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Comment by thaumaturgy | Hacker News Reader

OK, so, I am ardently socially liberal, and I've had a man-crush on Jon Stewart that hasn't waned ever since his appearance on Crossfire.

But.

I don't think that decreasing risk will result in more entrepreneurship.

I would support a wider social safety net for entrepreneurs -- er, business owners -- on principle alone, because I think what we should be saying is that these people are vitally important to our economy and to our nation's future, just as much as larger enterprise is, and we should support that.

But the thing is, most people don't want to run their own business no matter how safe you make it. I've spent the last few years encouraging people around me to start or run or improve their businesses, but so many of them just want to be a professional in their field; they don't want to deal with all of the other aspects of running a business.

So don't lower entrepreneurial risk because you think it will open more businesses, because you think that the guy with a good paying job and some savings is worried about his health insurance. If he (or she!) wants to open or run a business, he (or she!) will do that regardless. It's one of the few probably universal aspects of entrepreneurship that the people who will do well at it aren't really happy working for other people anyway, they have this itch that they can't scratch unless they strike out on their own, risks or not.

But do lower entrepreneurial risk because you recognize the value of entrepreneurs and you want to make sure that small business owners with families can still get good health care and dental care and afford a modest living.

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>I don't think that decreasing risk will result in more entrepreneurship.

TOTALLY disagree, as well as with folks who are saying that "risk is an important part!"

For one thing, there are a series of studies that show that people who are more risk tolerant actually create worse start-ups (for example, [1]). There is at least one meta-analysis that indicates that there's more risk tolerance in entrepreneurs (though the individual studies on that point are contradictory) [2], but OF COURSE there's risk in going off on your own, the biggest one being the opportunity cost of the cushy salary you're foregoing for a year.

No, it's not for everyone. But that doesn't mean that people who start businesses are reckless, and it is HARD to get a good price on health insurance in most states -- and if you get badly sick in the US WITHOUT health insurance, you're screwed (if and when the health insurance reform kicks in, this could change).

I personally refused to quit my job until I knew I'd be able to get health insurance, and it was much harder than I expected despite not having any health problems (as in, I was denied by two providers and had to get the "high risk pool" insurance). So I think it would be effective to reduce the risks of entrepreneurship for people in my situation (i.e., over 35 years old). It's risky enough to begin with; no reason to make it a matter of life-and-death as well.

[1] http://paraplyen.nhh.no/sfiles/85/88/1/file/hvide-panos-2012...

[2] http://psycnet.apa.org/?&fa=main.doiLanding&doi=10.1...

We need to define risk here. Startups are risky and most fail. That doesn't change, even if we gave people free health insurance and other benefits.

Jon Stewart is arguing to increase the safety net so that downside of failure is less harsh. It won't make the downside scenario less likely, just not as brutal for those who experience it.

But I bet his proposal would INCREASE the risk of failure for precisely that reason. People are more likely to hustle harder when their livelihood depends on it [1]. For example, the social safety net is higher across most of Europe and I bet the level of entrepreneurship is higher in the US (I wish I had data about this, please share it if you do).

[1] This reminds me of the AirBNB founders selling Obama O's. Such great hustle: http://www.avc.com/a_vc/2011/03/airbnb.html

I disagree with this. It's one thing to hustle to make your ramen budget. It's another to hustle to succeed before your son needs that kidney transplant.

There's hustle, and then there's killing stress. I can only surmise you're young and single.

Agreed. I'm 24 and the overriding reason why I haven't started a startup is that for the past three+ years I've had my hands full supporting my family, who fell on hard times due to the economic downturn. I can't risk my parents being on the streets dying from lack of healthcare. I'm willing to take the risk for myself, but right now my parents have nobody to turn to.

It's exceedingly clear to me that "they would start a startup anyways" takes a very privileged view, as if risks are there to be taken willy-nilly, and the fallout of a failure nothing much in the grand scheme of things. That may be true for the self, but if others depend on you, it's a whole different perspective and some responsibility must be taken.

I completely agree. When you have a family with serious (but treatable) medical conditions health insurance is not an option. Even if starting a business or doing freelance work would lead to a bigger paycheck: it wouldn't offset the loss of employer health insurance.

