Dateline: Taipei, Taiwan
Stepping off of the flight from Manila to Taipei was like being transported to another world. In addition to being much colder here, the culture is – of course – totally different.
Chinese and Taiwanese culture is all about efficiency and getting things done NOW. I knew I was back in the part of the world I know and love best when the cashier at 7-Eleven practically reached over the heads over two other people to grab the Coca-Cola from my hands and complete my transaction in lighting speed… all to keep the line moving.
Taiwan is, of course, one of the wealthiest places in Asia. and one example of that fast-moving culture is the high-speed rail that connects the country. Particularly along the country’s hi-tech west coast, getting from one end of the island to the other – and anywhere in between – is a breeze.
Domestic travel used to be the domain of Taiwan’s numerous local airlines. Flights from Taipei to other cities along the coast ran with amazing frequency.
Until the high-speed rail came in. Flight schedules were cut to the bone as people avoided the long drive to the airport to fly within their own relatively small country.
The big players adapted and survived, but the small upstart entrepreneurs were vanquished. All because the government came in and introduced a competing product.
Of course, I’m all for a free market. And as much I fly, I still enjoy taking a scenic train ride.
But government competing with the free market isn’t a free market. It’s nothing more than a new twist on crony capitalism.
In The Land of the Free, California is bumbling its way through a high-speed rail project that would connect Los Angeles, San Francisco, and the hours of cow pastures and meth labs in between. A prudent use of billions of dollars considering the state’s insolvent treasury.
If California ever gets a train line built, I’m sure some people will take it (although not nearly as many as they project).
And when those people put a dent in Los Angeles-San Francisco air traffic, the government will declare their rail project a success.
What they’ll fail to mention, of course, is how they are the same thuggish government demanding strip searches at the airport, along with a littany of other agonizing reasons to avoid flying.
As with anything else, government creates problems that the rest of us have to deal with. Then, they either refuse to solve their problem and instead blame the free market, or cobble together a half-assed solution and claim to be saviors.
What they don’t do is create truly free markets. As we’ve seen in the morally and financially bankrupt United States, laws can change at any time. Constitutions mean nothing when government thugs can simply ignore them.
You’re powerless against them.
Which is why I’m suggesting a New Year’s resolution: avoid business ideas and investments that make you a slave to one government.
There’s really no reason to be the subject of heavy regulation when you don’t have to be.
The idea of investing in something that fixes a government-created inefficiency can be attractive. And I don’t blame entrepreneurs and investors for taking advantage of things the government screws up.
Before you put your money into a business idea that is based on something the government does, ask yourself: “Could the government totally wipe me out tomorrow?”
My father spent years in the financial services business. Over the years, it became more and more regulated. Today, the mafia you call “Congress” is toying with legislation to force brokers to cut their commissions in half.
Their goal is literally to get rid of recurring income. In the past, you could sell someone a financial product and get a residual commission – even decades later. Now, the government decided such payment plans are “greedy”.
How ironic coming from people who steal trillions of dollars a year from their “citizens”.
While I doubt anyone reading this is planning on starting an airline, Taiwan and other places show how the government throws its weight around and literally bankrupts companies in the process.
Some states in the United States allow private market third parties to offer more efficient government services. For example, Arizona has dozens of stores that perform motor vehicle services a lot faster than the DMV. People have built huge businesses jamming as many services under one roof as possible.
Until the state decides they’d rather control the process themselves. Then it’s game over.
They say that if lying with dogs will give you fleas, and getting in business with the government, or even piggybacking off of it, is a potential recipe for disaster.
The internet has shown how virtually any business can be run with less regulation and no physical presence. A friend of mine in Vietnam makes the most beautiful custom suits, which you can order from anywhere in the world and have shipped to you. Rather than open a store in a bankrupt country, he merely ships to customers there.
I like that strategy a lot more than the guys opening software companies disguised as suit merchants in San Francisco. They’re totally at the whim of the government’s next bone-headed move.
Of course, living and doing business in a country with minimal regulation is ultimately your best option for running a business as you wish. That’s because there are times when merely living in a country where regulation has run amok can be a recipe for disaster.
Imagine being a health insurance agent and waking up one day to see your commissions cut in half because some socialists wanted the government to completely screw up the health care system.
In those cases, there’s nothing you can do.
Here at Nomad Capitalist, we help people avoid the madness of dealing with one government by going to the places where they are treated best. Call it “government arbitrage”.
In my mind, there will always be a market for this type of service because the world is changing. Unfortunately, as long as there is government, there will be a compliance cost of doing business.
Personally, I’d rather governments eliminate regulations and create truly free markets for business owners to thrive in. When that happens, you won’t need sites like this.
Until then, make sure your businesses and investments are government-proof.