A robust safety net (i.e. welfare) is better for innovation in society, not worse.
 A robust safety net (i.e. welfare) is better for innovation in society, not worse. stories
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In America, small businesses are often touted as being essential to innovation in society. My argument is that many potential small businesses never come to fruition for fear of failure. If you have an idea for a business/startup, there is generally a high up-front cost, which you're basically hoping to recoup when your business is successful.
By dogbreathTK https://www.reddit.com/r/...

A robust safety net (i.e. welfare) is better for innovation in society, not worse.

by dogbreathTK

In America, small businesses are often touted as being essential to innovation in society. My argument is that many potential small businesses never come to fruition for fear of failure.

If you have an idea for a business/startup, there is generally a high up-front cost, which you're basically hoping to recoup when your business is successful.

However, if your business fails, you will have lost all that money, and at worst, be mired in poverty.

This becomes a cost-benefit analysis, where you must weigh the potential benefit of having a successful business (less financial anxiety,

better life for you and/or your family) against the cost of failure (poverty for you and/or your family).

Fear of the cost may be preventing countless potential businesses from ever seeing the light of day.

However, if you could be more certain that you and your family won't starve or basically ruin the rest of your life, you'd be more willing to pull the trigger.

This would increase the pool of new businesses, which would succeed and fail according to market demands, which leads to more overall innovation and benefit for society.

Couple more things to add here:

* Currently, younger people are more incentivized to create businesses, in that they don't have a family to worry about providing for.

However, younger people aren't necessarily better at innovation. You could argue that older people have more experience, and therefore may be better at recognizing what ideas will or won't work.

* People who are more rash or less risk-averse are also incentivized to create businesses over their more risk-averse counterparts.

However, we have no reason to believe that those who are less risk-averse are more innovative.

* A counterargument to this could be, well everybody will try every dumb idea they can think of if there's no cost.

I'm not suggesting we as a society recoup all the money they invest, just that we make sure they don't become homeless or starve. I'm suggesting we lessen the risk, not do away with it.

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