Agreed. Certainly I can rationalize losing healthcare for a period of time, the risk could very well be worth it. Risking inadequate care for my wife and kid is a much more difficult proposition.

I was going to retort to your statement about changing failure rates saying that's not side of the equation we're talking about. If we take this as the number of startups we create as:

   numberOfSuccessfulStartups = startupAttempts * successRate

Then Jon Stewarts observation is by lowering risk failure we raise the startupAttempts. Not only do we raise the attempts, but we can recycle the failures to drive startupAttempts up more resulting in a higher number of successful startups is his hypothesis. Adding health benefits, tax credits for loses, etc drive up startupAttempts by lowering risk.

However, your observation that making things cushy for entrepreneurs could lower successRate because you don't have to hustle as much. Sort of a if I fire this gun above your head while you work maybe you'll work harder argument. I say that in some jest because I think there is some merit to your observation just how much I don't think either of us know.

The one counter I can provide to your counter is that lowering risk might have the same effect as lowering incentives for results. Basically support from this work on how incentives can lower success if they are too high. What I'm saying is maybe if risk is too high fewer people attempt and even fewer people succeed because there aren't enough original ideas to copy for scale.

http://carmine.se.edu/cvonbergen/Incentives.pdf

(Couldn't find a better link.)

I think both hypothesis have their points and we need more data to support them.

I think some people simply WANT to start businesses. Period. I know I did. It wasn't about trying to become rich; I'd be perfectly happy with a decent "lifestyle business." I just like the control of making my own destiny, and reaping the rewards of my own labor.

If I didn't think I could afford health insurance on my own, I wouldn't do it. I'd suck it up and take a paycheck, hating my work, but I wouldn't feel that I could afford a risk to my own life/health or my family's.

Is there extra motivation for the extra risk? I say no. If you decide to take the plunge and start a business, you're in it to SUCCEED. Extra stress CAN, under some circumstances, improve your odds -- but it can also make you TOO cautious, because the stakes are too high. And I submit that running your own business is enough to get you into the "ideal productivity" stress zone all on its own, without having to worry about whether you're risking your LIFE as well as your savings.

By this 'principle,' measures like eliminating the corporation as a risk management tool, or even imposing artificially severe punishments for business failure, should increase hustle and therefore mean more successful businesses.

True. That doesn't mean that there isn't some optimum amount of downside, for optimal progress and human flourishing and whatnot. But an automatic assumption that what we currently have is that optimal amount seems to just be a bias towards the status quo.

Well yes, of course. vm, like many people, misreads "no pain, no gain" to say, "pain == gain."

>We need to define risk here.

Agreed.

1. Risk to your savings and time. This is what you are always risking when you start a start-up. A safety net would mean that you'd not starve if the company failed and you couldn't get another job right away, but doesn't mean you'd be living your cushy ideal life even if the business failed.

2. Risk to your LIFE. I submit that, UNDER NO CIRCUMSTANCES should starting a business actually put you at risk of DYING. And yet that's exactly what happens if you decide to forego the expense of health insurance (until if & when "no preexisting conditions" takes effect in 2014) and you find out that you have a life-threatening condition.

I think there's plenty of stress and risk in starting a business without worrying about starving or your health. "Failure" is harsh PERIOD. And if you have a family you're trying to support, the above two points will likely prevent you from starting a company if there's no safety net.

So the many people who would be willing to start companies WITH a safety net means more people who would roll the dice. Many would fail, and that's FINE, because the rest would create jobs.

The contrast is Europe and the UK, where they have free health insurance and social safety nets. How many startups do we see there? By definition we should see more startups there and they should be driving forward.

I don't say I don't agree with having national health insurance, just trying to understand why the UK and Europe don't have the same level of startups.

Maybe it is all marketing anyway and maybe it is all access to capital.

I agree that starting a business isn't for everyone. I'm doubtful that I would enjoy it, but I would like to be an early employee at a company. If that company can't afford health coverage, then I can't take that risk for my family.

