“Touched by Entrepreneurial Angels”
By Karl Zinsmeister
The American Enterprise, July/August 1997
Jim was a house painter. After working for someone else for several years he had set up his own business, and when I crossed paths with him in later years he had built it into quite a prosperous enterprise. But at the moment I’m remembering just now, Jim was still a one-man band, hired by me to help sand and then paint a whole house full of new drywall. He and I worked side by side for most of a week, jabbering away until late in the night amidst thick clouds of white gypsum dust and blue country music. And it quickly became clear to me that Jim was not only an excellent painter and hump- busting hard worker but also a very smart businessman. I imagine he’s a fairly wealthy fellow today, assuming he’s still alive. (He had a disconcerting habit of power-smoking strong cigarettes while sanding ‘rock, and since drywall dust and cigarettes both tend to anger your lungs, combining them is probably no life-extender.)
Jim and I talked a lot about making it in self-employment, how to win work and price jobs, and the valuable contributions his new wife made as the telephone-answering and bookkeeping end of his fledgling company. We discussed his long-range business plan. And we touched on topics that some people don’t realize tough young twentysomething manual workers with high school educations care about: what makes one man trustworthy and another not, the importance of setting high goals, the ways taxes discourage ambition, how a person should hire and motivate other people, the best ways to build assets over a lifetime, and the desirability of investing in T-bills versus equities.
I admit Jim surprised me when he brought up that last topic. He was building his grubstake, and it turned out that when interest rates were high he’d put a lot of money into high-interest Treasury bills, which he understood quite well to have been an excellent investment vehicle. Now he was shifting his money into mutual funds, and he was talking to brokers, reading financial newspapers, and otherwise educating himself. Eventually, much of his kitty was probably directed into trucks and sprayers and Yellow Pages ads.
Jim was one of the people who helped me understand how broadly in the American population the love of and capacity for business is found. Over the years I’ve met lots of other hustling investor/entrepreneurs like him. I recall a dishwasher repairman who arrived at our house with a toolbox, a long pony tail, and a whole kit of entertaining tales and advice about how to gradually buy up and then manage small rental properties. He owned a couple houses in Kansas City that represented his nest egg, and had many of the characteristics (and grievances toward government) that Howard Husock sketches out in his page 65 article on landlording-as-small-business.
Recently, there was a bus driver I met at Logan Airport who invested not for riches but for freedom and leisure. He had a friend in Southampton, England, and liked to take off two or three months every summer to visit there. The rest of the year he’d drive, save, and pick stocks to put his funds in so he could finance his chosen style of life. More power to him.
Hordes of other Americans who go well beyond passive investing and actually start their own businesses have something in common with this bus driver—what they are seeking through their enterprises is more than just riches. Certainly the founders of most businesses are hoping for a solid income and financial success. But in lots and lots of cases the entrepreneur is also looking for something more intangible: the opportunity to be self- reliant, to set his or her own hours, to do something he or she finds enjoyable or socially valuable, to make more room in the day for family and personal pursuits, to be personally inventive.
***
Evidence of America’s deep attraction to small business extends far beyond these anecdotes. The best data available were released at the end of 1996 by the Entrepreneurial Research Consortium, a joint venture of two dozen American universities and research institutes. The ERC’s careful survey found that in an amazing 37 percent of all U.S. households, at least one person was currently running, founding, or funding a small business, or had in the past. In fully one out of every five households today there is an entrepreneur with a company up and running. In an additional 15 percent of all households (including retirees), someone ran a freestanding business at some point. In another 5 percent, someone is currently trying to launch a business.
In close to four out of ten American homes, in other words, there is firsthand experience with small business. No other country in the world exhibits that remarkable level of economic freelancing and independence—and we’re reaping many benefits. As American Enterprise Institute scholar James Glassman recently noted in the Washington Post, “the United States is racing ahead of other nations in economic growth” these days, and it’s not because we’re better educated, better financed, or luckier; it’s because of the amazingly fertile, experimental, entrepreneurial culture that has grown up on our shores.
America has stood Karl Marx on his head—we are literally a land where bosses outnumber proletarians. There are just 16 million labor union members in this country. Meanwhile, about 23 million small business owners will file tax returns this year. Millions of other citizens are in business on the side or off the books. And others, as we’ve seen, were in business in the past, or will be in the future.
