Obama’s Assault on Entrepreneurship: An Economic Roadmap to Nowhere

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A proper examination of President Obama’s assertions about entrepreneurs requires a close consideration of the underlying moral claims they contain. But first it should be conceded to the President that much of the infrastructure that facilitates business is created by the state. Indeed, he is correct to say that the state plays a role in economic activity.

But where is government’s place in the order of causation? If entrepreneurship is described in a mathematical or neutral fashion, as the accumulation of amoral factors in a line of production, then one can argue at length about the relative place of one factor against another.  If economic rationality is merely instrumental and factors such as inventiveness, risk, creativity, will, practical intelligence, perseverance and vision are one more set of factors in an assemblage, the element of government investment is yet an additional neutral link in the chain of causality. But a truly human act cannot be devoid of intentionality; it is moral.

Now, where can we fit government activity within the order of entrepreneurial initiative? If entrepreneurship is something that can be understood, it must have structure. If it has structure, it must possess a hierarchy.[1] Catholic moral theology can assist us in finding out where the state fares in that vertical order. Moral theology is, in a sense, comparable to economics. If good economics can help us recognize and predict proximate and ultimate consequences of economic activity and policy, then moral theology can help us understand the moral relevance of factors related to, and antecedent to, human activity.

Catholic theology speaks of degrees of cooperation with evil. The more we cooperate in the act, the greater our culpability. Some people cooperate with evil directly either by approving of the act or committing the act directly. If for example, I encourage a person to have an abortion or volunteer to drive a person to a drug house to buy narcotics, I am very close to the act itself. Indeed, my will and action directly merges with the evil committed. In such instances my cooperation may be termed formal or proximate.

If I, however, am in the chain of causality due to duress or to circumstance beyond my control or knowledge, my cooperation may be called remote or material, with various degrees of remoteness. Remote cooperation refers to any assistance one may provide to the commission of an evil act without approving it. The type of material cooperation may depend on what one actually does.  Even under duress, one is closer to the evil act if the act one performs is essential to it. For example, if I operate the suction machine that aborts babies, I am committing what is called immediate material cooperation, which is more morally relevant than if I just cut the grass at the facility.[2] Yet, if it causes scandal, even a remote or mediate cooperation ought to be avoided precisely because, say, I do work at a facility where babies are killed.

Another example can be given of remote material cooperation with evil where culpability would be even less present (or totally absent). For instance, I am a clerk at a store and a man comes in to buy a pen. After receiving payment, I hand him the pen. He then stabs the person next to him with the pen. Or he uses the pen to write a ransom note after kidnapping an innocent person. I am, of course, in the chain of causation but I cannot be blamed for the act. My cooperation was so remote that it loses moral relevancy.

Similarly, there are morally proximate and also remote causes for the performance of good deeds, including successful entrepreneurial activity. When a government of general jurisdiction[3] builds infrastructure in view of the common good, it is in the line of causality of every conceivable purpose of the populace using it. When, for example, a road is built, the state assists the work of entrepreneurs as much as it assists in, say, the act of a man who drove his car to a movie theatre and fired bullets at innocent people. The same is true for a drive-by shooting, or even for deaths from a car accident. Thus, by definition, such governmental acts of general purpose are remote to the specific acts of those benefiting from them. They may facilitate human action in general but they are not proximate to human action in particular.

If a public school graduate goes on to accomplish great things, the number of antecedent and influential intervening factors is so great, so difficult to quantify, that the high school experience itself also becomes an increasingly indeterminate factor in his later achievements in life. In effect, the same teacher who encouraged a student may have another student who goes on to become a hardened criminal. Other teachers might have failed in preventing bad behaviors of students who later on wreck their lives. The incommensurability of such remote influences is simply too vast. It is like me taking credit for your literary masterpiece because I sold you the paper it was written on. When we survey the scene of entrepreneurial success, we see that the state’s cooperation is so remote that it is not worth mentioning at all.[4] Since the state offers only a remote material cooperation with the work of entrepreneurs, we ought to focus our praise on the entrepreneurs themselves and the proximate causes of their success.

