The buzz

[fpb]

I recently spent a couple of days in Rome on business. I mostly live and work in London, but I am involved in a company in Rome and from time to time I have to make brief dashes south. On this occasion, however, I was struck by a difference in mood, in the quality of activity and even attitude, between London and Rome - or rather, Italy. Rome is not regarded as the most entrepreneurial or industrial part of Italy; that honour belongs to the legendary industrial triangle of Milan, Turin, and their deep-water harbour, Genoa. To the contrary, the joint heritage of state administration and Church institutions - by no means restricted to the Vatican; for instance, practically every religious order in the world has either its leadership or a major office in the city - have given it a somewhat sluggish and cynical self-image. In the eyes of the entrepreneurial North, Rome is an idle, immoral Great Wen sucking in tax revenue. And yet, at practically every turn, I was struck by the practically universal presence of individual enterprise. There is supposed to be an economic crisis? Well, I dare say that the difference can be felt by those who live there; but a visitor from a genuinely blighted London, where people look for "jobs" to be given by others, is struck by just how much everyone, Italian and immigrant both, have their own projects, their ideas, their little plans on the boil. Go into a bar in mid-day, and you will find that half the people drinking coffee are talking business. Walk home through a residential area in the evening, and you will see two middle-aged gentlemen sitting in a parked car; they certainly are discussing something to do with the business plans of one or both. The average company is small, but busy. You see little workshops and moderate-sized storehouses and factories everywhere. The sense of activity is pervasive. I have no doubt that a certain amount of this activity will be at the edge of legality, or perhaps beyond; I well remember, years ago, doing a translation for a Roman intermediary who wanted to purchase American arms for Libya of all places - and would not take no for an answer from his American contacts. I have no idea how that particular business went, but though the idea would disgust most Italians, it would surprise none. The point however is that, coming from England, the sense of commercial alertness, and above all of individual willingness to have ideas and back them, to take one's risks instead of expecting work to be created by large institutions above, is absolutely impressive. I do not think there is a word to describe this atmosphere; the one that came to me as I awoke to it is simply "the buzz".

Comments

[fishlivejournal.livejournal.com]

Nice. How can this be encouraged to spread? (not the arms dealing of course, but the cottage industry mindset).

[fpb.livejournal.com]

Hard to tell, really. It must have existed in England once, or else the industrial revolution would never have happened. I can tell you, having experienced it for a while, that the English unemployment relief system is probably one of the main culprits. It is geared towards looking for "jobs", that is, towards being permanently employed by someone else. I can tell you that taking a single transaction-type job, such as one translation, is a nightmare: you have to sign off the whole unemployment thing and then sign on again one or two days later, which is a nuisance and means that your cheque is blocked for two weeks - even if you are lucky and some bureaucratic clown up the pole doesn't find some excuse to slow it down further. As for what happens when you tell them that you want to set up - or in my case, to set up again - an independent business, I ended up having a shouting match with a particularly incompetent employee who had no idea what a translator did.

[mentalguy.livejournal.com]

I can tell you, having experienced it for a while, that the English unemployment relief system is probably one of the main culprits [behind the loss of "the buzz"]. It is geared towards looking for "jobs", that is, towards being permanently employed by someone else.

I can't help but think of the Paul Graham essay You Weren't Meant to Have a Boss.

[fpb.livejournal.com]

If I am correct, then the whole system has done a lot worse than just dampen English entrepreneurial spirits. England has a whole underclass which, having been turned loose by the labour-heavy industries of the recent past, have remained largely unemployed and underemployed, and heavily dependent on others to find work for them. The people who, in Italy, are most prominent in the self-employed business-building group - middle-aged and aging men, say forty to seventy, with a family and some work experience - tend, in England, to have no prospects beyond the ruined industries that cut them loose ten or twenty years ago. The next generation tends to live on temporary or unqualified jobs, and the one after that, not motivated to join society, follows the path of illiteracy and criminality I outlined in my essay about education. In a sense, what you see there is a recovery of the old spirit of enterprise, but in a villainous and parasitic way, as of someone who has simply no concern with wider society. All the while, unemployment relief plus the demand for officially recognizable jobs keep them pretty much in their place.

Understand: I am in favour of the principle of unemployment relief. I loathe the idea of leaving the losers in the battle of life to starve, humiliate themselves in some way (like the people in the third world who live on garbage dumps and make a living by recycling them in unsanitary ways), or turn to crime. I just say that the bureaucratic English way is the worst possible one. It does not really help anyone find a job - you have to do it by yourself; the ministry only hounds you to make sure that you have made the effort, and cuts your cheque if you have not. Otherwise, the cheque seems to be everlasting. Now, even apart from the issue of self-employment, I would say that even a draft would be better than this. Imagine the British State, in a situation such as it is facing now - econmic crisis cutting tax income - being able to call on the pool of registered unemployed to carry on work that would otherwise have to be cut, and that is necessary to the public - road repairs, for instance, or subsidiary work in the NHS. To be able to call on the unemployed to do such work would give them something to do in their time (and to show in their CV), to keep their skills going, push out the inevitable scroungers, and keep important but unglamorous public services going. The problem are obvious - how to prevent this from simply underpricing regular employees, encouraging the government to sack real employees and have the work done by cheap draftees? - but it would certainly be better than the current system of mingled neglect, pressure and indulgence.

