5 ms·

How to Promote Startups

37 points by joao 18y ago

edw519 18y ago
Beware, the social safety net can be a 2 edged sword. Sure, more people would start small businesses. But more people would give up earlier because the landing would be less painful. The social safety net would decrease the importance of perseverance, one of the most critical ingredients of success.
- aaronsw 18y ago
  I'm not sure I understand this argument. When startup founders bail out, they typically go and find a normal job instead. Why would a social safety net make this any easier?
  - rglullis 18y ago
    Because not everyone is a smart and talented overachiever like you. Some of them just want to find themselves in a comfortable situation, with the least amount of work necessary. When "normal" people bail out on a startup, they go find a regular job because they have to. If there was an option to just live at the other's expense, they'd just go on to do it. Also, the 21% percent of people who say they would start a company, but don't, are probably more afraid of the possiblity of failure than unable to cope with the consequences.
    - llimllib 18y ago
      To support your argument: > A study by McKinsey Global estimated the true figure [of unemployed working-age Swedes] —which included those on sick leave, in early retirement, in jobs programs—to be between 15 and 17 percent. Jan Edling, a researcher with the Social Democratic trade union LO, estimated the total figure of unemployed to be 19.7 percent. (Edling's report was suppressed and he was himself offered "early retirement.") The Confederation of Swedish Enterprise said the figure was 16.5 percent. Other studies ranged from 12 percent to 18 percent. * http://reason.com/blog/show/126884.html http://reason.com/blog/show/126884.html
philh 18y ago
>While there's much less of a culture of entrepreneurship and only 15% of Europeans think about starting their own company, nearly all (14.7%) of them actually go ahead and do it. I wonder what the average payoff is though. When the going gets tough, I can easily imagine that the reduced costs of failure cause more founders to bail out. (This is ignoring that any comparison between the USA and Europe will probably have so much baggage attached as to be meaningless.)
- notauser 18y ago
  What reduced cost of failure? Failing with a start up is when you get some stability back as you go and get a regular job. The US is where there is more incentive to quit early as it will restore your health insurance and other benefits. In the EU the difference between failing startup/government support and regular job is smaller, so the incentive to fold is lower. If anything the Euopean system could cause you to hang on to a no hope case for too long as you can make ends meet more easilly.
- dmix 18y ago
  The average entrepreneur makes less money starting a company then they would of getting a job at an existing company. I wish people would stop quoting stats of ALL entrepreneurship and focus on industries. High tech start-ups are much different and 824 times more likely to be high growth then starting something like a restaurant. But there's far more restaurants in those statistics people love to quote. Read: Finding Fertile Ground or The Illusions of Entrepreneurship by Scott Shane to understand the reality of entrepreneurship and high tech companies.
boromir 18y ago
Who is going to implement such a social net? Congress? The same Congress that has a 15% approval rating and a 97% re-election rate? The same Congress that is run by K-street? Currently, we spend as much as a percentage of GDP on Medicare/Medicaid as every other developed country spends altogether on healthcare. Theoretically, we could just turn Medicare into a single payer system that covered everyone, get the same benefits as the European countries, and not even raise taxes. Strangely, no presidential candidate has mentioned such a sensible proposal. The problems Aaron cites can almost all be blamed on the government. The drug companies, insurance companies, and big city hospitals are effectively state cartels. The AMA and nurse unions are a state guilds. They have all worked together to drive the price of healthcare through the roof. Government zoning regulations and negative interest rates have made housing prices rise at a far greater rate than wages. The decline of the dollar has led to massive investment in commodity indexes, driving up the price of food and oil. SEC regulations make it very difficult for entrepreneurs to raise money from small time investors. What makes you think that the government that causes all these problems is going to wake up tomorrow, and in a fit of competence and good sense, actually fix them? Better idea: abolish the Feds altogether. Without paying taxes to Washington and monopoly prices to state guilds, we could all retire at 30.
- jmatt 18y ago
  A true libertarian. One implication of having similar temperaments (http://news.ycombinator.com/item?id=204240 http://news.ycombinator.com/item?id=204240) is that a lot of NTs tend to be libertarians. So this site will likely favor a libertarian view. I agree partially with this. Government regulation in some industries prevent startups from entering (ie health care and medicine). And since the most radical solutions are going to come from startups, no startups will slow down innovation. I also agree that the US is spending a lot of money inefficiently where companies motivated properly could spend it more effectively. I believe if the house, senate and presidency is democratic that a social net is possible in the next 4 years. Implying that low approval ratings mean congress won't do anything isn't true. If anything it may motivate them to do something like this.
- bayareaguy 18y ago
  Strangely, no presidential candidate has mentioned such a sensible proposal. My candidate (Mike Gravel) did: http://www.gravel2008.us/issues http://www.gravel2008.us/issues
gojomo 18y ago
One reason people pursue startups is to achieve so-called "FU money". A strong safety net gives everyone at least a minimal version of "FU money". So at the same time it makes risk-taking easier, it might remove a major incentive for risk-taking.
