Something missing from this account is the importance of regulation in response to disruption. I acknowledge we have to be careful about this. Regulation has to make progress better for people rather than block it. But nonetheless, robust regulation seems important to me.
Take the Industrial Revolution. It destroyed the livelihoods of many craftspeople. These livelihoods were very empowering: they involved working out of the home running an independent business, using a complex skill the craftsperson had mastered.
What replaced these jobs? Long hours doing grueling, repetitive, dangerous work in factories serving the whims of authoritarian bosses. No wonder there was a backlash, even if GDP may have been higher.
We shouldn’t have stopped the industrial revolution from happening, but maybe we could have implemented the kinds of labor norms and regulations we take for granted today back then. Things like overtime pay, minimum wages, OSHA, sick and parental leave (still an ongoing fight!), the two day weekend, mandatory lunch breaks, and bans on child labor.
I’m not exactly sure what the equivalent of these regulations are in the case of housing or AI disruption, but we shouldn’t be closed to regulation in general as a solution. We just have to weigh trade offs.
2. That regulation was only possible because of the growth that happened. Before the factory, people just worked dawn to dust on the family farm, often not getting enough to eat. The factory job for all it's problem was a huge improvement. That's why people moved to the city to take those jobs.
This idea applies to the entire neoliberal project. The original principles of free trade and comparative advantage from Ricardo always included the idea that gains from this system would be redistributed to help those who lost out from the economic changes. But somehow the second part never happens
I'm reminded of a comment I made here last week, condemning capitalism generally, and capitalists in particular, for disregarding the value of lifetimes or even generations of labor which had built the same opportunities for growth and change which you've mentioned in this essay. My comment was a reply to the claim that America had in fact *not* failed the inhabitants of the Rust Belt from the 1970s and on, despite how blame for this failure is usually assigned.
Laborers in the Rust Belt, along with their families, were made into "losers" because the capitalists who employed their effort and who had inspired them to settle and build in Rust Belt cities, callously abandoned them to take advantage of the very same new opportunities which these working men and women had created for them. Working families were left with aging homes on worthless properties, which they could no longer afford to keep up or improve. This inspired many to leave right away. Those who stayed saw their neighborhoods pitch into sharp decline, as the "abundance" which moved the "line go up!" graphs on economic ledgers made "winners" out of suburban and exurban dwellers, and even (and often) inhabitants of cities in other regions of our country — and, in fact, other countries.
These exploited men and women could have been made whole if capitalists would have simply reinvested in the same places where they'd established themselves, but they chose to throw these workers, and their families, away like used napkins…
There is obviously a way to take on projects which expand and grow our economy without destroying what has already been built, along with the lives of the men and women who built it. Redistribution is needed, as stated, for the sake of preserving the dignity, utility, and potential (!) of those who've been unable, for whatever reasons, to participate in the "abundance" of growth and change — but perhaps this process should consider the preservation of the gains made by the our legacy industries as a *primary* action. I mentioned the example of moving solar panel manufacturing into Appalachia, where it could be done with the labor of former coal miners, for the sake of honoring their lifetimes and generations of contributions to our economy and society within the energy sector. Distributing investments with labor in mind would eliminate the need to redistribute for their assistance, because these laborers would already be thriving from their roles in the growth of their own "abundance".
Redistribution isn't cost free. And if you combine that with industrial policy (like say putting solar panels in West Virginia when the market doesn't want to) then you are going to lower efficiency as well.
In some cases maybe that's justified. For example, I supported the CHIPS act because Chips really are a vital national security interest. Same with rare earth's.
But that doesn't mean there aren't real costs to industrial policy.
An important note, we can't afford the welfare state we already have. It's not going to be expanding anymore.
We have trillions and trillions in unfunded entitlements. Any serious proposal to avert a fiscal debt crisis will require higher taxes AND benefit cuts. There are many good reasons for this, but the easiest the understand is that no political party will take the risks of doing this on their own.
Democrats won't push through that much tax increases on their own, and Republicans won't push through benefit cuts. It will need to be bi-partisan to avoid the political blood bath.
