1. THE ENTREPRENEUR AS HERO
Remember the infamous Iran-hostage “crisis” that ended after 444 days on January 20, 1981? With Jimmy Carter spending more than a year trying to figure out how to tie his shoelaces, the Evil Eye of Iran—Ayatollah Khomeini—had things pretty much his way.
But twenty minutes after Ronald Reagan was sworn in as president, Khomeini apparently started envisioning a nuclear cloud over Iran for the next four hundred years and decided to release the hostages. Like every other American, I was happy for both the hostages and their families.
Nevertheless, when the media started portraying them as heroes and New York held a ticker tape parade for them, I was puzzled. You happen to be in the wrong place at the wrong time, and you’re hailed as a hero? Really?
Heroes are people who accomplish extraordinary feats under extraordinarily difficult circumstances, such as the firefighters who marched into
the World Trade Center towers, in an attempt to save lives, while everyone else was scurrying to get out.
But there’s another kind of hero—one who makes a living accomplishing extraordinary feats under extraordinarily difficult circumstances, day in and day out. The hero I’m referring to is an individualist known to all as the Entrepreneur
The central focus of this book is twofold: (1) to explain what it takes for an Entrepreneur to succeed and (2) to demonstrate how government meddling in the economy gets in the way of his creating products and services that people want—at the lowest possible prices.
Why the Entrepreneur to the exclusion of all others, such as employees, who also contribute to the growth of the economy? Because the Entrepreneur is perhaps the most misunderstood and underappreciated human being on earth.
Entrepreneurs come in all sizes, shapes, colors, genders, and ethnicities. Steve Wynn (gambling resort hotels), Howard Schultz (Starbucks), and, of course, Donald Trump are billionaires, but their lofty level of success doesn’t strip them of their hero status as Entrepreneurs. When it comes to entrepreneurship, Wynn, Schultz, and Trump just happen to be size extra-large. Thus, while virtually all small businesspeople are Entrepreneurs, not all Entrepreneurs are small businesspeople.
However, when I use the term Entrepreneur
in this book, unless otherwise stated I am referring primarily to the small-to-medium-sized Entrepreneur whose day-to-day eating habits are directly tied to what he produces. Unlike the salaried worker, the Entrepreneur has no safety net. He gets results or he starves.
It is not surprising that so many of our heroic Founding Fathers were Entrepreneurs. Perhaps the two most famous examples are George Washington and Thomas Jefferson. They are also good examples of just how far apart the results of individual Entrepreneurs can be. Though they were both farmers, Washington was one of the richest men in America, while Jefferson struggled financially throughout his life and died broke. But Jefferson’s financial difficulties never dampened his enthusiasm for entrepreneurial pursuits, which resulted not only in the building of his beloved Monticello estate, but also in the establishment of one of America’s most prestigious institutions of higher learning, the University of Virginia.
Being an Entrepreneur isn’t for everyone. It takes a special combination of character traits: self-confidence, courage, boldness, self-reliance, resourcefulness, and persistence, to name a few of the more important ones. The Entrepreneur thrives on challenges and risk-taking. He is willing to venture outside the conventional-wisdom box, and his success is critical to his nation’s prosperity.
Before I go further, let me make it clear that nothing in this book is meant to detract from the economic contributions of hundreds of millions of employees throughout the world who put in an honest day’s work for an honest day’s pay. Choosing to be an employee rather than an Entrepreneur is just another route to getting what you want in life.
As a general rule, an employee has less upside potential and more security than the Entrepreneur, while the Entrepreneur, at least in theory, has unlimited upside potential but little, if any, security. Where people get into trouble is when they want it all—the biggest upside potential coupled with rock-solid security. The nature of the marketplace—at least on planet Earth—makes these two objectives totally incompatible.
I would also like to point out that employees are not
“associates.” When the Walmarts of the world call their employees “associates,” it is just another of the thousands of politically correct, Retrogressive ploys used to move us toward a utopian society where everyone is equal.
Personally, I find this practice insulting to the intelligence of employees. During my short stints as an employee in my younger years, I knew
I was an employee, and I was quite happy to be one. I wasn’t interested in being humored with a politically correct title. My focus was on doing the best job I could do in the hopes of getting a pay raise. Please, Retrogressives, spare us the “associate” stuff.
But here’s the nice thing about living in a free country. (Hopefully, you’re old enough to remember living in a free country.) A person can start out as an employee—and most people do—then, when he believes he’s ready, he can choose to leave his job and go into business for himself. The advantage in doing this is that when he leaves, he takes with him all the knowledge and skills he accumulated while being paid to do his job.