- davidw 18y ago
  Barely getting by, but with decent health care might be ok for some people, but not for most.
  - drusenko 18y ago
    Barely getting by without working, I think, is a much different version of "barely getting by".
    - davidw 18y ago
      In any case, it wouldn't work. How long would people tolerate a significant percentage of people just plain mooching off the state? I don't think that would work anywhere, Europe or US. Even in European countries that provide that kind of assistance, you're supposed to be at least looking for a job, or in training, or be seriously disabled enough that it's clear you wont' work productively.
      - gojomo 18y ago
        Operative words: "supposed to". Also, Aaron specifically uses the term "basic minimum income", and describes a scenario where "you could live off the government-provided income as you got things started." This sounds like the welfare office becomes your infinitely patient investor. "Well, yes, I've been receiving assistance for 20 years straight, and I'm not disabled. But you see, I've been working on my startup all this time, and I think we're just about to turn the corner!"
        davidw 18y ago
        "Supposed to" means they do have people in place whose job is to prevent fraud. It's surely not possible to prevent it entirely, but if you're just sitting around working on a startup, I think they'd probably catch on.
DaniFong 18y ago
I have to say I strongly agree with this. The personal risks I am taking to start a company, are a little crazy, and I've had no shortage of people telling me so. And I know so many people who are waiting for their life to be settled and stable before they begin. This is one of the main social influences repressing our potential founders.
- drusenko 18y ago
  Risk is generally proportional to reward. If it was less risky to start a startup, the reward or chance of reward wouldn't be as great (more people doing it, less chance of succeeding or of an exit).
  - DaniFong 18y ago
    But this isn't axiomatic. Risk isn't always proportional to reward. Sometimes risk is just pointless risk. Risk can be just one of many factors in how valuable something might be to the world. Furthermore, wealth isn't a zero sum game. It's possible that there's some limit to the number of conceivable successful companies in the social networking sphere, but there are a billion other things worth working on. As PG has pointed out, health alone is an like an infinite want.
    - drusenko 18y ago
      Well, I should have said risk is correlated to reward. While wealth might not be a zero sum game, if 5x the number of startups existed that exist now, it would just be harder to be successful on average. I'm not saying that's a bad thing, but it's different than what is out there and probably a worse scenario for everybody that is willing to take the amount of risk required today.
      - DaniFong 18y ago
        I'm not so sure. In many respects it's been easier for us (in these first few months) because of startup culture, which might not exist if we were five times fewer.
gojomo 18y ago
A serious problem with this thesis is that in addition to making good profitable startups easier, a strong safety net makes many other competing activities easier, too. One of those competing activities is: bad startups. When we accept the premise that "promoting startups" is a good thing, we are assuming such startups are still a net social positive. In fact, that quality may depend on them failing-fast, attracting investment from greedy investors, and generating enough income in a competitive market to sustain the founders/employees. With a strong safety net, it is easier to pursue a money-losing, wealth-destroying startup indefinitely -- really just a hobby masquerading as a startup. A strong safety net also makes it easier to be a painter, or a musician, or a writer... even if there's no paying audience for your work. Perhaps some who do startups now would, with a bottomless safety net, prefer to sit in a cafe all day sipping coffee, blogging, and posting snarky comments about real startups. "That seems easier."
- davidw 18y ago
  A "strong safety net", if done right (his minimum income suggestion is a bad idea in more than one way), doesn't mean people can just keep going forever. They can still fail, and fail fast, just that some of the "black swan" type risks with disproportionate downsides aren't a worry. Risk/reward calculations should be about looking at foregone opportunity costs (which are certainly significant for most capable hackers) rather than at "oh ####, my daughter needs an operation, and there's a problem with the insurance".
GrandMasterBirt 18y ago
My biggest hold-back from forming a startup has been Health Insurance. The pre-existent condition clause will pretty much ensure that I can't get my own health insurance, and leaving my 15 month old without insurance is just unacceptable. Once my wife gets out of Masters that will all change :). Thought I must disagree with the universal health care point. The government can help regulate the way insurance companies operate vs give universal healthcare which by empirical evidence is failing in European countries. Now my quick point on risk: You WILL fail (hence RISK) but sometimes you will succeed. All you need to ensure is that when you fail you can still have enough money to eat. Have a friend who didn't realize this point.
drusenko 18y ago
Yes, why don't we have the government promote our preferred group of people while penalizing the others? Let's help startup founders, and screw the large corporations! We want it to be easy for us to fire people, but it should be hard for big companies. We want other people to pay for our "safety net", to encourage more people to be like us. Or, why don't we just play on a level playing field instead of legislating a blessed group of people? If starting a startup is really that great, then it should happen naturally, not by having other people pay for our success.
- DaniFong 18y ago
