Kinds of Abundance
Kinds of Abundance
An Outline of Winning Conditions for Progress
Former US president Franklin Delano Roosevelt argued that the US is defined by four freedoms: freedom of speech, freedom of worship, freedom from want, and freedom from fear. Material progress and policies focused on abundance are centrally concerned with the latter two, freedoms from want and fear. The question, then, is how do you know when enough is enough?
In fact, the term abundance is loaded with strategic ambiguity. It is strategic in that it allows progress thinkers to rally behind one common cause, which is immensely useful. But when the systems are examined in more detail, the complexity reveals that a state of abundance may be very different between each domain. Air is abundant. Clean drinking water is abundant. In our lifetimes, text messages went from an expensive, metered resource to effectively abundant. When Boris Yeltsin visited a grocery store, he probably thought Americans had abundant food, which has only increased in both variety and quality while still leaving Americans wanting more. These reveal different and, in some cases, moving end-points of abundance. If we want to pursue abundance, we need to know what it is.
The only thing that is truly scarce for humans is time. All abundance is fundamentally about enabling humans to do what they want with the time they have. A rich person can have everything in our society, but a society could be abundant without reaching that standard. Instead, an abundant society is structurally affordable, such that any individual can provide for essentials in a minimal amount of time of their own effort.
As we push for abundance in different domains, I thought it worthwhile to be more specific about how we might achieve structural affordability because it probably won’t look the same in different dimensions and could lead to subverted expectations. My goal here is not a rigorous, academic dissection of the topic. Rather, I want a rough taxonomy for the public to understand not all abundance is going to look the same, but the point is you will not want for the essentials of life and you will have the time to pursue more. This exercise is roughly inspired by the distinctions of free beer, air, and speech, applied to the domains we take for granted (oxygen and water), the domains undergoing immense change (energy), and domains that need immense progress (housing and healthcare).
💨Abundant as in oxygen: Oxygen is naturally abundant (at this stage of Earth) and serves as my control for how to think about other kinds of abundance. When I talk about something being abundant, I think about oxygen. It has a few unique characteristics: it is elemental, free of charge, widely available, and in massive supply. It is rivalrous (the air I breathe is not air you can breathe) but it is not excludable (you can’t make me pay you to breath or at least not without causing a fight). While there are oxygen bars offering premium oxygen, on the ground of Earth the supply for oxygen dramatically outstrips the demand in pretty much all locations. While I would like for most of the other necessities of life to be like oxygen, that seems both unlikely and unnecessary to achieve abundance.
💧Abundant as in drinking water: Drinking water is only a small walk up the chain from oxygen. It’s just hydrogen and two oxygens, a molecule. The challenge is in getting only those molecules. Drinking water is in fact a private good, as it is both excludable and rivalrous. However, it is so essential to life that we declare it a human right, up to some threshold. Civilizations are built and destroyed on being able to provide sufficient hydration, such that it is in society’s interest to ensure drinking water is cheap, accessible, and ubiquitous. The abundance of clean drinking water is a great feat. Natural fresh water itself is naturally scarce. If an area had a drought, early hunter-gatherer societies would need to follow the fresh water. Refining fresh water into clean drinking water was really only possible with modernity, where prior generations preferred to drink spirits if they could afford it. Today, drinking water is not usually a natural resource, rather it is produced. It is not free of charge, but it is very cheap. Through great effort, it is widely available. When planning water uses, drinking water is prioritized, but farmers know the supply cannot always keep up with demand. Drinking water is part of a human-designed system that guarantees access at low cost to consumers with capacity and utilization constraints dictated by physics. The utilities that manage those systems have to justify their investments to both the communities that give them regulated monopolies and to the investors whose capital they have to put to productive uses. A University of Michigan study from 2022 found that “nearly one in ten households spend more than 4.5% of their annual household income on water and sewer service”. Similarly, the US government claimed that “more than two million Americans lack access to clean drinking water at home, and more than one million Americans don’t have the plumbing required to flush a toilet.” Together, these facts speak to the difficulties in engineering abundance universally even when we have the tools to do so. Could drinking water be 10x cheaper? The only plausible scenario for driving costs this low is if solar energy dramatically reduced the cost of desalination. I am not sure our life would be much different with 10x lower water costs, though it may have many benefits for the environment and agriculture.
⚡Abundant as in energy: Energy in its natural state is extremely abundant, but the abundance we care about is the kind we can actually use, when we want it, in a form compatible with our application. That too is more of a private good (or typically a service), though again the advent of electricity has made it worthwhile to provide electricity as a public utility. Regardless of how you produce energy, there is a cost to the user. Solar cells, petroleum, coal, and nuclear will always have a cost component. For a long time, the goal for energy has been “too cheap to meter” and for good reason. Energy abundance is probably the single biggest lever to lowering the cost of everything because energy is consumed recursively throughout the entire economy and many applications are limited by energy costs. It is excludable—a utility or the fuel pump can turn you away if you do not pay—and it is rivalrous in that the fuel or electrons I use are not fuel or electrons you can use. Energy for these purposes is a true commodity, where each unit of energy can be transformed into work. That said, there are meaningful differences in their generation’s impact on carbon release, the energy density of storage, the timing of energy release i.e. you may need power when there’s no solar, and the time required to replenish energy. The point, though, is that all energy can be effectively modeled as the cost to generate, cost to distribute, and the efficiency of the system.