Striking out on one’s own is a risk-reward choice, and, in a free society, it’s a choice that’s open to everyone. Under capitalism, it’s possible for anyone to start as a low-level employee and rise to the top through his own efforts. Some people start out as employees, strike out on their own, fail, and return to the job market—either temporarily or for life. Others, like Wynn and Schultz, go on to great entrepreneurial success—even becoming billionaires.The Ticket Scalper
One of my favorite Entrepreneurs is the ticket scalper. He doesn’t need an office, employees, a formal education, or specialized skills. His main assets are his willingness to hustle and take risks. He epitomizes what the free market is all about. He is living proof that a black market is nothing more than the free market asserting itself in the face of government oppression.
The ticket scalper acquires his inventory at the lowest possible prices, then sells at the highest prices the market will bear. If a ticket scalper works hard at his craft and is blessed with a bit of good luck, he can make a substantial amount of money. But when myriad factors go against him (weather, for example), he can end up going home with a handful of worthless tickets. Thus, the ticket scalper’s success is far from guaranteed. His is the risk-taking life of the Entrepreneur.
One other point worth mentioning about ticket scalpers: A majority of them are African-Americans. That’s scary, right? I mean, what would you do if one of those tough-looking dudes refused to give you the correct change or even sold you counterfeit tickets? No wonder ticket scalping is technically illegal outside virtually all stadiums and arenas.
To the Retrogressive who believes that government regulation is necessary to protect consumers from ticket scalpers—primarily black ticket scalpers—I have bad news for you. In the scores of times I have dealt with ticket scalpers over the years, I have never been cheated out of a dime. Not even once.
In fact, in every case I can think of—no matter how heated the haggling became—once our transaction was completed, the ticket scalper has never failed to cheerfully say something to me like “Enjoy the game.”
A ticket scalper knows that if he isn’t totally honest in his dealings with the public, he will soon become an outcast among his peers. Like insurance companies and banks, ticket scalpers have to protect the reputation of their industry. Free-market self-regulation beats government regulation every time. No exceptions.The Street Performer
I recently returned from speaking at an investment conference in New Orleans. On the Sunday that the conference ended, my wife and I walked around the French Quarter and watched some of the street acts. What struck me was that the people who put on those acts, much like ticket scalpers, are engaged in unfettered capitalism—and most of them are black.
On one street corner we came upon a somewhat rotund, middle-aged woman by the name of Doreen Ketchens, who was alternately playing the clarinet and singing. Her talent at each was as good as any I have ever seen. Her rendition of “Stormy Weather” sent chills up my spine.
Listeners who were so inclined put money in her basket to show their appreciation. And as I watched cash flowing into the basket, it occurred to me that the perverted mind of the Retrogressive might see this as a degrading way to make a living. But I saw it as very dignified work, which was evidenced by Doreen’s proud demeanor. Plain and simple, Doreen Ketchens engages in free-market transactions with consenting adults. No government bureaucrats need intervene, thank you.
And she is just one of the many remarkably talented acrobats, comedians, singers, and musicians—most of them black—who prefer entrepreneurship in the French Quarter to government handouts as a way to get what they want out of life.
Isn’t it amazing how consenting adults are able to transact business with one another without government involvement? It boggles the imagination to think about how the marketplace would explode with economic activity and jobs if the government would just stop regulating, taxing, and giving people incentives not to work—in short, if the government would get the hell out of the way. I’m referring here to nothing less than a totally laissez-faire economy.
The truth is that the Retrogressive does not want blacks to be too well off. After all, what would he and his bureaucratic cronies do for a living if there were no more poverty? The black Entrepreneur is anathema to the far left.
The antithesis of the Entrepreneur is government employees, most of whom perform services that people do not want or that can be done better, and more efficiently, by the private sector.
Nevertheless, honesty compels me to be somewhat of an apologist for government employees. Most, I believe, are simply victims of the Retrogressive’s big-government trap. Weaned on the notion that government is inherently good, and that government services are necessary in order to implement certain vague notions of “fairness,” they truly believe they are engaged in the noblest of all professions: public service.
They do not realize that they are being used as pawns—voting pawns. As the Retrogressives in all three branches of government continue to mislead and obfuscate in an effort to decrease employment in the private sector and increase government employment, they get ever closer to their decades-long goal of securing a foolproof, permanent majority of voters—which translates into perpetual power.The True Entrepreneur
When I use the term Entrepreneur
, I am referring to a true
entrepreneur—an entrepreneur who does his best to avoid government favors and financial largesse to advance his agenda. I say does his best
, because the cards are stacked in such a way as to force everyone to rely on government to one extent or another.
