Is economist Tyler Cowen bullish on a new charter city in Honduras? He says he’ll go and report on it if it ever gets off the ground. But let’s be honest with ourselves, it’s not going to ever get off the ground. Why? Two reasons. First (from Cowen’s excerpt):
It has its own constitution of sorts and a 3,500-page legal code with frameworks for political representation and the resolution of legal disputes
This is too many rules and not enough boundaries. A constitution of sorts? 3,500 pages of legal code, based off of…what, exactly? Some guys decided that they could purchase sovereignty (not a bad idea, actually) and then create – out of thin air and by using heterodox economic theory as their guide – all of the rules and regulations that this sovereign body would need to govern effectively? Did I get this right?
Second, when has a top-down central planning ever worked for something like this? Top-down central planning barely works for corporations when they reach a certain size threshold, and we all know how well this type of planning works in the public sphere. Even the U.S. federation – which can be considered a sort of top-down plan from a certain point of view – was built on top of already existing politico-legal institutions. Hong Kong and Singapore, two city-states that have long been the apple of libertarian eyes, were around long before they became city-states in the Westphalian state system. The British just grafted their imperial system onto already-existing indigenous politico-legal orders.
This charter city in Honduras is (I am assuming) not grafting itself onto an already existing indigenous politico-legal order. It is trying to forge an entirely new system out of thin air. That’s too rich for my blood.