For a week or so, the media has fixated on what I guess counts as an Obama gaffe. At a campaign stop, Obama said the following:
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.
Romney and conservatives have tried to make a big deal of it, primarily by stripping apart the context and focusing on only the bolded sentence. Of course, Obama is not the first person to make this exact point. Elizabeth Warren famously communicated the same sentiment a short time ago:
I think the basic notion is right. Nobody got rich on their own. Nobody. People worked hard, they buil[t] a business, God bless, but they moved their goods on roads the rest of us helped build, they hired employees the rest of us helped educate, they plugged into a power grid the rest of us helped build.
The conservative (Randian really) deification of business people as creators of all things in the world cannot handle this kind of sentiment. The sentiment suggests that business success is dependent upon government services, and not sourced purely from the isolated genius of entrepreneurs. One point I have seen raised on the conservative side goes like this: sure the business might fail if it did not have a road in front, but there are plenty of businesses with roads out front and not all of them succeed. The point being made here is that the roads alone do not make the business succeed; something more is necessary.
And of course, that is true. But the opposite is also true: business genius alone does not make a business succeed; something more is necessary. In theories of causation, we would describe this situation as one where there are multiple necessary causes. Government investment is necessary, but not sufficient to achieve business success. The same is true of entrepreneurial gumption.
The ambiguity arises the second one tries to explain what is causing the business success. In reality, ascribing causation is a slippery enterprise, especially when doing it on such a high level of abstraction. The best you can really do is say both government investment and entrepreneurial effort are necessary — but neither sufficient — for business success. I suspect liberals like Obama actually would endorse this more technical description of things; it’s conservatives who cannot seem to handle it.
Interestingly, the same kind of causal ambiguity underlies another object of constant controversy. As I have written before, the discourse surrounding “job-creators” is riddled with confusion about the phenomenon of causation. Conservatives say that investors create jobs because without investors there would be no capital, and without capital there would be no production. Of course, the same could be said of labor and consumption: without either, there would be no production.
The end reality of the “job-creator” dispute is the same end reality as the business success dispute. To cause production in a modern capitalist economy — and therefore create jobs — capital, labor, and consumption are all necessary, but none are sufficient alone. If you rip out any of them, production ceases. It is just categorically confused to pick one of the necessary factors and then describe it as the cause of job creation. It makes for good rhetoric however, and so I would not expect the approach to end any time soon.