
A Strong Welfare State Produces More Entrepreneurs - nols
http://www.theatlantic.com/politics/archive/2015/03/welfare-makes-america-more-entrepreneurial/388598/?single_page=true
======
umanwizard
Most people in this thread are conflating "entrepreneurs" and "startups".
Anecdotally there are a lot more small businesses (bakers, butchers,
independent bookstores, family owned clothing stores, etc.) in Europe than in
the US. The people who own these establishments are every bit the
"entrepreneur" the founders of Uber are.

Maybe the US has more startups on the ultra-successful end but that doesn't
say much about the chances of the average person starting an average,
unremarkable business.

~~~
weddpros
If we're looking at "entrepreneurs" as a source of growth, then yes, startups
are what we're looking for.

If you don't start that pizza business, I'll buy my pizza somewhere else.

Startups create new markets through innovation. A Facebook-like is like the
pizza business. Facebook (or its ancestors) was the market creator.

Uber has similarities with the pizza business, but it's all about transforming
a business (taxi service) into something else. So it's between pizzas and
Facebook.

So I guess there are various levels of disruption or creation of the market.
But the pizza business is probably at level 0 of disruption/creation.

Think of Starbucks vs. your coffee shop...

~~~
dingaling
> But the pizza business is probably at level 0 of disruption/creation.

There are no pizza restaurant in my town, but plenty of Indian and Chinese
take-aways and one each of the big three fast-food chains.

So if a pizza business arrived it could be disruptive to the status quo,
particularly if it offered something that the others didn't e.g. delivery
beyond two miles or first-class vegetarian options.

Another example of simple disruption is a shop which opened offering walk-in
printing. You just pop your memory stick into the machine and hit 'print'.
This completely undermined the library which previously had a monopoly on
printing and which took > 15 minutes by the time you waited for a librarian to
authorize the printing.

Neither are particularly exciting, but both offer a disruptive service.

------
graeme
I certainly felt the Canadian social safety net made it easier to start my
business.

First, my health care was covered. So I didn't have to worry about that
downside risk. In fact I even had a major health problem two years in when
money was tight. My medical care was a non issue financially.

I had some extended health insurance through my parents in the early years.
Covered wisdom tooth extraction, and rehab to fix an arm injury. (I needed
this to type). Not government safety net, but similar effect. Some countries
would cover this sort of thing.

Tuition is lower in Canada. Low student debt. And repayment is very lenient
for entrepreneurs and low income people. Never had to make payments or
interest while starting up.

There are tax credits for low income earners. I received about $1000 a year in
cash payments for sales tax credits. Tuition credits prevented my paying
income tax starting out.

I would have gone bankrupt several times over without the above. Or maybe not
even started. Instead, this year I'll be sending the government a large amount
of income and sales tax payments, and I'm glad to have the opportunity to do
it.

On the other hand, there was almost no red tape for starting up. This was
crucial. I didn't have to ask permission, I didn't need to pass a capital
threshold, I could easily open accounts for my business and I didn't even need
to register my company. And I didn't have to bother with sales tax until I
passed a revenue threshold.

Keeping that sort of bureaucratic regulation low is also crucial for
encouraging business creation.

------
notsureifwant
The two Olds papers both use clever triple difference designs (e.g. you're
using change in entrepreneurship amongst those who've just become eligible for
food stamps in one state relative to those who were already eligible as the
treatment group, and the change in entrepreneurship amongst those same types
of people in another state that didn't have a change in eligibility laws as
the control group) which are hard to find fault in. It seems like a lot of
people are arguing "other countries have strong welfare states, but less
entrepreneurship", but that's a different question - most of the papers cited
are arguing that in the United States, a strengthening of the welfare state
leads to increased entrepreneurship. That does not mean that this would be
true in other countries, nor that moving to a proper guaranteed minimum income
would increase entrepreneurship, nor that entrepreneurship is the best measure
of dynamism in the economy. But it is pretty convincing evidence that giving
potential entrepreneurs the ability to fail at starting a business without too
severe of consequences increases the rate at which they'll start businesses.

~~~
vannevar
One question I had was whether the _overall_ rate of entrepreneurship
increased. As you note, the papers seem to focus on rates _within the
population that receives the benefits_ , but the typical conservative argument
is that the cost of those benefits in taxes retards economic growth overall.
I'm not suggesting that they are right (as far as I know no substantial link
has yet been found between low tax rates and economic growth), but it's a
question worth addressing in the article and it was not.

------
Futurebot
This is the result of the "Peltzman effect" or "risk compensation." If you
make it so that failure does not sting so much, people take more risks. Bad
for car safety, but great for business creation. We've long had a
schizophrenic relationship with business creation in this country. We lionize
it. We glorify it. However, we also require people who do not already have
plenty of money / family backing to potentially put everything on the line for
it. It's where our love of business crashes head first into our "dog eat dog,
every man for himself, lift yourself up by your bootstraps, everything that
happens to you is your own fault" ideology. We say "you can do anything if you
try!", but then also tell you "but you cannot afford to risk it."

If we combined the American culture of entrepreneurialism and free enterprise
with Denmark's level of safety nets and free higher education, we could
probably do a lot more amazing things than we are now. There are likely plenty
of people who could make brilliant contributions (to business, technology,
art, science, etc.), but are forced to take what they perceive to be the least
risky path in their lives, and so never even attempt to get off the ground
with their ideas. That's just sad.

[http://angrybearblog.com/2012/01/peltzman-effect-why-
economi...](http://angrybearblog.com/2012/01/peltzman-effect-why-economic-
growth-has.html)

------
techpeace
The amount of blind conservatism on HN is pretty rattling. Here's the formula:

"Headline Claiming That Anything About Welfare is Positive, with Supporting
Evidence"

Top comment: "Sorry, but the evidence doesn't support that." Evidence provided
to substantiate claim: none.

~~~
MollyR
I don't think it's conservatism but skepticism.

However I could be wrong, I haven't been around on HN for long time.

Also I personally value skepticism, but I come from a semi scientific-
engineering background.

It was pretty hammered hard into us lab techs, we need to be skeptical of our
bioinformatics results, you never knew what hidden confounding factor could be
affecting the experiment. We even tried to use markov models to help find
hidden confounding variables.

Edit: On why skepticism is important, its because propaganda is everywhere
[https://news.ycombinator.com/item?id=9269760](https://news.ycombinator.com/item?id=9269760)

~~~
whybroke
>Edit: On why skepticism is important, its because propaganda is everywhere
[https://news.ycombinator.com/item?id=9269760](https://news.ycombinator.com/item?id=9269760)

There is here too. Not from The Atlantic but in the form of right wing
ideological sock-puppets. If you are skeptical of this claim then read the
article and its evidence and the comments and their lack of evidence and
consider which is which.

Just because there are some smart people here doesn’t mean there aren't kooks.

~~~
MollyR
On the issue of sock-puppets, it seems like you can have sock puppets for any
issue.

After reading
[https://news.ycombinator.com/item?id=9269760](https://news.ycombinator.com/item?id=9269760),
I suspect there are not only "right" or "left" wing sockpuppets but corporate
pr puppets too. I suspect some sockpuppets could drive up controversy to
increase ad revenue or product awareness(viral marketing?) as well.

disclaimer:I have no opinion on this Atlantic article nor am I familiar with
site. I just didn't think the original criticism of "conservatism" on HN was
accurate.

Also I don't think I understand why an article(I don't feel the Atlantic piece
is propaganda) can't be propaganda, and the comments section can't be
propaganda in another direction.

I'm still looking at evidence,but a big and bold claim should have some fairly
bullet proof evidence. I'd also hold something like Crispr
[https://news.ycombinator.com/item?id=8171039](https://news.ycombinator.com/item?id=8171039)
to the same standard.

Game changing gene therapy ? I would like some good fairly bullet proof
evidence.

