Can It Happen Here?

Every once in a while you run into an article so loopy you don’t know what to make of it. One example is John Tamny’s column in Forbes in which he contends that the U. S. is unlikely to become more Europeanized because Americans are too entrepeneurial. It’s in our DNA:

To understand why the U.S. will be fine over the long run, we have to remember that we’re a “nation of immigrants.” This is an important distinction, because as Johns Hopkins professor John D. Gartner says in his 2005 book, The Hypomanic Edge, “a ‘nation of immigrants’ represents a highly skewed and unusual ‘self selected’ population.”

We’re for the most part descended from the kind of individuals who possessed what historian John Steele Gordon referred to as the “get up and go” that drove them to leave the comforts of home in order to make their highly uncertain way in the new world that was the United States. We’re different because we’re descended from those who had the courage and drive to leave feudal, excessive taxing, warmongering governments. Simple as that.

Unfortunately, his column is virtually devoid of actual facts that support either of the two assertions, that most Americans are descended from people who elected to come here and that this has created an entrepeneurial spirit here. Leave alone the fact that most African Americans (at least an eighth of the population) here aren’t descended from those who elected to come here. Let’s use my own family experience as an example.

Of the eight strains in my great-great-grandparents’ generation, only one, the Wagners, clearly came here because they chose to. The others came here because they had no choice. They couldn’t stay where they were and there was nowhere else for them to go. Of those branches of my family tree only three, the Schulers, Wagners, and Blanchards show a history of entrepeneurship. Of the eight branches only two, the Schulers and the Wagners, were successful.

At age 9 I started selling greeting cards door to door. Since then I’ve started businesses of different kinds on a nearly continuous basis in wildly different areas, from theatrical production to catering to business consulting. None of my siblings showed a similar entrepeneurial bent.

I don’t believe that we’re entrepeneurial because of heredity but because of environment. Our institutions lend themselves to starting businesses in a way that those of our European cousins don’t. People with entrepeneurial spirit come here because we’re friendly to entrepeneurs. That’s as true of the South Asian entrepeneurs who come here to start businesses as it was of the Jewish immigrants who sold everything imaginable from pushcarts a century ago to my Wagner ancestors from the Rheinland-Pfalz.

And institutions can change. Indeed, we have been merrily changing our institutions for my entire life until rent-seeking is now the surest and soundest business plan.

It can happen here.

20 comments… add one
  • sam Link

    I just finished reading The Reason Why, Cecil Woodham-Smith’s account of the reasons for the the disasterous and useless charge of the Light Brigade at Balaclava. Short version: The system of purchase allowed incompetents like the Earls of Lucan and Cardigan to be placed in command. In the course of the account she described Lucan’s governance of his estates in Ireland during the Famine. Her account of the Famine is horrifying. That led me to do some research during which I found out the as a result of that famine, nearly half of the population of Ireland (which survived), immigrated, most of them to the United States. I don’t believe those people came here by choice — they came because, as you say, they couldn’t stay where they were and, for the most part, there was nowhere else for them to go.

  • PD Shaw Link

    I guess it depends on what you mean by entrepreneurial. If you are, say, a Pakistani whose trained for years to become a medical technician, and decide that a better life for you is not in your homeland, but in a place like America, is your migration entrepreneurial? If you mean creating a new business on a foundation of risk and without government support, then no. But if you mean taking the skills you’ve earned and using them to pursue happiness, then yes.

  • PD Shaw Link

    And I’m no expert on the Schuler family histories, but Germans migrated to a lot of different countries, such as Brazil, England, Canada, South Africa, and neighboring European states. There were a number of points in time where the German government was encouraging migration to some of his newly won (and admittedly less than hospitable) colonies. I believe most Germans came to this country in the nineteenth century because there was farmland available, an opportunity that didn’t exist in Germany.

    I suppose the argument that Tamny wants to make is that this country’s cultural identify was founded by waves of British immigrants prior to 1775, who came here voluntarily. See David Hackett Fischer. That those who followed found the opportunities and diversity attractive. I think in large part that is still true; the Pakistani that migrates to the United States is likely very different in his aspirations than one who migrates to Europe.

  • As I’ve mentioned before in my geneaological posts, the Wagners emigrated here from Germany in the 1830’s to buy land and farm it. They were clearly entrepeneurs. However, they were the only ones of my immigrant ancestors who fit that model. I think that’s the statistical norm. Most of those who came here weren’t entrepeneurs in any meaningful sense. They came here because they had to.

    The Schulers came here to escape gambling debts; the McCoys and Flanagans were probably evicted from land in Ireland. The circumstances under which the Fischers, Baders, Blanchards, and Schneiders came here are unclear.

    Judging by their behavior here the Fischers, Baders, and Schneiders probably weren’t entrepeneurs in any meaningful sense. Judging by their behavior the Blanchards were probably rascals.