Moreover, the pace of entrepreneurial activity in the United States is accelerating. In the first of our articles on “Business as a Creative Act,” Rich Miniter finds that there is tremendous interest in (and perhaps capability for) small business among the generation of Americans just now entering adulthood. Gen Xers are proving far likelier than Baby Boomers to start their own enterprises. Other parts of the population are also taking a turn toward self-employment. Black Americans, for instance, after decades of lagging the rest of the population, are becoming more active in business. And among women there has been an explosion of entrepreneurialism, documented by reporter Barbara DeLollis in the article after Miniter’s. As it spreads and deepens, this new female interest in commerce and ownership will bring large permanent benefits on American society.
***
Though we take our economic system’s amazing abundance almost completely for granted, even a cursory study of history reveals how unusual a blessing it is. The triumph of our free enterprising system is the bedrock on which most of the rest of our social successes lie. Without our deep ranks of productive, need-serving businesses, we would have no great charitable surplus to share with the disadvantaged, no luxury of time and energy for self-improving study, art, or religious contemplation. There would be more scraping for daily necessities, and not as much long-term investing of resources in the next generation. With a less successful economic system there would be fewer books, more illness, less variety of daily experience, sparser knowledge, and thinner pleasures.
The Americans who know this best are those who have lived in other countries, where one cannot simply assume that a child’s broken bone will be fixed, that a healthy diet will be available for purchase, that multi- bedroom houses and private cars will be affordable to everyday people, that a phoneline will be installed in days (rather than months), that there will be pharmacies open at 11 p.m. on a Sunday night stocked with cold medicine and low-fat milk and independent newspapers. It isn’t only the 85 percent of the world’s population who live in poor countries who are less fortunate in these things. Most Americans would be bitterly disappointed with Japanese houses, French cars, Italian doctors, Russian universities, Swiss record stores, and British groceries.
Your editors are hardly idolatrous about business. In this issue of The American Enterprise and all others you will find warnings against exaggerated materialism, criticisms of business practices that don’t factor in moral right, and articles cautioning against letting careerism lead to family neglect. We are well aware that work is but a part of life, and that American businesses mostly just serve immediate needs; they aren’t instruments especially well suited to the direct pursuit of truth, love, or beauty.
But what the poorer world knows, and Americans often forget, is that those higher goods cannot come into play until our basic needs are taken care of. Having a washing machine in your own home, an insulin supply for your diabetic son, a central heating system that rarely breaks down, and a choice of book shops is not such a bad beginning to a life of noble contemplation. And if you think those things are normal human “rights” you have very little understanding of how most people across time have lived, and continue to live today.
***
Our population’s deep devotion to self-supporting small enterprise is one of our most distinguishing national characteristics. There is an almost animal spirit that seems to drive American enterprising. Our business endeavors are not just practical arrangements, or mere ways of funding the rest of life. For a great many of us, the hunt of commerce is a fiercely involving way of pursuing high principles, finding meaning, and testing and proving our individual worth.
You will glimpse some of this higher purpose in our interview with T.J. Rodgers, a man motivated by a lot more than just the desire to achieve financial success or sell a lot of products. You will also see it in our feature article on “Spirited Enterprise,” where we profile some of America’s most successful businessmen (and one of Japan’s), and look at the high goals and moral purposes that power their efforts. You will get a further hint that something much more complicated than the pursuit of comfort drives most entrepreneurs in our “Indicators” item on American millionaires.
It isn’t only America’s tycoons who display this principled zest for commerce. The same creative impulse drives legions of small businessmen and women in this country—the kind of people who set up ice cream stands and repair shops when they get laid off (instead of seeking an anonymous perch in a large bureaucracy or going on the dole), who invent new ways of fixing problems and then grub to make them available to others, who mortgage their family homes to finance their productive dreams, who accept responsibility for other people’s mortgages and grocery bills by hiring employees who will have to be paid next month even if customers aren’t buying. These are brave, risky, steps. Someone following safe reason would simply get a job with the post office instead. We are very lucky so many of our fellow citizens prefer a more self-reliant course, for we are all beneficiaries of their willingness to shoot high, explore new paths, and walk the commercial tightrope without any guarantee of success or even safety.
Of course many of the Americans who shoulder the demands of business creation end up crashing. Each year, thousands of small businesses fail. Each year thousands more are launched. In a business downturn, an entire region like Houston can be knocked down hard. Yet, as Joel Kotkin outlines in his article on why some locales become business hotbeds while others don’t, Houston has bounced back—by sheer energy and force of will. That’s what entrepreneurs do.
