When Washington pointed out shortcomings in the black community—such as the high black crime rate—Du Bois erupted with outrage. “Suppose today Negroes do steal,” he thundered, “Who was it that for centuries made stealing a virtue by stealing their labor?” Washington never denied the bad habits cultivated in this way; his point was that they existed, and had to be changed. “In spite of all that may be said in palliation, there is too much crime committed by our people… . We should let the world understand that we are not going to hide crime simply because it is committed by black people.” If Du Bois’s motto could be summed up as “agitate, agitate, agitate,” Washington’s could be summed up as “work, work, work.”9
The Civil Rights movement, led by the NAACP and by Martin Luther King, was based on the politics of protest. This movement was successful not because it represented a revolutionary departure from American principles, but because it made a direct appeal to those principles. When Martin Luther King declared he was submitting a “promissory note,” and demanded it be cashed, we may pause to ask: What note? Did the Southern segregationists make him a promise and then renege on it? Of course not—the promissory note was none other than the Declaration of Independence. In other words, Martin Luther King appealed not for new rights but for the enforcement of rights already granted in 1776. Remarkably this twentieth-century black leader relied for his moral and legal claims on the charter of a white Southern slave-owner. Thank you, Mister Jefferson!
Today we hear from progressives that the Civil Rights movement is “unfinished,” and they are right, but not for the reasons they think. Progressives are still chasing the windmills of old-style racism, whipping the nation into a frenzy every time there is some obscure incident. The reason blacks remain so far behind whites, however, has very little to do with racism. It has to do with African American cultural backwardness. Martin Luther King recognized this. In a statement that has gone largely ignored, he said, “We must not let the fact that we are victims of injustice lull us into abrogating responsibility for our own lives. We must not use our oppression as an excuse for mediocrity and laziness… . By improving our standards here and now, we will go a long way toward breaking down the arguments of the segregationist… . The Negro will only be free when he reaches down into the inner depths of his own being and signs with the pen and ink of assertive manhood his own Emancipation Proclamation.”10
Here King places himself directly in the line of Booker T. Washington. But King’s advice, just like Washington’s entire philosophy, has been largely disregarded by the Civil Rights leadership. Even now that group continues with “agitate, agitate, agitate.” But today Americans enjoy equality of rights under the law, and the challenge for black Americans is to compete effectively in school and in the marketplace. Rights by themselves have a limited value. What is the benefit of having the right to compete in the Olympics if you don’t know how to run fast or swim well? More to our point here, what good is it to have a right to work at Google or Oracle if you don’t know how to do software programming? Rights are a prerequisite to success but success also requires the skills to take advantage of those rights.
Even though Du Bois knew this, he didn’t emphasize it. What he emphasized was discrimination and theft, and his solution was that the thief owes the victim and the thief must pay. Booker T. Washington’s insight was deeper: even if there has been a theft, sometimes it is the victim who is in the best position to mitigate the damage and restore his opportunities. In other words, society may have put him down but he is in the best position to get up. Ultimately Du Bois became disgusted with America because he didn’t see blacks achieve the same status as whites and other groups. Consequently Du Bois became an enthusiast of Soviet Russia—even an admirer of Stalin. He also tried to inject himself into the Third World anti-colonial movement, organizing a Pan-African Congress in 1945 for various African independence leaders. In 1961, Du Bois renounced his American citizenship and emigrated to Ghana. He was one of very few American blacks who actually took the step of going back to Africa, although he did it when he was ninety-three, two years before his death.11
While Booker T. Washington is ignored or reviled among the mainstream of the Civil Rights leadership, there is one group that is silently following his strategy of “work, work, work.” That group is the non-white immigrants in America. I am thinking here of the Koreans and Haitians and West Indians and South Asians and Mexicans. These groups are all beneficiaries of the Civil Rights movement, as I am. Yet we seem to know, in a way many African Americans don’t, that America has changed. Rather than protesting the remaining obstacles, we look for the broad vistas of opportunity. Rather than agitating for white sympathy and government largesse, we work our way up the rungs of success.
Today we can simply compare African Americans with non-white immigrants to see whether the protest strategy or the self-help strategy is better. This is one of the benefits of multiculturalism. It offers what Friedrich Hayek termed “a framework of competing utopias,” and we can compare them to see what works and what doesn’t. Today the verdict is clear—protest is a dead end when rights are already available to you. In twenty-first-century America, Du Bois is irrelevant and Booker T. Washington is indispensable. Consistent with Washington’s philosophy, little guys of every race and color can move up from the bottom and through “work, work, work” write the charter of their own Emancipation Proclamation.
