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American-Owned Private City in Honduras Greenlighted
September 24, 2012 5:05 AM   Subscribe

“Our goal is to be the most economically free entity on Earth.” The Honduran government has agreed to allow an American investment group build a private city, with its own laws, government, and taxation structure, from scratch. While some laud the project as a "beacon of job creation and investment," others decry it as an assault on human rights and democracy. One murder has already been attributed to the political tensions related to the plans for the private city.
posted by Rykey (165 comments total) 19 users marked this as a favorite

 
I'm game. If only to see how quick and massive the failure is.
posted by Blue_Villain at 5:08 AM on September 24, 2012 [4 favorites]


“Our goal is to be the most economically free entity on Earth.”

"And it'll cost YOU, the Honduran citizen, ABSOLUTELY NOTHING!"

Uh-huh. Fuck you and the horse you rode in on.
posted by flapjax at midnite at 5:11 AM on September 24, 2012 [6 favorites]


It's a libertarian utopia, just like Pinochet's Chile!
posted by acb at 5:15 AM on September 24, 2012 [22 favorites]


What could possibly go wrong?
posted by The Whelk at 5:15 AM on September 24, 2012 [18 favorites]


Shades of Bioshock. The descent into barbarism of this city will make a great auteur film masterpiece in my lifetime.
posted by LiteOpera at 5:15 AM on September 24, 2012 [6 favorites]


Who's got the over/under on whether this lasts as long as Sealand.
posted by ardgedee at 5:15 AM on September 24, 2012 [2 favorites]


What could possibly go wrong?

One would think that finding out would be the point of the project.
posted by valkyryn at 5:17 AM on September 24, 2012 [3 favorites]


I don't know if OCP's going to have their prototypes ready in time for Delta City.
posted by COBRA! at 5:17 AM on September 24, 2012 [14 favorites]


I'm game. If only to see how quick and massive the failure is.

That'd be all well and good if "failure" only meant some big shot investors, bankers and wheeler-dealers losing some multi-millions. But the "failure" here will mean much more than that: it'll mean all kinds of calamity for workers, average citizens, indigenous people, etc.
posted by flapjax at midnite at 5:19 AM on September 24, 2012 [15 favorites]


Who's got the over/under on whether this lasts as long as Sealand.

Entirely different projects. Sealand was an attempt, not to set up what amounts to a FEZ on steroids, but an attempt to set up an entirely independent sovereign nation. Rather than declaring independence from a sovereign state, they're working within and authorized by a sovereign state. Sealand failed less because economic deregulation didn't work than because trying to run an independent, sovereign state without any natural resources whatsoever is a spectacularly, hilariously bad idea.

Or, maybe to put it better, this is another version of the Sealand project, but whereas Sealand was running a multi-variable experiment, looking at both sovereignty and economic deregulation, this is a single-variable experiment, focusing only on economic deregulation.

I'm interested to see how it does. I'd lay good money that the thing will probably not do well in the long run, but probably not because of a "descent into barbarism" or anything like that.
posted by valkyryn at 5:22 AM on September 24, 2012 [5 favorites]


Cool, cool. I was worried we might not be on schedule, but they're taking care of extraterritoriality just in time for the Awakening. I better get my butt up to Seattle before the elves take over Portland.
posted by Caduceus at 5:24 AM on September 24, 2012 [10 favorites]


This is the worst idea in the history of worst ideas, if you're a poor working class Honduran.
Or, really, anyone in Honduras below the billionaire's line.

The Honduran president, Porfirio Lobo – a landowner from the rightwing National party – has given his full backing to the plan, which was inspired by US economic advisers.

I know violence isn't the answer, but I need a copy of the Shock Doctrine, some lube.... and some rubber gloves. I have an experiment I want to try.
posted by Mezentian at 5:24 AM on September 24, 2012 [9 favorites]


I better get my butt up to Seattle before the elves take over Portland.

I see what you did there, chummer.
posted by Mezentian at 5:24 AM on September 24, 2012 [12 favorites]


Great idea! Company towns never have any downsides!
posted by DU at 5:25 AM on September 24, 2012 [7 favorites]


You know how this idea could be better? All the worker's houses could be built with asbestos! It's cheap and fire resistant.
posted by Mezentian at 5:27 AM on September 24, 2012 [2 favorites]


This sounds like a cargo cult attempt to emulate Singapore and Hong Kong.
posted by unSane at 5:29 AM on September 24, 2012 [13 favorites]


If only to see how quick and massive the failure is.

The historical examples of Singapore and Hong Kong (and even Abu Dhabi, Las Vegas, and New York to some extent) would seem to suggest otherwise, but, you know, past performance is no guarantee of future returns.

Certainly what they have been experimenting with so far hasn't produced anything like a decent standard of living. Honduras is one of the poorest countries in the Western Hemisphere.

With a GDP just over 1000 USD per capita, it would seem that "workers, average citizens and indigenous peoples" are already living in a calamity.

Why mock them and wish them ill in this attempt to get their economy moving?
posted by three blind mice at 5:30 AM on September 24, 2012 [7 favorites]


Also: the extent to which this project is met with knee-jerk skepticism is why a lot of people are deeply suspicious of progressivism. Here's a project that, on its face, is supposed to be about liberty, and the immediate reaction is basically that there's no possible way anything good can come from people not under the watchful eye of a robust state. That sort of sentiment makes a lot of people, myself included, pretty uncomfortable.
posted by valkyryn at 5:30 AM on September 24, 2012 [13 favorites]


Singapore, or Fordlândia?
posted by acb at 5:31 AM on September 24, 2012 [2 favorites]


Here's a project that, on its face, is supposed to be about liberty...

The best way to judge any project idea is definitely by the propaganda put out beforehand.
posted by DU at 5:32 AM on September 24, 2012 [19 favorites]


It's a libertarian utopia, just like Pinochet's Chile!

As much as I consider libertarianism a completely worthless joke, I'll note that I seriously doubt this will be anything but a corporate oligarchy. There will be plenty of laws that restrain trade, etc. -- they'll just be written to favor the company that owns the city.

If they actually did this like, say, Hong Kong, it could in fact be a spectacular success. But HK was a dependency of a nation that had very different values that a for-profit corporation.

So, yeah. I expect labor to be utterly screwed, I expect services to be minimal, and I expect taxation to be horrific, if you're just a work. The corporation, of course, will pay zero taxes on the wealth it extracts.
posted by eriko at 5:33 AM on September 24, 2012 [9 favorites]


The part that makes this not make sense to me is the lack of real benefits for outside companies to invest the massive amounts of money that would be required to build a city from scratch. There are already plenty of places in the world with lax laws that would practically pay for companies to setup factories and whatnot. Dubai makes sense because people in the UAE have massive amounts of money from oil that they want to put into infrastructure. Whereas Honduras has about a 10th of the GDP as the UAE and is highly politically unstable.
posted by burnmp3s at 5:33 AM on September 24, 2012 [2 favorites]


I better get my butt up to Seattle before the elves take over Portland.

I see what you did there, chummer.


If it wasn't so fragging early, I would have worked in something about Saeder-Krupp and Aztlan, too, but I'm not on top of my game. Still, at least it looks like we'll get to skip right to the ARG part of the Matrix, that'll be nice. I'm less excited about the insect spirits, but I'll be pretty old by the time they break out.
posted by Caduceus at 5:34 AM on September 24, 2012 [3 favorites]


Welcome to MegaCompanyTown One.
posted by Mr. Bad Example at 5:38 AM on September 24, 2012 [3 favorites]


I better get my butt up to Seattle before the elves take over Portland.

Okay, I'll bite, what in blue blazes are you talking about.
posted by Sokka shot first at 5:38 AM on September 24, 2012 [2 favorites]


valkyryn: I think the concern many here have with what is held to be, on its face, concerned with liberty, is that this will be nothing more than a facade, and that where policy is dictated by freedom only in relation to what you have to spend then those with all the money, and thus all the power, get to be free to do what they like, while everyone else is virtually a serf.
posted by biffa at 5:39 AM on September 24, 2012 [5 favorites]


The Utopian rhetoric in the second link is setting itself up for a pretty hard fall.
“Once we provide a sound legal system within which to do business, the whole job creation machine – the miracle of capitalism – will get going,” Michael Strong, CEO of the MKG Group, which will build the city and set its laws, told FoxNews.com.
Strong said that the agreement with the Honduran government states that the only tax will be on property.

“Our goal is to be the most economically free entity on Earth,” Strong said.
posted by unSane at 5:39 AM on September 24, 2012 [2 favorites]


Or to put it another way, Quis Custodet MegaCorp?
posted by unSane at 5:41 AM on September 24, 2012 [1 favorite]


...Las Vegas? New York?!
posted by adamdschneider at 5:48 AM on September 24, 2012 [2 favorites]


"As much as I consider libertarianism a completely worthless joke, I'll note that I seriously doubt this will be anything but a corporate oligarchy. There will be plenty of laws that restrain trade, etc. -- they'll just be written to favor the company that owns the city."

So, a libertarian utopia then...
posted by Benjy at 5:49 AM on September 24, 2012 [5 favorites]


I believe Steve Goodman wrote a song about this a while back.
posted by TedW at 5:49 AM on September 24, 2012 [1 favorite]


Once we provide a sound legal system within which to do business...

Heh. Unless this is a one-man dictatorship with a private army, I suspect this step will prove the project's undoing. Unless, of course, by "sound legal system" they mean "no legal system at all". One corporation's "sensible operating framework" is another corporation's "unbearable over-regulation".
posted by Thorzdad at 5:49 AM on September 24, 2012 [2 favorites]


Also: the extent to which this project is met with knee-jerk skepticism is why a lot of people are deeply suspicious of progressivism. Here's a project that, on its face, is supposed to be about liberty, and the immediate reaction is basically that there's no possible way anything good can come from people not under the watchful eye of a robust state.

