COMMENTARY: “Who built that?” A grandson’s question sparks reflections on economic liberty
Published: August 24th, 2012
Debates over the source and limits of power are as old as humanity, and as fresh as the joust between President Barack Obama and presumptive Republican presidential nominee Mitt Romney.
In a celebrated recent incarnation of this fight, Obama started it.
As OCPA’s Mike Carnuccio remembered in a column for the Journal Record newspaper in Oklahoma City, University of Central Oklahoma business school dean Mickey Hepner anticipated the presidential clash at a spring forum in Oklahoma City, when he said “the wealthy don’t become wealthy on their own. They became wealthy as part of a system, as a part of a country that has supported and educates the populace, that provides roads that allows commerce to take place, that supports the infrastructure in this city, this state, and this nation.”
Stating the obvious is useful, but in this case it is inadequate. The same might be said about a now widely reported speech in which the president posed the view that the exercise of economic liberty is at the sufferance or tolerance or benevolence of government:
“(L)ook, 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. (Applause.)
“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.”
Most successful entrepreneurs know they rely on the cooperation of others — customers, consumers, vendors, even competitors. But the president’s formulation seemed aimed at the entrepreneurial class. Even if not so intended, that is how many took it — including Romney.
Romney countered the incumbent instinctively. Something in polling data may have indicated “saliency.” The former Massachusetts governor and his surrogates have sustained the message. He has taken to introducing small-business people at campaign rallies, an effective counter to the president’s (and his surrogates’) attacks on Romney’s record in business.
Natural rights to life, liberty, and property — the latter bound up with “the pursuit of happiness” in the American Declaration of Independence — are rooted in the Western tradition. These are widely viewed as the bases for economic freedoms in our cultural and moral tradition. Many libertarians argue that these rights are innate in our human nature, without reference to Higher Authority.
At the time of the founding, however, these were held to be “self-evident,” as in “certain unalienable Rights” granted by the Creator. To be clear, they were held in that generation to be more fundamental than government itself.
Human liberty is posited as a fundamental or natural right to seek “more” for purposes the individual determines worthy. This view can be found throughout recorded history. Efforts to root essential freedoms in structured law can be discerned from the earliest legal codes through the present time. The Ten Commandments are perhaps the best early example of this tradition, but there are others.
A coexisting assertion long sustained “in the Course of human events” is that rights flow from positive law — that is, the enactments of governments or executives or rulers of a given country or society. Such law can be developed from a religious worldview, but can also (and often does) flow from a secular perspective — that liberty is a by-product of our nature.
For thousands of years, the exercise of liberty came at the sufferance of rulers, who often invoked a divine source for temporal power, including their option to limit economic and other liberty. In the Medieval era, this view came under critical scrutiny, most notably in Europe where the rise of landed nobility and the merchant classes forced a balance between the powers of rulers and the prerogatives of the ruled.
University of Oklahoma historian J. Rufus Fears, a distinguished fellow for the Oklahoma Council of Public Affairs, has spoken (and written) beautifully of the steady development of liberty, stressing how fragile it is in the scheme of things.
In the field at Runnymede, English lords asserted their rights to be independent of a king’s powers, laying the basis for hundreds of years of development for unwritten “constitutional” structures in that realm. By the 18th century, a framework existed for division of powers between executive, legislative, and judicial functions.
The Founding Fathers believed it was for the purpose of securing in this world liberty (including limited governmental power) that governments “are instituted among Men, deriving their just powers from the consent of the governed.”
To look critically at Obama’s recent assertions is not to deem insignificant the necessity of sufficient national government power — so long as that power is exercised for limited purposes. These powers include the protection of the nation from foreign aggressors, punishment of wrongdoers, and sustaining structures necessary to allow the exercise of “life, liberty, and property.”
In the American system, most other powers are left to the states, localities, and the people. The summoning of the Constitutional Convention resulted in large measure from a clamor among the growing entrepreneurial class for a national government powerful enough to enable and protect the development of commerce, which was being thwarted by infirmities in the Articles of Confederation.
That was then, this is now. In a recent article for the Mercatus Center at George Mason University, Matt Mitchell reflected, “a person’s productivity is crucially dependent upon the ‘system’ in which he or she operates. Too many free-market advocates get hung up on the ‘pull yourself up by your bootstraps’ mentality and miss this point. There is a reason more successful businesses are started in the U.S. than in Zimbabwe. It has nothing to do with the inherent business acumen of Americans and everything to do with our ‘system.’”
Mitchell notes that those who move from Mexico to the U.S. increase earning powers, on average, by more than 400 percent. America’s “intangible assets” include contract law, police protection, a currency all or most others accept, honest government, and rewards (not punishment) for entrepreneurship.
Mitchell points to an amazing datum from The World Bank: Those “intangible assets” are worth $420,000 per capita in the U.S., compared to $34,000 per capita in Mexico. That’s why Mexicans who come here are so much more productive than in their native land.
’Twas ever thus — at least, until the last decade or so.
Our system has been the best — or, as Winston Churchill put it , “it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time.” This is primarily because of a regime of liberty and law, not because of government spending on bridges, roads, other forms of infrastructure, and varied services. Mitchell asserts, “It takes a village. A free one.”
In the comparatively free village of Oklahoma City, a company, Devon Energy, built a modern building as headquarters for worldwide operations. They got incentives, through tax-increment-financing improvements downtown, to help make it happen. The city government is working to improve surrounding streets. Arguments about such things are natural, and will continue.
But that building is primarily an expression of faith and hope rooted in rational expectations about the nature of our system. It resulted from the entrepreneurial spirit of the company’s president, Larry Nichols, and the confidence of thousands of employees and investors.
When my grandson Peyton points to the building, he wonders, “Who built that?” I tell him Mr. Nichols and his company built it. I know that explanation is partial, but it’s a place to start. The lad usually has other questions. I do my best to answer, giving due credit to consumers, taxpayers, and government officials in this (comparatively) free land.
Joyce Kilmer wrote, memorably, “Poems are made by fools like me, but only God can make a tree.”
God made us free to choose.
Only an informed and conscientious citizenry can demand, in this world, sustenance for a system adequate to the protection of this rare and dear land — which has been home of the engine of world commerce, a beacon of hope to millions, a special place where the protection of human liberty has allowed the creation and accumulation of wealth, and the prospect of better lives for all.
NOTE: Patrick B. McGuigan (M.A. in history, Oklahoma State University) is editor of CapitolBeatOK.com. This essay first appeared in Perspective Magazine,and nationally at the Watchdog.org website.
It also forthcoming at The City Sentinel.
You may contact Patrick B. McGuigan at Patrick@capitolbeatok.com and follow us on Twitter: