Compassionate Capitalism

In the United States, we already allow children to borrow hundreds of thousands of dollars in order to pursue a higher education, a college degree. Nobody argues with the idea that this is necessary in order to give them the opportunity to change their lives. And in recompense, these dollars they borrow will never leave their credit report. These dollars are thus spent on that individual, for that individual, in hopes of achieving something that may never come to fruition, and the debt follows them for the rest of their life regardless if they succeed or not. The average graduation rate in four year colleges is 33.3%. So two-thirds of Americans go into college, waste thousands and thousands of dollars they don’t have, and get sent back into the world, no better than they started, and the colleges pocket the money and keep churning out degrees that have less and less value in the real world.

Now, imagine if the United States let you instead use this money to start a small business, instead of going to college. There are so many different opportunities in this country, but we only let you earn the skills to be an employee, instead of trusting that you might have what it takes to work hard and think smart day one, to the point of owning a successful business. The biggest hurdle any small business owner will ever face will be raising the initial capital. Imagine how dynamic, robust, and competitive our economy would be if everybody had a shot at having the American Dream from day one of becoming an adult citizen, the same way we let them enter college, or sign them up for the draft, or let them vote for our leaders. The average failure rate of small businesses within the first year is 20%. That means that you have an 80% to succeed past the first year. Out to five years, the failure rate is 50%, still way better odds than going to college. I won’t lie, if it becomes as easy to start a small business as going to college, that number of businesses failing will skyrocket, but it’s better than putting the money into the pockets of college administrators, isn’t it?

Let’s assume the worst case scenario; they borrow the money, they fail horribly, and they are back at square one. How is that any different from going to college for 3 and a half years, and never returning? Here’s the first difference; it empties college campuses, which lowers the giant, never-ending inflating cost of college. Now the people who are serious about their educational goals don’t have to share space with the people who are there because they don’t know what else to do with their lives, or which major to pick, or because this was the only choice they were presented with after highschool. The second difference; these young adults will have experience running a company, signing other people’s checks, balancing the P&L, this is invaluable, unique experience that will build their resume if it doesn’t pan out with real world experience and give them a type of education that can’t be learned showing up to a classroom everyday. I guarantee you it will have an effect on the culture as well, socialism won’t look so appetizing when you are offered a seat at the American economy without busting your ass working for a giant inefficient conglomerate for five, ten, twenty years.

The next big difference; competitiveness will return to the American economy. One of the biggest wrenches in the machine of free markets is the monopolies that form due to lack of competition, the accumulation of capital, merging of large companies, etc. All of these things have grinded us to a halt, stifled innovation, prevented us from moving forward at the rate we should.

The biggest difference; unemployment will virtually disappear. If everyone and their mom starts a small business, there will never be a shortage of jobs ever again in our country. Minimum wage will be useless because the pay for workers will climb as the demand for manpower climbs.

Here’s the biggest problem. Nobody in power will want this to become law. Every single politician in congress benefits from the fact that a handful of companies are doing 90% of the economic activity. Walmart, Amazon, name a fortune 500 company and they won’t like this one bit. It’s going to take dollars away from them, but that’s the most important reason why we have to push for this change. Money is power. It is the greatest source of power in the world. And that power belongs to everybody, not just the people who were lucky enough to fall into it. If I can put myself into $40,000 worth of debt going to a college and come out of it with nothing, how can you rationalize that money was well spent? It wasn’t. And the odds of me succeeding were way, way less than starting a profitable venture. $40,000 is a lot of money to start a business with. And maybe I fail in the process, but at least in the process I can turn a profit and pay back some of the money I borrowed, perhaps all of it, maybe even go into the green before failing, if I fail. And if I do fail, I’ve gotten real world job experience in the process, and learned a hell of a lot about what it takes to succeed in running a business.

This single change to our economic system might destroy poverty and racial economic disparity, send us skyrocketing past every single other nation in the world, make college more affordable while shooting steroids into the economy, and return the greatest tool of power back into the hands of the citizens of the United States. If there’s a rational argument to be made here against the plan, it’s that we shouldn’t give $40,000 to 18 year old kids that don’t know what the hell they’re doing. Here’s the counter-argument; we are already doing that, Pandora's box is open and it’s not going back in. Knowing there’s a 67% chance of failure on one path and a 20-50% on the other, which would you choose? So either destroy financial aid at colleges or implement this policy as well, those are your only choices. For every kid that takes the money and abuses it regardless of the safeguards in place, there will be an Elon Musk-like character who changes the micro-chasm of their business world, and goes on to start hundreds of successful companies.

The current system we have is a lot like starting a game of monopoly, but everyone gets a random amount of money from 0 to 1000. And while the people that start with a few dollars spend their entire lives stewing about the unfairness of their situation, ready to flip the game board onto the table, there’s an equal amount of people winning the game without even really trying. This system levels the playing field without giving up capitalism, free markets or any of the systems we know work without the interference of other factors. If capitalism is ever going to be viewed as the compassionate, wealth-generating system that it is, we need to give everyone the same starting position so whoever ends up at the top can say that they played at the same level as everyone else and out-played them, out-smarted them, they actually earned their place at the top.

If you want to fixate on the kids that will abuse the system and buy things with the money, let’s talk about that for a minute. Well for starters, even if they did that, they would still be contributing to the economy by spending. And this is already going on in the college system; you are allowed to borrow more money than you need and get a student loan check for the difference, anywhere from a couple hundred to $2,000-$3,000 cash in hand for “school supplies”. How many kids are turning around and buying their first car with that money? Which technically they might need to get to college, but it’s not what they are supposed to spend the money on, and where’s the oversight on that? It doesn’t exist. Alright, so what’s stopping someone from borrowing the money and living off the grid for the rest of their lives, never to contribute a single cent or hour of work into the economy. I’ll admit, that’s a possibility. And some kids will suddenly have access to such a large sum of money they might overdose or drink themselves to death, or whatever horrible scenario you could craft. All of this is still possible under the college loan system; how many times do you think a poor kid had gotten a $2,000 check from school and turned around and bought drugs to sell at a profit?

The real question we should be asking ourselves is how the hell can we afford to pay colleges a blank check, put the burden on kids, and let the government make profit off these kids who might not have known any better, just trying to do what their teachers and parents told them to do. We need to stop babying our children; once they turn 18 they stop being children, they are adults, and we need to give them the same respect any adult gets. If someone is 18 and they don’t want to go to college, our answer to their dreams shouldn’t be “figure it out on your own, oh and by the way everyone you’re competing with is millions, billions and trillions of dollars ahead of you, good luck.” So often in America, we treat our young adults like they’re stupid, but Elon Musk, Steve Jobs, Bill Gates, Oprah Whinfrey, Jay-Z, Dwayne Johnson, all of these people were 18 year old kids at some point, how much faster would they have shot to the top if they had a $40,000 headstart to chase their dreams?

This system isn’t going to make everyone in America successful, it isn’t going to create a nation of millionaires, people are going to try and fail. And in that trying and failing, they will learn so much more than they ever could in any other situation. The market is cold and unforgiving, and eventually reality needs to slap everybody in the face. The earlier it happens in someone’s life, the more of a headstart they will have to start again on the right path. Sitting here alone, writing a script, I honestly can’t think of many reasons why someone would be opposed to this plan, since it’s already happening to every kid in America, just locked into the college/education system instead of giving them free will, choices in life. And the money they quote unquote “waste” will still go into the economy, instead of being given to colleges hand over fist.