A perfect example of this is roads and highways. Since virtually all roads and highways are government owned, even the most staunch libertarian has no choice but to use them. A Retrogressive would therefore take great delight in calling such a person a hypocrite. This is an old trick used by the “gotcha” Retrogressive: Have the government take control of the postal service, healthcare, etc.—then wave aside the libertarian-centered conservative as a hypocrite for using these government-provided services.
Yes, all Entrepreneurs use government-provided services at one time or another, but that doesn’t change the fact that, left alone to do what they do best, they grow the economy, provide jobs, and—through the “invisible hand of the marketplace”—improve the lives of millions of people whom they will never even meet. In fact, when it comes to jobs, anyone who watches the news knows that small-business owners create 75 percent of all new jobs in America. Take a look at these eye-opening statistics:By themselves, the goods, services and technology produced by American small businesses make up the world’s third-largest economy, after the United States and Japan. Small companies represent 99 percent of all U.S. businesses and employ more than half of the American workforce. According to the U.S. Small Business Administration: Small businesses pay more than 44 percent of the nation’s private payroll. More than 50 percent of the U.S. private gross domestic product is generated by small business, and almost 97 percent of exporters are small businesses.1
America’s Entrepreneurs have managed to do all this on their own, relying as little as possible on the government.
Another thing that distinguishes the true Entrepreneur from the average individual who trades hours for dollars is that he tends to be impatient—especially when it comes to being slowed down.
I’ve come to grudgingly accept the fact that most people are urgency challenged. Which is why, in today’s world, the individual who displays a sense of urgency stands out like a thinking person at a Barack Obama rally. A lot of people take umbrage at this sense of urgency, because it gets in the way of their enjoying their favorite reality TV shows and weekend sports telethons. Folks who want things done sooner rather than later irritate them no end.
Why is sooner rather than later so important? Because every one of us has to deal with an irreplaceable, finite commodity known as time
. The entrepreneurial mind gets this; the nonentrepreneurial mind does not. The Entrepreneur’s mind-set is: “Just get out of my way and I’ll do it myself!” The Entrepreneur doesn’t want to know what someone else is going
to do. He wants to know what he’s done
. He knows that spending hours each night kicking back and enjoying life may be a great way to reduce stress, but it does nothing to create wealth or jobs.
I can’t tell you how many deals I’ve closed, how many projects made it through the open window, because I took action one month sooner, one week sooner, or one day sooner. Even an hour—sometimes even a minute—can be the difference between success and failure. This makes urgency one of the many traits that make the Entrepreneur so invaluable to the wealth of a nation, a trait that sets him apart from the nine-to-fiver.
In the Preface to Stephen M. R. Covey’s book The Speed of Trust
, his father, Stephen R. Covey (of Seven Habits
fame), makes this remarkable statement: “My interactions with business leaders around the world have made it increasingly evident that ‘speed to market’ is now the ultimate competitive weapon.”
Just think about that for a moment—the ultimate
competitive weapon is speed. The
most important thing an Entrepreneur can do to win out over the competition is get his product to market fast
The Entrepreneur instinctively knows—or learns quickly through experience—that it’s not how much money he makes, but how much money he makes in a given period of time. Say that two people each make a million dollars. One makes his million dollars in a year’s time, while the other makes his million over the course of a forty-year career.
The latter person would have had an average annual income of $25,000—well below the poverty line. But the one who made his million dollars in a year is in the top 1 percent of income earners.
The Entrepreneur’s sense of urgency is the antithesis of the union worker’s mind-set. The Entrepreneur tries to deliver more value in less time. But a union worker who tries to work faster than his comrades is soon called on the carpet by his supervisor. Working too fast makes everyone else look bad, so labor unions insist that their members pay close attention to official signals for coffee breaks, lunch breaks, and quitting time. Sure worked out well for GM and Chrysler, didn’t it? If the Entrepreneur thought this way, we would still be living in the Stone Age.
Andy Stern, president of the SEIU, one of Barack Obama’s favorite Marxist organizations, and a frequent visitor to the White House, likes to mug Karl Marx by saying, “Workers of the world, unite” is “not just a slogan anymore.” But Entrepreneurs have no interest in uniting. They’re too busy creating wealth—wealth that the SEIUs of the world expropriate to feed their flocks of nonproducers.The Issue of Trust
Am I suggesting that we should consider all Entrepreneurs heroes? Of course not. There are crooked Entrepreneurs out there, just as there are crooked employees, crooked clergymen, crooked athletes, and—alert the media!—crooked politicians.
Tony Rezko was an Entrepreneur who apparently made a lot of money through political connections (as a prominent fundraiser for then-senator Barack Obama and Illinois governor Rod Blagojevich) before being convicted and sent to prison for fraud and money laundering. A dishonest Entrepreneur… and definitely not a hero.