Otherwise I think its reasonable to fall to a skeptical position.

~~~
whybroke
Of course one should hold all ones beliefs lightly.

But to dismiss quality evidence because of crackpot comments is irrational.

I know nothing about gene therapy. But if you find a venue where peer reviewed
papers on global warming are greeted by a flood of comments who deny it yet
don't explain why then saying they are equally valid or equally likely to be
propaganda is not being rational, it is failing to see a dangerous anti
scientific social movement.

>corporate pr puppets too

To whit, post an article about Facebook's appalling privacy policy and watch
what happens.

------
nakedrobot2
Sorry but the evidence doesn't stand up to this AT ALL.

Americans are much, MUCH more entrepreneurial than anyone in Europe. I'm
American, I live in Europe, I know this very, very well. (Yes, anecdotally
speaking, of course!)

Americans simply embrace risk, and embrace potential failure, far better than
anyone else in the world, taken as a whole. Europeans meanwhile are a more
gloomy bunch, more risk-averse, and far less likely to strike out on their
own. Notable slight exceptions being the Dutch to some degree.

America is so far from a "welfare state" \- it is about as far away as you can
get. America is a "if you're going to fall, you are going to fall all the way
down, and no one is going to save you, no matter what". And somehow, a huge
part of the world's entrepreneurs and innovation come from there. I don't know
why.

And don't take me as some kind of patriotic jingoist champion of the US of A -
I am just about as far as you can get from the "Yeah Murica" kind of ultra
patriots - heck, I live in Europe because I prefer the slower pace, the old
world, the semblance of an actual culture, the environment that has not eaten
itself from capitalism taken to the extreme.

Nice linkbait headline though. :)

~~~
bullfightonmars
Whose evidence?

According to this list[1] with data from the World Bank, Netherlands is 35th
has 45.05 small businesses per 1000 people. Do you have a stationary shop on
your corner or in your neighborhood? I certainly had access to many small
businesses in Rotterdam, that would have folded 25 years again the States,
replaced by mega corps and big box retailers.

The United States on the other hand is 69th on the list with 19.98 small
businesses per 1000 people

[1] [http://www.nationmaster.com/country-
info/stats/Economy/Micro...](http://www.nationmaster.com/country-
info/stats/Economy/Micro/Small-and-medium-enterprises/Number/Per-capita)

~~~
vasilipupkin
in all fairness, comparing numbers of micro businesses across countries is
tricky. differences in tax laws can create incentives to register as a micro
business vs some other way, but not much of a measure of large scale
entrepreneurship. But, either way, little evidence that US is more
entrepreneurial

------
maerF0x0
It seems to make a little sense: If you're not worried about the worst case
scenarios you can take on more risk.

ie: if you know your kids wont starve (food stamps), you wont end up in
permanent debt (bankruptcy laws), you wont be killed by your creditors (social
order) etc etc. then you can do things (start a business) that would otherwise
risk those consequences.

~~~
TazeTSchnitzel
Right, same reason we have limited-liability corporations.

------
Steer
I am European (Swedish), but I have a hard time wrapping my head around the
notion that the welfare state would produce more innovation/entrepreneurs. We
have a large public discussion here in Sweden that we need to create more new
companies and we definitely have a welfare state.

I would argue that a welfare state COULD be helping entrepreneurs, but that
depends where all the taxation for the welfare state comes from. In Sweden it
is very expensive to hire people for example, and it is also very hard to fire
people (besides the point, taxation-wise, but still), The companies that hire
people pay a large part of the welfare state. This makes it very hard to grow
a company since it is so very expensive to hire.

------
patja
I can see the argument making sense that with a strong safety net folks are
more willing to take risk. I know for me and my family needing to shoulder the
full burden of health care expenses, even with the ACA changes, was one of the
major inhibitors to striking out on my own. Even with the ACA and the opening
up of the individual direct insurance market, we end up with a catastrophic
high deductible plan that makes me loathe to seek medical care for some issues
that maybe I should take care of and that a citizen of a nanny state wouldn't
think twice about going in to have checked out.

