Abundance as a Sense-making Framework

How "Capture" and "State Incapacity" help us understand societal problems.

If I could wave a magic wand and make one change in society, it would be to wash away our learned helplessness as citizens. We live in a democracy. We possess immense amounts of financial, human, and social capital that we could channel toward better collective outcomes. And yet we feel nihilistic about a system that doesn’t produce the results we feel are possible. We complain about traffic, without realizing we are traffic.?

Complaining about traffic : being one of the cars that form the traffic :: complaining about government : being one of the citizens that form the government.?

What feeds our nihilism? We don’t understand why we get bad outcomes, and thus don’t know where to direct our energies to improve them.?

There are a set of common answers to the question “why do we get bad outcomes?” which attract various degrees of support:?

• One party is the problem—The problem (from a left-of-center perspective) is Republicans. If the GOP had less power, we’d get better outcomes.?
• The two-party system is the problem—In a country as big and diverse as America, we need more than two parties to represent people’s pluralistic views and avoid toxic polarization.
• Capitalism & racism are the problems—Capitalism is a fundamentally broken paradigm; racism is core to the American story. Corporate greed and white power are the enemies.??
• Elites are the problem—Snooty out of touch (liberal) elites rig the system to benefit themselves, leaving dregs for everyone else.?

Each of these answers contain some truth:?

• The GOP and its constituent interest groups hold us back from sensible policy on topics like immigration, gun control, and abortion.?
• Features of our two-party system, like single-winner first-past-the-post elections, contribute to extremism within party primaries and polarization in the electorate as a whole.?
• Capitalism has its excesses; corporations exert undue influence (on both parties) in policy domains like finance, pharma, and tax structure. Centuries of state-sponsored racism have held down certain groups, particularly Native & Black Americans.?
• Many institutions in society benefit the upper and upper-middle class by upwardly redistributing both financial assets and cultural status. (e.g. 529 accounts, “deplorables”)?

But these answers also have their limitations:

• GOP—Democrats fully control California, yet we have many bad policy outcomes in California.?
• Two-party system—Multi-party systems around the world also struggle to generate great policy outcomes.?
• Capitalism & racism—The problem is not capitalism per se but the crony/captured capitalism we’ve allowed to evolve over the past 50 years. Identity politics elides individual circumstances and has limited political appeal.
• Elites—This is maybe the sturdiest critique of the bunch. But it doesn’t exactly tell you what to do next.?

As Abundants, we are working toward our own answers to the question “why do we get bad societal outcomes?”? We believe our answers should act as a “sense-making framework” that helps ordinary citizens make sense of the problems they see around them. We believe if we give citizens tools to understand dysfunction, some subset of them (you?!) will join us in working toward better policy outcomes. That work is collectively called the “Abundance Movement.”?

Two Lenses: “Capture” and “State Incapacity”

We believe two core themes are common across many domains of societal dysfunction: (1) Capture (2) State Incapacity.?

First we’ll define these terms. Then we’ll go through specific examples to show how these two issues help explain poor policy outcomes.?

Capture

“Capture” means a policy process is overly responsive to a narrow (unrepresentative) slice of the electorate. Capture has always been a risk in liberal democracies per Mancur Olson’s The Rise and Decline of Nations. Small groups of people who are strongly affected by a decision will organize more fervently than a broader group of people who feel less strongly.

There are three dimensions of narrow interest. Oftentimes a given group displays some blend of all three dimensions:?

1. Financial interest
2. Status quo preservation
3. Ideology

Corporations, unions, and professional associations like realtors or doctors are typically principally motivated by financial interests.?

NIMBY homeowners are, we believe, primarily motivated by status quo preservation (“neighborhood character”), though there may be some financial consideration woven in, and even a type of ideology (“local control”).?

Far left Progressives are principally motivated by ideology when they push for things like 100% nonprofit affordable housing (“capitalism = evil”) or defunding police budgets (“police = racist”).?

Capture has increased in our political system over the past few decades due to causes including fewer restrictions on money in politics, the expansion of venues for “participatory” democracy (e.g. public input processes), and more sophisticated interest-group organizing.

State Incapacity

State Incapacity—or as it’s more commonly termed, a “lack of state capacity”—describes the government’s inability to make good on a stated policy intention. California’s inability to build a high speed rail system after we voters said we wanted it is a good example of “state incapacity.”?

State Incapacity is a broad term and has subcomponents, including the “structure” of government in terms of jurisdictional authority (e.g. overlapping authorities for governance across city, county, state, federal and special districts), but for now we’re defining state capacity as the problems facing the people who work in government.?

