Riskgaming

The implacable force against Abundance

Photo by Fahroni via iStockPhoto / Getty Images

First, OpenAI + Tariffs

We’ve been experimenting with Substack for Riskgaming and may transition entirely there in the near future. Right now, you can read two other articles I wrote this week:

Plus, we have multiple edited Q&As with our former podcast guests lined up as well. Check it out!

Second, what we know can really hurt us when it comes to growth

Never has something so obvious been greeted as so revelatory by so many seemingly educated people. Ezra Klein and Derek Thompson’s Abundance hit the stands just two weeks ago on March 18, and since then, the duo has been everywhere — and I mean truly everywhere — from appearances with left-leaning stalwarts like Gavin Newsom, Jon Stewart and Stephen Colbert to visits to the intellectual right with Tyler Cowen, Lex Friedman and Bari Weiss.

I say obvious because their argument is that growth is good. We knew that. America’s population will add tens of millions of new souls by the end of the century, and without growth, all of them will live increasingly immiserated lives. Growth ensures we have the products we want to consume, the roofs we’d like to have over our heads, and the healthcare and education services befitting the world's most powerful and wealthy country.

Even more importantly though, growth radically reduces warfare in politics. If all politics is just a Riskgaming scenario of resource allocation, having more abundant resources means zero-sum tradeoffs can often be removed from the game entirely; funding this or that suddenly becomes funding this and that. Leaders have more flexibility to think imaginatively about what can be, and indeed, Klein and Thompson begin their book with a multi-page speculative sketch of just how great life would be in a future with greater abundance.

If all of this is so obvious, then why write the book at all? The two authors are countering the rising tide of left-wing books like Kohei Saito’s Slow Down: The Degrowth Manifesto and the metastasizing activism of those opposed to growth because of climate change and resource depletion, capitalism and neoliberalism, oligopoly and billionaires, and urban aesthetics and the romance of the pastoral. In short, growth’s foes have broadened, and their bountiful arguments have many reasonable logics of their own.

What Klein and Thompson offer isn’t so much a manifesto (although that’s what the book ultimately is) as it is just the word on the cover. “Abundance” is now namechecked by ambitious pols in order to remind voters of a whole suite of positive policies, from improving housing growth through zoning reform to reindustrialization through greater energy supplies. Thus, you have NYC mayoral candidate Brad Lander calling for an abundance agenda after being endorsed by Abundance New York. The word is now in the policy lexicon with forceful meaning.

Even obvious policies, however, need a catalyst to be enacted. Sometimes it is a tragic event that suddenly opens the eyes of many people simultaneously and results in a shift in policy. Sometimes it’s an intrepid individual who through assiduous organizing can realign voting blocs. Other times though, it’s a single word or phrase that can evolve our thinking and break down barriers between disparate groups who suddenly realize they’re playing on the same side. Unfortunately, being obvious alone isn’t an incitement to action in government.

Klein and Thompson aren’t treading new ground, but harnessing the frontline work of thousands of activists dating back at least a decade and packaging it in a useful way. YIMBYs have been fighting for abundance for a decade or more. Back when I lived in San Francisco, there were all sorts of groups, from informal meetups to think tanks and advocacy organizations like SPUR, trying to build up the city. Now those groups have a popular word to use to fight forward farther.

Catalysts are needed, for sure. But one of the reasons why we are always Riskgaming out complex scenarios like reindustrialization or economic growth is that we have to understand how the outcomes we see in the real world emerge from the incentives and relationships of the actors in the system. What we see in the world is a direct outcome of those dynamics.

That’s the puzzle of abundance. Abundance is not just an obvious good, but a deeply incentivized one too. In fact, capitalism essentially is a system to promote abundance for as many people as possible. Millions of entrepreneurs are incentivized to build new housing and factories because they can get rich if they build what the market demands. Given the overwhelming force already placed behind abundance, why then do we need to argue for it at all?

As much as I detest degrowthers, it’s not actually willful ignorance that’s at work against abundance, but rather thoughtful knowledge and experience. We understand more about our world than ever before — not just what can go right but more crucially, what can go wrong. Our understanding of risk has expanded dramatically in the postwar period thanks to better science, flush funding of research centers and improved computational modeling.

