Historical article note: This article was originally published on 2019-04-25. Rates, policies, home prices, statistics, product names and qualification standards reflect the environment at that time and may have changed. This archive is for historical record and general education only. It is not mortgage approval, investment, legal or tax advice.

In 2011, The New Yorker published a cartoon titled 'How Long Have You Been Self-Employed,' which has been cited in many articles. In the cartoon, a leashed puppy asks another puppy who is walking on its own, 'How long have you been self-employed?' Choosing between being employed or self-employed is a question in both China and Canada. In the banking sector, some positions pay a salary, while others pay a commission; in accounting, one can work for a company or start their own practice; lawyers, drivers, software designers, artists, chefs, and many other professions can choose between self-employment and employment. In the book Little Island Economics, there is a good example: A starves and goes hungry but makes a fishing net, which allows him to fish several times more efficiently than B and C. Now B and C have two choices: 1. Continue catching fish by hand, or also go hungry to make a net and remain self-employed; 2. Work for A. What are the pros and cons of being self-employed versus working for someone else?

01 The advantage of working a job is stability, the disadvantage is fragility.

Adam Smith's "The Wealth of Nations" explains the basic principles of modern economics: to increase personal wealth, division of labor is necessary, and exchange occurs through the market. One person cannot farm, weave, build houses, raise pigs, and educate children all by themselves; human division of labor and exchange is the way to solve material scarcity. Smooth social division of labor and exchange inevitably need to address the following cost issues: information asymmetry, insufficient personal credit, costs of defining property rights, contract costs, and institutional costs, among others. By joining a company and working for the enterprise, many costs are shared. Therefore, modern industrial production conducts social division of labor and exchange at the level of companies or enterprises, as within an organization there is less information asymmetry, and contract, marketing, and property costs are lower. People who work for an organization are employees, and the organization, in order to minimize training costs caused by staff turnover, provides some benefits and protections, trying to balance between improving productivity and stabilizing the workforce. Recently, JD.com has been undergoing rebalancing, and many criticize Liu Qiangdong for targeting the brothers who co-founded the business, accusing him of being ungrateful and acting against loyalty by letting employees with disproportionate cost-effectiveness leave, which they consider "unrighteous and lacking in loyalty." If internal communication costs in an enterprise are too high, information asymmetry occurs, and people are underemployed, leading to a decline in competitiveness, the entrepreneur has no choice but to prioritize survival. Working for a company long-term, regardless of whether one's ability decreases, demanding the employer to pay for loyalty is unreasonable. The advantages of being an employee are that one does not need to overcome difficulties to build credibility, bear transaction and property costs, or directly face market risks; it effectively reduces information asymmetry costs, incurs no marketing costs, and simply requires doing the essential work. The disadvantages of working for someone else are that, over the long term, one lacks the vigilance to anticipate risks, personal abilities are not fully developed, and it is difficult to independently face external changes. Nicholas Taleb, in his book "Antifragile," gives an example: two brothers, one brother is a civil servant in the British government, the other drives a taxi in London—who is more fragile? The taxi-driving brother, although he has an unstable income, is always psychologically and materially prepared to cope with uncertainty; the civil servant brother seems to have a stable income, but if he loses his job, he may not even have food and will find it difficult to get employed again. There is no truly stable job in this world, especially after entering the information age; the lifespan of companies is shorter than that of people. The various securities of the industrial age have either gone bankrupt or are no longer provided. In Canada's corporate pension system, there is one of the most secure plans for employees, the DB, Defined Benefit plan, meaning the corporate pension continues to be paid until the employee passes away.

Nowadays, companies are increasingly unable to afford this "best" corporate pension plan. On one hand, the competition between companies is too intense, and high-cost companies are quickly eliminated. On the other hand, people's lifespans are getting longer, and companies simply cannot afford it. Sears, which went bankrupt last year, had this kind of corporate pension system. No company places employees' interests first and survival second. For workers, it is essential to constantly pay attention to whether their abilities can meet the current demands of the workplace and to improve their independent survival skills while working. There is only one way out for employees: to work proactively and deeply, not just be satisfied with assigned tasks, but to constantly equip themselves and be ready to work independently. The recently hotly debated 996 phenomenon on the internet—working from 9 a.m. to 9 p.m., plus overtime on Saturdays—is not just the cry of programmers but also represents the sentiments of many employees. This phenomenon may seem like employees being exploited, but it actually reflects the pressures on employers. In a highly competitive environment, the survival of a business is at stake every day. As Robin Li said, a company is always only 30 days away from bankruptcy, and there is no room for slack. Zhang Wuchang, after observing China's reform and opening up for many years, was most surprised by the labor law that came into effect in 1995. He believed that this law, which protects employees, was implemented too early and did not align with China's rapid development. Protecting employees so early was an obstacle to China's development. How employees view themselves and their companies varies across different eras. Ford Motor Company was once the place all young men aspired to work, but later it was described as a sweatshop. In the information age, what protects employees is not labor law or unions, but themselves. By improving daily, striving to advance, and working deeply, they can find a way out and a future.

