The apotheosis of John McClaughry

I’ve got to hand it to John McClaughry, Vermont’s own free-market ideologue who will ever be known to your correspondent as El Jefe General. Ten years ago, at a convention devoted to spreading the glories of neo-libertarianism to Latin America, McClaughry infamously donned the caudillo equivalent of blackface — khakis, army boots, wide red sash, a chestful of medals, and a fake mustache — and addressed the assembly as El Jefe General Saturino Borhorquez, dictator of an imaginary banana republic who had decided to embrace free-market reforms. After, of course, taking power in a coup and locking his country’s former leaders in a bank vault. Because nothing fosters freedom like a dictatorial regime.

This address was dubbed “good satirical fun” in the conference summary, which is how conservatives usually explain outbreaks of borderline racism. (See: Rush Limbaugh, “entertainer.”) Imagine a similar performance at a conference on free-market ideology in Africa: McClaughry in loincloth and beads, portraying the Great Chief Ongabonga.

On second thought, best not to imagine it.

Well, turns out El Jefe General’s address was not only “good satirical fun,” it was also prophetic. Because the right-wing president of Honduras, Porfirio Lobo Sosa, is touting a deal with some American investors to set up an independent statelet with its own laws, regulations and tax structure. Free-market, of course; there would be no taxes on income, sales, or capital gains.

“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

Yep, just like the American economy will perk up as soon as we release the Krak — er, the job creators from the triple shackles of taxation, regulation, and wealth redistribution. Never mind that we’ve been trying this since 1981 and it hasn’t worked yet; we just need to do MORE of what hasn’t worked. If we keep failing long and hard enough, we can’t help but succeed!

After the jump: a few storm clouds on this sunny horizon.

MKG will invest $15 million to begin building basic infrastructure for the first model city near Puerto Castilla on the Caribbean coast, said Juan Hernandez, president of the Honduran Congress.

… “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.”

The Fox News account, natch, puts a happy face on the proposal. The Guardian takes a more skeptical view.

Critics say it will allow a foreign elite to set up a low-tax, sympathetically regulated enclave where they can skirt labour standards and environmental rules.

“This would violate the rights of every citizen because it means the cession of part of our territory to a city that would have its own police, its own juridical power, and its own tax system,” said Sandra Marybel Sanchez, who joined a group of protesters who tried to lodge an appeal at the supreme court.

Ismael Moreno, a correspondent for the leftwing Nicaraguan magazine Envio, compared the charter cities to the banana enclaves, which were run on behalf of a foreign elite.

And if the ethics of this plan don’t bother you, he Guardian also raises some purely practical concerns:

…the initial investments seemed small compared to the scale of the ambition.

Yeah, $15 million doesn’t go very far when you’re talking about infrastructure, housing, and factories.

The plan appears to have been thrown together in the space of less than a year, partly to boost the economy and partly to make Honduras more attractive to foreign investors who fear crime (Honduras has the world’s highest murder rate) and political instability (Lobo was elected following a coup d’etat in 2009.)

Mmm, yes, mmm, rampant crime and political instability. Yeah, that’s where I want to invest my money!

This may well turn out to be another Fordlandia — an uber-capitalist dream that proves unworkable in the cold light of reality — but I must congratulate El Jefe General on his foresight, and apologize that I ever doubted the wisdom of the Big Black Fake Mustache.  

4 thoughts on “The apotheosis of John McClaughry

  1. Is being built in Honduras? Who’d a thunk.

    Maybe all those free staters that ate trying to take over our neighbor will move down there.  

  2. Combine “$15 million doesn’t go very far when you’re talking about infrastructure, housing, and factories” with “they can skirt labour standards and environmental rules”.

    $15M goes a lot farther when you don’t have to pay your workers and can dump toxic waste into the drinking water.  Slavery and toxic waste dumps are critical components of Free Market Capitalism and is also a cornerstone of Ayn Rand’s Objectificationism.

    (Objectificationism: a philosophy where all life forms, sentient and otherwise, are viewed as mere objects to be exploited for one’s personal gain.)

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