Unfortunately a strong welfare state often goes hand in hand with a stronger
bureaucracy in general including many regulations, red tape, unfavorable tax
codes, and other obstructions to entrepreneurship. This is where the US trumps
the strong welfare states.

~~~
noir-york
"Unfortunately a strong welfare state often goes hand in hand with a stronger
bureaucracy in general including many regulations, red tape, unfavorable tax
codes, and other obstructions to entrepreneurship."

Often... in general... - too many maybes. I know for a fact that the UK and
Ireland make it very simple and painless to start up.

"This is where the US trumps the strong welfare states."

Does it? Most regulations are set at the state level as well, so you're saying
that, say, Massachusetts is more bureaucratic than North Dakota?

------
ffn
Honestly, social-structure probably has a lot more to do with amount of
entrepreneurs in a nation. In America, we utter the word "entrepreneur" the
same way a 1960s boy would utter the word "astronaut" (or, if Soviet,
"cosmonaut" or "potato"). As an American, I take it for granted that I can do
a startup without my wife fearing she'll be ostracized by her friends, that I
can still find a job if things don't work out, and the general public thinks
it's endearing to support local/small businesses. Plus my parents don't feel
the need to wallow in shame if I were to stay in their garage for a year to
build my prototype (unless they're Asian), which effectively removes all my
internal barriers to quitting my job and going down the path less traveled.
The fact that social-security is there for me when I retire at 65 (lol) or so,
general medical insurance won't be denied to me (considering the demographic
of your average entrepreneur, why would it in the first place?), etc., don't
occur to me at all.

As much as your average 20-something cynical know-it-all likes to bag on our
education system and its spew of "you're special", "believe in your dreams",
"don't be afraid to do something if you truly believe in it", etc., I should
think it's that very sort of indoctrination starting at a young age that is
ultimately responsible for so many Americans casting caution to the wind and
pursuing their "American Dream", and for so many other Americans to sympathize
with and be willing to support such folk on their trek.

But I will admit that the one government innovation that definitely helps
entrepreneurship is the creation of the corporation. The fact that I can
create this entity that's owned by me and the family, friends, and fools who
believe in me, and that if things go South, the corporation can die without
dragging me down with it, is extremely helpful in encouraging folks to
venture. If I was a builder and the law was that if a house collapses and
kills its residents, the builder will be found and killed in an eye-for-an-eye
manor, I'd seriously think twice about building a house for anyone other than
myself.

So what encourages entrepreneurship? Telling people since the founding of your
nation that entrepreneurship is good and providing a means of separating the
entrepreneur from his corporation.

------
dataker
A very important premise has been ignored: the consequential government
intervention in the economy. That means hundreds of regulations that
constitute a barrier for many aspiring entrepreneurs.

Living in a welfare state, it took me 7 months to incorporate and ~$50000 on
licenses+fees to start a simple exporting business. Maybe America and certain
EU countries just haven't gotten there yet.

~~~
notahacker
Kafkaesque licensing processes and protectionism are totally orthogonal to the
welfare state, as demonstrated by many a developing country which neither
permits the average person to try and start a business larger than a food
stall nor provides them with access to any form of welfare whatsoever.

Edit: Do people _genuinely believe_ that the average sub-Saharan African
state, or even growing economies like Vietnam or Indonesia are either easier
to legally form a trading company in or more generous with welfare (relative
to incomes) than say, the UK, Sweden or even the USA? If there's evidence
rather than blindly partisan "he said welfare states weren't bad for business"
knee-jerk reactions behind the downvotes, I'd really like to see it.

------
borgia
If the conclusion of this is true, why aren't we seeing grand scale innovation
and entrepreneurship from European countries that are most certainly very
strong welfare states?

Why instead are we seeing massive amounts of unemployment?

There seems to be a delicate balance to strike to get this right. The fact of
the matter is that in many European countries someone who is not working can
enjoy the same standard of life as someone who is, except they don't have to
get up in the morning to earn it.

