A Special Note to Poor, Starving College Students (and Anyone Else Who May Need an Extra Hundred Grand)

In recent months, several of you have written to ask what happened to Jack Rain, who I had named Publisher of STR.  I wish I knew.  He went AWOL in late February, and I haven't heard from him since.  Several weeks before he disappeared, we made plans for him to come to Atlanta and stay at my house so we could talk about STR.  As that weekend approached, I kept trying to get him to tell me when he would arrive, but I never received a response.  Finally, on the Friday night of that weekend, I received a short, strange, cryptic message from him that led me to believe that he was not going to show up.  That was the last I heard from him, even though I sent him several messages after that. 

Why am I telling you this embarrassing story?  On January 15, he wrote a column in which he promoted an e-mail series on "Entrepreneurial Alertness" that he was planning to write, and a week later, he mentioned it again in another column, which was his last.  He subsequently offered this series to his newsletter subscribers for $49.  Although I had asked to be put on his mailing list months earlier, I never received an offer for this e-mail series, or any newsletter for that matter, so I have no idea what he was sending out via e-mail.  I do know that he was signing at least some of his messages as the "Publisher of STR."  In the last few days, I have heard from two readers who paid for the "Entrepreneurial Alertness" series but have not received anything (the first issue was supposed to be sent on June 9).  Both of them have tried to contact him since June 9 but have not received a response (I do know that as of June 5, he was still alive and had access to e-mail).  If you paid for the series but have not received anything, and want his contact information, e-mail me and I'll give it to you.  

Jack was a good writer and a good e-mail friend, and as Publisher, he helped me promote and raise money for STR.  There was no one who was more gung-ho about STR than Jack was, which makes his sudden disappearance all the more puzzling.  As far as I know, he never lied to me or did anything dishonest, but I never could pin him down on what he did for a living, and he seemed to make money in a variety of ways.  Perhaps his e-mail series has been delayed because he is sick or busy or whatever, but if I had paid him $49 and had not received a response after trying to reach him this week, I would be seriously considering putting a stop payment order on my check.

I am ashamed about the way this has turned out.  I thought I could trust him to act responsibly.  He wrote 34 columns for STR, seemed passionate about liberty, and helped promote and raise money for STR, so this whole saga has been bizarre.  I have learned a lesson, and in the future, I will be a hell of a lot more careful about who I allow to associate with STR, which has been my passion and labor of love for the last two years.  ~ Rob

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I believe most students of libertarian anarcho-capitalist philosophy would agree with the statement that most businessmen don’t have a clue about liberty. I am not sure most would agree with the statement that most libertarians don’t have a clue about business. However, I believe that both statements are in general just as accurate.

I’m not going to spend any time discussing businessmen who don’t have a clue about liberty, but from Ted Turner to Bill Gates to my corner restaurant owner, I really haven’t heard much theoretical comments about liberty. (Please don’t email me about some deli owner in Poughkeepsie who can quote Rothbard and Thoreau. I acknowledge there are exceptions, though very few and very far between.)

As for the second statement, I believe the signs that most libertarians don’t understand business are more subtle, but they are there. When I wrote my column asking for contributions to STR, I expected emails and posts coming from "poor, starving college students." I wasn't disappointed. The posts and emails went like this, "Rob you are doing a great job, would love to send you some cash but I am a poor college student." The implication being that "poor" and "college student" are two concepts that are somehow fused together at the hip now and forever, kind of like "starving writer." Well I am here to tell you that if you truly understand anarcho-capitalism, you will know that a student can be poor and a writer can be starving, but there is absolutely no reason the two need to be ever linked.

Perhaps the most under-appreciated economist of all time is Israel Kirzner. I rank his thinking and insights right alongside those of Murray Rothbard. What Rothbard has done as far as insights into the evils of the state, Kirzner has done as far as insights into the nature of business. I consider the following paragraph written by Kirzner in his book Competition and Entrepreneurship to be perhaps the single most significant paragraph ever written by an economist:

"The pure entrepreneur, on the other hand, proceeds by his alertness to discover and exploit situations in which he is able to sell for higher prices that which he can buy for low prices. Pure entrepreneurial profit is the difference between the two sets of prices. It is not yielded by exchanging something the entrepreneur values less for something he values more highly. It comes from discovering sellers and buyers of something for which the latter will pay more than the former demand. The discovery of a profit opportunity means the discovery of something obtainable for nothing at all. [Kirzner’s italics in original text] No investment at all is required; the free ten-dollar bill is discovered to be already within one’s grasp."

