Leading the Revival of Individualism & Self Reliance

Road to Individualism: How Crypto Is Helping the Middle Class Get Ahead

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Thirty-five-year-old Ryan Williams may not be able to explain the intricacies of Bitcoin or tell you how the blockchain works. But that hasn’t stopped cryptoassets from improving his life.

As a bus driver and father of two, Williams understands the plight of middle-class Americans all too well. When the summer heat became too much for his children to endure, they began to beg him for an above ground swimming pool. “I said I can’t afford it,” Williams told NBC News. But that was before Williams remembered that he had invested some money in Bitcoin a while ago.

Transferring his cryptoassets from his digital wallet to his Bitpay debit card in only a matter of minutes, Williams was able to buy the $150 pool his children had been wanting. And as the neighborhood gathered around the new pool for their Fourth of July festivities, his neighbors and family were dying to know how he was able to make this purchase.

With pride in his eyes, Williams let his friends and family know that Bitcoin was to thank for this holiday success. Now, everyone, Williams knows wants in on the crypto rush.

Google Bitcoin

At the moment, Bitcoin is by far the most recognizable cryptoasset. In fact, there are now more Google searches for “Bitcoin” than there are for “Beyonce,” proving just how mainstream it has become. And while many average Americans have heard murmurings about it for years, few understand what exactly it is or how it works. And that is completely fine.

The beauty of Bitcoin and cryptoassets, in general, is that their potential is not limited only to the tech-savvy. One does not need to work in Silicon Valley or understand blockchain technology in order to utilize these transformative mediums of exchange. All you really need is a digital wallet.

For middle-class participants of the crypto economy, the decentralization and anonymity of the blockchain world may not be a primary motivator like it is for libertarians and other decentralization enthusiasts. But what does resonate with this crowd is the ability to invest and make money outside the world of established financial institutions: the same institutions that have been stacked against them for far too long.

Better Than Stocks

Before the 2008 financial crisis hit, there was a widely-held belief that if an individual could learn to play the stock market, they would be financially set for life. But after these sacred and seemingly bulletproof institutions began to crumble, faith in the stock market and other traditional financial institutions quickly diminished.

Without precise inside information as to how the game is played and how automatic trading algorithms work, average Americans were not able to make a lot of money from these market investments unless they paid dearly to consult with someone with more experience.

Similarly, accessibility to these markets was severely limited if you weren’t able to shell out the cash needed to make a substantial investment.

For many millennials, like Williams, who came of age during the financial crisis, the stock market was not viewed as a surefire way to invest and make money, as it had been in our parents’ day, especially since we saw many of our own parents and family members lose so much.

But cryptocurrencies allow those from all classes and backgrounds to invest in something worthwhile at a moderate price.

As Greg Salerno, an ironworker from Hoboken, New Jersey says, “It’s like being in Apple at 10 cents.” Salerno himself invested $1,600 in Bitcoin, an amount now worth $20,000. “In five to 10 years you could be sitting on something nice,” Salerno stated.  

And while not everyone can afford to purchase one Bitcoin, which is now worth $8,718, the price is completely irrelevant for market entry. All crypoassets are divisible without limit, so you can be an owner even if you only have $1 to spend.  

Consider, too, what it means to hold money that increases rather than falls in value. For decades people are generally used to having the money fall in purchasing power; in fact, this is what the Fed attempts to create with its target inflation rate. But what if you could make money by not spending money, as has been the case with crypto for years now?

What does this reality do to family finances? It actually incentivizes savings. Whereas current financial markets are nearly barren of opportunities to earn interest above inflation, and hardly anyone trusts real estate as they did, crypto offers a reward for frugality. This means building personal and family capital rather than living on debt.

The implications of this for individuals and for the entire macroeconomic structure are profound. Savings and capital investment, and the prosperity that follows could again become a norm.

Everyone Loves Crypto

It has become increasingly hard for middle-class Americans to get financially ahead in our current economic climate. Single-income households are not as common as they used to be and almost everyone is looking for a side hustle. Many people are asking themselves: why not choose cryptoassets?

While cryptoassests may not make you a millionaire overnight, they can help you make a plan for your financial future. As Williams commented, “Always keep grinding. It’s about having those extra funds on the side. Thanks to Bitcoin, Williams and his family will also be able to take the vacation they had been talking about for years, but never had the means to take.       

Williams’ wife is still slightly unsure how this whole Bitcoin thing works, but as her husband said, “My wife doesn’t fully understand it, but she does enjoy that we go out to dinner and I say, ‘I got it.'”

6 Pillars Of Individual Economics For The 21st Century

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Arnold Kling is a rare bird, an economist who recognizes that mainstream economics is empty and worthless today. More specifically, he accuses economists of inhabiting the world of the 19th Century, where the mental model is one where “hordes of interchangeable workers in stark factories toil in the service of the owners of capital”. It’s pretty stupid, he implies, for economists to look at today’s economy through 200-year old glasses. As an example of the blindness that comes of looking through ancient glasses, Kling asks how economics can place a value on intangibles (like a Google search or free content accessible to all on the internet) when its 200-year old theories of value creation are based on factory production and physical capital.

After this explosive introduction, his essay, accessible through Medium, wanders off into what he calls “research directions” for a new economics. But that’s academic. We don’t need research directions. We need new principles of economics, to develop a science that is truly useful to help people succeed in a rapidly changing world.

Here are 6 pillars to build on.

Individualism.

Economists are always trying to aggregate economic activity into quantified data such as Gross Domestic Product and the Consumer Price Index and Total Employment and the Money Supply. But economics should deal with the actions of individuals, how they make decisions, and how they exchange goods and services with others. All economic actions are performed by individuals. All decisions are made by individuals. Individuals’ choices of ends and means are drivers of those decisions.

