Government didn't build that
A student recently asked what I thought of President Obama telling rich people “you didn't build that.” I don't think much of it.
It's true that Mr. Obama was talking not about private businesses and factories but about the infrastructure, such as roads and bridges, that increases the profitability of private businesses and factories. It's also true that the typical entrepreneur doesn't build and operate the infrastructure he relies upon to get his goods to market, to educate his workers, to maintain law and order, etc. (I say “typical entrepreneur” because there are exceptions, such as Dan Spivey. With private money, he laid a fiber-optic cable from Chicago to New Jersey to increase the speed at which his financial firm in New Jersey received information on the prices of assets in Chicago. Mr. Spivey did build that!)
But these truths don't support the conclusion that Obama and other progressives draw from them. That false conclusion is that successful business people don't deserve all of their profits.
Fact is, a great deal of infrastructure is built privately. FedEx, for example, is infrastructure: It's a combination of vehicles, warehouses, organizational knowledge and other specific capital that businesses and households rely upon to transport freight and packages. Without FedEx, many businesses would be less profitable or even nonexistent. Some online retailers, for example, might be unable to compete successfully against brick-and-mortar stores.
Of course, FedEx isn't a road or a bridge. But so what? FedEx, no less than a road or bridge, enhances our abilities to pursue our private goals. When you start to reflect on what is infrastructure, you see that infrastructure isn't only those things supplied by government.
And you then also see that our world is filled with lots of privately built infrastructure: FedEx, privately built oil and gas pipelines, private schools, private insurance companies, privately built skyscrapers. This list goes on and on.
All of these privately built and operated pieces of infrastructure are financed by the voluntary payments of the businesses and households that use them. When Amazon.com pays FedEx $11 to deliver a book to my home, both Amazon and FedEx gain. Each company gets value in exchange. And no one owes the other anything more.
FedEx has no grounds for lecturing Amazon founder and CEO Jeff Bezos that, because his company depends on FedEx, he owes FedEx more than what he already paid for FedEx's service. The fact that Bezos didn't build FedEx, yet relies upon FedEx for his company's success, does not mean that Bezos owes his success to FedEx.
FedEx supplies an important input (package delivery) to Amazon. Yet even if it's true that without this input, Amazon would go bankrupt, FedEx did not build Amazon. Jeff Bezos did. Amazon is the product of Bezos' entrepreneurial vision. Had Bezos been less visionary, less willing to take risks or more lazy, Amazon would never have been created or would have failed. Nothing that FedEx does would have changed that.
The same is true for the government that builds roads and bridges. These structures might be very important, but their existence does not mean that government is responsible for business people's successes.
Donald J. Boudreaux is a professor of economics and Getchell Chair at George Mason University in Fairfax, Va. His column appears twice monthly.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Penguins call up prized defensive prospect Pouliot
- Pittsburgh police break up customer fights over Air Jordan 11 shoes
- Undersized Beachum quietly excels at 1 of game’s pivotal positions
- Steelers notebook: Polamalu, Taylor unlikely to play, Harrison ‘ready’
- Michigan State defensive coordinator a Pitt coaching candidate
- Penguins’ defensive depth proves valuable
- Pitt: Football coach hire comes 1st, athletic director 2nd
- Hotel building boom sweeps Pittsburgh region
- Pirates sign Corey Hart to 1-year deal
- Pittsburgh adjusting to new bicycle lane, ‘stop boxes’
- Pitt’s acting athletic director is deft facilitator