November 2

Can “The Market” Provide Solutions?

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capitalismWhen I talked a  few days ago about why your business does not need a bailout, there was a method to my madness.   The method has to do with the market and the ability of the market to provide real solutions to small businesses problems.  The question is, can the market provide solutions for small business?

This question of free market effectiveness has come up from time-to-time since the economy started experiencing serious difficulty.  Many blame the market for the problems that the current economy is having.  For some people it seems outrageous to have the same vehicle (our current free market) get us out of the trouble that many feel that it caused.  So, can the market provide solutions for small business?

My answer is yes.  My experience with entrepreneurs and in looking at what is good about capitalism leads me to believe that there are more people out there looking for real solutions to real problems  than there are people looking to create problems for the marketplace.

So what does this have to do with small business?

One of the issues in today’s marketplace for small business remains access to capital, more specifically, small businesses lack of access.  There have been a few ideas thrown out by the government on how they can fix this problem.  The issue with these ideas is that it costs the tax payers the money and doesn’t mean we are going to solve small business issues just by giving them cash.  Because of fear, we turn to the government and demand that they solve the issues in our lives.  Many people blame the government for creating this fear but I feel that we, the people, create the demand for government spending.

If the issue of small business credit grows large enough, I believe that someone in marketplace will feel compelled to step in and take charge to find a private solution to a wide spread issue.  The story that gives me that hope is that of Muhammad Yunus.  Muhammad is a Nobel Peace prize winner and creator of the concept of microcredit which gives  banking and lending aid to the poorest people in the world through his Grameen Foundation and Bank.

These loans have mixed results in some cases but have been able to help individuals in third world countries start a businesses and be more productive.  The reason why I feel that this is such a great example is that by and large people in America know that there is severe poverty in other countries but it has little to no impact in our day-to-day lives.

If an issue such as funding for the poor can find a viable solution in the third world, I am confident that we can do the same in America with regards to small business financing.

One of the coolest thing about this country is how willing we are to solve big problems that exist in the world.  To me creating value and solving problems are the essence of capitalism done right.  With regards to the issue of small businesses getting access to credit, call me naive, but I think someone in the marketplace is working on the problem right now.

What do you think? Can the market solve problems for small business?

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