Monday, July 23, 2012

Are We A Few Heros or a Society

Drucker Institute tweet: "Does government tax policy “prevent and penalize” entrepreneurship? Weigh in!" On their post: Who Really Built This Blog Post?
President Obama, speaking to an audience last Friday, said the following: “Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that.” In response, Romney, highlighting the line “if you’ve got a business, you didn’t build that,” has called Obama’s words “insulting to every entrepreneur, every innovator in America.” To insinuate “that Steve Jobs didn’t build Apple, that Henry Ford didn’t build Ford Motor, that Papa John didn’t build Papa John’s Pizza,” Romney added, is “wrong.” ... What do you think: What’s the best way for the government to foster entrepreneurship?
I think far worse than any of the taxes is the extremely bad job that has been done with the health care system. Deming noted this as one of the 7 deadly diseases over 3 decades ago and it is in much worse shape today. Costing twice as much as other rich countries with no better results is bad. Since the costs are so large they are huge barriers to entrepreneurs.

Even worse for entrepreneurship though is the poorly designed system where 1 employees medical expenses can cause serious damage to small companies. And the poorly designed system that makes it difficult to get coverage for previous conditions - which greatly increase the cost (in risk) of changing jobs, starting your own new business…

The recent reforms did help some, but it is an extremely small step after 3 decades of failures and making things worse. There is so much more that needs to be done. The costs and uncertainty related to health care are likely the most critical problem for entrepreneurs. Another contender is liability costs (yet another one of the decades old deadly diseases). 

The next contender is the broken patent and copyright system (which I think of as one of the new deadly diseases - along with excessive executive pay). I would put all of these far ahead of tax system issues for entrepreneurs. The biggest thing government can do is fix the 3 deadly diseases I mentioned above. People like Jobs (and Wozniak), Henry Ford, Larry Page and Sergey Brin are extremely valuable to a society. They make great contributions. Thinking they are therefore the reason for Apple, Ford and Google's success is ludicrous. They contributed. They contributed a lot. Dump them in Mali when they were born and they would not have created those companies as adults.

Saying that society doesn't play a huge role is false (a failure to understand systems thinking). Saying governments role is the same as societies also shows a poor ability to reason. The good things that Jobs, Gates, Bezos... are related to government in some ways but are much much more related to the entirety of growing a business in the USA. Inside those companies many others helped make the organizations a success.

Certain individuals do have an amazing ability to create successful systems. Again they can't do it themselves. They need other people. Granted a few of these leaders are extremely special. 95% of CEO's are decent at their jobs (or even not that good at their jobs) but replacing them with any of hundreds of other people would make little difference. But those CEO's all think they are more like Steve Jobs - they are not.

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