InstitutionsMarch 12, 2021
This week, I get to cross something off my bucket list: a byline in The Economist. Those familiar with the newspaper (how the firm refers to itself) know it doesn’t byline its writers. However, The Economist also runs an online “By Invitation” section, which has featured Madeleine Albright, Garry Kasparov, Arnold Schwarzenegger — people I roll with all the time. So, how did this happen? I. Don’t. Know.
Anyway, below is an excerpt (complete with adorable British spelling). The full essay is available here.
American Individualism and Institutions
I grew up on stories of the second world war. During the aerial bombardment of London known as the Blitz, my mother, aged seven, had to sleep in tube stations for protection. She was given a mask against poison gas. It was difficult to put on, and frightening to wear, so a thoughtful designer had modified the children’s version with a rubber nose — my mother thought it made her look like Donald Duck. Sheltering underground with a gas mask was traumatic, but society was under threat and sacrifices had to be made. Today, when people refuse to physically distance or wear a mask at Walmart, I envision my seven year-old mother as a child, on a dark tube platform, with her awkward Donald Duck gas mask.
Once again, society is under threat — not from tanks and bombs but from an enemy one-400th the width of a human hair. The toll has been catastrophic. In America, Covid-19 has claimed more than 500,000 lives. Millions of people have lost their jobs and 40m face eviction. A generation of children have had their education interrupted or impaired.
America’s failure to defend itself against the virus is not unique, but neither was it inevitable. Other countries have beaten back the virus with fewer cases and deaths, with less interruption to daily life and at lower economic cost. The pandemic has dealt a blow to the notion that America is exceptional. Why has it fared so poorly? What is behind the refusal to adopt basic precautions, from social distancing to face masks?
In recent decades many Americans have conflated liberty with selfishness, adopting the notion that freedoms are self-sustaining, that liberty is a birthright that no longer requires sacrifice or collective action. In turn, this attitude has denigrated the institutions and traditions that yielded our freedoms in the first place and served as the connective tissue holding the nation together. These attitudes are societal comorbidities, and when the pandemic hit, the results were tragic. Despite having just 4 percent of the world’s population (and nearly 30 percent of the world’s wealth) America suffered 25 percent of reported Covid-19 infections and 20 percent of its deaths.
To respond to the pandemic — and other societal challenges — America must rediscover its communal values and its capacity for sacrifice. There will always be a place for the rugged individual in the American landscape. But we must abandon the delusion that such a figure can stand alone and isn’t obligated to sacrifice in the service of others.
Individualism is an essential part of the American story. The pilgrims left England on the Mayflower to freely practise their religion. Cowboys tamed the Wild West. Inventors and industrialists built the country’s commercial might. In my area of focus, technology, the idolatry of innovators is foundational. Success is the result of individual achievement, we are told, and failure comes from a lack of grit and genius. The message is seductive for the successful.
As the only child of a single immigrant mother who lived and died a secretary, I used to think I was self-made. But the truth is that I’m American-made and have benefited from a time and place of unprecedented prosperity, which dampened my failures and bolstered my successes.
To be sure, I work hard. But none of my ventures would have been possible without California’s public-education system, where I went to primary school, university, and business school from the 1970s to 1990s for a total of $10,000. I entered as an unremarkable, lower-middle-class kid. I left with credentials, a network, and my first startup. Without the generosity of California’s taxpayers, and being born in the right demographic (white, male), I’d probably still be installing shelving — my job until UCLA accepted my second undergrad application.
The same is true for many of our myths of individualism. Persistence and the plough “settled” the frontier, not a handsome white guy with a six-shooter and a pack of smokes. Cowboys were poor men who did dreary work for low wages; Hollywood and Madison Avenue morphed them into gunslinging heroes. Likewise, the wonders of Silicon Valley were built on a foundation of government-funded projects — the computer chip, the internet, the mouse, the web browser, and the GPS.
Yes, the private sector deftly turned publicly-funded technologies into commercial successes, and there was a place for individual genius in that. But those successes were also built on long hours by tens of thousands of engineers (many of them immigrants, many of whom went to public schools). The Ayn Rand image of the solo entrepreneur — Hank Reardon toiling alone in his laboratory to invent a new kind of steel — is a pernicious deception.
Myths have their place, and America’s worship of individual innovators inspires real achievement. The opportunity for success attracts the ambitious and those willing to work hard, like my parents, along with millions of others who land on American shores. But the myth becomes a liability when society becomes so enamoured with the idea of individual success that it forgets, and even attacks, the very institutions that enable it.
The modern spokesperson of America’s rugged individualism was Ronald Reagan. He captured the ethos in his famous declaration, “The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’” It was the opening salvo to a 40-year assault on public-sector institutions carried out under the banner of liberty and supposed self-reliance.
Reagan gutted administrative agencies by appointing leaders opposed to their very mission. His first director of the Environmental Protection Agency cut the organisation’s budget by 22 percent in 22 months before resigning amid scandal. The pattern continued in bipartisan fashion: Elected leaders pared back agencies’ powers and accepted the sentiment that the default government action was inaction.
Our hostility to institutions has immolated international bodies. Consider the World Health Organisation. Mr Trump’s decision to pull America out of the WHO in the midst of a pandemic (reversed under President Joe Biden) was galling, particularly as the WHO is responsible for one of humanity’s greatest public-health accomplishments: the eradication of smallpox in the 1970s. To appreciate the magnitude of this, Google images of “smallpox” and glimpse the horror that once killed millions each year. It was a victory for co-operative, state-funded projects and it cost a mere $300m. By one estimate, America, the largest contributor, recoups the value of its share every 26 days from savings in vaccinations, lost work, and other costs.