  There are already massive, artificial advantages for large corporations. Large corporations can bring foreign talent in quite easily compared to startups, which must constantly battle for the right to keep their employees or founders in the country. We know this because it's our #1 distraction right now. Being poor? No problem! But we're not even allowed to legally be in the country without a job working for a company that's not our own. Large corporations have access to the public markets and hundreds of other financing options. Startups need to rely on knowing friends, fools or family to fund initial efforts, and then perhaps squeeze into the insular silicon valley VC environment, if they can successfully justify a multimillion dollar investment. Furthermore, since IPOs are so incredibly painful now, M&A is the only exit for startup entrepreneurs, and so the practically only companies able to acquire others (and thus, hopefully, benefit down the line) are those already linked to the public markets, which are those which are already big. Large corporations have the risk of making the wrong hires aggregated over thousands of people. Hire the wrong person in a large company, and maybe nobody will even notice. Hire the wrong person in the startup, and the entire company might be sunk. Large corporations have the ability to massively lobby themselves to other large corporations or the government, encouraging massive kickbacks and corruption. The recent credit crunch bailout is an example of this. The major disadvantage that large corporations have is that in many areas they're not particularly suitable for creative work. But this is a natural disadvantage. If society encouraged organizations more able to produce useful and novel work, our civilization as a whole would benefit.
  - drusenko 18y ago
davidw 18y ago
Since he brought up a number "European" policies, I felt qualified to say a few words on the subject myself, but it got sort of wordy, so I posted it here: http://journal.dedasys.com/articles/2008/06/09/startups-government-help-and-hindrance http://journal.dedasys.com/articles/2008/06/09/startups-gove...
mattmaroon 18y ago
All if his suggestions are great until it comes time to pay the bill for them. It's rather naive to suggest that universal child and health care and free college for everyone will make our country so much better without explaining the very serious effects (many of which we probably don't know) that paying for all of it will have.
- tx 18y ago
  How about taking 60% of existing military budget and allocating that towards health care? How about forcing hospitals to buy directly from manufacturers avoiding multi-tier nets of middlemen? I am not even talking about private medical insurance companies and lawyers...
  - mattmaroon 18y ago
    You're throwing all sorts of wrenches into the gears of capitalism there. Defense spending isn't us taking money and burning it. It's the government buying things from private enterprise (largely American) and employing troops (also American). Same with regulating hospital purchasing procedures, which the market should regulate itself. You can't know what would happen if you stop that cash flow or force it to go somewhere else, but you can be pretty certain it won't be good. It's clear we can do more to help the poor get health care. Taking money from the rich and our corporations and paying for it is not the easy solution that a lot of people like to daydream about.
    - davidw 18y ago
      Defense spending is the government taking money from everyone and reallocating it, just like any other government spending (and, of course, in many cases, it's a monopsony). You have to consider that a "wrench in the gears" just as much as health care, education or whatever else they spend money on. One variety of universal health care that has been lauded by economists, even some towards the libertarian end of things, is that utilized in Singapore: http://www.american.com/archive/2008/may-june-magazine-contents/the-singapore-model http://www.american.com/archive/2008/may-june-magazine-conte... Furthermore, to call the current model in the US 'free market' is probably inaccurate, as it's distorted in all kinds of ways, first and foremost because of the strong link between people's jobs and their health coverage.
pg 18y ago
Providing a safety net might or might not encourage startups, but it's misleading to suggest that this idea is somehow in opposition to allowing economic inequality. To decrease economic inequality, you have to confiscate the wealth of the rich, not merely give money to the poor. As long as you allow people to become billionaires, you'll have huge economic inequality, no matter what's happening at the other end of the scale.
- llimllib 18y ago
  Do you consider it a problem to have huge economic inequality in a society?
  - pg 18y ago
    It seems like more of a problem not to. I think the best solution is to allow inequality, but to work hard to prevent wealth from becoming self-perpetuating through political power.
    - davidw 18y ago
      The other thing to do is to look after the bottom X% in terms of absolute poverty - making sure that they have basic food, medical, and so on. You could still have a lot of inequality, but at least no one falls beyond a certain point.
- mattmaroon 18y ago
  They're not necessarily in opposition, but the only payment method that the universal health care supporters ever seem to come up with is "take it from the rich".
  - pg 18y ago
    If you want to give more money to the poor, the only place you can get it is from the rich. But the amount you'd have to take to fund universal health insurance wouldn't put much of a dent in inequality. To get rid of inequality, you have to explicitly ban being rich, e.g. with tax rates that go asymptotic at a certain point.
bbgm 18y ago
I am conflicted on this issue. On the one hand, I believe in a situation where perseverance and risk taking is rewarded. On the other, it is true that many people with bright ideas do not go the startup route because they have family responsibilities or something similar that holds them back. It's too simplistic to say that a social safety net will encourage entrepreneurship. It will probably enable more people to start up companies, esp in the tech sector, but it will equally lead to more deadwood entering the system.

