Obama Ran a Capitalist Campaign
By BRET SWANSON
November 7, 2008; Page A17
If Barack Obama ran for president by calling for a
heavier hand of government, he also won by running
one of the most entrepreneurial campaigns in history.
Will he now grasp the lesson his campaign offers as
he crafts policies aimed at reigniting the national
economy? Amid a recession, two wars, and a global
financial crisis, will he come to see that unleashing the
entrepreneur is the best way to raise the revenue he
needs for his lofty priorities?
Like every entrepreneur, Mr. Obama’s rise was
improbable. An unusually-named, African-American
first-term senator defeated two of the most powerful
incumbent political brands, the Clintons and John
McCain. Like many upstarts, he won by changing the
rules of the game.
Mr. Obama, following FDR’s mastery of radio and
JFK’s success on TV, is the first candidate to fully
exploit the Web. The community organizer seemed to
realize that new social networking and video
technologies were perfect for politics. It didn’t hurt that
Facebook co-founder Chris Hughes worked for the
campaign. “What ultimately transformed the
presidential race,” Joshua Green of The Atlantic wrote
in June, “was not the money that poured in from Silicon
Valley but the technology and the ethos.”
The results of Mr. Obama’s decentralized Web effort
were staggering: 8,000 Web-based affinity groups,
50,000 local events, 1.5 million Web volunteers, and 3.1
million donors who contributed almost $700 million.
Republicans, Charlie Cook reported on Nov. 3, believe
their large but impersonal centralized databases could
not match the tacit knowledge, individual initiative and
agility of Mr. Obama’s diffuse social networks.
Such creativity could bubble up because Mr. Obama
was stable at the top. Not just anyone could recruit an
army of volunteers and let them run free, establishing
their own networks, offices and events. Because Mr.
McCain lurched from one message and tactic to the
next with dramatic frequency, his supporters froze.
They spent more time defending or deciphering his
shifting policies and tactics than they did organizing
and persuading. Mr. Obama’s even temper and
relentlessly consistent message, on the other hand,
encouraged supporters to take risks without the worry
of being blindsided.
The key question now is how will Mr. Obama
govern? Will he stick with the policies he ran on or
adopt the approach that he won with?
The only way a president can maximize economic
growth is to unleash diffuse networks of entrepreneurs.
As economist Bob Litan of the Kauffman Foundation
says, “Government can’t compel growth.” But Mr.
Obama’s plans – “card check” legislation to allow
workers to unionize a workplace without a secret ballot
election; curbing free trade; a government-led “green
economy”; and higher tax rates on capital and
entrepreneurs – do not reflect his campaign’s deep trust
in individuals.
A thought experiment, Mr. President-elect: What if as
your campaign raised more and more money it was
taxed away and given to Mr. McCain to level the field?
Or think of this: What if you were not allowed to opt
out of the public financing scheme that left Mr. McCain
with a paltry $84 million, about a quarter of your
autumn total?
Unleashing
entrepreneurs could be
the secret to governing
success.
––
Opting out of monopolistic, closed or centralized
systems is often the path to innovation. Sometimes we
opt out through the relaxation of regulations. More
often, technology allows us to leap, obliterate or ignore
the obstacles altogether.
So on education, why doesn’t Mr. Obama take
Charles Murray’s advice? Instead of spending ever
more billions to send ever more students to get often-
meaningless, four-year college degrees, we should
disaggregate the higher education market using the Web
and skill-specific short courses and accreditation exams.
Clayton Christensen of Harvard Business School
makes a similar argument for K-12 education, where we
mindlessly follow a century-old way of doing business.
Get rid of this manufacturing era, “value chain” model
– where we take inputs (students), add value
(sometimes), and spit them out the other end – in favor
of a “user network” model where unique students with
distinct learning styles plug in to smart software and
tutoring tools that deliver a customized education.
On health care, let’s face facts. We are not going to
“solve” the entitlements crisis by gouging American
producers to pay for the current Medicare/Medicaid
abomination. Much better to transcend the issue with
medical innovations and an entrepreneurial, consumer-
driven market where more physicians go into medical
technology, more nurses replace doctors, more
technologies replace doctor visits, and, with properly-
aligned incentives and real prices, more citizens take
better care of their own health and thus their pocket
books. The only way to escape current predictions of
scarcity is the unforeseen abundance that
entrepreneurship can bring.
Finally, Mr. President-elect, here’s a secret: Insist on a
strong and stable dollar. It worked wonders for
presidents Reagan and Clinton. A weak dollar killed
Messrs. Nixon, Ford, Carter and Bush 43. In the same
way that Mr. Obama’s millions of entrepreneurial
volunteers took comfort in their leader’s calm, steady,
disciplined approach, entrepreneurs need the
predictability and discipline of a stable currency to
unleash their unpredictable innovations.
Mr. Obama should throw away his tax-regulate-and-
centralize white papers. Instead, he should follow his
campaign playbook and trust the networked masses.
The best way to harness their power is to undo the reins.
Mr. Swanson is a senior fellow and director of the
Center for Global Innovation at The Progress &
Freedom Foundation.