This essay is based on remarks delivered at the “Yes, We Did Build It Rally” in Waukesha, Wisconsin on September 22, 2012.
In July, President Barack Obama expressed a vision of how the world works that surprised many people. The most famous line he delivered was “If you’ve got a business, you didn’t build that. Somebody else made that happen.”
The context of the president’s remark reveals the “somebody else” he had in mind is government. Here’s the full quotation:
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
Government Didn’t Build That
Many people have parsed those lines, trying to defend them or attack them. There is some truth in some of them. I had a great teacher from first to third grade. She taught me how to read and write, gave me my first book. We all use roads and bridges, and the government had a hand in creating the Internet.
But my great teacher was Sister Agatha, and she didn’t work for the government. She worked for the Holy Name of Jesus parish, which was built and supported by thousands of hard-working blue-collar Catholics. “Somebody” didn’t pay tuition for me at Holy Name; my folks did.
And so it goes with the rest of Obama’s examples. Government might plan and own roads, but it doesn’t build them. Companies like Payne & Dolan, Kraemer, Edgerton, Hoffman, Mashuda, and Daar Engineering build the roads, using vehicles built by companies like Caterpillar and John Deere.
Government doesn’t just allow us to use roads and bridges. We pay our way with federal, state, county, and local excise taxes on gasoline, and vehicle registration fees, drivers license fees, sales taxes on motor vehicles, heavy truck use taxes, traffic violation fines, and more.
And what about the Internet? The story that the Pentagon created the Internet to sustain communications during a nuclear attack is an urban legend. Xerox invented the Ethernet – the true precursor of the Internet – and the first personal computer, and the graphical user interface that still drives computer use today.
Try as it might, the government doesn’t own or operate the Internet. Maybe in China it does, but not here in America. Let’s all say a prayer to God that it never will.
Most importantly, government doesn’t build businesses, individuals do. Entrepreneurs do. People who are willing to put in long hours and hard work, take the hard way instead of the easy way, and risk losing it all.
Starting a business and making it work is something only individuals can do, because a successful business exists inside its CEO’s head, not out there. It’s as simple, and as hard, as that.
We Don’t Belong to the Government
At the Democrats’ convention in Charlotte on September 5, we learned that Democrats believe we all belong to the government. I think they got this exactly backwards: We own the government!
As the founding fathers said in the Declaration of Independence, “governments are instituted among Men” to secure our natural God-given rights, governments “deriv[e] their just powers from the consent of the governed,” and “whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it. …”
That doesn’t sound like the government owns us, does it? We own the government.
But Obama believes everything good in America flows from government. He thinks schools, roads and bridges, and the Internet all come from the government. We are “allowed to thrive,” in his words, because government lets us use these goods and services.
Obama thinks jobs and prosperity comes from government, too. This year, the federal government will spend $3.8 trillion, bring in $2.5 trillion in revenue, and borrow $1.3 trillion. The federal government has a debt of $16.4 trillion, not counting unfunded liabilities. Our debt is 32 times as large as Greece’s debt. It’s now 100 percent of our Gross Domestic Product.
If more government could produce an economic recovery, don’t you think we would have seen it by now?
Capitalism Is the “Unbelievable American System”
If Obama is wrong, if government isn’t the source of economic growth, then what is? It’s something most politicians are afraid to talk about: Capitalism.
What is capitalism? It is a way of organizing an economy that relies on freedom instead of force. It minimizes the role of politics and expands the role of individuals and the institutions of civil society – like churches, businesses, clubs, and charities.
Capitalism is a spontaneous order: nobody designed it, nobody stands at the top of it and tells everyone else what to do. It requires some government … but only as much as is necessary to prohibit the initiation of force. Too much government undermines the Rule of Law when it creates privileges, exemptions, and entitlements.
Capitalism taps the inherent desire of people to better their condition. It takes the greed or selfishness that has always been in human nature and puts them to work bettering the condition of mankind.
This is what Adam Smith meant back in 1776 when he compared markets to an “invisible hand.” Everyone acting in their own self-interest nevertheless end up doing things that benefit all of us, as if guided by an invisible hand.
The result is the most successful wealth creation machine ever discovered by man. Capitalism is the “unbelievable American system” that Barack Obama was talking about. It is a prosperity machine, a system that rewards innovation and productivity, which increases total prosperity.
Its discovery raised millions of people from abject poverty and slavery to relative prosperity and freedom. Today it makes it possible to feed and clothe a global population of seven billion people.
It’s a miracle, but because nobody invented it or runs it, politicians like President Obama can claim it is a gift from government. You know, the government that owns you.
What’s at Stake in November
In November we will decide if we should retain as president a man who imagines that government, not capitalism, builds all the things that make us a safe and prosperous people. By his own words, he attributes success in business to government actions, not the acts of individuals.
The American economy is an amazingly resilient thing. It can take a lot of abuses – excessive regulation and taxation, manipulation of the money supply, even massive corruption at virtually every level of government. But maybe it is important to have in the White House someone who understands how it works.
Regardless of who is elected in November, the country faces a trial by fire as it puts its fiscal house in order. Let’s hope the men and women we elect will work together to sustain the “Unbelievable American System” to which we owe so much.
Joseph L. Bast (email@example.com) is president of The Heartland Institute.