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.
Strong said that the agreement with the Honduran government states that the only tax will be on property.
“Our goal is to be the most economically free entity on Earth,” Strong said.
“Our goal is to be the most economically free entity on Earth.”
- Michael Strong, CEO of MKG Group
Honduran leaders hope that the city will lead to an economic boom for the poverty-stricken country south of Mexico. The average income in Honduras is $4,400 a year.
“[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.
Oh this might be awesome. I would be willing to leave everything behind to live somewhere with a limited form of government like this.
First let me say that I’m not being critical; more like putting critical thinking to work before I jump in with both feet. I wouldn’t bother w/critical thinking if the idea didn’t intrigue me in the first place. So, here goes…
They had me right up to this point:
Strong said that the agreement with the Honduran government states that the only tax will be on property.
Along w/the part about there being no sales tax because I prefer a sales tax to one on property; mainly because that means you never actually own it. Besides, define, “Property.” Is that to mean land?, the building structures? Vehicles? the swing in your backyard? They’re all property.
And to which gov’t is this property tax to go? The Honduran one, or the “Free City.”
First, we will build the critical infrastructure – roads, water, power, sewers," Strong said. "In collaboration with the [Honduran] government, we will then create the city’s government system and the security, and 3 to 6 months after that we will build the first factories.”
Aren’t they putting the cart before the horse? Wouldn’t it make more sense to build the framework on which you want to build before you build it?
And if they’re going to put together a City Government and a security system, just what is to pay for these ‘neccessary evils?’ (for lack of a better phrase at the moment.)
The city government, I can see as not all the difficult to compensate. I’d like to see it be what the U.S.’ government was intended to be - People w/a full-time job who served the country out of civic duty and the goodness of their hearts, meeting once or twice a year, and/or in cases of emergency.
The security, however, might be another story. 200,000 jobs is a lot of people, so it sounds like the ‘security dept.’ will be a lot bigger than a one-man operation, and a full-time job. How is it they plan to pay for this? Yes, it could be a private enterprise, but they still have to be paid.
The only geographical descriptions I saw were “tiny”, and “on the Carribean coast.” How crowded will it be w/enough jobs for 200,000 people? (The more crowded, the more security concerns there’ll be.)
Obviously, there’ll be disputes. Who’s to, and how will, these be settled. I realize they haven’t formed their ‘constitution’, so to speak yet, but there’s gonna be disputes before the infrastructure is finished. Promise.
Due to curiosity of the general outlay, the Contra/Sandanista probs, I did a wee bit of homework to see how things lie w/the current Honduras gov’t. (Have they ever not been in turmoil?) Anywho, I came across this.
In mid-May 2012, protestors in Ahuas rioted in the streets and set fire to government buildings. They demanded that all the U.S. drug enforcement agents leave. The protest was over a dispute involving an anti-drug operation on May 11 which killed four innocent people while they were fishing. Two of the people killed were pregnant women. The protesting began after the mayor of Ahuas, Lucio Baquedano, and others accused the U.S. Drug Enforcement Administration and the local police of killing the four people. Security officials for both the U.S. and Honduras disputed the accusation, saying that the operation had seized 1,000 pounds of cocaine and resulted in the death of two drug traffickers. U.S. officials added that only Honduran police had fired weapons. Despite these disputes, human rights organizations and Honduran officials called for a further investigation into the May 11 operation.
I’m starting to take back any possitives I may have had about going anywhere near that place.
Sorry, but no thanks.
I was thinking about it and I agree with you. Say the idea did work and there was this place with enormous amount of wealth all that will happen is the government of Honduras will start enacting small taxes on various things. The government will not be able to ignore it. It is like a treasure chest sitting there waiting to be looted by pirates. In addition, the people of Honduras will protest that they are being looted while the rich “free city” is left alone. It is not like the government will say look how well this all works and change their ways. More likely they will just make this new city conform.
I think I was excited about the idea at first but with further thought it quickly broke down.
I also agree that a tax on land is evil and does not allow the people to truly own land.
This idea would work best in the States. Preferably Texas…
Bremen, glad to hear you came to your senses. I figured you would. You ain’t 'xactly dumb.
But it was a fun thought… Until you started thinking about how well this Mr. Strong could so easily be corrupted by ‘absolute power.’ I couldn’t help getting the inkling that that is what he was really after, and not filled with some marvelous ultruistic goal for mankind when I read that he wants to put the infrastructure in BEFORE he makes the rules. IOW, he wants to own a city, more or less for his own sake, not others’.