This project seems to be about business liberty. And I'm sure that just about any poster on here could easily come up with numerous examples when businesses, given free reign, have trampled roughshod on people with few options available to them - all in pursuit of profit.

This project isn't an attempt to make a free, harmonious city. It's an attempt to make an area where businesses can profit and don't have messy laws in the way.
posted by entropone at 5:51 AM on September 24, 2012 [19 favorites]


Why mock them and wish them ill in this attempt to get their economy moving?

Why? Because the "them" we're talking about here is a questionable bunch of US (and possibly Canadian) investors who want to set up shop outside any laws but their own, aided and abetted by a right-wing strongman who came to power in a military coup. The "them" most decidedly does not include a large portion of the citizenry of Honduras, who appear to oppose the neo-colonialist idea vociferously, and are every bit as skeptical about it as the plan deserves.

And, um... who the fuck is the NKG/MKG group, anyway? I'm looking around, and I haven't found much so far. But, let's see... there is this...

"Private City" Does Not Have Transparency Commission

Oh, and another hopeful sign: it's not even clear whether this fine organization is the MKG group or the NKG Group, and other players are either invisible or very sketchy. Read more about the delightful behind-the-scenes goings-on here.
posted by flapjax at midnite at 5:51 AM on September 24, 2012 [28 favorites]


Plus, it seems to me that, in order to be considered a legitimate experiment and/or success, the colony will have to internalize all those mundane aspects of running a city...sewage, water, energy, etc. If their arrangement simply pushes those aspects onto the shoulders of the world outside (or simply dumps shit outside their borders), they really haven't proven anything.
posted by Thorzdad at 5:52 AM on September 24, 2012 [6 favorites]


...or just not provide those services. "The free market will provide housing and a sewage system to the workers! It's not in our financial interest to do so. And hey, there are jobs HERE and not in the rest of the country, so that makes it okay. Because there is NO coercion in a free market!"
posted by entropone at 5:55 AM on September 24, 2012 [1 favorite]


Weird how as time passes, life on Earth more closely resembles the transnational-corporate nightmare of Kim Stanley Robinson's Mars trilogy.
posted by chrominance at 5:57 AM on September 24, 2012 [2 favorites]


I think it's cute that the sponsors of this project believe you can deploy a justice system with a flip of a switch. Finding sufficient competent and honest lawyers/judges which are able to stand up to a large multinational corporation to move to some imaginary free port? Yeah ok, good luck starting up sufficient social capital to stop corruption. The power vacuum from a functional society means that you're just going to have one corporation (probably some kind of mob) dominate and ignore/rewrite all the (minimal) laws.

It's pretty sad because building Special Economic Zones is proven to work if you create it without corruption. Unfortunately, the problem with every government tends to be corruption, so it turns into a bit of a tautology. Creating a foreign designed SEZ sponsored by Libertarian wackjobs sounds like a recipe for disaster -- the problem is corruption, letting Libertarians run it doesn't solve the corruption problem.

I mean, let's be honest, the sponsors probably just want a place to park their money where corporations/trusts do not need to disclose ownership. Panama is pretty much the only place in the world that lets you do that, and that's probably not going to last much longer, so this is probably seen as a possible solution for tax evaders. Unfortunately for Hondouras, tax evaders probably aren't going to hire many locals, you can fit the necessary infrastructure for opaque corporate ownership in a single building.
posted by amuseDetachment at 5:58 AM on September 24, 2012 [3 favorites]


Just declaring that you'll have a good legal system, or even writing decent laws, won't result in a legal system which businesses and investors will trust. Even if you get a decent legal system off the ground, which is a very big if, what's to stop the Honduran government from interfering in the future? This isn't a bit like Hong Kong and Singapore, which had the institutional capital of the British empire and the might of that empire to protect them from interference from local governments.

At best, this is is likely to become some sort of haven for tax evaders.
posted by Area Man at 6:04 AM on September 24, 2012


The second link describes the legal system as based on that of Texas. It will be interesting to see what aspects of the Federal law (such as the bill of rights and Constitution) they incorporate. Or don't.
posted by unSane at 6:06 AM on September 24, 2012


I'd categorize this as yet another example of an idea that can be thoroughly discredited with only five minutes of SimCity play.
posted by RonButNotStupid at 6:07 AM on September 24, 2012 [16 favorites]


So it's like Scientology, but even MORE capitalist?
posted by Theta States at 6:07 AM on September 24, 2012


This is an example of Paul Romer's "charter city" idea, about which there was a good long story in The Atlantic a couple years back. Excerpt and link on my blog.
posted by grobstein at 6:08 AM on September 24, 2012


Relevant TED Talk by Romer, especially around the 8:30 mark.
posted by kithrater at 6:09 AM on September 24, 2012


You'll find a quote by one Michael Strong of NKG/MKG/WTF, extolling the utopian virtues of this modern-day company town idea in at least one of the links in the FPP. Strong and Whole Foods CEO John Mackey have (or had? it's not clear...) an organization called FLOW. Here's their website.
posted by flapjax at midnite at 6:10 AM on September 24, 2012


This seems only nominally libertarian, yes? Instead it's more of a "laws written by the people setting up shop", with a focus on "investment". But there doesn't seem to be a concerted effort to make the laws as libertarian as possible.

I guess it's the reality-based libertarian-as-corporatist?
posted by Lemurrhea at 6:19 AM on September 24, 2012


This is win-win, guys. First, all the wealthy libertarians of the world will immigrate here en masse, and those that don't will have no riposte when we tell them to go live there rather than bitching about paying 15% income tax during the 19th Stupid Libertarian Internet Argument of the week. One of these wealthy scions of freedom will inevitably turn out to be a political enemy of the United States, so then just we'll invent some justification whereby harboring him is an act of war, and then we'll carpet bomb the everliving fuck out of the place in because it has no standing military.

The free market solves the problem perfectly! The Libertarians had it right the whole time!
posted by Mayor West at 6:22 AM on September 24, 2012 [9 favorites]


More quotes from Michael Strong and a few other points that the other linked articles don't touch on may be found in this article:

Honduras Sets Stage for 3 Privately Run Cities.

One bit I find especially chilling is this: The "model cities" will have their own judiciary, laws, governments and police forces. They also will be empowered to sign international agreements on trade and investment and set their own immigration policy.
posted by flapjax at midnite at 6:23 AM on September 24, 2012 [5 favorites]


It seems to me that the outcome for Honduras as a whole will be either:

a) The project is a failure. Honduras will be left with a mess to clean up, which, given their very limited resources, they will find a distraction from efforts to improve their country.

b) The project is a success. The Honduran government ends up dominated by the appendage or, Texas-like, the Colonialists carve out a new state from the part they want when the ostensible national government becomes a liability. Either version produces some kind of civil war. But, hey, the promise of profit!
posted by GenjiandProust at 6:23 AM on September 24, 2012 [3 favorites]


So, privatized everything? I'm sure Blackwater Xe can provide security. Wild West style society seems to be right up their alley.
posted by Ghidorah at 6:25 AM on September 24, 2012 [3 favorites]


I came here to post "Mr. Lee's Greater Hong Kong" but somebody already hit Shadowrun. I'm out.
posted by Foosnark at 6:28 AM on September 24, 2012 [3 favorites]


"I don't experiment often, but when I do, I experiment on the poor."
--The Most Douche-Baggy Man in the World
posted by saulgoodman at 6:32 AM on September 24, 2012 [11 favorites]


And, um... who the fuck is the NKG/MKG group, anyway? I'm looking around, and I haven't found much so far.

This looks to be their website.
posted by kithrater at 6:33 AM on September 24, 2012


I think it's great that some libertarians area are actually putting their money where their mouth is, and in a very poor area of the world at that. I wish them the best of luck. I'm very curious to see just how free they end up being.
posted by shivohum at 6:33 AM on September 24, 2012 [2 favorites]


Actually, reading a little further into the articles -- what kind of economic activity is going to take place here? It can't be resource exploitation, because there's really no value in locating your company in-country for that (it's cheaper to just buy the government). It's not going to be import/export sorts of things, because, if there was a sufficient economy to manage that, Honduras wouldn't be interested in the plan. I suppose there is banking and various illegal activity, but those markets already have havens. So what kind of economic activity do they imagine? The stories mention manufacturing, but I am not sure the money saved via worker exploitation (vs other locations which allow significant if not total worker exploitation) probably wouldn't pay for a city in the short-run (and when have these people ever planed beyond the short-run?). I guess having sweatshops and legal slavery closer to the US might save shippiing, but...

Also:

“Texas law is also very familiar to American business people, and it is very familiar to Hondurans, because a lot of Hondurans have gone there or have family there.”

Hondurans in Texas are especially familiar with immigration enforcement and deportation laws!
posted by GenjiandProust at 6:36 AM on September 24, 2012 [3 favorites]


This looks to be their website.

Ah, so it's MGK. All these reports have so far gotten the initials and/or order of initials wrong. How weird. Thanks for that link!
posted by flapjax at midnite at 6:40 AM on September 24, 2012


I'm genuinely curious to see what happens. On the one hand, Bioshock. On the other hand, Hong Kong. It's a fascinating thing, you must admit.
posted by jaduncan at 6:42 AM on September 24, 2012 [1 favorite]


The guys with too much money to use for any practical purpose are getting really desperate to find new speculative investment bubbles to direct all their capital into because they literally cannot stand the thought of using their capital responsibly (in say, existing infrastructure projects and useful scientific projects) or letting a little bit more of that captured revenue return to the markets that generated it. They're glorified gambling addicts who value economic risk-taking and thrill-seeking over sound economic fundamentals.
posted by saulgoodman at 6:44 AM on September 24, 2012 [10 favorites]


Why mock them and wish them ill in this attempt to get their economy moving?

