More new businesses are better for society, right?
That’s a common assumption. For instance, take this recent Washington Post piece, headlined, “More businesses are closing than starting. Can Congress help turn that around?” Sounds ominous at first. But wait a minute – is starting more new businesses always a good thing? Isn’t it a basic economic tenet that well-functioning markets will have many entrances and exits, that weak businesses (including thousands of one-person enterprises) will get recycled quickly (fast failure) and that over time, vigorous, ...Continue Reading →