  • Drew Link

    You guys may find this to be too fine a distinction, but its something to think about.

    I concur that it is a stretch to think that all immingrants were sitting in their homes thinking “gee, my entreprenurial spirit compels me to go to the land of opportunity” vs “I gotta get the hell out of here.” But at least they had the initiative to do something.

    Let’s contrast that to those who just sit and do nothing. After, all, here in the US we have people who refuse to move when unemployed, and their future employment prospects fade in their current locale. Not exactly entrepreneurial.

  • Ann Julien Link

    Hi, Dave, this sibling, me, has shown evidence of an entrepeneurial bent—my first career was as an independent studio artist (trying to sell my work, unsuccessfully), and in my second, I co-founded a non-profit organization to provide arts activities in poor urban schools. In my somewhat entrepenurial third, I am serving as the communications/fundraising arm of an entrepeneurship, another non-profit, this one founded in 1993 to serve abused/neglected children through comprehensive treatment services. My services have enabled twelve-fold growth in services and budget during that time. Plus I’m married to an entrepeneur, (and as such, I’m one of the “Julien Associates”, as Doug’s business is called.) His independent entrepeneurship, Julien Associates Architects, is about 25 years old, and Seabridge Construction LLC is about 5 years old. love, ann

  • Sam Link

    http://www.cepr.net/index.php/publications/reports/int-comp-small-business/

    We’re not as entrepreneurial as we think we are. I recently visited my college town in Canada and was surprised at the lack of chain stores and restaurants that are so predominant in my current Az hometown. Nor are we that friendly to entrepreneurs. The only reason my wife can be self employed is because she can use my group health benefits, and even with a well paying professional occupation the self employment tax is her largest tax burden. Health insurance, self employment tax, and a tax system that makes self employed software professionals want to fly into IRS buildings are just a few of the things standing in my way.

  • Drew Link

    Slammin’ Sammy –

    Who “we” kemosabe? Entrepreneurs fight through those tax issues you cite, and they are govt driven. I’m subject to them all. If you are citing the general electorate, and their tendency to vote in goodie and comfort giving pols, I get it. We are becoming a nation of homogenized, risk averse sheep. Any wonder why I squawk?

    And I don’t understand your health bennies comment. Either you are out on your own, taking the risks and – before Obammidset – the rewards. If we want certainty, no risk, we will most assuredly get alot of mediocrity.

    And I also don’t get your chain reference. Those, now successful businesses, started as entrepreneurial ventures. So they are successful, what’s the beef? There are still plenty of retail concepts and dining venues starting, winning or failing here now.

  • Michael Reynolds Link

    Sam:

    That’s a fascinating link. I wonder if it’s coincidence that the PIIGS are on top of that list.

  • sam Link

    That ain’t me, Drew. I’m ‘sam’, with a lowercase ‘s’ as befits my shy and retiring nature.

    Uh, and Sam, I paid the self-employment tax for years. It’s just the income and fica taxes as applied to the self-employed, right? I don’t recall them being onerous, well, no more so than any other tax. Surely you’re not suggesting that the self-employed should escape taxation merely for the fact of being self-employed, are you?

  • sam Link

    And Drew, when was the bulk of the human race anything other than risk-averse?

  • steve Link

    Yup, that chart is fascinating. I think Drew thinks of small business differently than many of us do. He is dealing with businesses with many millions in revenue, not your local entrepreneur with 5 employees. BTW, Greece has a very high percentage of people employed by government. Not sure what it means when you have the combo of lots of self-employed and lots of government employed.

    Steve

  • Sam Link

    Drew,

    The original post was about our “entrepreneurial spirit”. The point I made is you don’t kill that spirit with European social democracy – entrepreneurship seems to be alive and well there. I also made the point that the tax system here favors employees over the self employed. The chain reference was simply an anecdotal supplement to the chart which says there are plenty of entrepreneurs outside of the US. Which of these do you disagree with? I don’t remember making any of the conclusions you are arguing with me about.

  • PD Shaw Link

    Greece must be like Illinois. The number of hours worked in a week by public employees allows them to have a small business on the side.

  • Sam Link

    lowercase “s” sam,
    Yes the self employed should pay tax, just not a good deal more of it than employees do. I would support trading the tax free health benefit status employees enjoy for a tax credit the self-employed could use too, for example.

  • sam Link

    But Sam, your wife is allowed all kinds of deductions for cost of doing business, etc. I deducted all my phone and internet costs, my office space at home, equipment, etc. Those are certainly not available to employees. It didn’t seem to me that I was paying more than someone else, in so far as I could make the comparison.

  • steve Link

    Note-There was a correction posted at Kling’s site and only 14%, not 30%, of Greeks are public employees.

    Steve

  • Sam Link

    sam,

    I think at best that’s even. As an employee I’m provided those things – it’s always better for me not to spend 100% of the cost than for you to receive back 25% of it. And my company can deduct those things and pay me more because of it.

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