DYSPEPSIA GENERATION

Tom Smith lays it out.

Much could be said about how stupid was President Obama’s recent comments about business founders not really having built their businesses by themselves, but rather owing them in large part to things others, especially the government, did for them. You drove on a public road to meet your 457th potential angel investor. Your third grade public school teacher taught you always to say please. And so government gets a lot of the credit for the thing you sweated blood to create. Big surprize. If you build anything, you can absolutely bet people will line up for the credit, like Al Gores for the internet. Failure, you can keep the credit for that.

But here’s the question to ask — how many more successful businesses, inventions, products, services, toys, tools, insights, and just plain fun would there be, if government did not in the first place make it so ridiculously difficult to start a business and keep it going? I don’t see our young president taking credit on behalf of the state for all the failures it help cause, all the ideas that never got off the ground because the regulatory hurdles were so high, or all the established companies that never had to face competition because they had managed to get their rents written into law. This is part of the seen and not seen insight of Bastiat. What you see is a successful business when it manages to survive, and then people run up, the same people who taxed and regulated it nearly to death, and say I helped! I helped! What you don’t see are all the businesses that perished or never got started because of the heavy hand of the state. And it’s a very heavy hand.

David Bernstein chimes in:

Not to mention the times when government directly destroys businesses. For example, my paternal grandfather opened business after business that failed (but always eventually paid his debts to his creditors, so he was always able to start again). He finally achieved some modest success in his forties. New York City, however, had other plans, and took his business via eminent domain, paying a nominal sum for his inventory and precisely nothing for his most valuable asset, goodwill. Lord knows how many thousands of small businesses were destroyed by (generally) misconceived urban redevelopment projects, with inadequate compensation to their owners. I don’t know the full details, but would anyone be surprised to learn that the developers who built on the condemned land had a lot more political power than the displaced small businessmen? That’s government, too.

All too often, what entrepreneurs build is successful not because of government but in spite of persostent government attempts to get in the way.

Bernstein again, with the bottom line:

Sure, the government can provide useful services, and undoubtedly my father benefited from public schooling and other services (which is not to say that at least some of those services might not have been better-provided privately). But it’s an atrocious logical error to argue that if government does some things with at least minimal competence and efficiency that this somehow justifies any other intervention into civil society by government, or that the fact that most of us appreciate some government means that we should inherently want more government (or for that matter, that we shouldn’t want less government).

This entry was posted on Sunday, July 22nd, 2012 at 05:41 and is filed under Think about it.. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.