It just baffles me that health coverage is so tied to where you work. What if you could only send your kids to the schools that your employer selected, or eat at the restaurants the your company had a deal with? It's just weird. I don't know if government provided insurance is the solution, but employer provided just doesn't make sense as the only solution.

Providing health insurance to employees is a massive tax dodge. Providing schools to their children (or auto insurance, etc) is not.

If employer-sponsored housing was a similar tax dodge, you'd see employers bidding for employees with salary + rent free living.

Interestingly enough, according to one post I read just today, that's exactly what Chinese factory employers are doing: http://www.slate.com/blogs/moneybox/2012/10/18/foxconn_facto...

It actually goes back much farther than that. The Krupp family provided their workers with free housing, schools, health care, etc. At the same time, it bound the employees to their employer for life, more or less.

Krupp established the Generalregulativ as the firm’s basic constitution. The company was a sole proprietorship, inherited by primogeniture, with strict control of workers. Krupp demanded a loyalty oath, required workers to obtain written permission from their foremen when they needed to use the toilet and issued proclamations telling his workers not to concern themselves with national politics. In return, Krupp provided social services that were unusually liberal for the era, including "colonies" with parks, schools and recreation grounds - while the widows' and orphans' and other benefit schemes insured the men and their families in case of illness or death. Essen became a large company town and Krupp became a de facto state within a state, with "Kruppianer" as loyal to the company and the Krupp family as to the nation and the Hohenzollern family. Krupp’s paternalist strategy was adoped by Bismarck as government policy, as a preventive against the Social Democratics.

http://en.wikipedia.org/wiki/Krupp#Overview

Similarly, in coal mines across the US for years, they would do the same thing. They would pay the workers in "script" so they could not earn real money and thus, escape the life of being a coal miner. That was what the famous song by Tennessee Ernie Ford was about (http://en.wikipedia.org/wiki/Sixteen_Tons).

Many other industries, such as trucks/shipping in the UK also paid employees in script, thus forcing them to only buy from the company stores. http://en.wikipedia.org/wiki/Truck_system

What I think would be a better solution that could fit in everyone's worldview (those that want a more socialized health care system and those who don't want a powerful federal government) is to have cities provide a public health insurance option that a person or business could buy into.

I think that the risk pool would be large and the members would be local (thus giving more rights to local communities rather than the federal government).

I think it could then encourage cities to be more healthy cities (less pollution, more activities for locals, encourage walking/biking rather than driving) in order to drive down health care costs for their citizens. Being a healthier city would then encourage people to move to there thus increasing the risk pool.

Citizens wouldn't be required to purchase through them but the plans could still be managed by private companies like Aetna, Cigna, etc. so that the plans could be used when local citizens travel to other parts of the country.

You could do it on a state-by-state basis, where each may provide a differing level of coverage but all of them would provide at least a base-line care for citizens that are residents of that state.

This could lead to a form of "competition" where some states might provide perks to help encourage people to migrate there from other parts of the country or make it more attractive for prospective employers.

This is the way it's done in Canada. Each province has differing rules as to what's covered, but emergency treatment and preventative care is never impaired by cost or a lack of insurance.

have cities provide a public health insurance option that a person or business could buy into.

That only works if all cities have plans, otherwise you can find yourself trapped staying in a city that same way that one might find himself trapper working for an employer.

Good point! I guess I was looking at it as an advantage and other cities would start their own program to compete just like employers do today. I just figured people tend to not move geographically as much as they change jobs.

In most of the US your public school is fixed by your address, so people have to uproot and move to change schools.

>It just baffles me that health coverage is so tied to where you work. What if you could only send your kids to the schools that your employer selected, or eat at the restaurants the your company had a deal with? It's just weird. I don't know if government provided insurance is the solution, but employer provided just doesn't make sense as the only solution.

Does it baffle you that the school location for your kids is so tied to where you live?

Does it baffle you that your employer decides how much it wants to pay you as well? How about what size your desk is or how up to date your computer at work is. How about your 401k match? Bonus size? Vacation days? Promotions? Who your boss is? Dress code? Where does it end?

Do you think every employer could actually afford to let you get the health care plan and provider of your choice?

