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There is much ado about President Obama’s recent statement “If you’ve got a business, you didn’t build that.” The overwrought right is abuzz with angry indignation. How dare he! they shout in unison, aghast that this evil communist could so thoroughly declare war on private enterprise. Let’s take a closer look.

First, it helps to have the entire quote before you:

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.

It’s a bit impolitic, a bit overstated. But how far off is it?

As I said in The War of American Interdependence, there are two cognitive frames in competition here, one which thinks that we are fundamentally, ontologically “individuals,” fundamentally mutually independent, and one which recognizes that we are fundamentally, ontologically members of a society, fundamentally interdependent. We think in languages we didn’t individually invent, using concepts and conceptual tools we didn’t individually invent. Every aspect of our lives implicates and depends on countless others, no matter how much of a rugged individualist one may be: Few frontiersmen built their own firearms, and, if some did, they did not mine the ores that provided the materials for it. And whatever they did, in almost all cases, they learned how to do it from others.

Most of us rely on one another to a far greater extent than that: Most of us don’t grow our own food, or, if we do, we don’t build the tractors and drill for the oil and do myriad other things involved in the enterprise. Most of us don’t make our own clothes, or build our own homes, or make our own tools, or produce our own electronic devises, or, if we do some, we certainly don’t do all. The market isn’t an expression of our mutual independence, but rather a social institutional form which helps deepen and facilitate our fundamental interdependence.

Our laws, as well, are an expression of our interdependence. We forge them in the light of what that interdependence demands of us. The developments of the modern era that led to market economies and popular sovereignty framed by written constitutions with carefully delineated rights and powers are part of the evolution of our interdependence. The concept of “liberty” itself is an expression of our interdependence, of the discovery of both increased vitality and increased humanity achievable by freeing up individual initiative and creativity to as great a degree as possible, while still recognizing and working within the framework of our fundamental interdependence.

Obama was talking about exactly that. It’s not some crazy idea, it’s not even really debatable: It’s a fundamental fact of our existence. We thrive through coordinated efforts and actions, through participation in a society with divisions of labor and mutual reliance on one another. The ideology currently in vogue which attempts to erase that fact from our awareness is pernicious and destructive; it attempts to redefine private wealth as attributable to nothing other than private actions, when that’s simply not true. Ben Franklin, unsurprisingly, got it right: Wealth is as much a function of the laws and markets and other social institutions that we forge together, and of the efforts of countless others channeled through those social institutions, as it is of individual effort, because without the former our own efforts have no framework within which to achieve their ends.

So, no, even in the more exceptional rather than more common instance in which a business is built up without any element of relative privilege (the differential material and social inheritances that we draw at birth) having advantaged the entrepreneur, they are not solely responsible for the creation and success of that business; the myriad other human efforts that it implicitly depended on are as well. And the market does not magically reward all of those efforts in ways which serve the ultimate goal of continuing to create the most robust, fair, and sustainable political economy human genius is capable of.

Those who are adamant that human genius cannot intrude on some imaginary pure and absolute individual “liberty,” that to do so is “social engineering” or “communism,” are rather remarkably ignoring how that individual liberty was legally constructed in the first place. Our own Constitution is an act of “social engineering,” and, in the way that too many now use the word, a “communist” plot. Indeed, the framers had to argue that we needed a government strong enough to facilitate effective collective action in our collective interests, “The Federalist Papers” frequently seeming to forecast the later invention of “game theory” and the recognition of what has since come to be called “collective action problems.” (See Collective Action (and Time Horizon) Problems).

The right claims to rever our Constitution and our Founding Fathers, and yet can’t seem to recognize that both acknowledged our interdependence. Art. I, Section 8, Clause i of the United States Constitution empowers Congress to tax and spend in the general welfare, meaning that “what’s mine” isn’t just mine; the public also has some claim on it. How much of a claim isn’t specified; that’s for us, as the popular sovereign, to determine and redetermine, in the light of growing knowledge and udnerstanding.

And as for the Founding Fathers, their views differed. Jefferson’s and Madison’s are frequently cited, but Ben Franklin’s are generally ignored, even though Franklin alone among them helped to draft and sign every single one of our founding documents and was the undisputed senior American stateman at the birth of this country. Franklin maintained that any private wealth beyond that need to sustain oneself and one’s family “is the property of the public, who by their laws have created it” (Walter Isaacson, “Benjamin Franklin: An American Life,” Page 424, quoting Franklin).

It’s not about denigrating individual effort and initiative, or failing to respect the vital role they play in our shared social existence. I can only speak for myself, but I’ll tell you clearly: I respect and admire individual effort and initiative, and recognize it as absolutely vital to our collective welfare. It’s not about failing to recognize the need to frame our shared social existence in ways that take that into account, and work to liberate rather than stifle such individual effort and initiative: I am adamant that it is imperative that we recognize the importance of that dimension of our shared existence in every public policy debate.

