In my last post I examined President Obama's historic Osawatomie speech from an historical and ideological perspective. The entire text and video of the speech is here.
Today I want to continue my analysis of the President's speech, his road map for America in the 21st century. He said in Osawatomie:
I’m here in Kansas to reaffirm my deep conviction that we’re greater together than we are on our own. I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share, when everyone plays by the same rules.
Our President firmly believes that in America today not everyone is getting a fair shot, and not everyone is doing his fair share, and not everyone is playing by the same rules. More importantly, our President believes -- firmly believes, no less -- that the reason America is the way it is boils down to "the breathtaking greed of a few with irresponsibility all across the system."
The President chose to speak in Osawatomie, Kansas in order to honor the memory of Theodore Roosevelt's "New Nationalism" speech in Osawatomie. New Nationalism was Roosevelt's grand progressive road map for America in the 20th century. The President admires Teddy Roosevelt because Teddy was sort of the Warren Buffett of his day. That is to say Teddy came from a family of wealth and, like Buffett today, Teddy yearned to share that family wealth with the US government.
What the President admires about Teddy's New Nationalism is the program's radical audacity, which can be summed up in two words: economic democracy. Roosevelt said:
Our country… means nothing unless it means the triumph of a real democracy…of an economic system under which each man shall be guaranteed the opportunity to show the best that there is in him.
Roosevelt's words, as quoted by Mr. Obama, are of course doublespeak. Mr. Obama was happy to translate them for today's masses:
Theodore Roosevelt...praised what the titans of industry had done to create jobs and grow the economy. He believed then what we know is true today, that the free market is the greatest force for economic progress in human history. It’s led to a prosperity and a standard of living unmatched by the rest of the world.
But Roosevelt also knew that the free market has never been a free license to take whatever you can from whomever you can. He understood the free market only works when there are rules of the road that ensure competition is fair and open and honest.
In my last post I pointed out the inconvenient truth that by the turn of the century the United States had already become the industrial giant of the world, having expanded its industrial base by a factor of 460 times between 1790 and 1913. So it is plain that America's mostly free market had indeed "worked" prior to 1913 without federal politicians providing "rules of the road." In fact, as I have also pointed out previously, Mr. Obama's contention that the "free" market operating in the United States prior to 1913 consisted of a "free license to take whatever you can from whomever you can" is an outright lie, a straw man fabricated out of whole cloth to facilitate the President's argument.
Since its very beginning America has cultivated a rich tradition of individualism and private property rights. This tradition was partly a reaction to the European system of aristocracy and the landed gentry. As a consequence, almost all Americans farmed land they owned themselves. They freely traded their produce amongst themselves. Brokers exported American farm goods the world over. American industry was similarly organized. Entrepreneurs established their own businesses and hired free labor on the open market. Merchants thrived on trade, freedom and the principle of private property.
No American familiar with the writings of Ben Franklyn or, for that matter, any of the original Founding Fathers, could doubt America's commitment to property and freedom. American farmers and merchants were prosperous and, when they weren't, they failed, started over and aimed for prosperity again. In early America honesty and respect for property were the only required rules of the road for the "economy."
Mr. Obama, and Mr. Roosevelt before him, would have us believe that early America was no different than Europe, that entrepreneurs and businessmen served as America's aristocratic class, the Bourgeoisie, and that those men who signed on to work with these entrepreneurs in factories and offices across the country were little more than forced labor, indentured servants or serfs or children in sweat shops.
Yes, as I pointed out previously, life in the 19th century was not easy. Men were rough and tumble. Manual labor was hard, long and often dangerous. Trade was brutally honest. The stupid or naive learned lessons the hard way. Entrepreneurs who couldn't cut the mustard and earn a profit quickly felt the bite of failure. Entrepreneurs with innovative foresight, who were bold, dynamic and starkly efficient, were wildly successful and richly rewarded on a national scale. The free and open American market reflected all these quirks of early, hardscrabble American life. Pioneering prosperity must always be first produced by scratching in the mud. If you don't believe me, ask your parents, or your grandparents, or your great grandparents.
Tuesday Mr. Obama said that "what’s at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, secure their retirement."
I feel sorry for the man. He just doesn't get it!
