Anony Mous inquires as to why one would see self-employment as a cure-all and a way out of this mess when places such as Italy and Spain have high self-employment and small business activity, yet the self-employed hardly seem to be thriving. Family members labor away with little or no compensation, life is a struggle. Why would anyone choose that? It hardly looks attractive or gainful.
It seems to me in such cases it is unlikely it is a choice, few people choose to underperform, although people very often weigh opportunities, and strike some sort of balance. The thirty year old living at home in Italy and manning the counter at the wine shop may have not done well enough to get into the civil service or medical school, so someday the wine shop will be all his. It is a default.
In these countries, once hot-beds of innovation, start-up business is very difficult. Making changes and adapting is difficult. Their best and brightest move up or out. This creates a sort of downward spiral for these countries.
We may wonder at tens of thousands of students in France protesting the raising of the retirement age by two years, for to us, why would students care about any retirement age? The reason is that in those economies life is something of a conveyor belt. As people retire after their planned obsolescence, there is a shift up the chain for everyone in the system. Retirees fall off, everyone in the system moves up one, and there is a a space for the graduates to get on. If retirement is raised by two years, then the next two years’ graduating classes will have no chance to get on the conveyor belt. It is not a matter of waiting two years, it is a matter of never getting a chance again. In two years, the jobs will be given to fresh graduates. Who wants people who’ve been cooling their heels for 2 years? Those students protesting know if retirement age is extended by two years, they are lost. Immigrate, crime, drugs - pick one - but forget about opportunity.
For these people, attempting to start a business in a lock down economy would be revolutionary indeed.
Now I understand the lock down of these economies by the progressive powers that be in those countries. The progressives have no interest in turning over their countries to the welfare queen Walmarts, McDonalds and Microsofts that have proven to be a net deficit to the USA economy. Better Italy be a museum than a mall.
Our problem in USA is the lawlessness of the government, our courts in particular. Respect for property rights is gone, with local jurisdictions free to seize the property of one private property owner and give it to another, from homeowners to Walmart. But this is not limited to property, government lawlessness is rife throughout the US economy. A particularly good book on all of this is Morton Horwitz’s The Transformation of American Law, 1789 to1860.
Of course that is a false dichotomy, lock down or welfare. It does not have to be one or the other. It can be something else, something good. We can catch glimpses of what can be in places like Hong Kong, and places of new freedom, like Vietnam, where property rights are respected and innovation welcomed. But a challenge for those who advocate freedom is there is no prescription, no prediction of what will be under freedom. It only guarantees, more better cheaper faster of the good, the true and the beautiful. Since the result of freedom cannot be predicted, only assurances that things will be beneficial, it is not a very compelling argument. In essence, Anony Mous is asking to see the brochure before he buys into the community.
I’d say there is no brochure, just a blank slate, for us to draft whatever emerges from our individual but cooperative free market enterprises, and whatever other cultural advances we make given the peace and prosperity that comes from our action in freedom. And no, I am not stoned. This is rational and I am arguing from human experience.
But “no brochure” is not quite right. There is a brochure, of the starting place. Moral philosophers for a while were arguing for a better way by following Hobbes, who claimed that life was savage - solitary, poor, nasty, british and short. Such a premise led to policies that are less than desirable. American philosopher John Rawls dominated political discussion the last half century by suggesting instead people operate from an “original position.” That is to say, regardless of mans’ propensities, we do possess rational faculties, so let’s work out an original, fundamental position (regarding justice, equity, polity) and then start over and build from there. Social planners whose policies had failed based on the Hobbesian premise were offered a fresh start for a new round of social planning! Before, when people based social policies on the Hobbesian premises, we got war, famine, denigration of rights, economic chaos and so many other problems. Working instead the last half century from the premise of “original position”, we have gotten war, famine, denigration of rights, economic chaos and so many other problems. The problem is the planners preclude the good we get from freedom. You cannot have freedom and central planning.
Perhaps we can try again. We very often get the opportunity. How about an original position that life is savage - solitary, poor, nasty, brutish and short. And whenever we have failed government policy - say after a Hurricane Katrina - government is forfeit and and anarchy is declared. City, parish, state and federal jurisdiction is null and void. The people are on their own (they are anyway) and then let the order come out of chaos, which is ever the result in anarchy.
