At the end of 2011, an article appeared in The Economist proclaiming “an ambitious development project aim[ing] to pull a Central American nation out of its economic misery”.

The project in question: Charter cities. The nation: Honduras.

The article explains:

“In a nutshell, the Honduran government wants to create what amounts to internal start-ups – quasi-independent city-states that begin with a clean slate and are then overseen by outside experts. They will have their own government, write their own laws, manage their own currency and, eventually, hold their own elections.”

The term “eventually” should raise some warning flags. According to US economist Paul Romer, whose brainchild the charter city concept is, the apparent affront to democracy is not actually problematic because the cities will be inhabited entirely by migrants who have taken up residence of their own volition. The Economist offers an analogy:

“Migration to Britain gives the legal system there legitimacy in the eyes of those who move there, even if they cannot vote. If the English legal system were enforced on the same person in his home country, Mr Romer notes, that would be colonial rule.”

Romer’s plan

Romer does not deem it necessary to clarify how the auctioning off to foreign leadership of territory belonging to a sovereign nation does not smack of colonialism, especially when – as the article notes – “he wants rich countries to oversee the administration of charter cities, in particular the judicial system and the police”, because this would “protect them from interference by the host nation”.

Naturally, Romer’s plan has attracted the rapt endorsement of The Wall Street Journal’s resident sociopath Mary O’Grady, who in February of 2011 gushed:

“What advocate of free markets hasn’t, at one time or another, fantasised about running away to a desert island to start a country where economic liberty would be the law of the land?”

It would seem, of course, that free market advocates fantasising about desert islands of economic liberty may have already found at least partial satiation in the sweatshop industry in Honduras. It is meanwhile curious that O’Grady lauds the alteration of the Honduran constitution in order to permit the establishment of fantastic islands when she invoked the sanctity of this very same document in order to justify the overthrow of President Manuel Zelaya in 2009.

According to O’Grady’s inverse reality, because Zelaya allegedly violated the constitution (by attempting to conduct a non-binding public opinion survey on whether or not to rewrite said document, itself produced at the height of Honduras’ cold war service as a US military base), the ensuing military coup against the democratically elected president constituted a heartwarming affirmation of democracy. The post-coup emergence of prospects for charter cities permitted O’Grady to hone her capacity for misplaced euphemism:

“Now the little country that stood up to the world to defend its democracy seems to be affirming a belief that it needs to change if it wants to ward off future assaults on freedom.”

Doug Henwood of the acclaimed Left Business Observer, on the other hand, has offered a more plausible assessment of the relationship between freedom and democracy in the context of charter cities. In a recent email to me, Henwood commented:

“It’s interesting how the charter cities concept unmasks the libertarian dream as deeply undemocratic. The compatibility of [Augusto] Pinochet and Milton Friedman offered plenty of hints, but this Honduran experiment looks like conclusive proof. First you need a coup. And then you need to set up a zone of freedom – but a special kind of freedom. Not the freedom of association, or of individual expression and development, but the freedom of manoeuvre for an economic elite to do as it pleases under a special kind of state protection. Milton’s grandson, Patri Friedman, one of the charter city pioneers, has declared that democracy is ‘unfortunately… ill-suited for a libertarian state’. Sadly, he reveals, most people aren’t libertarians, and in a democracy politicians have to offer something to the masses to win office. Milton wrote a book called Free to Choose. Patri apparently thinks that freedom for most of us is about being chosen for.”

Added benefit of isolation

As for other aspects of freedom, The Economist notes that Honduran charter cities “are supposed to be open to anybody, but the inflow of people may have to be controlled. What is more, success or failure will depend not just on good rules, as in laws, but on the social norms that are established by its first inhabitants, explains Mr Romer.” Public safety will be dependent on private security firms.

In other words, these artificial city-states will enjoy the added benefit of isolation from the existential challenges facing citizens in Honduras proper, recently designated by the United Nations as the homicide capital of the world. Foreign capital will not have to contend with a notoriously corrupt political class and police force, a military with profound ties to the drug trade, or what American University anthropologist Dr Adrienne Pine has labelled Honduras’ “excess demographic“, explained in economic terms as follows:

“Young men, especially poor young men who are undisciplined by the factory workplace or by institutions like Alcoholics Anonymous or Evangelical Christianity, are a threat that must be removed. This is necessary to achieve ‘security’, itself a means to creating an ‘Investment-Friendly Infrastructure’ to attract ‘Foreign-Direct Investment’.”

Needless to say, the excess demographic – which the Honduran state has in recent history dealt with via such policies as the criminalisation of tattoos and the reported extrajudicial killing of hundreds of Honduran youth – will not be awarded residence in charter cities.

The fact that Honduras’ intense poverty and crime rate has much to do with neo-liberal policies, international corporate machinations and imperial meddling meanwhile highlights the disingenuousness of Adam Davidson’s pious claim in the New York Times that Romer is indeed endeavouring to alleviate Honduran poverty via the charter city system. Although Davidson concedes that “[i]t’s easy to criticise experimenting with the livelihoods of the poor”, perhaps it’s not easy enough.

In a fit of neo-colonial glee, The Economist notes that the northern Honduran city of Trujillo is “where Christopher Columbus set foot on the American continent during his fourth voyage in 1502″, and concludes by noting that “[i]t is not just the connection with Columbus that makes Trujillo a suitable site for the first charter city. It was there in 1896 that the pseudonymous American writer O Henry wrote ‘Cabbages and Kings’, a derisive tale of torpor, in which he coined the term ‘banana republic’. Skyscrapers would be a suitable riposte”.

Actually, putting swathes of Honduran territory under the anti-democratic control of foreign corporate interests would be a pretty suitable continuation of the banana republic mentality.

Belén Fernández is the author of The Imperial Messenger: Thomas Friedman at Work, released by Verso in 2011. She is a member of the Jacobin Magazine editorial board, and her articles have appeared in the London Review of Books blog, AlterNet and many other publications.