Obamanomics: Against Free Markets and Human Creativity
In an interview last week with NBC News, President Obama suggested that innovation and technology were reasons why the employment rate was not rebounding as quickly as he had hoped. The president said, “There’s some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers.” This was meant as a criticism of American companies. Only a government official could condemn efficiency!
As an example of how increased efficiency through technology is allegedly displacing human workers, the President offered the ubiquitous automated teller machine (ATM) as an example saying, “You see it when you go to a bank and ... you use an ATM, you don't go to a bank teller. Or you go to the airport, and you’re using a kiosk instead of checking in at the gate.”
This is both an astonishing statement-astonishing in its economic ignorance-and reveals a dangerous anti-business ideology that is growing in America.
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Economically speaking, this statement is ridiculous because for one its fails to consider the multitude of jobs involved in the production of these more efficient technologies themselves, such as the ATM. Simply consider that the ATM itself is comprised of numerous parts, produced by multiple companies, designed and assembled by a multitude of workers. The ATM incorporates the acquisition of raw materials, manufacturing, software engineering, programming, utility services, distribution and shipping, installation and ongoing maintenance. In fact, the creation and use of machines like the ATM inures a massive network of human occupations thereby creating countless jobs.
Additionally, when I walk into any one of the thousands of branches that my bank now operates worldwide, I am still served by a human teller. However, with the advent of the ATM, access to my money is no longer limited to daily working hours and physical location. I can now draw cash from my account anytime day or night from thousands of locations beyond my local bank. The ATM has proven itself to be a valuable tool, serving millions by making an essential need much easier. Such innovation-driven by the desire to better serve others-is a unique product of a free market.
The ATM (as well as countless other technologies) arose in response to someone-an entrepreneur-who saw a need, defined the opportunity, took the risk by investing time and capital, and created something. If such persons didn’t believe there was the potential for a reward greater than the risk, they simply would not pursue the challenge. Furthermore, if their product didn’t meet some real need or desire on the part of people, they would have no hope of recovering their investment, much less a profit.
It is frightening to think that the man to whom we have entrusted our nation’s economic policy doesn’t understand-or embrace-these facts related to free markets.
This brings me to my second point: the ideological bias revealed in the president’s statement. Implicit in his statement is a suspicion of business, as if business leaders are plotting to replace human workers with machines. Also implicit is the idea that the free market drive to innovate and improve efficiency is harmful to human workers.
To be sure, American business-like every other social and cultural institution-has suffered its share of corruption, greed, and malfeasance. However, this has absolutely nothing to do with businesses pursuing innovation and efficiency or an economic system built on free markets. The ultimate source of harm to or oppression of the human person is sinful men! The secularization of American business has left us with system devoid of any coherent moral system.
The simple summary about the ATM given above offers an example of how human work through collaboration drives innovation. When we work to make difficult tasks easier, we are serving others while also providing the means by which we sustain our own lives and those of our families. This is the very nature of God-honoring work. Work that serves others is the most common means available for demonstrating our daily love of neighbor. (Clearly, not all work could be considered “God-honoring.” Suffice it to say that God-honoring work produces goods and services that meet essential human needs and/or improves the ability of people to flourish and serve others.)
Both the free production and consumption of God-honoring work promote human flourishing. In the production, we must work in collaborative harmony if we want to succeed. We must also produce something that consumers need or want and is of good quality, otherwise no one will buy the produce of our labor or they will seek another source if our quality is substandard. In producing, we are able to express our creativity and apply our God-given abilities. There is dignity in work that derives from knowing your work matters because it serves others and honors God through the use of one’s gifts.
As consumers, we benefit from the production of others by gaining access to goods and services that we, on our own, could not produce. This not only enhances the quality of our lives but also enhances our ability to serve others through the use of time saved and the goods acquired.
Unfortunately, the emerging ideology today in America is one in which employment is a right and not the result of cooperation between entrepreneurs, capitalists, and employees. As a result, workers have begun to resent the disparity in reward between parties (the Bible condemns this as envy). Practically, there is great danger in the notion that the entrepreneur is not entitled to any greater reward, because any attempt to limit or reallocate the wealth (reward) of risk takers only discourages essential risk taking.
Absent an appropriate risk/reward ratio, entrepreneurs won’t create and capital investment disappears. Innovation and production decline and opportunities to apply our vocational gifts in the service of others and acquire goods and services that enhance our lives diminish. Flourishing erodes, human dignity is degraded, and suffering increases-all of which hinders our ability to be fruitful and bring the fullness of God’s creation into being.
The solution to the problems facing corporate America will not be found in restricting free markets or limiting the creation of wealth but in recovering the Judeo-Christian view of work and business as a moral enterprise intended to serve others and glorify God.
