“Capital is only formed by self-denial.”
– William Graham Sumner, 19th century sociologist
President Obama has recently drawn much anger from the right for expressly doubting the conservative folklore of capitalism. That folklore holds that the rich became so entirely through their own efforts, that is, through the determined and disciplined application of talent. This is crucially a moral story: one is rich because one is virtuous. Capitalism is part of nature’s mechanism for enforcing morality. State interference in the free market can only upset the just distribution of riches that is its natural effect. This mythology is the principle moral rationale behind laissez-faire policies on economic, fiscal and monetary matters, policies such as lowering higher end tax rates, de-regulation, the privatization of Social Security and Medicare. That is, you should be on your own, because only then will you receive the compensation your individual moral character merits. Only then will you receive justice. Imagine John Calvin reading Milton Friedman.
It’s baloney, of course. It’s baloney in many ways. First of all, capitalism is no more natural than powdered wigs. It’s a human institution, with all the imperfection, corruption and injustice inherent in human institutions. Secondly, not all the character traits that bring wealth are admirable ones: greed, cunning, ruthlessness. Is manipulating consumers with advertising a virtuous enterprise? Many of capitalism’s ablest practitioners are simply good at gaming the system. Third, no one succeeds entirely on his or her own. Every business owner relies upon the cultural and moral resources provided by society and the stability, physical infrastructure and educated workforce provided by government. Fourth, luck often plays a great part in achieving success. The third and fourth unpleasant truths are the ones that President Obama has been so indelicate as to say out loud. Have I fairly represented and then dismantled the conservative view of capitalist success? Or have I merely burned down an easily combustible straw man? Maybe a look at the conservative responses to Obama’s remarks will help answer that question.
But first, a look at Obama’s impiety:
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.
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.
The president is clearly presenting objections 3 and 4 above. That is, many successful people, in keeping with the conservative myth, attribute their success entirely to their own smarts and hard work. But, Obama responds, this overlooks three other important contributions to success: simple luck, a supportive cultural and social background (“a great teacher”), and an enabling state (“roads and bridges”). He’s even touching upon objection number 1, i.e. that society and government played a role in constructing capitalism (“this unbelievable American system”).
But it is these lines in particular that conservatives have focused upon: “If you’ve got a business – you didn’t build that. Somebody else made that happen.” In particular the four words, “you didn’t build that,” have become in the conservative mind a perfect distillation of all that is foreign, socialist and unholy in Obama’s thought. Many – either from mendacity or ideological blindness – claim the “that” in “you didn’t build that” refers to the “business” that “you’ve got”. That is, Obama is denying that business owners built their own businesses, and insisting instead that government did. For example, Jim Treacher, in a post titled, “Stop claiming Obama said what he said, just because he said it”, renders Obama’s remarks as, “You didn’t build that because of your hard work and intelligence. You depend on the government, not the other way around.” Republican congressman Paul Ryan (who has since been picked by Mitt Romney to be his Vice-presidential nominee) wrote, “The President recently suggested that a central government – not individuals – deserves the credit for building successful businesses.” Romney himself, brave truth-teller that he is, threw Obama’s remarks back at him: “I do not give government credit for having built that, I give free people credit for having built that business.” Romney again: “The idea, to say that Steve Jobs didn’t build Apple, that Henry Ford didn’t build Ford Motor, that Papa John didn’t build Papa John Pizza, that Ray Kroc didn’t build McDonald’s, that Bill Gates didn’t build Microsoft . . .” But this is just foolish. It’s quite clear, as for instance Joe Klein has pointed out, the “that” in question means the infrastructure (“roads and bridges”) built by government. Besides, no socialist claims that entrepreneurs didn’t build their businesses; socialists claim that entrepreneurs shouldn’t build businesses. Any socialist worth his commissar-rationed salt knows how capitalism works; he just doesn’t want it to do so. So Obama is not only a socialist but an uneducated one. Clearly, for many, the lure of scoring cheap election year points is too great a temptation to resist.
Many conservative commentators, even if they avoid the explicit dishonesty and misrepresentation of the tale that Romney so casually spins, seem quite certain we’ve all now seen Obama’s socialist smoking gun. In a post entitled, “Obama lets the cat out of the bag,” the Washington Post’s Jennifer Rubin is stunned by Obama’s “collectivism,” his “rag on individual merit.” She quotes at length from Obama’s September 2011 jobs speech in which he makes the case for collective effort, a speech she summarizes as “You didn’t earn anything and government is everything.” But in that same speech – included in that part of Obama’s speech that Rubin herself quotes! – the president also says, “Yes, we are rugged individualists. Yes, we are strong and self-reliant. And it has been the drive and initiative of our workers and entrepreneurs that has made this economy the engine and the envy of the world.” For a socialist, Obama seems remarkably bad at ragging on individual merit! Rubin concludes: “Lo and behold he’s revealed himself to be the very caricature of the anti-business, government-is-all liberal Republicans have claimed him to be.” Caricature, indeed. Is Rubin simply a propagandist or a blinkered ideologue, unable to make distinctions? Well, ideologues make the best propagandists, true-believers the best liars.
