I don't know why the author of this Atlantic piece sounds so
surprised. Has he never been in a poor neighborhood? Guys selling T-shirts, handbags, produce and used appliances on the street -- of
course putting an economic floor under people encourages them to take a shot at something bigger and better.
Walter Frick for The Atlantic:
Reagan was right about the link between startups and growth, but wrong in assuming that small government was the way to encourage them.
His belief in a tradeoff between taking care of citizens and
promoting innovative new businesses is at odds with the evidence. In
fact, one way to get more people to start companies, according to a
growing body of research, is to expand the welfare state.
Pundits and researchers often note the negative correlation between government spending and entrepreneurship, both within the U.S. and internationally, and conclude that growth requires trimming social welfare programs. Jim Manzi of theNational Review,
for example, a thoughtful commenter on economic policy, wrote last year
that, “we must accept some amount of social dislocation in return for
innovation.”
Yeah, he kind of lost me at the point where he describes a National
Review writer as "a thoughtful commenter on economic policy," but do go
on:
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