Small Businesses at the U.S. Economy Core

Small Businesses at the Economy’s Core is the title of an online posting at IIP Digital, an arm of the U.S. Department of State. There it is written that the linked article was excerpted from the book Outline of the U.S. Economy, published by the Bureau of International Information Programs.

Since that is government material and because the topic is so important, we reproduce that excerpted article below in full, adding the commentary that all the reactionaries in American politics both on the left and the right should read especially the last paragraph. Unfortunately, much of modern America has become more like the countries that most of the immigrants who fled to America wanted to leave.

"American entrepreneurs remain eager to risk their own savings to start small businesses despite the potential for failure that Schumpeter’s model predicts. The widely published and sometimes embroidered story of American Founding Father Benjamin Franklin was a potent symbol of aspiration and perseverance for generations of Americans, “defining our image of ourselves, shaping our sense of possibility,” says author Peter Baida.

The 15th child of a Boston soap and candle maker, Franklin quit school after two years to work in his brother’s printing business. He learned the printing trade and accounting, became the American colonies’ most noteworthy publisher and inventor, and then played his storied role in the struggle for national independence. Since Franklin’s time, Americans have hailed leading inventors and entrepreneurs as icons of opportunism, from Thomas Edison to Apple’s Steve Jobs.

Millions of entrepreneurs try to create their own versions of success. Government data show that, in 2006, an estimated 650,000 new employer-owned businesses were started up and 565,000 went out of business, out of a total of around six million such businesses nationwide. Similar ratios of births and deaths among small businesses are repeated year after year.

One obvious reason why so many Americans choose this path is the relative ease of starting a business. Professions such as law, medicine, and accounting have stiff licensing requirements. But compared to other Western economies, the United States offers an open road to a would-be business owner. The contrast with some Third World economies is monumental. A study by the Peruvian economist Hernando de Soto found that it took 289 days to open a small garment workshop in Lima, Peru. The absence of a vibrant small-business class is not due to a lack of entrepreneurs, he argued. In 1993, an estimated 150,000 vendors worked the streets of Mexico City, to cite but one example. But these vendors were blocked from becoming full-fledged business owners by many hurdles, de Soto says, including rigid class barriers, laws that discourage property ownership, and bureaucracies intent on preserving the status quo. In the United States, change is a way of life."

Politicians who argue AGAINST change in America simply do not understand the history of their own country. I merely add one proviso to "the rule of change"
-- CHANGE "for the better" is preferable.