From an NPR interview with professor Justin Wolfers from the Wharton School at the University of Pennsylvania:
WOLFERS: Small businesses, firms that are just starting out, a bunch of them succeed, and a bunch of them fail. If we only count the success, which would be the wrong thing to do, we'd say they create an enormous number of jobs. But, you know, how difficult it is to start a successful small business. And so sure, they're doing a lot of hiring in total. But they're also doing a lot of firing as well.
BLOCK: Interesting, too, that a lot of small businesses are so small that it's essentially one person. It's maybe an independent corporation, or someone who's self-employed could be a small business?
WOLFERS: Yeah. And so this is actually one of the parts where the rhetoric of small business, I think, really leads us astray. If you actually look at the data, what we mean by small businesses, what they actually are, they're things like real estate agents or my hairdresser. They're lawyers; they're doctors. You talk to these folks, do they have any interest in innovating or bringing new products to market or any of the things we think of as being the engine of economic growth? The answer is no. My dry cleaner likes to take my clothes and then give them to me four days later. Most small businesses don't even have ambitions of being the engines of economic growth, or the engines of jobs.
Gee, I thought that the all powerful John Galt like Job Creators™ could do no wrong and were the engine of the economy and that we should all bow down before them like the groveling serfs we really should be.
Or... maybe there is nothing inherently righteous in running a business. Oh, yeah. Business is about making money, not creating jobs.
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