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Appreciating what we’ve built (or dismissing the myth of the “romantic” business owner / entrepreneur / free market)

[What follows is the long version of a somewhat dated but still relevant, unplaced op-ed.  I’ll post the short version on my Stanford CIS blog for anyone that is interested.]

President Obama received a lot of grief for his Roanoke Fire Station speech and in particular for saying “If you’ve got a business, you did not build that–somebody else made that happen.”  The backlash has been substantial, but largely political and not substantive.  Witness the speeches at the Republican National Convention.  Yet the President’s underlying message should be the defining theme of his re-election campaign and Obama’s efforts to revive/recover America.

The message is simple:  We inherently depend on each other and on shared infrastructures of various types.  It is too easy to lose sight of this basic fact.  We like to celebrate individual achievement and independence.  Unfortunately, we make the mistake of thinking in binary terms, individual or social, private or public, market or government.  This leads to great distortions in our perceptions about the world.  Reality is more complicated.

Most people understand that human beings are social and that we depend on each other to succeed.  This may be a rather uncontroversial truism, but it founders when you turn from the abstract idea to the question of how to give attribution or credit when someone is successful.  Obama emphasized that credit must be shared:  “The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.”

For those who study intellectual property law or innovation more generally, all of this sounds familiar.  It strongly resembles the now conventional idea that with respect to any innovation—whether a technological advance or a song, there is no single builder or creator to whom all credit should go.  All innovations are the product of many.  The romantic notion of an author or innovator creating independently, completely free from the contributions and influences of others has long been discredited.  The ancient aphorism, famously invoked by Newton, “We stand on the shoulders of giants” nicely captures the intergenerational and cumulative nature of innovation.

Of course, it is equally well understood that individual initiative, effort, and even personality matters.  Innovation depends on individuals.  Successful innovation, like success in just about anything, depends on many different factors, including luck, timing, skill, and access to necessary resources. Thus, rejecting the “romantic author” or “romantic innovator” is not a complete dismissal of individual accomplishment and contribution. Rather, it injects some realism about how innovation actually works.

Many have attacked Obama for disparaging entrepreneurs and private enterprise.  I find these attacks ludicrous.  All one has to do is pay attention to the speech.  What Obama attacked is the romance of individual achievement independent of social context, social institutions, and shared infrastructure.  He challenged the myth of the “romantic business owner” or if you like the “romantic entrepreneur” or even the “romantic free market.”

Frankly it is about time that such romanticism is discredited.  It has lingered too long and poisoned honest debate about public policy and the appropriate roles of governments, markets and other institutions in our society.  The romantic business owner / entrepreneur / free market meme casts every policy debate in terms of government intervention into free markets, and it anchors each debate to a host of romantic premises that do not match reality.

There are many reasons for Obama to attack these romantic concepts, but one reason stands out in the speech and should factor heavily in the upcoming election.    Obama would like to raise taxes on the wealthy to increase government revenues, manage the debt, and better finance public investments in shared infrastructure, institutions, and social systems that improve our capabilities to be successful.

In the Roanoke Fire Station speech, Obama did not say much about public investment priorities.  Instead, his focus was on making more apparent the social value of shared infrastructures, the many ways in which various infrastructures society builds contribute to our various successes.  He mentioned conventional forms of infrastructure such as roads, bridges, and the Internet, and he obliquely mentioned less conventional forms of infrastructure such as the legal infrastructure that enables markets and social systems to function.  Given the crumbling state of America’s infrastructure, this is a good start.  For too long, shared infrastructures have remained obscure, part of the background and taken for granted until a catastrophe strikes.  We can no longer afford systematic neglect.

President Obama will need to do much more to defend his commitment to public investments in shared infrastructure.  But that was not really the point of the Roanoke Fire Station speech and his attack on the romantic business owner / entrepreneur / free market meme.  Rather, his attack aimed at justifying the logic for raising taxes on the wealthy.  It was to give appropriate credit to the rest of society for the successes of the wealthy and thereby allow society to stake a reasonable claim to some of the gains.

This is a very difficult position to articulate and defend in the current political climate in the United States, but an essential first step is to discredit the romantic notion that successful business owners or entrepreneurs achieved success solely through their own heroic efforts, without any input from the rest of society.  If the wealthy succeeded only because of their own hard work and abilities, then why should they pay more in taxes?  But if they succeeded because we all provided them with the platform for their success, then we need to have a national conversation about how to ensure that our children and future generations can continue to stand on the shoulders of those who have come before.  That’s the conversation that the President should turn to next.