Moreover, when the human person, made in God’s image, creates and acquires property, there is a metaphysical reality at play. Human creativity springs from our divine nature. Each creative act does not depend on any analysis of social usefulness. Property and creation are identified with the person. Those who insist only in social usefulness identify right with the purposes of the state and may think that the common good is the only value (with the state the primary instrument). They might be tempted to say that private property really belongs to everyone. Entrepreneurship, regardless of the myriad antecedent influences, is a holy sanctuary against pagan statism precisely because it flows from the person. There is, in short, a self-justifying right to it.[5]

In the end, the debate is more about our attitude toward the world of entrepreneurial creativity and there lies the President’s misunderstanding. His categorical assertion that business success depends on government action reveals his ideological prejudice against individual initiative. In a world where individual prosperity depends on the collective will, talking of entrepreneurship is like finding the relationship between freedom and security in an age that ignores the meaning of freedom.

Interventionist liberalism is animated by an excessive and unjustified confidence in the value of government action. By using the state to solve social problems, interventionists fall short of their best intentions only to leave conformity behind.  Yet such narrative has become a rich vein feeding the organs of a growing statist monster that crowds out civil society.

Instead of exercising restraint in proposing government initiatives, President Obama speaks of federal power as being an ever present and all-encompassing reality. In his account, government is like the protagonist of a play in which the individual is merely the scenery. There lies our president’s error.



[1] See Richard M. Weaver, Ideas Have Consequences (Chicago: University of Chicago Press, 1948) Ch. 2.
[2] For a good explanation see http://www.thecatholicthing.org/columns/2012/no-cooperation-with-evil.html.
[3] It is important to understand that constitutional order is also an important factor here. Just because the federal government deems a policy objective good does not give them the constitutional authority to act. Catholic morality tells us that an act is good when the intention and means, as well as the object, is good. Violating constitutional principles is not simply an abstract political decision; it goes to the heart of the moral categorization of collective acts.
[4] Additionally, is government the only entity that could perform such functions?  If not, why offer government as a necessary factor when non-state actors are equally (or better) suited to perform certain tasks? President Obama seems to believe that government is absolutely necessary in other instances: “Aside from making needed investments that private enterprise can’t or won’t make on its own, an active national government has also been indispensable…[emphasis mine].” See Barak Obama, The Audacity of Hope (New York: Crown Publishers, 2006), p. 157.
[5] Richard M. Weaver, Ideas Have Consequences, pp. 131-132.

Ismael Hernandez

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Ismael Hernandez is an ex-Marxist Leninist from Puerto Rico. He joined the Jesuit seminary there and later came to America where he eventually renounced Marxism. He worked for a time as executive director of a Catholic ministry in the inner city for the Diocese of Venice. Most recently, he founded the Freedom & Virtue Institute in 2008 to bring the ideas of individual liberty, limited government, self-reliance and love for the poor to communities of color. Mr. Hernandez lectures regularly for the Acton Institute and lives in Fort Myers with his wife and three children. He holds a Master's degree in political science from the University of Southern Mississippi.

  • Tisantir

    More than any investment in roads or schools, the State of Law is absolutely indispensable  to entrepreneurship and in fact, to the very existence of private property in land.

    I would add that entrepreneurship also needs to be viewed a little differently. An entrepreneur is not a person who has found a novel method of making money

    Properly speaking, an entrepreneur is a Patriot, above all. and is possessed by a vision of greater perfection of his country. He seeks to realize his vision, impelled by the love he bears for the country.

    The Catholic teaching is the proper home of such a view. Acts that are commendable seek the common good and not private good. There is no exception. Thus all business enterprise must aim at common good.

