News outlets and blogosphere posters have been abuzz with comments and analysis on portions of Obama's recent speech in which he asserts something Elizabeth Warren did mere months ago in her bid to win election of the Massachusetts senate seat currently occupied by Scott Brown. It has to do with what it takes for a business to succeed, and because of the polarized nature of the political atmosphere, the speech portions of both have taken on such an ideologically charged air, that I feel the subject is getting thought through askance. There are a few important aspects I feel are getting lost in the war of implications between partisans accusing each other of missing the other's point, which I hope to draw out.
First the relevant speech portions:
Elizabeth Warren, Sept 2011: http://www.youtube.com/watch?v=XcFDF87-SdQ
and President Obama, Jul 2012: http://www.theblaze.com/stories/president-obama-if-youve-got-a-business-you-didnt-build-that-somebody-else-made-that-happen/
With full text of the latter here: http://www.whitehouse.gov/the-press-office/2012/07/13/remarks-president-campaign-event-roanoke-virginia
In both cases, the Democrats involved are invoking the fact that all success is necessarily built on previous success. Obama and Warren reference roads which are a public good on which employees get to work, on which goods are shipped to market, such that it is impossible for any individual to say, in effect, I did this myself. The principle also applies to teachers, whose salaries are by and large paid by government, to whom entrepreneurs owe their education.
Of course, the Fox news, Glenn Beck, Rush Limbaugh reaction has been to quickly point out the fallacious implication that without government programs educating people, and providing roads, for example, success would be impossible. Of course the invention of the car preceded the need for the roads, such that government is always reactionary, and not responsible for entrepreneurial success, except in the rare cases where their legitimate purpose has the side-effect of producing new marketable technologies, such as microwave ovens or the internet. Of course the success of a given entrepreneur is not predicted by the presence of any given teacher or any given road, since successes and failures BOTH occur in conjunction with the use of both resources. Not every student gets an A, even in the classroom of the most effective and inspiring teacher. Of course it's worth pouncing on the lunacy of the proposed solution the Democrats put forward which is that we should compel successful business people to pay more into the development of more governmental programs which would benefit more people. Since government doesn't create wealth, and since it performs even its essential functions with such inefficiency (because it has no competition keeping it honest), it only siphons off resources others could use more effectively, causing a huge loss in opportunity cost for any business.
But I think these self-admitted ideologues are missing some of the danger of such rhetoric, and aren't opening their minds to its wider implications in some key ways--ways which guarantee the likes of Warren and Obama continued support from those who can't see the subtle trickery at play in their words.
Both Obama and Warren hold out success as laudable, but then move to force an admission from the successful that their success is owed to the efforts of many others. The force exerted in calling for this admission is designed to answer a false premise: that business people are so inherently greedy and so inextricably selfish that they would never willingly demonstrate gratitude at all. This is the first premise that should be rejected outright that few are doing. Entrepreneurs ALL understand that wealth comes from the action they take on resources, the creation of which they were not responsible for.
Let's take a more or less concrete example: The oil that a tycoon taps has been laying under the ground for millenia, and his action of liberating it from the ground can become a fuel or a plastic for many others to enjoy for the price of the extraction plus a tiny markup for profit. He has converted the oil into something valuable for others, who will want to trade something valuable of their own in exchange for it, because of his effort. And of course not his effort alone, either, he knows there are contractors involved, laborers to be paid, transporters to be hired, and especially scientists to verify such extraction causes no lasting damage to the local environment's other resources. He must enter into contracts with each of them to pay them well for their services, so that everyone whose labor is directly involved gets remunerated fairly. By recognizing the cooperative nature of the enterprise, the entrepreneur negotiates for everyone to benefit from each exchange along the chain of production precisely because he IS full of gratitude, and demonstrates such by paying employees, contractors, vendors, etc. what he owes them. In a very direct way, capitalism codifies gratitude as an automatic consequence of engaging in an exchange, because both parties get something they value out of each exchange.
