2014-08-20

Differences Between Entrepreneurship And Self-Employment

The main difference is an entrepreneur gets capital, builds something up with the intent of selling it for a reward. For example, a contractor may build and sell single homes as a business.

Being self-employed means you create a job where you are your own boss. Where an entrepreneur doesn't have to concern him or herself with paperwork, administration, human resources and other functions that go into a running a business, a self-employed individual literally toils performing all tasks and functions for what often amounts to an average pay.

This is why I get absolutely apoplectic whenever I hear some idiotic, ignortant fuckhead talk as if small business owners are 'greedy capitalists' who somehow 'owe' something back to society because they are 'awash' in cash - 'les riches' as the left-wing nationalists say here in gibberish.

This is where government gets everything wrong. They go with this narrative and so, they come up with all sorts of regulations to 'curb' runaway capitalism. However, a funny thing happens on the way to unintended consequences. People simply don't go into business figuring it's not worth the headaches. Red tape alone is a massive financial and time-consuming burden for small business owners. The price to that is they can't focus on expanding, which in turn, creates more jobs.

It doesn't help that access to capital is very limited as well. A person has to put up their soul to get a small business loan. I went through hell to get one.

It's all about ensuring we don't profit as much and keeping us in check; particularly in Quebec.

And the results are plain and clear to anyone who cares to look. I don't think anyone will mistake Quebec for an attractive place for entrepreneurs to invest in. The taxes alone keeps them away. That's why all we seem to do here is put up condos.

Self-employment is a little difference in that there will always be people looking to open or start a business to earn some income off their expertise but even there, thanks to the racket of licensing and permits, the barriers to entry are superficially high.

***

Speaking of condos, I was in Philadelphia last week and part of the trip was to take in a Phillies game. Citizens Bank Park is a beautiful stadium to catch a ball game. Across the street there's Lincoln Field where the Eagles play and Comcast Center where the Flyers and 76ers share an arena.

Three world class sports facilities all in one setting.

I thought to myself this is a sports town.

Montreal?

We have the Bell Center where the Habs play politics. The Big O is empty and useless, Stade Saputo while a nice park for MLS is still a work in progress and hardly what one would consider world class and our professional football team doesn't even have its own field using McGill's turf instead.

As I stated back when the Expos left town. Montreal became a second-rate sports city when it lost MLB.

Bah. I digress.

****

Where was I?

Yes. The mentality is all wrong. The private versus subsidized daycare battle is a classic example of the free-enterprise system taking on a bureaucratic one wallowed in stale progressive ideas. All their efforts amount to is the plundering of the productive classes to pay for the sloths and opportunists.

I promise to stop digressing.

When you have Nobel prize laureates like Krugman who has argued in the past that saving (hoarding! He pimps the myth that rich people put money under their mattress when in fact all they do is look for ways to invest it) disrupts the cycle of consumption, you kinda get why (in concert with higher taxes and ever-increasing cost of living) we're mired in a stagnant mess. 

The trouble is there is no political will to fix or adjust what ails us. Politicians get into the field not to serve citizens but to get a pension and paycheck as well as get all the contact needed to start their own thing later on. The career politician is not going to risk anything for something like this.

Add to the mix the rise of the sense of entitled class addicted to instant gratification, government policies that itself is hooked on punitive policies that hurt those who work, save, and invest and you get one runaway train that when it runs out of track will leave one disastrous footprint.

****

Quick word on investment. Investment is not a rich man's game. It's a smart person's game. So to go on air, or write a letter to the editor or to proclaim at a dinner party pretending you're so fucking smart about 'we need to tax capital gains and dividends' remember one thing. Companies, where the majority of the middle class work, invest their financial capital in either themselves through buying back stock, paying off debt, or in some cases pensions. Just as critical, they look for capital to expand.

Expansion is another part of the equation progressives don't seem to understand. In order to expand, one needs capital. If capital is squandered through excessive wage mandates, pensions and taxes, there will be little left to expand. Notice, I said excessive where unions make unrealistic guaranteed demands. See GM. Expansion is a huge component to a healthy economy. People want jobs. Jobs give income. Income affords a life and it can lead to investment.

The returns made by people in mutual funds belong to THEM. In my view, there shouldn't even be any taxes on risk taken by investors regardless of class, income, race, religion whatever.

Taxing their rewards is confiscatory and only serves to prevent them from building wealth. Income builds wealth. Wealth is not money.

It drives me up the wall to listen to financially illiterate fucksticks talk about taxing people's money without a care about the impact because 'greater good' and 'pay fair share' and 'welfare.'

They seem incapable of considering how destructive this is.

Leaving investment income alone and letting companies do what they do best which is to expand and create jobs, is the BEST way to keep people off the welfare line.

Sorry if it's all disjointed but I think you get the picture.

One last thing, it's difficult for people to understand inflation and buying power of a currency. The famous analogy of the 'pie chart' is a prime example. Whenever you read liberal interpretations of the economy, they speak as if the pie chart is a fixed, zero-sum phenomena. It fits neatly into their '1%' narrative I guess. It's ludicrous because they talk as if a middle-class individual can't 'graduate' into the upper-class. People move about the classes all the time.

The size of the pie is not fixed and the figures that go into it are ever-changing.  It only stagnates when it faces heavy regulations. An economy that creates real value will expand a chart into infinite sizes and pieces. When that happens, everyone's cut increases. Not just one component or segment.

The key is to keep that pie expanding. 

/blank stare. But...Taxes!!!

Thus concludes our lesson.











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