The Market Division of Labor IS All of Us

A lot of hay is being made about President Obama's latest utterance to be made a negative sound bite by his political enemies. "If you’ve got a business. you didn’t build that." As if he is claiming that successful entrepreneur's did not build their business. 

Jake Tapper at ABC prints Obama's sentence in context, revealing the sentence in question is from the following paragraph:

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.

It is pretty clear to me that the President was more making the claim that other people contributed to the success of the entrepreneur by producing goods needed for the entrepreneur to do whatever that person did. The "that" which was not built by the entrepreneur was roads and bridges, not his own business.

I suppose that his observation is true enough, but his overall sentiment is still objectionable.  The entire mood of the speech tilted toward collectivism. He said, "There are a lot of wealthy, successful Americans who agree with me, because they want to give something back." I have news for him, those entrepreneurs who are wealthy and successful ALREADY HAVE given something back. It is called the product or service they have provided to people who VOLUNTARILY traded their money in exchange. The idea that they now have to give something more back is maddening.

Additionally, the President said

The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.

So we say to ourselves, ever since the founding of this country, you know what, there are some things we do better together. That’s how we funded the GI Bill. That’s how we created the middle class. That’s how we built the Golden Gate Bridge or the Hoover Dam. That’s how we invented the Internet. That’s how we sent a man to the moon. We rise or fall together as one nation and as one people, and that’s the reason I’m running for president – because I still believe in that idea. You’re not on your own, we’re in this together.”

Two things here require comment. He first recognizes the importance of the market division of labor, but then gets the entirely wrong lesson. He thinks that for projects in which we are assisted by other people, they must be government projects, such as building the Golden Gate Bridge. While it is true that we all depend on other people to provide the goods we use every day, this is part of the market, not government.

The best economists have always recognized that a market economy is not an atomistic economy populated by rugged self-sufficient hermits. As Mises said in Bureaucracy, "Under the division of labor, the structure of society rests on the shoulders of all men and women." As he explained in his monumental Socialism

The greater productivity of work under the division of labor is a unifying influence. It leads men to regard each other as comrades in a joint struggle for welfare, rather than as competitors in a struggle for existence. It makes friends out of enemies, peace out of war, society out of individuals.

It is precisely through the division of labor that people are brought together to do the very things we cannot do only as individuals. This, however, is the product of the market division of labor, not coercive state power.

The second problem I have with the Presidents remarks is that the GI Bill is responsible for creating the middle class. That simply is not true. There was a middle class long before the GI Bill. His broadcasting the idea that we need government programs to create a middle class should be enough  to disqualify him from seeking a second term.