***
By Karl Zinsmeister
The American Enterprise, July/August 1997
Jim was a house painter. After working for someone else for several years he had set up his own business, and when I crossed paths with him in later years he had built it into quite a prosperous enterprise. But at the moment I’m remembering just now, Jim was still a one-man band, hired by me to help sand and then paint a whole house full of new drywall. He and I worked side by side for most of a week, jabbering away until late in the night amidst thick clouds of white gypsum dust and blue country music. And it quickly became clear to me that Jim was not only an excellent painter and hump- busting hard worker but also a very smart businessman. I imagine he’s a fairly wealthy fellow today, assuming he’s still alive. (He had a disconcerting habit of power-smoking strong cigarettes while sanding ‘rock, and since drywall dust and cigarettes both tend to anger your lungs, combining them is probably no life-extender.)
Jim and I talked a lot about making it in self-employment, how to win work and price jobs, and the valuable contributions his new wife made as the telephone-answering and bookkeeping end of his fledgling company. We discussed his long-range business plan. And we touched on topics that some people don’t realize tough young twentysomething manual workers with high school educations care about: what makes one man trustworthy and another not, the importance of setting high goals, the ways taxes discourage ambition, how a person should hire and motivate other people, the best ways to build assets over a lifetime, and the desirability of investing in T-bills versus equities.
I admit Jim surprised me when he brought up that last topic. He was building his grubstake, and it turned out that when interest rates were high he’d put a lot of money into high-interest Treasury bills, which he understood quite well to have been an excellent investment vehicle. Now he was shifting his money into mutual funds, and he was talking to brokers, reading financial newspapers, and otherwise educating himself. Eventually, much of his kitty was probably directed into trucks and sprayers and Yellow Pages ads.
Jim was one of the people who helped me understand how broadly in the American population the love of and capacity for business is found. Over the years I’ve met lots of other hustling investor/entrepreneurs like him. I recall a dishwasher repairman who arrived at our house with a toolbox, a long pony tail, and a whole kit of entertaining tales and advice about how to gradually buy up and then manage small rental properties. He owned a couple houses in Kansas City that represented his nest egg, and had many of the characteristics (and grievances toward government) that Howard Husock sketches out in his page 65 article on landlording-as-small-business.
Recently, there was a bus driver I met at Logan Airport who invested not for riches but for freedom and leisure. He had a friend in Southampton, England, and liked to take off two or three months every summer to visit there. The rest of the year he’d drive, save, and pick stocks to put his funds in so he could finance his chosen style of life. More power to him.
Hordes of other Americans who go well beyond passive investing and actually start their own businesses have something in common with this bus driver—what they are seeking through their enterprises is more than just riches. Certainly the founders of most businesses are hoping for a solid income and financial success. But in lots and lots of cases the entrepreneur is also looking for something more intangible: the opportunity to be self- reliant, to set his or her own hours, to do something he or she finds enjoyable or socially valuable, to make more room in the day for family and personal pursuits, to be personally inventive.
***
Evidence of America’s deep attraction to small business extends far beyond these anecdotes. The best data available were released at the end of 1996 by the Entrepreneurial Research Consortium, a joint venture of two dozen American universities and research institutes. The ERC’s careful survey found that in an amazing 37 percent of all U.S. households, at least one person was currently running, founding, or funding a small business, or had in the past. In fully one out of every five households today there is an entrepreneur with a company up and running. In an additional 15 percent of all households (including retirees), someone ran a freestanding business at some point. In another 5 percent, someone is currently trying to launch a business.
In close to four out of ten American homes, in other words, there is firsthand experience with small business. No other country in the world exhibits that remarkable level of economic freelancing and independence—and we’re reaping many benefits. As American Enterprise Institute scholar James Glassman recently noted in the Washington Post, “the United States is racing ahead of other nations in economic growth” these days, and it’s not because we’re better educated, better financed, or luckier; it’s because of the amazingly fertile, experimental, entrepreneurial culture that has grown up on our shores.
America has stood Karl Marx on his head—we are literally a land where bosses outnumber proletarians. There are just 16 million labor union members in this country. Meanwhile, about 23 million small business owners will file tax returns this year. Millions of other citizens are in business on the side or off the books. And others, as we’ve seen, were in business in the past, or will be in the future.
