Largely unimpressed with Scott Shane's take on things. He seems to bastardize the work of Paul Reynolds.
We need a tax policy that rewards a certain kind of entrepreneurs - what we have now is a disincentive.
We need a tax policy that rewards a certain kind of entrepreneurs - what we have now is a disincentive.
"We need to reduce the incentives for marginal entrepreneurs to start businesses by reducing the...tax benefits that encourage more and more people to start businesses. Because the average existing new firm is more productive than the average new firm, we would be better off economically if we eliminated policies that encourage people to start businesses instead of taking jobs working for others."
One of his premises from earlier in the book is that most startups in which barriers to entry are low are colossal wastes of time. This may be valid but it does not follow that GDP would improve if we made companies even harder to start.
Notes from the book: http://dl.dropbox.com/u/17455578/hn/illusions-notes.html
He's saying 1 new worker added to a firm that already exists is more productive and causes more economic output than 1 new worker added to a random new business that wouldn't exist without the government benefits for them.
He's not saying they're a colossal waste of time, merely incentivising new hires in established firms will create more output than making new firms. He's just saying what the data is saying.
"Opening an Applebees is better than making a random restaurant with your own brand and corporate structure is more likely to create more economic activity".