37 points by joao 18y ago

Beware, the social safety net can be a 2 edged sword. Sure, more people would start small businesses. But more people would give up earlier because the landing would be less painful. The social safety net would decrease the importance of perseverance, one of the most critical ingredients of success.

aaronsw 18y ago
I'm not sure I understand this argument. When startup founders bail out, they typically go and find a normal job instead. Why would a social safety net make this any easier?
- rglullis 18y ago
  Because not everyone is a smart and talented overachiever like you. Some of them just want to find themselves in a comfortable situation, with the least amount of work necessary. When "normal" people bail out on a startup, they go find a regular job because they have to. If there was an option to just live at the other's expense, they'd just go on to do it. Also, the 21% percent of people who say they would start a company, but don't, are probably more afraid of the possiblity of failure than unable to cope with the consequences.
  - llimllib 18y ago
    To support your argument: > A study by McKinsey Global estimated the true figure [of unemployed working-age Swedes] —which included those on sick leave, in early retirement, in jobs programs—to be between 15 and 17 percent. Jan Edling, a researcher with the Social Democratic trade union LO, estimated the total figure of unemployed to be 19.7 percent. (Edling's report was suppressed and he was himself offered "early retirement.") The Confederation of Swedish Enterprise said the figure was 16.5 percent. Other studies ranged from 12 percent to 18 percent. * http://reason.com/blog/show/126884.html http://reason.com/blog/show/126884.html

philh 18y ago

>While there's much less of a culture of entrepreneurship and only 15% of Europeans think about starting their own company, nearly all (14.7%) of them actually go ahead and do it. I wonder what the average payoff is though. When the going gets tough, I can easily imagine that the reduced costs of failure cause more founders to bail out. (This is ignoring that any comparison between the USA and Europe will probably have so much baggage attached as to be meaningless.)

