Dani Rodrik: Abundance for consumers could still mean misery for workers
An economic vision of abundantly supplied markets isn’t enough. People don’t just derive an income from their vocations, but self-esteem and satisfaction too. We need policies that generate good jobs, even if we sacrifice some efficiency for it.
The surest way for policy advocates to lose a progressive audience is to talk about the economy’s supply side, the importance of incentives and the dangers of overregulation—ideas typically linked to conservative agendas. Ezra Klein and Derek Thompson’s new book Abundance aims to change all that.
As the authors point out, the left has traditionally focused on demand-side remedies. A key tenet of the New Deal in the US and social democracy in Europe is Keynesian management of aggregate demand to ensure full employment.
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Klein and Thompson rightly underscore that it is improvements in supply that are the source of broad-based posterity in the US and other advanced economies. As productivity rises, low- and middle-income families reap the benefits of cheaper and more varied and plentiful goods and services. However, increasingly, the US economy’s ability to build things has been hobbled, the authors argue, by environmental, safety, labour and other regulations, and by complex and time-consuming local permitting rules.
These rules and regulations may be well-meaning, but they can be also counterproductive. When governments and communities place obstacles in the way of investment and innovation, they undercut prosperity. Public transport lags behind, productivity in housing construction plummets and the deployment of renewables falters.
The authors’ vision of progress features energy from renewable sources and cheap, safe nuclear power; fresh water from desalination; fruits and vegetables from hyper-productive vertically stacked farms; meat produced in labs without slaughtering live animals; miracle drugs delivered by autonomous drones; and space-based factories meeting other needs without requiring any human workers. Since AI would greatly shorten the workweek, we’d all enjoy more vacation time without sacrificing our living standards.
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Keynesian social democracy no longer provides an adequate answer to the malaise experienced by workers. But Klein and Thompson’s depiction of utopia reflects a vision that ultimately remains consumerist. Their focus is squarely on the abundance of goods and services that the economy generates—on how much we build, rather than on the builders. In this, they share a common blind spot with economists who, ever since Adam Smith, have emphasized that the ultimate end of production is consumption. But what gives meaning to our lives is not just the fruits of our labour, but also the work itself.
When people are asked about well-being and life satisfaction, the work they do ranks at the top, along with contributions to their community and family bonds. For economists, a job provides income, but is otherwise a negative —a source of ‘disutility.’
For real people, a job is a source of pride, dignity and social recognition. Employment loss typically produces a reduction in individual well-being that is a multiple of the loss of income. The social effects magnify those costs. The rise of far-right populists in the US and Europe has been linked to the job losses associated with trade shocks, automation and fiscal austerity.
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Good jobs pay well, but also provide security, autonomy and a path to self-improvement. None of this is possible without high levels of productivity. A progressive focused on abundance of good jobs, rather than abundance of goods and services, would find plenty to agree with in this book. But there would also be many quibbles.
Consider housing, one of Klein and Thompson’s key examples. US productivity in housing construction has stagnated in recent years, in part because of safety regulations and union rules. But as one of the authors’ interlocutors readily admits, fatalities and non-fatal injuries in construction have fallen dramatically in the US since the 1970s, thanks to many of these restrictive rules. That must surely count as an improvement in overall worker well- being, casting the productivity statistics in a somewhat different light.
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The authors’ line of argument echoes economists’ case for automation and free trade. These may have been efficient by conventional criteria, and they certainly helped produce an abundance of goods. But they also hurt many of our workers, leaving societies scarred and paving the way for right-wing populism. A good-jobs focus would make us more tolerant of regulations that sacrifice some efficiency for the sake of better labour-market outcomes, especially for non-college-educated workers.
Ultimately, the real challenge for progressives is to devise an agenda that benefits workers as workers as much as in their role as consumers. This requires a distinctive approach to innovation, investment and regulation. Unions, worker representatives and collective bargaining must be viewed as essential components of abundance, rather than obstacles to it. Place-based strategies and local economic development coalitions are critical. Government must put its thumb on the scale to ensure innovation takes a worker-friendly direction.
Advanced economies’ most glaring failure has been their inability to deliver enough good jobs. Remedying this issue requires focusing on those who produce abundance, alongside abundance itself. ©2025/Project Syndicate
The author is a professor of international political economy at Harvard Kennedy School, and the author of ‘Straight Talk on Trade: Ideas for a Sane World Economy’.
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