We see the most salient aspect of the conservative reaction to Obama’s remarks: unbalance, the black-and-white thinking that turns Obama’s thoughtful recognition of collective effort into a thorough renunciation of individual effort. Lawrence Kudlow claims Obama has “trashed” and “demonized” entrepreneurs, that he “has it out for successful earners, investors and small-business owners.” Peter Kirasow says that Obama “denigrates individual American spirit, ambition, drive, skill and industriousness.” J.D. Tuccille laments Obama’s “repulsive, Borg-like philosophy.” Rich Lowry's characterizes Obama’s viewpoint as, “Everything is ultimately a collective enterprise”, perfectly expressing the inability to see both sides of the equation. Because Obama sees the value in both government and individual effort, Charles Murray thinks that he is “un-American”, that he doesn’t really get America. Pat Buchanan sadly wonders the same thing: “Does Obama understand America?” Stu Varney, Fox Business host, worries Obama’s remarks work “against the essence of the American Dream.” When one questions conservative mythology one is questioning America itself! Kimberley Strassel of the Wall Street Journal agrees. To her, Obama’s “dismissive words toward free enterprise . . . raise the far more potent issue of national identity and feed the suspicion that Mr. Obama is actively hostile to American ideals and aspirations.” She asks us to, “Witness the first president to demean the bedrock American beliefs in industriousness and exceptionalism.” Rush Limbaugh flops smack down on the sloppy and smelly McCarthyite conclusion: “I think it can now be said, without equivocation – without equivocation – that this man hates this country. He is trying – Barack Obama is trying – to dismantle, brick by brick, the American dream.” No equivocation is needed when no equivocation is felt. Obviously, much of the conservative overreaction to Obama’s remarks is simply a cynical attempt to make Obama look as bad as possible. But much of it seems to express a straightforward inability to see outside the strict confines of the conservative mythology.
Some conservatives seem to think that not only are Obama’s words unforgivably heretical, they actually harm the economy! Lawrence Kudlow compares Obama’s dark analysis with Reagan’s sunny cheerleading: “When Reagan praised our capitalist system and the businesses inside it, he provided a psychological lift to accompany his fiscal program. That was leadership.” James Pethokoukis praises and echoes Kudlow: “Maybe Obama doesn’t understand how damaging and corrosive these sorts of statements and speeches, repeated over and over, might potentially be?” Apparently, we must treat businesses the way overly permissive parents treat their young children: They must be continuously showered with praise lest their fragile self-esteem be tragically undermined. There was a time when the lure of wealth and power would have been sufficient spurs to success, but now entrepreneurs pout and go on strike if they don’t also receive our blind worship! Liberal writer Jonathan Chait incisively portrays the unbearably self-pitying sensibilities of the rich and the conservative movement devotees whose jobs it is to keep that worship permanently on high volume. Chait highlights “the extraordinary hypersensivity surrounding the egos of the rich in our current political culture” and the “genuine outrage of the right” over what is at bottom “Obama’s insensitivity toward the rich.” If the outrage really is genuine then conservatives must be either true believers in the mythology or terribly afraid that the mythology might lose its power.
This leads us to the “banality” response, in which a conservative writer readily accepts Obama’s points as obviously true – indeed, so obvious as to be uncontroversial – but rails against Obama for using those points to advance his insidious liberal agenda. Holman W. Jenkins, Jr. of the Wall Street Journal writes, “He only meant to say we need government as well as private initiative, and who could disagree? This argument is anodyne, dispositive of nothing that is in dispute. Of course, it also comes as a defense of policies that all run in one direction: bigger government, higher taxes.” So Obama’s words defend bigger government but don’t address anything in dispute? Rich Lowry finds Obama’s argument to be little more than “a warrant for socialization of the proceeds of success.” He concludes: “Behind its smiley we’re-all-in-it-together façade is a frank demand: You owe us.” How dare Obama make a convincing argument for raising taxes on the rich! Jim Geraghty quotes Obama: “If you’ve been successful, you didn’t get there on your own.” and quite reasonably concedes, “Which successful person claims that?” But he anguishes that Obama’s thinking leads to policies that are “changing and eroding” America. (Geraghty may be a bad example of the banality response, since his concession of Obama’s points can’t withstand his disdain for capitalism’s losers, especially those whose envy makes them forget their proper station: “And there are a lot of not-so-hard-working people out there who expect to be successful anyway.” But that merely helps prove my point: even some of those who intellectually concede Obama’s arguments find it impossible to really believe them.) These writers want to have it both ways: Yes, they are reasonable people who know the mythology is baloney and no, they won’t stand idly by while smarty-pants socialists call it baloney. But if Obama’s words are so undeniably and uncontroversially true, then why is it so terrible to utter them? Is the conservative argument that policy should not be based upon truth? Or do they believe it’s a misleading truth? It’s not clear. But here is their real – and quite remarkable – concession: widespread acknowledgment of Obama’s truth would inevitably lead to more liberal economic policies. The truth is on the side of the liberals so conservatives must fight against the truth. The conservative folklore of capitalism is a lie, but it’s an indispensible lie.