The unit of analysis for economics is the individual. If economics is to be a useful science, it will help individuals to make better decisions for themselves, in the context of productive collaboration with others. There’s a fancy academic term for this approach: methodological individualism. However, let’s not go there. Let’s just help shed light on good economic decision making.

Subjective value.

Arnold Kling wonders how economics can ever put a value on intangibles like Google search and Amazon marketplace. By analyzing how individuals make decisions, he would know. Value originates inside the mind of consumers, and they take action as a result. If they feel that, by deciding to use a tool like Google search, they will improve their situation (e.g. answer a question, expand their knowledge, find an appliance they were looking for, or whatever it might be), then value has been created. Every entry into the Google search bar is a statement that “my life would be better if…….” If I had this information, if I knew that answer, if I could find this object, if I could bring more knowledge into my decision-making.

Value is inside the customer’s mind. Google is valuable because people use it to improve their lives. The measurement of value is the level of satisfaction the user feels.

Connections and Interactions.

There are billions of individuals in this world. Economists try to place them in collectives in order to pursue their goal of aggregation. They talk about the working class and the middle class, or about the workforce and the capitalists. But the opposite perspective is the right one.

Individuals seek to be economically unique, to find a way to specialize and differentiate themselves from others to make themselves valuable in the marketplace. And then they connect and interact with others so that their uniqueness becomes a contribution to the system.=

The new world is a set of nested and networked systems, within which individuals play their role. Every time they connect and interact with others, new information is produced, a service is given, an exchange is made. It is the interactions that are productive.

That’s how the modern world is advancing. Because each individual is empowered and augmented and connected like never before by technology, the number of interactions and the frequency of interactions and the quality of interactions and the precision of interactions are virtually unlimited. There’s an economy of individual value creation in these ecosystems of interactions. That’s where economics should focus.

Services As Software.

Kling’s accusation that economists still seem to think as if the economy were made up of factories and line workers is doubly telling. First, the US economy is now 80% services – defined as the use of knowledge to serve others. But, even if economic theory were able to keep up with this development, services have moved on, and are becoming software.

Financial services are a good example. Financial services as software will change every perception we have of financial institutions. There will be no banks, just apps on a mobile device, with the same digital experience as any other. Instead of bottlenecked institutions, we’ll see peer-to-peer, self-initiated, self-controlled, low cost transactions that feel instantaneous, smooth and frictionless. There’ll be high privacy, high security, and no discrimination.

Kling suggests economists don’t understand financial intermediation today. When finance is disintermediated, they’ll understand even less.

Real World versus Theory.

Economists are always talking about economic theory: monetary theory, labor theory, capital theory, price theory and so on. Economics should be about the real world. There’s no shortage of real world data, and in fact much of it is real time. And we have advanced analytics to detect patterns and trends and identify insights from the data.

The data is factual – it’s about actual individual behavior. From these facts we can deduce the feelings and motivations behind the behavior, and hence individual value preferences. There’s no need for elaborate theories (which are often riddled with counterfactual assumptions) and even less place for the spreadsheet models that economists build on top of their theories and assumptions. We now have machine learning based on patterns of facts.

Economics As Morality.

The current world of interconnected individuals exchanging services points towards a highly moral society. Each individual wants to help others realize their subjective value preferences. They try their best, and accept market feedback with grace to achieve continuous improvement. The most just society is the one that releases the creative energies of their entrepreneurial citizens in service to others. Economics should concern itself with true morality.

Well done, Arnold Kling.

Dr. Kling has done economics a great service. He has demonstrated its emptiness. He has declared it worthless. Thank you, Arnold. New thinking can now take over.

 

 

Mises Knew That Socialism Causes Envy and Suffering

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On my college campus, the largest and most active club was the “Revolutionary Student Union,” also known as the school’s resident Marxists. Even then, I passionately disagreed with socialism. But one thing that struck me was how these students were not only wrong, but seemed deeply unhappy. They always walked into class scowling and were always grousing, not just about the evils of capitalism, but about intractable frustrations and perceived injustices in their personal and academic lives.

I often wondered if there was a connection between the dysfunction in their lives and their socialist ideology.

To these young revolutionaries, every frustration in their lives was someone else’s fault. If they weren’t getting the grades they felt they deserved, some bourgeois professor was to blame. If they didn’t have job prospects that matched their high regard for their own intellects, it must be the capitalist system holding them back. Their tendency was to scapegoat “class enemies,” not only for societal ills but for their own personal problems as well.

By shifting the blame to others, they relieved themselves of responsibility over their own problems. They wasted their time and energy complaining, wallowing in self-pity, and seeking redress, instead of taking ownership of their lives and fixing up their affairs. As a result, their frustrations only compounded.

This attitude also robbed them of one of the great pleasures in life: experiencing empathetic joy in the happiness of others. According to their zero-sum Marxist mindset, the prosperity of others came at the expense of their own prospects. So they resented anyone more successful than themselves. And they became so preoccupied with dragging other people down that they had little energy left over for lifting themselves up.

If my student comrades ever did manage to impose socialism on the country, it would cause deep and widespread misery. And yet plenty of misery in their own lives was already being generated by the mere idea of socialism residing only in their minds.

The Psychological Roots of Socialism

Yet, in spite of this, and in spite of all the economic logic and evidence that shows that classical liberalism and capitalism enriches and frees the whole of society, while socialism enslaves and impoverishes it, these young socialists would still cling rigidly to their ideology. Why?

