So Who Did Build That?

Every so often a politician makes a statement which so well represents the partisan divide that the political chattering class settles down to mocking or defending the statement for a week or two. Such a case, it seems, is Obama's "you didn't build that" speech last Friday. Speaking to supporters in Virginia, Obama said:

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.

My primary reaction to this is literary and intellectual snobbery. The pass to which political rhetoric has come in this really pretty sad. Compare Obama's whimpers of populism with the master, William Jennings Bryan:

Mr. Carlisle said in 1878 that this was a struggle between "the idle holders of idle capital" and "the struggling masses, who produce the wealth and pay the taxes of the country;" and, my friends, the question we are to decide is: Upon which side will the Democratic party fight; upon the side of "the idle holders of idle capital" or upon the side of "the struggling masses?" That is the question which the party must answer first, and then it must be answered by each individual hereafter. The sympathies of the Democratic party, as shown by the platform, are on the side of the struggling masses who have ever been the foundation of the Democratic party. There are two ideas of government. There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them.

You come to us and tell us that the great cities are in favor of the gold standard; we reply that the great cities rest upon our broad and fertile prairies. Burn down your cities and leave our farms, and your cities will spring up again as if by magic; but destroy our farms and the grass will grow in the streets of every city in the country.

Bryan may have been wrong on a lot of things, but dang could he speak.

But aside from its poor prose, the surprising thing about Obama's speech is its poor thinking. Yes, it's certainly true that no one does anything "on his own" in that we are all live within society. And of course, successful businesses exist within the context of a civil society in which laws exist and are enforced, infrastructure is maintained, etc. It is entirely just, for that reason, that we pay taxes to maintain that law enforcement and that infrastructure, and that we charge taxes proportionally to people's earnings, so that those who make the most pay the most. Contrary to Obama's implication, no one is disputing this. Even the most radical of "flat tax" proposals would still result in the rich paying far more than the poor. The only truly regressive tax we pay in the US is the social security tax, to which Obama, Mitt Romney, Bill Gates and I all pay exactly the same tax bill every year.

However the claim "If you’ve got a business — you didn’t build that. Somebody else made that happen." doesn't merely suggest the obvious and inane point that "hey, we all exist in society", but rather that there's nothing particularly special about those who build huge businesses or otherwise become huge successes. "Let me tell you something," Obama offers, with his typical, hectoring, I'm-much-smarter-than-you tone, "There are a lot of smart people out there.... [T]here are a whole bunch of hardworking people out there."

But here's the thing: We all have roads and laws and the internet and teachers available to us. Bill Gates and Michael Dell aren't billionaires because they had roads and teachers and I didn't. They're billionaires because through some combination of vision, hard work, drive and luck they built companies that provide millions of people with things they want enough to pay for. I grew up with the same legal system, the same public infrastructure, and the same educational opportunities as them, and I didn't build a huge, successful company. I work a good job and earn a nice paycheck by providing services that my employer is willing to pay for, and as a result I pay my mortgage and buy things that we want. And I pay taxes -- though far less taxes then billionaire entrepreneurs (as is just, since they make more money.) However, despite having the same government provided services and infrastructure available to me as billionaire entrepreneurs (and smaller entrepreneurs), I haven't built a successful company that provides other people with jobs and many more with valuable goods or services. As such, the difference between my fortune and that of Michael Dell or Bill Gates is not due to the government providing them with infrastructure, it's due to them and their actions. They really did build it.

This doesn't mean that taxation is theft or that those who are highly successful shouldn't pay an equitable share of the cost of maintaining the civil infrastructure and services we all benefit from, but it does mean that the "you didn't build that" line of argument that the president is attempting isn't just bad rhetoric, it's just plain wrong.