Give credit where it’s due — to entrepreneurs

Raymond Keating
Raymond Keating

Politicians on a bipartisan basis love to talk glowingly about entrepreneurs and the businesses they build and work to grow. Unfortunately, that rhetoric too often hides a fundamental misunderstanding about the process of entrepreneurship or economic risk takers themselves.

Those misunderstandings or hostilities usually become evident through policymaking. That is, while saying nice things about business owners, policies are imposed that raise costs for businesses and create disincentives for entrepreneurship and investment.

Such misguided policymaking includes higher taxes that diminish incentives and resources for starting up, investing in and expanding businesses; excessive regulation, which falls far more heavily on smaller businesses; high levels of government spending that drain resources from the private sector and threaten higher taxes down the road; and a lack of leadership in trying to lower trade barriers that reduce opportunity.

If that agenda sounds familiar, it’s because this is what entrepreneurs, businesses, their employees and investors have labored under for several years now. It’s the agenda of President Barack Obama.

Interestingly, the president let his guard down regarding his philosophy, bias and assumptions when it comes to entrepreneurship in recent remarks.

Mr. Obama declared, “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.”

Let’s break this down. Obviously, few entrepreneurs succeed without help from others. For example, they might have gotten a loan from an individual or a bank or received capital from investors. And, of course, no one succeeds in the marketplace without serving others, by creating or better serving various demands. But it is the entrepreneur who offers the new or improved good or service upon which a loan or investment is made and who finds customers.

This certainly is not what the president is talking about here.

Then Obama talks of having a great teacher somewhere in your life. Well, maybe or maybe not on that one. Making a direct link between having some great teacher along the way and starting up and building a business is difficult. After all, there are countless people who’ve had good teachers along the way, but no inclination towards entrepreneurship.The next lines reveal what the president is getting at: “Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges.” Obama is talking about government.

Now, government certainly has a critical role to play in the free enterprise system, especially establishing the rule of law, enforcing and protecting property rights, running a fair system of justice, enforcing contracts, protecting against fraud and so on.

But the president’s liberal philosophy rejects the idea the individual and private, voluntary groups and associations come first (including private and parochial schools, by the way, with many very good teachers), with government in service to and supporting individuals and such institutions. Instead, in the leftist or progressive view, government spurs and lays first claims on what is produced in our economy, since it’s government that “allowed you to thrive” and “invested in roads and bridges.” Obama misses the fundamental point that government derives its powers from the people. The Soviet Union, for example, was excellent at spending money on building roads and bridges. But since it was a communist/socialist system, whereby government controlled all, they were roads and bridges to nowhere.

Then came the kicker from Obama: “If you’ve got a business — you didn’t build that. Somebody else made that happen.”

In rather stunning fashion, the president takes his views to their natural conclusion, revealing his true take on entrepreneurship and the economy. It is all about government being the spark and the engine. He doesn’t understand that economic growth and wealth creation thrive most in the freest economies. Economic growth is driven by private risk taking — entrepreneurship and investment — not by resources being taken from the private sector and spent by politicians.

In the economies that thrive, such as the United States, private entrepreneurs and businesses innovate, produce and compete, with consumers, in the end, deciding what works and what does not.

Obama’s ignorance of the basics of how the economy works is not surprising. But there still is something unnerving and frightening to hear such economic obliviousness stated so plainly by the president of the United States.

Make no mistake, if you own a business, you did make that happen. You take the incredible risks and work to serve others. That’s an endeavor worthy of praise and thanks — certainly not denigration or diminishment by the president.