Opinion – Leandro Narloch: The left and the abundance agenda

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Suraj Patel is a Democratic Party politician; Ezra Klein and Matt Yglesias are founders of the news website Vox and columnists for the New York Times. These three names, among others from the American center-left, have drawn attention to one of the main themes of 2022: the need to form a consensus on an “agenda of abundance”.

Under normal conditions, if the supply of a good increases more than the demand, prices fall. This is great for the poor, because one way to make them earn more is to make things cheaper.

With this rule in mind, those who care about the purchasing power of the poor should be pressing madly for abundance — that is, for an increase in the supply of apartments, doctors, food, energy and other basic necessities.

But then why does the left tend to care so little about measures that increase supply, when not openly advocating regulations that prevent abundance? This is the question, with a touch of self-criticism, that American intellectuals are asking.

One answer is the excessive focus on subsidies, quotas, price controls, vouchers and income distribution programs.

“Many of the left’s big dreams focus on the demand side,” Klein wrote in the article “The Economic Misconception the Left Is Finally Facing.” For him, it’s time to create a “supply-side progressivism”, a left focused on the supply side.

San Francisco is the best example of the damage caused by a lack of concern for the supply of goods.

Ruled for decades by Democrats, the city has super-strict building and land-use rules. It’s easier for Elon Musk to send a car to Mars than to build a building in the city. With supply stable but demand soaring, property prices have risen 900% since 1980.

The power of residents to veto new construction in the neighborhood and excessive restrictions ended up making San Francisco an exclusionary city, for few.

Thousands of people live on the streets because they cannot buy a house or pay rent for the most expensive square meter in the United States.

In order not to play on the side of developers, the left usually responds to the problem with palliative measures (shares of popular apartments, rent control, subsidized credit).

“But it’s creating abundance — lots of homes for everyone, with the price of new housing related to basic building costs and ‘used’ houses available at discounted prices — that you build a more functional society,” says journalist Matt Yglesias in his blog post. newsletter.

A similar phenomenon occurs in healthcare, an area in which the physicians’ lobby imposes rules that restrict the supply of professionals and simplify procedures.

With less competition, doctors and hospitals can abuse prices. The government’s response (health insurance subsidies) ends up further increasing demand — and prices.

In the energy area, some proponents of the abundance agenda say things that seem to have come from former environment minister Ricardo Salles.

“We need to extend the power of the Federal Energy Regulatory Commission to circumvent communities that try to block the construction of transmission lines,” activist Suraj Patel, who ran for congressional Democratic party, said in a recent string of tweets.

Matt Yglesias believes that a first step is to accept the basic laws of economics.

“There is a certain type of person for whom the key to unlocking a radical, progressive shift in economic policy is to unmask the economic way of thinking,” he says. In other words, it’s time for the left to accept the law of supply and demand.

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