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Column: Where to find the next Facebook

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"The idea of the lone genius who has the eureka moment where they suddenly get a great idea that changes the world is not just the exception, but almost nonexistent," says Steven Johnson, author of "Where Good Ideas Come From: The Natural History of Innovation." That's because innovation, whatever the Facebook movie told you, isn't really about individuals. And in making it about individuals, we misunderstand, and thus impede, innovation.

I was not born physically or mentally superior to my grandparents. But I would have been much likelier to invent Facebook than they were. The natural capabilities of human beings don't change much from year to year, but their environments do, and so do the technology and store of knowledge they can access. Better sanitation lets people live in cities, where they can learn from one another. Transportation and communication advances allow ideas to mingle across distances that, a thousand years ago, they would never have traversed. The development of the Internet makes the coding of social networks possible.

When these advances happen, they happen to many people simultaneously, so many people tend to see the next step forward at the same time. In 2003, we were all social network geniuses, at least compared with everyone in 1993.

Consider CU Community, a Facebook competitor started at Columbia University. Adam Goldberg, its creator, programmed his social network over the summer in 2003. It was more advanced than Facebook, with options for pictures and integrated blogging software, though it did lack the elegant minimalism of Zuckerberg's design. (Disclosure: Washington Post Co. Chairman Donald E. Graham is on Facebook's board, and The Post markets itself on Facebook.)

Today, Zuckerberg is many times as rich as Goldberg. He won. Zuckerberg's dominance can be attributed partly to the clean interface of his site, partly to the cachet of the Harvard name and partly to luck. But the difference between Mark Zuckerberg and Adam Goldberg was very small, while the difference between what Mark Zuckerberg could do and what the smartest college kid in 1999 could do was huge. It was the commons supporting them both that really mattered. But the focus on individuals leads us to overinvest in the rewards for individual innovation and underinvest in the intellectual commons that make those innovations possible. We're investing, in other words, in the difference between Zuckerberg and Goldberg rather than the advances that brought them into competition.

Consider the current debates in Congress. Republicans are fighting to add $700 billion to the deficit to extend the Bush tax cuts for income above $250,000. It is hard to imagine the innovations that happen at a 35 percent tax rate for your two-hundred-thousand-and-fifty-first dollar, but not at 39 percent. We're also helping creators and their heirs hold legal monopolies on innovations for much longer, extending individual copyrights to the life of the author plus 70 years, for instance. Would we lose so many great ideas if the monopoly lasted only until 15 years after the inventor's death?

At the same time, the recession has broken the back of state budgets. California is gutting its flagship system of universities. Salaries are dropping, and research money is drying up. And California is not alone. According to the Center on Budget and Policy Priorities, 43 states have cut funding for higher education, while 33 others -- plus the District of Columbia -- have hacked away at K-12. And Congress seems to have given up on the energy and climate bill that could've kick-started our green energy industry -- even as China has committed almost a trillion dollars in green energy funding over the next decade.

And let's not kid ourselves into thinking that public investments don't matter. Direct public investment was crucial for developing a national railroad system, planes and semiconductors. It was behind the Internet and the Global Positioning System. It was behind the educated populace that developed those innovations.

Nor should we be overly sanguine about the private sector's interest in innovation. The average company spends 2.6 percent of its budget on research and development, and a National Science Foundation survey found that only 9 percent of companies reported a product innovation between 2006 and 2008. "You can't be an innovative economy if only 9 percent of your companies are innovating," economist Michael Mandel wrote.

People have many incentives to innovate. They love what they're doing. They're competing with others. They want to make money. They want, as Zuckerberg does in the film, to "make something cool." And they should be richly rewarded for their successes.

But there really isn't a replacement for public investment, and good rules. You need a good education system. You need intellectual-property rules that ensure space for new ideas and uses. You need a tax code that encourages research and development spending. You need, in other words, to furnish people with an environment in which innovation can take place.

We need to think harder about whether we want to spend our limited dollars on the vision of innovation in the Facebook movie or the reality of innovation behind Facebook.

Photo credit: Paul Sakuma/Associated Press

By Ezra Klein  | October 11, 2010; 4:32 PM ET
Categories:  Articles  
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Comments

You also need people who care about more than just themselves, and the glorification of innovative individuals and denigration of the commons and social capital in favor of this hyperindividualsitic model promotes selfish and egotistical thinking.

