TribLIVE

| Opinion/The Review


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Crowding out private-sector success

Daily Photo Galleries

By Donald J. Boudreeaux
Tuesday, Aug. 14, 2012, 8:56 p.m.
 

There's a kernel of truth in President Obama's now-infamous “you didn't build that” insult to productive Americans. It's this: Every successful business — every successful life — in modern society requires the help of millions of other people. Each of us depends daily on butchers, brewers, bakers, light-bulb makers — workers and suppliers of countless sorts.

The thrust of Mr. Obama's remark, however, is unquestionably off-target. Even if we grant that some of what government supplies is worthwhile — that is, government helps each of us to better pursue our life's goals, including helping those of us who are entrepreneurs to build successful businesses — it doesn't follow that government occupies a uniquely important place in society.

Sure, Wal-Mart uses government-built highways to speed its inventories to its stores. But the fact that Wal-Mart would be unable to operate without the highway system doesn't make those highways a uniquely special input to which Wal-Mart owes all, or even much, of its success.

Wal-Mart would be equally unable to operate without farmers to grow food to feed its truck drivers — or without textile producers to supply clothes for those drivers — or without oil companies to fuel its fleet of trucks.

Would Obama therefore conclude that Wal-Mart owes some special, open-ended obligation to oil companies? Would he insist that, if oil companies now squander their revenues, Wal-Mart and other retailers are morally compelled to chip in to help oil companies get back into the black?

Highly doubtful. Yet Obama's plea that successful business people now be forced to pay higher taxes as a kind of royalty payment for government-supplied infrastructure is no different than if he would plead to force successful business people to bail out inefficient oil companies.

History speaks with crystal clarity, saying that, if property rights are secure and culture is friendly to commerce, people are more prosperous as government's role is more limited. History also teaches that roads, bridges and many other species of infrastructure can be — because they in fact often have been — supplied by private enterprise.

Among the kinds of infrastructure that have, in fact, been supplied successfully by private businesses are city streets, highways, sewage systems, formal education, policing, money and commercial law. Government provision of such infrastructure, therefore, cannot be read as evidence that government's role on this front is necessary.

If government failed to build highways to connect, say, Atlanta to Pittsburgh, private firms almost certainly would. (It's easy to collect tolls from drivers who use highways.) And likewise for nearly any other pair of cities in America. So in what way is any actual, government-built highway necessary for any private entrepreneur's economic success? None — if (as is likely) private enterprise would have done what government instead did by crowding out private efforts.

Moreover, if — as is likely again — privately built highways would be of higher quality and cost less to build and maintain than government highways, then there is even less merit to Obama's “you didn't build that” sneer. If privately built highways would be superior to government-built highways, then government's crowding out of private efforts that otherwise would have built highways imposes a cost on the many businesses (and consumers) that rely upon highways for their economic success.

Far from being grateful to government for its highways, entrepreneurs should demand reimbursement from officials who led the government's highway-building efforts.

Donald J. Boudreaux is a professor of economics at George Mason University in Fairfax, Va. His column appears twice monthly.

 

 
 


Show commenting policy

Most-Read Stories

  1. Steelers notebook: Defense has a retro feel
  2. In Steelers-Saints game, all eyes on Brown-Lewis matchup
  3. Thousands attend Vandergrift Light-Up Night, Christmas parade
  4. Salvation Army in W.Pa. uses social media campaign
  5. Obama’s immigration actions neglect business pleas
  6. Trib real estate writer Spatter ‘worked right to the end’
  7. Gorman: Are mergers the future of Western Pa. football?
  8. Cash-strapped Pittsburgh Public Schools to sponsor holiday parade
  9. Auto technology gives mobile computing a new meaning
  10. Hempfield Area High School senior Richason creates Before I Die wall in Greensburg
  11. Hunting creates strong bonds, traditions
Subscribe today! Click here for our subscription offers.