notauser 18y ago
What reduced cost of failure? Failing with a start up is when you get some stability back as you go and get a regular job. The US is where there is more incentive to quit early as it will restore your health insurance and other benefits. In the EU the difference between failing startup/government support and regular job is smaller, so the incentive to fold is lower. If anything the Euopean system could cause you to hang on to a no hope case for too long as you can make ends meet more easilly.
dmix 18y ago
The average entrepreneur makes less money starting a company then they would of getting a job at an existing company. I wish people would stop quoting stats of ALL entrepreneurship and focus on industries. High tech start-ups are much different and 824 times more likely to be high growth then starting something like a restaurant. But there's far more restaurants in those statistics people love to quote. Read: Finding Fertile Ground or The Illusions of Entrepreneurship by Scott Shane to understand the reality of entrepreneurship and high tech companies.

boromir 18y ago

Who is going to implement such a social net? Congress? The same Congress that has a 15% approval rating and a 97% re-election rate? The same Congress that is run by K-street? Currently, we spend as much as a percentage of GDP on Medicare/Medicaid as every other developed country spends altogether on healthcare. Theoretically, we could just turn Medicare into a single payer system that covered everyone, get the same benefits as the European countries, and not even raise taxes. Strangely, no presidential candidate has mentioned such a sensible proposal. The problems Aaron cites can almost all be blamed on the government. The drug companies, insurance companies, and big city hospitals are effectively state cartels. The AMA and nurse unions are a state guilds. They have all worked together to drive the price of healthcare through the roof. Government zoning regulations and negative interest rates have made housing prices rise at a far greater rate than wages. The decline of the dollar has led to massive investment in commodity indexes, driving up the price of food and oil. SEC regulations make it very difficult for entrepreneurs to raise money from small time investors. What makes you think that the government that causes all these problems is going to wake up tomorrow, and in a fit of competence and good sense, actually fix them? Better idea: abolish the Feds altogether. Without paying taxes to Washington and monopoly prices to state guilds, we could all retire at 30.

jmatt 18y ago
A true libertarian. One implication of having similar temperaments (http://news.ycombinator.com/item?id=204240 http://news.ycombinator.com/item?id=204240) is that a lot of NTs tend to be libertarians. So this site will likely favor a libertarian view. I agree partially with this. Government regulation in some industries prevent startups from entering (ie health care and medicine). And since the most radical solutions are going to come from startups, no startups will slow down innovation. I also agree that the US is spending a lot of money inefficiently where companies motivated properly could spend it more effectively. I believe if the house, senate and presidency is democratic that a social net is possible in the next 4 years. Implying that low approval ratings mean congress won't do anything isn't true. If anything it may motivate them to do something like this.
bayareaguy 18y ago
Strangely, no presidential candidate has mentioned such a sensible proposal. My candidate (Mike Gravel) did: http://www.gravel2008.us/issues http://www.gravel2008.us/issues

gojomo 18y ago

One reason people pursue startups is to achieve so-called "FU money". A strong safety net gives everyone at least a minimal version of "FU money". So at the same time it makes risk-taking easier, it might remove a major incentive for risk-taking.

davidw 18y ago
Barely getting by, but with decent health care might be ok for some people, but not for most.
- drusenko 18y ago
  Barely getting by without working, I think, is a much different version of "barely getting by".
  - davidw 18y ago
    In any case, it wouldn't work. How long would people tolerate a significant percentage of people just plain mooching off the state? I don't think that would work anywhere, Europe or US. Even in European countries that provide that kind of assistance, you're supposed to be at least looking for a job, or in training, or be seriously disabled enough that it's clear you wont' work productively.
    - gojomo 18y ago
      Operative words: "supposed to". Also, Aaron specifically uses the term "basic minimum income", and describes a scenario where "you could live off the government-provided income as you got things started." This sounds like the welfare office becomes your infinitely patient investor. "Well, yes, I've been receiving assistance for 20 years straight, and I'm not disabled. But you see, I've been working on my startup all this time, and I think we're just about to turn the corner!"
      - davidw 18y ago
        "Supposed to" means they do have people in place whose job is to prevent fraud. It's surely not possible to prevent it entirely, but if you're just sitting around working on a startup, I think they'd probably catch on.

