On a recent Wednesday afternoon, I hit pause on my business and went down to the State Capitol to testify in favor of a bill for the first time in my life. It was SB1376, which would create a mechanism for the formation of “prosperity districts”. These districts would be formed at the request of Arizona property owners, and, if approved, would effectively hit reset on decades of taxes and regulations which have piled up into one indecipherable morass.
I like to think of these districts as being similar in spirit to the “Special Economic Zones” (SEZ) established in Latin America and East Asia beginning around the 1970s. Today, the biggest economic miracles being studied around the world are in these zones.
While there is still a long way to go, many countries in East Asia have embraced this spirit of taking calculated risks to see what happens when a local economy is allowed to function without the heavy taxes, regulation, and central planning of the rest of the country. The results have been nothing short of miraculous, which might explain why SEZs have continued to multiply with increasing speed.
At our State Capitol, I waited in the Senate Government committee for my turn to speak as paid lobbyists gave their testimonies about why SB1376 is such an awful idea. It might come as a surprise to some to learn that lobbyists from the business-friendly Chamber of Commerce testified against the bill in committee that day. It shouldn’t.
The Chamber represents the interests of current business owners. Fortunately, business owners in America tend to be philosophically in favor of the general idea of competition in the marketplace. However, ask a business owner if he personally would like a new competitor to open shop nearby and he’ll of course say “No, thank you.” That is logical self-preservation, even if it’s not in keeping with our belief in the idea that competition breeds progress. The reason the chamber is opposed to the bill is not because it’s not a pro-business, pro-entrepreneur bill, but because the Chamber represents current business owners, not future business owners.
Senator Mendez asked a great question that I’ll paraphrase: “Where are all the businesses that are clamoring for this bill?” After all, many of the leading “pro-business” entities were in the room opposing the bill. My answer: They don’t exist yet.
The people who will be able to take advantage of a prosperity district may not own businesses yet. They may not even be born yet. They may be people with great ideas who simply gave up when they realized how difficult and expensive it would be to start a new business. Maybe they didn’t want to deal with a complicated and expensive occupational licensing hurdle.
Whatever the case may be, people who haven’t yet benefited from SB1376 or anything else like it can’t be expected to go down to the capitol and lobby for it.
These days, we see great new businesses being formed that have disrupted the global marketplace in ways that clearly make our lives better, but that also are opposed by many in business who have dominated a particular industry for decades. Ride share companies like Uber and Lyft are great examples of this. Tesla Motors, too. All these companies began with business models that were illegal in virtually every state in the union (and in most countries).
Fortunately for us, these businesses were backed by plenty of venture capital and public support. So, when Tesla and Uber and Lyft began deliberately violating state laws in order to operate their businesses without all the necessary licenses and other requirements, they were operating under the aphorism that “It’s better to beg for forgiveness than to ask for permission.”
Eventually, the laws were changed and most cities and states and even many countries now allow these disruptive new business models, with a few caveats. But not all entrepreneurs have the political, financial, and popular support of the already multimillionaire entrepreneurs behind Tesla, Uber, and Lyft. Most of them are too afraid of the penalties associated with breaking an unjust law or regulation in order to start America’s next great business.
That is why we need prosperity districts. In these districts, entrepreneurs can act with as little friction as possible to start the businesses of their dreams and act on the creative solutions that percolate to the surface of their minds on a regular basis.
I can say with confidence that most great ideas die on the vine due to one issue or another, and sometimes for good reason. But the least we can do as a free society is make it as easy as possible for people to strike while the iron is hot and potentially create something that makes even the smallest improvement on the human condition.
Dan Jones is an internet marketer. Follow him on Twitter, @djonesvi.
The views expressed in guest commentaries are those of the author and are not the views of the Arizona Capitol Times.