“You Didn’t Build That”: The Conversation We Aren’t HavingPosted: July 20, 2012 Filed under: Corporations, Politics 5 Comments
It’s been a week since President Obama in a speech in Roanoke, Virginia offered up his “you didn’t build that” observation about business success, and Team Romney is still trying to make hay out of it. As recently as yesterday Romney declared in a stop-by at a local business in Massachusetts that “The president does, in fact, believe that people who build enterprises like this really aren’t responsible for it.”
It’s hardly surprising that a campaign trying desperately to shift from a defensive posture on matters of private equity and tax returns would seize on anything to change the subject, and perhaps that explains how this particular tidbit of second-rate campaign discourse distortion has kept its legs for a full week — an eternity in the news cycle game. (There’s nothing like yet another gun rampage mass shooting to really change the subject.)
But while Romney may have twisted Obama’s remarks last Friday into something never said or intended, the Mittster does edge dangerous close to having a point when he says of Obama, as he did yesterday, “It wasn’t a gaffe. It was instead his ideology.” The conceptual relationship between capitalism and infrastructure is actually a crucial and fascinating subject, one that does define significant differences between the candidates and their parties — or one that might if there could be a serious conversation about it instead of just harping on out-of-context utterances.
First let’s be clear about the distortion involved. This is what Obama said in Roanoke last Friday on this subject, from start to finish with no omitted words:
“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 allows 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 then all the companies could make money off the internet. The point is that when we succeed, we succeed because of our individual initiative but also because we do things together. There are some things, like fighting fires, that we don’t do on our own.”
And this is how Mitt Romney recounted Obama’s remarks:
“He said, ‘If you’ve got a business, you didn’t build that. Somebody else made that happen.'”
It does seem rather obvious that “you didn’t build that” refers to what came in the sentence before — infrastructure such as roads and bridges. Yes, one could make a grammatical argument, as James Taranto at the Wall Street Journal did, that “roads and bridges” is plural, while “that” is singular, so the word “that” should properly be “those” if Obama meant to say that successful entrepreneurs didn’t build roads and bridges. Point of grammar taken. But on that small fault in syntax we should believe that Obama meant to say something different that the otherwise extremely clear meaning of the entire passage? Really?
But campaign out-of-contextery aside, it is more than legitimate to ponder the extent to which business success does owe itself to public works and collective enterprise (indeed, to socialism! There! I said it! Socialism socialism socialism! Let the mouth foaming begin.) This issue sometimes arises as a policy argument in relation to the flatness vs. progressivity of tax rates. Writing in 2007 about progressive taxation, George Lakoff and Bruce Budner discussed the notion of “compound empowerment,” which refers to ways that the use of collective wealth and resources is compounded by corporations, investors, and wealthy individuals:
Consider Bill Gates. He started Microsoft as a college dropout and has become the world’s richest person. Though he has undoubtedly benefited from his unusual intelligence and business acumen, he could not have created or sustained his personal wealth without the common wealth. The legal system protected Microsoft’s intellectual property and contracts. The tax-supported financial infrastructure enabled him to access capital markets and trade his stock in a market in which investors have confidence. He built his company with many employees educated in public schools and universities. Tax-funded research helped develop computer science and the internet. Trade laws negotiated and enforced by the government protect his ability to sell his products abroad. These are but a few of the ways in which Mr. Gates’ accumulation of wealth was empowered by the common wealth and by taxation. As Warren Buffet famously observed, he likely couldn’t have achieved his financial success had he been born in Bangladesh instead of the United States, because Bangladesh had no banking system and no stock market.
The compound empowerment argument regarding tax progressivity is that rates should tilt steeply because “the wealthy have made greater use of the common good — they have been empowered by it in creating their wealth — and thus they have a greater moral obligation to sustain it.” It’s an interesting angle on tax policy, but not a debate we should realistically expect Obama and Romney to engage in the present climate, where stalemates between advocates of top marginal tax rates less than a handful of percentage points apart can paralyze the entire political system.
But the relationship between collective infrastructure and individual entrepreneurship is at the heart of the role of government in the economy, and is a conversation we should be having. I might be inclined to give Romney credit for raising this compelling question of political philosophy, except for the fact that he had to flagrantly distort his opponent’s comments to do so. Even so, it is disappointing that the Obama camp hasn’t taken the bait in a substantive way. Instead of just crying foul for the Romney distortion, there is an opportunity here to flesh out a very real and substantive difference between their philosophies (indeed, in Romney’s phrasing, their ideologies) and advance a meaningful conversation.
Not happening. Shocking.
A version of this post appears on the Nashville Scene‘s Pith in the Wind blog.
I have been incredibly disappointed in a number of conservative/business-oriented friends in their reactions to this — really unthinking reactions.
I have owned a small business for 4 years, and grew up in a small business household. The list of commonwealth infrastructure I depend on today is incredibly lengthy. I am grateful for it. I am mystified by businesses grousing about taxes in Tennessee, as well. I would prefer to pay slightly higher taxes myself and have a higher level of services and improved education, which in the long term, would be incredibly helpful to my business.
This is not true of every state, of course — I could go on about related experiences, but I will just say, as a business owner, I cry foul on people who are using this as a political point.
I think what makes it such an interesting subject is that many well-meaning business conservatives haven’t really thought about it very deeply … how much is taken for granted as necessary public infrastructure. I frequently have to remind my b-school students, who tend to lean heavily on property rights arguments as the basis for unregulated free enterprise, that those rights are only as good as the collective public (and publically financed) mechanisms that enforce them. Thanks for the comment, Laura.
Well said – from a former student. Too many business people discount the value that government has brought them. Most don’t think past this year’s taxes and next quarter’s financials. To understand the value of government to business, we need to look at the investments made over the past 100 years. It is surprising how insightful and nuanced people can be into business issues, yet so simple minded and ideological when it comes to politics.
I suspect most business people understand quite well the ample role played by collective action (in the form of government, public services, etc.) in business success. Romney’s people are looking for anything that can bolster their narrative that Obama is naive on business matters, so they saw an opening, or thought they did.
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