The virtuous toil of self-employment

January 20, 2014 by
Filed under: Enterprise 

Why would anyone ever want to be self-employed?

Take the wages. According to the Institute for Fiscal Studies, 40 per cent of self-employed people are in the bottom 20 per cent of all earners, and a significant number bring in less than the 35hr minimum wage. Nor is the situation getting better. Low-middle income self-employed people have seen their drawings fall by close to a third in the last 12 years alone.

Added to this are the working hours. On average the self-employed work 38hrs a week compared with 36hrs for employees, and approximately 35 per cent work over 45hrs a week compared with 22 per cent of employees. Then there is the isolation. Given many work from home, it is possible to go days on end without seeing another person.

So far, so miserable. Yet surprisingly, the vast majority of studies find that those who work for themselves are more satisfied with their occupation and happier overall in their lives. Results from the new ONS wellbeing programme reveal that the self-employed are the happiest and least anxious of all labour groups (barring the retired). One study even shows that the number of hours they work when starting up in business is positively correlated with how satisfied they are.

So here we have a paradox: sole traders earn less, work harder and are more isolated, yet in the round they are still some of the happiest in society. But why? One reason is that they have a great deal more autonomy. According to the latest Global Entrepreneurship Monitor survey, 7 in 10 business owners strongly agree they can decide on their own how they go about their work, while this only applies to 4 in 10 of people in typical employment. Yet this isn’t just about getting away from hierarchy and being your own boss. It’s also about the practical flexibility needed to work around your needs and those of your loved ones, for instance in caring for a newborn or looking after an older relative.

On top of this there is the meaning that comes from working for yourself. Indeed, many believe that the features of self-employed work – risk-taking, immediacy, instant feedback – may induce experiences of what the psychologist Csikszentmihalyi calls ‘flow’, a “kind of intense focus and crisp sense of clarity where you forget yourself, lose track of time, and feel you’re part of something larger.” There are few better feelings to be had than applying our talents to create something that other people value – better still if someone buys it.

All of this indicates that the joy of being self-employed lies not just in the end outcome (i.e. the earnings, the pension, the golden handshakes) but rather in the way that the work is done. It’s what the Swiss economists Benz and Frey term “procedural utility”, where the labour is an end in itself, not just a means towards something else.

Yet there is also something deeper at play here: namely that the self-employed – and creatives more broadly – are able to feel something. Like the protagonists of Aldous Huxley’s Brave New World, there are many who believe it is more virtuous to be “fully alive” than in a state of anaemic slumber; one where people simply fulfil their “unescapable social destiny”. We are faced with the easy world of consumption vs. the toil of creativity – and increasingly the latter is more attractive. As George Orwell once put it, “We long for the suffering that we strive to get away from.” And this, in a nutshell, is the kind of creative compromise we all have to grapple with.

Of course, none of this is to say we should ignore the perils and pitfalls of a creative life. We know that countless self-employed people are in precarious financial situations – and we should make it a priority to address such difficulties. But we also have to acknowledge that there are different measures of success than the ability to clock off at 5pm and have a company car. Increasingly we find that people want to labour for a higher, truer and more fulfilling purpose – even if it means forgoing the simple life.

Few understood this better than Joseph Schumpeter, the patron saint of the self-employed:

“First of all there is the dream and the will to found a private kingdom… Then there is the will to conquer: the impulse to fight, to prove oneself superior to others, to succeed for the sake, not of the fruits of success, but of success itself… Finally there is the joy of creating, of getting things done, or simply of exercising one’s energy and ingenuity… Our type seeks out difficulties, changes in order to change, delights in ventures.”

Joseph Schumpeter, 1934

Comments

  • ed sherwood

    most happiest?

  • Benedict Dellot

    Good spot. Consider that grammatical faux pas amended.

  • B Profane

    I came here looking to suggest grammatical errors but I can’t find any. Interesting article by the way.

  • John Nugent

    Self-employed people would normally by advised to pay themselves in dividends rather than wages, to reduce tax.

  • tim johns

    After 20-odd years working in large corporations, I am now an independent and enjoying having to make my own luck. Rather than working hard, I work smarter. I earn as much as I did before but feel considerably richer because I have more control over how and where I work; I don’t have to commute at peak times; I have the freedom to pop off to lectures and events, such as the RSA; and, of course, because my success is down to me. Without doubt, it is a most liberating experience.

  • Pingback: The self-employed are unhappy? Don’t believe the gripe : RSA blogs