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You Did PAY for That!

Summary:
In my latest column for AIER I reflect on Barack Obama’s (in)famous assertion, made to successful business people, “You didn’t Build that.” A slice: The second mistaken implication drawn from the scolding phrase “You didn’t build that” is that those persons who are successful remain perpetually in debt to each of the countless individuals whose efforts contributed to that success. In fact, in commercial society each of us depends nearly every second of our lives on the efforts of countless other people, almost all of whom are strangers to us. Yet this reality does not imply that everyone is forever running up economic and ethical debts to everyone else. A few days ago, Joyce Chang cut my hair. Because I’ve gone to Joyce for my haircuts for 19 years, it won’t surprise you to learn that

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In my latest column for AIER I reflect on Barack Obama’s (in)famous assertion, made to successful business people, “You didn’t Build that.” A slice:

The second mistaken implication drawn from the scolding phrase “You didn’t build that” is that those persons who are successful remain perpetually in debt to each of the countless individuals whose efforts contributed to that success. In fact, in commercial society each of us depends nearly every second of our lives on the efforts of countless other people, almost all of whom are strangers to us. Yet this reality does not imply that everyone is forever running up economic and ethical debts to everyone else.

A few days ago, Joyce Chang cut my hair. Because I’ve gone to Joyce for my haircuts for 19 years, it won’t surprise you to learn that I’m pleased whenever I walk out of her shop. And I’m certain that had I gone 19 years without getting my hair cut, I would have been somewhat less successful economically. Were my hair to reach down to my lower back, I almost certainly would have received fewer speaking and TV-appearance invitations than I received.

So do I owe to Joyce that portion of my income that I’ve earned because my hair is kept in a style that doesn’t discourage people from inviting me to speak? Of course not. In addition to the fact that I could have had someone other than Joyce cut my hair, I pay Joyce each and every time she cuts my hair. I’ve taken nothing from her. I’ve borrowed nothing from her. The excellent service that Joyce supplies to me is one for which I compensate her fully.

And what holds true for my economic relationship with Joyce holds true for my economic relationship with each of the millions of other individuals whose productive activities improve my economic well-being. I pay my supermarket. I pay my wine merchant. I pay my physician. I pay my mortgage banker. I pay my auto mechanic. These payments erase any debts that I might otherwise have with these suppliers.

Similarly, I fancy that I’ve contributed to the well-being of others. Or such is my sincere hope. Since 1982 I’ve taught economics and legal studies to upwards of 10,000 students. Most of these young men and women went on after graduation to enjoy rewarding careers. But none of them owes me a cent. I was paid fully for the teaching services that I rendered to them.

In this regard, goods and services supplied by government are no different. With rare exception, every government official, every government employee, every government contractor, and every government supplier is paid fully for whatever it is government buys from him or her. And so even if everything that government does is unambiguously productive, people who succeed in markets owe nothing to the state.

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Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

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