American Entrepreneurship Is Dying


Via Jim Pethokoukis, here’s a frightening chart:


Free markets depend on creative destruction. Old ways of doing things are constantly replaced by new, better ways of doing things. So, we should want to see a steady number of jobs created by new businesses, but as the chart shows we’re not seeing that at all. Which means a lot of things, not the least of which is that established big business is being effectively protected from competition from new start-ups.

That’s not a good thing for our country, and it illustrate’s a point our friends on the left are loathe to admit: Big government begets big business.

It’s not at all unusual to see big business support expanding government regulations. Though Walmart is derided by the left for low-wages and skimpy benefits, the company actually supports government minimum wage policy and health insurance mandates. Manufacturing and energy giants are often seen supporting new environmental regulations too. Now, you’d think these companies would have an interest in opposing policies that increase their cost of doing business, but in truth these companies support more taxes and regulation because they’re big enough to absorb the cost. Their smaller, younger competitors often are not.

Every new bit of red tape the government implements makes entry into the market place harder for new businesses. Given that the number of laws and regulations on the books increases under Republican leadership, and explodes under Democrat leadership, the fact that we’re seeing a decline in the number of jobs created by start-ups isn’t surprising.

Government should focus on making it easier to start a business, not harder.

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

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  • Thresherman

    Barack Obama, hero to the buggy whip industries.

  • Onslaught1066


    Same thing?

  • Game

    Look at all those jobs created during the Clinton era!

  • LastBestHope

    Watching the golf tournament @ Pebble Beach last Sunday was a visual pleasure. The ocean alive with whales, seals, porpoise and birds as backdrop to the lush greens and fairways of one of most magnificent golf courses in the world. ATT sponsored the tourney and the golfers wore/displayed their corporate logos on everything. It was a capitalist celebration that included dozens of Fortune 500 companies. Money was spent and money was made and jobs were provided. Freedom.

    But consider this: The EPA would never allow another Pebble Beach. The entrepreneurs simply would not receive the required federal permits. This red-tape reality is not our nation moving Forward…it’s us losing what made US.

  • camsaure

    Example; The Interstate Commerce Commission was created to support the established Railroads monopoly against independent truckers. (crony capitalism)

  • igx

    Great post Rob. This is a huge deal and effectively no one cares. Entrepreneurship might be the only thing standing between us and the bond market backing up becuse we can’t afford Medicare etc.

  • AV

    Rob has it backwards again. A lot of the policies that are advocated by free-market types lead to these inefficient markets, those that are dominated by large players.

    Within free markets, the more established of these markets often become monopolies, oligopolies, etc. In these markets, the size of their profits basically shows how inefficient such markets are.

    Disruptive new technology can shake-up established markets, but it’s well known that businesses in free market economies tend to spend much too little on “blue skies” R&D.

    Another way is for govts to prevent markets from stagnating; e.g, by breaking-up or regulating monopolies, and/or by generously-funding education and fundamental research.

    And, obviously, it’s much easier for big-businesses to influence small govt’s.

    P.S. Yet, Rob is against the sorts of policies that actually help entrepreneurs.

    • Rob

      I’m not for policies that pick winners and losers.

      And big government begets big business. The more power government has to sell, the more bug business buys.

      Tacitus wrote of republics being most corrupt when the laws were most numerous.

      That was wisdom.

      • AV

        “And big government begets big business.” — Rob

        Small govts still have big businesses, and medium-sized govts, …

        It’s not a causal relationship. For example, a big govt could outlaw businesses of more than ‘n’ employees, or whatever, to restrict the size of businesses.

        As a business owner, you’d probably prefer to own a large business, instead of a small business? If your blog’s only viewer was your mom, you’d probably have given up by now?

        Is this the fault of “big govt,” if you want to grow your business; e.g, invest to make your blog more widely-viewed?

        And if any govt has the ability to pass legislation, then how does a big govt have more power to sell than a small govt? (But, it might cost more to influence a big govt, more “donations” to make.)

        So, how does the “bigness” of a govt directly affect the bigness of businesses? Or, why would the legislators of a small govt be immune to lobbying attempts by big business?

    • Roy_Bean

      “Another way is for govts to prevent markets from stagnating; e.g, by
      breaking-up or regulating monopolies………”

      So lets start by breaking up the Post Office.

      • AV

        What do you expect to get out of that? Three post-boxes on a street-corner, instead of one, as the split-up companies compete?

        The post office is probably a good example of where there isn’t really a natural market? I doubt that a duplication of effort will save any money.