Moreover, the pace of entrepreneurial activity in the United States is accelerating. In the first of our articles on “Business as a Creative Act,” Rich Miniter finds that there is tremendous interest in (and perhaps capability for) small business among the generation of Americans just now entering adulthood. Gen Xers are proving far likelier than Baby Boomers to start their own enterprises. Other parts of the population are also taking a turn toward self-employment. Black Americans, for instance, after decades of lagging the rest of the population, are becoming more active in business. And among women there has been an explosion of entrepreneurialism, documented by reporter Barbara DeLollis in the article after Miniter’s. As it spreads and deepens, this new female interest in commerce and ownership will bring large permanent benefits on American society.
***
Though we take our economic system’s amazing abundance almost completely for granted, even a cursory study of history reveals how unusual a blessing it is. The triumph of our free enterprising system is the bedrock on which most of the rest of our social successes lie. Without our deep ranks of productive, need-serving businesses, we would have no great charitable surplus to share with the disadvantaged, no luxury of time and energy for self-improving study, art, or religious contemplation. There would be more scraping for daily necessities, and not as much long-term investing of resources in the next generation. With a less successful economic system there would be fewer books, more illness, less variety of daily experience, sparser knowledge, and thinner pleasures.
The Americans who know this best are those who have lived in other countries, where one cannot simply assume that a child’s broken bone will be fixed, that a healthy diet will be available for purchase, that multi- bedroom houses and private cars will be affordable to everyday people, that a phoneline will be installed in days (rather than months), that there will be pharmacies open at 11 p.m. on a Sunday night stocked with cold medicine and low-fat milk and independent newspapers. It isn’t only the 85 percent of the world’s population who live in poor countries who are less fortunate in these things. Most Americans would be bitterly disappointed with Japanese houses, French cars, Italian doctors, Russian universities, Swiss record stores, and British groceries.
Your editors are hardly idolatrous about business. In this issue of The American Enterprise and all others you will find warnings against exaggerated materialism, criticisms of business practices that don’t factor in moral right, and articles cautioning against letting careerism lead to family neglect. We are well aware that work is but a part of life, and that American businesses mostly just serve immediate needs; they aren’t instruments especially well suited to the direct pursuit of truth, love, or beauty.
But what the poorer world knows, and Americans often forget, is that those higher goods cannot come into play until our basic needs are taken care of. Having a washing machine in your own home, an insulin supply for your diabetic son, a central heating system that rarely breaks down, and a choice of book shops is not such a bad beginning to a life of noble contemplation. And if you think those things are normal human “rights” you have very little understanding of how most people across time have lived, and continue to live today.
***
Our population’s deep devotion to self-supporting small enterprise is one of our most distinguishing national characteristics. There is an almost animal spirit that seems to drive American enterprising. Our business endeavors are not just practical arrangements, or mere ways of funding the rest of life. For a great many of us, the hunt of commerce is a fiercely involving way of pursuing high principles, finding meaning, and testing and proving our individual worth.
You will glimpse some of this higher purpose in our interview with T.J. Rodgers, a man motivated by a lot more than just the desire to achieve financial success or sell a lot of products. You will also see it in our feature article on “Spirited Enterprise,” where we profile some of America’s most successful businessmen (and one of Japan’s), and look at the high goals and moral purposes that power their efforts. You will get a further hint that something much more complicated than the pursuit of comfort drives most entrepreneurs in our “Indicators” item on American millionaires.
It isn’t only America’s tycoons who display this principled zest for commerce. The same creative impulse drives legions of small businessmen and women in this country—the kind of people who set up ice cream stands and repair shops when they get laid off (instead of seeking an anonymous perch in a large bureaucracy or going on the dole), who invent new ways of fixing problems and then grub to make them available to others, who mortgage their family homes to finance their productive dreams, who accept responsibility for other people’s mortgages and grocery bills by hiring employees who will have to be paid next month even if customers aren’t buying. These are brave, risky, steps. Someone following safe reason would simply get a job with the post office instead. We are very lucky so many of our fellow citizens prefer a more self-reliant course, for we are all beneficiaries of their willingness to shoot high, explore new paths, and walk the commercial tightrope without any guarantee of success or even safety.
Of course many of the Americans who shoulder the demands of business creation end up crashing. Each year, thousands of small businesses fail. Each year thousands more are launched. In a business downturn, an entire region like Houston can be knocked down hard. Yet, as Joel Kotkin outlines in his article on why some locales become business hotbeds while others don’t, Houston has bounced back—by sheer energy and force of will. That’s what entrepreneurs do.
***