Broken Paradigms Regarding Entrepreneurship and Economics

Economics is one of the most important and fascinating topics anyone can learn, though it is seldom ever approached that way by those ignorant of it. Someone who understands even basic economics will be far more productive and make much more money throughout life than someone who doesn’t. That alone should be enough incentive to study it, as it necessarily complements all other knowledge and interests related to the pursuit of happiness. But there are other great reasons to learn its universal principles too.

Learning economics helps you understand the science of society and civilization, which is an extension of understanding the nature of how two or more people willfully interact with each other for mutual benefit. We only exist in each other's lives to produce and exchange subjective value. We would have no reason to interact with each other otherwise, whether in a close, personal way or a distant, impersonal way. The value we seek from each other can be simple and tangible, like a widget we borrow or buy from someone, or it can be complex and intangible, like a feeling of love, comfort, and support with one’s closest companions.

How can we be sure that everything we ever willfully do with another person is for the perception of mutual benefit? Because there are no choices we would make if we didn't perceive that we would be getting something we value from them. That’s the nature of choice. It is a discriminatory cognitive capability in humans that makes us evaluate which of all perceived possible options gets us the most of what we want at the least cost of incurring what we don’t want.

This means that all willful human relationships fall under the domain of economics. Every interaction you ever have with another human being is an economic interaction. The more you understand the objective and absolute rules that govern these interactions, the more profitable and optimized all your interactions will eventually be for everyone involved. And one consequence of that is that you'll probably make a lot more money throughout your life.

The person who embraces entrepreneurship is doing something unprecedented from an economic perspective because they are creating something that didn't exist before. There's already risk inherent to doing something new. There’s also social risk. It's possible that they will be alienating themselves from people who don't like when others act differently, who want everyone to be the same. Even if we ignore the general economic consequences of these broken paradigms (i.e., that everyone participating in the economy is poorer because of them), it's tragic that most people will never be able to express themselves fully. They will never be able to pursue their ambitions, passions, and wants because they fear the social consequences of standing out.

Economics Is as Objective as Any Other Field

It’s amazing that we are still at a point in history where most people don't seem to agree that there is an absolute objective nature to how the field of economics works. But that’s the evolution that every field of study must go through on its historical journey toward mass understanding and acceptance. Every area of science and philosophy undergoes a progression where, for the longest time, everyone fights amongst themselves about how it works. In the early days of physics (presently our most developed science), we didn't even know the answer to such basic questions as if the sun revolved around the Earth or the Earth around the sun. We didn’t know if the heavenly bodies were perfect spheres upon the firmament of the night sky. We didn’t even know if heavy objects fell faster than light ones.

Back then, anyone's guess or hypothesis was as good as anyone else's. We had little experimental data to work with. In fact, we didn't even have a proper scientific methodology to perform experiments and determine the difference between what was real and what was not. Nowadays, we know how to test and prove things. We know how to reason our way from basic universal premises all the way to the ends of large complex maps of understanding about all the possible ways things can interact with one another in a given field of study. As time, technology, and philosophy advance, we get more refined in each subject, and credible disagreements gradually disappear.

As a result, we now know how the cosmos works. We know it enough to build rocket ships that can take us to other planets. We know how living things work well enough to diagnose and treat or cure complex illnesses. We can even engineer life to a degree. But there is one area where it still seems like people are still in wild disagreement about how it works, and few people seem to have the reasoning capacity to sort out whose guesses and hypotheses are more valid than others.

Talking about economics with most people today still feels like talking about witchcraft or astrology. Are you a Virgo? Are you a Capricorn? Are you a capitalist? Are you a communist? People treat these answers as though they are all equally meaningful or meaningless, as though you might as well pull one out of a hat and accept it as a valid take on reality because no one could ever prove you wrong. Almost nobody's objectively breaking down what these things mean and checking to see if they conform to reality, just as no one did for centuries with various guesses about life, the universe, and everything.

When you finally get around the systemizing and testing the field of economics, you end up with the basic premises of human behavior, like the concept of supply and demand that dictates how everything about how human beings make choices and interact with one another for mutual gain. What do people want, and what do they perceive they have available to get what they want? This has governed every single choice anyone has ever made. Every future choice ever made will likewise be governed by it. These economic principles are fundamental postulates of human consciousness and volition.

Anti-Money and Anti-Success Sentiments

Under communism, speculation is considered a serious crime. What does it mean to speculate? It means to predict that something will increase in value and to take action to acquire and make more available this thing as a result of your optimistic prediction about it. What is criminal or immoral about that? Who is being hurt or treated unfairly by your predictive prowess? By predicting that something not currently valued will later be valued, you're making it more available to the people who will eventually come to value it. That’s the function of every entrepreneur: to move the economy in a more favorable direction for everyone participating in it by anticipating their demands, taking the risk, and catering to them ahead of time.

Every entrepreneur creates a new form of value in the marketplace or else improves upon the process behind an existing one. They have to speculate about the value before other people do; otherwise, someone else would already be offering what they want. Every entrepreneur is engaging in speculation.

The negative association with this necessary act seems to stem from perceptions of greed or unfairly acting on opportunities others cannot. How many people will even claim they don't want to make too much more money than their peers because they don't want to be perceived as greedy or selfish? It's quite a strange paradigm when you consider that money is just a tool to facilitate exchange. It just makes it easier for us to trade various forms of value with each other. What is fundamentally wrong with wanting to make trade easier? Or wanting to accumulate the ability to get more of what you want and help others get more of what they want?

