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


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.

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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