What is different with American Leaders after 233 years?

[michaelskis]

During a recent discussion with a good friend of mine, who is also conservative, we discussed a book called The Thomas Jefferson Education by Oliver Van DeMille, along with a presentation that DeMille had done. One of the things that DeMille pushed was the education that Jefferson, Franklin, Washington, Madison, and the rest of the founding fathers was geared more to arts, culture, history, and even religion. He went as far as quoting Morris who said “In order to be a country of independence, we must be a country of independents.” At that point 90% of free Americans owned their own business. Today it is less than 10%. He also felt that modern types of education can actually hinder leadership and free thinking. Most people go to college and focus on a particular job or major instead of expanding their mind or creative thinking. Bill Gates, Michael Dell, and Steve Jobs are all great examples of this. They all went against societal norms and are multi-millionaires (if not billionaires) today. Is society hindering quality leadership training?

He also went on to say that thinking about entrepreneurism today is only a tiny fraction of what it was back then. It was expected for a person to be an educator, business man, or house wife. Even chimney sweeps were independent contractors. Today the odds are small that you are going to meet a person who owns his own business.

What has changed that people are so afraid of taking risks to start their own business that it causes them to spend decades in a job that they don’t enjoy? I am fortunate that I enjoy my job and the people that I work with. But I know all too many people who cannot say the same.

[Seabishop]

A lot of it is probably that starting a business more complex in the modern world. Insurance, unions, government regulations, lawsuits and the massive amounts of money you need to get going keep people working for those who can handle those things. Its also easier to get health insurance and a retirement plan working for a large company than trying to save the meager earnings from your small business.

[imaplanner]

During a recent discussion with a good friend of mine, who is also conservative, we discussed a book called The Thomas Jefferson Education by Oliver Van DeMille, along with a presentation that DeMille had done. One of the things that DeMille pushed was the education that Jefferson, Franklin, Washington, Madison, and the rest of the founding fathers was geared more to arts, culture, history, and even religion. He went as far as quoting Morris who said “In order to be a country of independence, we must be a country of independents.” At that point 90% of free Americans owned their own business. Today it is less than 10%. He also felt that modern types of education can actually hinder leadership and free thinking. Most people go to college and focus on a particular job or major instead of expanding their mind or creative thinking. Bill Gates, Michael Dell, and Steve Jobs are all great examples of this. They all went against societal norms and are multi-millionaires (if not billionaires) today. Is society hindering quality leadership training?

He also went on to say that thinking about entrepreneurism today is only a tiny fraction of what it was back then. It was expected for a person to be an educator, business man, or house wife. Even chimney sweeps were independent contractors. Today the odds are small that you are going to meet a person who owns his own business.

What has changed that people are so afraid of taking risks to start their own business that it causes them to spend decades in a job that they don’t enjoy? I am fortunate that I enjoy my job and the people that I work with. But I know all too many people who cannot say the same.

The market would not be able to support 300 million small business owners. Plus the chances are that if you sack up and take the risk and start your own business - some mega-corporation will run you into the ground.

[Raf]

With the invention of modern transportation came this brilliant idea of economies of scale. With the ability to trade larger bulk goods for cheaper, it freed people from being jack of all trades. So the farmer/hunter/slash man of the house simply than needed to focus on one thing rather than many, and as timed has passed, these economies of scale have grown to what you see today.

[Duke Of Dystopia]

....What has changed that people are so afraid of taking risks to start their own business that it causes them to spend decades in a job that they don’t enjoy? I am fortunate that I enjoy my job and the people that I work with. But I know all too many people who cannot say the same.

You answered your own question.

On top of that, the actual low wages people earn for the effort they produce, keeps them from having the funds to start their own business most of the time. If you know anything about how business works, then you also realize that no worker gets the true value of the labor they perform. If they did, there would always be a zero sum balance positive or negative.

For the worker, that's motivation to start your own business, but it may not over ride the benefits of working for somebody else. Mainly the saving in time, effort, associated benifits and especially the risk.

People today are not generally more risk averse than they have been in the past. Most of our gadgets are MUCH safer though!

[wahday]

I definitely agree that the investment needed to start and run a small business today is much more complex and burdensome than in the past. Also, with big corporations deliberately seeking to put the independent business owner out of business, that is a lot to be up against.

