From: Hal Finney (hal@finney.org)
Date: Thu Jun 19 2003 - 14:35:10 MDT
Randy S. writes:
> And this provides a semi-seque to my ideas about where opportunity may lie
> for Westerners if the outsourcing and race to the bottom dynamics continue:
> immigration reciprocity may provide a place for small time American business
> people to immigration at least temporarily overseas to 3rd world countries
> where their savings would afford them much more ability to operate a business.
The problem for small business in many third world countries is not lack
of capital - otherwise they would do no better when they come to the
United States. The problem is regulation. Most third world countries
struggle with a bewildering maze of regulatory restrictions, applied at
multiple levels. Hernando de Soto shows in one of his books the enormous
number of steps necessary to start a business - it was something like
500 different contacts and approvals that had to be made. You had to
talk to the locality, the city, the state, the national government,
and a variety of special boards and commissions within each grouping.
Add to this the widespread corruption and demands for bribes and it
creates an enormous burden for the would-be small businessman.
As a result, many or most small businesses are "informal", i.e. illegal,
and are constantly in danger of being shut down. They can't get
too successful or grow too big, or they will draw the attention of
the authorities. You end up with a bunch of famly-run shops and services
which can barely make ends meet.
Hal
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