Friday, December 12, 2008

Will They Shrug?

Here's something to watch for - small business owners closing up shop, stepping back away from the System and falling back on their own resources to work in the gray market economy and junking the fees, hassles with employees, taxes and stress of running a business.

End of Work, End of Affluence V: Government--Reinvention or Insolvency
by Charles Hugh Smith
...At some point, the pressures on the people carrying much of the responsibility--be they Army captains, division managers, or entrepreneurs--reach a point where the person realizes, "This isn't worth it." That is, the sacrifices made to sustain The System (U.S. Army, the business, the division, billings, etc.) are not being compensated by either the inner rewards (sense of purpose, sense of being appreciated, prestige or respect factors, etc.) or the tangible rewards (financial compensation, security, etc.)

Employees of small business can also fail to grasp the knife-edge the owner/ entrepreneur lives on. When my partner and I were building dozens of houses a year (22-25 years ago), we had a standard answer whenever an employee would "crack wise" about how much money we were making (actually, we were losing money): we would hand them the keys to the office and say, "Payday's on Friday."

That would bring them up short, because we were exhausted and therefore serious. Go ahead, here's the keys--you figure out how to make payroll. (Many times we had to take cash advances on our personal credit cards to make payroll.)

Contrast this soul-draining burden with the complaints typical of government offices: somebody's playing their radio too loud, somebody didn't kick into the birthday kitty for the supervisor, etc. etc...

When those people shrug, the System will crash. Socionomically that would indicate to me that this sector - the hardworking entrepreneurs and dreamers who take ideas and turn them into businesses that support families and government burdens - will have shifted to pessimism, to anger, to a realization that they are being fed upon and the rewards are either too small or non-existent for the sacrifices they are asked to endure.

When your hardest working entrepreneurs turn to sole proprietorships, cash-only businesses and say to hell with high-rent office space and employees, then you will know the engine of growth and hope has broken down.

What to watch for?

Since the BLS figures for small business "Birth/Death" are a joke for the most part, I'm not sure what statistics are available. You might plug into your local Chamber of Commerce and keep a tab on how businesses in your area are doing. Go by a flea market or farmer's market and get to know some of the entrepreneurs behind the stall. I bet they will have interesting stories to tell...

What to do?

And if a significant number of entrepreneurs "check out" from the system? I suggest getting to know them, doing business with them, learning from them. These doers and creative types will be the nodes around which the new economic networks will build up as we work our way out of the ashes of this ongoing collapse.

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