Entrepreneurs & Social Change Capitalizing on Flexibility, Market Niches & an Evolving Future by Freeland Chew Even a superficial glance at the condition of the Republic suggests that the very large changes that have been experienced in the past generation will continue, and probably accelerate. Huge structures, both economic and social, have been built upon assumptions that are no longer valid, if they ever were. On the social side, the State's presumed ability to manage society, the favored treatment of select groups and an educational system devastated by political control are all wilting under the white heat of an objective analysis of their philosophic basis — an appraisal brought about by manifest failure. Economically speaking, distortions born of damaging political meddling with history's finest capital structure, the conscious debasement of our currency by the Federal Reserve, rapidly rising taxes of a State finally beginning to comprehend the size of its bills, the collapse of Franklin Roosevelt's war economy and the changing consumption patterns of an aging baby-boom generation, all portend an historic economic restructuring. During times of rapid change — times such as these — independent-minded entrepreneurs become possibly the most important element in society. For they are the people who recognize the gap between what goods and services are being provided and what is, in fact, actually needed; and it is they who undertake the challenging task of anticipating future demand. It is entrepreneurs who lead us from our current condition into an evolving future. It is entrepreneurs who embrace the change that causes more plodding intellects to freeze like deer in a car's headlights. There is more to entrepreneurship than meets the eye. For economics, properly understood, is the cumulative result of the individual actions of large numbers of humans. Since human action is based upon value judgments (people act to acquire or achieve that which they value), economic behavior reflects the personal, deeply felt mores of an entire society. Clearly, the essence of economics is substantially greater than profit, loss and the resulting material wealth. Thus entrepreneurs, far more than merely residing on the cutting edge of economic change, derive their understanding of the market from the personal values of their potential clients. Obviously, their role is of considerably greater significance sociologically than a superficial comprehension of economics would suggest. The rewards of entrepreneurship are deservedly high for those able to handle the associated failure rate — for predicting the future is always a risky undertaking. And substantial inherent hazards are magnified today by the calcified condition of the American economy. Wages are propped up by long-term contracts and government regulations, a horde of bureaucrats chokes all innovation that isn't explicitly detailed in their procedures, and unprecedented debt loads often preclude the low overhead conditions needed by startup enterprises. This issue of debt and money subsumes other problems as well. The precipitous fall, and the potential for even a greater drop, of the currency dramatically complicates the job of the entrepreneur. Wealth and money are in the process of having their natural relationship severed as international markets move to identify a valid medium of exchange needed to replace the decaying American Dollar. Today's entrepreneurs must perceive and respond to the values of Americans while living in a financial house of cards swaying precariously in an increasingly powerful wind. At this historical juncture, it is important for entrepreneurs to separate wealth and money. Again, we find that entrepreneurs are concerned with values. That which furthers human life is valued, and what is valued is labeled wealth — a concept considerably larger than, but still encompassing, money. Thus, wealth will always be sought. Today's money, however, can easily be repudiated. Thus entrepreneurs in the near future may have to function in an economy where informational feedback offered by the price structure is badly distorted by a debauched currency. Russia is experiencing this very problem at present. Since today's money cannot be trusted to remain for long a claim on wealth, individuals desiring to produce, acquire or preserve wealth must increasingly deal with it directly. To identify wealth, consider what is valued today; and more importantly, what is likely to be valued in the 21st century. Food, water and shelter are obvious. While this is no survivalist tract, those who do not put some thought into these fundamentals are standing at the gambling table, probably without realizing it. Capital, stored work, is also critical — and will be valued. America has been consuming capital at prodigious rates for quite some time. As a result of policies with misguided social ends, and policies with militarist ends, a fantastically large amount of capital is mar-invested, as the Southern California war industry is so painfully learning. Capital that can resist becoming plundered or disorganized under a chaotic liquidity squeeze will increase in value as the supply of appropriately organized capital shrinks. The picture is not totally bleak, however. Modern technology has made the storage and transmittal of information incredibly inexpensive and efficient. The modern entrepreneur is blessed with an ability to communicate with his/her potential market in ways never before conceived of. The very diversity that so frustrates both large private organizations and the government contributes to an almost infinite number of market niches that can be identified and accessed by modern methods. For example, the specialized magazine market that is the bane of generalist writers like me, classifies a large number of readers by their interests. From Mother Earth News to Guns and Ammo to High Times the narrow focus of these periodicals leaves no question as to which subjects hold the interest of their readership. In effect, highly useful marketing studies have been done for the would-be entrepreneur. The problems of large organizations posed by diversity