Published August 28, 2012
President Obama and many of his senior advisers have taken to the airwaves recently to argue that entrepreneurs and business owners owe their success to government—more than to their own individual initiative, hard work, and good ideas. While we always have to discount the craziness of campaign rhetoric, the basic idea behind this argument is objectionable and offensive.
First, it’s based on a massive straw man—namely, the idea that entrepreneurs believe that they did it all by themselves. At the Chamber, we speak with successful business people every day and have never heard any of them make that claim. In fact, they routinely credit colleagues, investors, spouses, families, great teachers, and others who have influenced them along the way—and plain luck. Success is usually a team effort, and successful Americans acknowledge this. But that team rarely includes the government!
And why does the administration only look at good outcomes? It believes that success is apparently a collective effort—but where was that “collective” during periods of risk taking and failure? The vast majority of businesses fail.
Every day, millions of people put their lives, savings, houses, and families on the line and work 20 hours a day just to grab their small slice of the American Dream. Where is the collective when all of this is going on?
Second, the argument that public goods like infrastructure and education are responsible for people’s success is equally ludicrous. There’s no question that they help create a platform upon which individuals can build, create, and achieve, but they do not drive success. If they did, then why isn’t everyone successful and wealthy? Public goods are available to everyone and benefit everyone. No one can reap an exclusive return from them.
So why do some people succeed and others don’t? Did Bill Gates, Steve Jobs, or Mark Zuckerberg succeed because the government maintains roads between their homes and offices, supports public schools with an average 30% dropout rate, or funds scholarships to the universities that these innovators famously dropped out of?
I don’t think so.
Third, it’s clear the culmination of this argument is that successful people ought to “give back” to government by paying much higher taxes. But let’s take a look at who pays for all the wonders of big government.
Data show that the top 1% of all households paid 39% of federal individual income taxes while earning 13% of total income in the economy. The top 20% paid 94% of total federal individual income taxes while earning 51% of total income. Facts are stubborn things—higher income earners actually pay more than their “fair share” for public goods and for the trillions of dollars worth of other government programs.
When individuals are allowed to succeed and keep what they earn, they contribute to society by creating jobs and providing goods and services that people need and want. And successful individuals and businesses need little prodding from government to give back to society—most are active participants in improving their communities and giving generously to charitable causes.
The proper role of government is to help create a climate in which opportunities are abundant. It should provide goods and services that individuals cannot reasonably undertake themselves, such as national defense and infrastructure, and establish a social safety net to care for those who cannot care for themselves.
The bottom line is that this nation was propelled forward by extraordinary people who were willing to do extraordinary things.
We should applaud the risk takers and the dreamers who are willing to stand out from the crowd and create the wealth and prosperity that we all enjoy.
Rather than denigrate what these people have done, we need to encourage more people to be like them. I don’t resent successful business leaders or think that they owe me something for their success. I admire and appreciate them for what they have provided to this country.
David C. Chavern is executive vice president and chief operating officer at the U.S. Chamber of Commerce.