CHAPTER 10
THE VIRTUE OF PROSPERITY
There are few ways in which a man can be more innocently occupied than in getting money.1
SAMUEL JOHNSON, BOSWELL S LIFE OF JOHNSON
In 1893 the historian Frederick Jackson Turner published a famous essay declaring that the American frontier was closed and that the American dream based on the acquisition of new land must finally end. Jackson argued that the frontier had defined America from the beginning. But now, he said, we have reached the Pacific Ocean and there is no more land to discover and occupy. Jackson identified the specific traits the frontier brought out in Americans. “The coarseness and strength combined with acuteness and inquisitiveness, the practical, inventive turn of mind, quick to find expedients, that masterful grasp of material things, lacking in the artistic but powerful to effect great ends, that restless, nervous energy, that dominant individualism, working for good and for evil, and withal that buoyancy and exuberance which comes with freedom—these are the traits of the frontier.” One can see that Jackson is not uncritical of frontier traits, but he also knows the role they played in building the country. Jackson declared that the closing of the frontier represented the end of an era. “Four centuries from the discovery of America, at the end of a hundred years of life under the Constitution, the frontier has gone, and with its going has closed the first period of American history.”2
Jackson’s thesis has been hotly debated. The first question I want to consider is whether he’s right that there is no more frontier. I don’t think he is. Jackson presumes that the American dream is built on land, and for more than a century, it was. People of limited means would move west in order to find someplace new. But now there is a new frontier, and it is new wealth and new technology. Instead of finding someplace new, we make something new. Today’s wealth is not primarily in land; it is in making things that didn’t exist before. I’m not just thinking about the wealth created by new communications technology—we have computers and cell phones now that didn’t exist in 1893—but also of the countless innovations and amenities in medicine, recreation, work efficiency, and home life. Someone has to come up with this stuff, and in a way it’s more difficult than simply to push west and develop new tracts of land. My point is that, under entrepreneurial capitalism, once the land is gone there are new ways for America to create wealth and opportunity. The frontier is never closed.
Progressive criticism of the Jackson thesis has focused on challenging his assumption that America has historically offered new land waiting to be discovered. The progressive view,
as we know, is that America was already a fully occupied country and therefore “settlement” is another name for “theft.” We have examined this argument in previous chapters. Now we consider whether capitalism, innovation, and free trade, the new forms of wealth creation that drive the American and the global economy, are also forms of theft. If they are, then the great mass of wealth now in America’s possession is illegitimate, and should be placed at the disposal of progressive redistribution, both on a domestic and global scale.
In 1965, Barack Obama Sr. published an article in the East Africa Journal in which he considered the possibility of 100 percent tax rates.3 It’s worth asking, how can a sane person propose taxing people at 100 percent? In the 1980s, the economist Arthur Laffer pointed out that if the government imposes a 100 percent tax rate, it is likely to get just as much revenue as if it imposed a zero percent tax rate. If tax rates are zero percent, obviously the government gets no revenue. But Laffer noted that at 100 percent tax rates, no one has an incentive to work. Why work at all if you have to turn it all in? Consequently, no one produces anything and here too the government gets no revenue.
Why then would an intelligent person propose 100 percent tax rates? There is one scenario in which such rates make sense. Imagine if you came to my house and stole all my possessions. In that case, what’s the proper tax rate for you? Well, 100 percent—because the possessions are not yours. Where theft is involved, no one cares what the effect of returning stolen goods may be on one’s incentive to work. The stuff doesn’t belong to you, so you had better give it back, and if you refuse, then the government has every right to take it back. The anti-colonial view is that capitalist wealth is stolen goods, and hence Barack Obama Sr. has no compunction about proposing that state power be used to confiscate it.
All of this may seem quite remote from President Obama, yet consider again what Obama said on the 2012 campaign trail:
Look, if you’ve been successful, you didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something—there are a whole bunch of hardworking people out there. 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. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.4
A similar theme was articulated by Senator Elizabeth Warren, darling of the progressives. “There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you. But I want to be clear: 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.”5
What are Obama and Warren really saying here? Clearly they are not saying that entrepreneurs should go back and find their old teachers and give them a nice bonus. Rather, they are trying to create nihilism about the source of wealth—to detach effort from reward. In a way, their argument that we aren’t entirely responsible for our own success seems indisputable. All success has preconditions—to build a house, we have to be allowed to get a permit to build a house—and also infrastructure—we cannot build houses without roads, police to protect us, schools to educate us, and so on. In this sense, it’s uncontroversial that our success is only partly due to our own efforts.
But this, while true, hardly says much because the public roads are available to everybody. Apparently entrepreneurs make better use of the public roads than everyone else. The teacher that taught the successful entrepreneur in school also taught other students. Did they learn less than the entrepreneur did? Did they not put their lessons to a good use? Well, that would imply that the entrepreneur made better use of what he learned and deserves the rewards of that. Now of course entrepreneurs couldn’t operate without some government infrastructure. They depend on essential government services like defense and fire-fighting. But again, all citizens benefit from those services, which is why we have a government in the first place. So why should entrepreneurs incur additional obligations to the government simply by virtue of having a successful enterprise? The government didn’t build that; they did.
