About This Blog

Ludwig von Mises (1881-1973) was the greatest economist of my time. His greatest works can be accessed here at no charge.

Mises believed that property, freedom and peace are and should be the hallmarks of a satisfying and prosperous society. I agree. Mises proved beyond a shadow of a doubt that the prospect for general and individual prosperity is maximized, indeed, is only possible, if the principle of private property reigns supreme. What's yours is yours. What's mine is mine. When the line between yours and mine is smudged, the door to conflict opens. Without freedom (individual liberty of action) the principle of private property is neutered and the free market, which is the child of property and freedom and the mother of prosperity and satisfaction, cannot exist. Peace is the goal of a prosperous and satisfying society of free individuals, not peace which is purchased by submission to the enemies of property and freedom, but peace which results from the unyielding defense of these principles against all who challenge them.

In this blog I measure American society against the metrics of property, freedom and peace.

Saturday, July 21, 2012

You Owe Society Because You Didn't Build Them Roads And Bridges!

Maximum Leader Obama said this last Friday in Roanoke, Virginia:
There are a lot of wealthy, successful Americans who agree with me -- because they want to give something back.  They know they didn’t -- look, 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.
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. 

So we say to ourselves, ever since the founding of this country, you know what, there are some things we do better together.  That’s how we funded the GI Bill.  That’s how we created the middle class.  That’s how we built the Golden Gate Bridge or the Hoover Dam.  That’s how we invented the Internet.  That’s how we sent a man to the moon.  We rise or fall together as one nation and as one people, and that’s the reason I’m running for President -- because I still believe in that idea.  You’re not on your own, we’re in this together.  (Applause.)

The President is now claiming his infamous "you didn't build that" line referred not to the clause in the same sentence ("If you've got a business") but to a clause in the previous sentence ("Somebody invested in roads and bridges").

This claim sounds suspiciously like an argument about what the definition of "is" is.

Really, what does it matter what Obama says he meant? He lies as easily as he breathes. His campaign, easier. Consider this as the possible truth of the matter: Maximum Leader was at a campaign pit stop speaking extemporaneously to a crowd of rabid supporters spouting his usual class-warfare rhetoric and he stepped in it.

This is not to say Obama misspoke. The President is a Marxist. He believes in the Marxist directive "from each according to his ability; to each according to his need." He believes capitalists exploit workers and profit from the surplus value of their labor. How he phrases his beliefs is irrelevant.

In his book, Theory and History, Ludwig von Mises writes:
Homo sapiens appeared on the stage of earthly events neither as a solitary food-seeker nor as a member of a gregarious flock, but as a being consciously cooperating with other beings of his own kind. Only in cooperation with his fellows could he develop language, the indispensable tool of thinking. We cannot even imagine a reasonable being living in perfect isolation and not cooperating at least with members of his family, clan, or tribe. Man as man is necessarily a social animal. Some sort of cooperation is an essential characteristic of his nature. But awareness of this fact does not justify dealing with social relations as if they were something else than relations or with society as if it were an independent entity outside or above the actions of individual men.
Mises' point is that all human action is purposeful and individual. Cooperation is nothing more than two or more individuals purposely collaborating to attain ends they cannot otherwise attain. When dozens or thousands of individuals cooperate in "society" to attain common or mutual ends, they do not create a super-organization greater than themselves. "Society" is not a superseding entity but a word that describes the nature of their cooperative network. "Society" is a means to attain the ends cooperating individuals seek, not an end in itself.

In his speech in Roanoke Obama tried to turn this truth back upon itself. He said, in effect, that those who are "successful," i.e., those individuals who profit from voluntary trade with other individuals, must "give something back" to society and its governors who allow individuals to trade and succeed. If "society" describes a network of individual traders committed to voluntary exchange, it does not follow that these individuals owe some sort of debt to the term that describes their cooperative action.

Obama describes individuals on the government payroll -- teachers, researchers, NASA scientists, road, dam and bridge builders, firefighters and the designers of the internet -- who serve and have served individuals in their quest to attain the ends they seek. He claims, therefore, that individual traders in society owe their success in part to the government that hires these individual contractors. He is, of course, correct. Individual traders in society owe their success in part to each and every individual with whom they trade. Mutual benefit is the very nature and purpose of trade. However, it does not follow from this that individual traders owe a continuing and lasting debt to their trading partners. 

What Obama does not acknowledge and, perhaps, does not appreciate is that the governors of society in the last analysis are nothing more than trading partners for the rest of the individuals in society. The only difference, of course, is that trade between the governors of society and those individuals who are not associated with government is mandated and coerced. 

As I have written here many times before, in a voluntary trade both parties always benefit. However, in a coerced trade one party benefits and the other does not, or at least does not benefit to the same extent that he would if the trade were free and voluntary. The truth is that the benefits individuals enjoy as a result of coerced trades with the governors of society would be far greater if these governors had allowed individuals to engage in free and voluntary trade.

Perhaps Obama believes that without mandated and coerced trades with the governors of society individuals would not fend for themselves. Does anyone seriously believe that if all trades in society were allowed to be free and voluntary that individuals would not educate their children, build roads, bridges and dams, fight fires, explore the heavens or do cybernetic research? Does anyone seriously doubt that individuals, trading voluntarily on the free market, could provide these services for themselves more efficiently and more satisfactorily than the governors of society?

Obama's belief that coerced traders owe a continuing and lasting debt to the governors of society who coerced them is absurd. Do you owe a real, continuing and lasting debt to the plumbing company with whom you contracted to fix your toilet twenty years ago? Or to the builder of your house? Or the doctor who delivered you into this world?

Isn't it clear that, if any debt is owed, it is an insubstantial debt of gratitude for partners willing to cooperate in free and voluntary trade?

In fact, trade incurs no real, continuing and lasting obligation because voluntary trade in a free and open society is a win-win game.

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