Thursday, July 24, 2008

Kevin Willis on starting a business

In mutliple studies, it has been proven time and again that the size of the national economy (in proportion to size of population) of any nation is directly proportional to how easy or hard it is to start a legitimate business. For the longest time, Hong Kong had the highest per capita GDP in the world because it took literally nothing to start a business--you just set up shop, and you were a business. In America, it's very similar, though there is more red tape, and certainly more and more in terms of taxes and legal obligations are being tossed onto employers every day. Still, it's relatively easy to start a business here, and we have the highest standard of living in the world. In most 3rd world nations, you see a similar pattern emerging: it is impossible for the average Joe in Egypt or Ethopia to start a legitimate business. That average time from starting the red tape to having a real, legitimate, government approved privately held business in Egypt was something like 15 years, as I recall. How can you have a robust economy if it takes fifteen years to start a legal business in a country?

Poverty world wide can be measured by two things: how easy is it to start a business, and how easy is it to accumulate capital. Where there are no laws to protect private property, there is no way to build equity or leverage personal property or real estate to start a business. Where starting a business takes years, or can't be done unless you're a member of a select class, the economies are in the toilet. In quasisocialist states like Europe, where it was once fairly easy to start a business, but businesses are now saddled with burdensome regulations, the economies are faltering, and the only thing that prevents much of Europe from going 3rd world is the same thing that prevents New York City from become Detroit--the sheer mass of wealth accumulated and number of businesses created before government regulation and paristical taxes turned growth into slow, but steady, decline.

-- By Kevin Willis (who posted this as a comment on another blog post, but it was too good to be buried!)


Anonymous Kevin S. Willis said...

Wow, that guy is brilliant, except for some of the typos. More of him!

10:58 AM  

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