What the VC gets so wrong

Marc Andreessen wants to build something. Something that does science, distributes money, manages cities, provides education, transportation, and more. Congratulations, you just invented government.

His essay It’s Time To Build completely misses the point. America isn’t a failed state because they lacked startups or ‘things’. America is awash in these. They’re a failed state because they don’t have a functioning government.

Andreessen talks about this once, and then never mentions it again.

Every Western institution was unprepared for the coronavirus pandemic, despite many prior warnings. This monumental failure of institutional effectiveness will reverberate for the rest of the decade, but it’s not too early to ask why, and what we need to do about it.

Many of us would like to pin the cause on one political party or another, on one government or another. But the harsh reality is that it all failed — no Western country, or state, or city was prepared — and despite hard work and often extraordinary sacrifice by many people within these institutions. So the problem runs deeper than your favorite political opponent or your home nation.

Do you see the problem here? Why does Andreessen limit the world do the west? The virus doesn’t. There are many Asian institutions that didn’t fail, if he could just see past the usual structural racism and arrogance of the west.

Andreessen could easily look to Korea or Taiwan and learn something, but instead, he just regurgitates the same business/innovation bullshit that left western states so emaciated in the first place.

The answer to Andreessen’s question actually isn’t that difficult. It’s already been done in every East Asian country, including poorer countries like Vietnam. Even places like the Indian state of Kerala. It’s nothing special. Just have a functioning government.

Eastern Civilization

Westerners are only going to die for their own arrogance. That’s the cardinal mistake that Andreessen makes. He spends a whole essay down his own navel when he could just look across the ocean.

Korea never stopped learning and that’s why they’re an advanced country and America is not. Their KCDC is literally based on America’s, but has now far exceeded it. The US could improve by learning back, but they’re just too proud.

Andreessen talks about the western world as if the distinction is relevant to a virus, or education, or infrastructure. It isn’t. There are good institutions all over the world, and lots to learn from them. Hubris has made Americans blind, and VCs are the high priests of pride.

Many of us would like to pin the cause on one political party or another, on one government or another. But the harsh reality is that it all failed — no Western country, or state, or city was prepared — and despite hard work and often extraordinary sacrifice by many people within these institutions. So the problem runs deeper than your favorite political opponent or your home nation.

But it didn’t all fail. If you’re from Taiwan your institutions didn’t fail, or Kerala, or Vietnam. Even my tiny country Sri Lanka has responded better than the US. If you’re saying that the West is failed, why don’t you look for answers somewhere else?

Going back to Korea, you can literally read their government playbook at the COVID Translate project (which I’ve discussed here). I’m also sure someone like Andreessen could just pick up the phone. Hell, America has military bases in Korea, they could just walk over.

The Korean answer, however, isn’t sexy. It’s not a product or a thing or a new technology. It won’t mint any new billionaires. Korea fought COVID-19 with boring old bureaucracy and government programs. That’s what institutions are, and they haven’t changed that much in thousands of years.

America just doesn’t do that anymore. They worship business and disdain government. The result of this ‘idolatry of the innovator’ is a few rich people and a bunch of crumbling institutions. This is what got them into this mess, and Andreessen can’t see beyond it.

The fact is that VCs have been exposed as non-essential workers. They’ve just picked the bones of government-funded research like Internet and GPS, calling themselves geniuses and pissing on the shoulders of giants. The US government put a man on the moon. VC backed companies will get you a cab, somehow lose money doing it, and call themselves gods among men.

America is now just a third world country wearing a Gucci belt. If you point out that other countries also wear clothes, and have PPE, they just proudly point to their belt.

Public Health Isn’t A Product

Andreessen cannot see beyond the western world, nor can he see beyond his narrow world of venture capital. I guess if you’re a VC, every problem looks like a startup. So he gets the problem all wrong.

The problem is desire. We need to *want* these things. The problem is inertia. We need to want these things more than we want to prevent these things. The problem is regulatory capture. We need to want new companies to build these things, even if incumbents don’t like it, even if only to force the incumbents to build these things. And the problem is will. We need to build these things.

