Creating a Prosperous Society Where People Love Their Work

Grand Potentate

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This was a rather thought provoking essay from Ian Welch and I wanted to get your opinions on it:


http://www.ianwelsh.net/creating-a-prosperou-society-where-people-love-their-work/
Creating a Prosperous Society Where People Love Their Work
Are you most productive doing what you love, or doing something you are indifferent to or hate? If you could try your hand at doing anything, would you be doing what you’re doing? Are you on track to eventually spend your life in the work of your dreams, or is it clear that will likely never happen?

There will always be lousy but necessary jobs that few people want to do. The garbage must be picked up, the toilets must be cleaned and the bed pans must be emptied. But a society is a better society when more people are doing what they love, or at least working for themselves, out from under close supervision. Almost no one likes being micromanaged, and normal jobs are called wage slavery for a reason.

We want people to stretch themselves, we want them to reach for their dreams, we want them to get up each morning looking forward to the day’s work. We want that for the cold hard calculated reason that such people are more productive, and we want it for the warm soft calculated reason that we’d rather live in a society with as many such people as possible because they’re a lot more enjoyable to spend time around than people who hate their jobs.

It’s not hard to create a society which makes it more likely that people can do what they want. It’s not hard to create an economy which encourages people to start new businesses or to launch new careers. But such a society cannot exist if we prefer to be mean, if we want to punish people for failure. It cannot exist if we see someone else’s success as our failure or if we allow envy to infect our public policy.

People fail to pursue their dreams because they fear failure or because the opportunities aren’t available. Fear of failure is rational: pour everything into a new business which fails, and many businesses fail, and you can be left with no money, no source of income, and lose everything. In a country without universal health care, you could even lose your life if you lose your insurance and become ill or have an accident.

So the first thing a society needs to do is have in place a basic social net: a basic income below which people cannot drop, so they will not become homeless if they fail. Universal health care so they can pursue their dreams without being chained to a health insurance premium. Bankruptcy laws which allow most debts to be wiped away in the event of failure, not just so that people don’t lose everything, but so they can try again. Many entrepreneurs fail more than once before they create a business which works, and we want that, we want bankruptcy. We also want bankruptcy because it is important that lenders do their due diligence and accept the real risk of lending, rather than insisting that the government act as their bill collector. It is not in the government’s interest for people to become impoverished, as impoverished people cannot contribute to society nearly as well.

Credit and calculable law are needed for entrepreneurship. People must be secure in the title to their property so they can borrow against it. They must know that contracts are generally upheld and that basic physical safety is taken care of. Taxation must be calculable, though it doesn’t have to be low. Eras with top marginal income tax rates in from 80% to over 90% have had far more growth than our own low tax periods, and much higher corporate tax rates do not correlate with low economic growth either. After all, first you have to make a profit, or make so much money you’re in the top bracket. As the saying runs, it’s a good problem to have.

Credit in in the modern era is ultimately a product of government. Banks create money when they lend, they do not lend money they have on deposit, though the amount of money they can lend may be some multiple of what they have on deposit. Since the ability to create money is a government grant, and since a government grant is a grant from the people of a nation, the government has the right to influence or even set interest rates. This ability is already used, with central banks setting overnight rates, treasuries influencing bond rates at different durations, and so on. Mortgages in many countries will simply not be issued if they do not meet requirements set down by governments, and so on.

If we want people to do things, we have to make sure the money is available for them to do it. This can mean credit, or it can simply mean the government paying for or subsidizing what is needed. In many countries health care is provided out of taxes. At one time, post-secondary education was virtually free for those who qualified, because governments understood that educated people make more money, create more jobs and contribute more in general. With progressive taxation a government can easily provide free or very cheap education knowing that it will take a portion of every extra dollar earned as a result of that education. Rationing education is short-sighted and foolish, even on a pure cold-cash calculation.

A basic income is another thing governments do and can offer. In the modern day this is generally done through a complicated hodge-podge of systems, from welfare to unemployment insurance to student loans and tax breaks. This is vastly inefficient, and should be simplified. If we aren’t willing to let anyone go without basic lodging and food we should simply guarantee the necessary level of income to anyone over the age of 18 or whatever age children usually leave home. It is simple enough to do it in a way so that everyone is still better off working, it is vastly cheaper than paying an army of social workers to determine who is worthy, and it assumes the most basic tenet of liberty: that adults have the ability to know what they want to do. Nothing is more counter-productive than policies which, say, restrict welfare recipients from going to university, so they can’t improve themselves and have a better chance to contribute to society.

Knowing that they will always have enough to keep a roof over their head and food in their belly people are far more likely to pursue their dreams, to do the work they really want to and to start new businesses. It is true that some people will take advantage of such a system, it is also true that such a system will have much lower administrative costs than current systems. And since the basic income will not be a great income, but only basic, it will not be attractive to many.

