Well, it sort of works: massively increasing the wealth of any third world country will shift it from "if you're poor then you starve and die" to "if you're poor then you are begging on the street and sometimes working a lousy job for little money".

It's not much of an aspiration, but it is, strictly speaking, an improvement. It's also not a hypothetical: supply-side economic demonstrably works, to some extent. It just doesn't work very well, and we should be able to do better.

I guess it's all a matter of your idiolect. It works, for some values of "works". Maybe it works for the macroeconomist studying national GDP growth rates? Sadly, there are also barbers and truck drivers.

In the countries under discussion, there aren't very many barbers and truck drivers. There are, however, a lot of starving people.

There is only a working class in a working economy.

> Well, it sort of works: massively increasing the wealth of any third world country

Things are more complicated in real world, because even if massive wealth is created (say, a boom of a certain industry), it doesn't necessarily go where it's supposed to.

Here [1] there is a real-world example of how, in a country with a strong mining industry, the "colonialists" get all the money, and the "colony" gets the crumbs (of course, that doesn't imply that this is always the case).

[1] Published long ago on HN: https://psmag.com/why-is-zambia-so-poor-f44dfeedd5ed

Two counter examples to your first statement about positive benefits of massive increases in wealth: Nigeria and Venezuela.

To be fair, the failings there had to do with the source of wealth being natural resources, rather than innovation per se. I'd also add Russia and Brazil to that list, but there are others. See https://en.m.wikipedia.org/wiki/Resource_curse

Personally, I think it's the difference in mentality between lottery winners and builders of successful products (who often work within difficult constraints and have to become very good at problem solving to succeed). There's a reason why lottery winners do not typically compound their success.

That's two out of how many countries where it was successful? You almost certainly live in one.

I'd say more, lightly regulated cities controlled by another country modeled on Britain running Hong Kong. While HK worked well, they are having problems finding countries to do the Britain role benevolently. HK was set up at gunpoint to facilitate the Brits opium pushing operation which probably wouldn't fly these days.

What do you think will go wrong? Please be concrete.

If such cities suck worse than the alternatives, no one will move to them.

The real worry I think many have is that charter cities will be successful and will demonstrate (by being successful without it) that a lot of existing socially favored regulation is harmful.

That thinking works in a perfect world with perfect information, 100% rational agents, and frictionless movement. It doesn't work for impoverished, illiterate, uneducated people with the weight of poverty, culture and a myriad of other practical considerations from food to roads to family preventing them from take the 100% rational actions that you expect them to take.

The problem with you libertarians is that everything you say works with spherical objects in a frictionless vacuum, so to speak. But the real world isn't such a place. Outside your idealistic worldview everything collapses.

This is very similar to an argument that libertarians make about their opponents. As long as the government is made up of benevolent geniuses with perfect information about every individual citizen, then socialism is a great idea. In reality, individual preferences are unknowable, and government workers are fallible and have motivations of their own.

In reality, neither utopia is particularly achievable in the world as it currently is, but that doesn't mean that incremental steps in one direction or the other can't improve the situation.

I'd guess very few of libertarianism's opponents believe in socialist utopias, and what the article suggests is about as far from an incremental step and one can possibly get...

> I'd guess very few of libertarianism's opponents believe in socialist utopias

Just as most libertarians are not anarcho-capitalists. My point is that you don't need to believe in the utopia (in either direction) to believe that a smaller move would be positive.

> what the article suggests is about as far from an incremental step and one can possibly get...

In terms of total impact, drastically changing the rules in a region where no one currently lives could certainly be a smaller step than slightly changing the rules for millions of people, which is what most political arguments are about.

"The problem with you libertarians is that everything you say works with spherical objects in a frictionless vacuum, so to speak. But the real world isn't such a place. Outside your idealistic worldview everything collapses."

Remind me again how big the death-toll from government wars is?

Or perhaps simply how badly it is failing at taking care of the sick, the poor, and the needy in almost every single 1st world country?

You are right, outside of our idealistic view of the world, everything does collapse. I am watching it collapse right now, on the state's watch.

>"It doesn't work for impoverished, illiterate, uneducated people with the weight of poverty"

Luckily, those people have noble individuals such as yourself to tell them what to do, and fix their problems for them. Because you deem them unfit to do so for themselves.

>Or perhaps simply how badly it is failing at taking care of the sick, the poor, and the needy in almost every single 1st world country?

That's quite a bold claim to make. I'm afraid I can't quite see what you mean by that. What I can see is that the countries with the most regulation and state "babysitting", as you like to call it, are the ones best placed in any poverty, development, health or well-being index. I really don't see what you can possibly mean by "badly failing at taking care of the sick, the poor, and the needy in almost every single 1st world country".

I count it as failed if the government is spending money from the budget on unnecessary items while any social problem is still unresolved. That includes homelessness, poverty, health-care for the poor/needy/elderly, etc. Same goes for crime, road-fatalities, and a multitude of other things we expect of the government. These should be largely solved problems by now, especially with the technology available these days.

Either way, yes you are most likely statistically right. Spending on healthcare, poverty, and disabled individuals probably directly correlates with their well-being. You were presenting a case against a hypothetical ideal, and claiming it would not be able to fix social problems in a non-idealized setting. The counter-claim to that is that those very same things are not resolved in a society almost-exclusively run by state-governments, either. Whether 1st world or otherwise.

