Let’s say you’re looking to start a new business, but you don’t want to deal with a lot of bureaucratic red tape. Where’s the best place to start it? The most interesting thing about the list of best places to start a business today is who’s not close to the top of the list: the United States.
The World Bank’s annual Doing Business report ranks countries according to how friendly they are to business. Of the 11 categories ranked, the United States is in the top 10 in only four of them. (In the category of paying taxes, the United States is the No. 72 country in the world.)
So where’s the easiest place in the world to start a business? The report says it’s New Zealand, followed by Australia, Canada, Singapore and Hong Kong. None of those are terribly surprising to anyone who keeps up with world business, but the No. 8 country is Rwanda. Yes, the country that’s synonymous in our minds with mass killings in its recent past is one of the few African countries getting its economic act together in this particular way. (Here’s a slideshow of the top countries in that category.)
So does this really matter? The United States is the richest country in the world. We have a huge lead over everybody else. Right? Well, not as much as you might think. We got rich by making it easy to start businesses and generate wealth, which created opportunities for millions and millions of people. The things we’re doing today are making it less desirable to operate businesses here. Some people are looking at the regulatory environment and deciding to quit. Some of you might remember a story I had a couple of months ago about a coal mine operator named Ronnie Bryant who decided to quit.
Once a country loses its edge, I don’t think it ever gets it back. I certainly haven’t seen any examples of it. When the Roman Empire was on top, nobody realized it was slipping and would collapse. When Spain was the most powerful country in the world, it was hard to see it losing its position on top. More recently, Britain was the unquestioned leader of the world until about a hundred years ago. History is littered with such examples. They all lost their leadership positions and never got them back.
The rules by which you govern society matter. If we set up rules that are free and consistent, we will achieve amazing results. When we take power away from people and put barriers in their way, we will start losing wealth and power. The United States once took the first approach. Today, we’re taking the second approach — and we’re slowing paying a price for it.