Monday, May 24, 2010

Conflict of Vision: Free Enterprise v. Gov't. Control

In his Washington Post commentary yesterday “America’s New Culture War: Free Enterprise vs. Government Control,” AEI President Arthur Brooks writes:

"In one [vision], America will continue to be an exceptional nation organized around the principles of free enterprise—limited government, a reliance on entrepreneurship and rewards determined by market forces. In the other, America will move toward European-style statism grounded in expanding bureaucracies, a managed economy and large-scale income redistribution. These visions are not reconcilable. We must choose."

According to the “Kauffman Index of Entrepreneurial Activity,” a study released last Thursday by the Kauffman Foundation, there is some new evidence that many Americans are moving in the direction of the first vision. The Kauffman report finds that entrepreneurial activity in the United States reached a 14-year high in 2009, measured by the number of new businesses created. From the press release:

"Rather than making history for its deep recession and record unemployment, 2009 might instead be remembered as the year business startups reached their highest level in 14 years—even exceeding the number of startups during the peak 1999-2000 technology boom (see chart above). In 2009, the 340 out of 100,000 adults who started businesses each month represent a 4 percent increase over 2008, or 27,000 more starts per month than in 2008 and 60,000 more starts per month than in 2007."

Read more here at the Enterprise Blog.

19 Comments:

At 5/24/2010 3:08 PM, Anonymous m said...

or as they year everyone become a "consultant" or a "webmaster" living on unemployment benefits buy avoiding the resume gap...

 
At 5/24/2010 3:23 PM, Anonymous Anonymous said...

Rather than making history for its deep recession and record unemployment, 2009 might instead be remembered as the year business startups reached their highest level in 14 years

If you can't find a job make one.
Low pay, no benefits, long hours, and you get every job from mail room to CEO.

Go for it.

 
At 5/24/2010 3:36 PM, Blogger Benjamin said...

I vote for free enterprise, but in fact any white-collar guy in his 50s who got laid off is now a consultant. It sounds better than saying "unemployed," or "waiting until 62 and Social Security."

Given how most 50-somethings feel about their wives, and how most wives feel about their now-permanently unemployed hubbies, a terrific move might be to create an American Expeditionary Force 50+.

Job One would be to set up American Export offices in foreign lands and help local population with simple development.

We have in the USA 7,000 extension officers provided free to farmers. Why not a million overseas sales people, free to American manufacturers?

When you get a lemen, make lemonade.

 
At 5/24/2010 5:12 PM, Anonymous Anonymous said...

There may be evidence that Americans are moving in the direction of free enterprise, but there's a whole lot of laws getting passed that go the other way, and can't easily been undone.

Wait until 2012 when small businesses have to file millions of 1099 forms, or start considering how the health care law forces them to change, start, or add coverage. On top of increasing unemployment insurance taxes and income taxes.

 
At 5/24/2010 8:27 PM, Blogger sethstorm said...


or as they year everyone become a "consultant" or a "webmaster" living on unemployment benefits buy avoiding the resume gap...

The more reason to make contracting away work no less costly than retaining the people for the proper full time.


If you can't find a job

...a law was used against a US citizen. We have the people, just more than a few stubborn entities who hate America(yet live in it).

 
At 5/24/2010 8:47 PM, Blogger sethstorm said...

They have the choice to hire US citizens on a good faith basis, or not complain why they have to pay their benefits.

 
At 5/24/2010 8:56 PM, Blogger wintercow20 said...

Well, I do appreciate the upward trend - but maybe what we are seeing is political entrepreneurialism? You know - opening a business just to get in on the orgy of rent seeking before the party is too late. Just think about the green energy sector.

 
At 5/24/2010 9:36 PM, Anonymous grant said...

Benjamin:
They already have american export offices in foreign lands they are called embassy's. They do not actively peruse possible sales of American goods. The USA is in a better position now to export because of the substantial devaluation of the $USD.
Maybe better to employ people on US mainland by seconding them on as volunteers on benefits to work for the big export companies to push US goods with fly ins at contract stage. I can just see you selling jet fighters for Lockheed Martin.