It would seem that we are undermining the very things that made us a great country, and I don't see a bright future here.

Posted by: Mimikatz | October 11, 2010 4:46 PM | Report abuse

Thank you for explaining an important concept so clearly and powerfully.

Posted by: happycamper44 | October 11, 2010 5:48 PM | Report abuse

--*It was the commons supporting them both that really mattered.*--

There's no end of your self-confusion, is there, Klein?

The "commons" invents nothing.

The masses may find value in the genius of individuals, or they may not, but the genius is still a genius either way, and YOU are ill disposed to apprehend such matters until well after the genius's success is established.

Your blather is that of mediocrity praising its hindsight.

Posted by: msoja | October 11, 2010 6:03 PM | Report abuse

--*We need to think harder about whether we want to spend our limited dollars on the vision of innovation in the Facebook movie or the reality of innovation behind Facebook.*--

Actually, if you learned to mind your own business, and quit trying to spend other people's money for them, you might be surprised at the future levels of innovation, all happening without your nose being stuck in.

Posted by: msoja | October 11, 2010 6:09 PM | Report abuse

Wow, what a perfect illustration of Ezra's point. Ezra is a smart guy who makes a lot of interesting (if sometimes hastily collected) observations, and in the right environment -- one in which thoughtful commentary had a chance to develop and feed on itself -- this blog could spark a lot of great, interesting discussion, and provide a great deal of value for those of us who would seek it out. But the website hosting Ezra's column has seen fit to invest virtually no thought or effort into creating the kind of "commons" that would effect this, and as a result Ezra is continually making this sort of long, nuanced post that becomes nothing but a launching point for irrelevant, intellectually vacant one-note trollery.

Posted by: bjrubble | October 11, 2010 7:26 PM | Report abuse

Obama is reaching out to young voters and it feels so good -- http://dailycaller.com/2010/10/11/obama-reaching-out-to-young-voters-before-midterm-elections/

Reach, Daddy Obama! Reach! More (spending) http://www.washingtonpost.com/wp-dyn/content/article/2008/10/28/AR2008102803413.html More (anonymous spending)! Please daddy Obama! If you can't reach, we'll have to go to Daddy Podesta over at ThinkProgress!

Posted by: rmgregory | October 11, 2010 7:58 PM | Report abuse

Nassim Nicholas Taleb talks about this in "Fooled by Randomness." I think he uses the analogy of a sand castle ready to collapse, and a grain of sand is added that sets the whole system in motion and releases all of its energy. It's human nature to attribute the whole event to that one grain of sand. So in this case, Zuckerberg would be the grain of sand and all the computing, programming and Internet stuff already in place would be the castle. Without all that stuff, Zuckerberg would have merely been a grain of sand on the beach, like thousands of other grains of sand. But the tendency is to credit just him for everything, and look past everything that had to be in place for him to cause such a massive event. Obviously, my explanation is ramshackle, so if you want better I'd read the book.

Posted by: jeff01 | October 11, 2010 10:31 PM | Report abuse

Ezra,

Fantastic post, even by your standards, and extremely important.

I have a related post with what I think are valuable points, including some numbers on national R&D spending, at:

http://richardhserlin.blogspot.com/2010/10/do-we-really-prefer-winner-take-all.html

Posted by: RichardHSerlin | October 11, 2010 11:49 PM | Report abuse

Oops, sorry, the R&D figures were from the previous post, at:

http://richardhserlin.blogspot.com/2010/09/optimal-level-of-governemnt-investment.html

Posted by: RichardHSerlin | October 11, 2010 11:55 PM | Report abuse

--*[T]he website hosting Ezra's column has seen fit to invest virtually no thought or effort into creating the kind of "commons" that would effect this, and as a result Ezra is continually making this sort of long, nuanced post that becomes nothing but a launching point for irrelevant, intellectually vacant one-note trollery.*--

Yuh, it's just turrbull, turrbull, innit?

Or, in other words, you're hearing things you don't like and can't make coherent arguments against, so it's somebody else's fault.

Klein has been prattling around about "innovation" for several days now, but all I see in it is just another shifty set of worthless rationalizations sprinkled with his usual unclever naivete all as some sort of semblance of an excuse to advocate for spending more of other people's money in a manner reminiscent of his genius at seeing value in hiring workers to replace broken windows in abandoned buildings.