According to Ludwig von Mises, it is not simply a matter of economic illiteracy and intellectual error in general. Rather, it is a psychological matter. He even went so far as to argue that the roots of socialism lie in neurosis.

“…the root of the opposition to liberalism cannot be reached by resort to the method of reason. This opposition does not stem from the reason, but from a pathological mental attitude—from resentment and from a neurasthenic condition that one might call a Fourier complex, after the French socialist of that name”

The socialist frame of mind can be summed up in one word: resentment. As Mises wrote:

“Resentment is at work when one so hates somebody for his more favorable circumstances that one is prepared to bear heavy losses if only the hated one might also come to harm. Many of those who attack capitalism know very well that their situation under any other economic system will be less favorable. Nevertheless, with full knowledge of this fact, they advocate a reform, e.g., socialism, because they hope that the rich, whom they envy, will also suffer under it.”

Psychologist Jordan B. Peterson also characterizes socialism as both driven by resentment and fostering resentment. In a panel, he said of Marxism:

“There is the dark side of it, which means everyone who has more than you got it by stealing it from you. And that really appeals to the Cain-like element of the human spirit. Everyone who has more than me got it in a manner that was corrupt and that justifies not only my envy but my actions to level the field so to speak, and to look virtuous while doing it. There is a tremendous philosophy of resentment that I think is driven now by a very pathological anti-human ethos.”

Those who have lost themselves in a downward spiral of resentment would rather fail than succeed if it meant that their class enemies would suffer along with them. The phrase “misery loves company” is particularly applicable to the socialist mindset.

As Mises explained, people often cling to resentment and scapegoating because it offers consolation, however fleeting:

“In the case of social failure, which alone concerns us here, the consolation consists in the belief that one’s inability to attain the lofty goals to which one has aspired is not to be ascribed to one’s own inadequacy, but to the defectiveness of the social order. The malcontent expects from the overthrow of the latter the success that the existing system has withheld from him.”

It is for this reason that Mises says, “…for modern man, socialism has become an elixir against earthly adversity.”

And this compulsive, unhealthy attitude is what closes the class warrior’s mind and makes it impervious to new ideas. As Mises wrote, socialism often amounts to a defense mechanism against an inferiority complex:

“The neurotic clings to his ‘saving lie,’ and when he must make the choice of renouncing either it or logic, he prefers to sacrifice logic. For life would be unbearable for him without the consolation that he finds in the idea of socialism. It tells him that not he himself, but the world, is at fault for having caused his failure; and this conviction raises his depressed self-confidence and liberates him from a tormenting feeling of inferiority.”

Only You Can Change Your Circumstances

Luckily, this kind of neurosis can be cured, but it requires effort on the part of the individual. As Mises wrote:

“One cannot send every person suffering from a Fourier complex to the doctor for psychoanalytic treatment; the number of those afflicted with it is far too great. No other remedy is possible in this case than the treatment of the illness by the patient himself.”

And the starting point for conducting such self-therapy is for each individual to come to grips with the fact that resentment, envy, and scapegoating only brings oneself frustration, stagnation, and needless suffering.

We are all responsible for improving our own lives, difficult and time-consuming as that quest may be. Renowned psychology professor Jordan B. Peterson has built his career and renown largely on helping individuals leave behind resentment and self-pity and take responsibility for their own lives. He argues that, far better than political agitation and contention, that offering that kind of help is the best way to help ideologues grow out of the neurotic tendencies that cause them to cleave to socialism and other toxic creeds. In a Q&A session, he counseled saying to such people:

“…look, we would like it so much if you could thrive as an individual. Drop your cult-like affiliation. Step out of the shadows, the demonic shadows of your ideological possession, and step forward as a fully-developed person into the light.”

The antidote to both socialism and debilitating resentment is individual reflection and action. If one makes an effort to look within and better themselves, then they will find that that resentment will begin to disappear, self-efficacy will grow, and their lives will improve. And dropping socialism will be a wonderful side-effect.

How You Can Be An Entrepreneurial Employee.

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In Skin In The Game: Hidden Asymmetries In Daily Life, Nassim Nicholas Taleb has some scary things to say about employment, i.e. working for a firm or a corporation with which your relationship is full time payroll employee.

He relates employment to slavery, in a chapter entitled How To Legally Own Another Person.

Every organization wants a certain number of people associated with it to be deprived of a certain share of their freedom. How do you own these people? First, by conditioning and psychological manipulation; second, by tweaking them to have some skin in the game, forcing them to have something significant to lose if they disobey authority.

Taleb describes the company person, “impregnated with the stamp his firm wants to give”. His evidence includes dressing the part, using the language the company expects, socializing with other company people and spouses, and sharing company jokes. Not the tiniest amount of idiosyncratic attribute is permitted – because there is “something huge to lose” if the individual does not behave as a company person.

In return, the firm is bound by a pact to keep the company person on the books as long as feasible. Except it doesn’t work that way any more. Technological innovations and financial and structural changes in corporations have ended the tenure of the company person.

But even worse, says Taleb, is the requirement that people who are no longer owned by the corporation must remain employable. They fear not only upsetting their employer, but also other potential employers.

Is it possible to live the entrepreneurial life when employed by a firm? Yes (despite what Taleb believes) because the entrepreneurial life is an attitude and a style and a way of managing the future that you can bring to any context.

Here are our guidelines:

Reinforce Your Own Uniqueness.

The entrepreneurial life is to serve a customer need in a unique and better way. If you are employed, you have chosen your employer as your customer, the one who buys your productive output. Serve your customer well, understand their needs, and deliver in a way that is superior to any other supplier of productive services to that employer. That may require accumulating and demonstrating unique skills, or acquiring unparalleled knowledge about a particular issue, or product, or process. There are many pathways to uniqueness.