It's not that we wish them ill. It's that this is magical thinking at a level just above the serial killer level.

In fact, given that they already have on murder under their belt, they may not even be a rung up.
posted by Kid Charlemagne at 6:45 AM on September 24, 2012 [2 favorites]


Hong Kong worked because it had the backing of the British Empire, and was a parasite on the Chinese economy. It won't be Hong Kong.
posted by Jehan at 6:46 AM on September 24, 2012 [2 favorites]


Well, just came across this at the MGK website:

Sept 10 - Grupo MGK No Relation to Other Similar Sounding Entity Names
Grupo MGK has recently been created to focus on the Honduran Special Development Region initiative. We have no relation to any other entities that may have similar sounding names.

It's on this page.

So... NKG, MKG, MGK... what is this, a shell game? 3-card monte?

Otherwise, I'm approaching bedtime, but their FAQ page might be of interest.

So far, I haven't seen any list of names (board members, whatever) on theat MGK site. Just the one name... Michael Strong.
posted by flapjax at midnite at 6:47 AM on September 24, 2012


The stories mention manufacturing, but I am not sure the money saved via worker exploitation (vs other locations which allow significant if not total worker exploitation) probably wouldn't pay for a city in the short-run (and when have these people ever planed beyond the short-run?). I guess having sweatshops and legal slavery closer to the US might save shippiing, but...

That looks to be about it. Their theory, as far as I can tell, is "if we provide 'good' laws, we will attract business, that business will attract workers with shitty but paying jobs, this model encourages the rest of the country to implement 'good' laws, and we take out slice off the top".

This appears to be not so much loliberatian fantasies come to life, but rather as mentioned upthread, SEZs on steroids. An interesting read is the rights of these Special Development Regions.
posted by kithrater at 6:49 AM on September 24, 2012 [3 favorites]


I think this says something about the mode of thought and discourse that treats "freedom," even "economic freedom," as a scalar--something you have more or less of--as though that were a complete, or even adequate, way of modeling something like "freedom". As though you could rank nations unambiguously by how free they are, and then move to the one with 100% or only 85% "economic freedom," as you prefer.

It is quite a common fallacy in libertarian arguments, often used just like this, to justify actions that "increase freeness" as though the other consequences didn't matter, or perhaps the freedom coefficient is supposed to remain stable while all those other numbers--suicide rate, GNP--fluctuate as they will. Perhaps they will admit that those other numbers matter, that their effects should be mitigated, but you've got to do these things for freedom points, you know?

This is the type of project that scalar-freedom thinking leads to, though normally on smaller scales. I don't think libertarians are unique in using this fallacy--I hear it from liberals all the time, but with a different concept of what constitutes "freedom," often "freedom of speech". And I can't prove this, but I think it always leads to doomed projects like this one, if such thinkers are empowered to build a society.

The trouble is that I'm not sure it's possible to avoid scalar idealism at some level. Maybe you acknowledge it's oversimplified, maybe you work to mitigate it when you catch yourself, the way that enlightened people do with their own internalized racism and sexism. It's better if you do. But if you end up in a position of great power, and you can't rely on anyone outside your head to call you on your bullshit, what can you really do to stop yourself from sliding into absolutism?

Dammit, calling it a "slide" is a scalar metaphor.
posted by LogicalDash at 6:50 AM on September 24, 2012 [10 favorites]


One would think that finding out would be the point of the project.

I see, so it's all a human experiment. Is there a Honduran equivalent of the US institutional review board?

the extent to which this project is met with knee-jerk skepticism is why a lot of people are deeply suspicious of progressivism.

On the contrary, the extent to which this project isn't met with knee-jerk skepticism is exactly why a lot of people are deeply suspicious of libertarian ideologues, who, apparently, once again, are incapable of distinguishing liberty from a jungle plantation.

Anyway, if Mitt loses, I guess he can be President-CEO of Free City; if he wins, I expect they'll be our staunchest ally in the next Coalition of the Willing.
posted by octobersurprise at 6:51 AM on September 24, 2012 [7 favorites]


Isn't this sort of thing usually built on some huge ship or self-powered aquatic platform?
posted by Mister_A at 6:53 AM on September 24, 2012 [3 favorites]


Hong Kong worked because it had the backing of the British Empire, and was a parasite on the Chinese economy.

Oh, I know. But it's going to be interesting. Part of me wonders if it's going to end up with the biggest casinos outside Vegas, premium rate chat lines and dens of prositution. It is all a little sci-fi dystopia...and say what you like about that, but it is at least interesting.
posted by jaduncan at 6:54 AM on September 24, 2012 [2 favorites]


"if we provide 'good' laws, we will attract business...

So, kinda like Field of Dreams, as written by Any Rand?
posted by titus-g at 6:54 AM on September 24, 2012 [9 favorites]


Let's all Google "special economic zone" shall we? This is the natural progression of the same mechanisms that give you your SMRT phones and video games.

Yay us.
posted by clvrmnky at 6:56 AM on September 24, 2012 [2 favorites]


This appears to be not so much loliberatian fantasies come to life, but rather as mentioned upthread, SEZs on steroids.

>implying that libertarians want anything else
posted by LogicalDash at 6:57 AM on September 24, 2012


I think this says something about the mode of thought and discourse that treats "freedom," even "economic freedom," as a scalar--something you have more or less of--as though that were a complete, or even adequate, way of modeling something like "freedom".

This is a really excellent point I've been struggling to make so succinctly for a long time now.

It applies as well to the concept of "government" (as in "bigger government" or "smaller government"). My hunch is this is another bi-product of the American "scientific management" industry and the MBA-nurtured impulse to view irreducibly complex, qualitative phenomena in terms of simple--and largely nonsensical--"metrics."

Speaking of those SMRT phones...
posted by saulgoodman at 6:59 AM on September 24, 2012 [5 favorites]


During the signing ceremony, government officials said the initial $14m phase of the project would start in October and create 5,000 jobs in the first six months and 40 times that number in the future – a major incentive in a country where one in four of the workforce are unemployed.

...$14 million? I'd like to think that the people who wish to build a society had more than it takes to buy a reasonably sized yacht.
posted by jaduncan at 7:01 AM on September 24, 2012 [1 favorite]


valkyryn: Here's a project that, on its face, is supposed to be about liberty, and the immediate reaction is basically that there's no possible way anything good can come from people not under the watchful eye of a robust state.

Liberty for who? It's a company town, and company towns are run by company rules. Read the group's website:

Safe Place: Oh, and there's their fun ideas on law and taxation, under Transparency & Efficient Governance:

One low property tax affords me outstanding local government services, and Choice of law? That sounds like trouble. "Well, I have a right to x under Honduran law, but you have the same right to X under Texas law" Perhaps that's part of the "Customized Governance Experience." Different residents will be interested in different packages of services from different service providers.

I'm interested in how this all plays out, but as flapjax said: it'll mean all kinds of calamity for workers, average citizens, indigenous people, etc.
posted by filthy light thief at 7:03 AM on September 24, 2012 [5 favorites]


This might be an irrelevant detail, but what is this city supposed to produce?
posted by Navelgazer at 7:04 AM on September 24, 2012 [2 favorites]


Here's a project that, on its face, is supposed to be about liberty

Quit using our most cherished values as a fig leaf for goddamn naked economic opportunism and greed!
posted by saulgoodman at 7:04 AM on September 24, 2012 [8 favorites]


Money, jobs, and liberty.
posted by filthy light thief at 7:04 AM on September 24, 2012 [1 favorite]


It's giving freedom a bad name.
posted by saulgoodman at 7:04 AM on September 24, 2012 [1 favorite]


No existing criminal element

They're talking as if crime wasn't an emergent property of human ecosystems.
posted by acb at 7:05 AM on September 24, 2012 [6 favorites]


This might be an irrelevant detail, but what is this city supposed to produce?
FREEDOM.
posted by Jehan at 7:07 AM on September 24, 2012 [14 favorites]


They're talking as if crime wasn't an emergent property of human ecosystems.

Or, indeed, that white collar crime isn't a big issue. I have no problems believing there's going to be a crapload of poorly paid security guards with a Honduran army backup agreement to stop people stealing consumer goods or going on strike.
posted by jaduncan at 7:07 AM on September 24, 2012 [3 favorites]


A merely libertarian mode of starting their quasi-country (buying the space) does not mean that they will be establishing a libertarian state. It's also notable that they mention that this will be economically free. What about social freedoms? Are they going to allow untrammelled free speech, for instance, even if that risks offending trading partners? Are they going to allow easy access to abortion even though Honduras allows them only for risks to the woman's life? Or to gay marriage? To online gambling or software piracy? I wonder.
posted by shivohum at 7:08 AM on September 24, 2012 [3 favorites]


Audio interview with Michael Strong at Soundcloud. Very buddy-buddy interview, his interviewer seems a kindred spirit all the way, far as I can tell.
posted by flapjax at midnite at 7:09 AM on September 24, 2012 [1 favorite]


//Derail alert
The trouble is that I'm not sure it's possible to avoid scalar idealism at some level.
Oh, it's entirely possible. Keep in mind the differences between idealism, and dealing with the consequences of your decisions.

Those of us who believe that things like discrimination for any reason (race, sex, gender, hair-style, etc.) is bad get swept under the rug and categorized as extremists. Historically the centrists get their way, which partially explains why there is nearly a 50 year gap between the 15th and 19th amendments.

It is entirely possible to draw infinitely long lines in the sand and never cross them at any point. But if you marked "here" as a point on that line the further away you get from it the more convoluted it gets, and thus the harder it is to stick with your convictions. For example, these days it's less Jim Crow laws and more Voter ID laws, but the line is still there, you just have to live with the consequences of continuously standing on one side or the other.

