Before, they concealed it behind a veneer of expertise and formal institutions, but their truly stunning failures have apparently given rise to a desire to do things a little more hands on and behind the scenes. The Atlantic has a new article about Paul Romer’s plan to force poor people around the world to behave how he wants them to. The entire article is a stunning example of just how shameless some hacks that serve as self-appointed sources of “enlightened opinion” are, but I’m going to keep it short and try to focus on the proposal.
Paul Romer is promoting the idea of “charter cities” where people with enough money and certainty about their benevolent intentions would actually buy themselves colonies:
By building urban oases of technocratic sanity, struggling nations could attract investment and jobs; private capital would flood in and foreign aid would not be needed….Romer looks to the chief source of legitimate coercion that exists today—the governments that preside over the world’s more successful countries. To launch new charter cities, he says, poor countries should lease chunks of territory to enlightened foreign powers, which would take charge as though presiding over some imperial protectorate. Romer’s prescription is not merely neo-medieval, in other words. It is also neo-colonial.
There’s really a lot to appreciate just in the wording here, such as “oases of technocratic sanity” which might well be surrounded by barren deserts of democracy, but again, I’m going to have to resist the urge because there’s a lot to cover.
To drive home the importance of good rules to economic growth, Romer sometimes shows a photograph of Guinean teenagers doing their homework under streetlights. The line of hunched, concentrating figures presents a mystery, Romer says; from the photo it is clear that the teens are not dirt poor, and youths like these generally own cell phones. Yet they evidently have no electric light at home, or they would not be studying by the curbside. “So here is the puzzle,” Romer declares: Why do these kids have access to a cutting-edge technology like the cell phone, but not to a 100-year-old technology for generating electric light in the home? The answer, in a word, is rules. Because of misguided price controls in the teenagers’ country, the local electricity utility has no incentive to connect their houses to the power grid. Their society lacks the rules that make technological advance meaningful.
You might be tempted to wonder why he’s so fascinated by this when his own country has problems like massive unemployment being exacerbated by employers increasingly performing credit checks to determine if they should hire people who can’t buy things because they don’t have jobs. A crucial requirement for enlightened foreign powers is that they never question their wisdom because it would pose a serious challenge to claims of enlightenment. This brings me to a passage about Cuba:
It must have occurred to [Raúl] Castro, Romer says, that his island could do with its own version of Hong Kong; and perhaps that the Guantánamo Bay zone, over which Cuba has already ceded sovereignty to the United States, would be a good place to build one. “Castro goes to the prime minister of Canada and says, ‘Look, the Yankees have a terrible PR problem. They want to get out. Why don’t you, Canada, take over? Run a special administrative zone. Allow a new city to be built up there,’” Romer muses, channeling a statesmanlike version of Raúl Castro that Cuba-watchers might not recognize. “Some of my citizens will move into that city,” Romer-as-Castro continues. “Others will hold back. But this will be the gateway that will connect the modern economy and the modern world to my country.”
How Cuba ceded Guantanamo Bay provides a great deal of insight on how little has changed in colonialism. US control stems back to a 1903 treaty imposed by force on a defeated Cuba at the end of the Spanish-American War. Cuba had been a Spanish colony until the Cubans waged a war for independence that they were on the verge of winning when the United States declared war ostensibly against the Spanish, but in reality against a truly liberated Cuba. Cuba contests this claim and has been refusing to cash checks for “rent” on the territory for quite some time.
Romer has apparently already tried to do this in Madagascar with very ugly results as “the idea of giving up vast swaths of territory to foreigners [became] increasingly unpopular.”
“Anything that involves land can be manipulated by people who want to rise up against a leader,” [Romer] began. “You have to find a place where there’s a strong enough leader with enough legitimacy to do this knowing that he’s going to get attacked. It narrows the options quite a bit. But we shouldn’t give up without trying a few more places.” In short, a disappointment with one client is no excuse for failing to pitch other ones. Any entrepreneur knows that.
To summarize the virtues of this scheme as seen by its proponents, I can’t really top direct quotes:
Rather than getting a vote at the ballot box, Romer is saying, the residents of a charter city would have to vote with their feet. Their leaders would be accountable—but only to the rich voters in the country that appointed them.
Romer is hardly the only person to doubt that democracy is a necessary condition for economic progress. And to the extent that opt-in charter cities offer a third way—something between pure democracy and pure authoritarianism—those who care for liberty might do well to embrace the experiment. Charter cities make it harder for authoritarians to claim that their system offers the only fast route out of poverty.