Nothing is perfect, including timing. But some things are better
than others, especially good timing.
a time for everything under heaven, the Bible tells us. This includes
unexpected opportunities. Among these unexpected opportunities
is good timing.
competition, we call these opportunities "entrepreneurial opportunities."
They are opportunities for profit . . . and also loss.
Let me provide
an example of an opportunity that arose early in my career.
BEST JOB I EVER HAD
In my previous
Dim Light, Long Tunnel," I discussed the causes of today's
long-term unemployment. I used the analysis provided by Murray
Rothbard's 1963 book, America's
Great Depression, to demonstrate that government is the
cause of today's unemployment. It
is available here as a free download.
Here is a
book written half a century ago that provides the analytical tools
I needed to explain the problem of today's unemployment. Rothbard
applied Ludwig von Mises' theory of the business cycle to Federal
Reserve policy in the late 1920s and early 1930s to explain the
Great Depression. He also applied price theory: the glutting effects
of price and wage floors on markets. For these floors, he blamed
Herbert Hoover. Almost no one in the academic community knew of
that book in 1963.
I did. That
was very good timing. Here's how it happened.
I had a great
summer intern job in 1963. I was paid $500 a month, which was
the equivalent of $3,700, in a time in which income tax rates
were low in the low-income brackets, and so were Social Security
taxes. All I had to do to earn my salary was read books. It was
the best job I ever had. Those were the most valuable three months
in my life.
I got that
job because I had attended a summer seminar for conservatives
in 1962. R. J. Rushdoony spoke there. He hired me the next summer.
had not attended that seminar. I had lost in a contest to go to
India. I got a scholarship to attend that seminar. I regarded
this as my consolation prize. It turned out to be first prize.
that employed Rushdoony and me had previously put up the money
to have Rothbard write the book. Then it put up the money to publish
it. I therefore had my copy hot off the press. It had been out
for a couple of months. It was one of the books I read that summer.
I was in the right place at the right time. This was good timing.
shaped my thinking about business cycles. I have put it to effective
use ever since.
I got into
the writing field a year after I read that book. I wrote my first
booklet, "Inflation: The Economics of Addiction." It
is in my book, "An Introduction to Christian Economics," which
is posted for free here. Rothbard's books have shaped my thinking
on money. One was What
Has Government Done to Our Money? (1964). The other was
Chapter 11 of Man,
Economy, and State (1962), which I also read on that summer
What if I
had not gotten that job? I probably would have read them, but
not in a focused, highly concentrated schedule. I had time to
think about what I was reading. I had no distractions.
like that job ever came again. I made good use of it. It reinforced
my thinking about the free market's operations. It gave specific
content to the overall intellectual framework I had already developed.
It was the right job at the right time. It shaped my future.
I had enough
knowledge to put that new information to effective use. It came
early in my career, so I have been able to use it for a long time.
In the state of California in 1963, there were probably not half
a dozen recent college graduates who had that framework: Austrian
economics, revisionist history on the New Deal, and anti-Communism.
I may have been the only one. Add to that my library on Greenback
monetary theory, which I opposed, and I surely was the only one.
good for Rushdoony? Yes. He had been influenced by the Greenbackers.
I persuaded him they were not to be trusted. I wrote a report
for him in 1965 on this. The Mises Institute had republished it:
was like an investment that makes 10% per annum after taxes. The
earlier you make the investment, the greater its impact. I am
still earning a positive rate of return on that 3-month investment
of time, for which I was well paid at the time.
In the early
spring of 1965, I had returned to graduate school at the University
of California, Riverside. I had been given $1,000 by my grandmother.
I used it for school. It would carry me for a few months, at best.
I needed a job.
I was walking
across campus. A former professor was coming in the opposite direction.
I had taken a class from him in late 1961 or early 1962. I still
remember writing a term paper for him comparing F. A. Hayek and
the Yugoslavian Marxist philosopher, politician, and dissident,
Milovan Djilas. He gave me a B on the paper and a B in the course.