Focus on indispensability.

Uniqueness that is dispensable will not get you long-term employment security. The entrepreneurial way is to develop deep insight into the needs of the customer, and to be able to identify those needs that are currently unmet and high enough on the value scale that a new solution to them will be perceived as highly compelling. Treat your employer exactly as you would a customer. Identify the need, do your research to make sure it’s a compelling need, imagine a future state where that need is fully met, and then deploy your personal resources to implement the new solution. Develop metrics to measure the results of your initiative. And your metric should not be a qualitative job assessment by a person of higher rank in the organization. That person is your competitor.

A couple of highly valued and measurable fields for indispensability are demonstrable individual contribution to the profit of the company, demonstrable individual contribution to the topline revenue of the company, and individual ownership of external important relationships. Traders in energy companies, financial companies and commodity companies can show direct contribution to profits. Sales executives who manage relationships with key customers can show direct contribution to revenues. And similar important external revenues might be attributed to financial reporting executives who help determine external analysts’ evaluation of the company’s stock price. Try to find your indispensable role.

Broaden your engagement.

Entrepreneurs, once they have developed an idea for a business offering, and have proven that there is a positive response to their offering among at least a small segment of the market, proceed to broaden their niche by attracting more customers, and/or adding new service line extensions. The principle can be applied as an employee: once your uniqueness is established, apply it more broadly. For example, the ability to cross internal company boundaries between departments and organizational silos is highly valued. Volunteer to contribute unique knowledge on cross-functional teams and then demonstrate your ability to lead the team, or to be a catalyst to team energy and team collaboration.

Don’t be afraid of losing.

Ultimately, you lose your entrepreneurial spirit when you become afraid of losing your job or losing out in the race for promotion. The employment game can be a lottery. GE and IBM, just to pick two examples, have discarded large numbers of employees in layoffs in recent years. You might have joined one of these companies and expected a long career path to eventual retirement, and been disappointed. No-one should put themselves in a position where their well-being depends on a lottery and they’re fearful of losing. So don’t develop a fear of losing. Establish your uniqueness, broaden your engagement and take whatever risks you need to in order to increase your value to your employer.

Or, decide to exit employment and become a true entrepreneur.

 

 

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What Is Blockchain?

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In the past few months we’ve written many articles about bitcoin and its underlying technology, “blockchain”. To help our readers fully understand the backbone of cryptocurrency, below is a great explanation of blockchain technology by Steven Buchko at CoinCentral.com

What is blockchain?

Simply put, a blockchain is just a list of digital records (blocks) that are chained together using cryptography.

The financial industry today contains all types of middlemen – payments processors, banks, and credit card companies are just a few. These intermediaries help to establish trust between buyers and sellers and ensure the accuracy of data in the transactions. However, adding additional people and steps to the process oftentimes leads to cost increases and reductions in speed.

Enter blockchain. This technology eliminates the need for middlemen by providing a decentralized, trustless ledger system with little exposure to fraud. Bitcoin is the most famous example.

Although you primarily hear about the financial sector’s use of blockchain, the technology expands far beyond just simple transactions. Blockchain companies are disrupting tons of industries from data storage and supply chain to gambling and the Internet of Things.

How does blockchain work?

Nodes

A blockchain is run by a large network of computers, called nodes. These computers validate and record transaction data on the network by solving complex mathematical algorithms.

Every node has a complete history of transactions, so if one were to try and maliciously change a record, the entire network would know and reject the change.

Transaction example

Bob wants to send Sally $5, so he submits his transaction to the blockchain. Every node in the network then receives his transaction request.

Each node checks for two things with the transaction data:

  1. That Bob is who he says he is
  2. That Bob has the $5 to send to Sally

First, the nodes check Bob’s identity using the private key that he provides. A private key is an ownership tool that identifies a source of funds.

Next, the nodes make sure Bob isn’t trying to spend money that he doesn’t have. Because the nodes all have a copy of the ledger of transactions, they can easily check whether or not Bob has the $5 that he’s trying to send.

If at least 51% of the nodes agree that Bob’s identity is truthful and he has enough money to send, then the transaction will go through. The nodes will also update the ledger on the network with the new transaction.

With each new transaction added to the chain, the previous transactions become harder and harder to manipulate.

This immutability is supported by hash pointers. A hash pointer is a cryptographic hash that refers to the previous data block in the chain. They allow you to confirm that no one has tampered with earlier transaction blocks.

A transaction becomes like a fly trapped in amber. You would need to remove each additional block (layer of amber) from the chain to access and manipulate the previous transaction data (the fly).

The benefits of blockchain

Faster

Cutting out the middleman shortens the process of transactions and data transfer. Validations are inherently built into a blockchain system, so there’s no need for lengthy approvals or complicated record checks.

Cheaper

As mentioned earlier, the more people and entities involved in a process, the more costly it becomes. The cost of running a blockchain network is far less than an intermediary doing the same job.

More accurate

Data on the blockchain is immutable and validated by mathematical computations. It’s nearly impossible to have any human error and/or fraud.

Blockchain TL;DR – Final Thoughts

A blockchain is a distributed ledger system that uses cryptography to link together bits of data. It removes the need for middlemen in transactions which leads to faster processes, reduced costs, and greater data accuracy.

Uncertainty, Chaos, And Skin In The Game: Attributes Of A Meaningful Life.

