I enjoy the propaganda of government agencies pleading the causes of special interests. This is the opening sentence of our state profile prepared by the U.S. Small Business Administration's (SBA) Office of Advocacy,"Small businesses are the heart of Indiana's economy."

Frequently we hear that farming is the beating heart of our economy. Others claim the thumping sound we hear is that of manufacturing.

In this frame of mind I turned to the data. First I looked at Hoosier non-farm Hoosier proprietors, those who are single owners of, or partners in an unincorporated business. In 2006, there were 607,100 proprietors in Indiana.

This was an increase of 23 percent from 2001 according to the U.S. Bureau of Economic Analysis.

During the same period, the total number of jobs in Indiana rose by a mere 4 percent. Nationally, the number of proprietors rose at a more rapid 27 percent and total jobs at a 7 percent rate. Thus, Indiana's business heart was beating with less vigor that the nation's while our entire body was torpid.

But we do not know how many proprietors also held jobs that paid wages or salaries.

The average earnings for all jobs in Indiana was $35,000 in 2001; by 2006 the figure was $41,000, up 17 percent compared to a slightly better 18 percent at the national level. Hoosier proprietors, however, saw their average earnings climb by 11 percent while nationally the growth rate was just 4 percent.

Nonetheless, proprietors' earnings were well below those for all jobs. In Indiana, being a proprietor brought in just 59 percent as much in earnings as all jobs, while in the U.S.the figure was only slightly higher at 63 percent.

The difference between the earnings of proprietors and the earnings for all jobs might be that a proprietor works only a few hours a week at her own business while holding a full-time job. Proprietors may include expenses in their business operations that other workers can not claim.

Next, I looked the most terrible number favored by the SBA. They count as a small business any establishment with fewer than 500 employees. That is an unjustifiable inflation of the concept of "small".

An establishment is a place of business. A firm like McDonald's owns many establishments. Since most controls and policies are centralized in these businesses, the size of the establishments is a statement about the firm rather than about entrepreneurial activity in a community.

Finally, I looked at the data on businesses with no employees. These 368,600 Indiana firms could be among the 607,100 proprietorships discussed earlier. This might be the guy who runs online services for those who want to know which stock or horse is the next sure thing.

Since the data are gathered by the IRS from actual income tax returns, they are subject to under-reporting. They indicate average receipts of $39,200; those are gross figures, not net earnings.

Thus, fans of small business, although I could not locate the heart you hear, I will not deny the existence of a pulse.

Opinions expressed solely are those of the writer. Morton Marcus is an economist, author and speaker formerly at the Kelley School of Business, Indiana University. He can be reached at mortonjmarcus@yahoo.com.