I received an email from someone who disagreed with my recent post, One’s Debt to Society. I encouraged the writer to post it on the blog but he declined, stating that he only wanted to correct the error in my thinking. I will respect his request for anonymity and just call him Al.
Al scoffed at the notion (see One’s Debt to Society) that corporate success is not dependent on government support. He points out that corporations hire workers educated by government schools, ship products on government roads, and even sell their products to recipients of government aid. As he put it, “the degree of corporate dependence on government is scandalous…progressives see the corporation’s dependence on government as obvious…we question the intellectual capacity of conservatives who don’t understand [this].”
Al is partially correct, but has slipped into a deeper truth. Let’s take his claims one at a time:
1. “Corporations hire workers educated by government schools.” Unfortunately, this is true. Taxpayers spend an average of about $150,000 per student to provide 12 years of the public school regimen. Would these students be better prepared for the workforce if their parents could spend these funds on private schools of their choice? The notion of vouchers is more complicated than I want to address here, but suffice to say that the evidence is strong. Consider drop-out rates, mediocre test scores, and Constitutional illiteracy, and very few Americans would choose the public school option if they weren’t already financed through their taxes.
2. “Corporations ship products on government roads.” True, Al, but you forget that Americans pay about 50 cents per gallon in gas taxes; truck drivers pay about 55 cents for diesel. Ostensibly these taxes are supposed to pay for the maintenance of our roads and bridges. In general, I have no problem with the gas tax if the funds it generates are used as the sole source of highway construction and maintenance. In this way, individuals pay for roads in proportion to their usage. Of course, corporations don’t really pay taxes in the long run, but simply transfer them to consumers in the form of higher prices. Businesses don’t succeed because governments pave roads. Governments pave roads because consumers demand products and services businesses provide.
3. “Corporations sell products to recipients of government aid.” Al didn’t use the word welfare but I well. Again, he is correct here, but he misses the greater point that welfare for some Americans is financed by the productivity of others. If this bothers anyone on the left, they why don’t they propose a drastic reduction in “government aid” programs?
Al is weaving several truths and half-truths into a flawed narrative, and missing the big picture. Al referred to corporations 13 times in his email and never referred to taxpayers, but referenced government 17 times as if it creates its own wealth. While government (through taxpayers) should play a limited Constitutional role, Al cites the burgeoning welfare and government control of education as support for his claim. He fails to acknowledge that progressives (and moderates)–not strict conservatives and libertarians–are largely responsible for these programs. Put another way, progressives have created some degree of business dependence on government through the tax code, regulations, welfare, and the like. Businesses have no choice but to adjust their behavior to meet the government demands, at which time they are told to be grateful because of this dependence. Of course, some businesses actively pursue dependence on government, a topic I addressed in earlier posts on crony capitalism. Al seems to view crony capitalists as progressive business owners who have learned to work with government. I see them as corrupt.
I have heard Al’s line of reasoning from others in the past. To Al and others on the left, if you really think it’s scandalous that corporations profit from government, then why not help us dismantle the programs that create the dependency? The truth is that progressives want to increase individual and business dependence on government, not decrease it. Society is indebted to individual achievement and initiative, not the other way around.
BTW, Al, please feel free to post your responses on the blog. Some of the readers might not agree with you, but they are eager to counter your best arguments.