4 ms·
In a free market, there is no such thing as "too much" of a given class of workers. A free market corrects for a glut of N by making the expected failure rate
by haploid 16y ago
In a free market, there is no such thing as "too much" of a given class of workers. A free market corrects for a glut of N by making the expected failure rate of N too high, or the capital available for N too low, or both.
Bubbles can affect this dynamic temporarily, but eventually they always pop, usually leading to a temporary condition of too little investment in N. Believe me, it was not "cool" to be a dot com founder in 2001.
But in the long run, this cycle averages out such that free markets don't have long term misallocations of resources.
Whether the system we currently have can be described as a free market, though, is a question for another day.
- maigret 16y agoI agree with you. It seems to me that having a startup currently is the new making a rock band. A few get super rich, many makes a simple living or side living from it, and many just fail miserably. It's life... They could all just do standard work in a office or be taxi driver, and contribute more "easily" (more predictably, but possibly with less gain) to the economy, but life wouldn't be so interesting then :)
- icegreentea 16y agoCan't really argue that. But the problem is that the market correction is inherently painful. There will be an overshoot, and the correction will hurt everyone together. I think the point of this article is to try to avoid the worst of the overshoot, and thus the worst of the correction pain.
- JoeAltmaier 16y agoHow? Its a free country, and people optimize their lives for their own perceived benefit. Regulate startups? Businesses operated out of garages/spare offices/abandoned warehouses? Ridiculous -they are exactly the sort of thing that cannot be tracked, counted, taxed or bent to someone elses view.
- orijing 16y agoI agree, up to the point where market imperfections come into play like externalities, "public liabilities" (i.e. opposite of public goods), etc. The question is, is there an externality (negative) to entrepreneurship? Does it help relieve some public liabilities?