Oh, sure, he'll find areas of endeavor not so plainly idiotic as fixing windows nobody wants, but the overall effort amounts to the same thing, else, alá, those windows would already be fixed were not the resources of the individual who owned those windows required elsewhere according to that owners predilections as determined by himself. The same goes for roads, education, and the pursuit of innovation, but Klein, et al., are bent on stealing all the free resources that they can (thereby destroying free effort and value) under the misguided operating principle that they know best what's needed for everyone else, while anyone who really takes a look at Klein can find that he doesn't know very much, and very much doesn't seem to know how the real world works. There was an earlier post of his (now yesterday) that proclaimed "How to raise revenues" and then enumerated: "Increase economic growth," presumably offered with a straight face. And if you want to get rich, why, just earn a lot of money, I say! But that's the sort of nonsense that regularly spills out of Klein. His little appeals to "the commons" are relatively more nuanced, but ultimately as hollow, little more than the practiced gibberish that the country has been awash in for too long.

But, hey, you know, you're free to be awash in it, yourself, and I wouldn't mind it at all, if your proxies weren't circling around with their guns pointed at my head so as to encourage me to cough up for your jelly-headed schemes.

Posted by: msoja | October 12, 2010 12:58 AM | Report abuse

I think there's a misunderstanding here among some as to what 'the commons' means.

Let's say you have the potential to have a useful and innovative idea, something potentially worth billions of dollars in created value.

The light bulb, say.

Now, you can only have that idea if you have available to you information critical to the idea. Prior work on the properties of various gases that you need to encase the filament in. The conductance and resistance of various materials that might be made into filaments. The properties of direct and alternating current.

If that common information - the fruit of someone else's research, knowledge, work - isn't available to you (say because you have the misfortune of being born in the year 900) then you will never invent the light bulb. The ingredients for the innovation just aren't there.

That's what Ezra is talking about when he's talking about the commons. The more we foster research and innovation and bring the fruits of that innovation into common knowledge, the more discoveries we make possible. It's something we can and should do with public policy, and it proved its worth in the incredible technological leaps of the cold war decades where fear of falling behind the soviets kept us investing hard in these things. It isn't in our interest to get lazy now just because the cold war is over.

That's all this policy recommendation is about. It's not some bolshevik plot to come for people's wealth, and shame on anyone who portrays it that way; American wealth is built on innovation, innovation that was fostered by government policy that encouraged and accelerated it.

Posted by: DPO- | October 12, 2010 1:44 AM | Report abuse

It's funny to think of "msoja" sending every one of his/her frustrated diatribes over a network that wouldn't exist without obscene amounts of public spending. It makes the "Who knows how the world REALLY works?" game kind of silly doesn't it?

Posted by: east33rd | October 12, 2010 3:24 AM | Report abuse

All generalizations fail.

The argument you make here is particularly compelling for something like Facebook, which is simply an application on top of mountain of existing technology. Google, java, and something like Lotus 123 come to mind.

But there are different, more independent entrpreneurs out there one can use as an example. How about Edison? Going back in time some, what about Galileo? Yes, an intellectual, technological, and educational "infrastructure" must exist to foster the best innovation. But true entrepreneurs, true geniuses, extract innovation from the society they are given, not necessarily waiting for society to develop into the perfect petri dish.

Posted by: Curmudgeon10 | October 12, 2010 6:48 AM | Report abuse

I have a nominee for the next Facebook: Netbrawl.com

Posted by: zvelf | October 12, 2010 7:46 AM | Report abuse

Patents (technical innovation) expiring sooner would have a much more beneficial effect on the public than copyrights (art, literature, and music) going into the public domain after life plus 70.

Posted by: laurelrest | October 12, 2010 8:20 AM | Report abuse

Patents (technical innovation) expiring sooner would have a much more beneficial effect on the public than copyrights (art, literature, and music) going into the public domain after life plus 70.

Posted by: laurelrest | October 12, 2010 8:21 AM | Report abuse

Curmudgeon10: It looks to me like your reference to Galileo pretty well makes one of Ezra's secondary points, that the promise of untold personal riches is not a necessary driver for innovation. Another proof is the fact that nearly all patents are filed on behalf of corporations whose employees developed the innovations in exchange for a nice, steady, upper-middle class salary. The majority of innovators in established business do not have the option of turning their creative ideas into billions of dollars--they are contractually forbidden to do so by their employers.

