Builders vs. Maintainers

Governance outcomes are better predicted by whether a country industrialized within living memory than form of government, e.g. democratic or authoritarian.

There has been much discussion recently of whether authoritarianism offers more effective governance than liberal democracy. The thinking goes, China was able to respond more effectively to covid, locking down, rolling out rapid testing, and keeping their economy open, while America struggled to lock down, test, and let covid run rampant before being saved by vaccines. Therefore, authoritarian systems are better at responding to exogenous shocks than liberal democracies. 

While China did have a more effective covid response, excluding vaccines, the cause is misunderstood. The dichotomy is not between authoritarian and liberal democracies, but countries that have industrialized within living memory and those that haven't (I'm ignoring island nations, Australia, New Zealand, etc).

If we add Russia and South Korea to the discussion, we get strikingly different results. Russia, an authoritarian government, performed poorly, was unable to effectively lock down, and had a high covid death rate despite likely underreporting. South Korea, a democratic government, had an extremely effective covid response, was able to roll out test and trace, and as a result suffered minimal deaths. 

Of course, there are confounding variables. East Asia had experienced SARS within living memory, which added to them taking the threat seriously. But as America 18 months into the pandemic still can’t take basic precautionary measures against covid, including rapid testing, I think the SARS experience, while important, only explains a fraction (~30%) of the different responses. 

Therefore, the assumption that autocracies can take decisive action more effectively than democracies is incorrect. History confirms this. New York City, for example, vaccinated 6 million people in less than one month in 1947. In 1957 America developed a new vaccine and produced tens of millions of doses to stop a pandemic flu. 

The difference between America in the 40’s and 50’s and America today is that back then America was in the latter stages of the industrial revolution. Americans were still building. Industrialization created the tools for mass coordination required to respond effectively to new threats as well as a culture and leadership able to use those tools. 

Today, most Americans do not build. They maintain. They maintain both the regulatory bodies of industrial capitalism, as well as the companies themselves. They no longer face the intense uncertainty and competition of their forefathers. The living memory of builders has faded, being replaced by a good enough status quo.

The status quo is maintained, and Americans maintain their standards of living, until there’s an external shock. When such a shock happens, e.g. covid, the facade is exposed. The ability to make decisions quickly, re-allocate resources, and face a severe threat no longer exists. Why would it? Our decision makers and their advisers have never faced comparable circumstances.

While the phase of industrialization predicts covid response competence on a national level, the framework of builders vs. maintainers can be applied more locally. Silicon Valley, for example, responded to covid quicker than any other American institutions, notably the public health establishment and the media. 

Silicon Valley was the first industry to send workers home, sometimes before CDC recommendations. Silicon Valley adopted risk mitigation strategies, even when pilloried by the press. Silicon Valley developed research funding mechanisms when traditional sources of research were slow to focus on covid. 

Of course, Silicon Valley had several advantages. The familiarity with technology simplified remote work. Their mental and geographic proximity to China ensured a closeness lacking in the Acela corridor. Their intuition about exponentials allowed them to focus on the growth rate of covid, not the number of cases. 

However, the fundamental advantage of Silicon Valley is their builders mindset. Silicon Valley is still dynamic. The difference between a tremendous fortune and a middle class existence is a decision or two away. Startup founders face a near infinite set of possibilities, forcing them to filter information quickly and effectively to make decisions. There is a material reward for being contrarian. This mindset is not only limited to founders, but has spread throughout much of the technology industry. It allowed them to identify covid as a risk, even when it was being ignored or downplayed by the rest of America. 

The 21st century is likely to see an increasing number of external shocks. Whether we can prevail depends in no small part on the influence of the builders mindset.

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