16 thoughts on “The Decline Of Entrepreneurship”

  1. A good test of policies : try starting a car company or a rocket company, that can actually sell its products on market.
    Elon Musk has tried both with moderate success, and i bet he has great stories to tell.

  2. From the NY Times piece:

    Multiply across the entire economy the effect of a Wal-Mart replacing the independent restaurant, grocery store, clothing store, florist, etc., in a town, and you can see how we end up with a downward trend in entrepreneurship over time.

    Maggianos/Little Italy – a Lettuce Entertain You national chain – is possibly a more illustrative example than Walmart

    http://maggianos.com/locations/

    Simply put, it is extraordinarily difficult for some guy who likes to cook Italian food to open a restaurant that can successfully compete on price and quality with Maggianos.

    We do know a guy who as done this – one guy – and we eat there when we can but it more expensive that Maggianos and he recently moved to a smaller space to avoid the headaches of running a large restaurant. He is also extraordinarily motivated by cooking as an art form.

    Fascism has nothing to do with this — it is simply the efficiencies inherent in larger operations – as Henry Ford proved with the auto industry. How many Entrepreneurs did Henry’s Ford’s assembly line put out of business?

    Oh wait, maybe Ford was a fascist, after all . . .

  3. Oh wait, maybe Ford was a fascist, after all

    Actually, he sort of was…

    As the head of his company, Ford was known to be a strong authoritarian in relation to his personal staff and workers. As time went on he wanted his workers to live as he thought they should live. He firmly believed that one’s behavior at home greatly reflected on one’s performance at work. In order to improve efficiency, he shifted his workers to an eight-hour day, introduced three shifts instead of two, and increased salaries—all benefits to the workers.

    Ford, however, also began to encroach into his workers’ personal lives and to “Americanize” his largely-immigrant workforce by offering English classes and other “improvement” programs, the goal of which was to create a “new American”—one who was encouraged not to dwell on the Old-World past, but rather focus on conforming to the standards of the New. This belief in his own righteousness led Ford to take on a more sermon-like tone with people in telling them how to live. Ford surrounded himself with a very small, tight circle of advisors. Access to this inner circle was strictly controlled by Ford’s long-time personal secretary, Ernest G. Liebold, who would protect his “Boss” for many years to come. This type of management style may have been conducive for getting things done, but it also alienated Ford from what his workers were thinking and created an isolationism that proved hard to bridge. This sense of “being out of touch” partially explains Ford’s later actions.

    Not to mention his acceptance of an award from the Hitler regime for helping them with their auto factories…

    Bill, if you don’t think that the current tax, regulatory and liability environment doesn’t present huge hurdles to start ups, you must be a lawyer who’s never tried to start a real business.

  5. Bill, if you don’t think that the current tax, regulatory and liability environment doesn’t present huge hurdles to start ups, you must be a lawyer who’s never tried to start a real business.

    I would paraphrase Reinhold Niebuhr — good regulation is good, bad regulation is bad, deciding which is which isn’t always easy.

    Yes, there are hurdles however some of those hurdles are good. For example:

    Here in Illinois my recollection is that a few decades back the major gasoline chains (Shell, Amoco etc . . .) fought with great vigor to oppose a proposed regulation that gas stations needed double walled tanks to prevent leaking gasoline from traveling underground across property lines or into water supplies.

    Suddenly they reversed course and embraced the regulation and it passed.

    Almost instantly, Mom and Pop gas stations vanished due to the cost of retro-fitting double walled tanks into existing facilities. The chains won the entire market. As with the restaurant example, a national chain could thrive in an environment where a sole proprietor was simply over their head.

    However, I have a question: Are Mom & Pop gas stations “worth” allowing neighboring properties to be contaminated by leaking gasoline, especially when those Mom & Pop ags stations lacked the insurance to pay for clean up operations? (This flows into liability issues)

    Is it “fascist” to enact a regulation that prohibits you from installing a tank likely to leak gasoline next door onto my property? And which allows you to do do so without adequate insurance to clean up my property if that happens?

    Another example. Allowing uninsured taxi cabs will perhaps “lower costs” and increase employment unless you happen to be one of the innocent people that un-insured cab driver smashes into.

    Is there bad, harmful and pointless regulation? Of course!

    But that doesn’t prove that all regulation is bad.

    A question — would you support putting most landscape contractors out of business through regulations requiring proof of citizenship?

    Would that be “good” regulation or “bad” regulation?

  6. And at what point do the unintended consequences and perverse incentives inherent in all regulation, even the best “good” regulation, outweigh the benefits?

