Wednesday, October 17, 2012

How You Build That

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.

So said President Obama.

It’s true that in a division of labor capitalist exchange economy, no one does it all. Society is not made up of lone wolves. But let’s carry Obama’s logic back one step: “Somebody invested in concrete and asphalt and steel. If you build roads--you didn’t build that.” We can carry this line back ad infinitum, around the economy and back through time to the emergence of man from the cave.

The narrative behind Obama’s “You didn’t build that” speech is just this: Since untold numbers of people past and present contribute to an industrial economy, no one in fact contributes anything, because no one can claim to have built anything. So our incredible modern industrial economy was built by no one--and thus everyone!

Obviously somebody had to have built something. Since the individual is the only human entity that exists metaphysically, it stands to reason that only individuals build anything. But given the myriad contributions of myriad individuals over time, how do we determine who built what?

To delve a little deeper into the question of how one’s achievements tie into the achievements of others, let’s revisit James C. Roumell’s article, What I Built with Government Help, from the personal angle:

Today, I own a small business, an asset management firm with $300 million in assets. Last year we launched the Roumell Opportunistic Value Fund (RAMSX) and hired three more people. We’re growing and creating jobs. I suppose I could pound my chest and take credit for my journey from Detroit to Chevy Chase, from working class to professional. I could say I built it myself. But this wouldn’t be true.

But how, exactly, did those other factors result in Roumell’s success? They, in fact, didn’t. They provided a starting point. The rest was up to him.

All of the opportunities laid before you by others--”government help” or otherwise--will do you no good unless you choose to seize them. The productive individual seizes them. The unproductive do not. From the day you are born, the impetus for self-improvement comes from within the self. Think of how much a child learns in the first three years of his life, before he has set foot in a school, based solely on the unaided, spontaneous, self-generated work of the child’s own intellect and energy. (In this regard, see the work of Maria Montessori.)

The best teacher, best educational environment, best education philosophy and curriculum is an open door of opportunity. But it is still the student who must seize the opportunity; to choose to focus and apply himself; to provide his own motivation and discipline and self-generated action; to think and work to acquire the knowledge and cognitive skills from which to build his future life and career. All of the accumulated knowledge of mankind is of no use without individuals who choose to do the mental work of acquiring it. The impetus for success must come from within the student himself. Good educators can foster (or hinder) the child’s progress by providing a good educational environment. But the student’s own ambition is his only path to a good education.

The same holds true throughout life. No one can think for you. Nothing but your own choice can animate you to intellectual and physical action. Nothing but your own passions and desires can drive and motivate you. No one can give you the qualities of character required for a productive career: rationality, integrity, pride, honesty, discipline, dedication, ambition, and so on are self-generated. No one is born with these qualities, as no one is born with the opposite, negative qualities. It is you who has to focus your mind, exercise your cognitive faculties, make the mental connections that lead to understanding. It is you who must work to acquire your chosen skills. Knowledge doesn’t just jump into your mind, no matter how good the teacher. It is you who must absorb it by a constant process of focus and thought.

It is you who must make the never-ending myriad of choices required to advance your life and your career. It is you who has to choose the ideas you will act upon, and set the goals and values to pursue. It is you who must make the effort to learn from your mistakes.

All of this mental and physical energy must be initiated by your own choice. The basic choices--to think or not, to act or not--and all of the derivative choices are yours and yours alone. All of the achievements that are yours to build upon, if you choose to build upon them, are there. But the building will not commence without the attribute that you and you alone possess--yourself.

Think of the achievements that came before us as a platform; a starting point. In some respects, the platform varies in elevation from individual to individual, depending upon where one lives, his family background, natural intellectual and physical attributes, etc. In other respects, such as mankind’s reservoir of previously discovered knowledge--which is available equally to everyone--we inherit a level platform. But each individual must build on his platform what he will. To the extent that an individual builds on the platform he inherits, the achievement is his. It is not for the schools, infrastructure, the work of others for which you are paid. It is your own achievements--great or modest--that your earnings represent; what you built upon that platform; the material value you added, after paying for what you received from others, including employees’ salaries, to the achievements you inherited from others.

Consider again Obama’s now famous--or, more precisely, infamous--statement:

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.

But neither did the people who built the internet, roads, and bridges build your business. This unbelievable American system--the system of freedom and law--also allowed them to thrive, just as it did you, each to the extent of their ability and ambition. Does luck play a part? Sure. But luck is relevant only to the extent that one builds upon the good luck--and overcomes the bad luck--one encounters.

Yes, there are many factors contributing to the nature of his success. 250 years ago, before the advent of individual rights and its political implementation, capitalism, Roumell wouldn’t have built the “asset management firm with $300 million in assets.” But his personal character and work ethic would have made him a success in any era, within the context of the economies and the extent of individual liberty of the time.

The advantages of living in today’s advanced industrial society  provide opportunity for a much higher level of success, to be sure. But regardless of the economic, political, and personal circumstances one finds himself in, the money one earns by productive work and voluntary trade with others is not payment for those “other factors.” The money one earns by his own work in any era represents value added by one’s own efforts; added, that is, to the value created by others.

Let me use my own occupation--plumbing--to demonstrate the point. A team effort such as erecting a building is not a ‘collective” effort, but a series of individual efforts bound together by voluntary cooperation and a common goal. As a construction tradesman, I can tell you that it is the individually acquired knowledge, skills and work of each member of the team…from the architect to the tradesmen to the construction supervisors to the suppliers to the inventors and producers of the tools and materials, etc., that makes that building possible. Each person involved is working to further his own self-interest by his own efforts. While the successful completion of the building depends upon everyone doing his job, each person is being paid according to his own contribution to that end. My work depends in many ways upon the work of others. I can’t do my work until the building has been designed, the foundation laid, the steel erected, etc. But I am not being paid for the erection of the steel skeleton, or the work of any other person contributing to that building. The work that I do by my own mind and hand is my accomplishment, and no one else’s, and the money I am paid is mine just the same. My money--and my success--represents value added to the value created by others.

The same process holds true for Roumell’s business. He built it. Others--like his employees--contributed, for which Roumell paid them. But the business exists because Roumell chose to take the actions necessary to bring it into existence, from the initial idea through all of the decisions that only an owner can make. He built that. To the extent that his employees earn their paychecks, they built that.

The incredible wealth of our industrial society is not a collective achievement. It is the sum of the achievements of productive individuals, to the extent that each [correctly] applied his own initiative, intelligence, and labor—from the industrialist to the construction tradesman. To the extent that you earn an honest dollar—or billion dollars—is the extent to which you built on the talent of your associations and all of the infrastructure and knowledge and incredible achievements that came before you. Your money represents your own self-made success; the value added to the inherited achievements of others. We are all fortunate to have these achievements--this platform--to build upon. It enables each of us to start from a higher rung on the economic ladder than has historically been possible. But what each of us builds upon that platform--whatever its level--is ours.

Acknowledging one’s accomplishments does not mean beating one’s chest and denigrating the accomplishments of others. Likewise, acknowledging the accomplishments of others does not diminish one’s own. They complement each other. That’s the greatness of a free market, division-of-labor, trade economy. People get better together through trade, with each contributing to others’ success in payment for what they receive from others. Roumell pays his employees for what they contribute to his business, and his employees get paid according to their contributions. To the extent that each individual builds his economic success through productive work, that individual did build that--and should be proud to take credit for it.

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