You are free to look for another job at a company who offers health care from the provider that you wish to use.

Let me ask you though. What if your employer would give you the money they put toward your health care to choose the provider of your choice (even if you had to pay the difference for any shortcoming)?

> Does it baffle you that the school location for your kids is so tied to where you live?

No. Kids need to get to school, often by walking/biking. Schools can't afford to bus random kids in from 100 miles away. At least where I live (Ventura County, CA) parents are able to drive their kids to more distant schools if they prefer. As long as schools are a physical location where you have to show up to benefit from, it makes sense for them to be location based. If schools were 100% online, then it wouldn't make sense.

> Does it baffle you that your employer decides how much it wants to pay you as well ... desk ... computer ... 401k ... bonus ... vacation ... etc...

All of those things are either related to the relationship between you and your employer. The 401k thing is a little funny. I'd rather take the cash and manage it myself. I'm assuming your point is that health care plans are just another form of compensation and if you don't like what's offered, quit and work somewhere else that offers something better. The problem is that 1) coverage chosen by the employer can change every year, 2) you can't get the same coverage at the same price on your own or at a small company, and 3) it's non-optimal because it bundles unrelated things and requires you, as a "consumer" of employment, to make your decisions based on the aggregate value instead of individual values of the components.

> Let me ask you though. What if your employer would give you the money they put toward your health care to choose the provider of your choice (even if you had to pay the difference for any shortcoming)?

That seems good to me as long as you had the option to buy the same coverage at the same rates as the big companies.

> Schools can't afford to bus random kids in from 100 miles away

This is my point... Affordability is the reason in both cases so I don't understand how this is so easy for you to understand with schools and so baffling with Employer paid health insurance. Do you thing that your HR dept could manage 100 different health care providers? do you think all the providers that you may wish to use are affordable to your company?

>All of those things are either related to the relationship between you and your employer. The 401k thing is a little funny. I'd rather take the cash and manage it myself. I'm assuming your point is that health care plans are just another form of compensation and if you don't like what's offered, quit and work somewhere else that offers something better. The problem is that 1) coverage chosen by the employer can change every year, 2) you can't get the same coverage at the same price on your own or at a small company, and 3) it's non-optimal because it bundles unrelated things and requires you, as a "consumer" of employment, to make your decisions based on the aggregate value instead of individual values of the components.

Money is a finite thing to your company and I just don't understand how you are baffled that you can't choose whatever health care you wish through your company. Whats more - with ObamaCare, you will still not be able to choose whatever health care provider you want so I don't see how you think that this will help you.

> Do you thing that your HR dept could manage 100 different health care providers? do you think all the providers that you may wish to use are affordable to your company?

Ah, I see where the confusion is coming from. I'm not arguing the the employer should allow you to choose whatever health care provider that you want. I'm saying that I don't understand why they're involved in the process at all.

I don't know if health coverage should be like eating at a restaurant (entirely optional and up to the consumer), like car insurance (required, but you buy it yourself), like the military (you have to pay for it through taxes and have no control over it), like lower education (required and you can go with the government option or pay for a private option out of pocket), like higher education (optional and you can go public or private), etc..., or some sort of combination. At this point, I'd probably lean towards health coverage being required, provided for free for poor people, available through the government(s) for everyone else, and a voucher system for anyone who wants to get it privately (with a regulated level of coverage). All of this would have to be funded through taxes (probably a combination of corporate and personal taxes), but employers wouldn't have to manage it at all.

Based on other comments, I understand why the situation is what it is today (because of tax benefits to both the employer and employee), but I don't understand why it should be this way.

> with ObamaCare, you will still not be able to choose whatever health care provider you want so I don't see how you think that this will help you.

I didn't mention ACA/ObamaCare (maybe you're thinking of someone else?), and don't have much of an opinions on it other than it's so full of compromises that it's unlikely to make anyone happy.

My first job with a large consulting firm offered exactly your last option. You had benefit "flex dollars" on top of your salary and you could shop among the plans they offered or you could take the cash and go buy your own (or not). Of course due to group rates their plans were cheaper than what you could buy as an individual, but not by a lot, and if you were a single young male (i.e. didn't need maternity coverage) you might even do better.

