How can one claim that a businessman "built" something when in fact his business was established by virtue of the input of others? For example, a person who starts a business must first acquire the knowledge from an educator. Then, he/she must obtain a loan from a bank. Next, he/she must rent a building, which was built by construction workers. To make the business viable, the roads had to be built, either by government or by private companies.
The teacher, the banker, the construction worker (and definitely more people) were all necessary in the making of the business. Yes, all of these people were paid in full for their labor (whether it was teaching or building roads), but a business would be nowhere without their labor. It is illogical to say that one person was solely responsible for "building that" business.
The business person used his/her own mental effort to organize all of these elements in a unique way, but it seems to be incorrect for this person to say "I built that," as it does not give due credit to "those who helped him/her along the way."
A successful business starts with the voluntary, collective input of others.
asked Sep 28 '12 at 17:27
The line of thinking encapsulated in this question is not new in the history of philosophy. Ayn Rand anticipated it and thoroughly blasted it (along with many other fallacies) more than 50 years ago in her epic novel, Atlas Shrugged. As Collin's comment on this question has already indicated, the essential fallacy is the denial of causality in regard to the role of the mind in man's existence. That causal connection (along with its moral implications) is the whole theme of Atlas Shrugged.
Suppose two individuals, A and B, decide to engage in a trade of some kind. If one or both of them is engaging in the trade as part of building a business, do both deserve equal "credit" for helping to build each other's businesses? By the law of causality, Objectivism answers resoundingly, no! The business of 'A' is his idea, and so is his estimation that the trade with 'B' can help 'A' in building A's business. Unless 'A' and 'B' are partners in the same business or an affiliated one, B's willingness to engage in trade with 'A' has nothing to do with B's knowledge of, or any goal of helping to build, A's business. The question, in short, does not fully comprehend what trading is, and what it implies.
'B' certainly deserves to be paid in some way for trading with 'A'; if the trade is to make sense to both 'A' and 'B', each needs to have his own reasons for wanting to trade. If the payment is in the form of money, that's perfectly fine if it is agreeable to both 'A' and 'B'. Yet the question as worded seems to imply that monetary payment isn't enough. The payee somehow deserves "business-building" credit, also, on a par with the role of 'A' in conceiving of the idea for A's business and identifying the series of trades along the way that would benefit A's business-building effort. By the law of causality, that is pure nonsense. 'B' is not an essential cause of the creation and development of A's business. The primary cause, the prime mover of A's business, is 'A'. 'B' is only a trading partner, not a primary builder of the business. At most, it might be said that 'B' is one of a great many who benefit 'A' in A's business, but that is only an indirect effect, not a primary goal of anyone in the 'B' position relative to A's business. The primary goal, building A's business, is A's goal, not anyone else's, and the achievement of succeeding in that business is A's achievement, first and foremost. Others may help, but it's not their achievement and wasn't their goal.
The question states: "For example, a person who starts a business must first acquire the knowledge from an educator." There are plenty of examples from the history of capitalism of great producers whose business acumen had more to do with their own vision and determination than with anything they learned from any educator. It's also a huge misconception to think that a business education will help much to build and/or maintain a business. In fact, business managers who have business degrees can actually hinder the success of a business if their fundamental visionary outlook doesn't measure up to the opportunities and demands of the market.
The question states: "Then, he/she must obtain a loan from a bank." But there are many ways of obtaining initial investment capital. It doesn't have to be a loan, and it doesn't have to come from a bank. Some ventures can be self-funded by the business-builder himself, from his own existing assets. Many other ventures are funded by partnerships of various kinds with other investors.
The question continues: "Next, he/she must rent a building, which was built by construction workers. To make the business viable, the roads had to be built, either by government or by private companies." It may be deeply baffling to many why receiving the benefit of ordinary trading with others should be considered gounds for the traders to receive special recognition as builders of the business, particularly since they are paid by the business owner for their efforts.
There's more: "It is illogical to say that one person was solely responsible for 'building that' business." (Bold emphasis added.) Being the primary cause behind a business does not require that one build it without ever engaging in any trading with others. Indeed, trade with others is the essential lifeblood of any business. But the prime mover of the business, the primary cause of its original and on-going existence, is the business owner himself and any team members whom he may choose to assist him in running the business.
The question continues: "The business person used his/her own mental effort to organize all of these elements in a unique way...." Indeed he did. What makes it possible for an observer to stare at a key issue such as this, and fail to see its significance? The answer is philosophy, specifically, a philosophy of mysticism-altruism-collectivism-statism.
The question concludes by making the implicit connection to collectivism explicit: "A successful business starts with the voluntary, collective input of others." No it doesn't. It starts with an idea in the mind of someone who wants to build a business, and depends first and foremost on the continuing vision and energy of the entrepreneur.