  • publiusnj

    The roads benefit everyone: successful  entrepreneur and unsuccessful entrepreneur; successful entrepreneur and welfare recipient.  The same road grid connects the former slum (now gentrifying) Harlem to the gilded Upper East Side that connects the Upper East Side to Harlem (and all other points hither and yon).  No one is barred from using any of those roads, so they are at best a neutral in explaining some folks’ success and others’ failures (or smaller successes).  President Obama knows that himself.  He lived on the Upper East Side after moving out of 109th Street in Morningside Heights.  He needs to get on to something meaningful.

  • Michael Paterson-Seymour

    But, of course, “individual property depends on collective will.”

    St Thomas points this out, when he says “Community of goods is ascribed to the natural law, not that the natural law dictates that all things should be possessed in common and that nothing should be possessed as one’s own: but because the division of possessions is not according to the natural law, but rather arose from human agreement which belongs to positive law, as stated above (57, 2,3).  Hence the ownership of possessions is not contrary to the natural law, but an addition thereto devised by human reason.” [IIa IIae Q66, II,obj 1]

    This principle was generally accepted during the French Revolution.  Take Mirabeau (a moderate), “Property is a social creation.  The laws not only protect and maintain property; they bring it into being; they determine its scope and the extent that it occupies in the rights of the citizens.” So, too, Robespierre (not a moderate), “In defining liberty, the first of man’s needs, the most sacred of his natural rights, we have said, quite correctly, that its limit is to be found in the rights of others.  Why have you not applied this principle to property, which is a social institution, as if natural laws were less inviolable than human conventions?”

    This is obvious enough.  Without laws, a person can have possession of a thing (which is a fact), but not ownership, which is a right.

    This is not to argue for or against any particular economic system; merely to recognise the basis of rights of property.

    • Tisantir

       ” ownership, which is a right.”

      There is some unappreciated  subtlety here.  A ‘right’ is an argument and
      thus requires a state of rational intercourse between individuals.
      There can be two levels of rational intercourse
      A) Rational intercourse between strangers: think of a trading post
      in Indian territory or at frontier between two tribes.
      This is called the ‘state of nature’ and the arguments made in this intercourse
      may be called ‘pre-political’ or the Law of Nations. It is libertarian utopia, as it were.
      These arguments suffice for property in chattels and protection of persons (“self-ownership”)
      The justice is arbitrative.

      B) Rational intercourse in the City.
      This is called the ‘state of law’ and the arguments made therein may be called political.
      It provides for full spectrum of property rights including property in land.
      The justice is sovereign.

      The absence of rational intercourse is called the ‘state of war’. There is neither security
      of person nor of property.

      The reason why the ‘state of nature’ can not provide for property right in land have to do
      with the definition of State. In Aristotelean scheme, the territory along with the people
      constitute the material cause of the State.

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  • http://twitter.com/joey89924 joey

    a truly human act cannot be devoid of intentionality; it is moral.
    SS8050

  • Anders13

    Losing our nation’s Christian social order can result in serious economic consequences.

    When Christ through the Church raises people out of the bondage of sin, in time, the bonds to slavedom also melt away and a new social order replaces the old. In this new order God’s commandments apply equally to all and so too civil laws that ultimately rest on the word of God. Which means that all citizens can live as equals under the law and free of bondage. As in Lk 22:24-30 servant leadership is the general rule, so societal leaders lift their followers up, as a result the whole of the nation is always greater than the sum of it’s parts. Such a nation will then produce more than it consumes and grow wealthy and prosperous in peace.

    In a nation whose citizens are held in bondage by a ruling class the situation is entirely different. For example, consider a master who owns a slave; the salve must always be less than the master otherwise the master could be overthrown. As a result the two together must always be less than the two apart. If a master and his lieutenants own a hundred slaves then the whole of the hundred must be less than the master and his lieutenants, as such the whole must be less than the sum of it’s parts. Likewise, for a nation whose citizens are in bondage the whole must be less than the sum of it’s parts. Such a nation will consume more than it produces and, in time, after it uses up it’s reserves will have to resort to plundering it’s neighbors to survive.

    In the not to distant pass our country had about one-tenth the population of China and ten times the economy of China. Which means that a transition to a nation in bondage could result in as much as a hundred-to-one economic contraction .

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