It will also put pressure on businesses to treat their employees better. If a business cannot make a job more attractive than living at barely above subsistence then perhaps that job shouldn’t exist. Do all the fast food jobs really make our societies richer? If a job really needs to be done, like janitorial work or garbage collection or cleaning the bums of our parents and grandparents, then does it not deserve to be compensated well? If your CEO doesn’t show up for work, or if the janitor who cleans the toilets doesn’t show up, who do you miss most? And do you really want the person looking after your parents in an old-folks home or hospital to hate their job?

Most money from a basic income, assuming high progressive rates on the rich and the same corporate tax rates as were the norm in the 50s and 60s, will wind up back in the government coffers in any case, after it goes through multiple hands and supports many jobs.

These are the first two thing required to increase the number of people who do work they want to do, or at least don’t hate—freedom from fear of devastating loss and the availability of opportunities to gain the necessary skills, education and credit.

The third thing is to reform laws so people can do what they love.

Consider Silicon Valley in California, one of the greatest entrepreneurial hotspots in the world. New tech business after new tech business has been started there, from Hewlett Packard to Apple. Millions of jobs have spun out from Silicon Valley to the rest of the world. What made Silicon Valley possible? Well the first thing is government money, both to buy products like early computers and to support Stanford University, which histories of the Valley put at the heart of its culture. But another reason Silicon Valley happened in California and not in Massachussets, say, around MIT (though there is a tech corridor around MIT) is this: California law makes non-compete agreements illegal.

A non-compete agreement is a legal contract which states that someone can’t work in a business which competes with their current employer, generally for a few years. So if you have a great idea for a new product in the same line of business you can’t quit and go set up a new company.

Silicon Valley’s history is of startup after startup directly competing with the company the founders left. There would be no Silicon Valley as we know it if California allowed non-competes.

This is a general principle. If law does not allow people to do what they want, well then, they can’t do it. Barriers to entry, barriers to the creation of new businesses are too much to deal with in this article, but just note that what is good for a specific business is rarely good for business as a whole. If I own a business I don’t want my employees to leave and compete against me. That’s bad for me. But it’s good for whatever business I’m in for their to be more competitors and new products and it’s good for society as well.

Likewise laws on protected works and intellectual monopolies in terms of copyrights and patent law can stifle the creation of new businesses. If a person or company is forbidden from creating a product or must pay overly high licensing fees, the business will not happen. There is a balance here, some protection for actual inventors and creators is needed, but in our current society we are very far from the correct balance, and much law that seems to protect creators in fact only creates intellectual rents, stifles the economy and inhibits competition. To cover intellectual properties properly would take another huge article, so I won’t go into it futther here. The basic principle is simple: if it’s illegal to start a business or engage in a career, or it costs too much to be worth it, people won’t. Every time we pass a law which protects incumbents from competition or which protects the work of the past, we ossify our economy and make it harder for people to do the work they want to do, sticking more and more of them in jobs they hate.

The more people who are both free and able to work in jobs they enjoy; who are able to start new businesses; who are able to pursue professions they prefer, the better off everyone will be. This is true both in pure economic terms and in softer terms: happy people are healthier and they are far more fun to be around than unhappy people.

In economies which are running cold, people turn mean. Seeing scarcity all around, they feel that they are in competition for scarce good jobs, scarce good education and scarce happiness. They start blocking other people and insisting that everyone pay upfront intead of behind. Bosses, knowing that there aren’t enough jobs, become mean as well, treating employees badly, knowing they have nowhere to go and confident that if they lose one, or a hundred, or a thousand employees to mistreatment, more will be ready to work, impelled by fear of hunger and poverty.

We can’t all be rich, but we can all be prosperous, and we become prosperous as a group, as a society, not blocking each other, but by opening up opportunity for all, treating everyone as adults, and understanding that other people’s success is our success in the broadest sense. It is certainly true that in a competitive market environment there will be losers and if your closest competitors win, you can lose as a result, but for everyone else in society, the success is beneficial so long as those who succeed to not shut the avenues to success behind them. And if failure does not mean disaster, if there are second and third and fourth acts in life and those who try are allowed to try again, then the fear that both stops people from trying and makes those who are successful try and stop those behind them is greatly reduced.

Societies are prosperous together. Individuals are rich separately. Let us remember this, and remember that fundamental economic success for societies requires generosity and kindness, not parsimony and cruelty.
 

Betelgeuse

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Some really nice words in there:

It cannot exist if we see someone else’s success as our failure or if we allow envy to infect our public policy.

People fail to pursue their dreams because they fear failure or because the opportunities aren’t available.

Many entrepreneurs fail more than once before they create a business which works, and we want that, we want bankruptcy. We also want bankruptcy because it is important that lenders do their due diligence and accept the real risk of lending, rather than insisting that the government act as their bill collector.

And a very nice article, thanks for sharing.

And I ill share a bit of my story. When I moved to Aguascalientes I wanted to become a professional golfer. In there a lot of people told me that I was crazy, especially the course pros but I started playing with a few of them and defeated them in a constant way. I even played once with a guy that this year won his card for the Web.com tour and I defeated him. What I needed was money. Then the school was over and didn't get a job in there so I cambe back to Mexico knowing that that dream is practically burried. Cause playing in here is way way too expensive. They think of golf in Mexico City as the sport for rich people and I think that is a serious mistake.

