In my column for the July 24th, 2012, edition of the Pittsburgh Tribune-Review I took on the zombie myth that asserts that, because an individual’s economic success in a modern market requires the cooperation of millions of strangers, the economically successful individual is not really responsible for his or her success. (The fact that in the opening sentence of this column I inadvertently misstated the meaning of Pres. Obama’s famous “You didn’t build that” remark doesn’t detract from the validity of the point that I make in the column. There are many people – for example, Thomas Piketty – who do believe that individuals’ economic successes in markets are overwhelmingly attributable to some larger – and, to me, utterly mysterious – collective forces.)
You can read my column beneath the fold.
Success and society
President Obama proclaims that any man or woman who builds a successful business doesn’t really do so. That entrepreneur, therefore, really shouldn’t take much credit for — or necessarily keep most of the monetary rewards from — his or her success.
As the president sees matters, any such success is caused overwhelmingly by others: workers, the teachers who schooled the workers, the people who built the roads over which the business’ products travel to market, etc. The list of all the many people who make any business’ success possible is long.
Mr. Obama’s confusion runs deep — so deep that I’ll devote several columns to exploring that confusion. And exploring it is vital, as this confusion over the role of the individual in a society of millions of individuals lies at the heart of so many political disputes.
Let’s begin by noting that no serious person denies that success for any individual in a market economy requires the ongoing efforts of countless other people. Indeed, economists have long emphasized that one of the distinguishing features of a free market is its capacity to inspire millions of people to cooperate successfully with each other.
Explaining how this cooperation occurs, why it succeeds and how it grows more complex and (hence) more productive is the very heart and soul of economics — and especially of economics as done by market-oriented scholars such as F.A. Hayek, Milton Friedman, Thomas Sowell and my colleague Walter Williams.
Here’s the father of economics, Adam Smith, writing in 1776: “Observe the accommodation of the most common artificer or day labourer in a civilized and thriving country, and you will perceive that the number of people of whose industry a part, though but a small part, has been employed in procuring him this accommodation, exceeds all computation. The woollen coat, for example, which covers the day labourer, as coarse and rough as it may appear, is the produce of the joint labour of a great multitude of workmen. The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production. How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! How much commerce and navigation in particular, how many ship-builders, sailors, sail-makers, rope-makers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world!”
Economists have understood from the start that a prosperous society is one in which each person — again to quote Smith — “has almost constant occasion for the help of his brethren.”
So we need no tutoring from Mr. Obama about the fact that each of us daily depends on many other people for our food, clothing, shelter, medical care and nearly everything else that we consume. The fact that the president presumes that sensible people are ignorant of this reality speaks volumes about his assessment of our intelligence.
We are neither children nor cartoonish business executives of the sort who populate Hollywood movies.
