9/23/2012

Donald Boudreaux discusses Obama's "you didn't build that" comment

In his Tribune piece, Don Boudreaux makes the point too often overlooked in analyzing Obama's comment:
. . . Yet Obama’s plea that successful business people now be forced to pay higher taxes as a kind of royalty payment for government-supplied infrastructure is no different than if he would plead to force successful business people to bail out inefficient oil companies. 
History speaks with crystal clarity, saying that, if property rights are secure and culture is friendly to commerce, people are more prosperous as government’s role is more limited. History also teaches that roads, bridges and many other species of infrastructure can be — because they in fact often have been — supplied by private enterprise. 
Among the kinds of infrastructure that have, in fact, been supplied successfully by private businesses are city streets, highways, sewage systems, formal education, policing, money and commercial law. Government provision of such infrastructure, therefore, cannot be read as evidence that government’s role on this front is necessary. 
If government failed to build highways to connect, say, Atlanta to Pittsburgh, private firms almost certainly would. (It’s easy to collect tolls from drivers who use highways.) And likewise for nearly any other pair of cities in America. So in what way is any actual, government-built highway necessary for any private entrepreneur’s economic success? None — if (as is likely) private enterprise would have done what government instead did by crowding out private efforts. . . .
His whole piece is useful.  The only point that I would add, and it is a small point, is that historically we in fact did see all these things built privately.  For other pieces by Don see here.

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