How to find a real free market as an entrepreneur

We’ve talked about this concept before: some places get it, others don’t.

You should go to the places that “get it”. That includes entrepreneurs trying to run a business in the real free market.

Expert investor Jim Rogers has repeatedly said that the smart money moved to London in the 19th century and New York in the 20th. They were the economic hubs of their era and a land of opportunity for those looking to make their mark.

Now, however, they’ve lost their way.

Consider a recent ruling by Denmark’s Board of Equal Treatment (you just know a group with that name isn’t good for business).  In response to a complaint from a woman with short hair, the board ruled it was illegal to charge women more for haircuts because it referred only to their sex.  Talk about government interference.

Think policies like this are only the province of socialist Northern European countries?  Think again.  Well over 100 barber shops and salons in New York City received fines last year for violating little known “fair pricing” rules.  Forget that salon owners say the forced changes will drive away business.  The government knows better than they do.

I’ve invested in or helped start a number of businesses, including service businesses where pricing was largely a function of the customer demographics.  Services rendered in a posh neighborhood with affluent customers would go for more than what was done for more middle-class customers.  Residents of million-dollar homes accepted paying more largely just because they lived in million dollar homes. As a business owner, you accept that each customer demographic operates differently and want the freedom to operate in that reality.

But western governments, with a desire to more power and populist mandates for “fairness” in every tiny nook and cranny, want to strip that power from you.  Sometimes even retroactively, like in California, where their Franchise Tax Board (perhaps the most unpleasant tax authority on planet earth) is demanding investors in qualifying businesses return legal tax breaks not just this year, but going back five years.  The gall of these governments is amazing.

Meanwhile, there are places that are incredibly friendly to entrepreneurs.  Chile, for instance, offers a very pro-business environment as well as a program called Start-up Chile where selected entrepreneurs get $40,000 to build their business.  Brazil also has agencies set up to inject capital into budding high-growth companies, and actually set up a campaign to get Brazilian entrepreneurs abroad to return home. Estonia allows companies to pay 0% tax on profits they reinvest in their business, while nations from Vietnam to even Canada are or are working to lower business tax rates.

And believe it or not, Indonesia was identified in a BBC poll as the most friendly place for entrepreneurs. Developing and smaller countries realize they have an opportunity to compete and are doing so to secure their position as a serious player in the 21st century economy.

To truly analyze the best place for your talents, you must shed your localized, comfortable mindset. As a westerner, and more so as an American, you’ve been brainwashed into thinking that never-ending statist government intrusion into your business is justified because it protects the marketplace. Yet you and I know that the market will account for the issues big government is trying to solve in this article. Believing what your government tells you about it’s system being the best because it’s anti-corruption or supports free markets or evens the playing field is a great way to not maximize the potential of your business.