Abundance Requires Economic Planning and Public Provision: A Radical Vision for US Progressives

Abstract

Whatever its flaws, the economic policy of the Biden administration marked a clear turn toward the goals and methods of progressive economic governance. Their embrace of robust fiscal policy was both a rebuke of market fundamentalist neoliberal austerity and a successful policy. Large-scale stimulus spending drove the fastest and strongest labor market recovery in US history, while green industrial policy programs provided the most significant US policy support for economy-wide decarbonization. This agenda, dubbed “Bidenomics,” originated with progressive intellectuals and policymakers in partnership with social movements. It is impossible to separate the scope of its ambitions from the concrete solutions developed by progressive mobilizations over the previous decade, most especially the need for a dramatic increase in public investment for a Green New Deal. Yet “Bidenomics” as implemented, proved to be a more limited program, shaped more by the political constraints of its passage than by its goal of addressing the overlapping sources of economic insecurity that characterize American life. Now, the progressive movement faces an impasse: What political program and project could overcome the collapse of Bidenomics in Trump's more aggressive second term? And what kind of economic strategy could meet the existential challenge of delivering deep decarbonization across the 2030s? In their recent book Abundance, prominent liberal journalists Ezra Klein and Derek Thompson look to meet this challenge with a policy vision oriented toward abundant housing, clean energy, and an economy focused on technological and biomedical innovation [1]. While the authors advocate for more than just deregulation, the central thesis of the book is that the current regulatory and administrative state works to thwart the capitalist dynamism which would otherwise produce the investment necessary to deliver on their policy vision. Fixing this problem, they argue, will provide the public good of generalized economic growth, which will in turn ease the affordability crisis by boosting supply in key sectors like housing. To make this argument, they point out places where they feel the Biden administration could have done more to boost growth and investment: zoning reform, permitting reform, and an excess of “sticks” over “carrots” in investment policy. They are right to make the affordability crisis the central issue for future economic policymaking, yet they are wrong to center regulation and “marketcraft” as the only—or even the most important—ways the government can shape economic activity. We believe the crises of our age cannot be addressed without a politics and program of democratic planning and non-market economic coordination. From the cost of housing and healthcare to the challenge of power sector decarbonization, the progressive approach must be premised on public direct investment, economic coordination, and public provision. Progressives must set an ambitious agenda by defining the political economic project of the post-Trump era as aggressive decarbonization which addresses the affordability crisis through public provisioning of universal healthcare, housing, education, and dignity for all workers. Practically, this means the task now is to envision a new era of green economic planning: direct public investment, co-ordination, and provisioning in key sectors including but not limited to energy and electricity. This is necessary to ensure the affordability crisis is addressed, to achieve rapid decarbonization, and to maintain macroeconomic stability through an economy-wide restructuring process. Inflation has loomed large in 2024 election post-mortems. Yet “inflation” as the “value of a dollar” is distinct from the structural cost of living stresses felt by broad swaths of the American public. Life's essentials—from housing to healthcare to childcare—are simply too expensive. Yet, contra Klein and Thompson, addressing this crisis requires not only supply-side growth—whether sectoral or aggregate—but actual decommodification of these pain points. Delivering universal, high-quality, and affordable essentials will require different institutions and policies across sectors and at different levels of government. But however they are organized, these policy goals will require some mix of public provisioning, direct public investment, and coordination—which is to say planning. In healthcare, for example, Medicare for All would deliver universal provision while lowering insurance costs. However, direct planning and coordination of the supply of healthcare—from infrastructure investments to labor conditions—will be required to achieve affordability and decommodification without sacrificing quality of care and dignity for labor. On decarbonization, Klein and Thompson focus on fixing the Inflation Reduction Act through permitting reform. Yet as even champions of “Bidenomics” have acknowledged, the recently repealed IRA would never have been sufficient to deliver decarbonization, regardless of the very real problems caused by permitting bottlenecks, overcrowded interconnection queues, and frivolous lawsuits. Decarbonization is fundamentally a problem of economic planning: a rapid, comprehensive, and stable transformation of our energy systems—both production and consumption—will require