Per Jen Pahlka’s framework, there are three ways to boost state capacity:?

1. Hire the right people
2. Focus them on the right things
3. Burden them less

We believe that state incapacity is upstream of the challenges we face.

Abundance sense-making lenses in Action

Now that we’ve defined our two lenses, let’s use them to look at problems.?

A couple notes before we start:?

Defining “better”—Our mental model: There is some version of the world that would be broadly seen as “better.” How exactly to define that is difficult, because we live in a diverse, pluralistic society with varying conceptions of the good life. But we don’t need to let that paralyze us. As a stand-in, let’s imagine a citizen assembly is convened on each of the topics below. 150 representative members of the community are given dozens of hours together to listen to experts and debate among themselves what a “better” system would look like. What we’re trying to do is narrow the gap between what they would come up with and what we have today. We’re arguing that “capture” and “state incapacity” will be more useful concepts—both to explain the dysfunction and to do something about it—than the answers proposed by the other political programs.??

Humble Expectations—We also need to be humble about just how much we can fix. Per Kant, “Out of the crooked timber of humanity, no straight thing was ever made.”? Human systems are not perfectable,4 but they are improvable. Our two lenses are not going to build utopias, but we think they can materially improve many lives.?

Share

Case Study: Public School Performance in Oakland?

Oakland public schools are failing. As one stat among many: Proficiency in math is 10% for low-income kids in the district.?

We don’t want to minimize the challenges here: There are deep issues for the school district, some of which track back to the left-Progressive critique of racism. The intensity of poverty and violence is unique in Deep East Oakland; a decade ago, the per-capita neighborhood violence there was higher than Iraq. It is also hard to attract and retain high-quality teachers in an expensive city where the median home price is 9x the median teacher salary.

On top of legacy issues, the pandemic has introduced new problems. Learning loss from lengthy school closures—12 months in OUSD—are hard to make up. The habit of school was compromised during the pandemic, and this disproportionately affected low-SES families. In addition, the norm of going to school while sick is no longer a socialized practice.?

How does capture and state incapacity help us understand what is going wrong? Recall Jen Pahlka’s framework: We need to have the right people focused on the right things with minimal burdens.?

Do we have the right teachers in the classroom? Per a longtime education reformer: “In underperforming districts you have underperforming teachers who are tenured. That’s actually a problem you’re trying to solve in education reform.” Last in, first out (LIFO) for teachers is not the way you get great outcomes for kids. But the best path to getting elected to the Oakland school board is to be supported by the Oakland teachers’ union (called the “Oakland Education Association”), and the union vigorously opposes change to LIFO.?

This is the melding of capture and state incapacity.

Are the teachers focused on the right things?? To the extent that OUSD’s high school goal is college prep (which is debatable), then the answer may be no. For kids to be college-eligible in the UC/CSU systems, they need to fulfill “A-G” requirements, which means achieving a C grade or above in history, english, math, science, a foreign language, visual & performing arts, and college prep electives. But many students at OUSD receive Ds, which make them ineligible for college while avoiding consequences for OUSD of giving students an F (schools are funded on a per-pupil formula; if a kid fails out, that’s less money for the school). In 2022, of the 72% of kids who graduate high school after starting 4 years ago, only 57% meet the “A-G” requirements. So 41% of kids who start 9th grade at OUSD will be eligible for UC/CSU 4 years later.7

Finally, have we struck an artful balance between accountability and burden? Here well-meaning school board members have over-rotated on measurement. There are 200 metrics for the upcoming school year. From OUSD insiders: “We’re trying to do too many things, and tracking too many priorities without having any one focus.” One school board member created 19 different task forces which each made their own recommendations and guidelines!

Countervailing narrow interests and boosting state capacity won’t solve every problem with OUSD, but it would certainly advance us toward better student outcomes.?

Case Study: Housing affordability in California

California has massive housing affordability issues. One metric among many: In 1970 it cost 2x median income to buy a house. It now costs 8.5x median income.

Again there are complex causes here, including the impacts of Prop 13 on California cities’ incentive to build residential housing and the fact that good weather + limited land near the ocean naturally boosts demand and limits supply. But capture and state capacity make material contributions.?

On capture, we see all three types at play:?

