Klein's "Abundance" is Paterson's Guillotine
Chapter 1: Grow
In March 2025, New York Times opinion columnist Ezra Klein and Atlantic staff writer Derek Thompson published their #1 NYT Bestseller Abundance. This essay is the second of seven evaluating the book for the facts, fallacies or falsehoods of its premises and prescriptions. This installment will focus on Chapter One: Grow.
Reading it recalls Isabel Paterson’s classic treatise on the builders and destroyers of modern civilized society, The God of the Machine. In particular, Chapter XX, The Humanitarian with the Guillotine,
If he wishes to help “humanity,” the whole of humanity must be in need. The humanitarian wishes to be the prime mover in the lives of others. He cannot admit either the divine or natural order, by which men have the power to help themselves. The humanitarian puts himself in place of God.
The God of the Machine exposes two of the many false premises of Abundance: 1) Wishing something to be true, makes it so, and 2) We are poor, dumb slobs desperate for help. Or as Klein and Thomson reveal in Chapter 1: “We made mobility into an engine of inequality, and we did it on purpose, using policy levers that make life in dynamic cities too costly for the poor to afford . . . So what does explain the homelessness? The availability and cost of housing.” Who is we?
According to Klein and Thompson, the absurd idea that mobility became an engine of inequality and homelessness began in the 1970s, at the same time New Journalism, of which they are practitioners, became a force in American culture. At least they are preaching, in part, to their own choir. As before, I will start with what Abundance gets right and divide my analysis into themes: Economics, History, Ethics and Reality.
Economics
For the good economic premises and facts of Chapter 1 - Grow, here is a list:
“Ideas, and the technologies and companies and products they power, draw the outer borders of growth.”
“Housing costs are highest in the superstar cities that now drive the economy.”
“Through bad policy and worse politics, we are doing in the twenty-first century what we so feared in the nineteenth: we are closing the American frontier.”
“The economic frontier is where new discoveries allow for the making of new things that can be sold to ever more people.”
“Eric Yuan, Zoom’s CEO, explained that it was too hard to build trust without nearness. Trust is the foundation of everything.”
“It is the liberals – and particularly the strain of liberalism that began to develop in the 60’s and 70’s – that bears much of the blame.”
“What really put the clamps on housing supply: zoning as a form of anti-growth regulation.” (Zoning is a small part of the problem)
“Starting in the 70’s, wages began to stagnate, inequality began to soar, inflation began to rise, and housing prices began their inexorable march upward.”
It bears repeating, economics is about cause and effect. Production creates wealth. Wealth creates demand. Supply lowers prices. Markets create information. Markets reward efficiency. Efficiency creates profit. Profit attracts capital. Capital finds talent. Talent obeys reality.
So, what is that “strain of liberalism?” Are zoning regulations merely a red herring to distract readers? And what really caused the “stagflation” of the 1970s?
History
Abundance ignores the individual as the prime mover for wealth creation and government as an instrument of force with this gem, “the age of untrammeled growth – the whirlwind economic expansion that the New Dealers had set into motion – was revealing its limits. What was the cause of all this plenty?” What motivates Klein and Thompson to reverse the truth about President Roosevelt’s New Deal of the 1930s?
With due credit, they had told us: “It is the liberals.” And in this case, that included the author of another government disaster, President Johnson’s Great Society as he revealed in 1964: “For half a century we called upon unbounded invention and untiring industry to create an order of plenty for all of our people.” Who is we? Capitalists did that with the benefit of economic freedom.
However, this chapter is not really about housing or homelessness. That is their red herring. It’s about the primary theme of the entire book - the religion of environmentalism. Naturally, it begins with a gratuitous reference to Rachel Carson’s 1962 book, Silent Spring.
As Klein and Thompson tell it, anti-Vietnam War activism led to environmental activism which led to Earth Day - and to the National Historic Preservation, Department of Transportation, National Environmental, Real Properties Acquisition, Noise Control, Clean Water and Endangered Species Acts.