Anyway, I'm completely aware that this is sliding into a derail. But since it seems to be blurring into a discussion on rights and responsibilities I felt it was appropriate.
posted by Blue_Villain at 7:09 AM on September 24, 2012 [1 favorite]


This is a fascinating development. What surprises me is how disconnected most folks feel this idea is. As I see it, it's simply an implementation of what's gone on before many, many times, only with more thought put into the planning.

All the concern for the poor seems misplaced, as they are generally already fucked, and fucked completely without choice in the matter. The status quo already sucks, and insisting on a full grown western society to spring up there is akin to saying, "fuck you, poor folks!", because it's not going to happen without economic development instigated by some evil capitalists somewhere. That it's happening outside the pathological government that's hobbled Honduras forever is a good thing.
posted by 2N2222 at 7:13 AM on September 24, 2012 [3 favorites]


And according to Grupo MGK's FAQ, these Special Development Regions (SDR) are still part of Honduras, so they are
subject to the Constitution of the Republic and the national government on issues related to sovereignty, territory, national defense, foreign affairs, elections, issuance of identity documents and passports.
But SDRs are mostly autonomous:
SDR’s are autonomous legal entities that have their own system of administration, promulgate their own rules and have their own judicial entities.

Fundamental rights of individuals living in an SDR’s shall be protected by the constitutional guarantees safeguarded by the SDR’s Constitutional Councils.
Ohohoho... and then it gets funny.
To offset the effects of bad rules and governance, most poor countries end up paying cash and other compensation to foreign companies to persuade them to put capital in their countries. The SDR system was designed to make this practice unnecessary by fixing the underlying problem itself. By making it intrinsically attractive for companies to invest based on the quality and security of the local SDR system, the SDRs can attract new investment to Honduras without the Honduran government paying anyone anything.
Except free land, right? Or are MGK paying for the land to set up their cozy little SDR? It's like resources aren't worth money in Honduras, or to MGK. But don't worry, everyone will be treated fairly and their rights will be respected, because:
The SDR’s are required to guarantee to the people residing within its jurisdiction, and those in transit or in any way present or passing through such jurisdiction, the most absolute respect for their dignity and fundamental rights. For the best compliance with this Constitutional Statute, the authorities of the SDR’s must take into account the general principles of the International Law of Human Rights, international jurisprudence on Human Rights, and the interpretations promulgated by international agreements and declarations on Human Rights
You know, we'll cover the "general principles" of human rights.
posted by filthy light thief at 7:16 AM on September 24, 2012 [1 favorite]


This might be an irrelevant detail, but what is this city supposed to produce?

It will provide convenient opportunities for laundering money, if nothing else.
posted by dortmunder at 7:17 AM on September 24, 2012 [2 favorites]


Reading in to the rules of the SDR, I'm even more unclear as to how this is meant to work. Article 50 requires that SDRs "may only spend within the limits of the revenues in their budgets. They are required to have balanced budgets, avoid deficits and keep the budget commensurate with the growth rate of gross domestic product".

Ah, balanced budgets, nature's punishment of the economically ignorant. Given the significant start-up costs any SDR will incur, they must be hoping for donations/very generous loans to tide them over until all that business investment results in something that can be taxed, at the maximum rate of 16 per cent.
posted by kithrater at 7:19 AM on September 24, 2012 [1 favorite]


What surprises me is how disconnected most folks feel this idea is.

I'm not seeing perceptions of 'disconnectedness' at all in these comments. On the contrary, I'm seeing many, many comments that immediately see the connection with the infamous 'company town'. Which is, of course, obvious.
posted by flapjax at midnite at 7:19 AM on September 24, 2012 [4 favorites]


This might be an irrelevant detail, but what is this city supposed to produce?

I am beginning to think that they will have ranches for Magical Finance Ponies. Magical Finance Ponies who eat workers and poop pure liberty.
posted by GenjiandProust at 7:19 AM on September 24, 2012 [9 favorites]


It's been mentioned, but

•Affordable housing options within
•Easy, secure access for visitors
•No existing criminal element

just don't seem like three flavors that go together. Affordable housing? For who? Easy, secure access doesn't usually isn't either. You've either got secure or easy, but best of luck with both.

Leaving us with no existing criminal element. People rich enough to suddenly leave their home country, or with, say, a strong desire to do so, to set up their own colony with their own laws? I'd love to see their committee to decide who can legitimately cast the first stone.
posted by Ghidorah at 7:19 AM on September 24, 2012 [2 favorites]


Both Singapore and Hong Kong evolved socialized housing concepts that would make Scandinavia blush. They actually tell you where to live. If Libertarians just want to lock up their maids in closets, they should just say so.
posted by Brian B. at 7:21 AM on September 24, 2012 [1 favorite]


three flavors that go together
Depending on your viewpoint the criminal element either has no barriers to entry, or barriers of regulation. So it could be the neighbor who was also given affordable housing or some sort of corporate element.
posted by Blue_Villain at 7:24 AM on September 24, 2012


Choice of law? That sounds like trouble.

I doubt it - it's presumably just a reasonably business-friendly setup of their conflict of laws laws*. All states/countries have some form of choice of laws laws*, and in normal circumstances, they're not that troublesome.**

* yes there should be two laws there.
** Except for beleagured law students who have to learn about fun things like renvoi.

posted by Lemurrhea at 7:25 AM on September 24, 2012


Am I the only one reminded of Oath of Fealty ?
posted by namewithoutwords at 7:26 AM on September 24, 2012 [1 favorite]


It's giving freedom a bad name.

But they haven't given love a bad name. Yet.
posted by octobersurprise at 7:31 AM on September 24, 2012 [3 favorites]


Neither the FAQ nor the Constitutional Statute of the Special Development Regions (PDF) say anything on how the congress is formed, and who is in this congress that decides the rules and regulations for the SDR.

Who's to say that the SDR stays any more clean of corruption than poor countries with large rural populations like Honduras? This summer, The Honduran government has set up an anti-corruption commission to target rogue officials in the judicial system and police force, which President Porfirio Lobo said the work of the commission was not "an intervention, but as a necessity".
posted by filthy light thief at 7:33 AM on September 24, 2012


Make the walls high.
posted by Artw at 7:34 AM on September 24, 2012


Weird how as time passes, life on Earth more closely resembles the transnational-corporate nightmare of Kim Stanley Robinson's Mars trilogy.

Except, you know, for the part where humans colonize Mars.
posted by localroger at 7:34 AM on September 24, 2012 [2 favorites]


how the congress is formed, and who is in this congress that decides the rules and regulations

I believe the congress those documents are referring to is in fact the National Congress of Honduras, given the reference at the very end of the document: "Given in the Assembly Room of the National Congress on the twenty-ninth day of July, two thousand eleven."
posted by kithrater at 7:36 AM on September 24, 2012


> Anyway, if Mitt loses, I guess he can be President-CEO of Free City; if he wins, I expect they'll be our staunchest ally in the next Coalition of the Willing.

They can call it Amercia.
posted by ardgedee at 7:39 AM on September 24, 2012 [1 favorite]


Hey, if any of you out there in MefiLand come across any news on this subject that identifies (by name) anyone directly and publicly involved in this scheme other than Michael Strong and Porfirio Lobo, could you be so kind as to post it here?
posted by flapjax at midnite at 7:40 AM on September 24, 2012


I predict it'll become one giant HOA cluster fuck wherein we discover that "small government" really means a government that cares about small things, at least to America's so-called libertarians. Your free market disappears the moment anyone gains anything remotely resembling a monopoly.
posted by jeffburdges at 7:48 AM on September 24, 2012 [3 favorites]


All the concern for the poor seems misplaced, as they are generally already fucked, and fucked completely without choice in the matter. The status quo already sucks, and insisting on a full grown western society to spring up there is akin to saying, "fuck you, poor folks!", because it's not going to happen without economic development instigated by some evil capitalists somewhere. That it's happening outside the pathological government that's hobbled Honduras forever is a good thing.
Part of the reason why Honduras is fucked is because it was, for many years, the dictionary definition of a banana republic. The idea of a town with fewer regulations and more foreign capital is not a plan, but a re-run.
posted by Jehan at 7:50 AM on September 24, 2012 [6 favorites]


I think 'no criminal element' is totally achievable. 'Criminal' is defined as 'one who breaks laws', yes? So if you just let them buy in to the process of 'writing the laws', then they stop being criminals. This is more like a rehabiliatory process!
posted by FatherDagon at 7:50 AM on September 24, 2012


They can call it Amercia.

Not Liberia II?
posted by jaduncan at 7:58 AM on September 24, 2012


'Criminal' is defined as 'one who breaks laws', yes? So if you just let them buy in to the process of 'writing the laws', then they stop being criminals.

Absolutely! Put another way:

“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it”

― Frederic Bastiat
posted by flapjax at midnite at 8:01 AM on September 24, 2012 [9 favorites]


Has anyone checked with the narco militias? Because that might be a problem. As would driving the rural and native populations into the drug lords' arms. (Or what Genji & Proust said.)
posted by snuffleupagus at 8:03 AM on September 24, 2012


Part of the reason why Honduras is fucked is because it was, for many years, the dictionary definition of a banana republic. The idea of a town with fewer regulations and more foreign capital is not a plan, but a re-run.

The banana republic wasn't the "fewer regulations" kind of place you seem to think it was.

Of course, the status quo isn't exactly helping out much. So what to do? Continue with the same, or try this venture? Remember, alternative plans are ok. Except nobody is actually doing them. Good intentions mean dick when you're not doing anything to make them happen.
posted by 2N2222 at 8:32 AM on September 24, 2012 [1 favorite]


Here's a project that, on its face, is supposed to be about liberty...