We also need to accept that today's society is much more complex and diversified than in our early years. There are a wider range of professions to pursue. In the past, being a doctor meant being a general practitioner - I heal people, pure and simple. But today, the medical industry needs specialists, innumerable support positions (nurses, radiologists, anesthesiologists, etc.), information technology experts, architects, maintenance crews and so on. And that's just one field. "Back in the day" we had horses and wagons and there were probably a lot of people who could fix such a vehicle. Now, you need special training just to run the diagnostics on a car let alone know how to actually fix it. The list just goes on. Its a more complex world.

I was also wondering if, in the survey of times past, farmers were considered small business owners or entrepreneurs under the author's definition. That would account for a lot of people right there - much fewer people farm than in our past.

As for the education thread, I would argue that more people today have received the kind of diverse education that Jefferson, Franklin, Washington, Madison, and the rest of the founding fathers got back then. Remember how few people even received any kind of higher education let alone high school. Remember also those slaves. They didn't get squat and that's a huge sector of the population.

But the kind of education you described sounds exactly like Liberal Arts Education which began, in America, with the establishment of Harvard. Interestingly, in the early years, religious colleges were at the forefront of liberal arts education. The contemporary liberal arts comprise studying art, literature, languages, philosophy, politics, history, mathematics, and science. This is the education I received and probably many of you, too.

It would be interesting to know the percentage of higher education graduates that pursued vocational or technical training as opposed to a liberal arts degree (BA). Maybe I am wrong, but I suspect more people get a BA than other degrees these days.

[Maister]

233 years ago the corporation was still in its' childhood and the Industrial Revolution had yet to unleash itself upon the world. Companies in that age still had many of trappings of medieval guilds. You had masters, apprentices, indentured servants and the like. Businesses tended to be small and were typically transferred along hereditary lines (father to son, or sometimes son-in-law through marriage). A skilled tradesman might require his own a set of tools necessary to make, say, barrels or whatever, but the products made in those days tended to be simple and the amount of capital necessary to start the trade/business was small by comparasin. Industrialization greatly increased the complexity of items produced and the advent standardized parts, piece work, and ultimately mass production required less knowlege on the part of an individual laborer to produce (their portion of) a good, yet increased the overall level of productivity.

I tend to think the Founding Fathers were an exceptional group of intelligent and talented individuals and would probably rise to the top regardless of what education, place, or time they lived in. Far fewer people received a college education 233 years ago than today and those who did tended to be either the wealthiest or most intelligent members of society.

Concerning the content of a classical education we've touched on it before in the 'end of the Renaissance Man' thread. In short, the amount of knowlege has increased exponentially over the last 233 years. In the days of Jefferson it was still arguably possible to know much of what was/could be known in a variety of different fields. That's no longer possible as the world's knowlege systems have moved towards greater and greater specialization and there's no way any one individual can become an expert in more than a handful of fields nowadays. That said, I still believe a liberal arts education has great value as it tends to show (as well as possible) how 'things interconnect'. In terms of leadership I feel a whole lot better about folks running the show with a background knowlege of history than, say, engineering.

[Jazzman]

Good points from everyone. I agree that often universities (which, by definition, are supposed to provide you with a well-rounded, liberal arts education) often focus on learning the skill as opposed to giving you any real knowledge about how to become wealthy and/or self-employed. They teach you how to do good work for someone else. Of course, I suppose one could argue that if you wanted to learn those skills you should enroll in an M.B.A. program, but I digress.

I wonder how much of what's been said thus far about small businesses applies to planning. Though I admit I know very little about exactly what it would take to start my own consulting firm, I envision myself doing just that someday. I really do see whatever planning job(s) I have once I get out of school as a stepping stone towards that larger goal of owning my own firm. But then again, there is the HUGE risk.......not to mention the fact that I could have a wife and kids by the time I'm in a favorable position to start my own firm........would I risk my family's financial ruin just to satisfy my own dream? Perhaps it would be easier to simply aspire to being an executive director or senior planner of a planning agency, or being the CEO or having a senior position in someone else's consulting firm.

[DetroitPlanner]

You saw a lot less guys with long hair or white wigs running the country. More women hold office now, and they can vote too!

I would agree with M'ski's but they were entrepeneurs because that is what the economy expected. Back in those days wealth was largely concentrated in agricultural areas leaving only the larger farmers with the time neccessary for creating public policy or to dabble in the liberal arts (they had slaves that did their work!) Independance was bunk. Independance then meant not paying taxes to the queen, not the ability for one to control their own destiny.

An independant govt would not have slavery or deny women or aboriginal americans the right to vote.