But maybe the truth makes a better basis for policy than myth does. Economic policy based on Puritan mythology can be just as irrational and destructive as science based upon Genesis. The “banality” writers are quite right about one thing: popular acceptance of the conservative mythology leads to greater acceptance for laissez-faire economic policies. If the rich righteously deserve their wealth then raising their taxes is a terrible injustice. If capitalism rewards the good and punishes the bad then interference in the market can only thwart the workings of justice. Of course, conservatives and libertarians don’t just make moral arguments in favor of freer markets, they present practical arguments as well. They claim that lower tax rates, reduced regulation and fewer government services help the economy grow faster, creating more wealth for everyone. These practical arguments, unlike the mythology, have some plausibility and liberals generally try to rebut them with practical arguments of their own. For example, liberals concede that unfettered capitalism does indeed generate great wealth but they believe that wealth tends to become concentrated in only a few hands. Both sides produce facts, charts, statistics, etc. to make their respective cases and the debate grinds empirically on. But typically liberals surrender the moral ground; in effect they concede that of course the rich deserve their wealth, of course private property is sacrosanct, government merely needs a little of it for its practical humanitarian purposes. But Obama’s remarks don’t make those concessions; they constitute a genuine moral argument against an excessively free market. They weaken the moral argument for the inviolability of private property, and to conservatives that inviolability is the material basis for freedom itself. What for liberals is a simple, reasonable and irrefutable point about the nature of capitalism is for conservatives a dagger aimed at the heart of the free society. In effect, conservatives are claiming that not only is their capitalist folklore necessary for economic health but it stands as a powerful bulwark against the collectivist nightmare. That’s some powerful lie.
Moderate conservative Josh Barro makes all this explicit. He starts with the obligatory concession to the trivial falsehood of the conservative myth: “Obviously, every successful outcome in life – and every failed one – arises from a combination of internal and external factors.” But he abhors the uses to which such trivial concession can be put:
People are rightly unnerved by an argument that amounts to “we can tax you because you didn’t deserve this anyway.” Faced with such an argument, defending your own contribution to your success isn’t just a point of pride – it’s an argument you must make to defend the principle that you are entitled to your own private property.
Here Barro is trying to force a liberal concession. He is making a point that any honest liberal should admit: that once one abandons the conservative myth one must also abandon the notion that individuals have an undiluted right to their own property. But most liberals don’t want to go that far; they just want to tame capitalism and make it better fulfill humanitarian ends. They just want to raise taxes on the rich a little and provide working people with a slightly better safety net. They never set out to undermine private property. But here we are and the logic seems inescapable. If you didn’t earn your wealth without help, then morally it is not entirely yours. There are, of course, prudential reasons for treating private property as inviolable, but there is no sound moral basis for doing so.
But it would be wrong to conclude – as many conservatives, even Barro, seem to – that Obama believes that individuals have no moral claim at all on their own property. The president is merely proposing a more balanced view of the subject. His position amounts to: individuals have a right to their private property, but it is not an absolute right. It’s a terribly important right and it should be respected as much as is practically possible, but it should also be balanced against other important considerations, such as the economic health of the nation and the fiscal health of the federal government. There are competing legitimate claims upon that wealth and all those claims must be respected. He’s expressing a realistic and pragmatic viewpoint, and one with a solid moral and intellectual foundation. Is that un-American? Or is the American dream predicated upon false folklore? Can we both accept the conclusions of our own logic and believe in America? But these are not questions in a vacuum. As Obama himself said in the speech Jennifer Rubin references (my italics): “But there’s always been another thread running throughout our history — a belief that we’re all connected, and that there are some things we can only do together, as a nation.” That is, the notion of collective responsibility has been there from the beginning, as important as the notion of individual responsibility. Obama acknowledges and honors both notions. Above, I referred to the conservative mythology of wealth accumulation as baloney. That was unfair: it’s not entirely baloney, though it does contain obvious falsehoods in the ways I described above. There is much truth to the notion that in a free economy those who work hard tend to do better than those who don’t and those with brains and talent tend to do better than those without, etc. But that’s the point: the myth contains much truth and many lies and if we hope to address our profound national problems in a realistic way then we must let ourselves see both. That’s what we’ve done through most of our history. That’s what Obama’s speech asks us to do. And that’s what conservatives refuse to do.