So I'm sure that the workers will have the freedom to form and join labor unions. Right?
posted by octothorpe at 8:43 AM on September 24, 2012 [4 favorites]


Strong said that the agreement with the Honduran government states that the only tax will be on property.

Perhaps a Georgist system?

I've sometimes wondered if might be possible to mostly replace an income tax system with a market in which rents (particularly real estate rent) essentially turns into property taxes paid to public treasuries.

If that were the experiment here, I'd be quite interested in the outcome.

I'm not really confident, however, that the experiment is actually much beyond an exercise in stretching deference to a small set of private economic powers/interests.
posted by weston at 8:48 AM on September 24, 2012 [1 favorite]


Your free market disappears the moment anyone gains anything remotely resembling a monopoly.

Quite so. I swear people have never heard of the Gilded Age, robber barons, industrial monopolies, Ma Bell, or the Microsoft suit these days. (and that's just the stuff from the American side of that problem!) There's really no excusing it, either.
posted by Archelaus at 8:48 AM on September 24, 2012 [6 favorites]


Okay, I'll bite, what in blue blazes are you talking about.

Shadowrun. AKA: William Gibson meets D&D.
posted by asnider at 8:51 AM on September 24, 2012 [1 favorite]


I'm pretty sure that this place will be subject to the Honduran constitution. Which means that all bets are off, once a less "business-friendly" government gets elected.

Of course, the investors may get around this pesky problem by ensuring that such a government doesn't get elected, or at least into office. That's where having a private militia may come handy...

So, same old same old, then...
posted by Skeptic at 8:59 AM on September 24, 2012 [1 favorite]


The banana republic wasn't the "fewer regulations" kind of place you seem to think it was.
For the wealthy, it was. Unless you earnestly think that this new town is going to be set up for the benefit of the poor to escape regulations.
Of course, the status quo isn't exactly helping out much. So what to do? Continue with the same, or try this venture? Remember, alternative plans are ok. Except nobody is actually doing them. Good intentions mean dick when you're not doing anything to make them happen.
Honduras has a GDP growth rate of about the world average. Just keeping things on track will solve the problem of poverty in time. That's the alternative: a moderately growing and stable country. Not carving some libertarian fantasy out of the jungle.
posted by Jehan at 9:01 AM on September 24, 2012 [2 favorites]


The commondreams link, presumably arguing that the city will be an assault on human rights and democracy, don't sound very unconvincing. Surely, better arguments can be made? Are people really so concerned over the independence of a newly built city, given the kinds of strife Honduras has to deal with with no charter city at all? It seems there's a constitutional objection that makes no judgment on the viability of the city at all. There's another objection to the concept based on the idea that "a foreign elite to set up a low-tax, sympathetically regulated enclave where they can skirt labour standards and environmental rules." Which sounds to me like a feature, not a bug, especially in present day Honduras, where they can enjoy all the labor/environmental laws they want, with nobody to break them. There's an argument that a new, independent city somehow violates the rights of every Honduran citizen, no explanation how. There's an environmental argument, though it seems only used to shore up the others.
posted by 2N2222 at 9:02 AM on September 24, 2012


For the wealthy, it was. Unless you earnestly think that this new town is going to be set up for the benefit of the poor to escape regulations.

Why would it have to be set up for the benefit of the poor? The idea is that it's set up for the benefit of capital. In the process, it benefits anyone willing and able to take advantage of the effects. This isn't a new idea. This is exactly what happens in a market economy in the rest of the developed world, and has done better for the poor than any programs or plans done for the benefit of the poor. What Honduras lacks is a good level of development. The carter city is looking like a way to kick start that development.

Honduras has a GDP growth rate of about the world average. Just keeping things on track will solve the problem of poverty in time. That's the alternative: a moderately growing and stable country. Not carving some libertarian fantasy out of the jungle.

Whoa there, Honduras. Daddy doesn't want you gettin' too big for your britches!

OK, moderately growing and stable country. Hobbled by inequality and crime. And as stable as the coup that installed the current government in 2009. But as long as it's libertarian, we can't allow that?
posted by 2N2222 at 9:14 AM on September 24, 2012


There's an argument that a new, independent city somehow violates the rights of every Honduran citizen, no explanation how.

How? Very easy: by violating the right of Honduran citizens to vote for their own laws. Whether this place is supposed to be governed under its own laws, Texas laws, or nearly no laws (despite the distinction being quite sharp, this is far from clear at the moment), the whole purpose of this scheme is to create a territory in Honduras which is exempt from democratically passed laws. Something rather worrying in what was supposed to be a fledging, if imperfect democracy. Because the solution to having trouble enforcing law is not necessarily to scratch it.
posted by Skeptic at 9:15 AM on September 24, 2012 [3 favorites]


But as long as it's libertarian, we can't allow that?

I can't see how a legal order imposed on its citizenry by a coup can be "libertarian" in any way whatsoever.
posted by Skeptic at 9:16 AM on September 24, 2012 [2 favorites]


Paging the handful of hard-core libertarians from the Romney open thread...
posted by odinsdream at 9:30 AM on September 24, 2012


Relevant- The Fountainhead Filibuster: Tales from Objectivist Katanga
posted by Apocryphon at 9:51 AM on September 24, 2012


an index of the above project
posted by Apocryphon at 9:52 AM on September 24, 2012


It looks like Paul Romer has bailed on the project.
posted by ghharr at 10:12 AM on September 24, 2012 [3 favorites]


Paging the handful of hard-core libertarians from the Romney open thread...
Oh god no.
posted by Catchfire at 10:14 AM on September 24, 2012


Why would it have to be set up for the benefit of the poor? The idea is that it's set up for the benefit of capital. In the process, it benefits anyone willing and able to take advantage of the effects.

Except this idea hasn't worked out like that anywhere, ever. What happens is the concentration of wealth in the hands of a powerful few while everyone suffers.

This is exactly what happens in a market economy in the rest of the developed world, and has done better for the poor than any programs or plans done for the benefit of the poor.


Again, it has not happened like that anywhere, ever. Not even vaunted Hong Kong or Singapore. Every country that has attained high standards of living has massive programs specifically designed to stop the kind of wealth concentration that happened during periods like the 19th century and to distribute the benefits to everyone via housing, education, etc.

You're literally describing the libertarian fantasy that has never ever happened anywhere. Yet libertarians keep crowing about this idea that if we only have unfettered markets, it will bring magic despite every single example showing the opposite.

And as stable as the coup that installed the current government in 2009.

The same one that's backing this libertarian utopia?
posted by Sangermaine at 10:20 AM on September 24, 2012 [8 favorites]


Yet libertarians keep crowing about this idea that if we only have unfettered markets, it will bring magic despite every single example showing the opposite.

Yeah, I thought it was interesting that Strong referred to the "miracle" of capitalism that was going to occur. Aren't miracles, by definition, the most unlikely, impossible things? It's just weird when free-market disciples describe the material, cause-and-effect, highly-measurable-and-analyzable world in terms of "magic marketplaces," "invisible hands," and the like.
posted by Rykey at 10:33 AM on September 24, 2012


Paging the handful of hard-core libertarians from the Romney open thread...

You ask, we deliver.

Looking over this, it's hard to say how it will function, and I don't think it seems designed to work as a purely libertarian society, though it's certainly possible to do so. For a few of those inquiring about the kinks:

No criminal element is easy when you control the immigration laws, but you'd need to essentially have a walled city of some kind. You simply deport every citizen who breaks the law. It'd be the same for the union issue - they could have no laws against forming a union, but also no laws preventing employers from firing unions, and if it's a company town where you need to have a job in order to live there, they could simply evict someone for vagrancy.

I'm certainly curious as to how this will play out, but far less excited than in the ones experimenting with sovereignty as well. I don't think this is going to wind up being as libertarian as a lot of people are thinking it will.
posted by corb at 10:33 AM on September 24, 2012


corb: No criminal element is easy when you control the immigration laws, but you'd need to essentially have a walled city of some kind. You simply deport every citizen who breaks the law.

Er, there's a reason countries and communities don't do this now, and it's because surrounding countries and communities won't put up with it. Is there any reason to believe that that won't be the case, this time?

Also, making criminals you catch and convict somebody else's problem doesn't mean you don't have crime. It doesn't stop the initial acts and it doesn't work unless you can reliably catch and convict criminals, a non-trivial problem.
posted by Mitrovarr at 10:38 AM on September 24, 2012 [1 favorite]


"Certainly what they have been experimenting with so far hasn't produced anything like a decent standard of living. Honduras is one of the poorest countries in the Western Hemisphere."

This sort of historical ignorance is really frustrating. Honduras is one of the poorest countries in the Western Hemisphere due to a couple centuries of Western manipulation in order to keep it exactly that. Wow, a country just out of a long civil war (featuring US-backed death squads) isn't the next Silicon Valley?

With a GDP just over 1000 USD per capita, it would seem that "workers, average citizens and indigenous peoples" are already living in a calamity. "

And these plans would help … how? Exactly?

Why mock them and wish them ill in this attempt to get their economy moving?"

God, ignorance is useful, isn't it?

"Also: the extent to which this project is met with knee-jerk skepticism is why a lot of people are deeply suspicious of progressivism. Here's a project that, on its face, is supposed to be about liberty, and the immediate reaction is basically that there's no possible way anything good can come from people not under the watchful eye of a robust state. That sort of sentiment makes a lot of people, myself included, pretty uncomfortable."

It's infuriating to see that skepticism born of actually having some familiarity with these sorts of projects and the history of Latin America is a reason why you're suspicious of progressivism. It's an utterly idiotic reaction, based on accepting your ideology over the basic history of the region and projects like this, and yet it's somehow our fault for the straw man you've constructed? "Sure, every similar project has failed, and there's a 500-year history of colonialism that should make us wary of the likely outcomes, but it's so unfair that progressives don't take liberty-based pablum at face value!"

