Boston Review - The Real Path to Abundance
Legal director Sandeep Vaheesan publishes a major review critiquing Abundance by Ezra Klein and Derek Thompson for promoting deregulation as a primary solution to societal challenges like housing shortages and the transition to renewable energy.
Sandeep Vaheesan, legal director at the Open Markets Institute and author of the recent book Democracy in Power: A History of Electrification in the United States, offers a powerful and provocative critique of “Abundance,” the book by journalists Ezra Klein and Derek Thompson, in a review published today by the Boston Review.
In the essay, Vaheesan challenges the core premise of “Abundance”—that excessive public regulation is the chief obstacle to solving America's most urgent material crises, notably inadequate housing and clean energy. While he supports the Klein and Thompson call for a “liberalism that builds,” Vaheesan contends that their basic program misreads both history and economics, advancing a deregulatory vision that is likely to further empower oligarchy rather than deliver broadly shared prosperity.
Vaheesan argues that “Abundance" proposes a corporate-centered narrative that downplays the limits of shareholder-dominated capitalism, misattributes policy failures to public oversight, and ignores the structural problems in today’s economy. Drawing on recent economic research and historical precedent, he calls instead for a twenty-first-century New Deal—one rooted in robust public investment, corporate accountability, and democratic participation.
Among the key points of contention:
Housing: Vaheesan challenges the notion that zoning is the primary driver of the housing crisis, pointing to critical obstacles such as high interest rates, high land prices, and the already dense development of blue cities like San Francisco.
Energy: He critiques the book’s claims about environmental review stalling renewable energy, explaining instead how private control of the transmission system has been the principal barrier to expanding the grid and integrating new clean energy resources.
Nuclear Power: Citing the failed expansion of the V.C. Summer plant in South Carolina and the massive cost overruns and constructions delays at Georgia’s Plant Vogtle, Vaheesan shows that nuclear power’s woes are not due to federal hostility but rather mismanagement by plant developers and operators.
Corporate Short-Termism: Vaheesan underscores the role of shareholder primacy and corporate prioritization of stock buybacks and mergers and acquisitions in undermining long-term investment, noting that Klein and Thompson fail to address the urgent need for structural reforms to corporate governance.
The essay also raises deeper questions about popular political vision, warning that “Abundance’s” anti-bureaucracy message risks echoing the Trump-Musk and other right-wing attacks on public institutions and could further weaken democratic control over economic life and society.
“Diminishing public power over land use decisions means greater private control, which in turn means more deference to the whims of the market and more discretion for corporate executives and financiers—in short, more oligarchy,” Vaheesan writes.
Vaheesan’s review is a vital intervention in the ongoing debate over how to effectively and equitably expand America’s capacity to build—and for whom — at a time when bold visions for future economic transformation are urgently needed.
Excerpts from the Piece:
On Housing:
Take housing construction, a notoriously volatile industry. Many American cities are indeed facing an affordable housing crisis. Over the last half-century, U.S. housing starts—the number of privately owned units being constructed—reached a peak in 2006 before cratering in the run-up to the global financial crisis of 2008; they have not recovered since. Klein and Thompson acknowledge as much. But they fail to note that zoning rules can’t possibly be the primary driver of this stagnation.
In fact, one of the central themes of Abundance—dynamic Texas versus sclerotic California—ironically undercuts the myopic focus on zoning. Klein and Thompson note that states like Texas today are building more housing than liberal strongholds like California, which they view as the epitome of blue state misgovernance. But the Golden State built plenty of housing in the mid-aughts. In fact, at times in 2004 and 2005, California even permitted more new housing units than Texas did. Since zoning restrictions didn’t suddenly get tighter in the second half of the 2000s, this building boom scrambles the thesis that public land-use controls are the root cause of today’s housing crisis. The authors fail to note the many determinants of housing starts, ignoring recent national dampers on homebuilding (including high interest rates and shortages of building materials and construction workers) as well as local factors such as much higher land prices and wages and the relative scarcity of undeveloped land in blue center cities in blue states.
On Renewable Energy:
As for energy, Abundance rightly stresses the need for more investment in zero-carbon power generation and transmission lines. But here the story of public barriers to abundance is even weaker. During the Biden administration, solar projects on public lands completed the environmental review process, on average, in less than six months, and between 2010 and 2021, few transmission projects required a time- and labor-intensive environmental impact statement. The real problems have to do with the authority to site transmission lines (which mostly remains at the state and local level, rather than with the federal government) and the bad incentives that shape the behavior of private transmission owners. Private management of the grid thwarts construction of lines that threaten the profits of investor-owned utilities and prevents timely connection of new generation facilities. In Kings County, California, solar projects that completed environmental review in a few months were stuck in the interconnection queue for an average of more than two years.
The excess procedure story is even less applicable to nuclear power. Setting aside public opposition, Klein and Thompson charge that the struggle to expand nuclear power in the United States “is not a failure of the private market to responsibly bear risk but of the federal government to properly weigh risk.” In reality, federal law has capped the legal liability of nuclear plant operators in the event of accidents since 1957. The problems of the nuclear power industry in the United States lie elsewhere. Its history is one of massive construction delays, cost overruns, and poor operational performance. While plant performance has greatly improved in recent years, frequent outages, high costs of operation, and the growth of cheaper alternatives have led to the closure of many nuclear plants. Rather than being “too cheap to meter,” as some nuclear proponents predicted in the 1950s, nuclear power has often proved too expensive and unreliable to keep in service.
Private Sector Limitations Across the Board:
This is the blind spot running through all of Abundance’s anecdotes: the limits of the private sector. The primary conceit is that in many areas, the private sector is ready to invest—and to invest big—if politicians would only lift public barriers standing in their way. There is little evidence that is true. In reality, corporate executives and managers make investment decisions based on expected profits. Even when zoning restrictions are favorable, developers evaluate a range of investment options before committing to construction. They are looking not only for positive returns but for higher returns than alternative options. Homebuilders, in particular, will not build unless they have reason to think they can achieve sufficiently high profits—those that outperform land banking, speculation, or other forms of investment. The much-touted housing boom in Austin is a case in point: after a few years of above-average building activity led to modest rent reductions, residential developers reduced construction substantially. The burst of construction made only a small dent in the dramatic increase in rents since 2010.
The same is true when it comes to renewable energy. In his recent book The Price Is Wrong, Brett Christophers shows that insufficient expected profits are a principal barrier to investment in solar and wind projects. Developers and lenders alike are reluctant to pursue and finance such projects unless they will deliver substantial and stable profits and are more attractive than other investment choices.
In addition to neglecting the central role of profit expectations in investment decisions, Klein and Thompson have nothing to say about the short-term orientation of today’s large shareholder-dominated corporations. In general, shareholders withdraw far more capital from businesses than they invest, and they often demand massive dividends and stock buybacks and acquisitions in lieu of capital expenditures, let alone higher wages for workers. Given that CEO compensation is often tied to their company’s stock price, top executives have little incentive to defy shareholder demands for cash.
Read the full article here.
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