A front page Wall Street Journal article (Risk averse culture infects U.S. workers, entrepreneurs) bemoans the lack of people willing to start businesses. Although the extent of the issue may be overstated, I firmly believe the trend is real and very damaging because it depresses the US growth rate and retards job creation.
There are many potential causes for this problem, and the WSJ mentions most of the main ones. I’m sure the GOP doesn’t see it this way, but from my perspective three of the national party’s main policy approaches are strong contributors to the problem:
- #1 is opposition to Obamacare. I’ve been arguing since 2007 (see When socialism is good for capitalism) that many would-be entrepreneurs are rightly frightened to leave their jobs because they fear they won’t be able to get health insurance due to pre-existing conditions. Massachusetts (which the article cites as a place that doesn’t suffer from risk aversion) addressed this problem with its universal health care law. Obamacare seeks to do the same on a national level. And in fact a new study estimates that 1.5 million additional people will become self-employed due to Obamacare
- #2 is opposition to immigration. If you’re an immigrant or worked with immigrants it’s completely obvious that as a whole they are more open to taking risks and becoming entrepreneurs than the native born population. We should welcome immigrants with open arms, especially those with skills and an entrepreneurial bent.
- #3 is opposition to the smooth operation of government. The willingness to risk default by not raising the debt limit was and is shocking and counterproductive. Uncertainty in the policy environment kills private initiative
There are areas where GOP positions are on the right side of this issue, in particular in limiting regulations and paperwork for entrepreneurs. But those issues are modest compared to the three I’ve mentioned.