Necessity is the mother of invention

There was an article on CNN today talking about entrepreneurs. The article begins by discussing the difficulty in quitting a project when it’s failing, but then goes on to discuss entrepreneurship in general, and it really hit home with me.

In a recession that has forced employers to eliminate 2.6 million jobs in 2008, people who might otherwise start a business at a time of their own choosing find themselves being pushed into entrepreneurship.

“More people often become self-employed in tough times like this,” said John Challenger, CEO of a top employment firm for executives and middle managers.

Between 5 percent and 7 percent of clients at Challenger, Gray & Christmas are choosing to start their own businesses, he said. Workers are more open to starting a small business in the dot-com era, Challenger said. “I think we’re in a more entrepreneurial period than we were in the ’80s and ’90s,” he said.

Recessions can be “crucibles” for at-home start-ups. “Some of the best new businesses start in recessions because what they have really makes a difference if the market is interested in it,” Challenger said. “There’s not a lot of easy money to go around, and they have to fight their way forward.”

More people often become self-employed in tough times like this. Recessions can be “crucibles” for at-home start ups.

I think this is one of the most widely ignored facts facing us right now.

I realize that my perspective as a young person is different from those older than me who had a lot invested in the current system. But this bailout business feels incredibly unfair to me, and here is why:

Protecting the old establishment protects big, lumbering companies that are otherwise dying. Letting the companies fight on their own to survive would mean many of those businesses failing.

However, when a big company like General Motors or AIG fails it doesn’t just disintegrate into nothing. The company’s assets and technologies are most likely to be split up and sold, and many businesses units will be spun off from the parent company.  Also, the many bright and talented individuals working for that company are not going to immediately and permanently become vagrants. In fact, history tells us, what happens to the displaced workers is very important.

Most will find new work, but many will not find excellent jobs immediately. Among those looking for new work, there will be a large number who come to the realization: “I have knowledge and skills that are unique, and I know how to put my knowledge and skills to work in such a way that will be much more profitable than working for someone else.” That group of people will embark on many different courses of action, many resulting in inventions, or the creation of new businesses.

A recession, a breakdown in the current economy, is the result of the old established businesses making enough mistakes to finally critically damage their corporate cash flow. I know that many businesses did not make the big mistakes internally, but rather played along with a financial system they were assured was safe, and got screwed. But businesses that are fundamentally sound right now are not failing, they’re hurting along with the rest of the country, they’re nervous, and they may even have to reduce their workforce, but they’re not failing left and right.

Weaker businesses and mismanaged businesses are the ones that fail. Overly agressive and risky businesses are failing. The “fat cat” tycoons who try to make money out of thin air, those are the ones who are being exposed. That power structure holds back opportunity, that power structure represses individuals ability to start up a new and better competitive venture.

Ironically, the Democrats are the ones who are promoting the bailout the hardest. I thought the Democrats were supposed to be the part of the people? I thought the Democrats hated big business, shouldn’t they be excited to watch these big corporations drown in their own greed?

Instead we’re propping them up. I understand that the justification is to “save the poor, helpless worker,” but come on. That’s garbage. I know what it’s like to desperately hunt for a job, I’ve been there, I understand. It’s painful. It’s difficult. I sympathize.

But the more the government props up the falling giant the longer the pain lasts. Opportunity comes from the chance to fill the vacuum left behind by the death of a tired old giant. New innovation, progress, revolution even, comes from the opportunity to begin anew.

And my generation is being denied that opportunity.

So the next time you hear a sob story about people having to find new jobs, try and remember this. Necessity is the mother of invention, those people will find or (even better) create new work. Their experience may be difficult, painful, exhausting, but they will persevere and they will survive!

The real sob story in this economy on life support is the millions of bright, young, entrepreneurial spirits whose big ideas would have opened a new generation of progress and prosperity, if only the old order would fade away.