It was in political science, which was not my major.
me. He asked if I wanted to do research for him. It was simple:
I would take notes on English-language documents relating to the
Soviet Union. I took it.
Why did he
choose me? He had not seen me in years. It only occurs to me now.
His name was Morton Schwartz. When I first met him, I said this.
"Some students are disappointed that you aren't Harry Schwartz.
I'm disappointed that you aren't Fred Schwarz." But who knows?
helped pay the bills until I got a teaching assistantship teaching
Western civilization that fall. The TA position, plus writing
for The Freeman, plus two fellowships, got me through grad
chance meeting and job offer by that professor was probably the
most crucial unplanned event in my life. I was in the right place
at the right time. One minute either way, and I would have missed
it. It was as close to perfect timing as any event in my life.
I probably would have stayed in school if I had not had that offer,
but it was nip and tuck.
A lot of
people would say it was a random event. Life is full of them,
they say. This was merely an oddity that stands out in retrospect.
I cannot prove that it was not random, or at least inherently
unpredictable, given the sequence of events. But this sort of
event takes place often enough in life to remind us that our pathway
in life could have gone another way without such events.
of unique timing in my life was the advent of Netscape Navigator,
the Web browser. Its predecessor hit the market in late 1994.
That opened up the Web in its present form. Netscape Navigator
hit the market in 1995.
was the first great company of the dot-com bubble. Its initial
stock offering made multimillionaires of its geek developers,
who had been low-paid employees a few years before. Wikipedia
made a very successful IPO on August 9, 1995. The stock was set
to be offered at $14 per share. But, a last-minute decision doubled
the initial offering to $28 per share. The stock's value soared
to $75 on the first day of trading, nearly a record for first-day
gain, the stock closed at $58.25 meaning a market value of $2.9
billion. The company's revenues doubled every quarter in 1995.
Netscape's success landed Andreessen, barefoot, on the cover of
investors would lose every dime, because Netscape had no rational
business model. I knew a free product would replace it. That is
what happened. Microsoft offered a free alternative immediately,
bundled with Windows 95. Netscape became free in 1998, but that
was too late. The product steadily disappeared, as did the hopes
of investors who had bought and held.
It was a
classic case of an invention that made the inventors rich, but
only if they sold out their holdings to the naive investors who
thought they would make a bundle. The investors lost, but the
invention changed the world. The consumers won.
Navigator was great timing for the inventors. It was also great
timing for me and Lew Rockwell.
started www.Mises.org in 1995.
I started GaryNorth.com in 1996. We were present at the creation
of the graphic browser phase of the Internet. Before that, the
Internet had been the noncommercial plaything of geeks. There
was an anti-commercial ethos governing the Web. Then, beginning
in 1995, geeks saw that they could get fabulously rich. That ended
the Web's anti-commercial outlook. Money talks. Loudly.
and I got online early, we built traffic when competition was
low. Today, the estimate of 350 million separate Web sites, plus
100 million blogs, is conventional. It is not easy to get into
not everything, but it is important. Sometimes, it is crucially
In his scholarly
but highly readable books on entrepreneurship, Austrian School
economist Israel Kirzner speaks of alertness. It is an X factor
possessed by successful entrepreneurs. If it were not an X-factor,
it would be repeatable and teachable. Others would enter the field.
The rate of return would fall.
terms, this alertness is an aspect of what Kant called the noumenal.
It is a realm outside of scientific cause and effect, yet in some
way is related to the realm of causation. He never explained this
connection. Kant said the noumenal is the realm of ethics, meaning
choice. We are not determined. We are not billiard balls in a
cosmic game of pool. But if our choices are related to causation,
thereby letting us influence the future, how is it that the bridge
over the moat is only one way: out? How can we cross the bridge
to let us use our pool sticks across the moat, yet no one is able
to cross the bridge to use his pool stick on us? Nobody wants
to be the 8-ball. He does not want to hear those fateful words,
"8-ball in the corner pocket."
entrepreneur is like a pool player who has a clear eye and a steady
hand. He can position his shots so that the balls are in the right
position after his next shot. The other players can't do this
pool-shooter is dealing with people, with groups, with prices.