In any other context, Obama’s and Warren’s statements would seem nutty. Imagine if I told my daughter, who is now a freshman in college, “You didn’t earn your SAT scores.” Asked to explain, I point out that she used the public roads to go to her SAT test. Or that she could not have taken the test had she not received childhood vaccinations that prevented her from getting typhoid. Indeed I could go further. She could not have done what she did if she had been an orphan in a Third World country. Nor could she have produced good SAT scores had there been no oxygen in the earth’s atmosphere, or had the sun not been eight light minutes away from the earth, giving humans the necessary warmth to live. Now if I said all this, she would think I had lost my mind. While there are obvious preconditions for achievement, it does not follow that the achievement is unearned. So from this point of view, Obama’s and Warren’s statements seem like pure stupidity.
Yet when intelligent people say something stupid, that doesn’t make them stupid. Rather, they are actually trying to convey a different point. Here’s what Obama and Warren really mean. They mean that capitalist wealth—all of it—belongs to the community. No one specifically earned that wealth, and no one has an exclusive right to it. Wealth is produced collectively, and therefore everyone is collectively entitled to it. The problem, from this point of view, is that before the wealth can be widely claimed and evenly distributed, greedy entrepreneurs rush in and grab it. These selfish people think the surplus belongs to them. But it’s not theirs, and the government has every right to seize it and distribute it however it wants. The government is not taking what’s yours; it is taking what never belonged to you in the first place. Thus there is a close similarity between the ideology of the two Obamas, father and son. In fact, they both subscribe to the same creed.
The premise of the progressive argument is that wealth and profits in today’s economy are being appropriated by greedy, selfish people who are taking more than their “fair share.” This is a new type of attack on capitalism. In the twentieth century there was a lively debate between capitalism and socialism in terms of which system was more effective in creating wealth. Capitalism won that debate. Yet although capitalism won the economic debate, it never won the moral debate. Today’s critique of capitalism, led by Obama, is not about how well it works; it’s about how capitalists are the bad guys. In order to answer Obama, we have to consider the motives of capitalism. We also have to examine more closely what it is that entrepreneurs and workers actually do, and whether they deserve the money they make.
Many successful entrepreneurs seem to have internalized the progressive critique of capitalism, which has put them on the defensive. Years ago, Ted Turner was asked a probing question on John Stossel’s TV show. Noting that Turner had pledged to give a billion dollars to the United Nations, Stossel asked him: Why give to such a dubious cause? Why not invest in your own businesses? This way, you could create jobs, and generate products, and arguably benefit far more people. Turner became so agitated that he ran off the set. Stossel pursued him. Finally Turner erupted, “I am simply trying to give back to the community.”6 And this is a standard justification for philanthropy. “I am giving back to the community.” Yet whenever I hear this, I think to myself, “How much have you taken from the community?” The implication is that profits are illegitimate, and some of that loot now must be returned through a kind of obligatory philanthropy. Entrepreneurs like Turner seem to be pleading guilty to the charge o
f theft. At the very least, they seem unwilling or unable to make a moral defense of the system that enables their prosperity.
The moral conundrum of capitalism is, in one sense, a twenty-first-century phenomenon, but in another, it goes back to the very origins of capitalism.
The classic defense of capitalism was made in 1776 by Adam Smith in The Wealth of Nations. In that book, surprisingly enough, Smith takes a dim view of businessmen. He says they seldom meet in private except to fix prices. Moreover, Smith seems to agree that capitalism is based on selfishness. Smith writes, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities but of their advantages.”7
Smith’s argument is based on a paradox: individual selfishness can be channeled to the collective benefit of society. How is this possible? A half-century before Smith, Bernard Mandeville offered an even more flamboyant version of Smith’s thesis. In a long poem titled The Fable of the Bees, Mandeville insisted that “private prices” produce “public benefits.” Virtue, said Mandeville, is simply the province of “poor silly country people.” Mandeville actually praised vices such as greed, selfishness, pride, and envy. Without them, he suggested, the engines of commerce would grind to a halt. Vice is what makes possible modern civilization.8
Smith repudiated Mandeville, and in place of Mandeville’s terms “greed” and “selfishness,” Smith used a more precise term: self-interest. For Smith, self-interest is not good, but neither is it bad. What’s significant about self-interest, however, is that it works. Self-interest, mobilized in the right way, produces mass prosperity. But not by itself. Here is where Smith introduced his famous concept of the “invisible hand.” Individuals may be thoroughly self-interested, but through the “invisible hand” of competition, they are motivated to improve quality and drive down prices and thus to promote the material welfare of the community. Smith notes that by activating self-interest through the mechanism of competition, the entrepreneur promotes the prosperity of society “more effectually than when he really intends to promote it.”9 Imperceptibly but surely, private self-interest promotes the public interest. Economist Gary Becker, a Nobel laureate, has termed this one of the most important ideas of the past two and a half centuries. Smith’s defense of free markets, however, seems incomplete. While Smith vindicates capitalism—the system—he does not seem to vindicate capitalists—the people.
Dinesh D'Souza - America: Imagine a World without Her Page 15