Now think about this paragraph for awhile. I have literally thought about this paragraph for more than a decade. If what Kirzner says is true, and I believe it is true, then there is basically free money just lying around to be picked up. That’s what Kirzner says, ". . . profit opportunity means the discovery of something obtainable for nothing at all."

Now, there is a lot of government propaganda about how anyone can become president, but it is just that--propaganda. There are over 280 million citizens in the United States, and only one is president at any one time. Even if all presidents during a person's lifetime serve only one four-year term and we use a life expectancy of 80 years--of which you will be over 35 and eligible to be president for 45 years--then in a person's lifetime, when he is eligible to become president, there will be approximately 11 different presidents. That means, if everyone does get an equal shot (yeah, right), the odds of becoming president are at best one in 25 million.

What Kirzner is saying about business, though, is that it is not a one in 25 million shot. That you don’t need capital, money or anything else, outside of alertness! "No investment at all is required; the free ten-dollar bill is discovered to be already within one’s grasp," he says.

If anything should give hope to the poor child born with next to nothing, to the single parent with mounting debt and yes, to the poor college student and the starving writer, it is this paragraph by Kirzner. It means that you may be a starving writer or a poor college student or someone up to your eyeballs in unpaid bills, but you are in that predicament not because of your current place in life, but because you have not developed the alertness to pick up money that is just sitting there for the taking.

When I first read this paragraph, I realized its importance, but it took me nearly 15 years since that first reading to really understand it to the point where I can now literally see mounds of cash sitting around from time to time.

Do yourself a favor: If you want a new hobby, make it thinking about entrepreneurial alertness. From time to time, I have been around some very wealthy people, real entrepreneurs, and I realize that while they could probably never articulate the insights that Kirzner has discovered, instinctively they somehow understand the principles and operate under the principles that Kirzner articulates. It is alertness that has generally made them rich, almost nothing else.

Now, there is a popular book that floats around the business world titled The Art of War by Sun Tzu. Over the years, one business or financial commentator after the other mentions the book and the book's sales skyrocket. It was even mentioned in the movie "Wall Street." Michael Douglas’ character Gordon Gekko calls it the "bible" for Wall Street. Talk about socialist propaganda subtly slipped in to influence young people headed for a career on Wall Street.

In truth, it’s a great book if you are going to be fighting a war, but the only problem is business is not war. Perhaps ten percent of the book provides some insights that may be applied to business negotiating situations, but I wonder how much time business people have wasted trying to apply the Sun Tzu methods of war to business?

Kirzner’s book, on the other hand, is full of valuable insights about business. Particularly valuable are his insights about entrepreneurship, profit and ownership. His book is a serious academic text at a very high theoretical level, however, so don’t think you are going to breeze through it and catch all the insights at once, and please don’t think the book is going to make you a millionaire overnight. But once you do grasp what he is discussing, well then, you literally begin seeing money in front of your eyes.

Once I fully grasped Kirzner's concept and began to tune myself in to looking for "free money," I began to recognize it to the point where sometimes the payout to me has been extremely substantial to say the least.

I suspect most of the regulars here at STR get the anarcho "I hate the state" part of anarcho-capitalism down pat. It’s the capitalist part that most need to do more thinking about. What’s most promising, though, is that once you "get it," it’s liable to put some good money in your pocket. For just a few hours work it's possible to earn what now may take you a week, a month or a year. That's how it has been in my case.

Alertness is often the key ingredient in creating value. There is nothing wrong with labor, but alertness, in general, is a much more important factor in making big time money. Think about this a lot, you don’t need investment capital or major labor output, all you need is that alertness. I hope that’s an encouraging thought for you today, tomorrow and the next day, wherever you are, whatever your circumstance. Good luck!

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