Ezra, I don't get why you say "And they should be richly rewarded for their successes." Rewarded, sure thing. But richly rewarded? Why? Just because the structure of a market system does reward some richly has nothing at all to do with what they deserve, what they "should" receive. How could the creative innovators who attempted to save health care reform from complete death-by-compromise with the idea of a public option be richly rewarded for their ideas? How could Peter Barnes be richly rewarded for his ingenious and socially beneficial cap-and-dividend concept? Both of those ideas would improve the world more than Facebook does. Given that only certain kinds of innovations can be marketed into billions of dollars in value, yet other kinds of innovations can have equal or greater value in increasing quality of life, I'd think you could make a good argument that the system as it is irrationally biases innovation toward the marketable variety. In which case, overly rich rewards are actually inhibiting the efficiency of our political economy by promoting market-oriented innovations of lesser value over commons-oriented innovations of greater value.

Posted by: JonathanTE | October 12, 2010 9:05 AM | Report abuse

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Posted by: budonging | October 12, 2010 9:57 AM | Report abuse

--*The more we foster research and innovation and bring the fruits of that innovation into common knowledge, the more discoveries we make possible.*--

Unfortunately, your "we" is not the "we" of free individuals seeking their own values at their own pace, but is instead the "we" of a select few who intend to impose their own values on the rest of us via state force, in service to their own values while muttering about the ostensible benefits. History is rife with atrocities committed by those intent on bettering their fellows by force. Economics is rife with examples of the failures of central planning. And all Klein's dancing around the cannibal pot with the brightly colored totems of modern pop-think taped to his head doesn't alter the hard landscape: At the root of the force he advocates is failure. The "education system" he speaks of *is* a disgrace and a travesty, enduring more for its *political* aspects than for its service to the concept of education. The health care system is well on its way to becoming the exact same sort of disgrace and travesty, said qualities "fostered", as you put it, by the same ostensibly good intentions that Klein wants so badly to bring us more of. Does Klein think that banning incandescent light bulbs fosters innovation? How about an FDA approval process that takes years and costs hundreds of millions? How about an FTC that takes three years to stick its nose into a plan by one grocery chain to buy another, and then disposes of some of the assets arbitrarily? How about an EPA gearing up to put U.S. cement manufacturers out of business in the name of environmental protection, with the affected jobs expected to pop back up in China in cement plants less high tech, and more polluting, than the soon to be gone U.S. ones? One can go on and on and on. Where is the innovation, or fostering of that which is alleged breeds innovation? It isn't there. Government can only steal. It can steal either your money or your freedom, and the U.S. government is now actively stealing both, and innovation will only be among the first casualties.

Posted by: msoja | October 12, 2010 11:27 AM | Report abuse

The notion of an "intellectual commons" doesn't hold up under scrutiny. Zuckerberg didn't pick up his knowledge out of a commons; he paid for his education.

It's just like all of the other inputs that went into the making of Facebook. He paid for his computers and their operating system, as well as his office space and furniture. None of these items came out of a commons.

Posted by: tomtildrum | October 12, 2010 12:35 PM | Report abuse

Ezra,

Great article. It's funny to read the comments of those who oppose investing in education and roads. You offer a very compelling argument with regards to innovation. I don't think anyone can make a compelling argument that significantly more innovations would occur if taxes stayed at their current rate (9% of companies innovate currently). Investing in the commons, to increase the rate of potential future innovations would certainly make up the difference and then some.

Posted by: GuiltFreeDrinks | October 12, 2010 1:23 PM | Report abuse

I've been thinking a lot about Facebook as I just saw 'the social network' last night, and I appreciate Ezra Klein connecting the dots between the story of its invention and the push-pull arguments between personal genius, the glorification of individualism we celebrate in America, and the other end of the spectrum--a systemic approach to work, power, and innovation that seemed to be gaining cache in the early 1990s with a focus on teamwork, skunkworks, and techniques such as 'scrum' methodology which impart joint decision-making to many stakeholders in an organized process to solve engineering and business challenges.

What I've encountered in my work experience is that most problems are too big for just one person to solve. You need a team of folks. And if you notice--even Zuckerberg, who had the initial spark of the idea he 'borrowed' and enhanced from the Winklevi--even he had his team of programmers working on enhancements, his partners, and the venture capitalists. I doubt anyone brings an important product completely to fruition all on their own.