I do think we'd be much better off if health insurance was not seen as an employment benefit but as aomething you are responsible for yourself, like car insurance, rent, utilities, groceries, clothes, and all the other necessities of life. (I'm not saying that the government should provide it or administer it though).

In theory I agree with you, but there would need to be a more even playing field. I used to buy my own insurance, and I would get screwed every time. There was always some little loophole they gave me as to why the visit I pre-approved with ended up not being coverable. Am I supposed to have the resources to try beat them in court myself? No, so I switched companies and told them why. This happened twice. Now I'm on my employers plan with a successful company. Everything gets covered no-questions-asked... The argument against social medicine is inevitable injustice and slowness of beaurocracy, but what difference is an insurance company that doesn't really care if they have my business or not? If they're small enough to care, can you trust them with big financial commitments?

>most people don't want to run their own business no matter how safe you make it. I've spent the last few years encouraging people around me to start or run or improve their businesses, but so many of them ... don't want to deal with all of the other aspects of running a business.

True dat. But you point this out as if it is some moral failing on their part. People generally don't want to do uninteresting stuff. "all of the other aspects of running a business" is seriously uninteresting.

Its why I don't have a dog - am not interested in picking up dog poop :)

If its about the money...I have made 5-6 figures from simple butterflies & straddles - took me less than half hour to devise, and then I just wait for the right mkt opportunity to come along.

If its about independence, not working for anybody etc...my boss used to say that while I only have 1 boss (ie. him ), he has infinite bosses ( ie. all the customers of the company ). So I don't see what the big advantage is in being accountable to the masses of the planet because of some bug in some stupid software.

There's trons of things infinitely more interesting than being an entrepreneur - Family. Mathematics. Physics. CS.

> There's trons of things infinitely more interesting than being an entrepreneur - Family. Mathematics. Physics. CS.

Depends on your interests. My business is my family -- I started my company with my brother. I was a Physics major when I went to college and I find entrepreneurship much, much more fascinating.

Starting companies isn't for everyone, and it would be misleading to say it is. But I don't think anyone can category say that "X is the most interesting thing to pursue."

Im an options trader too, I would like to discuss with you some of your strategies... could you contact me on:mark.samson11 on googles email

But the thing is, most people don't want to run their own business no matter how safe you make it.

In the aggregate you may be right. Just from my own personally experience, I can think of at least a dozen folks (extremely well-regarded in their field) who have all expressed to me a desire to strike out on their own, but it's the company-provided healthcare that keeps them from doing that.

And (for the most part) these are folks in Massachusetts.

Isn't it possible that's just a handy self-justification, though?

If healthcare wasn't an issue, would it be something else?

Isn't it possible that's just a handy self-justification, though?

Looking specifically at the folks in my circle, I doubt for for two reasons: 1) they've seen me make a living at it for 9 years and they are all as smart, if not smarter than me and generally better connected than me, 2) a couple of folks in particular are supporting family members with medical needs.

#2 is a big issue because insurance companies love to deny pre-existing conditions. I believe there is some time-limit to them doing so, like after being on the plan for 6 or 9 months they start covering, but don't quote me on that. The idea that having a pre-existing condition can screw you pretty severely if you have to switch insurance ilproviders is crazy to me, especially since insurance is so tied to employer in the US. I realize insurance prefers healthy people to subsidize the sick, but once someone is diagnosed, "punishing" them for being sick, everytime they change insurance is just crazy to me. I guess I am too much of a socialist to see how that is a good societal move.

#2 is irrelevant in MA. MA already has Obama/Romneycare.

I.e., they already have the ability to force an insurance company (more precisely, other people who purchase insurance) to subsidize their care with or without an employer.

#2 is irrelevant in MA. MA already has Obama/Romneycare.

It's not quite that simple. One, the plans offered through the MA Connector may not be as inexpensive as plans negotiated by an employer, so you may wind up paying more for the same coverage. There's alao the issue of finding a plan with doctors in the same network, you may find yourself paying a little more if you have a favorite doctor treating you for a pre-existing condition.