DaniFong 18y ago

I have to say I strongly agree with this. The personal risks I am taking to start a company, are a little crazy, and I've had no shortage of people telling me so. And I know so many people who are waiting for their life to be settled and stable before they begin. This is one of the main social influences repressing our potential founders.

drusenko 18y ago
Risk is generally proportional to reward. If it was less risky to start a startup, the reward or chance of reward wouldn't be as great (more people doing it, less chance of succeeding or of an exit).
- DaniFong 18y ago
  But this isn't axiomatic. Risk isn't always proportional to reward. Sometimes risk is just pointless risk. Risk can be just one of many factors in how valuable something might be to the world. Furthermore, wealth isn't a zero sum game. It's possible that there's some limit to the number of conceivable successful companies in the social networking sphere, but there are a billion other things worth working on. As PG has pointed out, health alone is an like an infinite want.
  - drusenko 18y ago
    Well, I should have said risk is correlated to reward. While wealth might not be a zero sum game, if 5x the number of startups existed that exist now, it would just be harder to be successful on average. I'm not saying that's a bad thing, but it's different than what is out there and probably a worse scenario for everybody that is willing to take the amount of risk required today.
    - DaniFong 18y ago
      I'm not so sure. In many respects it's been easier for us (in these first few months) because of startup culture, which might not exist if we were five times fewer.

gojomo 18y ago

A serious problem with this thesis is that in addition to making good profitable startups easier, a strong safety net makes many other competing activities easier, too. One of those competing activities is: bad startups. When we accept the premise that "promoting startups" is a good thing, we are assuming such startups are still a net social positive. In fact, that quality may depend on them failing-fast, attracting investment from greedy investors, and generating enough income in a competitive market to sustain the founders/employees. With a strong safety net, it is easier to pursue a money-losing, wealth-destroying startup indefinitely -- really just a hobby masquerading as a startup. A strong safety net also makes it easier to be a painter, or a musician, or a writer... even if there's no paying audience for your work. Perhaps some who do startups now would, with a bottomless safety net, prefer to sit in a cafe all day sipping coffee, blogging, and posting snarky comments about real startups. "That seems easier."

davidw 18y ago
A "strong safety net", if done right (his minimum income suggestion is a bad idea in more than one way), doesn't mean people can just keep going forever. They can still fail, and fail fast, just that some of the "black swan" type risks with disproportionate downsides aren't a worry. Risk/reward calculations should be about looking at foregone opportunity costs (which are certainly significant for most capable hackers) rather than at "oh ####, my daughter needs an operation, and there's a problem with the insurance".

GrandMasterBirt 18y ago

My biggest hold-back from forming a startup has been Health Insurance. The pre-existent condition clause will pretty much ensure that I can't get my own health insurance, and leaving my 15 month old without insurance is just unacceptable. Once my wife gets out of Masters that will all change :). Thought I must disagree with the universal health care point. The government can help regulate the way insurance companies operate vs give universal healthcare which by empirical evidence is failing in European countries. Now my quick point on risk: You WILL fail (hence RISK) but sometimes you will succeed. All you need to ensure is that when you fail you can still have enough money to eat. Have a friend who didn't realize this point.

drusenko 18y ago

Yes, why don't we have the government promote our preferred group of people while penalizing the others? Let's help startup founders, and screw the large corporations! We want it to be easy for us to fire people, but it should be hard for big companies. We want other people to pay for our "safety net", to encourage more people to be like us. Or, why don't we just play on a level playing field instead of legislating a blessed group of people? If starting a startup is really that great, then it should happen naturally, not by having other people pay for our success.

DaniFong 18y ago
There are already massive, artificial advantages for large corporations. Large corporations can bring foreign talent in quite easily compared to startups, which must constantly battle for the right to keep their employees or founders in the country. We know this because it's our #1 distraction right now. Being poor? No problem! But we're not even allowed to legally be in the country without a job working for a company that's not our own. Large corporations have access to the public markets and hundreds of other financing options. Startups need to rely on knowing friends, fools or family to fund initial efforts, and then perhaps squeeze into the insular silicon valley VC environment, if they can successfully justify a multimillion dollar investment. Furthermore, since IPOs are so incredibly painful now, M&A is the only exit for startup entrepreneurs, and so the practically only companies able to acquire others (and thus, hopefully, benefit down the line) are those already linked to the public markets, which are those which are already big. Large corporations have the risk of making the wrong hires aggregated over thousands of people. Hire the wrong person in a large company, and maybe nobody will even notice. Hire the wrong person in the startup, and the entire company might be sunk. Large corporations have the ability to massively lobby themselves to other large corporations or the government, encouraging massive kickbacks and corruption. The recent credit crunch bailout is an example of this. The major disadvantage that large corporations have is that in many areas they're not particularly suitable for creative work. But this is a natural disadvantage. If society encouraged organizations more able to produce useful and novel work, our civilization as a whole would benefit.
- drusenko 18y ago

