Rarely does a phrase hit that conservatives and liberals can both seize as a rallying cry. Elizabeth Warren’s statement that “Nobody in this country got rich on his own,” reiterated less tactfully by Obama, is such a meme.
To conservatives, this shows the destructive socialist kernel in liberalism, denying individual effort and ingenuity in order to take from the producers and give to the non-producers. To liberals, it is a simple reminder that every successful capitalist venture makes material use of pre-existing social formations.
The funny thing is that the logic of this meme is built upon propositions that everyone can agree upon:
- Individual effort is a valuable driver in any business venture.
- Entrepreneurs who so drive the venture deserve ample recompense.
- Entrepreneurs draw upon existing social formations in building their business.
(a) The entrepreneur was educated (through schooling and apprenticeship) by and within a social formation.
(b) The entrepreneur’s workers were educated (through schooling and apprenticeship) by and within a social formation.
(c) The entrepreneur drew upon and continues to draw upon existing technologies and infrastructure (transportation, communications, policing and judicial, trained work force, consumer base, etc.).
(d) If the business has more than one employee, the profits of the business depend in part upon the labor of the employees.
No reasonable person on either side can dispute these propositions – a successful business depends in part upon the efforts and ingenuity of the entrepreneur and in part upon a pre-existing infrastructure. The real dispute comes down to a matter of emphasis. Rational conservatives will admit that social infrastructure plays a role, but assign that role a minor value compared to individual initiative. Rational liberals will admit the value of individual initiative, but emphasize the individual’s obligation to give back to the social infrastructure from which he or she so heavily drew.
Given these premises, most would agree that the successful businessperson with a number of employees should feed something back into the infrastructure through taxes. The only real dispute is what amount is a fair amount.
I could stop here, and leave this as a non-partisan analysis of the meme to see if both sides could agree to this much. But my conservative friends know me better than that, so I’ll follow up with my liberal conclusions. Like most Democrats, I believe that the owner of such a venture, or the CEO in the case of larger businesses, can in all fairness make 10, 20, 30 times as much as the average employee. If you have a dozen employees averaging $30,000 a year and you’re taking home a half million, good for you. Contrary to popular opinion, liberals are not out to soak the rich. But let’s face it, the wealthier you are, the more you are making from investments (and from the productivity of your work force) rather than from your personal productivity. Liberals say that you and I and Oprah should pay the same tax rates on our first $250,000, and that you and I and Oprah should pay a slightly higher rate on our income that falls over that line. In a country with huge income inequality, where the rich are fabulously rich, where the middle class is stagnant, and where the poor are hard-pressed to break out of poverty, that doesn’t seem too much to ask. We do all live and die, flourish and falter, within the same social infrastructure, and the wealthier you are, like it or not, the more you have gained from that infrastructure. To liberals, it’s just a matter of getting the investing elite to put a little bit of the surplus back into the infrastructure that supports the worker bees of productivity.