Smart People Should Build Things:
How to Restore Out Culture of Achievement,
by Andrew Yang


(Click for Amazon book review)

This book was written in 2014, a few years before Andrew Yang decided to run for the Democratic nomination for President. So it represents his general thinking about how to improve America: his big idea is that "smart people should build things" instead of our society focusing on sending our smart kids to law school or into financial services. For the 2019 campaign, his big idea got transmogrified into "everyone in America should get a Universal Basic Income" and we'll theorize how that transmogrification occurred below. But first an outline of the 2014 book.

Yang founded a company called "Venture for America" (VFA), a non-profit organization to provide venture capital for small start-up companies. Yang says he founded VFA because "I was a moderately rich dude in my mid-thirties" who "wanted to do something to give back to the country that had given my family so much" (p. 115). The purpose of VFA is to enable "smart people to build things," as the book title suggests, instead of the "default path" of going to law school or into financial services (where smart young people are assured a high income, but don't build anything).

Yang believes that smart people should build things because he was a smart young graduate who took the default path and went to law school, and then into financial services. Chapter 4 of the book focuses on Yang's assertion that there are too many law schools in America. Yang's "default path" means that he chose law school because it was a sure thing to make a good salary, and nobody would argue against any young person who took that path, whereas many people WOULD argue against the risk of undertaking a startup creative business idea. Yang became disenchanted with practicing corporate law because it is not creative, and is only a "money chase" instead of creating something of value to society.

Yang details the negative aspects of the "money chase" in chapter 8, entitled "Rent-Seeking versus Value Creation." The economic term "rent-seeking" means "shifting around financial resources to maximize revenue for its owners," i.e. a "money chase" which is the opposite of "value creation." At age 25, Yang made a partial shift from rent-seeking (working as a corporate lawyer) to what he viewed as more satisfying and more creative work, by starting a non-profit enterprise called "Stargiving." That enterprise helped celebrities raise money for their favorite causes (chapter 5). But that was still just financial services -- rent-seeking in a less self-centered wrapper.

Yang's next venture was "Manhattan GMAT," a test-prep company focused on the GMAT, the business school entrance exam (later renamed to "Manhattan Prep," chapter 7). Here Yang learned his current business principles: invest in keeping staff happy instead of keeping investors happy; focus on providing a real service to real people instead of rent-seeking; make customer satisfaction the goal of the company, instead of focusing on bottom-line profit. Yang then sold Manhattan Prep to the larger company Stanley Kaplan Test Prep, which is the source of most of his current wealth.

That's the path that Yang took to Venture for America. This book suggests that smart young people might avoid that long circuitous path and get right to the value-creation part, instead of taking years to learn to avoid rent-seeking. And VFA will fund you, if you'd like to give it try.

How does that all translate into presidential politics? Well, that's the problem -- it doesn't. There are SOME national policy prescriptions involved in all of the above -- like, acknowledge that successful start-up businesses are the major source of job creation in America, so colleges should give them special attention and encourage grads to apply there (pp. 180-1). But that all focuses on just the "smart people" -- young college graduates who have the wherewithal to take a risk rather than just take a well-paying job. We can imagine a political consultant meeting with Yang in 2018 and saying, "That's elitist; you need to generalize the idea to millions of people rather than just the smart people, to make it sound like a Democratic Party idea instead of a Republican Party idea." And hence the Venture For America concept outlined in this book is barely part of Yang's current presidential campaign.

Yang's big idea in his presidential campaign is a "Universal Basic Income" (UBI), which is not mentioned in this book at all (it is the focus of his 2019 book, The War on Normal People). We imagine that 2018 political consultant saying "Let's come up with a non-elitist version of VFA, something where millions of normal people can get a chance to start their own business, instead of just the elite few smart people." Then they came up with UBI, which would give every citizen $1,000 a month with no strings attached, to replace existing welfare programs and perhaps part of Social_Security; facilitate changing jobs when automation occurs; and ensure universality to avoid stigma.

Yang is a unique candidate -- he has excited enough voters that he is among the top contenders qualifying for the 2019 autumn debates (the 2019 summer debates had easier qualifications). We like his ideas for VFA as well as UBI -- they are both new "big ideas" that SHOULD be brought up in presidential campaigns. But Yang's presidential campaign has ignored his VFA credentials to focus on UBI. Yang's campaign website has dozens more innovative ideas, building on the UBI idea -- but ignoring the VFA idea. How come?

We don't believe that Yang has renounced the big ideas around Venture for America. But we do believe that he is intentionally de-emphasizing them because they look too much like Republican ideas to present during a Democratic primary. But there's nothing WRONG with having some ideas that appeal to opposing party voters -- and in fact, that's NECESSARY in the general election campaign, even if doing so is a problem in the Democratic primary campaign. Plenty of Yang's opponents have pushed bipartisanship in the Democratic primary -- one opponent, Sen. Michael Bennet, even wrote a book about bipartisanship!

We think that Yang is missing a major opportunity to appeal to more conservative and business-oriented voters, by focusing on the welfare-oriented aspects rather than the job-creation aspects of his big ideas. Yang seems to have disowned his corporate-lawyer past and his job-creator credentials, in order to pander to Democratic primary voters' more anti-corporate preferences. Yang should OWN his past -- Yes, he was a job creator! Yes, he believes that helping elite students start businesses will trickle down to others! Yes, smart people should build things! -- and increase his appeal to all of America.

-- Jesse Gordon, Aug. 2019

OnTheIssues.org excerpts:  (click on issues for details)

Corporations     Economies recede after switch from making things to services.     Explore ideas on the side while working full-time job.     Send top people to startups, not financial services.     Venture for America: non-profit entrepreneurship support.     Start a company? More realistically "Join a team".     Enlist entrepreneurs as mentors.     Ran test-prep company, then sold it to bigger company.

Education     Later graduation makes more entrepreneurs.     College career services should identify growing "new firms".

Jobs     Venture for America: army of builders with sense of purpose.

Principles & Values     2006: Founded test-prep company Manhattan GMAT.

Welfare & Poverty     Non-profit work is dispiriting if not rapidly expanding.

Click for quotations from other sources by: Andrew Yang