Via commentor Gex, Fox News shares word of the latest proposed Randian utopia:
No taxes and land along the coast? What’s not to like?
Small government and free-market capitalism are about to get put to the test in Honduras, where the government has agreed to let an investment group build an experimental city with no taxes on income, capital gains or sales.
Proponents say the tiny, as-yet unnamed town will become a Central American beacon of job creation and investment, by combining secure property rights with minimal government interference.
“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….
The laws in the city will be separate from those in the rest of Honduras. Strong said that the default law that will be enforced in the city will actually be based on Texas state law, which has relatively few regulations.
“It will be Texas law with more freedom of contract. Texas scores well on state economic freedom rankings,” he explained…
MKG will invest $15 million to begin building basic infrastructure for the first model city near Puerto Castilla on the Caribbean coast, said Juan Hernandez, president of the Honduran Congress. That first city would create 5,000 jobs over the next six months and up to 200,000 jobs in the future, Hernandez said…
Well, apart from citing a couple fewer zeroes in start-up costs than Peter Thiel’s semi-defunct Seatopia, this new Liberty Colony has the advantage that its noble founders wouldn’t actually drown if (when) the infrastructure breaks down.
The Guardian, needless to say, had a less rosy-hued view of the project:
… The Central American nation hopes the plan for model development zones, which will have their own laws, tax system, judiciary and police, will emulate the economic success of city states such as Singapore and Hong Kong.
But even as the government signed a “memorandum of understanding” with a group of international investors on Tuesday, opponents tried to lodge a suit at the supreme court for the arrangement to be declared illegal because the “state within a state” risked undermining national laws, sidestepping labour rights, worsening inequality and creating a modern-day enclave that impinged upon the territory of indigenous groups.
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….
The plan appears to have been thrown together in the space of less than a year, partly to boost the economy and partly to make Honduras more attractive to foreign investors who fear crime (Honduras has the world’s highest murder rate) and political instability (Lobo was elected following a coup d’etat in 2009).
It is the realisation of a proposal for “charter cities” proposed by the US economist Paul Romer, a graduate of the University of Chicago school of economics, who is currently professor at the Stern School of Business at New York University.
Citing Hong Kong as an example, Romer argues that cities based on a “charter” of strong, pro-business laws and institutions are the key to rapid growth, particularly when they can act as international gateways to larger regions such as China….
Call me an old cynic, but when I hear phrases like “pro-business laws” and “miracle of capitalism” mouthed by the Chicago-School economic advisor to the caudillo of a desperately poor and violence-ridden nation conveniently located to both Mexico’s drug cartels and the U.S., my first thoughts are not of the booming China market. Assuming this project gets past the taking-money-from-suckers — I mean, investors — stage, I’d guess a reasonable projection would be one resident DEA agent for every two Galtian overlords (or 17 Honduran housekeepers, janitors, home nurses & sex slaves). And since you can’t buy much
Blackwater Academi security with a lousy fifteen-mill budget, I suspect the intial investors might eventually realise that “no taxes and land along the coast” could also be used to describe the most prosperous (and news-worthy!) areas of Somalia.
So, a cheering thought: No matter how little you look forward to starting your Monday routine, at least you’re almost certainly not involved with this ridiculous fustercluck…