Bernie Madoff, too, was an Entrepreneur in that he organized and managed an enterprise with considerable initiative and took great risks—one of them being the risk of going to prison for life! But he was a dishonest
Entrepreneur who defrauded people out of billions of dollars. Definitely not a hero.
I believe that the honest Entrepreneur has an inherent belief in liberty, while the dishonest Entrepreneur often believes in tyranny (e.g., using government force to gain an advantage over his competitors in the marketplace). It is the dishonest Entrepreneur who is the black sheep of an otherwise proud culture of heroes. Those who use government to gain an advantage in the marketplace bring dishonor to the good name of the Entrepreneur.
But let’s be careful here. I’ve seen more than one falling out between two parties to a business deal where each believed that the other person acted dishonestly. One man’s entrepreneurial saint is another man’s entrepreneurial sinner. The difference can be, and usually is, in the eyes of the beholder—or is decided in a court of law.
So just because one or more people believe that an individual is dishonest doesn’t mean he is. I feel obliged to make this point because too many far-left types seem to believe that anyone who becomes wealthy through the capitalist system does so only by “exploiting” others. The notion of a hardworking Entrepreneur becoming wealthy by providing great products and services at prices his customers are willing to pay undermines their belief in the supremacy of the state. That being said, throughout this book you can assume that whenever I use the term Entrepreneur
, I am referring to the honest
In The Speed of Trust
, Stephen M. R. Covey takes the speed issue a giant step beyond his father’s statement that “speed to market” is now the ultimate competitive weapon. He says that the greatest catalyst for speed is trust
. Where there is a lack of trust, says Covey, everything takes longer and costs more. And he’s absolutely right. In today’s fast-moving world, it’s speed, not size, that carries the day—and, as the tired cliché goes, “levels the playing field,” giving David the best chance he’s had against Goliath since he used that homemade slingshot. After all, isn’t it a lot faster and less expensive if you trust someone enough to make a deal on a handshake rather than having to bring in a brigade of problem-finding, fee-building attorneys to cross the t’s and dot the i’s?
Covey emphasizes that it’s not so much how people act in the presence of others, it’s what they do behind the scenes. (Anyone who doesn’t understand why this is so probably shouldn’t be reading this book.) And the successful Entrepreneur instinctively realizes that it’s in his best interest to strive for consistency between what he says and does behind closed doors and how he presents himself in public. As I mentioned with regard to ticket scalpers, the Entrepreneur cannot afford the cost of not being trustworthy. So, sorry Retrogressives, but most Entrepreneurs are honest.Entrepreneurial Traits
As I said earlier, Entrepreneurs come in all sizes, shapes, colors, genders, and ethnicities. Some Entrepreneurs believe in God; some are atheists. Some are kind and compassionate; some are ruthless. Some display great civility; some are uncouth. Some are faithful to their spouses; some are philanderers.
Each Entrepreneur is a unique human being with his own moral standards and his particular set of human frailties. As with Christians, Jews, Hindus, men, women, blacks, Hispanics, and people of all ethnicities, certain generalizations are valid. But each individual
With that caveat, I would like to point out some generalizations—repeat, generalizations
—that I believe to be valid for most Entrepreneurs. To name but a few of the obvious ones, Entrepreneurs generally believe in hard work, long hours, short-term sacrifice to achieve long-term gain, the power to control one’s own destiny, and individual sovereignty.
Thus, the true Entrepreneur is everything the collectivist is not—self-sufficient, a risk-taker, and an individualist. Unfortunately, these traits make him the target of jealousy, vilification, intimidation, bullying, and even blackmail.
The Entrepreneur is driven by the desire to create wealth for himself. So how does that make him a hero?
For one thing, successful Entrepreneurs stay in business. As a result of their pursuit of profits, they create more jobs, produce more products and services that people want, and do the one thing that government can never
do: stimulate the economy. It is just one of the many reasons capitalism results in a better life for the greatest number of people, which I will discuss in great detail in Chapter 4.
Is there anyone in this day and age—even the most ardent Retrogressive—who does not understand this self-evident truth? Scary to contemplate, but, yes, I believe there are millions of folks who do not understand it—most of them well-meaning but ignorant. Even so, they are no less dangerous to the well-being of a nation than those who are informed but malevolent.
Further, the successful Entrepreneur pays more taxes than the average worker, but don’t tell that to those who want to control everyone’s life through a corrupted web of government largesse. And, as Arthur Laffer demonstrated decades ago with his famous Laffer Curve, lower taxes stimulate economic activity, which in turn increases both the profits and
taxes paid by the Entrepreneur.