(If your mind runs to security and such, there is massive experience on this, and some time I’ll address it.)
What comes of it? We can only know that we will get more better cheaper faster of what is good and true and beautiful... there is no predicting what it will be, there is no telling what wonderful things a free people will create. We see this time and again in history. We also see any plan will wreck the possibilities, no brochure can capture the future.
So self-employment is not signing up for a program with known benefits, career progression, and retirement plan, like a French waiter, but it is signing on to exercise every aspect of your existence at every level in life and the world around you. And your retirement plan is you grab your chest, gurgle, and drop dead mid-sentence.
As a practical matter no matter what happens, if you are self-employed, you’ll have something to trade, so you will have options. When the US Occupation forces’ policies in Germany after WWII were leading to widespread starvation, Konrad Adenauer talked the US General in charge to remove price controls on eggs. The next day the market was full of expensive eggs, within a week they were cheap and plentiful. It is always we merchants who save the day.
We’ve been conditioned to make our judgments based on income. Self-employment is about lifestyle, not income. As I pointed out elsewhere, income is what we want to minimize. A business needs and owner, but a business needs no physical plant, or can have palatial grounds. It cannot pay taxes because ultimately its customers pay the taxes. Whether sole proprietor, corporation or some other form, a business outfits and supports the owner. The owner decides everything. The owner is self-actualizing.
On the other hand, to be an employee, its to be at the direction of others, and to be directly controlled by others, and feed the beast. We do not have the right to agree to limit the excercise of our talents by ordering ourselves to the narrow needs of an employer, even if it is a great deal: big payoff for small effort.
Big payoff for small effort is what we are conditioned ot seek. Such a polity is the result of social engineering, which in fact picks winners and losers. We ethically cannot agree to a system that chooses who loses just because we are, or might be, chosen as a winner.
(Also, this inevitable leads to chaos, as those who were close to success, or recently lost it, are the ones who pursue armed intervention against the state. See Eric Hoffer on True Believers).
Regardless of the payoff from “employment” the social engineering aspect of your activity plus the lack of challenge to the powers that be both feed the beast.
Our balance of entrepreneurial to big biz is perniciously out of balance.. If Ron Paul were to win and get his way (he will not win, if he did, he would not get his way...) we’d have mass starvation. Once farm subsidies were cut, most of usa ag would fail. We destroyed ag around the world, so we could not import enough from around the world to feed ourselves. there simply are not enough people who know how to farm in usa to grow enough food to replace usa production of subsidized food. What arable land that would be freed from franken-farming , such as soy and corn crops, is lethal to real crops for decades.
Austrian school economists pine away “if people could just understand...” People understand perfectly well, and that is why they reject it.
Austrian economics, while effective, is particularly popular with people who wish to keep hold of ill-gotten gains. This is why the term capitalist is very popular in the Austrian school, when in fact capitalism is adverse to free markets. A policy that says expropriation is unlawful if attractive to those who gained much from government policies that fostered the capitalists’ ability to expropriate.
But the Austrians are right. We are in a crack up bust following a boom... the powers that be are managing well, cooking the frog slowly...inflation here, cut services there... thinner socks, smaller hamburgers, and bus drivers who say “I dunno” cause they don't know the system routes. Drugs just are not there.
Everybody is negotiating their own deal, or think they are. It is everyone for himself. And if war is inevitable, well it will be fought by 19 year olds, who do not know any better, and then things will get better. USA has always been big on human sacrifice as a way to propitiate the gods, something we copied from the Aztecs and others who ruled these lands before us.
The people who were describing what we see today 4 years ago were called crazy, and we elect to office and appoint to the commanding heights people who saw none of this, and have no capabilities whatsoever to deal with any of it. Their continued relevance depends on not dealing with it. That will not change, because people want that. They want to believe Timmy Geithner can save us. They want their corn dog and football game on the big screen TV.
What goes around comes around. Thoreau complained that in democracy it is too easy for a small group to drag the entire country into war. He was referring to the Mexican war, a plot by southern planters to get access to fresh cotton fields. General Grant thought the devastation of the Southern States in the war between the states was God’s punishment for the Mexican War. The overall system is unraveling, specific actions are generating specific results.
Self-employment is no escape, it is just a lifestyle alternative to what will be issued in an ever constricting economy. You’ll have options.
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