Also, you are only allowed to enroll in MA Connector plans during one (maybe two) "open enrollment" periods during the year, so you may be faced with a gap between losing insurance coverage after quiting a job before being able to enroll in a new plan. Of course there is always COBRA, but again the amount you pay out-of-pocket for the premiums go way up.

But you are correct that insurance co's in MA generally can't reject you for pre-existing conditions.

There is no gap because COBRA covers you (costs go up precisely 1%) until the next open enrollment. As for "open enrollment", this just means you need to start your business in July.

Anechoic is right - anyone claiming they can't start a business in MA due to employer sponsored healthcare is just making excuses.

See also "I'm a fatass because I don't have time to exercise", "I have no girlfriend because all the girls I don't ask out would say no anway", "I'm underpaid because all other companies would pay me the same, not that I actually interviewed."

COBRA covers you (costs go up precisely 1%)

When I was on COBRA, my out-of-pocket costs went up significantly more than 1% (compared to what I was paying for the same policy when I was employed).

Anechoic is right - anyone claiming they can't start a business in MA due to employer sponsored healthcare is just making excuses.

I didn't say that.

Your out of pocket costs may have gone up, but that's an arbitrary distinction. The total cost of cobra is precisely 101% of the cost of health insurance provided to your employer.

Now, it's possible your employer was giving you $Z worth of benefits but making you deduct $Y from your wages for it, and $Z > $Y. All this means is that your comp (and hence the opportunity cost of starting a business) was higher than you realized.

Sure, I was speaking more generally than just to the people the parent knows in MA. If that becomes nationwide under Obamacare then good. By your phrasing ("force..other people who purchase insurance..to subsidize their care with or without an employer") it seems you are opposed to that idea (sorry if I presume incorrectly). If so is the idea seriously that if you get diagnosed with a serious medical condition then no one should subsidize care and you should basically be driven into bankruptcy or death due to lack of medical treatment? Perhaps this is an issue I am too close to since I am currently seeing an endocrinologist and just had a brain MRI, but prior to that (and likely still) I would say the insurance companies cleaned up on me / I subsidized a lot of other people since I have rarely had any medical conditions / costs for the entire time I have had medical insurance. But that doesn't bother me, so I guess the idea that insurance being a pool to subsidize / provide a safety net in an organized society regardless of employment somehow being portrayed as a bad thing is something I am having trouble wrapping my mind around.

I'm totally with you about loving Jon Stewart and I'm all for removing barriers for those inclined towards entrepreneurship.

But the concept of creating safety nets to encourage more entrepreneurship strikes me as paradoxical. To an extent, the inherent risks that come with starting a new business is a good thing -- it forces would-be-entrepreneurs to assess critically what they would gain or lose before taking the plunge. The inextricable dependency on company health insurance, however, should not have to play a role in that risk assessment.

Maybe I'm just being picky over semantics, but instead of creating a "wide safety net for failure," which to me sounds like something that encourages poor business judgment, I would be in favor of reducing the extrinsic risks of starting a new business (e.g. insurance) so entrepreneurs could focus on the risks relevant to the business itself. But like I said, I might be nitpicking over choice of words, so forgive me.

Knowing there's a risk of failure isn't so bad -- it makes me try really hard at, well, not failing.

I agree, but I feel the more likely scenario is the 40 year old with domain expertise who is rationally confident he could strike out on his own but is hindered for fear of losing health insurance/income not only for himself, but for his family. The current conditions seem to discourage these individuals from starting companies in favor of the far more common mid-20s silicon valley web junkie who has far less to lose and a minute chance of success.

Thank you for pointing that out. Since this is Hacker News I can sometimes be a bit myopic about the different kinds of entrepreneurs.

Now that I think about it, the guy from Breaking Bad could be the perfect poster-boy (poster-man?) for what happens when middle-aged dudes don't have safety nets for starting legal businesses!

Well put. My thoughts were similar that if the safety net were to allow for excessively risky behavior (as in unsustainable, non-profitable, or predatory business schemes) with repeated failure and limited negative side effects, it could be a net drain on the overall economy.

