A Nation of Entrepreneurs?

September 25, 2012
Posted by Jay Livingston

To hear the Republicans tell it, the only people in the US worth mentioning are entrepreneurs (and maybe soldiers). Those who get a paycheck rather than a P/L sheet were absent from the speeches in Tampa. The same is true for the Romney and Ryan campaign talk since then. 

We hear the stories of the successes, the people who put in 70-100 hour weeks, risk their savings, and follow their dream. The trouble with that picture is that most business start-ups fail, even though those entrepreneurs too put in the long hours and take financial risks. Very few new businesses survive ten years. That’s capitalism’s famous creative destruction, which is fine as long as you’re not the one being creatively destroyed. (Dean Baker in yesterday’s Guardian has more on the “we built it” myth.)

Still, the image we get is that the US is just teeming with entrepreneurs.  Now I know I shouldn’t go making comparisons with other countries. As Marco Rubio told us in his speech at the GOP convention, other countries should be more like the US, not the other way round.  But I couldn’t resist taking a peek at the statistics on self-employment in the OECD factbook.  

I expected that the US, with lots of people working for themselves, would be way out ahead, followed, at a distance, by some of the stronger European economies. After all, independent entrepreneurship is what builds a great economy. 

(Click on the chart for a larger view.  Or go to the original spreadsheet.)

The green bar shows the 2010 rate.  The diamond shows the rate in 2000.

There must be problems of definition – not all self-employed people are what we think of as entrepreneurs.  Still, the differences are striking.  The US rate is less than half the OECD average.  And most of the countries with high rates of self-employment are the weaker economies.  Even among the wealthy countries, the US trails all but Luxembourg, which also has the highest income.  Independent work seems to be related to national wealth (and perhaps personal wealth), but not in the way I expected.

(HT: Ceterus Paribus (@imparibus) via Xavier Molénat.)

Ignorance and Arrogance

September 24, 2012
Posted by Jay Livingston

Visitors to the US are often dismayed by how little most Americans know about the rest of the world.  As Ambrose Bierce said, “War is God's way of teaching Americans geography.”  We don’t even know all that much about the countries we do make war on.  But why should we?

In his speech to the Republican convention,  Marco Rubio said,

These are ideas that threaten to make America more like the rest of the world instead of making the rest of the world more like America. [NB: threaten]

In Rubio’s view, knowing nothing about other countries is fine because we can just assume that America is best at everything.  Other countries should copy us. 

The defense for our ignorance is our arrogance.   But who benefits from our ignorance of the rest of the world?

When Verizon offered me their land phone-cable-Internet “triple play,”  it seemed like a good deal.  But my basis for comparison was what I was paying before (more), and what Time Warner was offering (roughly the same).

Then I heard David Cay Johnston interviewed on “Fresh Air.” Johnston too must have gone for a package deal. 

We're way behind countries like Lithuania, Ukraine and Moldavia in the speed of our Internet. Per bit of information moved, we pay 38 times what the Japanese pay. If you buy one of these triple-play packages that are heavily advertised, where you get Internet, telephone and cable TV together, typically you'll pay what I pay, about $160 a month, including fees.

Well, the same service in France is $38 a month . . . . And instead of two-country calling, you get worldwide calling to 70 countries. You get an Internet that is 10 times faster . . . downloading and 20 times faster uploading. And you get much broader international television stations than you get here in America.

To the list of countries that are way ahead of us in average speed Johnston could have added Latvia and  the Czech Republic as well as more likely countries like Japan and South Korea. 

Oh, that threat of being like other countries. I wouldn’t mind the threat to reduce my Verizon bill to $28.  But why is my bill so high?  Must be the cost of freedom.  As Rubio explained, the US “chose more freedom instead of more government.”
The threatening ideas Rubio was referring to – those bad ideas used by other countries – are ideas about the role of government.  Much better is the idea of American capitalism: If the government doesn’t interfere, then competition among corporations will bring us more and better stuff at lower prices.  At least that’s what Rubio, the corporations, and their other defenders tell us.

Johnston looks at his triple-play bill and sees the actual government role as something different from that ideal.  The bill is higher, he says, because telecoms use their wealth and power to get legislatures to write friendly laws that force consumers pick up the tab.* Our ignorance – ignorance of those laws and how they are made, and ignorance about other countries – is a big help to the corporations.