But it is not the ONLY dimension that we need to consider; it is not the ONLY value that we must respect and maximize. Our nation today has the highest gini coefficient (statistical measure of economic inequality) of any developed nation on Earth, and the statistical reality of one’s socioeconomic status at birth predominantly determining throughout life is inescapable (see This is not only unjust, but also systemically dysfunctional: The two most catastrophic economic collapses of the last 100 years in America were immediately preceded, by a matter of months, by the two highest peaks in the concentration of wealth in America in the last 100 years, in 1929 and 2008, respectively.

Such gross inequality of opportunity and in the distribution of wealth hurts us all, and violates fundamental American values of fairness. It is one of the challenges facing us as nation, that we have to meet and address as a nation. It’s not wrong to remind those who succeed by some combination of individual effort and good fortune, facilitated, in either case, by our entire social production function, that they succeeded by virtue of their membership in this society, and that their success does not come without reciprocal responsibilities to the society that made it possible.

And that was very clearly and explicitly Ben Franklin’s view as well as mine (in fact, his was a stronger statement of it), so if you want to vilify me for daring to recognize that the public has some claim on private wealth, be sure to vilify him as well.

Buy my e-book A Conspiracy of Wizards

Buy my e-book A Conspiracy of Wizards

“Property” is a concept concerning the relationship of people to one another regarding objects that have value. It refers to who is included in the circle of people with a legal right to utilize or dispose of the object(s) in question, and who is excluded. The object, at least in any direct sense, is unaffected by these relationships (of course, it may be affected in terms of how it is utilized, destroyed or exhausted). While at first glance it might appear that property rights define the relationship between individuals and objects (both tangible and intangible), it really defines relationships among people by identifying who can and can’t exclude which others from access to or utilization of those objects (sometimes with the assistance of third parties authorized to enforce these rights).

Two essential truths about property are in tension with one another:

1) A market economy depends on well-defined property rights, and preferably extensive private property rights (in which the right to access and to exclude others from access is vested in a single individual), and a hybrid, predominantly market economy is the most robust producer and distributor of wealth yet discovered; and

2) Property is theft, especially historically.

Most Americans bristle at the second observation, usually assuming that it implies a denial of the first, even when both are stated. But the second observation is clearly accurate, though a bit paradoxical itself (how can property be “theft,” if “theft” presupposes the existence of property?). As a “first cause,” when a human being or group of human beings first encounters land or other objects that they lay claim to, this is the creation of property. Calling this first encounter “theft” is a bit of  a stretch: It can be depicted as “theft” from all other would-be claimants, since it is held by force against others unable to exert superior force, such that its possession isn’t a function of first encounter, but rather a function of greater might. But the “theft” really occurs once the force is exerted.

For the sake of argument, let’s consider this first creation of property to be the one instance in which property is not theft; if those who encounter first can hold it, let’s say they are entitled to do so. All other involuntary transfers, when someone takes property by force from another, can then be considered “theft,” and any subsequent transfers of such stolen property can be considered exactly that.

From prehistory into the modern age, territories have been possessed, defended, conquered, and expanded primarily by means of force. Probably no current tract of land is possessed primarily by the decendents of those who first encountered it. Probably every or virtually every current tract of land is either possessed by someone who is descended from, or was originally purchased from someone who was descended from, some individual or group who took that land from others by force. Thus, all land is stolen property.

There is a line from my novel, set in an ancient civilization, in which a warrior of non-noble birth who is leading an up-start army against the nobles of his own land tells his gathered soldiers before the decisive battle, “if we lose this battle, the nobles will shackle us in chains and label us criminals for doing ourselves what their great-grandfathers did for them.”

It’s not difficult to extrapolate from this objects other than land, since such objects are ultimately derived from the land in various ways (from mined ores, logged timber, and so on). If the land on which resources are found is all stolen property, then the resources exploited upon it are as well.

But that is then and this is now: Given that well-defined property rights, and particularly private property rights, are a cornerstone of a robust economy from which everyone, to varying degrees, benefits (in relation to the alternatives), what difference does it make? The difference it makes is that we stop pretending that property is a god-given right, and that its distribution at any given moment can be defended as somehow inherently just. Of all of the virtues that private property legitimately can be defended as providing, fairness is not, and never has been, one of them.

One of the defining characteristics of private property is the right to give it to whom one wishes at any time, including the right to devise to whom one wishes upon one’s own death. That means that people are born into an inequitable distribution of originally stolen property. Every baby at birth is born into a property-context not of their own making, not to their own credit or fault, which yet determines a great deal of what their opportunities will be. Such determinations are not just due to the direct material implications of the differential property-contexts into which people are born, but also into complex consequences of the property differentials, such as social and professional networks that parents have, the traditions and habits and attitudes associated with the possession and preservation of property that they transmit through socialization, and so on.

