Creating A Capitalist Paradise In…Honduras?

Mnay of you will recognize the name Pat Slattery. Pat’s blog is The Free Market Project and Pat is a regular Guest Saturday contribitor here at Conservatives on Fire. What you may not know is that a feww years back Pat worte a novel titled “Tamarack Conspiracy“. From his side bar, he says about his book that it was “written in the spirit of Atlas Shrugged, but with a more accessible length, and a better sense of humor.” I’ve had the pleasure of reading Tamarack Conspiracy because Pat was so kind as to send me a pdf copy. (My bank in the US won’t give me a debit or credit card unless I personally go there to request in person. A real pain in the butt!) The novel takes place in a future time in America when the government has become so socialistic that private enterprise is nearly non-existant. The government is telling private companies who they must hire, how much of their products they must produce and there are price controls. In secret, the productive class, those that believe in free market capitalism, have been planning how they will escape from America with their capital  if they can find a place to go where free markets will be allowed. Pat, told me that the two main protagonist were modeled after Thomas Sowell and Pat’s father, who in real life is an entrepeneur. What the heroes were able to do was negotiate with the government of a third world country to let the American capitalist come and set up business with laws that protected free enterprise and with low taxes and absolute minimum government interference.

Now, this post is not about Pat’s book. So, if you want to know how America got in such a terrible condition and what eventually happened to the capitalist, then go to Pat’s blog where you can buy the book in digital or print form at a reasonable price.

I don’t know if Michael Strong,  CEO of the MKG Group, has read  Pat Slattery’s book, but he is in fact bringing part of it to life. You see, Mr. Strong has struck a deal with the Honduran government to build a private city on the Honduran coast where companies can set up shop and where there will be no income tax or capital gin tax or even sales tax. There will be, however, some property tax.

Daily Kos refers to the project, the first of three, as:

A grand experiment towards developing a Randian Utopia is in the works on the Caribbean coast of Honduras. One of the poorest and most corrupt countries anywhere.

Huffington Post was a little more balanced in their reporting:

The project “has the potential to turn Honduras into an engine of wealth,” said Carlos Pineda, president of the Commission for the Promotion of Public-Private Partnerships. It can be “a development instrument typical of first world countries.”

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.

Huffington did go on to point out that some indigenous groups and some civic groups are opposed to the idea.

From Fox News we learn some details:

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.

[…]

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

[…]

“[It] will bring a lot of investment into the country [and be] a center for many employment opportunities for our people,” Honduran President Porfirio Lobo Sosa has said.

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.

Strong’s company, MKG Group, will be the first to set up shop and then other companies will be able to follow. If all goes well, Mr. Strong has plans for two more private cities or “free enterprise zones”, as I call them, in Honduras.

Will this “Free Enterprise Zone” succeed and flourish? It will certainly be worth watching over the next several years. Success will depend on many factors not the least of which is will future Honduran governments honor the agreements that have been signed. It will also be important that the Honduran government and the Honduran people do in fact see economic benefits from the project. The participating companies will have to train and employ Hondurans and pay them decent wages. If this project is successful, you can expect that the idea will be copied all over the world. Can you imagine hundreds or maybe thousands of these Free Enterprise Zones around the world. That would take the world’s economic paradigm and set it on its ear, sort of speak. Industrialized countries like those of Europe and the United States could be seriously hurt by such a phenomena. Talk about wealth redistribution! The UN would be ecstatic! But, maybe some future administration  will decide to set up some Free Enterprise Zones in America. Wouldn’t that be nice?

Could it be that our own pat Slattery was the inspiration for this remarkable experiment? I’d sure like to think so.

Well, now you know what I’m thinking. What are your thoughts?

20 thoughts on “Creating A Capitalist Paradise In…Honduras?

  1. IF the Honduran government and IF the Honduran peoples see benefits that will be the key. However I fear this city will turn into Atlantic City, where no one in Atlantic City or New Jersey benefits except the cronies who run the casinos.

  2. Interesting. If this works it could be big.

    I love the Daily Kook quote about Honduras being “One of the poorest and most corrupt countries anywhere”

    He needs to pull his head out of his ass and look at Obama’s America. We are probably just as corrupt, and I know we are more broke.

  3. A great idea and an interesting post about it, Jim. It is an almost Randian dream.
    However, I’m a bit skeptical. To put it simply, it is obviously not a free enterprise zone in its basic dependency of the laws of Honduras. The implication that,
    “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”,
    makes them much more than a free enterprise zone.
    My skepticism is in the source of power that could uphold their sovereignty of the above quoted principles when push comes to shove, and in the very likely event that the present government of Honduras will eventually change into something much more nasty in the traditional history of Central America. The reliability of law and order in that country is less than dicey. A police force will not be a match to the Honduran army and hordes of plebeians masses when they decide they want more than they bargain for.

    Nevertheless, interesting. But I would not be interested in placing significant investments which would be dependent on paper agreements and promises of respect, independence, and the application of the rule of law from the Honduran government.

    The concept can only be achievable if the territory in question can obtain international recognition as an independent entity and be under the protection of a larger nation where the rule of law exists and who have the means to enforce them and protect them against foreign predators. Case in point, Andorra, under the protection of Spain and France; Monaco, under the protection of France; US Virgin Islands, under the protection of the United States, et al. . . .

      1. Exactly my point. Hong Kong’s success is based on the same reasons of why 7 of ten of the “Freest Nations of the World” were chips out of the old British Lion’s shoulder – the Rule of Law and Parliamentary Democracy.

  4. The United Nations “should be” but won’t be ecstatic, it was set up to establishment a world government with world control. It institutionalizes poverty by “helping” the ruling class politicians keep control. Like Ron Paul said, “stealing from the poor in rich countries to help the rich in poor countries”. Zelaya in Honduras took the “poor program” money from the IMF and spent it on his lifetime presidency coup, for example.

    Honduras WANTS this. My wife is from Honduras, we WANT this. They want a Honduras more like today’s Chile than Cuba or (barf) Venezuela. NOT stupid.

    Sure the central-command advocates are hysterical, and the future is not totally predictable. But it just may be a Noah’s ark during the coming dollar crash hurricane.

    You can’t violate the laws of nature and of nature’s God forever without blowback, but some will see the storm coming and be able to get to shelter.

    http://www.trutherator.wordpress.com

    1. Trutherator, thank you for your comment. I live in Venezuela and I know our government was trying to do in Honduras with Zelaya. The Obama administrations responde was completely wrong. I hope this project in Honduras is a great success.

  5. I don’t see how it could fail. I pray it works but to be honest I’m worried as to what it will do to the U.S. Not that it’s not our own fault for letting our government ruin this country.

    1. Todd, thak you for your comment. It is a tragedy that an American capitalist has to go to another country and negotiate the right to operate in a free environment. Sadly, that is indicative of where our country is today. I sincerely hope the Honduraan project is a success and breeds other such projects..

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