Well, FWIW, to your question, I loved the piece- this "deep dive" is what I am in substack for. It was extremely interesting and information dense. I agree that Labour needs to see that increasing significantly the level of ambition of its currently timid growth agenda is not just right for the UK, but right for itself, narrowly, politically-- a matter of survival. If they let these next 4 years drift similarly as year 1, the UK will be in trouble and they will be wiped out. This "Shapiro timeline" is the one possible path for success they have- the sooner they realize, the better. The UK is centralized enough that taking the relevant decisions is actually feasible. The current timelines are simply ridiculous- and the costs do not come from any law of physics, but from regulation upon regulation that is for the government majority in the Commons to remove if it so chooses.
Interesting post. Three, rather boring points reflecting my training as an economists before physics envy took over the profession . First, abundance as the opposite to scarcity (which is how it often seems to be presented) is an economic nonsense: you always need to make choices, the questions are about which ones. Second, fiscal devolution is highly desirable (indeed essential if you want to preserve local government as an independent tier, which I’m not sure this administration does) but doesn’t address the path dependency of regional inequality. Finally, I’m not sure that you can keep land prices down because, unlike capital and labour, it’s fixed in supply by location and is released on a market driven basis. If you own a greenfield site near a big town/city you’re only going to see its value increase if you hold onto it so you’re not going to release it cheaply. You can build more houses this way but it won’t have a significant impact on prices. See the OBR comments for an illustration.
Yes-- the Abundance claim is less that one can eliminate scarcity/the need for choices and allocation (which as you say would naturally be nonsense), but that the degree of supply constraint creates perversities (e.g. aggressive rationing of city-centre housing) that hold back growth and accentuates the pain of that allocation process.
And on land prices: all that is true, but of course densification does allow the supply in any given location to expand, and outside of maybe a few bits of central London it's pretty hard to argue we're anywhere near the density that would prevail were it not for building restrictions. Though having grown up in Hong Kong, I'm more relaxed about higher urban density than most Brits!
Agree with all that. Don’t know whether you’ve ever read the late Fred Hirsch’s “The Social Limits to Growth “ which was very influenced by the time he spent at Nuffield College when Mancur Olson was also there? Seems like we’re reinventing, and relabelling, some old - often neglected - issues.
I think the elephant in the room is that in the UK a politician advocating for “smaller” government is political suicide since most of the electorate worships the NHS and safety net in general. I don’t think giving more powers to local government would necessarily create a gov that delivers more infrastructure or lower house prices in the short to medium term. Republicans small government tradition is entrenched when I think it barely exists in the UK.
This title reflects a poor understanding of the book. A more accurate description would state that the different values of both parties create the situation in which things cost more here. Regulations and oversight on the left and resistance to location of needed projects among the wealthy. The present “ add tariffs to pretty much everything” is a solution that will include the worst of both worlds. Read the book.
Well, FWIW, to your question, I loved the piece- this "deep dive" is what I am in substack for. It was extremely interesting and information dense. I agree that Labour needs to see that increasing significantly the level of ambition of its currently timid growth agenda is not just right for the UK, but right for itself, narrowly, politically-- a matter of survival. If they let these next 4 years drift similarly as year 1, the UK will be in trouble and they will be wiped out. This "Shapiro timeline" is the one possible path for success they have- the sooner they realize, the better. The UK is centralized enough that taking the relevant decisions is actually feasible. The current timelines are simply ridiculous- and the costs do not come from any law of physics, but from regulation upon regulation that is for the government majority in the Commons to remove if it so chooses.
By the way, on similar notes (concluding instead on how EU politicians SPD/Green should get into the Abundance agenda) our review on Silicon Continent of the book and the agenda. https://www.siliconcontinent.com/p/book-review-abundance-by-ezra-klein
Enjoyed Pieter's piece! And agree, I think, that the proximate policy stuff in Abundance maps better to Britain's supply-side issues than Europe's
Interesting post. Three, rather boring points reflecting my training as an economists before physics envy took over the profession . First, abundance as the opposite to scarcity (which is how it often seems to be presented) is an economic nonsense: you always need to make choices, the questions are about which ones. Second, fiscal devolution is highly desirable (indeed essential if you want to preserve local government as an independent tier, which I’m not sure this administration does) but doesn’t address the path dependency of regional inequality. Finally, I’m not sure that you can keep land prices down because, unlike capital and labour, it’s fixed in supply by location and is released on a market driven basis. If you own a greenfield site near a big town/city you’re only going to see its value increase if you hold onto it so you’re not going to release it cheaply. You can build more houses this way but it won’t have a significant impact on prices. See the OBR comments for an illustration.
Yes-- the Abundance claim is less that one can eliminate scarcity/the need for choices and allocation (which as you say would naturally be nonsense), but that the degree of supply constraint creates perversities (e.g. aggressive rationing of city-centre housing) that hold back growth and accentuates the pain of that allocation process.
And on land prices: all that is true, but of course densification does allow the supply in any given location to expand, and outside of maybe a few bits of central London it's pretty hard to argue we're anywhere near the density that would prevail were it not for building restrictions. Though having grown up in Hong Kong, I'm more relaxed about higher urban density than most Brits!
Agree with all that. Don’t know whether you’ve ever read the late Fred Hirsch’s “The Social Limits to Growth “ which was very influenced by the time he spent at Nuffield College when Mancur Olson was also there? Seems like we’re reinventing, and relabelling, some old - often neglected - issues.
I think the elephant in the room is that in the UK a politician advocating for “smaller” government is political suicide since most of the electorate worships the NHS and safety net in general. I don’t think giving more powers to local government would necessarily create a gov that delivers more infrastructure or lower house prices in the short to medium term. Republicans small government tradition is entrenched when I think it barely exists in the UK.
This title reflects a poor understanding of the book. A more accurate description would state that the different values of both parties create the situation in which things cost more here. Regulations and oversight on the left and resistance to location of needed projects among the wealthy. The present “ add tariffs to pretty much everything” is a solution that will include the worst of both worlds. Read the book.