In Volume 2
of his Law, Legislation and Liberty trilogy, economist Friedrich Hayek explained that the
everyday term "economy" doesn't adequately encapsulate the dynamics
of functioning free markets. Hayek described "the order
brought about by the mutual adjustment of many individual economies in a
market." And he used word "catallaxy" to define this order of
competing economies.
"Catallaxy"
never captured public consciousness, of course. But the idea that economic
competition takes place not only within particular regions or markets but also
between different markets surely resonates with us. Living, as we do, in a
Union of 50 states, we recognize that states compete with one another for
opportunity, jobs, and business enterprise. A state's quality of life depends
on its maintaining an economy that can effectively compete with the other 49
states, with a state's economic competitiveness vis-à-vis its immediate
neighbors an imperative.
Now a
special report just issued by CNBC offers Maryland a timely reminder about the
state's pressing need to boost its business-friendliness and overall economic
climate. In "America’s
Top States for Business 2012," CNBC placed Maryland at #42 in
"Cost of Business." Maryland also ranks #43 in "Cost of
Living," making it the 8th
most expensive state to live in.
CNBC ranks
Maryland higher according to some other important indicators. But for business
start-ups or existing enterprises looking to grow, bottom-line business costs
are a critical determinate of where to locate or migrate operations. Moreover,
where Maryland's score fares better, neighboring Virginia scores better still.
Maryland's #24 ranking in "Business Friendliness" pales next to
Virginia's #3 ranking.
CNBC's
Special Report should clue Maryland policymakers to the work they have cut out
for them. As we've blogged about previously, steps for Maryland to improve its
economic climate and attract new jobs and business opportunities include:
getting its continuing budget
deficit and public
pension liability problems under control, reducing its business
tax rate to more competitive levels, avoiding new
taxes
and regulations that punish technology and entrepreneurship. Otherwise, the
best economic opportunities will take place outside of Maryland's borders.
Posts
