Texas essayist and publisher Markham Shaw Pyle recently said, “If the power to tax is the power to destroy, the power to regulate is no less so.”
For the life of me, I cannot tell you why our bloated bureaucracies of city, state, and fed seem to have it in for entrepreneurs and small business. But they apparently do. Why? Why? Why?
If the U.S. and the world is ever to escape the torpidity lingering from the Great Recession, to say nothing of bailing out the indebted entitlement state, it must do so on the success and vitality of creative free enterprise. Yet, everywhere I look I see businesses groaning under unnecessary government intrusion that is antithetical to business health.
Don’t get me wrong. I actually believe in higher and fairer taxation as a partial palliative to the increasing inequity between the very rich and everyone else. Maybe I’m still at heart the spiritual socialist I was in college. But one thing the autodidactics of everyday business has taught me is regulation is increasingly irrational in its omnipresence and labyrinthine incomprehensibility.
I must admit this entrepreneurial cri de coeur comes bubbling up in me every year as we approach tax time. But the conundrum of excessive bureaucratic interference with small business is bloody exasperating year round. The rules are confusing—a babel of unclarity and sometimes of contradiction. New government interventions—wage laws, labor rules, environmental regulations—while mostly well-intended, have unintended business-killig, job-killing consequences.
For example, though God knows I love the prairie sage grouse, the snail darter, the spotted owl, clean air, and untainted water, do we really have to close down agriculture in California? Surely there is a place for simple, practical common sense compromises, rather than rigidly mandated bureaucratic micro-management and ideological and ecological perfection.
Last fall I noticed an interesting op-ed in the Wall Street Journal (Oct. 13, 2015) by Bob Funk entitled, The Golden Goose Is On The Run. Funk states, “For decades, most businesses operated, innovated and expanded despite what was happening in the nation’s capital, or perhaps even oblivious to it. But now the goose that laid the golden egg is on the run. Free enterprise, which made the economy grow and produced rising wages for middle income Americans is under assault.”
The animal spirits of Main Street are palpably moribund. Anecdotally, observing my business friends and colleagues of late, I can tell you businesses are holding back, tentative—not sure if they want to commit more capital and passion in an atmosphere of geometrically growing governmental intrusion. Small business optimism is at a nadir, despite the romantic fascination with entrepreneurship fostered by Donald Trump, Shark Tank, The Apprentice, et. al., as well as the jam-packed popularity of Inc. Magazine’s conventions.
Let me point out just one challenge that my company Corporate Rain International, has to increasingly adjust to. My small firm does business in a number states and locales. Multi-state businesses are increasingly compelled to monitor new laws and regulation in many cities, towns, and counties, as well as the states themselves and an ever omnipresent potpourri of unaccountable federal agencies. Some of these are outright contradictory. For example, how does one reconcile a sick-leave ordinance in Detroit that conflicts with the law in Boston?
As the King says to Miss Anna in the current Broadway revival of The King and I—“Is a puzzlement!”
A 2011 survey by ADP showed that half of small-to-medium size businesses in the US lacked confidence that they would be able to keep up with constantly changing regulation. More than half saw things becoming much more challenging. They were right. In 2014 American businesses paid over 400 million just to settle wage-and-hour lawsuits.
The indebted welfare state should be trying to make doing business easier and simpler. It must. It needs the revenue engendered by the success of the entrepreneur and the creative small businessman. Regulations need to be reigned in with common sense. A reasonable degree of freedom is the essential ingredient of “free” enterprise. Overregulation is ultimately the death knell of freedom, ergo the death of the entrepreneur.
17th century Dutch philosopher Baruch Spinoza speaks to the practical problem of overregulation. He says, “He who seeks to regulate everything by law is more likely to arouse vices than to reform them. It is best to grant what cannot be abolished, even though it be in itself harmful. How many evils spring from envy, avarice, drunkenness and the like, yet these are tolerated because they cannot be prevented by legal enactments.” Thank you, Baruch.