contrast between liberal Californian homes with their Black Lives Matter posters in the windows and on the front lawn, and those same homeowners mobilizing to prevent the construction of affordable housing, which predominantly falls on the lowest income and minority populations in the United States. CA: But do they describe or analyze why the United States has as legalistic a culture as it always has had? Because in the absence of that, it seems like there’s some sleight of hand in the book in imagining a more effective administrative state. If the United States fundamentally has a low-trust society, and then that’s why it’s always been a legalistic culture, that’s a more fundamental problem to solve, right? AT: I think what they’re trying to argue is that, yes, the United States has always had this legalistic culture. And let’s not make any bones about it—anyone reading it outside the U.S. would be struck—it’s an intensely American book for an American audience. It ends with pages discussing the American character, as though this was a thing. But their argument, to their credit, is that there is some possibility of movement here. And the argument, basically, is that the United States has been trapped by both the advocates of government and the opponents of government in a formalistic model of legitimation, by means of procedure—ultimately, in other words, by means of legality. And that’s why this is a lawyering culture. Their argument is that what that does is displace and strangle what could potentially be an alternative form of legitimation—and after all, what for U.S. society as a whole and for U.S. capitalism is the ultimate form of legitimation, is output legitimacy. In other words, the making of things and the doing of things quickly. They cite this terrible accident on I-95 in Philadelphia in June 2023 and the relatively rapid actions of the Pennsylvania governor to fix the bridge and how popular that was. Americans do believe—perhaps in this deep historical way—in law, but they’re not blind to the attractions of good things being done quickly in an affordable way. And the authors’ argument is this: We need to bootstrap our way out of the legalistic, formalistic impasse toward a better future by rebalancing formal and substantive legitimation, procedural and output legitimacy, and regain a foothold. This whole book is overshadowed in a way that only really becomes clear in the final pages, which are about China. That’s the ultimate argument here, is that the United States as the great shining city on the hill—or whatever it is—is losing to China, which is nothing if not the demonstration of the power of output legitimacy. CA: Obviously, the authors are advocates of further growth and production—but who do they presume should decide what should be produced in the first place? Does their book ultimately give too much credence to the capitalist perspective on what ought to be built? AT: I would argue that it really isn’t, in their view, business or the market or profit that decides output. In fact, they have these rather strange sections where they kind of face and then dodge the question of how economists calculate the standard of living, and real wages, and so on. And they say, ‘Well, televisions have gotten cheaper, but homes have gotten more expensive, and somehow though our real wages increase, we’re worse off.’ Whereas an economist would say, ‘Well, no, actually we aren’t, because the measure I’m using is supposed to capture that the apartment’s more expensive. So either you’re saying that you don’t believe in the data, or you’re saying that my data is wrong.’ But essentially, the Klein and Thompson argument is not really an economist’s argument. It’s more basic needs, Aristotelian kind of stuff, where they’re basically saying, ‘Look, we all know what Americans need to flourish, to be prosperous. We all know. Let’s stop arguing with each other. We all know.’ What is it? Well, it’s housing, it’s health care, which is why all the innovation matters. And they go on a lot, quite rightly, I think, about Operation Warp Speed . It’s education, though they don’t say anything about that. It’s child care, though they don’t say anything about that, either. It’s the internet—that’s the infrastructure part. So those are the basic needs, and the agenda of this book is for government to take a more constructive role in delivering those for the U.S. population. And that is going to be the politics of abundance. It’s not abundance in general; it’s not growth in general. It’s actually this—dare I say it—a kind of Brooklyn progressive liberal vision of what a good life consists of, and it consists of these basics that need to be provided. And they start with this image of waking up in America in 2050. It’s really a Ronald Reagan-style, “morning in America” 2050 kind of vision. And it’s the satisfaction of all of these needs by green and efficient and cheap needs. That’s what abundance is about. So, I don’t see the market or profit really being a key element of the argument, though they lurk in the background. It’s really: How do we get these things that we all agree that we need? And the statistics don’t tell us how unaffordable they’ve become, and therefore, we’re living in a fantasy world in which we think we’re well off, but in fact, we aren’t. It’s that discrepancy that ultimately is the source of our discontent, and it’s what populism rides in on. And Democratic Party politics needs to seize on this and address it—not by more formal mechanism, by better representation, all of that. No, not that. That’s everything-bagel liberalism. It’s by delivering. Give us bridges, give us roads, give us metros, give us housing, give us all of that. That’s how we’re going to get there. Cameron Abadi is a deputy editor at Foreign Policy . X: @CameronAbadi Adam Tooze is a columnist at Foreign Policy and a history professor and the director of the European Institute at Columbia University. He is the author of Chartbook , a newsletter on economics, geopolitics, and history. X: @adam_tooze Read More On Economics | Liberalism | Media | United States Join the Conversation Commenting on this and other recent articles is just one benefit of a Foreign Policy subscription. Already a subscriber? Log In . Subscribe Subscribe View 0 Comments Join the Conversation Join the conversation on this and other recent Foreign Policy articles when you subscribe now. 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