to build a business. That seems to be what Barack Obama thinks. Actually, the Republicans are making a little more out of his statement than they really should. He didn’t precisely say, “you didn’t build your business”. What he did say is somewhat intriguing. Here is part of President Obama’s statement which puts his remarks in a fuller context.
There are a lot of wealthy, successful Americans who agree with me, because they want to give something back. They know they didn’t -look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something – there are a whole bunch of hardworking people out there.
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business. you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.
In an important sense, President Obama is right. No great enterprise is ever accomplished by one person working entirely by himself. Thomas Edison invented the light bulb, but he hardly built his laboratory all by himself. He did not think up the idea all by himself but he built on the work of others who had worked before him. Albert Einstein did not just write e=mc² on a chalkboard one day. He built on the work that physicists had been doing for the past decade. No one does anything truly by themselves.
And yet, Obama is wrong too, and the way that he is wrong perhaps says something about the way he views the world. We justly honor people like Edison and Einstein because although they built on the work of others, they put that work together in new ways to create something altogether new and wonderful. Without such innovators, the work of others that they used would not have been used to its full potential.
A business person, entrepeneur, or capitalist also makes use of the work of others, just as Obama has said. What he did not say is that the capitalist makes use of the existing work, or investments, or factors of production, such as labor, land, and capital to use economics jargon to make something new and wonderful, just as the inventor or scientist does. In fact, the capitalist, by bringing together the labor, capital and resources to make a business is the one indispensible person in making any sort of progress. Without the capitalist, there are no factories, no trade, no goods and services being exchanged for the good of everyone.
This understanding of capitalists seems to be directly opposite Marx’s understanding. If I understand him correctly, he believed that capitalists were a sort of parasite that leached off what the workers produced. Instead of profit being the just reward of the ones who took the risks and put everything together, he believed that it was what was stolen from those who did all the real work. I do not wish to speculate too much on the President’s inner thoughts, but I strongly suspect that this his close to his understanding of things as well.
Now, note, I am not saying that Obama is a Communist or a Marxist. I am not sure that he would identify himself as a Marxist in any sort of formal sense. Nevertheless, such ideas were and are very much a part of the academic environment in which he lived before turning to politics. With his background, it would be surprising if Obama did not fail to appreciate fully the importance of private enterprise.
He is wrong in another sense too. Firstly, I am not sure he is aware of the fact that government has no actual resources of its own. Everything he wants to give credit to the government for accomplishing, was ultimately paid for with taxes from the private sector. Sometimes, it is a good idea to take money for the common good, roads and armies come to mind as examples. Other times it is a terrible idea, think Solyndra, or stimulus packages.
Secondly, look closely at his statement. Notice that he seems to believe that collective action is only possible through the state. Consider his example of fire fighting. I can imaging fighting fires without a formal government organization. What about a volunteer fire company? How about a private fire fighting service that the people in a town pay a fee for? These examples may not work very well, but I want to illustrate that it is possible for people to work together without the federal government running things. It is possible to help the disadvantaged through private charities. Businesses are usually very good examples of people working together voluntarily.
It is this particular blind spot that I think Obama’s statement really reveals. This idea that nothing should be done unless government, preferably at the highest levels, is leading the way. I think that Obama simply does not see the importance of the voluntary associations that Alexis de Tocqueville saw as so essential to American success, and so misunderstands the factors that have made America what it is. This is the real problem with this president.
I am glad to see that I am not the only one who has described Obama’s economic views as essentially Marxist.