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Economists use the term uncertainty in reference to future conditions that are unknown and unknowable. The economic system consists of trillions of interactions between individuals, and, in each one, both buyers and sellers are making a creative choice. Shall I buy this or that? At what price? Shall I sell this or that? At what price? If I modify my offer slightly, will there be a different result? I felt good about this possible purchase yesterday, but now I am not so sure. Should I check out this new competitor first? I didn’t expect it to rain, so maybe now I should buy an umbrella instead of lunch. I didn’t expect electric cars. I didn’t expect artificial intelligence.

Bearing The Weight Of Uncertainty.

Those same economists say that the people who bear the weight of this future uncertainty the most in the economy are the entrepreneurs. They bear it eagerly on behalf of the rest of us. Entrepreneurs have a special relationship with the future. They make a deal with the future. It is their domain. They imagine a future that is better than today, and they believe that they can bring it about. They sacrifice in order to do so, because while they are assembling and deploying their resources, they are not earning current rewards. Rather, they are hoping for future rewards – and those future rewards are uncertain. They may bet wrong. Some competitor may be imagining the same future and doing a better job of investing and implementing.

For the consumer, the uncertainty of the future is a positive sum. They are going to be offered something new and better. For the entrepreneur, it could be positive or negative.

The Psychic Rewards Of Sacrifice.

Importantly, however, the entrepreneur’s incentive for bearing uncertainty is not only financial. There is considerable psychic reward on offer. Different entrepreneurial personalities may experience the psychic reward in different ways – the exhilaration of taking on the unknown, the joy of self-reliant action, the fulfillment of pursuing one’s own intuition, the sense of achievement in assembling resources in a new and unique way.

In his book 12 Rules For Life: An Antidote To Chaos, Dr. Jordan B. Peterson spends a lot of time talking about entrepreneurial sacrifice: the proposition “that something better might be attained in the future by giving up something of value in the present”. In other words, sacrifice now to gain later. The difference between successful people and unsuccessful people is the successful sacrifice. The courage to undertake this sacrifice gives you more security and strength than any short-sighted concentration on your own safety. It’s living properly, it’s discovering meaning. Meaning, for Dr. Peterson, is the antidote for chaos and suffering.

Honesty And Authenticity.

Another take on the importance of entrepreneurial uncertainty comes from Nassim Nicholas Taleb in his book, Skin In The Game. Taking responsibility, including moral and ethical responsibility as well as financial responsibility, for the downside risk of one’s entrepreneurial efforts (Taleb would call these “trades”) is what holds society together. It is transparency and honesty and authenticity. It is the honorable life, the only one worth living.

Beware Of Those Who Don’t Have Skin In The Game.

According to Taleb, those who don’t have skin in the game include:

Bureaucrats: Bureaucracy is a construction by which a person is conveniently separated from the consequences of his or her actions.

Governments: government interference in general tends to remove skin in the game.

Academics: in academia, there is no difference between academia and the real world; in the real world, there is.

Administrators: Administrators, everywhere on the planet, in all businesses and pursuits, and at all times in history, have been the plague.

Take Action. Do Something Heroic.

The people with skin in the game are doers. They act. They take risks. And they are prepared to accept the consequences if they take the wrong risk, or the risk does not work out. Taleb includes entrepreneurs in this group: Entrepreneurs are heroes in our society. They fail for the rest of us.

For economists, the market is a process of learning and discovery in the context of uncertainty. For Dr Peterson, entrepreneurial sacrifice is courage and meaning. For Nassim Nicholas Taleb, skin in the game is authenticity and an honorable life.

In all cases, the entrepreneurial life is the one that reaps the greatest rewards, both psychic and (potentially) financial.

 

 

What The Free Market Can Do For Prescription Drugs

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There is almost nothing Amazon can’t do. From delivering nearly any item you can think of in two days to single-handedly reducing the price of certain Whole Foods’ products, Amazon has been a huge force for market innovation. And if not for the federal government’s interference, Amazon might have even been a leader in the drone delivery industry by now.

But according to recent gossip circulating around the business world, the online retail giant may soon be venturing into uncharted territory by entering the pharmaceutical business.

While these rumors are purely speculative for the time being, Amazon’s potential entry into the world of prescription drug care could be huge for consumers looking for alternatives to our country’s outdated, insufficient health care system. It would also be the realization of one doctor’s dream.

Prime for Prescriptions?

For several years, Dr. Josh Umbehr has been sending emails to Amazon CEO, Jeff Bezos every other week. An admitted “fanboy,” of Bezos and his successful business endeavors, Umbehr believes Amazon has the potential to completely change the way consumers purchase prescription drugs.

In one of his biweekly emails, Umbehr wrote:

Amazon could work with small pharmacies across the country to provide a huge value to Prime customers, on a regular basis (with) short delivery times, not to mention the effect it would have on competition that overcharges immensely.

While these emails have become routine over the last few years, Umbehr hasn’t necessarily been holding his breath waiting for a reply. However, there was a small inkling of hope when he recently received a response from an employee of Amazon who implored him to submit a business proposal to the company.

After submitting his proposal he was told that if his idea was accepted, he would most likely not hear back from the company. Fully expecting to have to continue writing his biweekly emails, Umbehr was shocked when he received a detailed email in January, explaining that his proposal had been forwarded to Amazon’s business development team for further consideration.

By the time May had rolled around, it was reported that Amazon was actively looking for a general manager to place in charge of the company’s potential pharmaceutical branch. While it is still uncertain what Amazon’s plans may actually entail when it come to breaking into this multibillion dollar industry, something is definitely brewing.  And if Bezos has any doubts that this type of model could be successful, he need only ask Umbehr for advice.