The efficiency of public-sector programmes can be seen all the time. An American family with an annual income of $52,000 per year pays approximately $16,000 a year in federal, state, and local taxes. In exchange, that family gets roads, public schools, environmental protection, national security, fire, and police. Try assembling that as a package of private services and see what it costs.
Antipathy to government institutions is often called “conservatism,” but it bears no resemblance to any principled tradition by that name. Conservatism is rooted in a respect for institutions. Its intellectual founding father, Edmund Burke, wrote, “Nothing turns out to be so oppressive and unjust as a feeble government.” The observation comes from his most famous work, a criticism of the anti-institutional, pro-individualism of the French Revolution and the bloody terror that followed. There is plenty to criticise about the American administrative state, but idolatry of the individual is hardly a true “conservative” critique.
Nor can the current, degraded notion of freedom be found in the works of America’s founders. The premise of the Declaration of Independence is not simply that our rights are “self-evident” but that “to secure these rights, Governments are instituted among Men.” This is to say, the founders respected “government” — they saw the state as a vehicle to guarantee freedom. In the years after the American Revolution, those who fought for liberty spent the rest of their lives progressively strengthening the central government they had formed in order to secure that freedom. Their legacy is the stability and prosperity we have come to take for granted. The exaggerated emphasis on individualism imperils their achievements.
Comorbidities around Us
In the U.S., Covid-19 did not find an exceptional country. Instead, the virus found a land of individuals — too many of them poor, overweight, under-educated, and overly imprisoned. It found underfunded institutions and a population teeming with a sense of entitlement rather than community.
What separated America from countries that staunched Covid-19 is neither size nor geography. China has the world’s largest population (Wuhan has more people than New York City). And though many countries that did well are islands, oceans offer scant protection from a pandemic. (The first person to die of Covid-19 in Iceland was an Australian, and the virus reached America from China and Europe, not Mexico or Canada.) No common political system or cultural tradition links the successful countries.
America’s response was inept because the institutions designed to protect the public failed or were enfeebled. At almost every level of society, people chose individual convenience over collective well-being.
What can be done to reverse the country’s self-destructive course, and to repair and prepare? America should use the pandemic as a turning point for renewal. Just as the human immune system develops antibodies from one viral infection to fight off another, Covid-19 presents us with the opportunity to build “societal antibodies” — practices to fend off the contagious disease of selfishness.
The country needs a “Corona Corps.” Similar to the armed forces or the Peace Corps, it would consist of people largely aged 18 to 24, trained and equipped to fight the virus. The Corps would conduct contact tracing, staff testing, and vaccination centers, and work with people required to isolate, providing anything from food delivery to a sympathetic ear. Corona Corps members could not only be paid but could also earn credits to reduce tuition and lower their debt — as well as gain experiences that serve as an on-ramp to jobs post-graduation.Once the virus is tamed, we should transition Corona Corps into a robust national service programme.
A second reform is our tax system — a government function that is fundamental to all public programmes, but which has been ravaged by our disregard for the state institutions. Allowing the super-wealthy 0.1 percent to enjoy a greater share of spoils while we cut their taxes is not the hallmark of a functioning society.
Regardless of the tax rules we adopt, administering them requires an efficient institution — and America’s Internal Revenue Service has been severely underfunded. A recent congressional report estimated that a $100bn investment in tax enforcement would take in $1.2trn — yes, trillion — in revenue over the next decade.
But the bigger point is that we must pursue a cultural shift: a renewed recognition of the value of institutions, and of the balance between the individual and the community in a prosperous society. Certainly, people should complain about the arcane and sometimes onerous regulations that hamper entrepreneurship — at the point of contact, institutions often feel like friction, like something to be avoided. Yet we must also recognise that beyond disagreements over the size and specifics of government institutions, those institutions are essential and honourable — as are the people who serve in them.
Individualism is embedded in America’s cultural identity, but it is a sign of national character to act together as a community.
Again, the full essay is online here at The Economist (non-subscribers need to register with an email address to read it).
Finally: It’s a big week for us. Our online education startup (Section4) closed a $30 million round of financing. We’ve assembled an impressive team and an outstanding roster of teachers.
And tonight, I’m appearing on Real Time with Bill Maher. I’m in Los Angeles for the taping this afternoon, and I’m sure it will go great. The last sentence is a lie — there’s a non-zero probability I will throw up and pass out. So… tune in. Tonight at 10pm, on HBO betamaxplusnowgo.
Life is so rich,
P.S. Section4 has added spaces to the upcoming sprint, How to Win in the Platform Economy. Taught by renowned consultant and professor Mohan Sawhney, this sprint dives into how platform businesses (think Airbnb, Roblox, Uber) dominate traditional product markets. Sign up now.
P.P.S. On this week’s Prof G Pod, NYT columnist Andrew Ross Sorkin gives us the state of play on SPACs, the markets, and tech stocks. We also hear about Andrew’s typical workday and how the pandemic has impacted his family life. Plus, I share my thoughts on why states shouldn’t receive a bailout as part of Biden’s American Rescue Plan, Netflix’s short video clips, Twitter’s e-commerce experiments, and whether or not you should pursue an MBA. You can find our show on Apple Podcasts, Spotify, or wherever you listen.