Honduras sells out

Last week, the government of Honduras announced its intentions to essentially sell three of its cities to a swath of international investors. This maneuver—described as an effort by an impotent government to try to both quell criminal activity and stimulate economic growth—is expected to result in something akin to the arrangement in cities such as Dubai and Hong Kong, which are usually referred to as “states within a state.”

Unsurprisingly, many have been quick to decry this move, and some of them on legitimate grounds: The fear that the lands of indigenous peoples—lands to which the government should have no rights, and therefore should not lawfully be able to sell—could be sold without their consent, for example, is warranted. On the other hand, however, there are elements of this new Honduran idea that are extremely interesting from the point of view of political theory. Is it possible, for example, that these foreign investors will be able to successfully piece together their private cities? And, if so, in what ways will they differ (or not) from the traditional, centralized state authority? They will, after all, be responsible for the planning of three entire cities—including roads, utilities, neighborhoods and the rest—lending this venture the potential to create something of a bizarre hybrid between forms of anarchism, capitalism, corporatism and socialism.

In this regard, though, those in control should consider refraining from excessive planning. In fact, they might do best to allow as many of these institutions as possible to emerge spontaneously, as the result of private initiatives among members of their fledgling populations. Although such a relatively hands-off approach would more or less fly in the face of conventional wisdom on the subject of nation-building, a host of neglected or misinterpreted historical examples provide evidence for the efficiency of spontaneous order in society.

Take, for example, the community of Neutral Moresnet. A product of the Napoleonic Wars, this mountain community situated near the Aachen forest existed from 1816 to 1920 under the joint governance of Prussia, Belgium and the Netherlands. As a result of its small size and this system of shared oversight, however, the isolated Neutral Moresnet was more or less left to its own devices for the better part of a century and, with little significant local authority, came to be organized according to a spontaneous emergent order. In fact, though the community had just a single policeman, it saw over time the development of a number of private and effective channels for the adjudication of interpersonal disputes. This, combined with almost no taxation or import tariffs, encouraged a respect for free trade and property rights that translated into a century of relatively rapid growth in terms of both the economy and the population.

There is also the more familiar case of the American West. The “Wild, Wild West”—which two scholars have actually retroactively dubbed the “not so Wild, Wild West”—is another example of a spontaneously organized society which created all of its necessary institutions solely from the initiatives of its private citizens. In fact, even armed security—long thought to be a province of the state and state alone—became readily available in the old American West, and arose out of arrangements such as land clubs, cattlemen’s associations, mining camps and wagon trains. Despite the depictions in both popular entertainment and normative historical narratives of the American West as a den of murder and lawlessness, it was actually the case that crime in the area only became a significant problem once the state itself arrived. As another historian has put it with regards to the cattle town of Abilene, “Nobody was killed in 1869 or 1870. In fact, nobody was killed until the advent of officers of the law, employed to prevent killings.” Furthermore, the records show that some districts in the American West went so far as to ban the practice of federal law altogether. As a resident of stateless California wrote back then, “We needed no law until the lawyers came,” and in the words of another Californian, “There were few crimes until the courts with their delays and technicalities took the place of miners’ law.”

Lastly, there is the case of stateless Somalia, which is actually usually invoked as an argument against the reliability of spontaneous order within society. It is said that the violent conflict and political instability of this failed state, for example, amount to some form of proof that human beings cannot coexist peacefully in the absence of a central authority. Now, although it is true that the condition of stateless Somalia was, by and large, an undesirable one, it in no way follows from this observation that spontaneous order itself is an unreliable mechanism for the organization of society. In fact, it should be noted that, in many places, both local elders and businessmen recognized it as in their best interest to provide private security for the surrounding community, and were even able to significantly undermine local warlords simply by paying their gunmen a higher premium for their own defensive purposes. The same community leaders were also involved in facilitating local systems of “sharia” (Islamic law) courts to take the place of the fallen state judiciary. It also merits mentioning that, even prior to the collapse of the Somali state, most citizens elected to settle their interpersonal disputes in such courts, outside of state channels.

Of course, I have to admit that these examples are incomplete, excessively complicated and not entirely analogous. They do not provide irrefutable evidence that an absolute policy of spontaneous order—if such a notion itself is not already inherently contradictory—is decidedly the most appropriate path for the cities of Honduras, or that such a policy would exhibit the most successful short term outcomes. In fact, it is still unclear if such a policy would even be possible under what will still be a form of centralized—even if apparently privatized—authority. But, then again, these examples are not included here as the basis for policy prescriptions. Instead, they are intended to serve as accounts of the “black swan” variant, where the supposedly irreconcilable phenomena of order and statelessness have actually emerged hand in hand.

In the end, though, it is highly unlikely that the investors responsible for these cities will allow them to be organized according to a system of spontaneous order. In all likelihood, the boards in charge of erecting these societies will begin to function as proxy states, and the experiment will be lost without much gain or philosophical insight. And this, of course, would be a shame.