Archive for May, 2013

Entrepreneurship and its Discontents

MBA student C.Z. Nnaemeka writes a brilliant evisceration of the American entrepreneurial mindset that also gets the solution very, very wrong (HT: Cindy).

At bottom, Nnaemeka’s diagnosis is based on some shaky underpinnings. Her dim view of government will probably go over very well with her peers at Sloan, but is both subtly and egregiously unfounded. Egregiously because she seems to take the common view that American politicians are universally corrupt and uninterested in solving the problems of the underclass, when what really ails our politics is that one party – I’ll leave it to the reader to guess which – has managed to game our political institutions to thwart some mostly reasonable attempts to solve real social problems.

Subtly,  because she falls into the corporate triumphalism that underlies all business schools. Government at all levels in the US is slow and lumbering for a whole host of reasons (inability to pay employees salaries comparable to what they’d make in the private sector chiefly among them) but one overlooked reason is that the government as an institution is old.  This is not a problem inherent to government; rare is the corporation that’s been around several decades that isn’t running on horribly outdated processes with ossified management. (Any freshly minted Sloan MBAs jumping at the chance to work in the sexy mining, rail freight, or steel industries lately? I didn’t think so.)

But the real problem with Nnaemeka’s essay is that it misses the obvious solution for the sake of managerial grandstanding –  again, a not uncommon pathology of modern managers. Poor white people don’t have enough money to pull themselves out of poverty? Rather than first brainstorm how to use technology to make their daily lives more efficient or marginally help them deal with their kids’ food allergies or whatever, you could, you know, give them more money. Fundamentally this kind of large-scale tide-rising is why we have governments to make economic policy, even if the political system is currently broken. It would be nice to see a manager acknowledge that once in a while.

A little spring hackery

I’m going to descend into a little hackery and admit that I think this isn’t really 100% wrong:

Organizations were singled out because they included the words “tea party” or “patriot” in their applications for tax-exempt status, said Lois Lerner, who heads the IRS division that oversees tax-exempt groups…”That was wrong. That was absolutely incorrect, it was insensitive and it was inappropriate. That’s not how we go about selecting cases for further review,” Lerner said at a conference sponsored by the American Bar Association.

“The IRS would like to apologize for that,” she added.

So these organizations wanted tax-exempt status, and (some people down the totem pole at) the IRS flagged their applications because of the organizations’ specific political beliefs. That’s indeed improper. Political advocacy organizations get tax-exempt status under the law, and the organization’s specific ideology should stay out of the conversation of whether an organization deserves that status.

But here’s the thing. A lot of people are conflating reviewing an application for tax-exempt status with “getting audited.” And contra everyone who’s commented on this, I actually think it would be much less of a big deal if these organizations were subjected to disciminatory audits, and maybe even commendable. Think about it. The IRS’s job is to collect taxes. The point of audits is to check up on the people who are most likely to be evading the tax laws. Why would it be improper to think that an organization named after the motto “Taxed Enough Already” might be more likely than average to engage in tax shenanigans?

EDIT: pwned by tbogg.