 
At 5/24/2010 11:57 PM, Blogger Ron H. said...

I don't see how more business startups point to a move toward more free enterprise. Without less government control, nothing has changed.

How many of these start-ups will still be in business in 3 to 4 years? If more businesses are created now, I would expect more to fail in the not so distant future.

No slowing has occurred in the headlong rush toward socialism.

 
At 5/25/2010 3:12 AM, Anonymous grant said...

Market fundamentalism says markets work perfectly so there cannot be any unemployment as demand always equals supply. Consequently we all know that there is never any involuntary unemployment.So someone who is not working has chosen not to work.It is not the governments job to promote leisure as work and then pay for it.

 
At 5/25/2010 8:29 AM, Anonymous Anonymous said...

create an American Expeditionary Force 50+.

Job One would be to set up American Export offices in foreign lands and help local population with simple development.


Benjamin, that is a great idea. you interested in seriously working on it?

 
At 5/25/2010 9:29 AM, Anonymous morganovich said...

this does not square terribly well with the recent trends in private vs public income:

Key shifts in income this year:

• Private wages. A record-low 41.9% of the nation's personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

•Government benefits. Individuals got 17.9% of their income from government programs in the first quarter, up from 14.2% when the recession started. Programs for the elderly, the poor and the unemployed all grew in cost and importance. An additional 9.8% of personal income was paid as wages to government employees. "

that's 27.7% of income coming from the government in one way or another.

all that money comes from the private sector (or mounting debt which will come from it later)

that's an awfully large burden to carry.

 
At 5/25/2010 9:41 AM, Blogger juandos said...

I love the optimism Professor Mark but the fact of the matter is that there is a glaring detail that could take a lot of the magic out of start ups...

 
At 5/25/2010 9:51 AM, Anonymous Anonymous said...

Seth-

Your vision of an America in which everyone is owed a job is still stupid no matter how many times you repeat it. Move to Greece.

 
At 5/25/2010 10:36 AM, Anonymous Anonymous said...

As the stock markets around the world melt down, the big news in Washington is who's going to be on the committee to "reform" Wall Street. As if they have any clue what they're doing. They won't fix the problems, just as the health care law didn't fix the real problems.

The nanny state is imploding in countries from Venezuela to Greece, and the powers that be have decided to sign us up for that same program.

 
At 5/25/2010 1:41 PM, Blogger Ron H. said...

Grant said: "Market fundamentalism says markets work perfectly so there cannot be any unemployment as demand always equals supply."

You are no doubt referring to L. von Mises on unemployment:

“unemployment in the unhampered market is always voluntary”

Meaning that in theory, the market for labor will always clear unless labor is voluntarily withheld.

The key word here is "unhampered".

In the real world, there are many legal barriers to voluntary labor transactions, including minimum wage, licensing and certification requirements, as well as unions that prevent market clearing.

"It is not the governments job to promote leisure as work and then pay for it."

Correct.

 
At 5/25/2010 6:38 PM, Blogger grant said...

RON H.
Thanks for your comment.I am amazed I didn't get tramplled for making it.

 
At 5/25/2010 8:27 PM, Blogger sethstorm said...


Your vision of an America in which everyone is owed a job is still stupid no matter how many times you repeat it.


There are two choices that I gave.

* Start employing these people on good faith (and not even think of using temp/staffing agencies) on a permanent basis.

* Stop complaining about the transfer payments to the unemployed.

It's a case of putting your money where your mouth is. Not doing a half-job at it with temp work or speaking out of both sides of your mouth.

Your money is going their general direction either way.

 
At 5/25/2010 11:11 PM, Blogger Ron H. said...

Sethstorm said: "Your money is going their general direction either way."

And you don't see anything wrong with that?

 

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