🏘️Abundant as in housing: To be clear, housing is not abundant in the US today; but it does not have to be this way. In circumstances with varying consumer preferences and high capital costs, abundance is about supply responding to demand. Housing is a product, a pretty big one too that has real costs in materials, machines, and labor. Housing location is exclusive; if I live in a place, I am selective about who, if anyone, can live with me. People also have strong preferences that likely shift over time: my college dorm room was fine but not OK with a wife and dog. Making housing abundant like air is a great sci-fi setting, but generally I think people are just happy if they can get what they want, where they want it, at a fair price. Just building equal numbers of all kinds of housing in one area would be inefficient for the customers and investors if there isn’t an equal distribution of demand. Notably, the USSR built lots of housing of a similar style in the interest of speed and efficiency, and it was reportedly terrible. Like Boris Yeltsin being impressed with the selection of a grocery store, we would likely find a market with deep supply across segments that can quickly respond to demand to be abundant. Capital efficiency matters here too, though in a truly abundant society, a house may not be a great asset, at least not to build wealth. Rather, their primary role is a place to live, ideally as an asset with stable value and liquid enough to sell and relocate somewhere more desirable should the time come. Houses themselves might not be an investment, but a firm producing housing designs and the land under housing might be (something something Georgism).
🏥Abundance as in medical care: Like housing, the end-state here is more like housing than air. An ideal outcome is getting the right care, when it is needed, at the lowest possible price. There are natural impediments to this: there is a finite supply of people suitable for serving as a doctor or nurse, the education required to provide effective medical care is intensive, and the quality of care delivered can vary significantly based on the provider, the patient, and the nature of the illness. All of that is to say, achieving abundance here is hard. But there are obvious improvements available. For one, the American Medical Association intentionally restricts the quantity of doctors admitted every year to keep prices up. Stopping cartels at least has a straightforward solution. While our goal is structural affordability, it’s worth asking if medical care could ever be “too cheap to meter”? In diagnostics, if artificial intelligence (AI) can truly deliver on its promise of expertise, AI may prove to be a path to providing at least baseline diagnostics at a fraction of the price. Most medical care is augmented by devices in both diagnosing issues and treating issues, and it is difficult to see those ever being cheap enough that they would be effectively free to use for patients. Perhaps the best outcome for actual structural affordability and patient outcomes at the population level is simply avoiding costs by not getting sick in the first place. Technology can deliver extreme helpfulness here, relegating the costs to stuff outside our control: genetic issues, infectious diseases, accidents, and afflictions like cancer that seem to be a result of simply being alive for long enough.
💊 Abundance as in pharmaceuticals: The issue that seems the most insidious is the actual price of existing pharmaceuticals. US patients are familiar with generics, the same drug carrying much lower prices because the drug’s patent protections have expired. Generics are great, as long as you don’t have to choose between living a healthy life or bankruptcy. That is the unfortunate reality of many drugs today, especially as pharmaceutical companies play games to extend their patent duration. Many countries have found a way around higher prices, by successfully negotiating for drug prices as a bloc. For example, Australians pay about $83 per month for Ozempic, while Americans pay $936 per month. One objection raised by the pharmaceutical industry about the US embracing such a tactic is that it might destroy the market. They argue the higher prices Americans pay is critical to their ability to get a return on investment such that investors will continue giving them money to operate. Let’s judge if the data supports their argument. Biopharma’s ROI stood at just 4.1% in 2023 after rising above a record low of 1.2% in 2022. For context of how low that is, highly diversified funds tracking the S&P 500 returned about 26% in 2023. It stands to reason that the pharmaceutical industries’ concerns about lower prices threatening their ROI have some merit. I am left with the impression that the world is actually free-riding on American healthcare dysfunction. A quick search says the US is something like 40% of the global pharmaceutical market. The US claims prices in the US are at least 2.2x more expensive than the rest of the world. Imagining a hard reset overnight, an equivalent pricing would cut the US pharmaceutical price by over half, which is all profit. If pharma R&D spending is $145B, ROI is 4.1%, then the return must be $150B. If 20% of the market evaporated, the return would now be $120B, erasing any return from the $145B investment. In a 2020 research project, The Brookings Institution came to a similar conclusion. The market would likely adjust, with either lower investment, higher prices internationally, or ideally looking for more efficient ways to develop drugs. Alternatively, the US or potentially the US and a coalition of countries could be more aggressive in pushing patents into the public domain, including novel patent buyout mechanisms like those proposed by Michael Kremer which attempts to eliminate the deadweight loss to society from patents while still rewarding companies for generating socially valuable goods.
To be clear, I would like to live in a world that achieves abundance in any of these domains more than the current world; and I see little stopping us from achieving all of them except ourselves. Today, there is a belief at least that if you work 40 hours per week for ~45 years, you should be able to retire (YMMV). Of course many people work much beyond that, both for very low wages (because it may be what they need to meet their life’s commitments) and very high wages (because they like what they do and are quite good at it or they just like wealth or status). In our imagined society of abundance, wouldn’t the hours required for success be much lower? It requires some optimistic assumptions about how productive human labor is across the labor pool, as we would need to generate much more value per worker in each of these fields to reach abundance, but it is a worthy goal. I imagine the pessimism for the future would change dramatically if people felt that at age 30, they had housing, healthcare, and food secured for the next 40 years. This version of the future is essentially financially independent/retire early for everyone, and while some may want to spend that time exploring or watching TV I know most would want to keep pushing themselves (I know I would). I imagine many would lead very different lives, lives somewhat detailed in the fantasies of artificial general intelligence solving all of our problems for us. Naturally, there will still be scarce resources and games people love. Status and attention (a form of time) will always be scarce, though they probably would not tolerate horrible bosses and work conditions as much. If people are healthy, happy with how they are spending their time, and feel confident about the future, I would consider it a win.