Sure, there's people who want to be entrepreneurs and people who don't, but to me it seems like the situation is perfectly analogous to supply and demand and consumer surplus. Most people, if they want something, they'll buy it at any price they consider to be reasonable. Why? Because they really want it – just like people really want to be entrepreneurs, or don't. But lo and behold, when the price of a consumer good goes up, demand almost invariably goes down, because for some people, the cost/benefit equation did change just enough to make it (not) worth it.

I know many, many people in Europe that have dreams of starting a company or startup, but without ready access to venture capital, making that dream a reality suddenly becomes much, much harder. So you compromise, and you focus on other dreams that are more attainable.

Yes, human psychology might be an important factor in deciding whether someone wants to be an entrepreneur or not, but people's attitudes are generally not as black and white as you make them out to be.

I have a rare eye disease. I'd love to start my own business, but I didn't because I feared a lose of insurance with a pre existing condition. I completely disagree with your premise that wouldn't do well at it because my itch isn't so strong as to make me risk losing insurance.

Btw, what data are you using to draw your conclusion?

Facing a potential health crisis without insurance has got to be one of the biggest disincentives to starting a business.

Even if that disincentive is irrelevant to most entrepreneurs, you still have potential entrepreneurs with health issues. If X% of potential entrepreneurs have managed but costly health problems, the disincentive to starting a business must be much higher.

I know a few such people myself, and I don't even really know that many people. One category is people with issues from birth: one friend of mine has a congenital heart defect, which is well managed, but completely disqualifies him from buying health insurance on the open market as an individual. So he is basically forced, against his will, to work for a large corporation, so he can qualify for their group health plan. Note that this is due to something that happened before he was even born. To me, that's not how things should work in a country with real individual freedom and equality of opportunity.

You misunderstand individual freedom. Freedom, in the context of a "free nation", isn't freedom from consequences or risks (even those out of a person's control), it's freedom from the imposition of state-sponsored force. This is an important distinction. We all invite a little state-sponsored force into our lives (i.e. the persecution of violent crimes, the civil court system, etc). Your version of "freedom" actually requires state-sponsored force at a fairly low threshold: if someone can't pay for their own health insurance or medical bills you're going to force others to pay it for him. You're not asking for voluntary donations, you're taking with the threat of legal consequences. That can't be congruent with any meaningful definition of freedom.

It is you who misunderstands individual freedom. Freedom is not some formalist anarcho-capitalist construct, but meaningful ability to take individual action. That requires, as Hayek argues, that a functioning state exists, which provides basic physical safety, a minimum of economic security, and contract enforcement, within which people can act as individuals. Absent that, in the "state of nature", people are forced to cling to tribalist groupings (religions, extended families/clans, etc.) for security and coverage of the "risks common to all", which is not individual freedom but collectivism.

You're not really illuminating much by explaining with the contorted libertarian definitions of 'individual freedom'. Seriously, you can't think of a 'meaningful' definition of freedom that includes helping each other? Not necessasrily one you have to agree wtih, just one that is 'meaningful'?

I am in a similar situation. I have thyroid cancer, which is generally a manageable form of cancer but has a small (but not insignificant) risk of recurrence and distant metastasis which could require expensive diagnostic & treatment options. Having a pre-existing condition makes it very difficult to buy insurance on the private market and it is very expensive, if you can buy it at all. I recently hit a point in my life where I'd paid off debts and could have afforded to take a risk and start my own business (and want to), but I am not willing to put my family at risk for bankruptcy if I end up requiring expensive tests and treatments and I'm not willing to forgo those things and risk my own life. My dad faced a similar situation when I was younger. My mom was diagnosed with cancer at a time when he was considering leaving his blue collar job to return to college; he ended up staying in his job to keep his generous union health care plan, my mom got great care and eventually recovered, but he missed a chance to grab new opportunity because the risk again was too great.

I guess, but what about all the he entrepreneurs from the era before health insurance? I wasn't long ago.

Medical expenses weren't what they are now all that long ago, either.

1. Price and wage controls weren't forcing companies to compete on benefits, starting us down a path of employer-linked health insurance.

