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Charter Cities: Another, BIG Step toward a Global “Corporate State”

Henry Ford Receiving Third Reich's Highest Award (for a foreigner)

COMMENT: Corporate advocates are pushing the concept of  “charter cities,” which would allow foreign-based corporations to assume governance and what appears to be almost total control of cites in OTHER countries.

If this idea catches on, it will constitute a major step toward the implementation of a global version of Mussolini’s “Corporate State”–his term for the fascist economic and political system.)

Note that one of the precedents for this concept was Henry Ford’s Fordlandia, a failed enterprise in Brazil. Ford was one of Hitler’s earliest financial backers and a financier of domestic fascist groups as well.

“The Quest for a ‘Charter City'” by David Wessel; Wall Street Journal; 2/3/2011.

EXCERPT: For the past couple of years, economist Paul Romer has been hopscotching the globe looking for a country desperate enough to try his audacious notion: Start a new “charter city,” an enclave free of old laws and practices, as William Penn did in Pennsylvania. (Think “charter school,” a school free of union contracts and school bureaucracy.)

He thinks he’s found the perfect place to build a city that could be as prosperous as Hong Kong or China’s Shenzhen: Honduras.

Mayor of Charter Cities?

About the size of Tennessee with one-tenth the per-capita income, Honduras is a country of 7.5 million, a growing number of whom are leaving for the U.S. Its international standing was marred by a messy 2009 expulsion of its elected president. Its murder rate is rising as it becomes a way station for drug traffic.

But here’s the key: Honduras is interested. Two weeks ago, with only one “no,” its Congress voted to amend the constitution to allow for a ciudad modelo.

“This is a country in which most people want to pursue the American Dream,” says Octavio Sanchez Barrientos, chief of staff to Honduran President Porfirio Lobo. “And they have to leave the country and move to the U.S. This offers the possibility that, in the long run, they’ll have that opportunity here.”

Mr. Romer, now perched at New York University, made his mark 20 years ago arguing that ideas or “recipes,” as he calls them, are more important to growth than other economists believed. (It sounds simple, but it’s the stuff of the Nobel Prize.)

About a decade ago, he walked away from academia, started an online teaching company, sold it and then turned to his next big idea: To create jobs to lift millions out of poverty, take an uninhabited 1,000 square-kilometer tract (386 square miles), about the size of Hong Kong, preferably government-owned. Write a charter: the all-important rules. Allow anyone to move in or out. Invite foreign investors to build infrastructure for profit. And sign a treaty with a well-governed country, say Norway or Canada, to serve as “guarantor” to assure investors and residents that the charter will be respected, much as the British once did for Hong Kong, and—with some oversight from the Honduran Congress—govern the city.

“It’s a mixture of great creativity and great naivety,” says William Easterly, an NYU development economist. He doubts the city, especially if successful, could withstand pressure if the Honduran government turned hostile. Adds Harvard’s Ricardo Hausmann: “It would be great if it happened, so we can take a look at the experiment.” He, too, has doubts , and recalls Henry Ford’s failed Fordlandia, which was to be an oasis of U.S. capitalism in Brazil.

Back while Mr. Romer was courting Africans, a group of Hondurans was pondering how to improve their country’s prospects. One idea, a turbo-charged version of existing free-trade zones, was to lure investors to a super-embassy, an area governed by another country’s laws. Then they spotted an online video of a Romer presentation to a conference. “As soon as we watched it,” says Xavier Arguello, “we knew this is what we were talking about.” . . .


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