02 Choosing self-employment means choosing to be responsible for yourself

When I graduated, the state no longer guaranteed job assignments, so one had to find work independently, and I missed the 'good' era of guaranteed job placements. Among my classmates, some went into enterprises, some joined government agencies, and some started their own businesses. Over 20 years have passed, and not every self-employed person has become wealthy, nor has every government worker become a high-ranking official; intuitively, one can't clearly tell whether self-employment or working for others is better. I myself have worked in both the employee and self-employment quadrants, and my feeling is: at the early stage of a career, it is better to be an employee; after gaining a certain amount of experience and accumulation, it is better to choose self-employment. During the era of guaranteed job placement, the state decided what you were suitable for, and you went into that job, with your future income and housing guaranteed by your unit. People with weaker abilities had advantages, while those with stronger abilities were restricted. I have read almost all the books written by Feng Lun. He is a representative figure of government officials and intellectuals starting businesses after 1992. Before him, since 1978, there were people who chose contracting or self-employment, and some were certainly successful, but there are few written records left. From Feng Lun's accounts and my own experience, actively choosing self-employment comes from feeling that staying in your current position limits your development space, whereas the knowledge and experience you have accumulated can be better utilized in self-employment. Capable people like to choose what they do; less capable people like to be assigned tasks. Choosing self-employment means choosing to be responsible for yourself: you have to handle marketing, use your abilities to serve more people as much as possible; you have to overcome difficulties yourself, no longer relying on an organization or company; you have to be responsible for your own time, income, and wealth allocation. Feng Lun advises those planning to start a business not to pursue an MBA, but rather to learn more about human nature, for example, by watching gangster films like 'The Godfather' or 'Once Upon a Time in America' several times. Before deciding to go into self-employment, I consulted an old classmate, who told me, 'If a person doesn’t do sales at least once in their life, they won’t understand warmth and coldness in human relations, or the harshness of the world.' Choosing self-employment means you have to absorb institutional costs, transaction costs, and the costs of information asymmetry yourself.

Adam Smith's 'The Wealth of Nations' was published in 1776 and was his second book. His first book, 'The Theory of Moral Sentiments,' was published in 1759, 17 years earlier than the second one. Scholars studying Adam Smith have found that he was actually revising 'The Theory of Moral Sentiments' throughout his life, and 'The Wealth of Nations' was a byproduct of this process. The main idea of 'The Theory of Moral Sentiments' is as follows: Human selfishness drives social progress and the growth of material wealth, while humans are also capable of sympathy; human sympathy can only operate within a close small circle, and a person can spend a lifetime without significantly expanding this circle; small circles rely on love and sympathy, whereas the larger world relies on the market and rules. Smith's important advice: do not mix things up, do not be overly calculating at home or among friends, and excessively apply market rules; and do not expect strangers in the market to show unrealistic love. This is the foundation of the market economy that Smith identified. In China, doing business with 'strangers' is very difficult, especially in the early stages of the market economy, due to one hurdle: the market lacks a spirit of contracts, so strangers must be turned into friends first. Drinking a bit of wine with clients is a small matter, the most civilized approach using the most primitive means, nothing surprising. In Canada, these costs and efforts can be minimized, as long as market rules are followed and contract spirit is applied. Recently, I saw that someone wants to build a Chinese 'city that never sleeps' in Toronto, and I wonder how the business will turn out.

Because exchanges ultimately need to be completed, the property rights system must be very complete; otherwise, the cost of property rights would be too high. Where there is exchange, there is competition, and the cost of the institutions that restrict and regulate competition arises. The capitalist system is the social system with the lowest cost; otherwise, it would not have flourished to this day. The cost of information asymmetry, as everyone knows, has been reduced to a very low level by the Internet. Individuals, through social media, can gain trust, and even admiration. I tell many young people that in Canada, not being self-employed is considered a waste of resources.