When George W. Bush used to insist that America’s health care system was the best in the world, most Americans had no idea what other systems were like or how much they cost.  Besides, how can you define quality in health care, and in any case, it’s hard to imagine yourself going to a French or Swiss doctor. 

But we all know what an Internet connection is, and we get the bill every month.  It’s just that most of us can’t discuss that bill with anyone in Paris or Vilnius. 

Maybe we should follow Rubio’s advice and avoid making that comparison. Ignorance is bliss. It’s also beneficial to Verizon.

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*Johnston has much more about this in the interview and in his new book The Fine Print.

Moral Principles and Political Tension

September 21, 2012
Posted by Jay Livingston

Riffing last week on the Jonathan Haidt’s moral chart, I said (here) that the conservatives’ choice of five moral principles makes it easier for them to justify any idea or action.  Liberals have to get by on just two such principles. 

It hadn’t occurred to me that this moral diversity may also make it harder for conservatives to agree among themselves. We usually think of the Democrats as the weak magnet, unable to keep its iron filings from floating away.  Hence Will Rogers’s famous “I am not a member of any organized political party. I am a Democrat.”

But B.A., who blogs for The Economist,* notes (here) that the different branches of the Democratic party are not really at odds on specific policies.

Obama’s embrace of gay marriage did not require him to cut food stamps. Supporting card check neutrality for unions does not interfere with opposing tort reform. In fact, all of these positions can be collectively thrown together under the rubric of fairness and equality.

In fact, the policies mirror Haidt’s liberal diptych

• Harm / Care
• Fairness / Reciprocity

Things are different on the other side of the aisle.  Republicans seem remarkably similar to one another – the  convention in Tampa looked like a huge gathering Buick drivers – but the ideological voices aren’t always in harmony.  B.A. refers to

the competing blocs within the party – pro-immigration businesses versus nativists, tax-cutting zealots versus defense hawks and retirees who want to keep their entitlements . . .

He could have added the Randian libertarians and the religious conservatives. These seem to comprise all five of Haidt’s moral principles – the liberal two plus

• Ingroup/ Loyalty
• Authority/ Respect
• Purity/ Sanctity

(Haidt has recently added a sixth  – liberty, a card which he deals to both sides of the table, making the count six vs. three.) 

B.A. credits this moral diversity in the GOP for Romney’s refusal to make specific proposals lest he offend one of those blocs.  But these blocs have long been part of the GOP.  Back in the Bush years someone (can’t remember who) referred to them as “The Taliban, the Predators, and the Neo-cons.”  But as long as the party was winning, everyone was happy, and these differences seemed unimportant.  Now that the party teeters on the verge of losing the big prize yet again to a Kenyan socialist, conservatives are looking at one another and wondering whose principles should be put front and center to bring back the glory days.  That goal, “taking our country back,”** may be the main thing they all agree on.  They just can’t agree on which of their principles to push forward.

Mo’ principles, mo’ problems.


* The Economist identifies its bloggers only by initials.  Apparently, in the magazine’s view, these scribblers are not worthy of a full byline.

** An earlier post on this meme is here.

Romney and The Help

September 20, 2012
Posted by Jay Livingston

The “Romney 47%” recording reminded me of “The Help.”  Apparently, the recording was made by the help – a waiter or bartender or some other hired servant who, either independently or at the behest of a reporter, put the camera or cell phone on the counter and pushed “record.”

I didn’t find “The Help” all that impressive a film (further comments on it are here).  It was too pretty.  Emma Stone was prettier than the real author, and race relations in the film were prettier than Mississippi of the early sixties.  But “The Help” did accurately show one often overlooked aspect of the relation between servants and those who hire them:  servants are so powerless that from the masters’ perspective they become non-persons.   Servants are harmless.  And all they are is servants, at least to the master. 

No man is a hero to his valet.  But masters also forget that the valet may be more than just a valet. So masters relax the usual constraints of self-presentation and information control, and servants acquire a lot of information.

Most of the time, servants use that information only among themselves, largely as protection for the self.  By swapping stories that deflate the self of the masters, they  narrow the self-worth gap between the two statuses. Information is power, but the power of servants’ information usually remains potential. 

Still, every so often, as in “The Help” and in “Romney 47%,”  that power becomes actual.