Why we can’t build

In a viral essay, venture capitalist Marc Andreessen makes a simple exhortation: It’s time to build. Behind the coronavirus crisis, he writes, lies “our widespread inability to build.” America has been unable to create enough coronavirus tests, or even enough cotton swabs to fully utilize the tests we do have. We don’t have enough ventilators, ICU beds, personal protection equipment. The government hasn’t built the capacity to quickly get money to people or businesses who need it.

And it’s not just the coronavirus. The US could be building our way out of the housing crisis and the climate crisis. We could be building a better education system, more advanced infrastructure. We could have more and better factories, supersonic aircraft, delivery drones, flying cars.

Andreessen is a Silicon Valley pioneer. He co-created the Mosaic web browser and co-founded Netscape. He built multiple billion-dollar companies, runs one of the industry’s largest VC firms and sits on the board of Facebook, among others. His essay channels the inversion of the moment: After years in which the tech industry has been criticized for moving too fast and breaking too much, we’re seeing the consequences of moving too slow and building too little. Wouldn’t you prefer the drawbacks of disruption to the calamities of stagnation?

Even so, Andreessen is braced for criticism, and he has an answer ready. “Here’s a modest proposal to my critics. Instead of attacking my ideas of what to build, conceive your own! What do you think we should build?”

I think Andreessen is uncharacteristically underestimating the appetite for building. The absence of creation doesn’t reflect an absence of desire — even in that epicenter of supposed stagnation, Washington, DC.

I’ve covered Congress for almost 20 years. The place is littered with proposals to construct universal pre-K and reimagine the health system, to decarbonize the US economy and incentivize drug development through prizes and solve the housing crisis. They just don’t pass. It’s become a running joke in Washington that every week is “infrastructure week.” But we’re not rebuilding American infrastructure.

The question, then, is why don’t we build? What’s stopping us?

Here’s my answer: The institutions through which Americans build have become biased against action rather than toward it. They’ve become, in political scientist Francis Fukuyama’s term, “vetocracies,” in which too many actors have veto rights over what gets built. That’s true in the federal government. It’s true in state and local governments. It’s even true in the private sector.

I’m not against soliciting more ideas of what to build. But what we need is sustained funding, focus, and organizing to make building in America possible again. And that requires patiently engaging with the kinds of institutions that frustrate builders.

That the US government has become a dysfunctional vetocracy is obvious. Hell, I wrote a whole book about it. But in short: America’s system of checks and balances requires unusual and even extraordinary levels of consensus to pass legislation. First, you need the agreement of the House, the Senate, the White House, and, increasingly, the Supreme Court.

More granularly, congressional power is diffused across committees. The Senate has built in a supermajority requirement, known as the filibuster, which effectively raises the threshold for passage from 51 votes to 60 votes.

This raises the question: If the problem is embedded in the structure of the US government, how did the US ever do anything big? The short answer is that for most of our political history, two unusual conditions held. First, the parties were ideologically mixed, which made compromise easier. Second, one party was usually electorally dominant, which gave the party in the minority a reason to compromise: If you can’t win, you may as well deal.

Both those conditions have dissolved. America’s political parties are more ideologically — and demographically — polarized than ever before. We’re also in the most competitive period American politics has ever seen. In a system like that, both sides utilize the system’s bias toward inaction to foil their opponents. You can see this in the rise of the filibuster over time. The rule has been around almost as long as America, but it’s only been deployed as an omnipresent veto in recent decades:

The result is a system biased toward inaction. The left can’t remake American health care. The right can’t voucherize American schools. The left can’t pass a climate bill. The right can’t privatize Social Security. Neither side can rewrite our immigration laws, hence the turn towards oscillating executive orders. Neither side can pass their infrastructure packages. Neither side can reform social insurance.

