31 July 2012

Political Pedantry

Apparently Obama gave a speech, a while ago, wherein he made an apparently controversial claim that, “If you've got a business, you didn't build that, somebody else made that happen.”  This led conservatives to getting up in arms.  However, some of the conservatives who took to attacking Obama had apparently received quite a bit of money from the federal government, thus proving Obama’s implicit assertion.

While Obama’s specific claim is a little unclear in its direct intent (is he saying, e.g., that all businesses are started by someone other than the owner or is he suggesting that no one acts independently, contra the Randian ideal?), the broader point that no man is an island is one that is generally true, and has been made many times over the past several centuries.  This point is pedantic enough that it should go without saying, and even in the event that it does not, making the point that no man is an island shouldn’t cause an uproar.

Furthermore, the broader implicit claim that government has caused some level of business success is also true.  The mere existence of corporate status shields individuals from being directly responsible for their behavior in the marketplace.  Government-funded infrastructure has been the norm for many countries for many years.  Government paid for railroads, canals, highways, and roads in the US, and has also subsidized electricity and telecommunication networks.  These have undoubtedly contributed to business success, and I see no reason to deny this fact.

Really, this whole episode proves two things:  1) the media was really bored during the month of July and 2) conservatives are bad at arguing.  Regarding the latter, Obama’s claim that businesses don’t come to existence in a vacuum is simply an assertion that begs the question of what government can do to help business.  But this implicit question is actually a non sequitur because the fact that there was once a time in which the government enacted policies that helped people start businesses does not require the conclusion that the government must continue to enact the same policies, or change them or increase spending on said policies, in order to ensure that people continue to receive help when starting businesses.  To put it more succinctly, just because government may have been partially responsible for others’ business success in the past doesn’t mean that the government will continue to do so. It may be that government intervention is unnecessary.  It may be that government intervention is counterproductive.  It may even be helpful.  But, in a technical sense, past performance is no guarantee of future performance.

In closing, let me also note that a strong case can be made that the government is not always essential for commercial infrastructure.  James J. Hill provides a rather fascinating example of how one man can do a better job at building infrastructure than the federal government.  To be fair, his example is not completely free of government help and intervention (though most of the government intervention was negative).  However, an honest reading of his history should lead to the conclusion that he could’ve done a better job building infrastructure if the government didn’t exist.  Thus, the idea that the government needs to do anything to ensure that businesses succeed is suspect.  Therefore, the proper conclusion to draw from this brouhaha is that the government has indeed helped many businesses succeed, but there is no logical reason to think that is necessary for future or even current business success.  Historical fact does not necessitate political policy.


  1. It's easy to point out that Government has helped businesses when all your examples are of cases where Government does help certain businesses.

    What of the cases where Government has hurt or prevented business from forming due to red tape, bureaucracy, high barriers to entry, licensing, etc.?

  2. The problem was never that his claim was 'false'. It's that it is stupid and banal. It's also that he is trying to use the (true but trivial) claim in a larger argument for high(er) taxes and whatnot. The problem there is that it does not actually support such an argument in any way hence his claim is an idiotic non sequitur. This is the case regardless of the issues you bring up about whether government has or can, historically or logically, help businesses. None of that matters in the first place, because regardless, the fact remains that 'you didn't build that' just isn't a real, logical argument for any particular tax level or structure. Obama thinks it is, which makes him an economic ignoramus. Our President being an economic ignoramus perhaps shouldn't be big news or get anyone up in arms, but it is rare to see the ignorance in such pure, undiluted form.

  3. @olivierb- Obama's assertion was not, "government only helps and never hurts businesses." His assertion was that government helps businesses in a general sense. His assertion is correct, in that there are numerous instances in which the government did help businesses (see: infrastructure spending). Furthermore, it must be noted that the market does not necessarily "help" specific businesses (just ask VHS manufacturers how friendly the market is to them).

    @rwcg- well said.