Ok. How does it fail in reality? Please be specific.

Precisely because of what I said: people aren't 100% rational beings with full information. People, especially in third world, war-torn, poverty-ravaged countries don't have the power to make the "best decision" in to a libertarian free-market approach as you suggest. Some things aren't solved by capitalistic competition.

Again, what bad decision will they make regarding charter cities due to being irrational? Why do you think that Hondurans will make choices so terrible w.r.t. charter cities that they should be forbidden from having that choice?

Similarly, because Hondurans are irrational, should they also be forbidden from entering Mexico and the US? Similarly, Brexit is good because Europeans and Brits might irrationally make the wrong choice on where to live?

Pointing out that people are irrational is not a magic argument against all policies that sound "too libertarian" to you. You still need to actually make an argument (presumably using irrationality as an underlying premise), which you haven't.

This already went wrong. We are commenting on an older article. He actually got a chance to try this project and it failed pretty resoundingly.

I eagerly await your "no true Scotsman" response.

No, he didn't. Honduras cancelled the project.

Failing to coalesce and maintain political support from the host government is just about the most predictable failure mode imaginable.... no true scotsman, indeed.

Ah yes, and there it is.

"The problem with [obviously unworkable governing system] is of course that it's never been given a proper chance!"

So basically, any project which politics cancels can then be assumed to be completely unworkable? Basic income can now be rejected since the Swiss considered it then rejected it? Ok.

Incidentally charter city like policies have been tried. Hong Kong. Singapore. Gurgaon. But I guess all the successes should be ignored because Honduras cancelled their project.

You're forgetting inertia in multiple levels. Moving away from such a place could prove harder and costlier than moving in.

The same is true of the surrounding dysfunctional country (e.g. Honduras). Charter cities add more options, and generally make exit easier.

I.e. exiting Honduras is easier if a charter city is right next door.

That's not what he's proposing at all. There is a whole paragraph in the article about how Romer is not a libertarian and recognizes the importance of rules. But some rules are good and some are bad. The electric utility example is a good one: price controls are very popular in third world countries, but just about the worst way to meet whatever objective you want.

Getting the government out of the way can also help in countries that have ingrained cultures of low-level corruption. One of the things that drove my dad to leave Bangladesh and move to the other side of the world was having to pay a bribe to a functionary for the phone company to hook up a new phone line in our house.

Which just sounds like the author trying to make the proposal palatable to non-libertarians (or more precisely, ideological opponents of libertarians) by framing Romer's views as anti-libertarians. Rules are absolutely important to libertarians.

> That's not what he's proposing at all.

Of course. But it's almost certainly the end result.

If that's your claim, then you should say that explicitly, and make it clear what your criticism is, rather than making it look like you failed to read the article. "While the intent may be ..., the end result will almost certainly be ..."

That wasn't the end result in Hong Kong.

All we have to do is figure out how to replicate the efficiency and relative lack of corruption of the British civil service, the relative military superiority of their Navy, the untapped economic power of China, and the political ability to kick the project off with a racist narco-trafficking based trade arrangement enforced with weapons, and just sit back and watch as we yield great benefits in about 100 years.

Why third world? We have tons of ailing dying rust belt and Midwestern cities.

Welcome to the St. Louis Free Economic Zone.

My politics are weird though. I would combine it with a basic income and single payer health care. I think the best current system we could create would be a strong but non invasive social safety net combined with total at will employment and business deregulation.

Lower cost of living makes possible economic modes that the already relatively high economic floor in St. Louis makes prohibitive. Plus, the relative benefit of pouring X dollars into an area with lower per capita gdp is much higher: going from 20 cents to $2.20 a day is a much bigger life change than from $10 to $12.

Still could be helpful, and I think we do see it often in some form or another, but is also subject to regulatory arbitrage: two cities pitted against each other to provide the best situation for companies, or Walmart flexing their power to get more favorable deals.

I think your St. Louis Free Economic Zone might get too many people coming for the free money and health care and not enough coming to pay tax for the books to balance.

So basically...put into motion our cyberpunk future?

Seems like it could easily backfire due to gentrification.

But in anycase what puzzles me, is why would first world countries allow this? If Sealand and such other projects failed because they lacked soverignity, why would a corporate city in Honduras be any different?

The short version is Hong Kong which has worked out spectacularly. So I'm not sure I understand the source of your negativity.

Thank you. I just couldn't force myself to read through articles that are so padded with fluff.

What you're describing as "fluff", most people describe as "long-form writing." If you're reading purely for brrt-brrt-clank-insert-information-into-meatbot-head, you're missing out.

Different learning styles and purposes. Even people I know who enjoy descriptive detailed writing when reading a novel like to-the-point list of facts/arguments when reading news and essays.

Others might also describe it as "getting paid by the word count".

You're high if you think that The Atlantic is some Demand Media/About.com/wikihow content spoo.

With few exceptions the long-form articles posted here are all normal articles padded with bullshit, not very in-depth articles. I wouldn't want to read them either.

bullshit.

If someone would write an article that long without offtopic infos that would be cool.

most of this text is just fluff to stretch out the whole thing without adding anything...

Which parts are offtopic?

thanks for the summary!