You're shoveling bullshit as fertilizer and complaining that progressives think it stinks.
posted by klangklangston at 10:42 AM on September 24, 2012 [3 favorites]


I'd rather they tried seasteading instead of occupying existing lands. Boats rock!

We should however observe that living abroad only protects American citizens from income taxes on their first $90k as well as income covered by a Foreign Earned Income Exclusion, which you cannot get if you don't pay similar taxes elsewhere. Afaik, there isn't any other country in the world that pursues it's own expats for taxes the way the U.S. does.
posted by jeffburdges at 10:44 AM on September 24, 2012


Why would it have to be set up for the benefit of the poor? The idea is that it's set up for the benefit of capital. In the process, it benefits anyone willing and able to take advantage of the effects. This isn't a new idea. This is exactly what happens in a market economy in the rest of the developed world, and has done better for the poor than any programs or plans done for the benefit of the poor. What Honduras lacks is a good level of development. The carter city is looking like a way to kick start that development.

This is NOT what is done in the developed world.

Market economies in the developed world have a TON of regulations to protect labour against capital, and to protect consumers from producers: safety regulations, wage regulations, discrimination regulations.

The developed world WITHOUT these regulations is better known as "Dickenisan" replete child labour and a malnourished working class - and that was at the end of the 19th century, after a century of massive economic growth and development.
posted by jb at 10:53 AM on September 24, 2012 [4 favorites]


Also: the extent to which this project is met with knee-jerk skepticism is why a lot of people are deeply suspicious of progressivism. Here's a project that, on its face, is supposed to be about liberty, and the immediate reaction is basically that there's no possible way anything good can come from people not under the watchful eye of a robust state. That sort of sentiment makes a lot of people, myself included, pretty uncomfortable.
valkyryn

You've got it backwards. Sentiments like yours are exactly why libertarians often find themselves the subject of mockery and derision: this tendency to blindly promote anything that has the word liberty slapped on it. Something about this seems to just shut off the critical part of libertarian minds. This is bad for people of a libertarian persuasion because it dilutes the power of their message and makes them seem like naive dupes. It makes people deeply, deeply suspicious of libertarians and their motives when what they champion as liberty often turns out to be terrible corporate oppression.

I always enjoy reading your posts and you seem like a very smart person, so it surprises me that you could write something as stupid as "Here's a project that, on its face, is supposed to be about liberty". You really can't see why a project specifically marketed as being about "economic freedom" set up by wealthy foreign investors by a right-wing government that came to power in a coup in a nation with a long, ugly history of brutal exploitation by foreigners in projects exactly like these might engender a bit of skepticism? That given the situation and history taking the self-applied face-value label of "liberty" might be a bit naive?

It's like some well-intentioned progressive telling me, "But they call themselves the Democratic People's Republic! What's wrong with democracy for the people?"
posted by Sangermaine at 11:04 AM on September 24, 2012 [6 favorites]


Guys, Common Dreams buried the lede in the penultimate paragraph (emphasis mine):
He also spelled out the environmental risks, particularly if one of the development sites is the Sico valley, an area of virgin forest on the Mosquito Coast.
This life as you now live it and have lived it, you will have to live once more and innumerable times more.
posted by Kylio at 11:11 AM on September 24, 2012


If we are getting to choose which corporate town we want to live in, I'm going with Google. Good thing I am old, because when they take up arms against the Apple city-state I don't want to be conscripted.
posted by Ber at 11:20 AM on September 24, 2012 [1 favorite]


Why would it have to be set up for the benefit of the poor? The idea is that it's set up for the benefit of capital. In the process, it benefits anyone willing and able to take advantage of the effects.

Well, this may be true, except the accent is on the "able to take advantage." I have been doing a bunch of reading and listening on the history of Rome and China lately, and one take away is that, over time, small inequalities without any kind of counterbalancing regulations snowball into massive inequalities where a small percentage have most of the wealth and all of the effective power to keep the game rigged in their favor. It is not "a rising tide lifts all boats" but a "large boat's wakes swamp smaller boats" effect.

I am wondering if the rise of Absolutism in Europe didn't short-circuit the effect by removing lots of hands from the levers of power until the last set could be pried loose and the power returned to the people (for some value of people). The systematic disenfranchisement of the hereditary power elites may have made Western progress possible from, say 1500-1800 when the wealth and power began to concentrate again as a new class of people learned to game the system.

I don't know enough about Early Modern Europe to push that thesis, but the histories I do know something about tend to suggest "what is good for capital is good for the nation" has been not only not true, but the exact opposite of true for pretty much every time it has been allowed to happen.
posted by GenjiandProust at 11:24 AM on September 24, 2012 [3 favorites]


So, when are they gonna realize they don't have a working class?
posted by kafziel at 11:34 AM on September 24, 2012


This sounds like a cargo cult attempt to emulate Singapore and Hong Kong.
Or more likely a dubai. Without the massive subsidies from selling oil. But hopefully with a working sewage system. The question is whether or not it will end up with the same slavery problem.

Anyway, if done right this could work. If they are required to pay some low tax to Hondurans after some number of years, it could end up being an economic benefit in the long run. And of course there is always the risk to investors that some socialist could get elected and simply seize the country the way Chavez and Morales did to various business interests in Venezuela and Bolivia. There had been a coup attempt a few years ago where a socialist elected president was deposed there.

So that's where the biggest problem with this idea comes from, once it's in place the people profiting off this city are going to have to 'invest' in making sure that no one gets elected in that country who might mess up or 'renegotiate' their little arrangement.
Also: the extent to which this project is met with knee-jerk skepticism is why a lot of people are deeply suspicious of progressivism.
It's not unusual for people with different political views to be suspicious or skeptical of policies from the other side. That's how politics typically works.

Anyway, I don't really think this idea is intrinsically untenable. I don't really think you can really predict too much what kind of outcome you're going to get based on the 'ideology' of a certain project or policy. Brutal, Darwinian capitalism might be a bad idea for an entire country, but if it's limited to a specific region where people are free to leave, is that as bad? What happens if people from other countries come, have children there, etc? Are they free to move to Honduras proper if they want? It really depends on a voucher program.
So, when are they gonna realize they don't have a working class?
Why wouldn't it have a working class? I mean, millions of mexicans are willing to come to the US and live without any legal protections at all, clearly people are willing to travel for jobs. Since they'll control their own borders, they'll be able to import work from anywhere in the world. (Again, just look at dubai. That city actually only has a few hundred thousand citizens but millions of residents, many of whom are practically slaves)
posted by delmoi at 11:42 AM on September 24, 2012 [1 favorite]


Again, it has not happened like that anywhere, ever. Not even vaunted Hong Kong or Singapore. Every country that has attained high standards of living has massive programs specifically designed to stop the kind of wealth concentration that happened during periods like the 19th century and to distribute the benefits to everyone via housing, education, etc.

You're literally describing the libertarian fantasy that has never ever happened anywhere. Yet libertarians keep crowing about this idea that if we only have unfettered markets, it will bring magic despite every single example showing the opposite..


Actually it has happened, and continues to happen. Witness the modernization of China, which opened up to investment to the benefit of millions of Chinese people in addition to the investors.

However, by describing this venture as an unfettered free market, I think you're attacking a straw man. Whatever libertarian influence this charter city may have, it's likely to disappoint the preconceived notions of what that word means. If anything, I think its biggest potential spot for failure is the good chance that it won't have the autonomy to be as libertarian as folks seem to think. One of the biggest objections seems to be that the country won't be able to milk its success the way it might be able to were it not a charter city. I believe Romer himself, though initially involved with this development, has stepped away for this very reason, that whatever libertarian roots it may have, it will be transformed into another kleptocracy.
posted by 2N2222 at 12:13 PM on September 24, 2012


Witness the modernization of China, which opened up to investment to the benefit of millions of Chinese people in addition to the investors.

And the relative impoverishment and loss of resources to tens and perhaps hundreds of millions of other Chinese not well-paced to take advantage of the shift. "Some Get Rich First" was a nice slogan, but it's more like "Only Some Get Rich, Ever."
posted by GenjiandProust at 12:28 PM on September 24, 2012 [1 favorite]


This is NOT what is done in the developed world.

Market economies in the developed world have a TON of regulations to protect labour against capital, and to protect consumers from producers: safety regulations, wage regulations, discrimination regulations.


It's exactly what's done in the developed world. Every time a company moves to a State with low regulations. Every time a worker leavers a rust belt town to move to a place with a booming job market.

Modern market economies do have tons of regulations. This isn't how they became modern market economies, but are the result of the prosperity. Opposing the idea of new development without those regulations, hobbles potential for becoming that modern market economy that can afford regulations. By saying you can't have a development without all the regulatory baggage upfront, becomes the liberal version of "Fuck you, I got mine". So instead of the possibility of an impoverished region becoming even moderately more prosperous, it's somehow deemed better to let the fields lie fallow.
posted by 2N2222 at 12:30 PM on September 24, 2012 [1 favorite]


“There will be a free market in land,” Strong said.

So who owns the land / how is land ownership decided when the free market starts up?

My limited understanding of some of the initial benefits of a "Libertarian" city is tourism, think Amsterdam, Thailand, Las Vegas, there is also potential web-hosting outside of Western jurisdiction, and finally loose or non-existent visa requirements allowing foreigners to be brought in as needed without quotas or other restrictions.

I actually know Michael Strong, and have spoken with him on several occasions -- I sent him the link to this FPP, hopefully he'll stop by and answer questions if he has the time and inclination.
posted by Shit Parade at 12:35 PM on September 24, 2012


And the relative impoverishment and loss of resources to tens and perhaps hundreds of millions of other Chinese not well-paced to take advantage of the shift. "Some Get Rich First" was a nice slogan, but it's more like "Only Some Get Rich, Ever."