That being said, the faster we grow, the less painful compromises we will need. Also, we should be investing a ton of money in anti-aging research, the one thing that could potentially save us. Giving people not just lifespan but health span so they can work longer.
That's like MAGA talking points about foreign aid. Foreign aid is less than 1% of federal spending.
Where all the spending actually goes is SS, Medicare/Medicaid, defense and interest on the debt. That's over 80% of spending on just those. You could eliminate all the rest of the spending and we would still be in a deficit. And what's driving the growth in spending is the entitlements.
It does, though, in terms of politics and public opinion. Most people can't conceptualize a billion dollars or a trillion dollars. If you're throwing $40B at some loser who can't manage his own country, then why can't you raise my SS payments? That's the logic people have.
I think this is part of the story, but it underplays the extent to which people may also be objecting to the real and quite unnecessary costs of the growth that happened in the post WWII era, costs that go beyond just displacement. In the urbanism realm, for example, development, and liberal-establishment-driven urban progress policy generally, during that era very often made cities uglier, less safe, and less family friendly. It didn't have to. And now, we who are pro-development for the usual abundance reasons have a politically understandable burden of convincing people that *our* version will not be like that. That's a burden we can meet, but the work of meeting it can't be neglected if we want abundance to be politically sustainable.
One quibble I have is with the end about Abundance. I agree in theory. And hopefully we can collectively walk and chew gum at the same time.
But if you can’t, history, the same history you cite in the first half-ish of this post, suggests making a bigger pie is more beneficial to more people than splitting the existing pie slightly more fairly.
Thank you! I’ve never understood why people think Abundance and more leftist aims have to necessarily be mutually exclusive. As you say, they can build upon each other.
Something missing from this account is the importance of regulation in response to disruption. I acknowledge we have to be careful about this. Regulation has to make progress better for people rather than block it. But nonetheless, robust regulation seems important to me.
Take the Industrial Revolution. It destroyed the livelihoods of many craftspeople. These livelihoods were very empowering: they involved working out of the home running an independent business, using a complex skill the craftsperson had mastered.
What replaced these jobs? Long hours doing grueling, repetitive, dangerous work in factories serving the whims of authoritarian bosses. No wonder there was a backlash, even if GDP may have been higher.
We shouldn’t have stopped the industrial revolution from happening, but maybe we could have implemented the kinds of labor norms and regulations we take for granted today back then. Things like overtime pay, minimum wages, OSHA, sick and parental leave (still an ongoing fight!), the two day weekend, mandatory lunch breaks, and bans on child labor.
I’m not exactly sure what the equivalent of these regulations are in the case of housing or AI disruption, but we shouldn’t be closed to regulation in general as a solution. We just have to weigh trade offs.
1. we are already very very regulated.
2. That regulation was only possible because of the growth that happened. Before the factory, people just worked dawn to dust on the family farm, often not getting enough to eat. The factory job for all it's problem was a huge improvement. That's why people moved to the city to take those jobs.
!
This idea applies to the entire neoliberal project. The original principles of free trade and comparative advantage from Ricardo always included the idea that gains from this system would be redistributed to help those who lost out from the economic changes. But somehow the second part never happens
I'm reminded of a comment I made here last week, condemning capitalism generally, and capitalists in particular, for disregarding the value of lifetimes or even generations of labor which had built the same opportunities for growth and change which you've mentioned in this essay. My comment was a reply to the claim that America had in fact *not* failed the inhabitants of the Rust Belt from the 1970s and on, despite how blame for this failure is usually assigned.
Laborers in the Rust Belt, along with their families, were made into "losers" because the capitalists who employed their effort and who had inspired them to settle and build in Rust Belt cities, callously abandoned them to take advantage of the very same new opportunities which these working men and women had created for them. Working families were left with aging homes on worthless properties, which they could no longer afford to keep up or improve. This inspired many to leave right away. Those who stayed saw their neighborhoods pitch into sharp decline, as the "abundance" which moved the "line go up!" graphs on economic ledgers made "winners" out of suburban and exurban dwellers, and even (and often) inhabitants of cities in other regions of our country — and, in fact, other countries.
