Has the Culture of Entrepreneurship Gone Too Far?

The culture of entrepreneurship and risk-taking has always been a central theme of the American history and character, but in the last few decades it morphed into a rather bizarre and unnatural form.

America today reminds me of a poker table where one player has sucked in all the other players’ chips and insists on keeping the game going, dismayed that the customers don’t have any money. “Come on, people, what’s the matter with you? Let’s play!” He laments. But he gets no action. It is at this moment that he has to decide whether it is all about the money or all about the game for him: what’s the point of having all those chips if you can’t use them? The chips only have value if you can use them to get even more chips. But what’s the point of being great at taking other people’s money when there are no customers around? What’s the point of having billions in cash if you have nowhere to invest it? You know you’re good at your game, but the more money you have the less opportunities you have to demonstrate it. It’s much easier to make 20% return on $10 million than on $10 billion. And the thought of shopping for yet another Lamborghini is depressing, because you already have several in your garage.

Game, action – is what you seek at that point. Perfecting your skills and promoting your gospel is the reason you wake up in the morning. That’s the main reason, perhaps, that many billionaires go into politics. With this mindset you invite, or rather, insist on others participating in your game. You view any human interaction as a business transaction, an opportunity for one-upmanship. To keep playing that game you have convince all the suckers out there that they too, if they work hard, can learn to play it. It is only when millions of others are striving to become like you, to play at your table, by your rules, you can have a lasting legacy. If they don’t then you’re just a lonely guy with mountains of chips at an empty table. And after you used all the leverage out there to improve your returns and received all the political favors, it all still comes down to having players at your table. At some point, when the flow of new customers slows over the normal course of business, you begin to devise plans to extract fees from the existing ones to keep with the original pace of growth. That’s how we got the new business models with various “financial innovations” schemes: private equity funds or activist investors extracting value from already existing caches, like pension funds or profitable companies; raiding others for value rather than building it.

With such a mindset one becomes blind to the idea that, perhaps, making a few hires, parting with a few chips, would jump start the game. But lack of introspection is the name of the game. The ideology of competition has penetrated our political quarters and our national discourse so deep that we glorify the gamblers and pity or tolerate the salaried workers. Such over-the-top encouragement of risk-taking produced many bad players. Extracting value from companies through M&A, rent seeking, and trading synthetic indices is not entrepreneurship in its distilled form, because there’s no risk involved or no product being made. These bad players have entered the game over the last few decades and in order to win they began to manipulate the odds for all other players. They situated themselves permanently on the button (the best position in poker) by making deals with dealers and the floor managers. But of course, they don’t attribute their success to such a privileged position – they attribute it to their skills. They look at 9-to-5 cubicle workers as cost centers, because those schmucks don’t engage in a game. And yet they would like for them to join the table. We rarely hear stories of a businessman turning into an office worker, because that is viewed as a failure. College students are encouraged to scrape around or borrow money and start their own businesses. We expect, nay, demand, that everyone becomes a small entrepreneur. Good luck with that, kid. Except you won’t be doing M&A, or charging others 2/20, or collecting insurance premiums from dumb customers with money, the businesses with essentially zero risk – the kind of businesses only “serious people in suits” and incidentally the biggest advocates of risk-taking are engaged in. You’ll be spending that last $50K to open a cup cake shop or a restaurant that has an 80% chance of closing in a few years. Giving such an advice to someone right out of college is bad faith. Strangely, the loudest advocates of risk-taking are the ones who deal with no risk at all. But then what’s wrong if one simply wants a quiet life, a stable paycheck, some financial security? He’s seen the statistics – the majority of small businesses fail, so perhaps he decided that such gamble would be imprudent given their circumstances. And why should such a decision be derided by the gambling worshipers on top of the hierarchy? Those workers simply assessed the situation and decided, correctly, that it would be a bad investment. If anything they should be commended for it, not ridiculed and called names, like “moochers” or “takers”. Since when simply working for a paycheck became a point of derision?

Poker players in the casino have a choice not to play, they can stand up and leave the table if they don’t like the game. Average citizens do not have that luxury. If the business community still insists on fleecing those unfortunates who scrape by paycheck to paycheck the least they can do is stop calling them names.

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