A Different Approach

Dr. Umbehr has been leading the charge towards free market health care alternatives in the United States. Based in Wichita, Kansas, Dr. Umbehr, along with Dr. Doug Nunamaker, runs a direct-pay primary care health practice that does not accept insurance premiums.

By opting not to work with third-party insurance companies, Atlas MD has been able to dramatically cut medical costs for its patients. Instead of accepting an insurance copay like most physicians offices, patients pay a monthly flat fee for a membership subscription. These membership costs vary by age. For children, Atlas MD charges $10 a month. For adults, services range from $50-$75 a month. Senior citizens are charged the most at $100 a month.

For health care consumers who have purchased memberships, this allows them access to all the services provided at the Atlas MD office without having to worry about whether or not their insurance policies cover a procedure.

In addition to making the care and payment process easier to manage, Atlas MD also stresses the importance in using tech to communicate information to their patients. On its website, clients have access to numerous amounts of health information on their computer or mobile devices, allowing them to have more control over their personal health.

This revolutionary health care model hasn’t gone unnoticed either. Atlas MD has made headlines over the last several years not only because their concierge care model is so unique, but also because it works.

What Is Bezos up To?

In addition to looking for personnel to head up this potential pharmaceutical project, Amazon has also recently hired several professionals from the health care sector to offer feedback and advice for any future medical related projects.

Since this is all currently speculation, guessing is all anyone can really do when it comes to predicting Amazon’s next move. But according to some in the medical field, it would be in Amazon’s best interest to cater any future health-related endeavors to consumers willing to pay out of pocket for care. These are the same types of health care consumers who are attracted to Atlas MD.

Others weighing in on the issue have wondered if Amazon’s recent acquisition of Whole Foods provides some evidence to support the company’s intentions of getting in on the pharmaceutical game. Stephen Buck, who co-founded “GOODRX,” a company that provides consumers with coupons for costly prescriptions, said, “The acquisition of Whole Foods makes entry into pharmacy much easier for Amazon. Amazon could use this retail footprint for consumers to pick up prescriptions.” While Buck thinks that the 450 physical Whole Food locations provide an easy access point for health care consumers to pick up prescriptions, others are thinking bigger.

“Whole Foods creates an entry point to drug delivery,” analyst Morgan Stanley recently wrote. But whether the company chooses to have a pick up site or offer Prime delivery on certain prescriptions, or perhaps both, one thing is known for sure: Amazon is already selling prescriptions on its Japanese site. So Amazon moving into the health care world is not entirely out of the realm of possibility.

Additionally, and again this could merely be a coincidence, Gabrielle Sulzberger, Whole Foods chairwoman, is also on the board of Teva Pharmaceuticals, a huge drug maker in Israel.

It should shock no one that the most problematic obstacles standing in Amazon’s way are health insurers and government regulations. As physicians like Umbehr already understand, third-party health insurers often make the situation worse as it stifles the organic pricing process associated with demand for a certain product. It will be hard to compete for prices within a system that is already vastly distorted by third party insurance companies.

Likewise, the government has many restrictions in place for medications that require special requirements. In the instance of certain stimulants and opiates, delivery would not be an option as these require in-person pickups where the patient must provide government identification. But since Amazon hasn’t released any substantial information regarding its plans, there is really no telling what route they may take, if they take any at all.

Others who have chimed in on this new venture have insisted that there is no money to be made from the pharmacy business. Both CVS and Walgreens, two of the most well-known pharmacies in the country, have been experiencing falling stock prices this year. And many in the field have said that this would be a risky move since there is not a whole lot of money to be made in the world of generic prescription drugs.

But one thing the public is no stranger to is Amazon’s willingness to take experimental risks in the world of online retail. So while there may be much working against its favor, there is still hope, especially from Umbehr that Amazon will take on the beast that is the pharmaceutical company.

And while we wait to see if and how Amazon plans to execute an online pharmacy, it is hard to imagine any apparatus that is less effective than the current government controlled system.

How a Childhood Book Series Taught Me About the Entrepreneurial Spirit

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I have always been a fan of a good hustle. My parents firmly believed that allowance made kids entitled. As members of the family, we were expected to pitch in around the house without the expectation of payment. And while I do not know that I will subscribe to this philosophy with my own future children, it did help me develop an instinct for making my own money at a young age.

As a kid growing up in the 90s, I was surrounded by fictional characters who valued making money. Every time Saved by the Bell came on and Zack Morris cooked up a new scheme to make money off his Bayside High classmates, I was inspired. Although Zack’s methods were sometimes less than pure (he has on more than one occasion earned a dishonest dollar), it was his entrepreneurial spirit that encouraged me to start my own hustle.

Problems and Solutions

In the fourth grade, I noticed many of my classmate’s mechanical pencils were becoming jammed with lead. Unable to use them, my friends would get frustrated and throw the pencil away in anger. But mechanical pencils were prized possessions for nine-year-olds. Throwing one away meant you may not be able to convince your parents to replace it for several weeks. That meant having to use regular pencils. The horror!

This same predicament happened to me often as well, but I had learned how to fix the lead- jammed pencil myself. And it was this skill that led me to set forth a solution to this grammar school conundrum. I would start my own “mechanical pencil de-clogging” business.

For one dollar, I would take my collection of tools, including a bobby pin and several straightened paper clips, and poke and prod at the problem until the lead jam was no more. As it turns out, this was a fairly lucrative operation for a nine-year-old. I began taking on at least a few “clients” each week.

When my parents asked me now I had earned the money, I simply told them I had started my own business fixing mechanical pencils. As long as I was not stealing the money, they had no qualms with my entrepreneurial spirit.