These exploited men and women could have been made whole if capitalists would have simply reinvested in the same places where they'd established themselves, but they chose to throw these workers, and their families, away like used napkins…
There is obviously a way to take on projects which expand and grow our economy without destroying what has already been built, along with the lives of the men and women who built it. Redistribution is needed, as stated, for the sake of preserving the dignity, utility, and potential (!) of those who've been unable, for whatever reasons, to participate in the "abundance" of growth and change — but perhaps this process should consider the preservation of the gains made by the our legacy industries as a *primary* action. I mentioned the example of moving solar panel manufacturing into Appalachia, where it could be done with the labor of former coal miners, for the sake of honoring their lifetimes and generations of contributions to our economy and society within the energy sector. Distributing investments with labor in mind would eliminate the need to redistribute for their assistance, because these laborers would already be thriving from their roles in the growth of their own "abundance".
That sounds like strangling the natural efficiency the free market provides and thus greatly reducing growth.
No, it just sounds like redistributing the spoils of the huge successes.
Redistribution isn't cost free. And if you combine that with industrial policy (like say putting solar panels in West Virginia when the market doesn't want to) then you are going to lower efficiency as well.
In some cases maybe that's justified. For example, I supported the CHIPS act because Chips really are a vital national security interest. Same with rare earth's.
But that doesn't mean there aren't real costs to industrial policy.
An important note, we can't afford the welfare state we already have. It's not going to be expanding anymore.
We have trillions and trillions in unfunded entitlements. Any serious proposal to avert a fiscal debt crisis will require higher taxes AND benefit cuts. There are many good reasons for this, but the easiest the understand is that no political party will take the risks of doing this on their own.
Democrats won't push through that much tax increases on their own, and Republicans won't push through benefit cuts. It will need to be bi-partisan to avoid the political blood bath.
That being said, the faster we grow, the less painful compromises we will need. Also, we should be investing a ton of money in anti-aging research, the one thing that could potentially save us. Giving people not just lifespan but health span so they can work longer.
If we can't afford our welfare state, maybe we could avoid giving Argentina $40 billion.
That's like MAGA talking points about foreign aid. Foreign aid is less than 1% of federal spending.
Where all the spending actually goes is SS, Medicare/Medicaid, defense and interest on the debt. That's over 80% of spending on just those. You could eliminate all the rest of the spending and we would still be in a deficit. And what's driving the growth in spending is the entitlements.
Don't care. I don't want to give Milei $40 billion just because Trump likes his hair.
If you don't support giving them money that's a fair position. But don't pretend it has anything to do with the welfare state.
It does, though, in terms of politics and public opinion. Most people can't conceptualize a billion dollars or a trillion dollars. If you're throwing $40B at some loser who can't manage his own country, then why can't you raise my SS payments? That's the logic people have.
fair enough. I certainly agree that the vast majority of people are very bad with numbers and don't understand the countries fiscal reality at all.
Worse both political parties pander to them. Rainbows and unicorns for everyone (at someone else's expense of course)
Really well said, nicely done!
I think this is part of the story, but it underplays the extent to which people may also be objecting to the real and quite unnecessary costs of the growth that happened in the post WWII era, costs that go beyond just displacement. In the urbanism realm, for example, development, and liberal-establishment-driven urban progress policy generally, during that era very often made cities uglier, less safe, and less family friendly. It didn't have to. And now, we who are pro-development for the usual abundance reasons have a politically understandable burden of convincing people that *our* version will not be like that. That's a burden we can meet, but the work of meeting it can't be neglected if we want abundance to be politically sustainable.
One quibble I have is with the end about Abundance. I agree in theory. And hopefully we can collectively walk and chew gum at the same time.
But if you can’t, history, the same history you cite in the first half-ish of this post, suggests making a bigger pie is more beneficial to more people than splitting the existing pie slightly more fairly.
Thank you! I’ve never understood why people think Abundance and more leftist aims have to necessarily be mutually exclusive. As you say, they can build upon each other.