According to several talking heads on my television set today, the Romney Campaign must be feeling the heat about the tax return release issue because it’s time to haul out John “Frequent Flyer” Sununu for a reminder that the current President of the United States is The Other.
“What I thought I said but I guess I didn’t say is that the president has to learn the American formula for creating business,” Sununu said. “The American formula for creating business is not to have the government create business.” Sununu [HuffPo]
Former Massachusetts Governor Romney entered the lists running after a line from a speech by the President in Roanoke, VA.
“If you were successful, somebody along the line gave you some help,” Obama said. “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.” [HuffPo]
Governor Romney was outraged, I say, outraged:
“The idea that Steve Jobs didn’t build Apple, that Henry Ford didn’t build Ford Motors, that Papa John didn’t build Papa Johns, that Ray Kraut didn’t build McDonalds, that Bill Gates didn’t build Microsoft,” Romney said. “It’s not just foolishness, its insulting to every entrepreneur, every innovator in America and it’s wrong.” [HuffPo]
Let’s ignore the relatively obvious antecedent of “that” as the physical infrastructure, and move quickly to what used to happen at the dinner table when one of the offspring made altogether too much of some personal exploit.
You could tell when the line between pride and chutzpah was crossed: Someone would grin and ask, “You Shoot A Bear?”
Steve Jobs built Apple, for which he was justly proud. Bill Gates built Microsoft, an accomplishment in which he should take pleasure. However, where would Apple or Microsoft be if the Atanasoff-Berry Computer hadn’t been designed and built at Iowa State University in 1942? IBM/Harvard’s 1944 Mark I? The Colossus machines delivered to Bletchley Park in 1944? Where might we have been but for the University of Pennsylvania’s School of Electrical Engineering constructing stored program computers in 1946? [CTL]
Henry Ford built his motor car company. Where the cars were going to travel was another matter. Around the turn of that century:
“The country had approximately 2,199,600 miles of rural roads and only 190,476 miles (8.66 percent of the total) had improved surfaces of gravel, stone, sand-clay, brick, shells, oiled earth, bituminous or, as a U.S. Bureau of Public Roads (BPR) bulletin put it, “etc.” Many people thought of interstate roads as “peacock alleys” intended for the enjoyment of wealthy travelers who had time to spend weeks riding around the country in their automobiles.” [FHAd]
Where might the U.S. auto industry be now if only 8.7% of our roads had improved surfaces?
What of franchising, as in the case of McDonalds and Papa Johns. Sorry, the founders of those two popular American franchises are standing on the shoulders of Albert Singer who used franchising to sell his Singer Sewing Machines in 1851.
Infrastructure takes a variety of forms. There’s the physical component, for example, local and state efforts were necessary to create a road system on which cars and trucks could travel efficiently. There’s the knowledge component. Jobs and Gates availed themselves of a knowledge base created by a variety of government, educational, and private efforts to create stored program computers. There’s an economic component.
The American system of finance should function to channel investment from areas of surplus to areas of scarcity — from those who have money to invest to the entrepreneurs like Ford, Jobs, and Gates, who need capital. There’s also a legal component — for private enterprise to flourish there must be an independent legal system in place with the power to interpret and enforce laws governing contracts and other businesses matters.
What’s WRONG is to assume that Ford, Gates, Jobs, and Kraut didn’t create their businesses in an environment in which the physical, knowledge, legal, and economic infrastructure elements were used to entrepreneurial advantage. Ford didn’t pave roads. Gates and Jobs didn’t invent computers. Kraut didn’t invent mass production and franchising. And, all of them were successful in a legal context in which an independent judiciary could call for the enforcement of contracts and business agreements.
To say that a single individual was personally responsible for the success of his or her enterprise without any acknowledgment of the physical, knowledge, legal, and economic infrastructural environment falls easily into the You Shoot A Bear? category.
To say that it is only the financial sector which assures the success of any commercial enterprise is almost as naive. Without the knowledge base there are no software start-ups in which to invest. Without the physical base there is no way to deliver power generated by alternative energy sources. Without the legal component there is no way to insure patents and contracts.
Governor Romney’s rather arrogant thesis also rests upon the notion that business owners need not feel “grateful” for the public infrastructure on which they rely because “we paid for it.” Yes, business owners pay taxes. However, the former Governor’s argument works if — and only if — the business owner in question was the only one paying for the work. The argument doesn’t work because the taxes paid by the business owner are combined with the taxes paid by the butcher, baker, candlestick maker, teacher, firefighter, police officer, garage mechanic, airline pilot, and veterinarian….
What is foolish and insulting is the notion that Americans are so ill-informed and naive as to believe that our modern innovators and entrepreneurs are so divorced from their business environment that they don’t acknowledge the elements which inform and support their endeavors.
Perhaps the failure to acknowledge the totality of our American business environment comes from being a Master of the Universe? “Who shot a bear?”