Hey, I’ve no problem with capitalism at its best! If somebody wants to invest millions into a project, and it works out, he deserves the rewards!
But there’s something very sneaky and suspicious about a guy who wants to build his dream in the middle of one of the most corrupt areas of the world where the U.S. military was practically thrown out for trying to break up a drug cartel… And actually got the President of Honduras to go for it.
Ya think? lol.
Whatever happened to that dude who wanted to build a “floating city?” It was described as a “paradise.” Sounded more like a paradise in hell to me, but to each his own.
Still curious whatever happened to the guy or his idea. My guess is that he ran out of investors, couldn’t get a ‘license’ or some such.
Come to think of it, I think I heard that most countries denied him the ability to dock at any port anywhere near their country.
Was that the fall-out? I don’t recall.
A group of wealthy investors create the libertarian utopia; what could possibly go wrong?
There are at least two views on the shape that true free markets would take. The “traditional” view from classical liberals, anarchists, and the market-oriented left-libertarians, is that free markets will result in a broadly egalitarian structure with heavily decentralized economic power. According to this view, in a society such as the United States, a move toward true free markets would benefit the poor and the middle-class at the expense of the rich. Hence, free markets may be seen, in the words of Roderick Long, as “the true proletarian revolution.”
On the other hand, what we might call the “mainstream” libertarian view holds that a true free market will look basically like present-day America only with more, more, more! More Wal*Mart, more low prices, more wage labor! On this view, free markets are characterized by (comparatively) centralized economic power in the hands of giant and dynamic elite corporations.
Which of these results do you suppose your wealthy investors expect (and want)? Which of these positions do you suppose will be favored by the “minimal” government regulations they speak of? Even placing a finger lightly on the scales in favor of wealth can have very large consequences for both outcomes and justice, as liberals since Adam Smith have warned. More significantly, if the first view is correct, then we should not expect any top-down libertarian messiah strategies to work, whether it be through apparent political saviors such as Ron Paul, or through enlightened corporate elites constructing the utopia.
The Seasteading project? I am not sure but I hated the idea from the start. Floating islands sounds horrible. But if they could pull it off I would be happy for them. The amount of momey and technology needed to start such a project will be too much for a long time to come.
The article did say that they were going to be using Texas law for Businesses. So most likely it will have laws limiting competition for start ups and be a tax haven For large corporations.
I think in a completely free market the amount of wealth would not concentrate at one end but rather more like a bell curve. The difference is the ultra wealthy would not exist and it would be transfered to the middle class. I imagine the middle class would look like what most people would consider rich today but those like Bill Gates, Warren Buffet would just not be able to exist. Copyright and patent laws would not exist so these people’s IP would not be protected with the money of a Expropriated public.
I’d like to see a user fee government put in place and tested.
Man, you’ve got a good memory. Yup, that’s the one. Believe it or not, they’re still alive and well.
I do understand their point. Getting out from under overly restrictive gov’t regulation where the entreupenorial spirit can thrive. I was suprised to learn that their goal is not to build the seasteads, themselves, but rather to create the environment so others can.
our role is not to build seasteads ourselves, but to set the stage in order to empower others to do so. Our program therefore focuses on business development, engineering and legal research, political and industry diplomacy and building a community of aspiring seasteaders.
But check it out. Somebody just donated them a 275-ft. ship. Their hope is to lease it. (At $4000/day, I hope somebody’s got deep pockets.)
All Aboard The Seasteading Institute’s New 275-foot Ship – August 2012 Newsletter
On July 13, ownership of a seaworthy, 275-foot ship was transferred to the Institute from an generous donor. The Seasteader I was built in 1985 and is rated to carry 900 people on four decks. Earlier this year she was appraised at $10 million dollars. Docked on the East Coast of Florida, she was originally a passenger ferry and more recently a gambling ship. Her solid structure and spacious interior present endless opportunities for seasteading entrepreneurs looking for a malleable space for their ocean startup.
I wish them luck, but looking at this pic here, I’d get claustrophobia big time.
The Poseidon Award is our prize for the establishment of the first independent seasteading community–the seed for the world’s first ocean city-state. This will be a major milestone for the seasteading movement to represent critical progress and is achievable in a relatively short period of time.
They figured to have it up and running by 2015, but w/the acquisition of that ship, perhaps plans have changed.