American Capitalism?
Published by Bob Foster
It seems the U.S. has, for quite some time, prided itself in being the true Capitalist nation of the world. With relatively low taxes, fewer government controls, and that indomitable American spirit of freedom, entrepreneurs have a free rein to start whatever business they want in the U.S. This is the land of opportunity, and that is why we lead the world in entrepreneurship—right?
Sadly, the above comments appear to be part of a giant myth. John Schmitt and Nathan Lane, of the Center for Economic & Policy Research published a paper in August declaring that the U.S. ranked second to last out of 22 countries in the ratio of self-employed workers to the total civilian workforce. Not surprisingly, the U.S. also appeared near the bottom for workers employed in small-business manufacturing. Much more surprising, was that the U.S. was also near the bottom for computer related services.
Here are a few comparisons of self-employment as a percent of total civilian employment, as published by the Organization for Economic Cooperation & Development:
- Greece – 35.9%
- Spain – 17.7%
- Britain – 13.8%
- Germany – 12.0%
- France – 9.0%
- U.S. – 7.2%
Of course, when throwing big corporations into the mix, the U.S. fairs much better, but what does this say about small business being the future of the American economy? What does this study say about the role of American small business in any part of our future?
So, what has happened to the entrepreneurial spirit in the U.S.? Why are our European and Asian neighbors beating us at our own game? Have we become so used to living the easy life, with cheap and abundant credit, that we no longer want to work the demanding regimen of the small-business entrepreneur?
It takes guts, passion, persistence, and very hard work to become a successful small-business person today—and it now appears that America has a dearth of people with these attributes.
What has happened in America…and can we retake our former position as a world leader in small business Capitalism?
Comments
4 Responses to “American Capitalism?”
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Excellent thoughtful post, Bob! Thank you. You ask some very thoughtful questions. It is always a question of ethics in business and it seems that we have come to believe that hard work is demeaning and that easy paper shuffling Wall Street “work” which often adds little value to the whole of society is good.
This is probably why during the 90s young people went to Wall Street instead of into other fields. But it didn’t used to be this way. Morgan Chase, for example, funded Thomas Edison and George Westinghouse which enabled the industrial revolution and other large and small businesses. Bankers now just bank profits largely for themselves, producing very little.
Nassim Nicholas Taleb does not call what we have now capitalism he says that we are “privatizing gains and socializing debt.” Large corporations benefit but the whole of the American economy, including small business, does not. This cycle enables Goldman Sachs to make 3.4 billion dollars in 3 months and not lend to small businesses. Arianna Huffington calls what we currently have as “corporatism” which does not include small business or local banks and credit unions.
Judith Ellis´s last blog ..Being Goldman Sachs IV
Judith – Certainly, U.S. Capitalism does not fit the dictionary definition of capitalism, as we are too tightly connected to just one industry–the financial industry. But, why is that? Could it be because of “greed?” College students are pursuing careers in finance, instead of science and engineering, because they can make so much more money (just think of the “billions” in bonuses alone).
The U.S. has a critical shortage of scientists and engineers, while other countries are pulling ahead of us in the technology business arena. Studying to become a scientist is very hard work, with not a great promise of wealth…so why bother?
I think we have instilled a culture of greed in too many of our younger generation, and it is now coming back to haunt us. Not sure we can put that toothpaste back into the tube either.
Thanks for you comment Judith, they make this all worth while.
Bob Foster´s last blog ..Children are Watching and Listening
“To feel much for others and little for ourselves; to restrain our selfishness and exercise our benevolent affections, constitute the perfection of human nature.”
–Adam Smith
There seems to be a core ethics to his capitalism.
Judith Ellis´s last blog ..Being Arianna Huffington XI
Judith – Whatever happened to the teachings of Adam Smith as they relate to our present cast of characters in U.S. big business? It seems that Smith’s concept of capitalism has been replaced by ego and greed.
Bob Foster´s last blog ..More Bad News for Small Businesses