Friday, April 03, 2015

America needs an entrepreneurial economy

think-entrepreneurAmerica needs an entrepreneurial economy. This would require a massive overhaul in Washington, which with its regulatory schema favors big business, and with its tax schema punishes wealth creation and entrepreneurial success.

An entrepreneurial economy would do more to solve our nation's woes than any other policy. It would enable people to be free to create and keep wealth. The spillover effects of this would benefit many more people who aren't themselves entrepreneurs, but who associate with entrepreneurs. It would create growth, and thus tax revenues. It would reduce the crony capitalism between government and big business.

Unfortunately, there is no single voice for entrepreneurship in Washington. By its very definition, entrepreneurship is organic, iterative, and experimental, whereas Washington is centralized, top-down, and "experts know." This is true even when Washington supports entrepreneurship.

As with so many of our other societal problems, the solution to this one begins with whacking Washington by at least 25% for starters. We need less from elected officials, and more from ordinary citizens.

The true entrepreneurs are people like Bill Gates, Steve Jobs, Mike Dell, Mark Cuban, Sergey Brin, and Marc Zuckerberg. Nobody "taught" these people anything about how to be entrepreneurs. Some of them didn't even finish college.

True entrepreneurs are like great artists. They have a way of looking at the world that so far surpasses the conventional wisdom that nobody can understand what makes them tick, maybe not even themselves. They just do what they're driven to do, constantly improving on their unique vision as they execute it, and the world comes to their door.

It's very hard to believe that any organized institution like universities or government can "teach" people to become the kind of entrepreneurs that the economy needs. Maybe you can teach somebody how to open a gas station or supermarket, but you couldn't train somebody to be a Bill Gates or Steve Jobs. These guys COULDN'T be trained because they INVENTED concepts and products that didn't even exist until they thought them up.

These folks were totally driven by their passion to bring innovative products and technologies to market. They literally would let nothing stop them. During their early days they found ways to keep the business open when they had zero cashflow.

The entrepreneur doesn't answer to anybody but him/herself and therefore strives to build sustainable companies that create real growth and wealth.

Of course many fail, but the ones who succeed seem rather surprised at the wealth that is formed around them. They were motivated by the intellectual glory of inventing something that nobody else had ever thought of. The money that came into their hands as a result seemed almost like an afterthought. For example, I believe Sergey Brin lived in a modest apartment for years; Bill Gates used to fly coach; Warren Buffet lives in the house he grew up in; and the late Steve Jobs shopped his own groceries.

Much of the discussion in this article can be summed up with the admonition, "worker harder and smarter." Well, I am one who believes that people who want to get ahead have always worked as hard and as smart as they could, and the human genome has not changed in recent years.

What too many people ignore the fact that something fundamental has changed. We were once a productive entrepreneurial nation, and we are no more.

Why invest capital and effort in a business that Obama says is not yours anyway? Why work when government consumes 50% of your income and gives you nothing but grief in exchange?

There is a reason why entrepreneurialism is on the decline, and it's because more people have realized that it doesn't pay off in a society that places the social welfare of the poorest above the rights of the productive individual. If you produce, they take what you produce. Not only that, but it is their legal right to take what you produce.

What is the best way for government to help the entrepreneur? The answer should be obvious, because we have a model from history. Simply implement the model that made the U.S. economy the greatest and most productive economy of all history: market capitalism. And get the government out of the business of "helping" business.

The most help government can give is to remain small and inconsequential.

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