Elderly Americans who survived the Great Depression, or who labored laying track for the transcontinental railroads, or who hot-riveted steel girders building skyscrapers, or who worked uncomfortable hours as day laborers or charwomen, didn't weather the rough and tumble of the free market so they could tell their grandchildren about the "modest savings" they managed to accumulate. They proudly tell stories about how America allowed them the opportunity to provide a better life for their children than they themselves had experienced as children in Europe. They scrimped and saved not to live modestly in the present but to build a future for themselves and their families.
The mostly free market that existed in the United States between 1790 and 1913 was always a means for individual Americans, it was never an end in itself. Tuesday the President described "workers" as if they were prison inmates who seek nothing more out of life but a modest, more comfortable existence behind bars. Americans don't get up each and every morning and trudge to work in order to make their status as a member of the working class a bit more tolerable. Americans strive, and they have always strived, to achieve their dreams, and their dreams more often than not have nothing to do with their current, economic circumstance.My sister worked at McDonald's to gain work experience and put herself through college. Now she's a CEO of a successful company. Frank Sinatra worked as a delivery boy and as a riveter in a shipyard. Andrew Carnegie worked as a messenger in a telegraph company.
My grandfather proudly told stories about working endless days in harsh conditions blazing roads through dense, hardwood forests. He wasn't concerned with the reforms the Roosevelt Progressives advocated, and Obama brags about, ("an eight-hour work day and a minimum wage for women—insurance for the unemployed and for the elderly, and those with disabilities"). These reforms didn't come to be solely because a Washington politician imagined them and passed a law. They came to be because ordinary Americans, like my grandfather, had become prosperous enough to think these ideas were possible and practical.
Apparently, we are to believe that Obama loves and believes in the miracle of the free market, and that he simply despises its rough and tumble nature. Of Roosevelt, Obama said in Kansas:
And so he [Roosevelt] busted up monopolies, forcing those companies to compete for consumers with better services and better prices. And today, they still must. He fought to make sure businesses couldn’t profit by exploiting children or selling food or medicine that wasn’t safe. And today, they still can’t.
Politicians like Roosevelt and Obama naively believe that the "free market" is a majestic beast of burden, similar to a powerful Belgian draft horse that will work tirelessly and produce endlessly. But they believe the free market, like the draft horse, must be harnessed lest it run wild and injure the innocent, harnessed by wise and caring federal politicians.
The truth is that the free market is not a thing. It has no existence independent of the human individuals who comprise it. The free market is nothing more or less than free individuals exchanging voluntarily goods and services among themselves. No more and no less.
When a politician advocates "busting up" free market businesses, or "forcing" free market businesses to behave as the politician wants them to, he is talking about "busting up" agreements voluntarily entered into by free individuals. He is talking about "forcing" free individuals to do his bidding.
When a politician talks about "forcing" a free market business to provide "consumers with better services and better prices," he is saying he wants to coerce free and cooperative individuals to do things his way instead of their way, to make the choices he wants instead of the choices they want. He is saying that only he knows what is in the best interests of free and dignified individuals. He doesn't understand that the free market is comprised of individuals who are at once both producers and consumers.
These free and cooperative individual traders are not the equivalent of draft horses. They are reasoning and caring human beings. If they decide their children will benefit from work experience at a young age, who is the politician to damn their judgement and forbid them from doing so on grounds they are "exploiting" their progeny? If free individuals decide to eat certain foods or take certain medicines, who is the politician to overrule their choices as not "safe?"
Politicians are not some extraordinary and infallible model of human wisdom and compassion. Politicians are individuals, the same as any other individual. Some are wise; others are dangerously stupid and greedy. Each has his own particular prejudices, motives, virtues and vices.
Thus, their interventions in and their coercion of free individuals in the marketplace is the imposition of their will on the marketplace and, by implication, their wants, needs and desires. The actions of the individuals these politicians coerce are not independent of such coercion.
The more politicians coerce, force, regulate, restrict, tax and bust up free individuals in the marketplace, the less these free individuals will cooperate, the less they will produce for their oppressors.
President Obama's ignorance about the free market, how it works and what it does is made perfectly clear in the following excerpt from his Osawatomie lecture:
Today, over 100 years later, our economy has gone through another transformation. Over the last few decades, huge advances in technology have allowed businesses to do more with less, and it’s made it easier for them to set up shop and hire workers anywhere they want in the world. And many of you know firsthand the painful disruptions this has caused for a lot of Americans.
