10/16/2007

New kinds of entrepreneurship

While touting is raising its head among taxi drivers, don't blame them entirely. It is a way of living, to earn that extra $2 to feed the rising cost of living. Look at it positively, it is entrepreneurship. Not everyone has millions of dollars in their war chests to fight in the big league. The small guys have their own turfs to play with. Look around the kopitiams and MRT stations and you will notice a new kind of buzz. More entrepreneurial people are setting up shops, as buskers and beggars. Very lucrative and low capital. Tax free also. These different kinds of talents need an outlet to earn a living. Can't just dump them behind bars. Too costly. And they need to survive in this very costly city. The GST of 7% is eating into their bones. Shall we support such entrepreneurship? Shall we give them a chance to earn a few dollars?

4 comments:

Matilah_Singapura said...

Once in awhile redbean asks really good questions. Unfortunately his 2nd paragraph is pure nonsense. Oh well, you win some...

> Shall we support such entrepreneurship? Shall we give them a chance to earn a few dollars?
<


Ultimately, anyone who chooses to offer his produce (goods and-or services) in the open and free market has to face the decision of The Consumer (who is King because he has selfishness to choose and the cash to buy) with regards to that question.

The entrepreneur is essentially a speculator. He "recognises" a "need" consumers want fulfilled, and so the brave entrepreneur musters his resources (no matter how scarce), pays for them in advance, organises them in specific ways to come out with whatever service or product he has to offer.

He then sets a price—an amount which takes into account his risk, the premium he's paid in advance for the factors of production, what his effort and labour are worth (also factors of production), and any other amount which constitutes "profit" when he makes a sale.

"Profit" is what makes his CHOICE to produce worthwhile. If the venture generates a profit which is acceptable to him, he has "succeeded" in his venture; in his "speculation".

If the profit is negative—i.e. a "Loss" then he is unsuccessful in this venture. He has either "speculated" wrongly, or allocated his resources in less than optimal ways. Whatever it is, "profit and loss" are SIGNALS which tell the entrepreneur OBJECTIVELY how things are proceeding.

So should these brave new-frontier folks be supported? That is entirely up to the individual customer—who is always right, and before anyone forgets it, let me restate a hard, cold fact of life, the sole determinant of any entrepreneur's "success" or dismal failure:

THE CUSTOMER IS KING

redbean said...

your usage of the market is wrong again. there is no market when their presence is determined by the law. if they are not permitted to haunt the streets, they cannot practise freely and let the people determine how much to give them.

Matilah_Singapura said...

There is a market whether there is "freedom" or not.

Street prostitution is illegal in S'pore. I get approached OFTEN—I've been accosted in broad daylight in Orchard Road by (I think they are) Chinese women.

Another example:

Drugs are not "freely" available, but they are available. In other words, there is a customer demand for drugs, and because markets are demand driven there is a definite market for illegal drugs.

The fact that the penalties for drug dealing are HIGH is reflected in THE (high) PRICE dealers charge.

This is why it is difficult to eradicate drug use in any society—stiff penalties do help —regardless of what some anti death penalty Western liberal cry-baby do-gooders claim—in the sense that they offer a "disincentive" to those who are considering fooling around with drugs.

However, the evidence is clear that for some folks, a death penalty is merely priced in as a "risk", and they will still use or sell drugs.

There is a point to this: the power of MARKETS is incredible—WHY? Because markets are Spontaneous Orders—intangible and "formless", can't be described in words, operates by universal laws of causality, you can't see or touch it...but you know it is all around you; spontaneous orders are what Lao Tze referred to as "Tao".

Now, back to the above example: the market for drugs is definitely NOT FREE—there is MASSIVE government interference, but yet, the market still thrives.

Let's consider our buskers and "entrepreneurs"—yes, some of them will "drop out" of the non-free market, due to massive interference (the law and the cops enforcing it), but some "hard core" (determined) ones will definitely TRY.

Whether they succeed or not is another matter entirely.

redbean said...

they called it black market.