davidw 18y ago

Since he brought up a number "European" policies, I felt qualified to say a few words on the subject myself, but it got sort of wordy, so I posted it here: http://journal.dedasys.com/articles/2008/06/09/startups-government-help-and-hindrance http://journal.dedasys.com/articles/2008/06/09/startups-gove...

mattmaroon 18y ago

All if his suggestions are great until it comes time to pay the bill for them. It's rather naive to suggest that universal child and health care and free college for everyone will make our country so much better without explaining the very serious effects (many of which we probably don't know) that paying for all of it will have.

tx 18y ago
How about taking 60% of existing military budget and allocating that towards health care? How about forcing hospitals to buy directly from manufacturers avoiding multi-tier nets of middlemen? I am not even talking about private medical insurance companies and lawyers...
- mattmaroon 18y ago
  You're throwing all sorts of wrenches into the gears of capitalism there. Defense spending isn't us taking money and burning it. It's the government buying things from private enterprise (largely American) and employing troops (also American). Same with regulating hospital purchasing procedures, which the market should regulate itself. You can't know what would happen if you stop that cash flow or force it to go somewhere else, but you can be pretty certain it won't be good. It's clear we can do more to help the poor get health care. Taking money from the rich and our corporations and paying for it is not the easy solution that a lot of people like to daydream about.
  - davidw 18y ago
    Defense spending is the government taking money from everyone and reallocating it, just like any other government spending (and, of course, in many cases, it's a monopsony). You have to consider that a "wrench in the gears" just as much as health care, education or whatever else they spend money on. One variety of universal health care that has been lauded by economists, even some towards the libertarian end of things, is that utilized in Singapore: http://www.american.com/archive/2008/may-june-magazine-contents/the-singapore-model http://www.american.com/archive/2008/may-june-magazine-conte... Furthermore, to call the current model in the US 'free market' is probably inaccurate, as it's distorted in all kinds of ways, first and foremost because of the strong link between people's jobs and their health coverage.

pg 18y ago

Providing a safety net might or might not encourage startups, but it's misleading to suggest that this idea is somehow in opposition to allowing economic inequality. To decrease economic inequality, you have to confiscate the wealth of the rich, not merely give money to the poor. As long as you allow people to become billionaires, you'll have huge economic inequality, no matter what's happening at the other end of the scale.

llimllib 18y ago
Do you consider it a problem to have huge economic inequality in a society?
- pg 18y ago
  It seems like more of a problem not to. I think the best solution is to allow inequality, but to work hard to prevent wealth from becoming self-perpetuating through political power.
  - davidw 18y ago
    The other thing to do is to look after the bottom X% in terms of absolute poverty - making sure that they have basic food, medical, and so on. You could still have a lot of inequality, but at least no one falls beyond a certain point.
mattmaroon 18y ago
They're not necessarily in opposition, but the only payment method that the universal health care supporters ever seem to come up with is "take it from the rich".
- pg 18y ago
  If you want to give more money to the poor, the only place you can get it is from the rich. But the amount you'd have to take to fund universal health insurance wouldn't put much of a dent in inequality. To get rid of inequality, you have to explicitly ban being rich, e.g. with tax rates that go asymptotic at a certain point.

bbgm 18y ago

I am conflicted on this issue. On the one hand, I believe in a situation where perseverance and risk taking is rewarded. On the other, it is true that many people with bright ideas do not go the startup route because they have family responsibilities or something similar that holds them back. It's too simplistic to say that a social safety net will encourage entrepreneurship. It will probably enable more people to start up companies, esp in the tech sector, but it will equally lead to more deadwood entering the system.