Economies of scale are hard for buildings

Brian Potter is the author of Construction Physics and The Origins of Efficiency, published by Stripe Press in 2025. He is a senior infrastructure fellow at the Institute for Progress.

Manufacturing has gotten dramatically cheaper over two centuries. Construction has not, and that gap isn’t closing anytime soon. Brian Potter has spent years trying to understand why, first as a structural engineer, then inside Katerra, the SoftBank-backed startup that raised billions to factory-build housing and went bankrupt trying. His conclusion is that the forces behind falling manufacturing costs resist construction for reasons that are structural, not accidental.

Jon and Brian trace those forces from Ford's interchangeable parts to SpaceX's materials choices to the specific dynamics that have kept American shipbuilding uncompetitive for 150 years, and turn at the end to whether anything seems likely to change.

Links from the discussion:

Construction Physics (Brian Potter's newsletter): https://www.construction-physics.com

The Origins of Efficiency (Stripe Press): https://press.stripe.com/origins-of-efficiency

The Origins of Efficiency on Amazon: https://www.amazon.com/Origins-Efficiency-Brian-Potter/dp/1953953522

Institute for Progress: https://ifp.org

Katerra (background on the SoftBank-backed construction startup): https://techcrunch.com/2021/06/01/softbank-backed-construction-giant-katerra-said-to-be-shutting-down-after-raising-billions

"Why Can't the U.S. Build Ships?" (Brian Potter, Construction Physics):https://www.construction-physics.com/p/why-cant-the-us-build-ships