But we love them really. I mean you meet them in your everyday life and you have a certain appreciation for their enthusiasm. They really do think that the little guy can "make it". You know, set up a shop that sparks a chain - end up on MTV, all that kind of thing...
Well, I've been thinking recently - after discussing with a friend of man some of his business plans (read: fantasies) - what's going to happen to this not-so-noble class when price deflation hits? I mean it has to happen. With credit floating skyward and savings non-existent, price deflation is inevitable. So this got me thinking how is this going to affect the "entrepreneurs" directly?
Okay, let's do some imaginary maths on an imaginary small business. Let's say that I'm an aspiring bourgeois. I open a small cafe/lunch restaurant. My profits are about 120% of my costs. But in a deflationary environment this is surely up in the air. Sure I can drop wages, but I can't have any sway over the fluctuating costs of rent or... eh... I dunno the Newspeak word for this, so lets go with "raw materials". These things will fall with deflation within the world economy as a whole, of course; but I'm talking about the immediate effects on Jimmy-shopkeeper, things that can't wait for that myth of general equilibrium. Doesn't deflation inject chaos into small business?
Anyone have any comments? Any ideas? Any academic studies?
***(NB: Incidentally, before designating me a class enemy; if you want a practical political issue if there ever was one, here you go!)