In the midst of a pandemic, a financial crisis, or a terrorist attack, emergency measures can pass, for a little while, but absent some kind of crisis, paralysis is the rule. (This is a sketch, and it ignores some important party asymmetries, so read the book if you want to dig deeper into how polarization makes American ungovernable.)

If paralysis ended once you walked out of the Capitol, we wouldn’t have a housing crisis. We’d have better social insurance infrastructure. We’d have better infrastructure, period. But it doesn’t.

To put the question simply: Why is Penn Station, the flagship rail station in New York City, such a dump? Why can’t the richest city in the richest nation in the world have, at the very least, a train station with seating, some nice restaurants, working elevators, and an absence of human waste falling through the ceiling?

Marc Dunkelman spent years cataloging the many failures to revamp Penn Station, a number of which came complete with hefty doses of federal funding. Each time, the story was the same: Plenty of people who wanted to build, and plenty of money with which to build, but too many people with vetoes who simply didn’t want the building to happen.

This is representative democracy at its worst: A democracy that only represents those who know to show up at meetings most people never hear about, and so ends up handing power to special interests and aggrieved NIMBYs. I highly recommend this Weeds podcast on “neighborhood defenders” and the way participatory local processes favor the status quo for more on that dynamic.

Dunkelman, himself a liberal, locates the crisis in a progressive skepticism of power that had roots in a real crisis but that has itself become a crisis for effective state and local governance:

Beneath America’s deep frustration with government is something else: a deep-seated aversion to power. Progressives resolved decades ago to prevent the public from being bulldozed by another Robert Moses—and the project to diffuse power to the public has succeeded. But the pendulum has swung too far in the other direction. The left’s zeal to hamstring government has helped to burnish the right’s argument that government would mess up a one-car parade. The new protections erected to guard against Moses’ second coming have condemned new generations to live in civic infrastructure that is frozen in time.

You can see this if you attend a planning meeting in San Francisco and watch the line of people who assemble to oppose even the most modest development. You can see it in California’s inability to build high-speed rail, despite tens of billions of dollars in federal subsidies, because the state got so trapped in its own vetocracy it couldn’t just build the damn thing in a straight line. You can see it in the inability of American cities to build public transit at cost and quality levels that simply rival that of poorer, older European cities, to say nothing of leapfrogging the new development in Asia.

As Dunkelman puts it, “in New York, and in other cities, government power is now spread so thin that places once incapable of stopping bad projects now cannot get good projects off the ground.” That applies far more broadly, of course, than just city governance.

But the problem isn’t just progressives who grew afraid of what would happen if government power could be wielded too easily. The problem is also conservatives who want government to work poorly when it’s needed most. Andreessen singles out for criticism the archaic structures through which America delivers unemployment insurance. “A government that collects money from all its citizens and businesses each year has never built a system to distribute money to us when it’s needed most,” he marvels.

Unemployment insurance is administered by the states. In many of those states, the system works just fine. In some, it worked fine, but simply wasn’t prepared for an unemployment crisis of genuinely unprecedented dimensions:

In some states, though, the system’s dysfunction is a feature, not a bug. In Florida, the unemployment insurance system is designed to be difficult to use because conservative governors wanted it to go unused. They’re regretting those decisions now, but only because it’s screwing over their own voters in a time of crisis. In a grotesque way, Florida’s disastrous UI system represents the successful completion of a project: They intended to build a UI system that failed those who needed it, and they very much did.

Which goes to a problem that afflicts governance at all levels of America: If you live in a vetocracy and one of your two political parties actively wants the government to work poorly, the government will work poorly. And so it does.

But some of Andreessen’s examples really can’t be blamed on the government, at least not in a traditional sense.

America doesn’t have more ICU beds because hospitals have budgets to balance. You can’t both run a profitable hospital and maintain enough spare capacity for a once-in-a-century pandemic.