Those benefiting from these states likely have very little incentive to rock
their own boat of comfort by stepping out and taking on debt/risk for more of
a reward. Especially when you throw high taxation into the mix, where that
risk/reward ratio is further skewed because even if you do very well you'll
end up paying the state a huge amount of tax, to then support the same welfare
system.

In the US, on the other hand, you've a significantly less generous safety net
and I would imagine the vast majority of those who fall into it from a more
grand place - such as being securely in the middle class - would fight more to
get out of it.

That's intuitive anyway.

Where the argument starts to fall apart is when you look at all the young tech
entrepreneurs, whether it's hardware or software, or those starting up new
media companies, or whatever, very few seem to come from the type of
background where if they failed they'd end up on food stamps.

Are they better risk takers because they have a better, non-government
provided safety net, perhaps? Which then goes on to conflict with the enhanced
safety net available in Europe and the comparatively low level of innovation
and entrepreneurship.

My conclusion would be that the government provided welfare is likely not a
factor in determining innovation and entrepreneurship and that there's other,
less obvious, factors at play.

~~~
michaelchisari
The strongest welfare states (and by that, I also mean the best managed) are
the Scandinavian countries.

And the amount of culture and technology that comes out of Sweden alone is
extraordinary for their population size.

~~~
MollyR
wow really, I know of ikea, but do you mind linking me to some references ?

~~~
michaelchisari
Tech: Skype, Spotify, H&M, Neo4j, Mojang

Music: Tove Lo, Robyn, The Knife, Miike Snow, Those Dancing Days, Icona Pop,
Lykke Li.

In fact, pop music around the world has been shaped and written by Swedish
producers and writers, everything from Brittany Spears to Katy Perry.

And look at all the Swedish films that America loves to remake. Girl With The
Dragon Tattoo, Let The Right One In, etc.

And remember, this is just Sweden, a small country of 9 million people in the
middle of nowhere.

------
ende
I think the headline is a misnomer. It's not a strong welfare state that
promotes entrepreneurism but rather simply a saftey net. There's a huge
difference. A highly centralized cradle-to-grave welfare state seems to
actually facilitate the opposite. But the point is taken that a limited but
efficient social safety net is facilitative of risk taking. A universal basic
income would probably be more effective than either the strong centralized
European welfare state or the inefficient multitude of highly specialized
national programs in the US.

------
gavanwoolery
Yes, there are two sides to the coin. Look at France, which once had a 75
percent tax rate [1] on the wealthy. When you are only getting 25 percent of
what you make (or even 50 percent in many countries), you have that much less
incentive to succeed and others have that much less incentive to invest. There
are not very many French startups, relative to other countries.

I'm not saying you can't have the best of both worlds. You could have a good
social program and low taxes, if you cut things like defense spending (I
believe in a strong defense, but I also believe that in the US we let
contractors bill excessively and do little to curb it). But I think you give
the consumer more freedom when you just cut taxes - it gives them the choice
of what they want to buy, without government imposed restrictions (i.e.
certain things not being covered in healthcare, having to live in low income
housing, etc). If you want to encourage startups, you can always provide
government grants (most countries already do in many areas), or tax breaks for
small businesses.

[1] [http://www.theguardian.com/world/2014/dec/31/france-
drops-75...](http://www.theguardian.com/world/2014/dec/31/france-
drops-75percent-supertax)

~~~
majormajor
The post-World War II US had even higher top marginal income tax rates than
that, but many see the US 50s as glory days economically. Certainly there was
a lot of progress and innovation going on.

94% for 1944 and 1945. Above 90% until 1964. Above 70% until 1982.

[http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...](http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates)

~~~
gavanwoolery
Yes, has largely to do with our shift from blue collar jobs I think (we are no
longer producing housing/infrastructure/automobiles/etc at the rate we once
were). We are seeing this growth in places like China and India where these
jobs still dominate.