  7. However, I have a question: Are Mom & Pop gas stations “worth” allowing neighboring properties to be contaminated by leaking gasoline, especially when those Mom & Pop ags stations lacked the insurance to pay for clean up operations? (This flows into liability issues)

    Is it “fascist” to enact a regulation that prohibits you from installing a tank likely to leak gasoline next door onto my property? And which allows you to do do so without adequate insurance to clean up my property if that happens?

    Before I can answer that question, I’d like to know just how common an occurrence the leaking tanks were. Did all of the single wall tanks leak? 10%? 1%? 0.1%?

    My brother used to be part owner in a Virginia gas station. They were required to replace their tanks by law. The tanks weren’t leaking, they just had to be replaced to comply with the law. In addition to the expense (IIRC, around $20K), there was considerable down time where the business was closed while the tanks were being replaced that resulted in a considerable loss of income. Add to that the fact that they lost a lot of their regular customers as a result of the downtime. The business failed within a year.
    Now, if leaking tanks really were a common happening then that’s one thing. However, to mandate replacement of non-leaking tanks because they might leak one day in the future is a different thing. Large oil companies are much more likely to be able to survive these legislatively mandated expenses than the independents, so it isn’t uncommon for them to bribe politicians (aka give campaign contributions) to help drive their competitors out of business.

  8. One quote:

    Steel tanks left in the ground for decades rot like Swiss cheese, said Pat Coyne, director of business development for Environmental Data Resources Inc. Coyne said a joke in the industry is: “What percentage of steel tanks leak? 100 percent!”

    In the late 1980s and early 1990s the government insisted on better-made tanks. The underground tanks of today must have safety measures including leak detection and an extra shell made with material resistant to gasoline, diesel and ethanol, Coyne said.

    Fiberglass and other corrosion resistant composites apparently are working out much better than stainless steel (or non-stainless steel).

  9. Leaking tanks are a fairly common occurence. And I can tell you of a town with Benzene in it’s drinking water as it will easily penetrate plastic piping.

    Groundwater contamination isn’t as sexy as Gorebull Warming but it is infinetly more likely to ruin you life.

    Gentlemen, groundwater contamination sucks. It is one of the most insidious and hard to remediate forms of pollution. It is insidious because it is out of sight and out of mind. It represents a takings from others because groundwater does not respect property lines or political boundaries.

    I have though of one day writing an article titled: “The Libertarian Case for Reasonable Standards of Environmental Protection” based on the concept of environmental harm as an illegal theft of service I.E. represents a taking from others. I would like to know if there is a half-assed chance that someone would be interested enough to publish it before I pour a lot of effort into it.

  10. Bill, most older ones were epoxy-clad carbon steel mabey with catohdic protection but Underground Storage Tanks are not my forte’ so I can’t tell you for sure. I can, hover, tell you anything you want to know about them no later than next Monday evening.

    The reason they tend to corrode is simply because gas floats on top of water.

  13. I have to grant Rand, I cannot think of a worse environmental harm that groundwater contamination.

    Air pollution, damage from mining, surface water contamination, grossly overblown anthropogenic global warming garbage…..pretty much pales into comparsion.

    Modern landfills are complicated animals designed to prevent lechate contamination of grounwater over very long timeframes.

  14. The point is, if you look at all the regulations; how many are about fixing a taking from others and how many are just punitive?

    It is common for human activity to result in a complicated waste that could be simplified or eliminated. As a programmer I used to see it in the form of bloated code. I can tell you that 99% of the programmers I worked with were unaware or unconcerned about a bloat problem (which increases software maintenance costs.)

    The people in government that produce regulations are a much less cohesive group than a team of programmers and so the problem is much worse. It gets even worse when the regulators think less is more is silly, obviously more is more. Those adding more usually have a public good argument even if it’s wrong.

  15. The point is, BIll, since the 60’s the government has piled regulation after regulation on to business. Many are contradictory and require a legal team to sort out. Every victim group act has their own guidelines and rules. Look at the size of any HR group and understand most of that is to deal with employee law. Is all of it needed? No way. You presented your “Debby Smith” to argue it’s mostly good and ignore the invasive reporting government imposes on business and don’t mention the lobbying that goes on to minimize the damage to companies that can afford to bribe politicians. Pretty soon, if you can’t “convince” politicians to not pass something, you’ll be the sh*t in the sh*t sandwich and start ups can’t afford that.

  16. No offense but water contamination is local. A source can’t pollute an entire country’s groundwater. On the other hand, a government protected rent-seeker can pollute an entire country’s groundwater.

Comments are closed.