Ah, the lazy way to write a blog post: see two posts/articles, connect them together, and add commentary.
Post/article #1: Megan McArdle’s speculation on whether the existence of Obamacare (that is, both the subsidies and the no-preexisting-condition-exclusion requirements) will enable people to be more entrepreneurial, “Will Obamacare Inspire Small-Business Ownership?” Her answer is basically that the jury’s still out (or, in other words, it’s a “talk among yourselves” kind of post).
Post/article #2: Via marginalrevoluation.com, an article at the New Republic on the current situation in Zimbabwe, in which dollarization has ended the hyperinflation but it’s still a very, very troubled country.
Will a greater safety net inspire more people to strike out for themselves? Not really. My expectation is that the reverse is true, that societies in which the citizens expect their government to provide a generous safety net (medical, food, housing, general living expenses), expect safety in their working life as well. Consider that in European countries in general (or maybe just “countries in general”), instead of “employment at will,” it can be, depending on the country, rather hard to fire someone. At work, our research group produces summaries of employment-related legislation, and some countries define what is (and hence, what isn’t) a fireable offense in great detail — exactly how many times an employee can be absent, for instance.
Of course, on the other hand, in countries like Zimbabwe, where there isn’t a safety net, everyone is an entrepreneur. The author describes his “bicycle tour” of the city, given by a young man who, sensing there was money to be made, instantly reinvented himself as a tour guide.
Here’s something to think about: who do you know who’s self-employed?
Here’s my list:
- My uncle, for a great many years, started one small restaurant after the next. He had a “Subway” before it became a major international franchise, and had a buffalo wings restaurant before the Buffalo Wild Wings chain hit it big.
- My mom’s aunt and uncle and cousin followed the Greek immigrant tradition of small businesses. I think he owned a dry cleaners.
- My brother and sister-in-law’s “small business” hobby consists of hitting the Goodwill, finding the brand-name, good quality hidden gems, and reselling them on e-bay. Said sister-in-law was also trying to start up a photography business until the family had to move.
- A cousin owns food trucks, though this goes back to the days when they just sold cold sandwiches to workers, not gourmet food.
- My kids’ piano teacher, of course.
No “next Bill Gates” anywhere in this list. Sure, there are some people who start small businesses because they have a dream, and some because their profession (e.g., music teacher) basically requires it. But others do so simply because it’s the best option they see at any given point in time, as in the myriad of small businesses run by stay-at-home moms who need the flexibility (esty shop, anyone?), or anyone who, losing their job, hangs out a shingle to become a “consultant.”
And small businesses are great — but let’s not romanticize them.
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