Success and society
By Donald J. Boudreaux
Published: Tuesday, July 24, 2012, 8:59 p.m.
Updated: Tuesday, February 19, 2013
President Obama proclaims that any man or woman who builds a successful business doesn't really do so. That entrepreneur, therefore, really shouldn't take much credit for — or necessarily keep most of the monetary rewards from — his or her success.
As the president sees matters, any such success is caused overwhelmingly by others: workers, the teachers who schooled the workers, the people who built the roads over which the business' products travel to market, etc. The list of all the many people who make any business' success possible is long.
Mr. Obama's confusion runs deep — so deep that I'll devote several columns to exploring that confusion. And exploring it is vital, as this confusion over the role of the individual in a society of millions of individuals lies at the heart of so many political disputes.
Let's begin by noting that no serious person denies that success for any individual in a market economy requires the ongoing efforts of countless other people. Indeed, economists have long emphasized that one of the distinguishing features of a free market is its capacity to inspire millions of people to cooperate successfully with each other.
Explaining how this cooperation occurs, why it succeeds and how it grows more complex and (hence) more productive is the very heart and soul of economics — and especially of economics as done by market-oriented scholars such as F.A. Hayek, Milton Friedman, Thomas Sowell and my colleague Walter Williams.
Here's the father of economics, Adam Smith, writing in 1776: “Observe the accommodation of the most common artificer or day labourer in a civilized and thriving country, and you will perceive that the number of people of whose industry a part, though but a small part, has been employed in procuring him this accommodation, exceeds all computation. The woollen coat, for example, which covers the day labourer, as coarse and rough as it may appear, is the produce of the joint labour of a great multitude of workmen. The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production. How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! How much commerce and navigation in particular, how many ship-builders, sailors, sail-makers, rope-makers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world!”
Economists have understood from the start that a prosperous society is one in which each person — again to quote Smith — “has almost constant occasion for the help of his brethren.”
So we need no tutoring from Mr. Obama about the fact that each of us daily depends on many other people for our food, clothing, shelter, medical care and nearly everything else that we consume. The fact that the president presumes that sensible people are ignorant of this reality speaks volumes about his assessment of our intelligence.
We are neither children nor cartoonish business executives of the sort who populate Hollywood movies.
Donald J. Boudreaux is a professor of economics at George Mason University in Fairfax, Va. His column appears twice monthly.
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George, Nice try with the spin, but even granting that this is what Obama meant by his comment, the logic is lacking. If business owners didn't build the roads and the infrastructure, who did? Government cannot do anything. The government is merely the aggregation of the resources of society put to use for the common good. If "government" built the roads, that simply means that society as a whole, including the very business owner that Mr Obama claims did not build it, actually were the ones who built it. Further, to use logic, the statement that "If you built a business, you didn't build the infrastructure" as a universal statement is almost certainly demonstrably false in a literal sense. Consider the contrapositive of that statement, which is logically equivalent to it, namely "If you built the infrastructure, then you didn't build a business." Interpreted as you do, Obama is really stating that it's impossible to build a successful business if you've ever had a job building roads or other infrastructure! Do you really believe that out of all the successful business owners, precisely ZERO of them have had jobs that involved building infrastructure? Just remember, most business owners had other jobs before starting their business; it seems likely that some of them might have built roads for a living.
Submitted by: George on Thursday, July 26, 2012
Professor, The very first sentence of your first essay is wrong. You state, " President Obama proclaims that any man or woman who builds a successful business doesn’t really do so." He never said that. He said of the bridges and roads and internet you used to build your business that you did not build THOSE. <a href="http://www.youtube.com/watch?v=YKjPI6no5ng">President Obama's speech in context. </a>. We have seen huge companies pay no net taxes in some years and very wealthy people pay far less in percentage terms of their income as taxes. The president is merely pointing out that we've been underpaying compared to the past and that taxes are the price you pay for a civilized society. That's nothing radical. It's common sense. Our current effective tax rates are well below what they've been in the past. Putting the top rate up a few per cent when those on top have been gaining an ever greater share of wealth and income while public debt has increased is not a claim to all or even a majority of their success.