The prosperity of China has been widespread. Some get rich. Most simply have a better life than they would have otherwise. That only some get rich, even ever, isn't a bad thing when so many times more simply enjoy more prosperity. Really, the change has been overwhelmingly positive for the vast majority of Chinese. Do you truly think it would be preferable if China had remained as it was prior to opening up to the West?
posted by 2N2222 at 12:35 PM on September 24, 2012 [1 favorite]


Such a city could prosper, because it would be a parasite being subsidized by the most successful nations. Those other nations provide the schools and laws and commerce that allows a few people to become massively wealthy. Some of those people don't want to pay anything forward for the next kid that comes along with a great idea, and so export all that wealth to Rapture City (or whatever you're going to call it) in the ultimate tax dodge.

Such a city could float on the wealth of the world, subsidized by the outside civilization that produces the wealth and maintains the freedom for people to take it.
posted by anonymisc at 1:35 PM on September 24, 2012 [1 favorite]


re: deploying a justice system...

Myanmar's Suu Kyi Calls on U.S. to Heed More Than Economy: "She cautioned that unless there is the rule of law and a functioning judicial system to enforce it, companies coming to Myanmar won't have 'either security or the freedom necessary for them to operate effectively in our country.' "

U.S. Shifts Mexico Drug Fight: Military Aid Plummets as Washington Turns Focus to Bolstering Legal System
Secretary of State Hillary Clinton meets her Mexican counterparts at a security summit in Washington Tuesday to discuss the next phase in the drug war: how to train the judges and prosecutors that will be trying suspected drug lords.

The Merida Initiative, the U.S.'s $1.9 billion assistance program to Mexico, began mostly as a means to buy military hardware like Black Hawk helicopters for Mexico. But over the past two years, it has entered a new phase, in which purchases for the Mexican military are taking a back seat to measures to mend the branches of Mexico's civilian government.

The former director of Colorado's penitentiary system has trained more than 5,000 Mexican prison officials in recent years. Mexican jurists are running mock trials with visiting American judges to prepare for a transition to oral hearings that will replace Mexico's enigmatic closed-door meetings where sentences are handed down.

"Different things have come to the fore at different times, but strengthening the rule of law in Mexico is the area that's crucial right now," says Roberta Jacobson, the Assistant Secretary of State for Western Hemisphere Affairs.

Officials in both countries increasingly believe the root of Mexico's problem lies in creating an honest police force, professional judges and a prison system comparable with that in the U.S...

That reality is being reflected in how U.S. aid is being spent in Mexico. Assistance to the Mexican military has nearly collapsed, with counternarcotics and security aid falling from a height of around $529 million in 2010 to $67.5 million planned for next year.

Meanwhile money meant for strengthening institutions from law schools to prisons doubled in the last year, to $201.8 this year from $105 million in 2011.

Training Mexico to handle its own struggle could be more cost-effective for the U.S.—total aid this year to Mexico is at $330 million, less than half its number 2010—in large part because training police and prosecutors is less expensive than financing a military with big purchases like helicopters.

One example both sides are touting has to do with Mexico's courts, which are undergoing a radical overhaul. Unlike the U.S., most trials in Mexico take place in closed proceedings where judges aren't present nor even meet the defendant. Attorneys and witnesses gather in a cubicle where a clerk takes notes and prepares a file, later sent to the judge for a decision. There are no juries.

In 2008, Mexico's congress approved a change to have trials be conducted orally—with attorneys arguing in an open courtroom before a judge—with a complete rollout by 2016. The overhaul is hoped to boost conviction rates and guarantee fair trials.

Since the new system will be similar to the way trials are conducted in the U.S., the government has sent legal experts to train their Mexican counterparts in everything from witness protection to plea bargaining. So far more than 7,500 Mexican judicial personnel have received U.S. training at the federal level, and more than 19,000 at the state level.

A delegation from the U.S. Supreme Court met with Mexican judges in taking oral testimony, a first in Mexico. Members of the U.S. Bar Association are training lawyers... both the U.S. and Mexico agree that no amount of training will solve crime problems if corruption remains in institutions such as the police and judiciary.
also btw...
-The Waning of the Modern Ages [1,2,3,4,5,6,7,8,9]
-The radical right-wing roots of Occupy Wall Street
-Wilson Miner - When We Build
-Open Source Politics: The Radical Promise of Germany's Pirate Party
If anything, the Pirate Party is more akin to the Communist Party, in that it was born out of an emerging economic and social era driven by a new technology, and that it advocates for people's rights in, and postulates new rules of engagement for, how to live in this new era of new advances. If the communists were beholden to industrialization, then the Pirates are beholden to the Internet.

"The ancient dream of compiling all human knowledge and culture and to store it for the present and future is within close grasp," the Pirate manifesto posits. "The digital revolution brings humanity the opportunity of advancing democracy" and "enables completely new and previously unthinkable solutions for the distribution of power within a state."

"The aim," it calls, "is to distribute power as broadly as possible over all citizens and thus secure their freedom and their privacy."

The Internet has radically transformed human society by democratizing access to information, as well as the aspiration to shape knowledge.
The descent into barbarism of this city will make a great auteur film masterpiece in my lifetime.

The Movie Set That Ate Itself: Five years ago, a relatively unknown (and unhinged) director began one of the wildest experiments in film history. Armed with total creative control, he invaded a Ukrainian city, marshaled a cast of thousands and thousands, and constructed a totalitarian society in which the cameras are always rolling and the actors never go home
posted by kliuless at 1:48 PM on September 24, 2012 [1 favorite]


...which was inspired by US economic advisers.

May they all fry in hell.
posted by BlueHorse at 2:04 PM on September 24, 2012


I look forward to the photo essay posted to MeFi in 10 years featuring eerie pictures of abandoned homes, well-composed, wide-angle shots of rusting infrastructure and corporate parks being reclaimed by nature.

A fiver says the copy editor will pen a low-hanging jab at Ayn Rand in the headline.
posted by MiltonRandKalman at 2:24 PM on September 24, 2012 [2 favorites]


Well, this may be true, except the accent is on the "able to take advantage." I have been doing a bunch of reading and listening on the history of Rome and China lately, and one take away is that, over time, small inequalities without any kind of counterbalancing regulations snowball into massive inequalities where a small percentage have most of the wealth and all of the effective power to keep the game rigged in their favor. It is not "a rising tide lifts all boats" but a "large boat's wakes swamp smaller boats" effect.

I am wondering if the rise of Absolutism in Europe didn't short-circuit the effect by removing lots of hands from the levers of power until the last set could be pried loose and the power returned to the people (for some value of people). The systematic disenfranchisement of the hereditary power elites may have made Western progress possible from, say 1500-1800 when the wealth and power began to concentrate again as a new class of people learned to game the system.

I don't know enough about Early Modern Europe to push that thesis, but the histories I do know something about tend to suggest "what is good for capital is good for the nation" has been not only not true, but the exact opposite of true for pretty much every time it has been allowed to happen.
posted by GenjiandProust at 2:24 PM on September 24 [1 favorite +] [!]


I wouldn't put too much on absolutism, considering that two of the countries which experienced the most economic growth and change in the Early Modern were the Dutch Republic and England/Britain (after 1707) -- and neither were absolutist in any way.

What we see in Britain (the example I know best) c1500-1800 is a concentration of one of the major sorts of wealth (land) into the hands of fewer and fewer people; in both the Dutch Republic (due to flooding) and in Britain (due to the buying up of land), landless labourers provided cheap labour for manufacturing revolutions in the 16th and 17th centuries respectively.

As for distribution: Britain was a deeply unequal place well into the 19th century, even early 20th. We don't have the data to study income distribution through the early modern, but qualitative data suggests that things got worse for the poorer sorts from c1500-1650 (population rising, landlessness rising, crises of unemployment, famines in the 1590s, etc). After 1700, it's a complicated picture -- average age of marriage went down from about 1750 on, suggesting that labourers had better economic opportunities that allowed them to marry earlier (due to expanding employment in the growing manufacturing sector), but research on food and living standards suggest things didn't get much better. (I really need to re-visit that living standards debate literature, though).

But yeah, the history of economic development in Britain does not support the idea that "a rising tide lifts all boats". The rising tide only started lifting all boats AFTER unionism and labour activism got going strong - so the moral is that the "rising tide only lifts all boats if we tie the smaller boats to the bigger ones with collective action and regulations"?
posted by jb at 2:58 PM on September 24, 2012 [5 favorites]


Modern market economies do have tons of regulations. This isn't how they became modern market economies, but are the result of the prosperity. Opposing the idea of new development without those regulations, hobbles potential for becoming that modern market economy that can afford regulations. By saying you can't have a development without all the regulatory baggage upfront, becomes the liberal version of "Fuck you, I got mine"

Unregulated economic development in the third world doesn't primarily benefit people living there. It benefits you and I in the developed world, in the form of profits to companies headquartered here, and cheap products for us.

China did NOT have unregulated economic development. It's Special Economic Zones had different regulations from the rest of China, but that's because when they started, the rest of China was communist (really State Capitalist) and there was no private enterprise. Both China and India have bucked the standard globalization models and insisted on at least partial local ownership of companies setting up there -- and that's why there has been some, albeit unequal, development of their local economies.

Nor is the model being proposed is anything like the manner in which the developed world developed. I do research on economic development in Europe c1500-1800 (with my specialty being economic development in England). English economic development was never foreign owned, and never unregulated. Similarly, economic development in the "white colonies" - USA, Canada, Australia, Chile, Argentina - was not primarily foreign-owned and never outside of local law.

