“”They might be giants, and we might be pygmies; but we stand on the shoulders of giants, so we can see farther.” Attributed to Sir Isaac Newton
So just to be clear, Obama did say:
“If you’ve got a business — you didn’t build that. Somebody else made that happen.”
But why is this so bad?
It’s terrible because it shows us exactly what Obama thinks. He thinks that without an activist government you cannot survive. That without an activist government there is no progress. That without an activist government there is no growth.
Intellectually, factually, morally and ethically he could not be more wrong.
Now some very, very stupid people trying to sound reasonable might say something like:
“Neither private sector nor public sector are sufficient. Both are necessary.”
Now in a grander sense, yes, this is true. The necessary evil of government is necessary to provide a system of laws, a police and military force, and a court system for prosecution of crimes and arbitration of disagreements, a handful of various other services. Not a single Classically Liberal or capitalist philosopher, be it Adam Smith, Milton Friedman, or F.A. Hayek, would ever argue that government is not necessary to a successfully run economy and society. Capitalism is just as opposed to anarchy as it is to socialism and tyranny. But every Classically Liberal and capitalistic philosopher will also point out that government’s function are there to provide rules, protect others from violence and fraud, serve as arbiter, and provide those few services that the private sector cannot easily provide. And also, while many of them hadn’t seen the monster of an overgrown federal government, most would argue that where government does need to step in it should as locally controlled and locally funded as possible.
Now what is an example of a function that only the federal government can do. Well you have the army and navy. You have the post office in the early days of the Republic (although nowadays you could cut the Post Office down to 10% of it’s current size and FedEx, UPS, and local companies could more than pick up the slack at lower prices and higher efficiency). I’m sure a private mail carrier could have made money in the early days of the Republic, but the Founding Fathers realized how useful the committees of correspondence were, and how communication is one of the most deadly tools against tyranny, and thus had to make sure there was always an option for communication that could not go bankrupt (as there exists with any private company)…which is also the reason I advocate drastically cutting the USPS but not completely destroying it.
But is infrastructure something that only the public sector can provide?
No it’s not. And this is a self evident truth. Governments were building infrastructure before they started using dimwitted Keynesian tactics of spending money they didn’t have. Logically this meant that they were getting money from commerce to build infrastructure. Commerce and business predated infrastructure, their success is not dependent on it…it is the reverse that is true, that infrastructure is dependent on business success.
Look at the entirety of U.S. history and you will see this. In terms of transportation, stage coaches, ferries, and even railroads started out as private sector industries that did not have government funding (yes railroads became the transcontinental giants with government help…but they also became inefficient, monopolistic, corrupt and low quality when government money got involved). Most of the infrastructure that raised Britain to an economic powerhouse in the Industrial Revolution was privately built. I recall that a good portion of Hong Kong’s early infrastructure post-WWII was more privately funding by booming business more than by the hands off government of the colony. Even in now uber-liberal California, we should all remember the completely private Red Car system provided efficient and cheap transportation (using it’s own infrastructure) to most of Southern California for nearly 4 decades before being taken over by the state.
Yes the interstate highway system is wonderful and has been a great boon to commerce…of course Ike built it as an easy way to move the military in the Cold War, the economic benefit was secondary so you don’t get to claim that it was built for the purpose of the economy. However even if the highway system should have originally been a federal project to ensure that all states are connected…it no longer needs to be federal—at this point states are more than capable of up keep of their own roads as they need them to stay economically competitive (i.e. they won’t let them just fall apart) and the local control will keep overhead, graft, and inefficiency down (at least it will be far less than what a distant federal government would create). So even the highway system isn’t an argument that Obama has. Yes does the system of roads and bridges need work? Yeah, it does. Of course if it was such an important function why didn’t you get it done in the first 4 years Barry? And why did you saddle the debts with such massive future debts via Obamacare so that they couldn’t deal with the problem themselves?
But maybe we’re not just talking about roads for infrastructure. Electricity maybe? No, that was originally built by private companies…and the modern government controlled national grid is such an unmitigated disaster that even liberal Thomas Friedman of the New York Times went off on what a joke it is in his book Hot, Flat, and Crowded.
Communication? No. Private company AT&T built the original infrastructure and controlled it so well that the government felt the need to unjustly break the company into the baby bells…which was really dumb because within only a few years the private built cell phone infrastructure made AT&T’s land-line infrastructure about as important as your appendix.
But the internet! Oh I love this argument. So the military builds a communication network and does nothing for over a decade (beside being a plot point in 2nd rate Matthew Broderick film…Shall we play a game?) and then private industry built on computers (which was also built on computers the government had been working on for years to no avail. Government had silicon chips since the 1960′s but it took a Steve Jobs to create the personal computer.) and suddenly makes use of it. Trust me if the network the military (and Al Gore) built hadn’t been in existence there would have been some genius on par with Gates, Jobs or Ellison, who would have created a network that would have allowed computers to speak to each other easily.
Everyone seems to forget that the empty cities in China or Detroit have lots of infrastructure that does nothing for them. However there are literally hundreds of towns in this nation where a factory was built first and then the infrastructure and growth followed…if you look at the world and the joys of globalization and outsources (which makes life better both for America and the country work is being outsourced to) the examples reach thousands. Business success always precedes infrastructure in a sane system. To say the opposite is to say the cart pulls the horse.
