Today at the FEE (Foundation for Economic Education), Zachary Slayback has an excellent overview of the decline in entrepreneurship among those under 30 since the late 1980s. He writes,
Between local, state, and federal regulations placed on everything from who is allowed to braid hair to who can tell you what color to paint a wall and where to place a door and a schooling culture and system that encourages young people to waste away the first 22-30 years of their lives away from the market, the systems placed upon young people today create a climate extremely hostile to entrepreneurship and economic growth.
Regarding barriers to entry (like our egregious state occupational licensing laws), I presented a paper in April at the APEE (Association of Private Enterprise Education) annual conference in Las Vegas on the subject, offering a theological and moral analysis. Particularly relevant to Slayback’s detailed post, I wrote,
we may note that those who look at such barriers to entry and, nevertheless, find innovative ways to compete can completely disrupt entrenched market actors, rendering the market barriers that ensure their place of privilege ineffectual. Additionally, as Joseph Schumpeter pointed out, even the possibility of such creative destruction helps to mitigate monopoly power in the meantime. Despair, then, becomes the first enemy in the way of such revolutionary reform. And the Gospel message of life in the place of death, blessing in the place of the curse, and mercy in the place of condemnation, is an excellent source of hope.
While I wholeheartedly support those who seek to repeal the regressive regulation that creates such barriers to entry, I think this is a point worth remembering as well. Indeed, Slayback notes,
Government regulators are notoriously slow to figuring out new technologies (I still have to pay my municipal sewage bill by mail) and the decentralized, low-cost nature of the Internet makes it harder to levy regulations on firms based there instead of a brick-and-mortar location.
Not surprisingly, “this area is more prone to seeing startups than elsewhere.” But the principle applies to all markets, to some degree. Or more accurately, it applies to all future markets. So cosmetology may be over-regulated now, but develop a new technique or technology that doesn’t quite fit the classification of cosmetology and none of those regulations will apply.
Slayback argues that our education system discourages this sort of thinking. I don’t disagree, but I would add the benefit of Christian hope to the need for education reform. Indeed, while I’m sometimes skeptical of the claim, many say that Millennials are less religious and less Christian as a generation, a decline that would correlate with the decline in entrepreneurship among the young as well.
Whether that is due to a common factor is an open question, of course. But if, despite such anti-entrepreneurial education, a person truly believes that Jesus Christ overcame death by his death and created the Church out of a bunch of quarrelsome fishermen — a big risk! — then perhaps she would be more likely to imagine that the risks of enterprise are not too much for her and that earthly failures are not the end of a truly heavenly life. Perhaps then, even despite her education, she’d have the hope that entrepreneurship demands and that can break through the unjust barriers to entry that stand in the way.