Sunday, July 22, 2012

Social Contract? You Didn’t Build That

Published in The Tennessean, Sunday, July 22, 2012 and Forbes with archives.
by Richard J. Grant

Just as one drop of blood (real or imagined) made Elizabeth Warren a Cherokee for a while, she also believes that receiving $1 of benefit from government spending makes each of us a child of government forever. Last fall, at the beginning of her senatorial campaign (challenging Sen. Scott Brown in Massachusetts), she pooh-poohed charges of “class warfare” by assuring a group of supporters: “There is nobody in this country who got rich on his own — nobody.”
Sound familiar? President Barack Obama seemed at the time to be sharing the same scriptwriter and, in case we forgot, last weekend he reminded us: “If you’ve got a business — you didn’t build that. Somebody else made that happen.”
An unduly charitable interpretation of these words would take it that the president and Ms. Warren have noticed that most of life, including commerce, consists of interaction and cooperation with other people. Were that construal correct, then their words would not attract comment. But that is not what they meant. They were not talking about trade among free individuals but the obligation of the individual to the collectivity, the state.
Ms. Warren was more subtle than the president: “You built a factory out there? Good for you. … You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did.”
Notice that she portrays you, the individual, as a free-rider on the back of the collective. What a conservative would recognize immediately as the fruit of free cooperation in a culture that has prospered and survived the test of time, a socialist sees as gifts from the essential nanny state with an open-ended mandate to comfort and to protect us from our ignorance and our natural leaning toward social disorder.
Notice also that government is not essential for the provision of any of the services that Ms. Warren mentions. That we choose to supply such services through government reflects our preferences and judgment on costs.
I once worked for a company that built and maintained the public roads around its factories. Home schools outperform government schools. But government schools, when locally funded and controlled, outperformed those influenced by federal bureaucrats and union rules. Private fire protection has always been feasible, and not even in a police state would government have a monopoly over your personal security.
Ms. Warren lectures us: “Now, look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
While we appreciate that Ms. Warren might allow us to keep some of what we produce, we should remind her that nowhere in the U.S. Constitution is there any mention of a “social contract.” We have never needed a government or any other waster of capital to tell us how to provide for the next generation. It’s in our blood.
Richard J. Grant is a Professor of Finance and Economics at Lipscomb University and a Senior Fellow at the Beacon Center of Tennessee. His column appears on Sundays. E-mail messages received at:

Copyright © Richard J Grant 2012