are exemplified by Microsoft, the software giant. Moving from a lean, highly profitable market niche to a burgeoning corporate giant, Microsoft has found its freedom to adapt to market conditions hindered by its own growth. It suffers large product delays and is the recipient of government harassment. This is not to say that Microsoft isn't a leader in the world of business — it is. But like an athlete going to seed, the company has proven unable to react in a manner comparable to its earlier days. And this author strongly suspects that Bill Gates is having far less fun than he used to. The experience of Apple Computer is similar. Without question, this situation works to the advantage of the quick-hitting, flexible entrepreneur. The more rapid becomes our sociological change, the greater the successful entrepreneur's advantage and potential profit. Above all, remember that knowledge is required to create So be an entrepreneur. Think about what individuals want that is not being adequately provided. In light of cur rent events, consider the services offered by government that are decreasing in quality and quantity. Education jumps immediately to my mind; so does personal security. The Post Office would seem to be on its last legs. There are, no doubt, countless others. In particular, education seems to hold a fantastic potential for those expecting rather than escaping the future. Given the circumstances of modern education, this is a huge field. The school system is turning out functional illiterates at a remarkable rate. Yet, somehow, some way, these miseducated Americans will have to survive, and even function, in the future. Teaching them the skills they will need is likely to become a major enterprise if the nation is not to descend into third-world status. The historic changes already underway in our society can be seen as the market reclaiming some of the areas of life that the State appropriated to itself. And education is one of the largest. Above all, remember that knowledge is required to create wealth. Educate yourself, and continue to do so. The whole question of knowledge today centers around the difference between data and information. The world is awash with confusing, contradictory data that are revised several times, becoming old in the process, before they are finally accepted. And since the assumptions and procedures that underlie the initial collection of data are unappreciated, almost nobody knows what it means. Knowledge, on the other hand, implies clearly identified data that is relevant to the case to which it is being applied. One has only to watch Alan Greenspan standing before Congress and dissembling about the state of the economy to recognize the difference between data and knowledge. We live in what is widely recognized as an information society, so much so that businesses are often overwhelmed by it. The successful entrepreneur today is one who can cut through the confusing noise of data overload and focus on what is truly relevant and important. The importance of knowledge, as opposed to data, cannot be over-stressed. Knowledge can become antiquated, of course, but unlike wealth, it cannot be destroyed or taken from you. Don't be afraid to be a generalist. Our age is badly overspecialized. Literally millions of highly intelligent people have pursued knowledge along a narrow path. Should that path prove to be an intellectual dead-end, or be dependent on mar-invested capital (again, defense scientists and engineers highlight the point, as do municipal planners and real estate agents), the potential for the total collapse of their field is very real. Eras such as ours are dominated by great change. There is great opportunity inherent in the restyling of our world. But one must look closely at what is going on. Do your own thinking. Reexamine all your assumptions every Monday morning. The folly of experts throughout history is staggering, if not often discussed. If you doubt this, go read some five-year-old newspapers. Or consider the bureaucrat in charge of the Patent Office in the days of Woodrow Wilson who told Congress his operation should be shut down. His reasoning? Everything that would ever be invented already had been. Rapid change, by definition, means that major institutions in society will undergo unexpected alteration or even eradication. It also suggests that those whose voice speaks for such institutions enjoy much less comprehension about the world than their position would suggest. Listen closely to an Ivy League philosopher talk about reality, or a Federal Reserve banker discuss the economy, or the President expound on the Balkans. Do they make sense? If you think not, go your own way. Bibliography: Dolan, Edwin G., The Foundations of Modem Austrian Economics, Sheed & Ward, Mission, Kansas Rothbard, Murray N., America's Great Depression, Richardson & Synder, New York Rothbard, Murray N., Power And Market, Sheed Andrews and McMeel Inc., Kansas City Sennholz, Hans F., Age of Inflation, Western Island, Belmont, MA Smith, Jerome F., The Coming Currency Collapse, Bantam Books, New York Freeland Chew has his Bachelor of Science in Electrical Engineering and a Master of Science in Systems Management. He has been a student of history since the age of 12, when he discovered Winston Churchill's History of the English Speaking Peoples in his father's library. It was from a serious and self- directed study of American history that he developed the individualism that characterizes his perspective on events current and past. He lives in Mammoth Lakes, California, where he and his wife own an art gallery and home school their two young daughters.   Table of Contents | 1995 Issues | Subscribe Truth Seeker | Feedback | Freethought.com Webmaster Credit card Orders call: 800-321-9054 or fax: (619)676-0433 Or send check or money order to: Truth Seeker / 16935 W. Bernardo Drive, Suite 103 / San Diego, CA 92127 $20.00 annual U.S. subscription ($35.00 international). Individual issues—$10.00 + $2.50 postage and handling Or be a committed freethinker and send $35.00 for a two year subscription. Truth Seeker is published by Truth Seeker Co., Inc. (ISSN 0041-3712) © 1996