Take permitting reform. There is a bipartisan movement underway to improve permitting for everything from new energy generation and the power grid to housing and factories. Since growth in some of these sectors has been anemic, the argument goes, removing or at least streamlining and accelerating the issuance of permits must be part of the solution.

But let me reframe this example in terms of knowledge. Since the 1960s, we have dramatically enhanced our understanding of how constructing a building can affect the environment. We now model how resculpting land will change a property’s hydrology, potentially redirecting rainwater in ways detrimental to nearby property owners or the environment more broadly. We now know that certain materials like paint can introduce toxins into the environment that are differentially harmful to animals and humans. We now understand that the shadows of a high-rise building can cause trees and foliage around it to become etiolated from reduced sunlight.

Those are three examples out of not just a few dozen risks, but hundreds and likely thousands of different aspects of how a new building can potentially damage the environment. Which of these factors are likely to be problems and which can be mitigated or ignored? Only analysis can tell us.

Too many see a conspiracy between trial lawyers and environmental consultants to make environmental impact statements as lengthy and complex as possible, driving up demand for their services and, in turn, their fees and profits. The more insidious problem is that analyzing thousands of known risk factors with any modicum of rigor is going to require tens of thousands or even millions of pages of files, not to mention the manpower and years to properly conduct this work.

The implacable force against Abundance isn’t the obvious culprits: the NIMBYs who hate more housing in their neighborhood or the sclerotic buildings department at city hall that takes eons to approve even the simplest design proposal. It’s actually our own hard-fought intelligence, and our inability to let go of some of it. We’re too smart for our own damned good.

Rigorous policy analysts do this empirical work. They will calculate, for example, whether the benefits of investing in a mitigation effort will outweigh the costs. Will a new policy like reduced car emissions improve quality-adjusted life years of nearby residents sufficiently that the societal benefit exceeds the cost of upgrading or replacing cars? We have the social science tools to answer that tradeoff today.

However, we never see such discussions from any leaders, political or otherwise. I have never seen a politician offer a nuanced take on how to balance housing growth with the environmental or lifestyle costs of that new growth. Instead, we get one party that is protective of the byzantine due process mechanisms that have accumulated for decades while the other party tries to DOGE the entire process into submission.

A better discourse would prioritize and explain these nuances. Greater density from housing growth could lead to a bit more traffic but also to stronger schools, hospitals and communities as more residents share the costs of these amenities. Public services that don’t make sense with lower growth — think buses — could suddenly become options at the right level of abundance, improving local air quality. A slightly polluting factory could be placed away from housing while still delivering regional economic value. In short, these projects need to be looked at holistically and pragmatically, rather than with dogma and ideology.

Klein and Thompson wrote their book for liberals, in the hope of inspiring today’s left-wing politicians and activists with a vision of just how much better off we can all be with a more abundant approach. Yet the tradeoffs are real and voluminous, and the critics of growth have their points. We can’t ignore the costs, but instead need to judiciously and serenely accept some of them as the price of civilization and progress. That’s a revelation that remains just out of reach.

The hyper-competition of U.S.-China trade relations

Design by Chris Gates.
Design by Chris Gates.

This week, Laurence Pevsner and I hosted Neil Thomas and Kate Logan of the Asia Society Policy Institute. Neil is a fellow and researches the elite politics and political economy of China, while Kate is director of the China Climate Hub and Climate Diplomacy. We have a short extract of our conversation available below, and the rest on Substack.

🔊 Listen to “The hyper-competition of U.S.-China trade relations”

This conversation has been condensed and edited.

Danny Crichton: The second thing I thought was interesting is that you, Kate, came in number two in the game, so two out of six, and Neil, you were three out of six. The Shanghai Car Company, though, was number one and quite a bit further ahead. How did they get so far ahead? Did you build a joint venture with them?

Neil Thomas: Not until the very end. And that was a classic example of, I think, present bias in my decision-making. The current conversation in DC is very much focused on the ways in which the Chinese state and its enterprises have got the better deal out of many joint ventures, and are now out-innovating and outpacing some of the private companies that are their main competitors in Europe, United States, and around the world.

But I really missed out on a lot of points by not pursuing an early joint venture with the Shanghai Automotive Corporation. Joint ventures are how a lot of American car companies and companies in other industries made most of their money — and made a lot of their initial inroads in China in the 70s, the 80s, the 90s.