Now this tycoon also relies on mail, roads, policemen, teachers and a host of other legitimately public resources along the way as well, for which he pays sales taxes on everything he has to buy in order to extract the oil, for which he pays income taxes on every dollar of salary he draws for his own time, and for which his business organization pays corporate taxes. The latter, obviously, actually gets paid by the consumers because it's just factored into the price of the oil he offers, such that corporate taxes, properly understood, are really nothing more than immoral hidden taxes on consumers and should be abolished. Be that as it may, there's no reason between sales taxes and income taxes that the government shouldn't have such a surplus for its required constitutional functions AND THEN still have so much for a host of inefficient, costly, cumbersome, almost always counterproductive and unconstitutional extras that it should never need to ask for more. But even if it does, since the public resources are public, why is it that everyone shouldn't have an equal burden in providing them? Thinking through it this way puts the greed and selfishness, as well as the unfairness, much more on the part of government, and much more on the part of the politicians who attempt to skew the tax code to make some more responsible for public resources than others. This is the second false premise that isn't getting enough play.
Finally, there's the point that without our tycoon owning the resource, without him taking the risk of acting upon it, without him incurring the expense of exploiting it, it remains a black goo useless and unknown to anyone living hundred of feet on top of it. Under this realization--that it takes an owner willing to risk loss to create wealth--the factors that the public resources provide become ultimately irrelevant. Since the government can't decide for the tycoon what to do with his own resources (although it CAN restrict them--therefore its only effect can be negative in terms of wealth production), there really IS a sense in which that tycoon is solely to credit for his own success. I suppose we could illustrate the fallacy of the opposite argument by asking them to continue it down further along the path: the tycoon had teachers and roads, yes, but he also had food to build up his body, and in fact, that body is composed of cells, which in turn have atoms in them, some of which came into being only because of a violent supernova millions of light-years away, therefore he really owes a distant sun his entire existence. There, see? It's the same ridiculousness we find in all deterministic philosophies undone by Rousseau hundreds of years ago: yes, I know my brain's impulses send signals to my muscles to move my arms, but no one but me, and the will which is in me, can cause those impulses to fire in my voluntary muscles. We are what we make of ourselves. Ultimately.
But Obama also added a little agitator rhetoric to his speech which I find dangerous. He talked about successful people who credit their success to their own hard work or to their own intelligence, claiming that there were a lot of smart people out there and a lot of hard working people out there. This is where the adoring crowd begins not to hear the truth, but the flattery that THEY are the hardworking ones and that THEY are the smart ones, and that their economic woes in such times of high unemployment and anemic growth in the private sector are all NOT due to their own efforts or talents, but rather are the effect of chance or, worse, the obstruction posed by the greedy entrepreneurs who DID succeed. When you allow yourself to be convinced that success happens because of chance, you give up working and justify relying on others for your support. When you allow yourself to be convinced that your application and personal investment gives you no greater chance at success than someone of inferior talent or lesser effort, then it becomes logical to you to expect less of yourself, and you can even become embittered toward others. You become blind to the opportunities which surround you, you become adverse to risk, you ultimately you become lazy and dependent. This is the true danger of Warren and Obama-type thinking. It whips people up into believing their freedom is an illusion, and that they should give up their responsibility to the "experts". It titillates them right where it sticks: in their pride. It flatters them with vanity, making them think that their own failure to risk, to engage, to grow is the fault of something outside their control. It teaches them to give up doing what it takes to succeed, and instead direct their energies toward attack of institutions, enterprises, and systems that promote freedom and responsibility. It asks them to accept more coercion from politicians in the false name of their freedom, and misdirects frustration to where it can't solve the real problem.
It's anti-American.
True gratitude is like true charity. It can't be coerced anyway. When you don't need to, but you still say thank you, that's when it's meaningful and blesses both the giver and the receiver. If you try to coerce it, something perverted comes out: the giver loses his satisfaction, and the receiver doesn't end up with the genuine article. You end up with the opposite of what you intended: ill-will.
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