And we need to separate the imperative to build these things from ideology and politics. Both sides need to contribute to building.

What things is he even talking about? PPE is just a bunch of plastic. PCR tests have been around since the 80s. None of these ‘things’ are new. Yes, you can use apps here and there, but public health hasn’t changed much since 1918. Vietnam and the Indian state of Kerala are doing pretty well with little tech at all. It’s not a tech problem and it’s not a startup, it’s just bureaucracy. It’s just humans doing age-old jobs, and doing them well.

As Singapore’s Dale Fisher said, “We don’t have the magic answer here, we just do it well and efficiently.”

In Korea (which is doing better than Singapore right now), they didn’t launch some startup accelerator after MERS. They passed legislation, built up the Korean CDC, funded planning and stockpiles and kept it all ready. All boring government stuff, and highly effective.

This is simply not something that the private sector can or should do. Are private companies going to create a pandemic response and fund it through 100 money-losing quarters? Only government can hedge against catastrophic risk across decades. Government is more efficient than the private sector at providing public goods like this — not just public health but also transport, education, and more. Startups are good for a few things, but government is still essential for running essential services, as the global pandemic response has shown.

The same goes for the other problems he points out — transportation, education, infrastructure. These are public goods, and almost every other country treats them as such. There is a role for markets and there is a role for the state. The result is something called civilization, compared to the carrion capitalism of the west.

Andreessen could see this if he looked to literally any non-white country, but he’s like a frog in a well. He can’t see beyond his narrow western world, and the even whiter world of venture capital.

The Answer Is Government

VCs are famous for ‘inventing’ stuff that already exists, except with more class segregation. Like Lyft reinventing the bus. In this case, Andreessen seems to be trying to reinvent government, except as a weird, amorphous business opportunity. Indeed, he washes his hands of politics entirely.

We need to separate the imperative to build these things from ideology and politics. Both sides need to contribute to building.

Again, building what? America needs to rebuild its government, not some app. That requires politics. If you don’t deal with politics you’re not dealing with the root cause at all.

The logical conclusion of Andreessen’s ideas isn’t some techno-utopia, it’s Donald Trump. A businessman with no political experience, ‘disrupting’ government. It hasn’t worked out very well.

And yet Andreessen brushes politics aside. Instead, he posits a kumbaya future, where everyone meets in the middle, despite the American right being actively and demonstrably insane.

It’s time for full-throated, unapologetic, uncompromised political support from the right for aggressive investment in new products, in new industries, in new factories, in new science, in big leaps forward.

The American right doesn’t believe in science — not climate change, or social distancing or even evolution. They don’t care about new industries like clean energy. And, as mentioned, the problem isn’t that America lacks new factories or products. Andreessen is asking the unwilling to do the unnecessary.

He has similarly myopic advice for the American left, or what in any other country is known as the right.

The left starts out with a stronger bias toward the public sector in many of these areas. To which I say, prove the superior model! Demonstrate that the public sector can build better hospitals, better schools, better transportation, better cities, better housing.

I mean, OK, it’s been proven. Everywhere else in the world. Public health care is better and cheaper in every other developed country, and many developing. Every European and East Asian country has better public transport and infrastructure. American students don’t perform very well and end up in debt peonage if they go to college. Of course, the public sector works better for these things. These aren’t even debated questions in the rest of the world. Even white people are doing it.

This brings us back to Andreessen’s (and America’s) central problem. Hubris got them into this mess, and yet he calls for more hubris to get them out. In the face of a collapse of government institutions, this VC can’t see beyond the problem, because he is the problem. He simply cannot conceive of a solution that doesn’t also make him more billions. He’s so used to looking down on government that he can’t see that America has already hit rock bottom.

America a failed state that needs its government rebuilt. But that’s not what Marc Andreessen proposes. Instead, he offers the same old bullshit about innovation and the private sector that got them into this mess in the first place. If America is a third world country with a Gucci belt, Andreessen’s solution is to make it a Louis belt. That’s not a solution. America needs to join the rest of civilization and have a government again.