~~~
majormajor
I don't follow. Companies like Apple and Microsoft, among others, were founded
regardless of the US having a 70% top income tax rate; what's the connection
between that and blue collar jobs?

~~~
gavanwoolery
Oh, I'm just saying that the 50s were "the glory days" because there was no
shortage of jobs, relatively low inflation (IIRC?), high housing demand, etc.
College degrees (up until maybe as late as the early 90s) used to guarantee
you a good job, and student debt was far lower, and overall there are many
factors that you can't necessarily correlate directly to economic policy
(IMHO). A lot of our jobs are going overseas (but they are jobs we don't
particularly want, I suppose). That goes as well for current economic policy I
think - for example, we see a lot of growth in Silicon Valley even though
California is no haven for businesses (albeit many of those get registered in
Nevada).

------
pdeuchler
Argh, yet another simple economic principle conflated by politicization.

Entrepreneurship is directly correlated to easy access to capital and the
legal environment surrounding both starting and maintaining a small
business... this has been proven ad nauseam.

I can't directly critique the papers linked in the article (especially because
one of them 404's) right now, but I'd be willing to be a lot of money they
cherry pick policies that (either directly or indirectly) created greater
access to capital or made it legally easier to start and run a small business.
That, or they've found some correlation between the two and are trying to
gloss over the actual economics of the deal and support their political
opinions.

Strong "social good" (read: welfare), strong laissez faire, totalitarian,
anarchic, doesn't matter your political leanings as long you increase capital
and ease of legal machinations you will experience an increase in
entrepreneurship (comparatively, of course).

~~~
Chinjut
Surely there can be more than one thing which has an influence on rates of
entrepreneurship... Why couldn't it be the case that both increasing ease of
access to capital increases entrepreneurship and, separately, increasing
security against risk of destitution via a strong welfare state increases
entrepreneurship?

------
sambe
I suspect there is a correlation between welfare provision and protectionism
around small businesses/anti-big business behaviour. This would lead to many
more small businesses than the free market would support, but there is a bit
of a question mark over how entrepreneurial and economically valuable this is.

I live in Amsterdam (cited elsewhere in this thread as being entrepreneurial):
I appreciate having small independent shops and see the Dutch entrepreneurial
attitude relative to other European countries in which I've lived. But I also
understand why Hacker News readers would not believe the article is
reflective: the majority of these businesses are not going to risk everything,
change the world, or be worth millions/billions. Perhaps the count alone is
not a useful metric.

edit: I'm European. Lots of neutral comments treated to downvote-disagree in
this thread.

~~~
Jacqued
I think entrepreneurship is more of a mindset where you liberate yourself from
the wage constraint and take control of your life by directly producing value
for others.

Changing the world and being worth billions is just the Silicon Valley
mythology, but that is not the only 'real' form of entrepreneurship there is.

Dare I say, a small business owner is more of an entrepreneur in my opinion
than some wealthy dude who made an app, raised 5 mil, and ran the company into
the ground in 12 months.

Now startups are great, but I really don't get the contempt the startup-types
hold for small businesses. Maybe that's just a form of class contempt.

~~~
sambe
I like your perspective and agree the 0.1% of glamorous tech startups do not
define the whole word. I think though that more people lean towards a concept
of risk-taking and innovation (me too).

I guess my hypotheses are: a) HN will mostly lean this way too; b) America
will mostly lean this way (but I have not lived there); c) if you accept this
definition, European business are _on average_ less of this style than
American ones (due to government mitigating their risk or them being in
established segments) in some - but definitely not all - cases.

You are of course free not to accept the definition ;) and I could be wrong
about what the majority of HN readers/Americans think. If I'm not, the
Atlantic - an American magazine with mostly American readership - is being a
bit unrepresentative. As others have said, even if I'm wrong the conclusions
seem a little strong for the evidence.

------
SilasX
The first thing I expected the article to show: a correlation between welfare
state strength and rate of entrepreneurship, with the counterintuitive result
that there are numerous countries with higher rates than the US and weaker
welfare states, but if there are, it didn't list them.