Mr. Obama doesn't understand that businesses in the free market today don't change because of "advances in technology" that occurred over the last few decades. Businesses change in the free market today because they must. Businesses have always changed in the free market. Change is the password to success in the free market. Why? Because the lives of individuals are not static.
Individuals change their goals, their wants, their needs. So businesses (which are nothing more than a cooperative of free individuals) create and innovate to satisfy these changing demands. Competitors (which are nothing more than free individuals who have similar ideas) enter the marketplace. As a result, businesses must adjust. They must change or die.
Obama went on to say:
Factories where people thought they would retire suddenly picked up and went overseas, where workers were cheaper. Steel mills that needed 100—or 1,000 employees are now able to do the same work with 100 employees, so layoffs too often became permanent, not just a temporary part of the business cycle. And these changes didn’t just affect blue-collar workers. If you were a bank teller or a phone operator or a travel agent, you saw many in your profession replaced by ATMs and the Internet.
If Mr. Obama had been President at the turn of the last century and had been speaking in Osawatomie instead of Roosevelt, would he have blamed Karl Benz for inventing the automobile and, thereby, dashing the retirement dreams of buggy whip workers?
Later in his speech Mr. Obama praised Henry Ford who "made it his mission to pay his workers enough so that they could buy the cars he made." The principle of private property gives the owner of a business the right to offer employees whatever wage he wants to. The principle of freedom gives the employee the right to accept that wage or reject it. In a free market the voluntary choices made by both owner and employee are assumed to be made in their own best interests.
Ford's decision to offer his employees a wage higher than the wage offered them by his competition, does not establish some grand principle of economics or sound business practice. It simply illustrates Ford's business acumen and foresight, his anticipation of change in the market.
Ford realized that individuals in the American market demanded millions of cars, but that he could not satisfy this demand by custom-building each car as was the industry practice at the time. So Ford innovated. He invested capital into a new manufacturing technique: the rolling assembly line. This capital investment allowed Ford to produce and sell millions of cars at a fraction of his former labor cost. As a result, he could also afford to pay his employees a higher wage.
Ford demonstrated that change in the free market is a not a new, 21st century phenomenon. He also demonstrated that innovation, technology and capital investment are not the evil President Obama implies they are. Henry Ford figured out how to get 100 assembly line workers do the work of 1000 artisans to everyone's ultimate satisfaction.
Whoa! Some, like President Obama, would say that the 900 artisans Ford displaced lost their jobs. Ford "exploited" these "workers," dashed their dreams of retiring as car builders, put them out on the street to starve. How could that be good for them and their families? (President Obama might even advocate tax money be collected from the rest of us and spent on behalf of these "exploited" and unemployed workers. He might decide to establish re-training programs and three years of monthly unemployment compensation to help each of them adjust to this traumatic phase of their lives.)
My grandfather would have laughed at such nonsense! He knew instinctively that Ford's mass production innovation would lower the price of automobiles for everyone. He knew that now even he could afford to buy one. Moreover, he knew that if he could afford an automobile, every American could afford one. He knew that more factories like Ford's would be needed to make them. He knew that more steel, rubber and gasoline would be needed to manufacture and run them. He knew tons of concrete and many hours of labor would be needed to build roads for these millions of cars to drive on, and that new opportunities for country and suburban living would follow. In short, my grandfather knew that, as a result of Ford's innovation, his life and the lives of all Americans would improve.
But what of that artisan that lost his job building one car at a time? My grandfather was nothing if not a realist. He would simply say to that artisan: "Times change. You got to change with them. You lost your job, yes, but you're skilled, experienced and, if you are ambitious, you'll find another, even better job. In the mean time, here's a couple bucks to tide you over."
Some would say, perhaps even President Obama would say, that my grandfather was a fool. "Workers" can't find their way in the world without "rules of the road" to guide them and the federal government to feed them and train them, that we're all better off "together than we are on our own," that over "the last few decades, huge advances in technology" have changed everything.
My grandfather would have had a good laugh at that one too. "...Feed them and train them!" I can hear him laughing and shouting. "As if people are horses!"
More to come.
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