Other parents did not hold the same view. A friend of mine caught onto my business idea and began competing with me. Unfortunately, her parents believed it was “not right” for a fourth grader to be making money off of other fourth graders, and she was quickly shut down. Once again, I was the only game in town, which did not bother me one bit.

This side-hustle only lasted one school year, but as I got a little older I would discover a more lucrative way to make money thanks to the “Baby-Sitters Club” book series.

Kristy’s Great Idea

I had received one of the books for Christmas. The cover featured a picture of the young teens conducting a laid back business meeting and the words, “Kristy’s Great Idea.” This was a perfect title since it does, after all, always begin with a great idea.

The book tells the story of Kristy Thomas, who does a lot of babysitting in the small town of Stoneybrook. One day, her single mother is overwhelmed when all her older children are too busy and cannot watch their six-year-old brother. She begins frantically calling sitter after sitter, but to no avail. Each is already booked. But just as I saw an opening in the market when my classmates kept jamming their mechanical pencils, so did Kristy see her mother’s predicament as an opportunity to solve a problem, while earning money.

A passage from Ann M. Martin’s classic, told in Kristy’s perspective, reads:

“I chewed away at a gloppy mouthful of cheese and pepperoni and thought it was too bad that Mom’s pizza had to get cold while she made all those phone calls. I thought it was too bad that David Michael had to sit there and feel like he was causing a lot of trouble just because he was only six years old and couldn’t take care of himself yet.”

Then comes the brilliant watershed moment when the idea for the Baby-Sitters Club first occurs to Kristy:

“Then the idea for the Baby-sitters Club came to me and I almost choked. I could barely wait until nine o’clock so I could signal the great idea to Mary Anne.”

Kristy realized that if her own mother was having to call several sitters before securing one who was available, other parents were surely experiencing the same. Since all her friends were already working as babysitters after school and on the weekdays, she knew exactly who she could call on to help her with her business.

“My idea was that Mary Anne and Claudia and I would form a club to do baby-sitting. We would tell people (our clients) that at certain times during the week we could all be reached at one number. We would hold our meetings during those times. That way, when someone needed a sitter, he or she could make one phone call and reach three different people. One of us would be available for sure. Of course, people could call us individually at other times, but the beauty of the meetings would be the opportunity to reach several baby-sitters at once. Our clients wouldn’t have to go through what Mom had just gone through at dinner.”

By streamlining the services they were already each providing separately, they were able to save clients the time of having to call several potential sitters. And from this idea, Kristy and her friends were able to create their own babysitting empire in their small town. And it was this great idea that provided the setting for 133 books in the series. Each installment was filled with overarching themes of entrepreneurship that surely inspired many of its readers, including me.  

My Own Babysitting Empire

The babysitting business idea was of particular interest to me. Growing up in a Mormon community meant that childcare was an oft sought-after commodity since large families were the norm. My own family, for example, has ten children. This means lots of kids in need of a sitter.

If Kristy could turn babysitting into a lucrative hustle, certainly I could too. So I set to work, using the old computer program “Print Shop” to make business cards to hand out during church. Sundays would be my most important marketing days.

In order to demonstrate how good I was with children, I made sure I was always around to help busy parents who seemed overwhelmed listening to the Sunday speakers while also trying to keep their children in line. This made a huge impact.

My parents also helped me through word of mouth, advertising, and attesting to my topnotch childcare skills. Eventually, the word spread and I was making a pretty penny. For five dollars an hour, I would entertain your children while keeping them safe. This was a steal for most of the members of my community.

From the ages of 12-15, I spent a fair portion of my weekends and after school hours babysitting and making money. Throughout my junior high years, I do not remember ever having to ask my parents for money to go out with my friends. In fact, nothing made me prouder than being able to use the money I had earned to buy the things I wanted. This must be what independence felt like, I often thought to myself.

Of course, my successful business didn’t negate my curfew, so it wasn’t true independence, but it was a nice glimpse of what free market success felt like. And while I didn’t have much of a chance to use my childhood entrepreneurial skills during my college years, they have found use again throughout my professional career.

As a writer, I am a lot like a prospective babysitter, trying to earn a positive reputation that makes people feel comfortable trading money for the value I create. And by returning to my entrepreneurial roots as a freelance writer, I have able to build a prosperous future for myself. But this time around, I have nicer business cards.

Entrepreneurs Succeed By Helping Others. For Politicians, It’s The Opposite.

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We live and operate in the service economy. For example, services account for 80% of US GDP according to the World Bank (and this is 2015 data, so probably the number has increased since then). And services account for 80% of US private sector employment according to official statistics.

Actually, we should think more expansively about services. According to the framework called service-dominant logic, all production is valued by consumers as a service. Goods derive their value through use – the service they provide. All economies are service economies, and all jobs are service jobs.

Knowledge For The Benefit Of Others.

The definition of service, according to the discipline called Service Science, and its intellectual father, Dr. James C. Spohrer, is the application of knowledge for the benefit of others. The science part of Service Science is, today, highly focused on adding artificial intelligence capabilities to service-delivering entities in order to apply knowledge to perform a service task as well as or better than a person.

In other words, all the entrepreneurs throughout the country and the economy and the world are doing their best to do better in helping other people. In his book The Inevitable, Kevin Kelly says that he knows the business plans of the next 10,000 start-ups: “Take X, and add A.I.” – making service better by adding online intelligence.

But it’s not just A.I. entrepreneurs. Your tax accountant, your hairdresser, your dry cleaner, your delivery service, and your attorney are all thinking hard every day about how to serve you better. If they don’t, someone else will.

Service Providers Want You To Enjoy A Great Experience.