Have we gone overboard with our value on individualism? Is it hurting our institutions? Take education reform. We are looking to philanthropy to solve our public school system challenges--hoping elites such as Bill Gates, Governor Christie, and Mark Zuckerberg(!) will come to the rescue with their wealth and their ability to strike deals. But I think a more lasting solution is to strengthen the existing institutions, and their inter-connections--the local associations, the state districts, the interfaces with community partners to support extended learning, the teachers, parents and students themselves.

Cut the reliance on reform efforts that are tied to the political cycle of 3-4 years--the deadline--with the election, that we're up against right now. That's a phony and self-defeating constraint. Our economic problems are also going to take more time to solve. Why have we fooled ourselves that somehow the results of bad habits we've indulged in over 10 years (risky mortgages, non-existent foreclosure documents, credit default swaps, etc) are somehow going to be resolved in two years?

Posted by: moiraeve1 | October 12, 2010 2:46 PM | Report abuse

I've been thinking a lot about Facebook as I just saw 'the social network' last night, and I appreciate Ezra Klein connecting the dots between the story of its invention and the push-pull arguments between personal genius, the glorification of individualism we celebrate in America, and the other end of the spectrum--a systemic approach to work, power, and innovation that seemed to be gaining cache in the early 1990s with a focus on teamwork, skunkworks, and techniques such as 'scrum' methodology which impart joint decision-making to many stakeholders in an organized process to solve engineering and business challenges.

What I've encountered in my work experience is that most problems are too big for just one person to solve. You need a team of folks. And if you notice--even Zuckerberg, who had the initial spark of the idea he 'borrowed' and enhanced from the Winklevi--even he had his team of programmers working on enhancements, his partners, and the venture capitalists. I doubt anyone brings an important product completely to fruition all on their own.

Have we gone overboard with our value on individualism? Is it hurting our institutions? Take education reform. We are looking to philanthropy to solve our public school system challenges--hoping elites such as Bill Gates, Governor Christie, and Mark Zuckerberg(!) will come to the rescue with their wealth and their ability to strike deals. But I think a more lasting solution is to strengthen the existing institutions, and their inter-connections--the local associations, the state districts, the interfaces with community partners to support extended learning, the teachers, parents and students themselves.

Cut the reliance on reform efforts that are tied to the political cycle of 3-4 years--the deadline--with the election, that we're up against right now. That's a phony and self-defeating constraint. Our economic problems are also going to take more time to solve. Why have we fooled ourselves that somehow the results of bad habits we've indulged in over 10 years (risky mortgages, non-existent foreclosure documents, credit default swaps, etc) are somehow going to be resolved in two years?

Posted by: moiraeve1 | October 12, 2010 2:48 PM | Report abuse

I have no general objection to "investing" in education or roads, for that matter. My objection is to equate more public expense with improved outcomes. You can find school districts all over the country who are spending tons of money per student with poor outcomes. Come to think of it, you can find one of those school systems right here.

Also, there is a difference between "innovators" and "entrepreneurs." Innovation takes place everywhere, all the time in very small ways and occasionally in very big ways. That some of it --- or even most of it --- takes place in corporations where the corporation is granted the patent is a fact of life. Should the corporation fail to reward its innovators, one finds them quitting and becoming entrepreneurs, ready to risk almost anything due to confidence in their innovative idea.

Relatively low success rate of true entrepreneurs tells you why most "innovators" choose to remain as employed persons doing work for hire.

Posted by: Curmudgeon10 | October 12, 2010 2:48 PM | Report abuse

Where to find the next Facebook? Same place that the first Facebook founder and the first Microsoft founder came from: Harvard.

Posted by: blasmaic | October 12, 2010 2:51 PM | Report abuse

Oh come now, 'government can only steal'? Building roads is stealing? Hospitals? Sewer systems? Develop an analysis that isn't blinded by your prejudices and you'll earn some respect.

As for why most potential innovators choose to work for a salary, it's because they starve if they go without one. The sad truth of all IP is that people don't have access to the money or connections needed to make innovation possible, or to capitalize on it when it does. And I say that as someone who works in IP law. There are reasons that corporations own virtually all patents; wealth inequality has grown so much over the decades that individual engineers and doctors just don't have the luxury of time and money to innovate, safe for the tiny number lucky enough to inherit wealth. Major corporations and governments are the only entities with that kind of wealth any more.

Posted by: DPO- | October 13, 2010 5:47 AM | Report abuse

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