Similarly, the companies that make ventilators are private companies. They didn’t make more ventilators because there wasn’t demand for more ventilators. Same goes for surgical masks, eye shields, hospital gowns. Now, you can argue the government should’ve been stockpiling more of this stuff all along — and definitely should have been ramping up production in January and February — but a capitalist logic of efficiency prevails both inside and outside the market.

Take, for instance, the wildly successful Obama administration program to loan money to renewable energy companies that became infamous because one of those companies, Solyndra, was a bust. That program led to a slew of successes (including Tesla) and turned a profit to taxpayers. As Michael Lewis argues at length in his book The Fifth Risk, the problem, if anything, was that it was too cautious — so afraid of a Solyndra-like story that it wasn’t funding sufficiently risky investments. But they proved right to be afraid.

If even the government is forced to turn a constant profit on its programs and to avoid anything that might look like a boondoggle, you can imagine the pressure actual private companies are under. CEOs of all kinds of companies lament “short-termism.” Startup theorist Eric Ries has even gotten SEC approval for a “long-term stock exchange” meant to ease the problem.

In practice, short-term shareholder capitalism acts as a kind of vetocracy on public companies: If the market thinks whatever you’re doing is going to cut quarterly earning for an uncertain payoff, it can punish you severely, and instantly, for trying. There are CEOs like Amazon’s Jeff Bezos who’ve been able to get themselves a longer leash, but they’re the exceptions that infuriate the rules.

Silicon Valley isn’t immune to these dynamics. As Peter Thiel has complained, there’s been too much spending on bits and not enough spending on atoms. Software scales easily, and if you get it right, you can make billions in a couple of years. Andreessen famously declared that “software is eating the world” and helped drive the enthusiasm for super-scalable, digital business models. As the sorry state of vaccine funding shows, companies with more uncertain business models have had more trouble getting investors.

Andreessen knows this story better than I do, and would, I’m sure, tell it with more nuance. He’s even a backer of Ries’s long-term stock exchange. But hyperefficient, financialized, globalized capitalism leads to fragile supply chains, copycat investments, and products with predictable demand curves. And it’s harder and harder for even CEOs to ignore when the market, or activist investors, or board members, or even just a critical mass of Twitter users, veto their plans.

Andreessen’s essay ends with a call for mentorship, social pressure, and a realignment of priorities. “Every step of the way, to everyone around us, we should be asking the question, what are you building?” He writes. “What are you building directly, or helping other people to build, or teaching other people to build, or taking care of people who are building? If the work you’re doing isn’t either leading to something being built or taking care of people directly, we’ve failed you.”

I don’t think that’ll be enough. So let me end with my answer to Andreessen’s question: What should we build? We should build institutions biased toward action and ambition, rather than inaction and incrementalism.

But that means doing the difficult work of reforming existing institutions that aren’t going anywhere. You can’t sidestep the existence of the government, as too many in Silicon Valley want to do. You have to engage with it. You have to muster the political power to rebuild parts of it. And then you need to use the government to make markets competitive again.

At the federal level, I’d get rid of the filibuster, simplify the committee system, democratize elections, and make sure majorities could implement their agendas once elected. As I’ve argued for years, we should prefer the problems of a system where elected majorities can fulfill the promises that got them elected to one where elected majorities cannot deliver on the promises that the American people voted for. The latter system, which is the one Americans live in now, drives frustration and dysfunction.

But legislators on both sides prefer the status quo because it gives them power when they’re in the minority, and because they’re more afraid of what their opponents might do than committed to what they’ve promised to do. The allure of what they could build isn’t as powerful as the fear of what the other side may build.

I’ll let others make granular recommendations at the state, local, and market levels. But whatever the recommendations, the same thing is needed: A sustained and concerted movement that cares about institutional reform. But people get much more excited about building something, anything, than about reforming existing institutions. Meta-building isn’t a popular pastime, and the patient, focused work it requires is particularly frustrating, in my experience, to entrepreneurial personalities.

But if you want America to build more, you need to do the institutional work to make more building — of all kinds — possible again.