Cooperation and the Division of Labor

You are always limited if you operate from only your knowledge, skills, and resources. Division of labor is an objective economic concept that describes how some people are always better suited to perform certain tasks than others. If you're not taking advantage of that reality and you're trying to force yourself or other people to do things that you or they are not optimally suited to do, you're not really thinking objectively and efficiently about the value you are trying to produce. You're not employing the division of labor principle to the fullest possible extent to produce the most value for the least effort. You should be collaborating with someone better suited.

So you have to ask yourself, “What can I do optimally? What am I best suited to do to produce the most value for the least effort?” In other words, what would you be doing if you could cut out all the bullshit and busywork from your productive life?

The idea that everybody has to do shitty work is extremely anti-entrepreneurial and counter-economical. So is the idea that the more you suffer to do your work, the more valuable the work is. Non-entrepreneurial thinkers will say that you have to just shut up sometimes and do stuff you hate doing and are objectively bad at. They say it because it’s the best way they’ve figured out how to live their lives, so they try to pass the same burden onto you.

But the beauty of humanity is that we all have different strengths, weaknesses, and interests. For everything you don't like or are bad at doing, someone else is probably better at it and enjoys it more (or at least hates it less). So how does it make sense from an objective perspective to spend your time doing the things you are both bad at and don't enjoy? Wouldn’t the optimal arrangement of labor always be to let the people best-suited to each task do as much as possible of them and as little as possible of anything else? The extent to which you fail to understand and implement the division of labor is the extent to which you will continue to submit yourself to shitty work for which you produce sub-optimal results.

Competition and Standing Out

Maybe you think it's difficult for young, new entrepreneurs to get started in an industry because there's already so much competition from existing companies that can invent and distribute something a thousand times faster and more effectively. Perhaps that discourages them from even trying to be entrepreneurial. Instead, you submit to following the professional path of least resistance at an ordinary job you hate.

The value of anything can only be determined in contrast to the other available options. That's why you hear so much talk about USPs: unique selling propositions. How is your product or service notably different from everything else catering to the same basic need? What will it provide that isn't already being provided to an existing base of consumers in some subjectively better fashion?

If there are already huge companies that are very good at producing a specific type of value, it means that, yes, it is probably going to be harder for someone new to come along and try to do the same thing better. The competition already has a headstart regarding time, knowledge, reputation, and capital. It’s foolhardy to think you can do the same thing as them and expect to compete. But entrepreneurship is a universal concept that applies to all aspects of the economy and all types of value you could ever offer. Why are you so interested in competing with the biggest players who are already the best at what they do?

The question to answer is how to most profitably get involved in the aspect of the economy you are most passionate about or qualified to provide value in. And it doesn't even have to be you starting your own company out of your garage, hoping it takes off and becomes massively successful like your favorite famous tech entrepreneurs. That's just an inspiring narrative. In principle, entrepreneurship provides something of unique value to the economy. That could mean working for someone else's company if that’s the labor arrangement in which your knowledge and skills will be most valued.

Part of the problem with the trendy narrative of entrepreneurship is that people might think it's demeaning to work for someone else's company. If what you bring to the table synergizes there, and you will be valued and appreciated (and hopefully paid well as a result of it), that might be the most entrepreneurial path for you to pursue. That might be where you can make the greatest productive contribution. Being entrepreneurial doesn't mean you have to start your own company in a competitive space. That's just a story.

Feel free to ignore the gatekeeps who would tell you that you’re not a real entrepreneur unless you hire a certain number of employees or ship a certain amount of product every month. That's an arbitrary standard they’ve adopted, probably because it boosts their ego. They have a company that size, and they’ve decided that's now the definition of a real entrepreneur. An entrepreneur, in principle, produces and/or manages something of unique value and offers it to the economy. That can happen at any scale and take on any form.

Entrepreneurs and Entrepreneurial Enthusiasts

There are now more people than ever who seem, on the surface, interested in entrepreneurship, but their interest lies only at surface depth. It's like the difference between a pilot or aircraft engineer and a child enthusiastic about airplanes. An excitable child might wear a shirt with an airplane on it. They might play with toy airplanes. They might make enthusiastic “vroom vroom” noises while they do. And you, as a pilot or engineer, might say to them, “Oh, that's great that you're so interested in airplanes. I fly or build airplanes for a living. Do you want to learn about airplanes?”

Nine times out of ten, the child won’t want to learn about this stuff at any depth. They’re interested in the exciting image of airplanes. They would lose interest if you tried to instruct them how to fly or maintain one.

A similar surface level of trendy interest now exists for what most people call entrepreneurship. Ninety percent of them don’t want to learn how an economy works, the valuable role entrepreneurs play in it, or how to be successful. They just really like the marketing appeal of its image. It can be difficult to differentiate between people who actually want to learn how this stuff works because they see how important it is, how it can improve their lives and society, and people just caught up in the hype of it and who perhaps seek social reward for associating themselves with it.

The problem with romanticizing and oversimplifying entrepreneurship is that you attract people who only like the romanticized and oversimplified image you project. They don't want the responsibility, they don't want to take risks or put in the required work.

However, people have to be exposed to new ideas and new values one way or another. There are really only two ways you can do that. One is the educational approach, which involves explicitly explaining how something works. The other way involves more unconscious influence. It’s the subtle spread of ideas that unthinking people have no real reason to accept because they remain unexamined. They believe what it is popular and convenient to believe. If nothing else, entrepreneurial enthusiasts contribute to the spread of unconsciously accepting that it’s okay to try new things, produce new forms of value, and take control of one’s life by believing in oneself.

The child wearing a shirt with an airplane on it still subtly contributes to the popularity of airplanes. Someday, some of those unconsciously influenced people might find that they are interested enough to actually sit down and learn how to fly one. The world’s economy and the satisfaction of all its people will improve with improvement of our working knowledge of the economics that governs all of us.