What is being proposed most looks like the colonial model of development, particularly what was set up in Latin America and Africa in the 19th and 20th centuries -- foreign-owned, little to no legal oversight, no investment in wider infrastructure, no downstream-multipliers, no creation of a local consumer class. How well did that work out for them?

I have a great concern for economic development - as do the many scholars working in the field. You don't appear to have much knowledge of the history of economic development or how it works.
posted by jb at 3:11 PM on September 24, 2012 [5 favorites]


Not that I would say that anyone fully understands economic development. From what I know of history, moving from a pre-modern agrarian society into a industrialized country seems to always involve a) the seizure of other people's land and/or b) massive slave plantations - usually both. So if we really want the third world to develop as we did, which of us Canadians and Americans are volunteering to be the first cargo on the New Middle Passage to Africa? Will we empty the mid-West to make way for Indian farmers?

Or maybe there are other models, ones that don't involve genocide or slavery.
posted by jb at 3:18 PM on September 24, 2012


The success of capitalism in China has been undeniable, but I think it shows the success of the modern Napoleonic industrial state as well as raw capitalism. China's rise involves a lot of government planning and subsidizing. Look at Germany's rise from the nineteenth century as a Bismark style semi-socialist welfare, becoming the scientific and technological leader of the world by WWII - even after the economic catastrophe of WWI.

Modern market economies do have tons of regulations. This isn't how they became modern market economies, but are the result of the prosperity.

I don't think this is very true. They become a necessity for an advanced economy to work well. The amount of corruption, lack of well enforced regulations (intellectual property rights for example), and general chaos in China is probably hampering its economic development at this point. Financial regulations may even help prevent them from facing a boom and bust cycle as has happened in the West so often throughout history.
posted by Golden Eternity at 3:30 PM on September 24, 2012


Real-life version of J. G. Ballard's Cocaine Nights and Super-Cannes
posted by quartzcity at 3:41 PM on September 24, 2012


Seriously, 150 comments and not one reference to Gault's Gulch?
posted by The Michael The at 4:41 PM on September 24, 2012


wide-angle shots of rusting infrastructure and corporate parks being reclaimed by nature.

Hope you're really zoomed in for that $14m-stage-one wide angle. By my count that's like a couple of city blocks at most.
posted by jaduncan at 4:45 PM on September 24, 2012


2N2222 writes: This is exactly what happens in a market economy in the rest of the developed world, and has done better for the poor than any programs or plans done for the benefit of the poor.

Needs cite.
posted by flapjax at midnite at 4:52 PM on September 24, 2012


I think it may be just a tad brilliant exercise by some secret Honduran economic theorist. Arrange for this amazing expat paradise, help them tweak the laws so that it's incredibly safe an lucrative to import and store all their resources and gold in the city, let percolate and grow for a number of years, then arrange a small insurrection and nationalize all that gold and throw the now penniless bums out of the country. Instant first world!
posted by sammyo at 6:18 PM on September 24, 2012


By that time the libertarians will already have developed nuclear arms and a force of UAV's./bots Why don't these guys just buy an island and start a new country or something? If they wait a while maybe they can buy Alaska to get the US out of debt.
posted by Golden Eternity at 6:23 PM on September 24, 2012


Do you truly think it would be preferable if China had remained as it was prior to opening up to the West?

Actually, I will suggest to you that China is returning to exactly how it was before opening up to the West, the first time (well, maybe the second, depending on how you count). An oligarchy made up of shifting players looking for advantages for their families and dependents, with the Party standing in for the Emperor and the Imperial Court.

Everything that I have read and listened to suggests that the economic and political position of rural workers and women has slipped in the last few decades, especially in the northern and western provinces. While I do not claim to be an expert on the Chinese economy, nothing I have read suggests that the vast majority of people are substantially better off, and, indeed, with the dismantling of price controls, retirees, government workers, and the like, living on relatively fixed incomes, fared very badly in the 80s. Perhaps they have all died by now, but the reports of huge numbers of migrant workers traveling illegally from rural areas to seek work in factories (discussed in this thread) does not suggest general robust economic health.

So I don't know what to say. Again, I'm no expert, and maybe someone with a better sense of what the Chinese economy is like on the ground will come forward, but your impression of it is not what I have seen or heard about.

I wouldn't put too much on absolutism, considering that two of the countries which experienced the most economic growth and change in the Early Modern were the Dutch Republic and England/Britain (after 1707) -- and neither were absolutist in any way.

Ah, well, there is a good theory shot to hell. Back to the drawing board.
posted by GenjiandProust at 6:37 PM on September 24, 2012 [2 favorites]


Follow-up to the "One murder" link: Slain Honduran human rights lawyer complained of death threats before killing
posted by homunculus at 7:53 PM on September 24, 2012 [1 favorite]


May I? I've been to Honduras. A lot. I know Honduras. I know hondureños. Usians believe they are the only freedom loving people in the world. Bullshit. Hondureños are freedom loving people. In Olancho, they say “Olancho Libre.” It's like “don't mess with Texas.” or whatever else “I love my stupid region more than yours means “in your vernacular.

Except hondureños mean it and will fight you for it. Hondureños do not need to be taught what freedom means. They know. They fought for same. They have fought harder and more violently than you have. They don't need new laws to give them freedom. They are free.

I've seen hondureño priests and nuns and people fighting for the environment with more vigor and more intelligence than any US environmentalist could ever muster. And under the threat of death and torture . Hondureños are courageous.

When the coup happened, they fought. And they are dying. They are still dying. They are still fighting.

The government of Honduras was robbed from the people. Possibly with with US government help. Assuredly with US corporate help. And now, this bullshit libertarian paradise is being created. And it is Pinochet's Chile.

What is freedom—people or profits? Should people be free or should profits be free? In the new economic zone is there free speech? No. There's free profits. Money has to be free. People cannot be free, at least not before money. Human beings suffer and are in fact murdered and tortured in the name of an abstract concept of exchange. That is capitalism.

Father Jim Carney, S. J. was murdered in Honduras by the US.

The democratically elected president of Honduras was overthrown.

And now this bullshit.

I support hondureños storming the gates of this proposed “free zone” and liberating it. It is not free. It is a scam.

It's the same scam being perpetrated here. I 'm pretty sure hondureños will figure that out before usians do.
posted by leonard horner at 8:58 PM on September 24, 2012 [13 favorites]


I wrote a song about this, and posted it to Metafilter Music:

Bring Your Money Down To Honduras
posted by flapjax at midnite at 1:00 AM on September 25, 2012


I wrote a song about this, and posted it to Metafilter Music:

Bring Your Money Down To Honduras


Wow, this made my day! Thanks Flap!
posted by Rykey at 6:09 AM on September 25, 2012


Ah, well, there is a good theory shot to hell. Back to the drawing board.
posted by GenjiandProust 13 hours ago [1 favorite −] Favorite added!


Don't worry - it's not like economists and historians haven't been debating the Great Divergence (aka European Economic "miracle") for decades. Have you read Pomeranz's book? He's a great research - expert in Chinese economic history, but conversant with European.

It's been a while since I engaged in that literature, but I think the common media story tends to completely ignore the place of colonialism in European economic development (as opposed to the academic literature), as a source of raw materials, capital, food, and a place for excess population/labour. The natural resources that European economies could call upon expanded massively through colonialism -- even as China was going through some serious resource crises in the 19th century (eg fuel). Europe didn't go grow in a vacuum - it was like a vacuum, sucking in resources from around the world. At first, those resources - like tobacco, sugar, cotton, also silver and gold from the Americas, spices, tea, fine goods from Asia, slave labour from Africa - wouldn't have been very large in volume, but the capital built up by traders was enormous. By the 19th century, timber, leather, meat, grain, even dairy after refrigeration - huge amounts of materials were being shipped to western Europe. In 1928, Britain was importing so much that it had a serious trade deficit -- except that if you factored in finance, that trade deficit disappeared. Basically, the British lent money to much of the world to produce goods that it then sold to Britain.

This seems to be the only major factor in divergence. Asian countries had a longer tradition of market-oriented production than Europe, better technology, and were just as rich per person in c1750 as Europe (and thus, being more populous, richer overall). Chinese military technology had fallen behind European, largely thanks to the relatively peaceful period of the 18th century under the Qing (while the Europeans are running around trying to improve their ability to kill each other).
posted by jb at 8:37 AM on September 25, 2012 [3 favorites]


Myths of ancient China
posted by kliuless at 10:39 AM on September 25, 2012


kliuless - everyone should be skeptical of any statistics from before 1900, and very skeptical of statistics from before 1800.

As for before 1700? There's a reason that we say that there are "lies, damned lies, damned damned lies, educated guesses and early modern statistics". Finding out the GDP of one TOWN in the pre-1700 period is almost impossible, let alone for a country.

That said, we do have a sense of things like labourers' wages, costs of living and general living conditions -- and estimated productivity c1800. It's based on that later information that we talk about China and Indian having been "as rich" as Europe c1800 (per capita), and richer(? need to check literature) c1700.
posted by jb at 11:16 AM on September 25, 2012 [2 favorites]


In Brazil: The Poor Get Richer Faster

While the poor are getting richer in Brazil while the poor get poorer in the U.S., there is still no comparing poverty and even middle class incomes in the two countries. Social services and state safety nets in the U.S. are more elaborate and sophisticated than they are in Brazil. And despite growing inequality in the U.S. over the last several years, Brazil has a ways to go before there is more uniformity in the social classes.
posted by Golden Eternity at 7:13 PM on September 25, 2012


Historical GDP estimates for early modern China
China's rural transition
The great divergence
more...
posted by kliuless at 12:34 PM on September 26, 2012 [1 favorite]


Honduran court: Private cities 'unconstitutional'
posted by the man of twists and turns at 6:01 AM on October 5, 2012 [1 favorite]


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