Many on the right today want to pretend that the persistent disproportionate poverty of some categories of people –most notably, Native Americans and African Americans– is due to failures of their own. But, while there are complex mechanisms by which this occurs, it is clear that the First Cause of that persistent disproportionate poverty is the fact that people from these categories are born into long chains of unpropertied lineage, chains that began with the theft of the land from those who occupied it when the Europeans arrived, and the importation and conversion of others from another land into property themselves.

There is another complexity, perhaps more salient but even less obvious, that renders the conceptualization of private property as inherently just and equitable a ruse to protect what is in fact quite unjust and inequitable: The fact that property, and wealth, are produced by social processes that involve complex, articulated in-puts and result in socially institutionalized distributions of the product of those processes. In other words, the political economy by which we produce and distribute wealth doesn’t distribute it fundamentally on the basis of merit, as some conveniently mythologize it to be, but rather on the basis of privilege, as has been the case throughout human history.

This system of distribution primarily on the basis of privilege functions through a variety of mechanisms. One such mechanism is that the occupations that receive the highest remuneration are the occupations that require the longest education. Since such education is expensive, it is more easily accessed by those who have the money to invest in it. Since wealth is inherited, and few have earned much on their own prior to entering into such advanced education, it is the wealth of one’s parents that determines the ease of access to the educational opportunities which position one to remain wealthy in the future.

But there are subtler aspects of this system as well, subtler mechanisms embedded within it. Not only are inequitably distributed material endowments transmitted from generation to generation, but so too are the inequitably distributed skill sets and cultural adaptations that are associated with that inequitable distribution of material endowments. Parents teach children how to cope with the world that the parents encountered and understood, and, even as times and opportunity structures change, the sub-cultural adaptations to past circumstances remain embedded in the lineage of socialization transmitted from generation to generation.

While some social mobility exists, and some individuals rise out of the most opportunity-deprived circumstances to achieve phenomenal success against the odds, the actual statistical rates of social mobility are far lower than what many imagine them to be, and the exceptional cases both fewer and less accessible than many imagine them to be. For every exceptional case, there are some set of particular circumstances that applied in that case to make it exceptional (e.g., the good fortune to find an exceptional mentor, an unsually fortuitous genetic endowment, etc.). The underlying fact remains that the opportunities available, on average and in the aggregate, between those born into poverty and those born into wealth are inequitably and unjustly distributed.

So the challenge becomes how to preserve the robustness of markets, which depend on the existence of private property, and at the same time mitigate the inequities and injustices inherent in the existence of private property. This is really what the development of the wealthiest nations, particularly over the last 80 or so years, has been all about: Spiralling toward some balance of robust markets dependent on clearly defined private property rights, and administrative interventions that both preserve the health of those markets and increase the equity of opportunity faced by members of society despite the inequities inherent in private property rights. (The fact that such interventions not only can be used to increase the justness of distribution, but also are necessary to maintaining the functioning of the market economies at all, is evident throughout the historical record, in which periods of underregulation have led to spikes in the concentration of wealth followed by catastrophic market collapses, most notably in 1929 and 2008.)

Though the two necessary functions of government in a modern predominantly market economy (i.e., preserving the efficiency and well-functioning of markets, on the one hand, and increasing the equitability of the distribution of opportunities and benefits produced by those markets, on the other) are closely intertwined, I am focusing only on the latter in this essay. The question is how best to mitigate the inequities of markets without undermining them (and, indeed, whenver possible, enhancing and invigorating them).

There are two areas which rise to the fore: 1) Improving real access to education, at all levels; and 2) heavily taxing inheritance. In fact, education, at all levels, should be completely publicly funded, and the way in which it can be completely publicly funded is through inheritance taxes with gradually rising marginal rates approaching 100% at the extreme heights of personal wealth. Obviously, this is politically impossible in America today, but is approximated in most other developed nations to varying degrees, with unambiguously beneficial results.

There is more involved in improving real access to education than simply making it free to all at all levels. It would also involve community development and related up-front investments which would increase the ability of those who are currently born into lower socio-economic strata to succeed in school, so that the opportunity available is a real one rather than merely a formal one. That is something I discuss in my essays on education (see. e.g., Education Policy Ideas, Real Education Reform , Mistaken Locus of Education Reform, School Vouchers, Pros & Cons, West Generation Academy, American Universities: Two Dimensions on which to Improve).

However we move forward, however we address the myriad challenges and opportunities facing us, it’s time we did so by letting go of the mythologies which insulate social injustice from scrutiny, and instead confronted our world and our social systems as they are, with both strengths and weaknesses, both virtues and shortcomings. There is much that works well and should be defended, preserved, and built upon. And there is much that doesn’t, which should be examined, analyzed, addressed, and improved upon. That is what the human endeavor is all about.

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