Mitt Romney was, of course, correct.
Culture makes a huge difference — as Romney adviser Dan Senor eloquently explained on Wednesday’s “Morning Joe”:
The cultural choices that a society makes, the choices that it makes about its culture, about its political culture, its economic culture are big factors in determining its economic vitality…and in the case of Israel, there’s no doubt the fact that there’s this enormous respect for rule of law, for private property, for freedom of the press, for respect for minorities and for women in Israel and this celebration of entrepreneurship and innovation.
This concept is obviously true. Culture matters…in business, sports teams — and, yes, in societies.
Without the rule of law — a belief in fundamental fairness — entrepreneurs would have little incentive to take risks. As Hayek explained, the rule of law “means that government in all its actions is bound by rules fixed and announced beforehand — rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one’s individual affairs on the basis of this knowledge.”
Aside from taming the mercurial nature of coercive governments, prosperous societies must also take reasonable steps to protect its citizens (and their property) from one another. Just as Maslow’s hierarchy of needs stipulates that man gets around to “self actualization” only after his basic needs have been met, members of societies don’t worry about accumulating wealth unless or until they are reasonably safe from suicide bombers, mafioso shakedowns, etc. (Other observers have made a similar point regarding “basic needs.”)
Perhaps ironically, this notion seems to dovetail with Barack Obama’s recent, controversial, comments. When it comes to living in a good society, the notion that, “If you’ve got a business, you didn’t build that,” is technically correct.
America’s society, including our free market economy, owes much to traditions of western civilization that began going back at least to the Magna Carta. (Others would say it goes back to Aristotle.)
Either way, we didn’t build that, but we do benefit from it.
In this regard, we are in Newton’s words, standing on the shoulders of giants.