Here is how Ayn Rand expresses this in Atlas Shrugged, Part III, Chapter I, in a scene in which John Galt explains to Dagny (in the Valley):
"We've heard so much about strikes," he said, "and about the dependence of the uncommon man upon the common. We've heard it shouted that the industrialist is a parasite, that his workers support him, create his wealth, make his luxury possible—and what would happen to him if they walked out? Very well. I propose to show to the world who depends on whom, who supports whom, who is the source of wealth, who makes whose livelihood possible and what happens to whom when who walks out."
Those who today seek to advance the spread of collectivism by undermining the stature of great industrialists are counting on their audience not to have read Atlas Shrugged.
Update: Justice for Producers
Regarding "social benefits" such as public schools and roads, a commenter asks how best to respond to statements such as: "your products are delivered to stores on roads paid for by the rest of us" -- and through an education delivered in schools paid for by the rest of us.
A hero in romantic fiction might answer: "Are you offering me a choice? And offering me a refund of my taxes if I forgo the use of government operated roads (and government-run schools)?" I would love to see this response in reality as well as in fiction.
A mixed economy inevitably sets a vicious trap for conscientious producers: it limits or removes choices that would otherwise exist, forces citizens to pay for projects and services they might not want to support if they had a choice, and then tells producers everywhere that they allegedly have a "duty" to "give something back" to the society that allegedly made their success possible. That is not justice. It's exactly the opposite, obliteration of the role of the mind in man's existence.
Update: Ownership in Trading
In a comment, the questioner restates his central thesis very succinctly:
When Obama said "You didn't get there on your own," he meant that no one succeeds by themselves, and that is true. When you trade with other people, and use the products of that trade to build your business, that still counts as others helping you along the way even if you're the primary driver. Even when people buy your products, they help you build your business by giving you money. Collaborative effort is required in almost all business scenarios. Milton Friedman even said that no one person can produce a pencil.
This formulation adds nothing new to the original question, other than mentioning Obama and Friedman, with a shift to building a pencil rather than building a business. This formulation and the original question both lead to the conclusion, for example, that Atlas Shrugged should not be regarded as Ayn Rand's own achievement. She sat on a chair at a desk while writing; she wrote on sheets of paper with pencils and/or pens; she used electric light some of the time, which depends on light bulbs, wire, and many other materials, along with electricity generated and transmitted by others; she lived in a building in New York that she didn't own herself; and so on, Therefore, by the logic of the questioner's thesis, all these other manufacturers, inventors, and even ordinary delivery people deserve part of the credit for producing Atlas Shrugged, along with book agents, publishers, distributors, bookstores, etc. The list is endless.
Ayn Rand, too, would, by this thinking, deserve part of the credit for every other achievement by anyone who benefitted in any direct or indirect way from trading with Ayn Rand. A trade between 'A' and 'B' involves the exchange of something of value from 'A' to 'B' and also from 'B' to 'A' in return. If 'B' retains some claim over 'A' as a result of the trade, the reverse must also be true: 'A' retains some permanent claim over 'B' as a result of "helping" 'B' to exist. The end result is that all owe something to all. It's total collectivism. Individuals no longer exist, except as integral parts of the collective whole. Individual achievement doesn't exist; the role of the mind in man's existence is nothing like the way Atlas Shrugged portrays it. The questioner not only misrepresents the nature of trade, but uses that misrepresentation to undermine the whole reality of the role of the mind in man's existence.
What, then, is the essence of the flaw in the questioner's thinking? My original answer explains most of the issues. There remains one issue, however, that needs more explicit emphasis: a trade involves a change of ownership, not merely custody, of values. Any claim by 'A' to a value that 'A' gives to 'B' ends when the trade is completed, and vice versa. There is no on-going, lingering claim by 'A' to a value that he has willingly given to 'B' in a voluntary trade (other than as might be explicitly agreed by contract of some kind, such as a warranty, for example). The countless millions who allegedly made Atlas Shrugged possible have no such claim on Ayn Rand's achievement. It's hers entirely, not theirs, because it was her idea and her effort in creating it. (Ayn Rand has acknowledged intellectual debts to her predecessors, Victor Hugo and Aristotle; that is the only kind of debt that would be philosophically appropriate.)
As for Milton Friedman, his essential point about the pencil is very different from the questioner's thesis. Furthermore, Ayn Rand strongly disapproved of him in any case. In The Ayn Rand Letter, Volume IV No. 3, she remarked: "I have virtually nothing in common with Mr. Friedman, whom I do not regard as an advocate of capitalism...."