aggressive and synchronized programs of investment and divestment to overhaul our infrastructure and capital stock. Macroeconomic and macrofinancial governance measures beyond conventional aggregate demand management will be necessary to facilitate and stabilize the wider socioeconomic effects of such a transformation. The IRA offered subsidies to private capital in the hopes it would undertake generalized investment in green infrastructure and domestic manufacturing capacity. These subsidies did lead to an increase in private renewable investment, but rollout has still been limited by supply chain snarls, interest rate hikes, and underinvestment in the privately controlled power transmission system. The IRA's effects on the carbon intensity of the power sector have also been diluted by demand growth. Yet, an increase in green investment does not amount to a transition between fundamentally different infrastructure systems. Phasing out fossil fuels will require an economic planning project far more ambitious, comprehensive, and serious about the scale of the task at hand than possible within the tools and frameworks of the IRA. Instead, we must build robust institutions and systems of public direct investment that can structure public coordination and public direction of allocation and consumption in key nodes of the energy system and related supply chains. Instead of simply reviving the clean energy tax credit approach of the IRA—but this time with permitting and administrative reform built in! – progressives should push for the US to redesign its power sector by building publicly owned energy infrastructure. As climate writer Robinson Meyer recently noted, it is already clear in the face of electricity inflation that states with publicly owned power authorities such as the New York Power Authority “are able to intervene more forcefully in their own power markets than states that lack such capability. because the state itself can act to build its own large-scale power plants.” A dramatic expansion of these capabilities should be the centerpiece of future energy policy. After Bidenomics, planning must become a critical aspect of macroeconomic policy and energy transition management frameworks. The Biden Administration was right to use fiscal spending to pursue a strong labor market recovery in the wake of the pandemic. Yet the experience of supply-side inflation has also demonstrated the political limits of uncoordinated growth alongside rapid uncoordinated changes in the composition of supply and demand across different industries and sectors. Klein and Thompson do not address how to manage and coordinate the growth underpinning their vision, leaving that coordination problem to market actors following profit incentives in a swiftly shifting market. The solution is twofold: macroeconomic planning to coordinate growth and economic restructuring to prevent price instability, whether from real bottlenecks or what Isabella Weber has called “sellers' inflation.” What is required is a stronger national macroeconomic planning apparatus: a revival of the Office of Price Administration, the establishment of a National Investment Authority, and the chartering of a National Economic Planning Board to coordinate investment and govern prices from a macroeconomic stability perspective. Amidst fierce contest over the future of the Democratic Party—its content, form, and aims—progressives have every reason to confidently put forward a bold and transformative program. Zohran Mamdani's recent victory shows that a truly progressive vision of alleviating economic insecurity through public provision is both politically winning and able to produce a policy coalition capable of accommodating liberal reformers as well. Zohran Mamdani campaigned on an explicitly democratic socialist platform, which centered on public provision to alleviate the cost of living crisis formed through his deep connections with the Democratic Socialists of America and efforts to engage with everyday New Yorkers. He advanced a positive vision of comprehensively tackling the issue of affordability with concrete policies premised on the universality of the problems we face and of the solutions we can achieve together, such as addressing the broad crisis of childcare affordability with a universal public program. But he has expressed support for technical policy tools advocated by many “Yes in My Backyard” (YIMBY) proponents: lowering housing costs through a rent freeze, building more public housing, and a suite of zoning and permitting reforms in the housing sector. The political route to achieving such reforms may indeed be the path of democratic socialism. While Mamdani's campaign was focused on tools the Mayor of New York City could execute to tackle affordability, a national program to alleviate economic insecurity through public provision will look quite different. Yet it would begin by moving beyond the narrow premise and limited ambition of Derek Thompson and Ezra Klein's abundance: that were it to be properly subsidized and freed from administrative constraints, capital will deliver enough aggregate and sectoral growth to address affordability, social care, and the climate crisis. Instead, actual abundance will require economic planning and the ambition to deliver universal provision of high-quality and affordable essentials. The authors have nothing to report. The authors declare no conflicts of interest.