Danny Crichton: Going beyond the Riskgaming scenario, both of you have worked on these exact issues for more than a decade apiece. I'm curious, how much did the game actually represent what you have seen in these spaces in the last couple of years? What was inaccurate about it?

Kate Logan: Obviously it's a whirlwind experience, but like Neil was saying, it felt pretty accurate in terms of the way that it played out over time.

Working on the climate side and having lived in Beijing from 2013 to 2018, one thing I've been thinking about is whether the rest of the world could have had the foresight to see China's current clean technology dominance coming. Today, you have the Xin Shen Yang, the three new technologies of solar, EVs and battery technologies that China's just absolutely dominant in. When I think back to 10 years ago and my time living in China, would the rest of the world have predicted this?

Playing the game was a really good simulation of how difficult it is to pick up on those early signals, but also to realize that there are signals there that if you're watching closely.

Neil Thomas: One of the accurate parts of the game was the competition between the two Chinese vice mayors. Different provinces and cities compete for the big contract with General Motors. But at the same time, the game had only one Chinese state-owned enterprise. Another part of that competition within China is that different state-owned enterprises also compete against each other to partner with foreign firms.

That dynamic is still alive today, particularly as China's economy struggles. People on the ground doing business in China are saying that they're being lobbied from all sides to move their business registration so that someone else gets credit for it. Maybe introducing another state and enterprise to compete with the Shanghai Automotive Corporation would've just added to the realities.

Laurence Pevsner: Yeah, I think that's exactly right. We're obviously limited by the number of players we can have and how much complexity we can build in. But we make the same point with the mayors too. There are obviously more cities than just Chengdu and Shanghai. In this game, they can theoretically cooperate, but it's really hard to do so if you have multiple mayors at the same time.

Read the rest of our conversation on Substack.

Lux Recommends

  • On our sister podcast The Orthogonal Bet, Lux’s scientist-in-residence Sam Arbesman talks with Nadia Asparouhova on “antimemetics" or ideas that don’t spread and why.
  • Grace Isford, Katie Salam, multiple Riskgaming readers and I all recommend “AI 2027,” an extraordinarily well-designed speculative fiction novella on the future of AI over the coming years. “Just as others seemed to be catching up, OpenBrain blows the competition out of the water again by releasing Agent-1-mini—a model 10x cheaper than Agent-1 and more easily fine-tuned for different applications. The mainstream narrative around AI has changed from ‘maybe the hype will blow over’ to ‘guess this is the next big thing,’ but people disagree about how big. Bigger than social media? Bigger than smartphones? Bigger than fire?”
  • I recommend a fun article by Harriet Weber on “Why don’t molecules ever stop moving?” “I ask Caram if he ever thinks about the constant motion going on within our bodies, at molecular and macro levels, and he tells me he tries not to think about it. ‘It’s a little unsettling to think of all the things that our bodies are doing. Yeah, I don’t know. I don’t know how to answer that, other than to say: I like to not think about it that much, because sometimes I do worry, “What if it’ll just stop?”’”
  • Senator Cory Booker broke the record for the longest speech ever given in the U.S. Senate chamber this week. Sam recommends Alex Hutchinson’s look at the human performance science required to allow one person to talk for 25 hours straight. "Scientists assess that, on average, humans can survive without water for about three days. Long before that, your kidneys will be stressed, your cognitive function will be impaired, and you may develop a headache as your brain—which is mostly water—shrinks. Just as well that Booker didn’t have to debate anyone.”
  • Deena Shakir highly recommends the new Broadway show, “Good Night, and Good Luck,” a dramatization of the famous showdown between television anchor Edward R. Murrow and Senator Joseph McCarthy at the height of the Red Scare.
  • Finally, Arxiv has been one of the most important platforms for researchers to publish preprints of their work before landing them in often-paywalled academic journals. Sam recommends Sheon Han’s profile in Wired of Paul Ginsparg, who founded the project 35 years ago. “Long before Arxiv became critical infrastructure for scientific research, it was a collection of shell scripts running on Ginsparg’s NeXT machine. In June 1991, Ginsparg, then a researcher at Los Alamos National Laboratory, attended a conference in Colorado, where a fateful encounter took place.”

That’s it, folks. Have questions, comments, or ideas? This newsletter is sent from my email, so you can just click reply.

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