Monday, August 20, 2012

“You Didn’t Build That” Sneer and Crowding Out Private-Sector Success

Recently Don Boudreaux, economist George Mason University wrote an essay entitled “Crowding out private-sector success” published 08/14/2012 at Triblive, the e-edition of the Pittsburgh Tribune. Boudreaux points out in the essay, as the title implies, that Mr. Obama’s recent sneer of “you didn’t build that” is an attempt to crowd out private-sector success with collective action. (1)

Among the kinds of infrastructure that have, in fact, been supplied successfully by private businesses are city streets, highways, sewage systems, formal education, policing, money and commercial law. Government provision of such infrastructure, therefore, cannot be read as evidence that government’s role on this front is necessary.

If government failed to build highways to connect, say, Atlanta to Pittsburgh, private firms almost certainly would. (It’s easy to collect tolls from drivers who use highways.) And likewise for nearly any other pair of cities in America. So in what way is any actual, government-built highway necessary for any private entrepreneur’s economic success? None — if (as is likely) private enterprise would have done what government instead did by crowding out private efforts.

Regarding Mr. Obama’s “sneer” and Dr. Boudreaux’s essay, here are some points to ponder:

(1) the essay finds some of its basis in the economic concept that: government produces nothing. This is, government produces nothing that the private sector would not have otherwise produced, absent tax. The total would be equivalent, albeit a different basket of goods.

(2) Obama’s “sneer” along with Elizabeth Warren‘s “sneer“ may well indicate that the two know just enough about the concept of “collective action” to frame political notional talking points, but no more.

(3) consider F.A. Hayek’s position that if collective action is to be undertaken, the government should merely act as resource [tax] collector and the collective action should be deployed through the private sector. Hayek postulated that the deployment of collective action through a public sector was due to politicos gaining power through such an arrangement.

(4) if a collective action is undertaken, say building a bridge, the collective action was undertaken in lieu of private action. However, the collective action is not pure “someone else/everyone else” made this happen. That is a very ultraistic view. Do bond referendums end up on ballots, for say a performing arts center, by voters casting a vote due to spontaneous order -or- in the main, do the ballot initiative end up placed on said ballot by special interests? Does appropriated highway money build bridge X or replace bridge Y due to bureaucratic decisions or voter preference?

(5) if voters V vote for bridge Z, does the voter not do so out of self-interest? Conversely, if voter VV votes against bridge Z, does the voter not do out of self-interest? If special interest S lobbies to have bridge Z built through someone else’s money, does special interest S not do so from the point of self-interest? Hence one might label an action “collective action” but Mr. Self-Interest is at the bottom of this collective action.

Therefore, by notionally framing collective action as a spontaneous action of diverse citizens rather than its self interest roots, leaving out that much collective action is politico and/or special-interest associated and adding back the ultraistic idea that participants of the collective action voted for the object of the collective action out of their pure benevolence for their fellow man….we end with Obama and Warren’s notional political argument of “you didn’t build that” by indeed crowding out private sector success with a politically framed notional proposition.


(1) Crowding out private-sector success, Donald Boudreaux, 08/14/2012, Triblive

(2) Ibid


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