Then a few months later I knew that my dad received a proposal of some friends in which they were willing to invest on me so Icould have gone to the states a keep pursuing that dream. But that was when I was still in school. My dad denied that offer cause he said that I needed to finish school first. I was on my last semester and 6 sujects were the ones I was missing. I always thought that finishing the schoool would be something that will eventually happen and it did but be honest I don't feel of it as one of my greatest achievements. yes I studied in the best school in Mexico and I'm thankful for that but I would be more happy playing golf every single day.

I started working in here as a IT Consultant. I didn't knew shit about IT, i hated it so I finally decided to be self-employed. it's in a branch I have no experience but I'm having fun. I love dressing to go to see a client and meeting with them but the problem with Messicans is that they are not used to save money, so practically I have to visit a lot of clients to close deals. I want to start the shirtmaking business and my fear is not to start it but to find people that have the same ideas than me. As we use to say here that they don't step in a brick and feel dizzy quickly.
 

Russell Street

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I agree and disagree.

There should be a net, but it should be friends and family, community. Not government. The net should be very low, so that shirkers can be impoverished and not comfortable. Americans are prosperous. Our poor have houses, cars, cell phones, cable television... This is vast luxury to most of the world.

More importantly, the government needs to get out of the way. The bewildering array of regulations and obligations is the main reason that I don't see myself ever starting a business.

The reason college is so expensive is...college loans, from the government. Tuition is set as high as the government will loan money and it causes a feedback loop. It fucks the invisible hand of supply and demand.

Read "Life at the Bottom" by Theodore Dalrymple and you'll realize that this article's author is a bit optimistic. When people's needs are met unconditionally, they are not necessarily going to be doing socially beneficial things, many will now be freed to pursue base, destructive malevolence that destroys society. The underclass simply will not become cultured business mavens, this is absurd. They will become loitering bar brawlers, vandals, drug addicts. They will bear illegitimate children in scores.

Comparing homogenous cultures of small European nations to the polyglot beast that is America is also quite laughable and erroneous.

Many kudos on condemning the stifling intellectual property laws which create an insurmountable aristocracy of sorts.

The ultimate result of shielding men from the effects of folly is to fill the world with fools.Herbert Spencer
 

Betelgeuse

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Reading the comments of Russell and Harvey, I agree with what they say, I think the different locations on the map are working here.
 

Russell Street

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Just to buck any sense of privilege or social darwinism, it should be said that the other end of small government being the best for all is that the rich and powerful parlay their advantage through governmental favor. Adam Smith recognized the justice of progressive taxation, as wealth is very dependent on the protections of government (or to paraphrase PJ O'Rourke, law exists to protect the rich from the poor) so they literally get more and should pay accordingly. Smaller government means less abuse in all direction.

Also, I do support hefty probate taxes (aka "death taxes" aka "Paris Hilton tax") which serve to destabilize hereditary privilege. The Earth belongs to the living, Jubilee and all that.

I must also urge that one be happy with the job they have instead of foolishly seeking a mythical satisfying job. This is akin to the young women expecting to hear music and see fireworks when kissed by some prince. You have been set up for failure; an attainable happiness ruined and scorned.
I recommend the Chapter on Contentment from Eliot Gregory's Worldly Ways and Byways:
http://www.readprint.com/chapter-27451/Worldly-Ways-and-Byways-Eliot-Gregory

Addendum: I shall always remember the name of Michael Carroll, the king of the chavs, a lottery winner that epitomizes water seeking it's own level.
 

Russell Street

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Fuck, there are still people buying this 'war is good for the economy' tripe? The broken window fallacy was already mentioned in this thread. Capital spent on destructive efforts is capital that was not invested elsewhere.
:soap:
 

OfficePants

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Yes, it's true that 55% of lottery winners declare bankruptcy. I have a friend who has made a small fortune doing the bankruptcy's for a number of them. But she made a HUGE fortune setting up and filling bankruptcy's for very wealthy people. It often takes a few years for the set up, but well worth it. She's in FL and has some great stories.

Look at pro athletes. It's shocking. Just watch the ESPN 30 for 30 called "Broke".

Rambo... to the original point. Only rich people love their work. The rest of us pretend. And you can't start businesses when 115% of your money is spent every month. We just got lucky in the 90s (if you bought a house). That ATM died in '07 and look what happened.
 

ballmouse

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The author wants safety nets and more availability of credit.

But that just means more money that go to the providers that are already capitalizing people's limited incomes (landlords, mortgages, higher education, cars, food, etc.).

The way these businesses operate is to charge as high as they can, often so much that an individual can no longer afford to pay for these items alone (hence borrowing from family or banks or getting free food from food pantries, shelters, or elsewhere).

Adding more money to people's pockets without changing the price structure of these organizations only means they will charge more and the intended effect of safety nets (universal basic income) and more credit is easily stunted.

To me, it's not about adding more money because the system will just find a way to take away that money, but finding a way so the system is unable to take away as much as it does now so people have more money to do what the article is saying.
 
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