Prices are said to change randomly, according to random-walk theory,
yet some entrepreneurs can predict them and profit from them.
Warren Buffett is one of these people. He has had some problems
recently because of his failure to predict the direction of natural
gas prices, but, on the whole, he has profited immensely. His
timing is not perfect, but it is statistically way above randomness.
One of the
things I have found over the years is that I become more alert
to subtle changes as I get more familiar with the subject. I can
"smell" something amiss, even though I cannot "lay my finger on
it." The long familiarity with a topic lets a person identify
deviations when others cannot sense this. The observer cannot
say exactly what is different, but he knows it. Anyway, he thinks
this difference is likely.
of something abnormal this alertness is not quantifiable.
We call it intuition, but we cannot define this elusive factor
in our decision-making. We use it. We do not know exactly how
we use it. We surely could not write a comprehensive training
manual on how to use it predictably.
. . .
TO YOUR KNITTING
pursue something systematically and relentlessly, you build up
a body of experience that gives you an advantage over competitors.
You can work faster and more accurately. You know what to do and
what not to do.
for staying with a career for decades is that your cumulative
experience gives you profit opportunities. I mean "profit" in
Kirzner's sense: a positive return on alertness. It's not a salary.
It's not a rate of interest. It's not rent. It is what remains
after all other factors of production are paid for.
One of the
problems that Americans face in the first decade of their careers
is that they bounce around. They have several jobs. They do not
get into a long-term career and stick to it.
If a person's
skills are technical, such as video production, and he moves from
job to job doing video production, this may not be a problem.
He is developing his skills. He is applying these skills to a
wide range of markets. He is finding out what works and does not
work in several markets.
skill is writing advertising copy. A copywriter can work in several
media: catalogues, direct mail, Internet, display ads for magazines,
classified ads, and radio. These competing media offer the copywriter
different challenges. Nevertheless, the basic skills remain the
same. Time spent in each of these areas is cumulative. The opportunities
for an above-market rate of return are high, because the practitioner
is practicing routinely every day.
This is the
peculiar aspect of entrepreneurial alertness. It is a combination
of routine and unpredictable awareness. The long years of routine
performance lead to an increase in profitable alertness.
We hear praise
for getting a wide range of experiences. I agree, if these experiences
are bounded by patterned performance. It is the framework of our
work that provides the working capital for our breakthroughs in
life. We recognize the familiar, so we can better assess the importance
of the unfamiliar that is a product of or an intrusion into our
pattern. Someone has said that the two greatest words in science
are "that's odd." This applies to every field.
to young people that they identify their calling early. Their
employment may shift, but they should stick to their knitting
with respect to their calling: the most important thing they can
do in which they are most difficult to replace.
I saw a movie
recently about a man who identified his calling in his mid-thirties.
He is an African American who worked for 35 years in a factory
that made cans. But when he got home every evening, he began working
in his yard. Over the years, he created a topiary garden like
nothing ever seen. He used cast-off plants that were not supposed
to grow in the region. His South Carolina topiary became famous.
Busloads of people come from as far as New York to see it. His
name is Pearl Fryar. The movie is called A
Man Named Pearl. It is on Netflix.
When he dies,
he will be difficult to replace. He was not difficult to replace
in the can factory.
I have learned
over the last half century that if you stick to your knitting,
you will get very good at it. The opportunities will appear, and
you will be alert to them.
and I spent decades publishing, editing, and writing. Then came
the World Wide Web through Netscape Navigator. As the New York
politician George Washington Plunkett said of his career in the
19th century, "I seen my opportunities, and I took 'em." Through
the Internet, we expanded our audiences to hundreds of thousands
of people. That would have been inconceivable in 1993.
Right place the "no place" of the Internet.
happen to you. (That was Jack Lemmon's first
movie. A year later, Mr.
Roberts made him a star. It happened to him. I saw it
at age 12. It was about a self-funded billboard in New York City
that made an obscure woman famous. Right time. Right place. That
was my first real encounter with the logic of display advertising.
I never forgot it.)