• Financial interests: Construction unions, specifically the “Building Trades,” have opposed streamlining the permitting process (6 min) because the status quo gives them leverage when negotiating project labor agreements. They also oppose factory-built modular housing, even when that housing results in cheaper home prices and faster completion timelines.?
• Status quo interests: Local homeowner NIMBYs oppose new construction in their neighborhood because it will change neighborhood character.
• Ideological interests: Left-NIMBYs oppose new construction not because of neighborhood character per se, but because they distrust developers, profits, and capitalism.?

This coalition of narrow interests suppresses overall housing production, although polling consistently shows the public broadly agrees we need to build more housing. This supply shortage leads to all sorts of negative downstream consequences. The YIMBY movement, along with Abundance-oriented labor partners like the NorCal Carpenters, have begun to turn this tide, but it is still early.?

How does state capacity fit in?

Unlike schools, where government employees (teachers) are delivering the service directly to end customers (families), in housing, government employees (e.g. planning department personnel) are delivering services to intermediate customers (developers), who are in turn delivering final products to end customers (renters and homeowners).?

Using Jen’s framework, are the right people focused on the right things with minimal burdens??Per a local planning department official, a common state capacity issue is that planning departments don’t have the right mix of skillsets needed for the job. While they are well-staffed with technical expertise to imagine complex long-range urban planning scenarios, they lack the storytelling and design skills necessary to communicate such plans effectively to the public to facilitate productive community input processes.9 As a result, the community doesn’t understand the planners’ work, trust decreases, status quo-ism increases, and fewer units of new housing are built, leading to escalating prices.

Case Study: Federal tax policy

Federal tax policy is a giant policy area—the tax code is 6,871 pages long, and when tax regulations and official tax guidelines from the IRS are included, it goes up to 75,000 pages. Even a very high-level analysis of problems in our tax policy is way beyond the scope of this piece.?

That said, there is a small corner of tax policy that points to the ways capture and state capacity might contribute to our broader problems. This is the issue of simplified tax filing for low-income Americans.?

For decades, advocates have called for a simplified tax filing system. After all, the government has lots of the data it needs already available via various existing data collection efforts (e.g. payroll tax info, banking info).?So why do Americans collectively spend 6.5 billion hours and $104 billion dollars on tax prep each year?

Capture has a lot to do with it, as detailed in this excellent (and blood-boiling) article by investigative journalists at ProPublica. (27 min)? The title and subtitle tells you most of what you need to know.?

“Inside TurboTax’s 20-Year Fight to Stop Americans From Filing Their Taxes for Free: Using lobbying, the revolving door and “dark pattern” customer tricks, Intuit fended off the government’s attempts to make tax filing free and easy, and created its multi-billion-dollar franchise.”

State capacity also factors in. 10 years ago, the IRS would have struggled to gain access to the product & engineering talent necessary to build the product, or even successfully procure it from a vendor.? But over the past decade, the civic tech movement—which we think of as a key constituent community of the Abundance Movement—has built product capabilities in and around government (e.g. Code for America, 18F, the US Digital Service) which departments like the IRS can leverage if their leadership is sufficiently motivated to do so. At least in the instance of Direct File, the IRS has the right people working on the right thing with minimal burdens.?

As a result, the IRS recently announced that Direct File would be permanently available as a free and simplified public tax filing option for Americans, inviting all 50 states and D.C. to participate. This announcement comes on the heels of over 140,000 people filing their taxes for free through this year’s Direct File pilot, disrupting big tax prep companies like Intuit and H&R Block from profiting off taxpayers.

Based on a report from the Economic Security Project, it’s expected Direct File (again, just serving low income Americans) will save Americans an estimated $11 billion annually in filing fees, and unlock an additional $12 billion in unclaimed tax credits like the Child Tax Credit and Earned Income Tax Credit.

Conclusion

At some level, all political programs aim to answer the question: “what holds us back from better societal outcomes?”??

We live in a big pluralistic country, which means people will have different ways to define “better.” But we’re with the majority of Americans in thinking there are some set of dysfunctions embedded in our governance systems that leave us far short of a (pluralistic) ideal.?

The main groups who vie for political power all have an answer to the question:?

• Mainline Democrats—Republicans are the problem.
• System Reformers—Our two party system is the problem.
• Movement Progressives—Capitalism and racism are the problems.
• MAGA—Liberal elites are the problem.

To that list, we add ourselves to the list:

• Abundants—Capture and State Incapacity are the problems.

We believe applying these two lenses will help you better understand many of the problems you see in society. The next step after problem identification: How can you, personally, help fight capture and state incapacity? By joining the Abundance Movement.?