Linkage: Voxiversity Edition

Blogger Vox Day has been good enough to assemble a series of Lecture & Test posts on a variety of topics.  I’m currently working my way through Rothbard’s America’s Great Depression – an Austrian examination of what occurred.  The book itself, of course, is hosted by the Mises Institute, but this is a great service by Vox Day, nonetheless.  The multiple-choice questions at the end of each chapter are a great help.

He’s doing more than just blogging – he’s actively laying out coursework for your own edification, from several books (down on the left-hand side-bar).  I might go through The Divine Comedy next – or not; I hate poetry.

And that’s pretty much all I’ve got to say on the subject – if you want to understand Rothbard, go read Rothbard.  He says it much better than I could.  So for the Good of Humanity, go check it out.

However, I would like to riff on Rothbard & Entrepreneurship, if you don’t mind.

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In the second chapter, Rothbard discusses the causes of less-than-full employment (employment meaning the people who want to work – obviously you’ll have a certain number of people switching careers at any given time, and they’re not included in this since they’re not immediately desiring employment).  The most obvious cause of unemployment is government price controls – i.e. the minimum wage.  Business owners can only budget so much for labour, before it eats into their bottom line.  They might want hire 10 people at $6/hour, but only hire 6 people at $10/hour – leaving for with no income.

Remembering that money has no inherent value – $1 is only worth what you can buy with it.  Having full employment at lower wages is the more desirous outcome.  Retailers and landlords will adjust to the reality of the situation; possibly by selling more bread and less cake.

Why has no one photoshopped Marie Antoinette into this meme yet?

However, there’s a second, more insidious cause of unemployment…

Workers, for example, become persuaded of the great importance of preserving the mystique of the union: of union solidarity in “not crossing a picket line,” or not undercutting union wage rates. Unions almost always reinforce this mystique with violence, but there is no gainsaying the breadth of its influence. To the extent that workers, both in and out of the union, feel bound by this mystique, to that extent will they refuse to bid wages downward even when they are unemployed. If they do that, then we must conclude that they are unemployed voluntarily, and that the way to end their unemployment is to convince them that the mystique of the union is morally absurd.[9] However, while these workers are unemployed voluntarily, as a consequence of their devotion to the union, it is highly likely that the workers do not fully realize the consequences of their ideas and actions. The mass of men are generally ignorant of economic truths. [Emphasis mine.]

This is where Entrepreneurship comes in.

I’ve long been of the suspicion that we have Far Too Many large companies in our modern world.  While there are certainly some industries that can benefit from economies of scale (cars, computers, and Noisy Shiny Crap) but the majority – I suspect – are top-heavy and unwieldly, unable to improvise or break from procedure.  The small business owner, on the other hand, is Versatile; for instance, I know a man who makes Trampolines for a living, who recently built some custom netting for a sky-scraper.

Good luck finding that at Walmart.

And yet – large megacorps abound.  And the reason is obvious.  It’s the regulations, stoopid!

I can’t fathom how small business owners do it – personally, I have trouble filling out my income taxes each year; the columns make me break out in hives.  These guys, meanwhile, take care of pay-roll taxes, somehow know the regulations for having 10 vs 15 employees, deal with property assesors and environmental inspectors, manage, lead, and train their employees, and yet still somehow find time to actually Git Er Dun.

Sounds like a nightmare to me.

So here we see the real economy of scale: it’s not just producing 1000 widgets instead of 10 – it’s because hiring an HR manager, a Lawyer, and an Accountant full-time is cheaper than a la carte.  The useless bureaucrats who clog this society (both in and out of government) are the real drag – that’s why small business is almost exclusively high-end boutique, or else immigrant run nepotism (that way they don’t have to deal with HR).

Even “government loans for small business” skew the reality; a lemonade stand should be making lemonade, not filling out forms for free money, so that they can afford to fill out all those other forms.

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The economic inefficiency of megacorps (who manage to survive through punitive regulations) is just part of the problem, however; Rothbard’s point about the stupidity ignorance of the masses brings up the other important aspect.

Working as a salary man offers deceptive security.  Just as someone who’s never been in a fist fight thinks that the Cops Will Protect Them, the salary man assumes that his 401k plan will be worth something when he retires; he assumes that the Value of the things he owns comes from their price tag, rather than what they’re innately worth.

Entrepreneurs seldom fall for this illusion.

As Rothbard says, the Entrepreneur is an expert at predicting the future.  They instinctively analyze the market, predicting what will be profitable and what won’t.  Uncertainty is at the heart of what they do – nothing is guaranteed, as they apply their wits and skill to build a future for themselves, their company, and their employees.

The Entrepreneur lives in the Real World; even their employees, to some extent, rub up against this Real World when they cash out the till each night.  The Entrepreneur doesn’t mistake the dollar for having an innate value – he recognizes that it’s just a fungible (and less fun) version of gasoline.  He is a Real Man, and a pleasure to speak to.

Compare to the office worker, where go-along-to-get-along matters as much, if not more, than real productivity.  Whose goal is to tread water for the next 20 years until he can retire.  Who buys a new car because the service is guaranteed on it.  Who follows the recommended diet plan and runs marathons.  Who votes for smoking bans.  Who votes for alcohol taxes.

Who votes for more bailouts for his corporate masters.

Singularity2050 wrote about the Misandry Bubble; I present you with the Employer Bubble.  What we need is more Entrepreneurs, and less megacorps.  We need more human beings, and less sheeple, as the term goes.  Bloody cavemen managed to survive without free healthcare or social security – yet somehow we – with all our cars, computers, and sports memorabilia – we need protection from the Indifference of Nature?

The dissolution of Reliable Employment has only just begun.

That old, grey mare; she ain’t what she used to be.