President Obama created quite the stir last weekend in a speech at a fire station in Roanoke, Virginia. In the speech (full text available here), he made some remarks that touched a nerve of several hot-button issues of business, tax rates of the wealthy, and government spending on programs and infrastructure. “If you’ve got a business,” said Obama, “you didn’t build that. Somebody else made that happen.”
This blew up pretty quickly in conservative circles. Rush Limbaugh claimed, “It can now be said, without equivocation – without equivocation – that this man hates this country. Barack Obama is trying to dismantle, brick by brick, the American Dream.” "Fox and Friends" highlighted a small business owner who had switched her support from Obama in 2008 to Mitt Romney this election. Conservative blog RedState attacked it as perpetuating the dangerous notion—premised on Marxist economics—that the successful owe something to the government. Mitt Romney launched a page called “You Did Build It” on his website to give business owners a chance to tell their story of success. And now we have a new slew of memes like this one:
What did Obama actually say and mean? Here is the controversial part of the speech:
“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 this: when we succeed, we succeed because of our individual initiative, but also because we do things together.” (Full text here)
Now let’s unpack this a bit. Obama says this in the larger context of deficit reduction, where he claims that the government has already cut a trillion dollars. The next step, according to the president, is to ask the wealthiest Americans to pay a little more of their income so that we can reduce the deficit and continue investing in government programs and infrastructure. This is fair, he argues, because no one can take all the credit for his success. Success is always dependent on outside factors—particularly government programs.
Before tearing the “you didn’t build that” part to shreds, let’s all at least be honest enough to admit that Obama has a point here. People don’t succeed in a vacuum. Countless personal and societal factors affect a great degree of someone’s success. Often these factors are things that we have no control over and do not particularly earn or deserve. There certainly isn't, after all, a formulaic correlation between how hard someone works (or how intelligent he is) and how much money he makes or influence he wields.
Author and journalist Malcolm Gladwell does a great study of the issue in his book Outliers, which looks at the stories of various successful groups and individuals such as Bill Gates and the Beatles (permit me to toot my own horn and link to my review of Outliers here if you'd like a quick synopsis). Each only found smashing success because a very particular series of circumstances all came about. For Bill Gates, he had access to one of the few modern computer terminals in the world while growing up, and he had a family that allowed him to indulge in his obsessions with computers. The Beatles started off playing lengthy shows at strip clubs, but it was only the experience of playing for long periods of time that forced them to innovate and brought out their musical genius. A unique set of circumstances maximized the fruits of their labors, and they thus found phenomenal success.
Granted, founding and running a business doesn’t exactly make you a unique “outlier.” Plenty of people have done it. But here’s the key. Those “lucky” breaks or external supports only help if the individual is putting in a great deal of his own effort. No one pulls himself up by his own bootstraps, but anyone who hopes to be successful has to do a lot of pulling on his own.
Now back to the president’s speech. Conservatives are right that he has an agenda: greater taxes on the wealthy. He is trying to justify more government programs and greater government investment in infrastructure like schools and highways, and surely no one in their right mind would disagree with him—to a point. We have the government to thank for teaching many of our children, paving roads for us to drive on, making sure our food meets certain standards of health, and so on. The government actually does a lot to create an environment in which people can prosper -- sometimes the government is the best institution for the job.
Yet, Obama fails to balance his statements with the importance of individual freedom and free enterprise. Sure there are many cases where government-spearheaded efforts have come up with amazing inventions like the internet, but you also have America's Thomas Edisons, Wright brothers, Henry Fords, and Bill Gates. These kinds of people were deeply driven individuals who succeeded mostly because of their own single-handed efforts--independent of any government initiative--because they saw themselves as free men and reaped the rewards of their labor. Not entirely because of their own efforts, of course, but hard work and innovative thinking were absolutely vital to their success. As such, Obama’s claim that a business owner “didn’t build that. Somebody else made that happen,” was at best a poor choice of words and at worst a horribly flawed understanding of how economic prosperity and success come about. Many business owners have indeed built their own businesses, sometimes with much more opposition than help from outside forces, and they’ve done so at the cost of their own money, blood, sweat, and tears.
The question, then, is how much should we require the wealthy to give back to the government, and by extension society, for their success?
It’s beyond the scope of this post to venture a specific answer, and perhaps there is no clear-cut right or wrong answer. Maybe that’s one reason why it’s the nucleus of the debate in Congress these days.