President Obama’s “you didn’t build that speech” certainly created a firestorm. And it still continues to rage. Republicans, sensing a golden opportunity to prop up their own tepid presidential hopeful, seized the quote and immediately began using it as proof of Obama’s socialistic worldview.
Of course, if you take the president’s words at face value, he speaks the truth. Nobody created anything on their own. We live in an interconnected society. Businesses depend on others to supply parts and labor, to buy their products, and yes, to build infrastructure.
But what of his underlying message?
Obama wants to make the case that successful people somehow “owe” something to society at large. Implicit in his remarks, we find the idea that successful, rich Americans use “public resources,” such as roads and education, and this creates the justification for levying higher tax rates on the fruits of their labor. After all, the “public” helped them “build that.”
Obama’s remarks parallel those made by Massachusetts Democratic Senate candidate Elizabeth Warren last year.
“You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.
“Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
Obama and Warren rest their idea on a fallacious premise.
The president, and like-minded big government statists, point to the existence of the system to justify the existence of the system. “See, look,” they proclaim, pointing at the interstate system and the Internet. “Government did that. And without government doing these wonderful things, Joe-businessman wouldn’t have any way to get his products to market.”
But note the underlying premise. If Uncle Sam didn’t build a highway system, we would all just sit inside our huts and never travel any further than our little legs could carry us. And if the government hadn’t “invented the Internet,” I would be posting this article on a telephone pole with staples.
We simply can’t presume that if the government hadn’t done these things, they would have never gotten done. In fact, if we look at the general level of efficiency demonstrated by most government entities, I think we could more safely assume these things probably would have gotten done better, quicker and cheaper without government.
And we will never know what innovations might have come about had the government not taken resources out of the private sector and forced them into channels deemed most appropriate by a bunch of bureaucrats. While statists praise government for building some highways, they ignore the fact that perhaps those resources could have been used to create an even more efficient transportation system.
And therein lies the crux of the matter. Government does not create wealth on its own. In order for it to do anything, it must first take resources from you and I. To say entrepreneurs somehow owe more because they utilized public services they were already forced to pay for is ludicrous.
Warren talks about a businesswoman utilizing “roads the rest of us paid for.” Excuse me. The businesswoman helped pay for those roads too. And she had no choice in the matter. Resources she might have utilized to create a better way to move her goods were tied up in creating those government roads. Warren and Obama act like these people get some kind of free pass. Far from it! Every action the government takes rides on the backs of productive individuals.
Obama and Warren try to define all of this government intervention as a benevolent gift. Frederic Bastiat called it t parasitic.
Whence does [the State] draw those resources that it is urged to dispense by way of benefits to individuals? Is it not from the individuals themselves? How, then, can these resources be increased by passing through the hands of a parasitic and voracious intermediary?
The government must take before it can do anything. And when it takes, it does with its spoils what it pleases, without regard to normal economic factors such as supply and demand. Policy makers say we must have “green energy.” So Congress takes resources from the productive and forces them into schemes concocted by the bureaucrats. Never mind if anybody actually wants the policies implemented. Never mind if they will even work. The government has no constraints on what it does, and no consequences for failure, so it just takes and does. If its policy fails, it will simply create a new program to solve the problem it created. If the scheme turns out even modestly successful, policy makers will swear we could have never survived without it. And when it reaches the point it can no longer take enough from the productive to make good on its promises, it borrows from future producers.
Bastiat grasped in 1848 concepts that elude most Americans today.
We all therefore, put in our claim, under some pretext or other, and apply to Government. We say to it, “I am dissatisfied at the proportion between my labor and my enjoyments. I should like, for the sake of restoring the desired equilibrium, to take a part of the possessions of others. But this would be dangerous. Could not you facilitate the thing for me? Could you not find me a good place? or check the industry of my competitors? or, perhaps, lend me gratuitously some capital which, you may take from its possessor? Could you not bring up my children at the public expense? or grant me some prizes? or secure me a competence when I have attained my fiftieth year? By this mean I shall gain my end with an easy conscience, for the law will have acted for me, and I shall have all the advantages of plunder, without its risk or its disgrace!”
As it is certain, on the one hand, that we are all making some similar request to the Government; and as, on the other, it is proved that Government cannot satisfy one party without adding to the labor of the others, until I can obtain another definition of the word Government I feel authorized to give it my own. Who knows but it may obtain the prize? Here it is:
“Government is the great fiction through which everybody endeavors to live at the expense of everybody else.”
For now, as formerly, every one is, more or less, for profiting by the labors of others.
I’m not arguing government has no role at all. On the other hand, we simply cannot assume that government reaching into nearly every facet of our lives brought about all that is good in America, or that nobody could possibly find success without government paving the way. Anybody who understands basic economic principles understands that prosperity generally comes about despite the interference of government, not because of it.
In her eerily prophetic novel Atlas Shrugged, Ayn Rand gives us a glimpse of what the world will become if we continue to insist government can give us everything we want or need on the backs of the “rich.” She understood a concept apparently lost on the Obamas and Warrens of the world.
Money is made before it can be looted or mooched – made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.
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