2. People paid for their medical expenses directly providing direct feedback into the system.

3. Less gov't red tape constricting the supply of medical care.

I can back you up with real word evidence for your claim.

In Denmark we have system very close to what John Stewart proposes but still we have far fewer entrepreneurs than in the US. This suggests that culture is much more important for entrepreneurship than a social safety net.

> most people don't want to run their own business no matter how safe you make it.

So? That's like saying "most people won't become olympic athletes, so supporting olympic athletes won't lead to more participation in the olympics.

We only need to care about the population of people who might start their own businesses. Not every potential entrepreneur is an entrepreneur.

I'm in Canada. The fact that I don't have to worry about any major health costs was a big factor when I decided to start on my own.

I might fail, but there's less risk of a catastrophic failure scenario. I'm not the only one who weighs risk this way.

> If he (or she!) wants to open or run a business, he (or she!) will do that regardless.

There's a concept of 'margin' in economics that is applicable here: some people will never open their open their own business, others will, no matter what. In the middle are people who might, or might not. Doing things to make it easier for them will tempt more of them.

From the article: But what about the risk of, you’re afraid to leave your job and be an entrepreneur because that’s where your health insurance is?

I don't know how many people fit that description, but it is certainly more than zero.

There are SOO many things to be afraid of if you're starting a business, I really don't think that health insurance (or especially other things the article mentioned, e.g. retirement savings, medicare, social security) is a showstopper for most people. In starting your own business, you are risking the ability to put food on the table and pay the rent. Health insurance has got to be less scary than that.

I'm not sure about most people. Two points of anecdata: I fell and broke my back almost a year ago. If I had been self employed I would be liable for tens of thousands of dollars. Second: I have a friend who was forced out of the consulting game because of a serious medical issue that private insurance would have cost too much to cover.

I can't generalize from two data points but I can say that for me and my friend, lack of a safety net has absolutely been the show stopper.

No one single thing is showstopper for most people. But healthcare is a really big deal.

If you can't pay rent, then at most you owe your back rent. If you're in a car accident without insurance there is almost unlimited liability. You may owe more than you could ever possibly hope to repay. You may be forced to select treatment that is cheaper, rather than treatment that is better and this could have serious impact on your health.

Presumably you think that the laws of supply and demand are bunk? The risk of having poor health cover is part of the cost of entrepreneurship. Reduce the cost of something and people, in the aggregate, will buy more of it.

>> If he (or she!) wants to open or run a business, he (or she!) will do that regardless.

I completely disagree. No two people are in the same situation; some people are in situations that make it extremely risky to start a business, and instead will coast through life without acting on a dream. I don't necessarily think this means they're not dedicated enough or not made for it.

People don't do things for a lot of reasons, and those reasons often aren't because they don't want to -- rather it's often because there's some boulder blocking their vision.

I think that those who have nothing to lose are the ones who are more likely to go out and make their own life. It is the people who sat at the opposite end of the interview table hearing 'no' too often that decide they had enough with society and create their own success.

Every single successful person I ever met starts with the same story: "I was doing X, and I just quit. I promised that I would never have a job again." Simply put, it is the mindset that is inherent in those that go out and create that make them create.

The reality is that people who have a lot to lose are those that aren't going to take a risk. Giving more raises, more insurance, and more social security is going to make people more comfortable with their life as-is.

I can easily imagine a class of people who would become entrepreneurs if they didn't feel like the risk was too big. Especially people families -- not only might you be risking something on their behalf, you might also have a spouse that's difficult to convince (http://www.inc.com/magazine/201209/meg-cadoux-hirshberg/livi...).

Right. Some people might well be willing to take a risk for themselves, but not be willing to take a risk with the health insurance for their kids.

I'm only one data point but seeing my dad unable to retire, he's 70, and myself being 47, I'm definitely afraid to give up the cushy job I have.

If somehow I knew food, shelter, medical and retirement were covered I'd be far more likely to try a few things now that I wouldn't have hesitated to try 15-20 years ago.

I guess the take away is something like this might be better or worse depending on your current situation.

> I don't think that decreasing risk will result in more entrepreneurship.

Wait, really? You don't think people factor in downside risk when making life choices?

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