Of course, this “strain of liberalism” bears the stain of bipartisanship, as President Nixon told the nation during his 1970 State of the Union address,
Restoring nature to its natural state is a cause beyond party and beyond factions. It has become a cause of all the people of this country. It is a cause of particular concern to young Americans, because they more than we will reap the grim consequences of our failure to act on programs that are needed now if we are to prevent disaster later.
Abundance continues, “This is a story, at least in part, of how the solutions of one era created the problems of the next.” Except for one problem, government has no solutions. Their credentialed “experts” do not abide causality. They are not accountable. They have no skin in the game. That describes the new “strain of liberalism.”
Ethics
So, what was Rachel Carson’s book all about? The danger of pesticides, particularly DDT that thinned the eggshells of birds. Even the presiding administrative judge of the Environmental Protection Agency concluded it was not hazardous to human life. Yet, in 1972, EPA administrator William Ruckelshaus banned DDT anyway, the effects of which are described by Robert Bidinotto in his book, A Rebel in Eden,
But millions of people whom Carson deprived of pesticides are not here, for, predictably, the international ban on DDT soon caused a staggering resurgence of malaria.
Speaking of guillotines, never mind that it was President Nixon’s cancellation of the gold standard in 1971 that made possible the subsequent “stagflation.” But no mention of that in Abundance. So, why do Klein and Thompson support all this? Isabel Paterson explains,
He has been taught that it is right to “live for others,” for social aims,” and “social gains.” As long as he can believe he is doing that, he will not ask himself what he is necessarily doing to those others, nor where the means must come from to support him.
Cause and effect be damned. But for rational adults, the means to support us all comes from man’s capacity for reason, transforming nature in ways that make earth’s environment less hostile – and acquiring knowledge. Solving malaria comes to mind, but mere survival is not living unless you subscribe to the housing economics of Klein and Thompson,
If you live in a city with too few homes, poverty and drug abuse and unemployment and mental illness make it likelier that you will be among those who end up without a home. But the cause of the homelessness isn’t the poverty or the addiction or the unemployment.
In that package deal of gibberish, homelessness is society’s fault – meaning you - as Klein and Thompson lecture: “the difficulties of deprivation had been joined by the diseases of affluence.” Effectively, they have replaced the personal virtues of independence, pride, integrity and productiveness with need.
Reality
As Abundance correctly observes, the technological forces of innovation have collapsed distances, “omnipresence is yet easier with digital products” and the demand for cities should have collapsed. Instead, cities are essential to “find the colleagues and the friends and the competitors and the antagonists who unlock our genius and add their own.” Perhaps this is why homelessness is concentrated in certain cities and not others. The decoy catastrophe has little to do with housing prices.
Getting back to the provable facts in the first five items above: ideas power growth, superstar cities drive the economy, bad policy is closing the frontier, new discoveries allow new things for ever more people, and trust is the foundation of everything.
Beginning with the latter, finance journalist John Tamny insists that successful businesses never run out of money, they only run out of investor trust. Money is not stupid. Capital flows to talent. Talent is specialized. Specialization creates wealth. Wealth funds greater specialization that creates new discoveries allowing new things to ever more people. This effect was mentioned above - Paterson explains the cause:
Innumerable speculative thinkers, inventors, and organizers have contributed to the comfort, health, and happiness of their fellow men – because that was not their objective.
Their objective was to create; their greater purpose was lives of meaning - and their culture is economic freedom. In fact, only bad policy – meaning the force of government, can short that circuit. And this is what is being proposed in Chapter 1 of Abundance, as Paterson also describes,
The philanthropist, the politician, and the pimp are inevitably found in alliance because they have the same motives, seek the same ends, to exist for, through, and by others. And the good people cannot be exonerated for supporting them.
Independence is the greatest fear of the humanitarian - yours and theirs. The next installment in this series will analyze Chapter 2 of Abundance - Build. To learn more, please click this link for The Moneyball Method.