The closes it comes is showing that the already-abysmal rates of
entrepreneurship for people around CHIP eligibility levels, it's 30% higher
for people just below the bracket.

Then there's idle theorizing about how food stamps "must" embolden
entrepreneurs because they know they can fall back on it if their venture
fails. While it sounds superficially plausible, can anyone give a concrete
example of the kind of hypercompetent person who launched a successful startup
and who would also have needed food stamps if it didn't succeed? Bezos? Musk?
Kalanick? Even Brin or Page?

~~~
TazeTSchnitzel
None of them needed food stamps because they had rich backgrounds.

~~~
SilasX
Sure, but I think the causality is reversed: had they not been rich, they are
still extremely capable people who could and would have build up a big buffer
before starting their business, which didn't depend on food stamps.

~~~
TazeTSchnitzel
Had they not been rich they wouldn't have gone to university. Had they not
gone to university, I doubt they'd have been able to go anywhere.

------
geoelectric
Worth noting that a "welfare state" approaches basic income as it benefits
more and more people.

Without getting into the various hairballs on here about the truth of the
research, -if- this were true it might imply that the core conjecture of a
basic income promoting innovation holds up.

------
stonetomb
Although the cost of healthcare is not insignificant, it pales in comparison
to general living expenses (food, rent, utilities, etc.).

Everyone is discussing conceptually, here are concrete numbers... When I was
striking out on my own a few years ago health insurance was "the big one"
everyone brought up, so I went on Kaiser's website and got a quote from ~$250
- $450/month (varies with copay, benefits, out of pocket max). It's a bit of a
cost though not nearly as scary as everyone makes it out to be and not enough
to plunge you into the depths of debt if things don't work out (it's also tax
deductible).

------
tomphoolery
I totally get this. Most people I know who are on welfare also describe
themselves as "entrepreneurs". Unfortunately, they are not very good at making
or saving money.

------
lifeisstillgood
Why not give every graduate a bursary for one year and see what happens. In
the logic of VC's it will take only 1% to pay that back and more.

------
zmitri
"More" doesn't necessarily mean "more successful". It's not unreasonable that
government intervention creates more entrepreneurs - as a Canadian I know I
can go and get tens of thousands to start my own company along with some nice
tax breaks - but it doesn't mean they would produce much value or amount to
anything more than a barely afloat small business.

------
karl11
There is a point where this makes sense, but I would venture to guess that
there is also a point where increased welfare benefits yield less and less
entrepreneurship. People have to be willing to take a risk because they
believe they could be better off - if the benefits of welfare were too great,
there would no longer be any desire to take risks.

------
skilesare
This is true. It would be nice if the welfare didn't have to come from the
state.

I'm solving this and am announcing my findings Sunday at the Texas bitcoin
conference.

The fix is really pretty simple.

------
blumkvist
>America is a "if you're going to fall, you are going to fall all the way
down, and no one is going to save you, no matter what".

I don't see how this is even remotely true. There are 42million people on food
stamps, costing $82bn a year. This is a mere fraction of the spending that
goes towards catching falling people. There is no capitalism. Open your eyes.

~~~
TazeTSchnitzel
A welfare state is not incompatible with capitalism. Actually, it is a natural
consequence of capitalism, a thing bolted on to try and work around some of
its more severe issues.

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kuni-toko-tachi
This article, like every other one produced by the laughable Atlantic magazine
is pure nonsense.

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pcardh0
Sure

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javert
More dishonest sludge from The Atlantic. This simply isn't true.

~~~
freshyill
Is your source on this reliable?

~~~
javert
A welfare state is reducing some people's economic security to add to other
people's economic security. There is no way that can produce a net increase in
entrepreneurship. Plus, a welfare state adds more regulations that block
private enterprise in various areas and make it more difficult. Moreover, a
welfare state hurts economic growth overall, also dragging down the total
amount of entrepreneurship.

~~~
themoonbus
So, uh... sources? Because the parent article had sources. Simply from a
logical standpoint, it makes sense to me that having a safety net would make
person less risk averse.

