09/29/22
Harry Binswanger writes that he became
… convinced (again) that starting a new country is impossible at this time. The unintentional persuader was Mark da Cunha, who answered my question about what happened in the free-enterprise zone of Freeport, in the Bahamas. He linked to an article that was eye-opening.
I have searched HBLetter for any post by Mark da Cunha that talked about Freeport, but cannot find it. Was this discussion on HBL? If yes, would it be possible to link to the post, otherwise to provide just the article link?
Harry Binswanger further explains his disappointment:
The short version of the story is that something called “The Hawksbill Creek Agreement,” in the mid-50s made about 80 square miles (10 times the size of the active part of Manhattan) into an almost perfectly free-trade zone, with a 50-year agreement.
I thought it would rocket into the future. It didn’t. Why not? Because the government simply broke its promises.
In order to secure an autonomous land, it is not enough to get the declaration document from the parent country. I have this understanding from reading the diary of Theodore Herzl and the memoir of Chaim Weizmann. Weizmann opined in his memoirs that the Balfour Declaration would not have held any value if people would not have moved into the territory en masse to secure it.
Herzl too wasn’t prepared to trust the Sultan’s promise when he negotiated with the Ottoman empire. At that time the empire was in dire debt to European Control Commission, and no bank wanted to loan it more money. Herzl offered to loan the Sultan the funds needed to save the empire, provided that the Sultan allows a large number of Jews per year to immigrate to Palestine. Every year the administration of the Jewish settlement would pay a cumulative tax to the Sultan, and the Sultan would use this money to repay the loan. If the Sultan suddenly revoked the permission to immigrate, he would default on the loan since the increase in the Jewish population was necessary to repay the loan. By the time the loan is repaid, Palestine would be settled with so many Jews that they could demand militarily an autonomy.
How many people moved to Freeport to utilize the advantageous special economic zone (SEZ)? What enterprising was done to relocate masses of people there? Since Herzl’s diary was translated to English only in the 1960s, those (libertarians) who tried to start a new country or SEZ have not read it and have not drawn lessons from it.
Also, things are easier today: the Internet enables online jobs. People could move to a new territory and export their intellectual work online. What is needed is to find benefactor large corporations such as Google and Microsoft to commit to hire enough people from that zone. (I have mentioned this idea before on this forum). It would be in the interest of such companies because the new zone will be also a tax haven.
It’s also interesting to note that Herzl did not succeed to get into the arrangement with the Sultan. Money alone is not enough. A stronger motivation is to enable a status quo of competing political interests. If there are two conflicting political interests for a territory, then making this territory autonomous will satisfy both political interests. For example, make Crimea an autonomous state under the protectorate of Ukraine, Russia or both. If either country breaks the promise, then the other country would wage war against it. Paradoxically, this means that the autonomy must be sought in complicated conflicted places, not in benign simple places.