All well and good, but doesn’t the Entrepreneur always act in his own self-interest? Absolutely! And so does everyone else in this neck of our galaxy. Do you believe that politicians do not act in their own self-interest—that they do not pass laws and regulations intended to keep themselves in office and live luxuriously at the taxpayers’ expense?
Likewise, spreading what they believe to be the spiritual truth makes clergymen happy. When they do so, they act in their rational self-interest and, like the Entrepreneur, make others happy in the process.
Adam Smith’s “invisible hand” doesn’t just bring about wonders in the marketplace. It works in all areas of life. If the Retrogressive would just stop trying to play God by carrying on a nonstop fight against universal law, life would be so much easier for everyone.
The fact is that self-interest is neither good nor bad. It’s simply a human trait. The Entrepreneur acts in his own self-interest by producing goods and services that other people want, which he hopes will increase his own wealth and well-being.
Those who are parasitic—who live off the efforts of others—also act in their own self-interest. The former is an example of rational
self-interest, while the latter is an example of irrational
self-interest. The Entrepreneur’s self-interest is a benefit to society as a whole, while the self-interest of those who are parasitic is a drag on the economy and the productive efforts of others.
For this reason alone, even if you’re not an Entrepreneur, you should cheer for the success of those who are. The Entrepreneur is not your enemy; he is your friend. Not because he wants to control your life, but because he understands that the best way to get what he wants is to give you what you
The Entrepreneur knows that if he does not give you the best products and services at the lowest possible prices, his competitors will be more than happy to win your patronage by doing so. How do you think big, bad Walmart got to where it is today—by selling inferior products and services at the highest
possible prices? Sam Walton is a great example of an ambitious, hardworking Entrepreneur who ended up building a goliath company by giving people what they wanted.
By creating jobs and stimulating the economy, the Entrepreneur helps the underprivileged more than any politician or government program could ever hope to do. This alone makes him a hero in every sense of the word. It also makes him the enemy of the Retrogressive, because it undermines the Retrogressive’s agenda for achieving power over others through government wealth-transfer programs.
Though it’s difficult for well-meaning do-gooders to understand, most politicians are not interested in helping the underprivileged. Rather, they see them as faceless, expendable, less-than-human creatures who not only can be bribed into voting for them, but can be used for photo ops when needed. (Jimmy Carter and John Edwards come quickly to mind.)
Perhaps John F. Kennedy’s most memorable statement was “And so, my fellow Americans, ask not what your country can do for you, ask what you can do for your country.” Sounds patriotic, to be sure. But many an innocent person has been led down the road to serfdom by such high-sounding sloganeering. Kennedy’s statement is one that deserves a full-fledged debate by those on both sides of the issue, so, to avoid getting sidetracked, we’ll leave that for another day.
The reason I bring it up here is that it gives me a platform to present my view of how the Entrepreneur best serves his country. In my opinion, the most valuable contribution anyone can make to his fellow man is to produce products and services that others want and, as a result, not only be a self-sustaining individual but, in the process, create jobs and stimulate the economy. I emphasize the words as a result
This is what the Entrepreneur excels at, and why he can feel proud in the knowledge that he is among those individuals on our planet who are not adding to its problems. It is, above all else, what makes him a bona fide hero.
Unfortunately, the government harbors great disdain for the Entrepreneur, especially the small Entrepreneur. Why? Because he is stubbornly independent. He doesn’t need or want government help. The Entrepreneur makes his own way in the world.
In a truly free society, it would be difficult enough for the Entrepreneur to make a profit. Much like an orchestra conductor, he has to be on top of every aspect of his enterprise. He has to make sure that every employee is doing his job correctly.
And when he goes broke—as millions of small businesspeople have done—he often feels like all he has to show for his work is that he provided a lot of good jobs for his employees for an extended period of time. They go on to the next job, while he goes on to face his creditors.
Ironically, the Entrepreneur’s biggest threat is also his biggest employee—the government. I say biggest employee
because the government is supposed to work for him
. It says so in that antiquated little piece of work called the Constitution. But those who hold the reins of power don’t much care about the Constitution.
As a result, the government taxes the Entrepreneur at every turn, regulates him to death (often literally), and relentlessly harasses him. Rather than being his humble servant, the government has transformed itself into the natural predator of the Entrepreneur.
* * *
Some people marvel at how far mankind has advanced in such a short period of time. But what they marvel at is not a reflection of his true potential; it is his true potential minus
government interference. It is hard to fathom where mankind might be today had government never been allowed to go beyond its original purpose of protecting the lives and property of its citizens.