[mentalguy.livejournal.com]

The people who, in Italy, are most prominent in the self-employed business-building group - middle-aged and aging men, say forty to seventy, with a family and some work experience - tend, in England, to have no prospects beyond the ruined industries that cut them loose ten or twenty years ago.

In the US, the slow collapse of industry is still an ongoing process (the auto industry has been the last major holdout). But even among the middle class in the US, that group is the group least likely to start their own businesses: they are typically deeply in debt, are paying large college tuitions for their children, etc. Entrepreneurship at that point tends to be seen as flirtation with financial ruin. Generally the perception seems to be once you start to form a family/have dependents it is too late to attempt such a thing.

[fpb.livejournal.com]

Which is a part of the ill-grounded modern worship of youth for its own sake. Start-ups by young people will necessarily suffer from relative ignorance of business conditions, necessities and finance; the basic idea may be good, but it will not be in the real world. I have started three businesses in my time, all failed because I had not clearly taken into consideration what the requirements in terms of time and equipment would be. Only experience can take you there. Considering the most successful European economy, people should make a thorough study of Germany's mittelstand, the small and middle business stratum that is universally acknowledged to keep the country going.

[mentalguy.livejournal.com]

Hm. And some degree of family ownership, if I understand correctly, is characteristic of mittelstand.

[fpb.livejournal.com]

Quite. And, as I understand, more reliance on own capital and less on borrowing from financial institutions. Well, economy in general is a Darwinian affair, and the most suited will survive.

[fpb.livejournal.com]

Also, in Italy, a family is not a drain on one's resources, but a support. I am speaking, inevitably, of an extended family: grandparents, uncles, cousins. They may lend you money when nobody else will, or at least not at rates that will allow you to make a profit. They will accept your excuses. They will look after your kids if you need the time. They will take a post in your company if they think it has a chance to work. They will work for you. And, in turn, you tend to assume that you are working not just for yourself, but for them.

[mentalguy.livejournal.com]

That is probably at least one important difference. Modern families in the US are comparatively atomised. Absent that degree of family support, most people look for a large corporation to play client to, or -- failing that -- the state. (Though such employers are indifferent and the state is typically even less help.)

[mentalguy.livejournal.com]

It is a mood which is largely lost in the US as well.

I've briefly done the independent business thing myself, in the period before I got approached up by Canonical. Before that, I wasn't eligible for unemployment benefits since I had voluntarily quit my previous job, but aside from that it is at least as biased towards permanent employment under a recognized employer. In my state in particular (though I understand that others are similar), eligibility is contingent on providing, on an ongoing basis, detailed documentation that one is actively searching for a "real" job, using the prescribed job search procedure they give you, plus a number of other weekly procedural hoops. (Americans tend to associate bureaucracy with "those countries", but as far as I can tell -- in this matter as in others -- the US has the bureaucratic disease worse than most.)

I wouldn't really say that the US unemployment system is a cause so much as a symptom, though: pretty much the whole of society is oriented against "self-employment", which as I found in many cases is treated indistinguishably from unemployment. Even when you have income, some transactions become rather painful if you do not have the patronage of an employer, and of course if you are self-employed in the US you are entirely on your own for health insurance. (Even after I joined Canonical, their US arm was itself too small to be able to offer health coverage initially -- and it was already bigger than a small office could accommodate, if everyone were located in the same place. So in practice the bias is not simply towards being employed full-time by an organization, but towards being employed full-time by a sufficiently large organization.)

[fpb.livejournal.com]

Of course, the business of US private health cover is one on which I have let fly plenty of commentary in the past.

[fpb.livejournal.com]

The effect of big business is also poisonous in another way. It gives an entirely wrong notion of what business is and what wealth creation really is. I sometimes feel like taking one of townhall.com's supposedly conservative commentators, shaking them till their teeth rattle, and shouting in their faces: "can't you understand, you damned twit, that big business is entirely different from real business?" You have communities whose top bosses are insured against the very possibility of failure - if things go wrong, they merge with their most successful rival and get a post on their Board, for which they in essence don't have to do anything. Or else you downsize and sack other people. Or both. A real wealth creator is a small businessman with four or five employees, all directly committed to the success of their company, all aware of the stakes and concerned to give it what they can to make it work. Big business, at best, is the final result of one such operation; but to treat them as the primary wealth creators, or to criticize those who would tax and regulate them, is simply to be outside reality.