The fact is that business has traditionally built the infrastructure it needs to grow if it is not already present. Private companies wanted to build high speed rail back in the early 90’s but were stopped over and over again by environmental regulators in the government…and unlike the BS high speed rail Obama and California want to put in that doesn’t really go anywhere, the plans in the 90’s were for things like LA to Vegas…you know rail that would have paid for itself and paid for further expansion.
FedEx was stopped by government regulation and bickering from creating a second hub in its distribution infrastructure in the 90’s.
Private airlines where hampered in their growth early on by government regulation (usually taking off from fields that the airlines had built with their own money in the early days).
I could go on.
You would have to be a brainless troll or an idiot of the highest caliber to not see that industry builds the infrastructure it needs with its own money (often cheaper than the government) and has more often has had its growth hampered by government than it has been helped by it.
You can build all the infrastructure you want. It won’t create business. It will help business…but it’s not like the business isn’t paying for that infrastructure (through income, corporate, sales, and a myriad of other taxes). If the government doesn’t provide the infrastructure business will create it themselves or someone else will find some way to provide the service that infrastructure would provide, often at costs less than the inefficient government creation. Government created infrastructure is never NECESSARY for business success. Government laws and protection against harm are necessary, but not infrastructure.
Now some claim that we need government infrastructure to provide things like TVA giving electricity to rural communities…to which I respond, when did electricity become a right? My grandparents lived quite contently in a house until the late 80’s, in California, without public electricity (they had a wind generator that they built)…it didn’t harm them. If there is no economic reason to have electricity in an area, then it probably shouldn’t be there…and if you don’t like it, it’s a free country, move to an area that has those services or create a business that makes it feasible to bring those services out there. Arguing we have to provide things to people where there is no financial reason to provide it to them is the mentality of building bridges to nowhere and repairing roads no one drives on it. It is the mentality of government waste. And that is the kind of infrastructure that Obama is touting…or do you think the man who thought Solyndra was a good idea knows more about infrastructure?
Everyone likes to point to highways, the internet, the advance of the space race….but everyone forgets these were military ventures with military goals, not economic ones (those were merely unintended side effects)—I bring this up because which area of spending do those who tout infrastructure call on most to be cut?* And this leads to the reason why I have repeatedly said one of our biggest mistakes in Iraq and Afghanistan was not spending more time on building infrastructure. I wanted the communication and military benefits of modern infrastructure as a counter to the insurgency (which are getting their own benefits provided by other countries). Yes such projects put the cost of a system that would benefit commerce on those countries on the US taxpayer instead of the Iraq or Afghani businessman, but I believed in the long term the military benefit would pay for itself (if you think we’re not going to have to go back to Afghanistan within a generation because we botched it so badly this time, you’re crazy).
But back to Obama’s “You didn’t build that” quote.
In context he is referring to the businesses. But even if you take his reading that it was government provided infrastructure you built your business on and you couldn’t have done it without that infrastructure…it’s still a bullshit statement.
With only a small exception in education, everyone has equal access to the benefits of infrastructure. Everyone has access to the roads. Everyone has access to the electric system and all the other utilities. From the things that only government can provide (police, courts, health control, an income safety net**) to those things that government and the private sector and justifiably provide (roads, schools, post service, electricity and water) to those things which the only private sector should be providing but the government can’t keep it’s stupid hands out (green energy, wifi, medical services) everybody pretty much has equal access to all of these benefits and all of this infrastructure. And yet some build great businesses and some don’t. Because some had the intelligence and the work ethic and the drive to succeed and some didn’t. Because some people built that for themselves. This is why there is that quote at the beginning about standing on the shoulders of giants…everyone is standing on the same giant but some choose to see further and some don’t. Now success for many may not be building a business but doing something else…but it is because of their drive, their intelligence, their work, and their choices that makes them successful or not, not because of government.
Now I did bring up that education is not always equal. Its not. And education can be a greater equalizer in terms of access to opportunity than any road or Internet hub…and our system of education in America is screwed up. But notice also in this most important of things the government provides it is Obama preventing growth, preventing change, preventing charters and vouchers and experimentation, and wholeheartedly backing the vile teacher’s union which seeks to maintain the status quo. So in the one thing he could really affect to help give people more opportunity to build their own lives, he doesn’t actually want to improve that system.
Nothing in infrastructure determined who would succeed and who wouldn’t (except for education) it is will, intelligence, and work that does.
It is those things which build infrastructure.
And it is those things which Barack Obama is most opposed to and most wants to destroy.
*Not that that I don’t think the military couldn’t lose quite a bit of fat from its budget…however much of its waste is in Congressional pork projects that can’t be cut without Congressional approval…if you just cut the military’s budget the DOD doesn’t have the authority to cut those pork projects, only needed things like troops and body armor.
**Even Friedman and Hayek believed you need some form of income safety net, and they were right, you do…they were also right it needs to be for the lowest of the low (like the bottom 5%) not the for a third of the nation.