03 How to Market Yourself

Self-employment, whether in a sales position or not, requires marketing skills. Lawyers, dentists, or accountants who start their own practice and entrust third parties to market for them usually see poor results. For professionals, once they choose self-employment, whether they can perform better than when they were working for someone else depends primarily on whether they can present themselves and effectively promote themselves. First, for self-employed professionals, the most important aspect of marketing is demonstrating their problem-solving abilities, that is, whether they are sufficiently professional and whether their work in their field is superior to that of their peers. Nowadays, social media is more advantageous than mass media for self-promotion, but much of the content people post cannot prove their professional competence; it only shows how active they are in the community, which is both a waste of time and ineffective. Second, marketing involves solving cooperation issues and striving to collaborate and mutually recommend with other professionals related to one's business or field. In the social media environment, word-of-mouth promotion is more effective than mass media advertising, and recommendations from upstream and downstream professionals are crucial. However, avoid overly tight cooperation, as making other professionals feel excluded can backfire. Third, address issues of over-marketing and under-marketing. Excessive exposure only indicates that a stable client base and cooperative relationships have not yet been established. Constantly posting ads in social media feeds is over-marketing. Many professionals attend social events unrelated to their field, and such ineffective networking can harm their professional image. Being too reclusive doesn't work either; introverted professionals are better suited for one-on-one meetings or referrals based on collaborative relationships. Fourth, it is acceptable to elevate yourself, but do not disparage your peers. Some people use the excuse of exposing industry practices to subtly undermine their colleagues' professionalism. Efforts unnoticed by others are still known to heaven; clients are not foolish. Would you want to deal with a petty, narrow-minded person? Would you entrust important matters to someone who has made countless enemies? Everyone starts their career as a newcomer; treat others as you would like to be treated. Marketing for professionals begins with self-reliance and diligence, and ends with fulfilling responsibilities and honoring commitments. Making full use of social media to let potential clients understand you and recognize your professional abilities is sufficient; there is no need to add unnecessary embellishments.

04 How to Take Responsibility for Yourself

First, being responsible to your clients is being responsible to yourself. Being self-employed means completing an entrusted responsibility relying solely on your own effort. Lawyers, dentists, driving instructors, and immigration consultants must help clients fulfill their entrusted matters. Real estate agents, insurance brokers, and loan intermediaries must help clients achieve information symmetry and complete transactions. Always put entrusted responsibilities first and your own income second; this is an iron rule for self-employed individuals. Second, self-employed individuals must be responsible for their own income and assets. Without the protection of an employer, self-employed people need to accumulate assets when income is good and use the income generated from those assets to live when income is low. Assets are a regulator that balances uneven income over a lifetime. If a self-employed person loses the ability to work and has not accumulated assets, old age will be disastrous. Third, the reputation of a self-employed individual is the foundation of their standing. Cultivating a professional reputation is like taking health supplements—you must take them regularly for them to be effective. Building a reputation cannot be done like taking a quick-acting heart medicine only in emergencies. Conversely, long-term misconduct and prolonged stagnation will eventually backfire.

05 Are slash youth reliable?

Choosing to be self-employed is choosing a mindset of freedom and an independent spirit. Many self-employed individuals think divergently and want to try everything; they earn many licenses and venture across fields. There are some ideas in 'The Slash Generation' that I really agree with: only discipline brings freedom; crossing fields is not the same as having a side job. Personally, I believe that in any professional field, if it is not a hobby you have loved since childhood, without 10,000 hours of deep work, you basically don't have the ability to help others. 10,000 hours is roughly 5 years, and those with exceptional talent may need a bit less time. I have not yet met a slash professional as outstanding as Susan Kuang, the author of 'The Slash Generation.' I trust more in professionals who are disciplined, strong, experienced, and solid in their work within one industry.

06 Are self-employed people with honorary titles outstanding?

I have received an invitation from a certain award organization, but it required sponsorship, so I ignored it. Later, I saw someone in my friend circle receiving the award, and they even posted photos on social media while delivering their 'acceptance speech.' Feng Lun has a comment in his book that left a deep impression on me: to do something great, it is enough to do a simple thing at a great moment, with great people; constantly discussing great ideas and wearing the aura of greatness is superfluous for this ordinary world. Whether someone is a top performer in the industry can best be seen by the kinds of people they collaborate with. Self-employed individuals don’t need trophies; the reputation among clients is everything.

Being self-employed is by no means an easy task. If you lack ability and self-discipline but still desire freedom, that is simply being willful. When you are still a seed, loose soil is your adversary; when you sprout, pebbles may hinder your growth; when you become a tree, strong winds may break you. I could continue writing this article for much longer, but I fear readers might get bored. So, I will end with a sentence to encourage all readers: The sea is vast and the heart boundless, the mountains are high but humans can be their peak, self-employment is a journey of self-cultivation.