[michaelskis]

While yes, there are more complications than putting out a sign and saying you’re open for business, I don’t think that it is nearly as hard as you make it sound if your willing to put in the work. In 2000, the New York Center for Urban Future did a study and found that almost half of the new business start ups were from immigrants. Many of them have less capital, less education, less opportunity, and less resources than most US born citizens.

We constantly hear of people starting a business with nothing and becoming phenomenally successful. If the service and quality is superior then people will go to a small business over a corporate conglomerate. Programs endorsing locally owned business are common across the entire country, and if enough of them started up, it would take a major share of the economic pie.

So no, I don’t buy the woe is us, things are just too hard mentality. Many of the firms what those of us in the private sector were started by individual entrepreneurs and there are far more small firms than the national multi state deals. I think that if anything society has driven the idea that you have to work for someone else all your life, that people are going to have to work their way up the corporate ladder, and that we need to go to school to memorize skills and facts related to a particular job.

I think that is one of the big shifts about to happen. There has been focus on the creative class for some time. Maybe a component of this shift is away from the corporate world into the small mom and pop art galleries, web design business, advertizing agencies, or even doctor’s offices. Unfortunately, I fear that too much of America has lost their backbone and is not willing to risk anything for change… instead they expect some socialist leader in DC to give them what they want instead of actually going out and earning it.

[CJC]

Maybe a component of this shift is away from the corporate world into the small mom and pop art galleries, web design business, advertizing agencies, or even doctor’s offices.

I don't think the problem is that places like these are owned by large businesses. Most of these places are owned by small-time entrepreneurs. There isn't as much of a benefit to scale in these type things. However, opening a hardware store, grocer, auto maker, airline, oil company, investment bank, or whatever else is significantly harder, because other larger companies have the huge advantage of scale. Our nation can't function in today's world without massive companies with thousands of employees. Now, if our country wants to change the way we interact with the rest of the world (essentially close our borders to trade, capital flows, and immigration), we could probably create something like we had in the past.

In your opening post, you mentioned guys like Bill Gates, Michael Dell, and Steve Jobs. You know what these guys have in common? They were each the person in a specific industry (or industries) to figure out how to exploit scale and put all of the small guys out of business with a superior product that was adopted by people all around the world. There can really only be a few guys like that. If we want more people running their own business, we would actually need to make it harder for people to become like Gates, Dell, or Jobs and break up companies before they got so big.

[Maister]

There can really only be a few guys like that.

True. Just as there can only be a few Founding Fathers. These are exceptional individuals. If everyone was as talented as they are/were they wouldn't be special.

[wahday]

I think looking at successful immigrant-run businesses is a great place to learn what it takes for an entrepreneurial enterprise to thrive. These folks are really starting at a great disadvantage (language barriers, access to lending, etc.) and so learning how they are able to overcome the obstacles (risk, financial investments, etc.) can be very educational.

One thing that has intrigued me in this arena is the extent of inter-group, small business lending in immigrant communities. For many groups, there have developed informal lending networks that will not only help start-ups with small loans, but may also provide a road map of sorts for replicating successful models. I noticed this with Korean-run dry-cleaning businesses and sporting goods stores when I lived in Philadelphia and I wondered how much it applied to some other areas as well. I also see it here in Albuquerque with Chinese Buffets. I swear there are a million of these places now and all the ones I have visited serve the exact same (and sometimes odd) range of food - like they are all working from the same playbook. So, it occurred to me that perhaps they are. Even the mispellings of things like "Apples Cobbler" is the same!

So, why is there not as wide a range of small inter-group lending and business model advice for entrepreneurship among non-immigrant communities? The micro-lending and community based business assistance model has been very successful in developing nations (see Grameen Bank). Why do we not use it here in the US?

[TexanOkie]

If we want more people running their own business, we would actually need to make it harder for people to become like Gates, Dell, or Jobs and break up companies before they got so big.

There's a downside to that, however - we have to mandate or drive people to worse products. Even by your own admission, those gentlemen put out superior products that helped pushed their companies forward to begin with.

You know what these guys have in common? They were each the person in a specific industry (or industries) to figure out how to exploit scale and put all of the small guys out of business with a superior product that was adopted by people all around the world.

[CJC]

There's a downside to that, however - we have to mandate or drive people to worse products. Even by your own admission, those gentlemen put out superior products that helped pushed their companies forward to begin with.

Oh, I wasn't suggesting that we do it, just that that's what it would take. Also, I mentioned things like closing our borders to trade, capital flows, and immigration if we wanted to go back to a time of smaller companies and more entrepreneurs - I don't think that would be a good thing either.