The President has been insisting for some time now that those who earn more than $250,000 a year are not paying their “fair share.” One must assume that the President is aware that these “wealthy” Americans are in fact paying more than their fair share, under any obvious definition of the word. So what exactly does he mean when he keeps referring to a “fair share”?
Last Friday, the President dropped a big hint as to how he answers that question, and in the process put his campaign into damage control mode (including calling out Romney for quoting the President’s words back to him):
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.
The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.”
Before we get to the “what does he mean by ‘that’” question, let’s focus on what the President’s supporters say he really meant by the money line: “If you’ve got a business, you didn’t build that. Somebody else made that happen.” Let’s assume for the moment that the President is in fact referring to infrastructure—i.e., publically funded schools, roads, fire and police services. And those are just the cheap and easy examples to get the heads nodding. (The President was standing on a road across from a firehouse. Sometimes, you say what you see.) We also need government to provide a stable currency and a transparent, arm’s-length financial system. We need government to provide a legal system that allows individuals to collectivize and risk their capital in limited liability organizations, and to check the behavior of those organizations with appropriate regulations (civil damages are quite a bit insufficient if you’re a victim of the Triangle Shirtwaist fire, for example). We need government to protect intellectual property and balance innovation with Jefferson’s vision of ideas as fires that must spread or die. And so on.
It’s all of this, far more than mere roads and schools and police and fire protection that entrepreneurs absolutely depend on to create new wealth. And if we’re being charitable—because, to be precise, a literal construction defines “that” as referring to the nearest preceding object, i.e., “business”—then the President is referring to this sort of infrastructure.
The real hint to understanding the President’s vision of “fairness,” then, is in another line of his speech: “The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.” This is more revealing than it might at first appear. Consider: Not one serious person is suggesting we stop acting collectively (i.e., through government) to provide education, roads, police and fire service, courts, a stable currency, and the rest of the necessary infrastructure of a modern economy. And this is true even though, as I will argue in a forthcoming long piece, a strict conservative constitutionalism denies the federal government from providing many of the components of this infrastructure.
Thus, the President’s remarks were not advocacy for some particular spending program or other policy objective. They were an articulation of his understanding of the moral basis of the modern economy: A financier, for example, cannot pretend to the same sort of moral claim over a stock dividend as a farmer has over his crop. The simple farmer owed thanks to no man, but the financier owes his good fortune to a long train of economists, inventors, statesmen, intellectuals, entrepreneurs, armies of blue-collar workers, and untold others.
The President is not wrong about this, if I have not gone overboard already by reading so far into his remarks. But there is a logical leap, a principled leap, that the President is not entitled to make unilaterally, not without a full-throated articulation to the American people of what he is about. When he says, “we succeed … because we do things together,” I suspect he means that, somewhere along the way of achieving this modern economy, we have done away with the presumption that the individual owns his success and treasure. I suspect the President thinks we have replaced it with the presumption that the wealth generated in this country—by individuals making profitable use of the infrastructure created by their forebears—belongs to the collective, and specifically to the institution that acts on behalf of the collective: the government. The government owns the means of production, and thus holds a lien on all wealth. The individual no longer invests in infrastructure; infrastructure invests in the individual.
One can also see this presumption in the way the President speaks of taxes. In a recent speech concerning another extension of the Bush tax cuts, the President twice referred to the cuts as “spending,” suggesting that the money you earn does not belong to you unless and until the government decides not to tax it. This further evinces the notion that, for the President, our success and our wealth is derived “together,” and it is together, through government, that it is owned.
The problem is, we don’t do things that way. It is not the American way, no matter how elastic that term may be. It’s not that we can’t have the conversation. It’s just that it’s so obviously far beyond the beliefs of mainstream Americans that it would be politically foolish to try. Maybe Robert Reich will write another honest (and politically toxic) speech in favor of the President’s economic vision the way he did for the left’s health care vision.
For now, the President’s July 13 speech will do. The statement “you didn’t build that” is a double entendre, and for the President, both meanings are true: Yes, that entrepreneurs need infrastructure; but also that the government, not individuals, presumptively deserves the credit for economic success.