The output of a service is an experience. You get a completion, such as a tax return or a clean shirt, of course. But what you actually receive is a feeling that your life is better as a result. You feel relieved at filing your taxes on time and that they are accurate; you feel well groomed; you feel well-defended in your law suit.

In order to produce this result, service providers must be highly empathetic. They must know your emotional preferences and cater to them. It’s a big challenge, because your experience – the one on which you judge your service provider – is subjective, idiosyncratic, often inconsistent from day to day, and always emotionally charged. One day you are stood in line at Starbucks happily checking your Facebook messages without a care. The next day, at the same time in the same length of line with the same barista, you are screaming inside because you are late for an early meeting at the office. How can a service provider cope with this emotional inconsistency?

The Morality Of Service.

The answer is that they want to help you. As Adam Smith said in The Theory Of Moral Sentiments:

How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.

That same morality that Adam Smith identified in empathy now manifests itself in the entrepreneurial service economy. Everyone is competing to help you. Today we have 5 star ratings and comment streams and social media and reference checks to make good service a national obsession. Every service provider is trying to be different and better, which means a better experience for you. They try to be uniquely valuable to you via personalization – serving you as a unique individual with unique needs. They strive for your loyalty, by always listening and always responding to your changing needs.

If they can combine personal and technological service, and if you like the combination, then that’s the new experience you can expect. Turbo Tax for example is software that will complete your tax return for you, and also offers Turbo Tax Live and Turbo Tax Expert Services if you want that extra emotional reassurance of a human expert to answer your individual question. Over time, we’ll trust the software more and have less need for the human expert, but for now the combination suits us better.

The Opposite Case.

Politicians claim to be in “public service”. But the opposite is the case. Their entire political system consists of someone losing in order for someone else to win. Someone must be defeated. Therefore they recruit their own voters, with the specific objective of defeating the interests of the opposition’s voters. They lie and cheat in order to continue defeating their opposition, i.e. other human beings.

In the world of service, every human can be served the way they prefer, and they’re free to change service providers if they feel that bargain is not being kept. In the world of politics, not so much.

 

 

Road to Individualism: Charting Our Own Career Course

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Today, more so than at any other point in history, individuals have the ability to pursue their own unique dreams while still earning a living. In earlier times, going to school and finding a profitable career often meant being miserable. But happiness was hardly the ultimate aim of a steady paycheck. This was the sacrifice of adulthood: you did what you needed to do to make money regardless of how your quality of life suffered.

For a majority of people, this did not mean pursuing their passions. It meant pursuing what was sure the make the most money. But young Americans, accustomed to the technological advances and the wondrous internet, have found a way to combine their dreams with a paycheck by using unconventional means.

Etsy

One of the greatest aspects of young people making money from their passions is the degree of specialization that has been given to the world as a result. Looking for a knitted beard warmer, or perhaps a custom-made mermaid costume for your next cosplay event? Look no further than Etsy.

Etsy is an online marketplace that exists especially for one of a kind and handmade items. While prices may be higher on Etsy than in traditional venues, consumers are more than willing to pay more for better quality items that no one else has.

In the era of “Do it Yourself” weddings, many have looked to Etsy to provide specialty, craft-made decorations. Sure, many of these consumers could make these items themselves. But therein lies the beauty of Etsy: It is the division of labor at its finest.

You may not have the time to spend your days painting reclaimed wood, but someone else provides this service for you. Allowing you to focus on whatever area of expertise you choose.

But what is truly amazing about Etsy is that it is allowing artists to make a steady income from their creations. This was much harder to do before the days of the internet. But now young people do not have to settle for career choices that make them unhappy just to pay the bills.

Patreon

If your creations are more abstract than the physical items sold on Etsy and other online markets, than you may find better luck on site like Patreon.

Before the progressive era, when state funding was the answer to all of life’s problems, the arts were privately funded by wealthy patrons. This is how many artists were able to pursue their passions without living in extreme poverty.

Patreon has brought that same principle into the modern world. Now, independent journalist, writers, vloggers, and other artists are able to produce work while accepting funds from patrons who have a vested interest in the work. This has helped many make lucrative careers while pursuing what they love to do.

This has been huge for the indie media scene. With Facebook’s algorithms constantly changing and established outlets often reaping the benefits, it has been hard for many independent journalists to stay afloat. But Patreon has created an outlet for them to do so.

With so many people dissatisfied with the direction mainstream journalism is heading, many have chosen to vote with their dollars, giving donations only to outlets that they believe are doing a good job at reporting the news.  Through small donations, starting at as little as a dollar, interested patrons can support whatever cause they like. Personally, I make a habit of supporting independent journalists. And the fact that I am able to do this without being exorbitantly wealthy myself is the true beauty of Patreon. With each microdonation I give, I am supporting artists and writers I believe in.And while small donations do not seem like much, several small donations can add up quickly.

There are even some Patreon users who have made over 60 thousand dollars a month in donations. While this may be a rare happening, it shows what is possible when artists crowdsource their salaries. This has allowed young people to pursue their passions without having to risk being penniless. It also gives them instant market feedback. If people like what you are producing, you will get more patrons. If they do not like what you are doing, you will feel it in your wallet and will know to adjust accordingly.

Patreon and Etsy, as well as other options that will be discussed later, have helped contribute to the changing mindset occurring all over the world. Younger people do not want to do what is profitable simply because we can make money. We want to do what we love without sacrificing a paycheck.

The advances that have made this lifestyle possible are allowing more and more people to chart their own course in life, rather than follow what has traditionally been expected. And this is, in itself, leading to a world filled with more individualism.

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