Total Domination is not Freedom

Dave Killion — April 28, 2012

A metaphor for the manner and degree to which the Honduran government intervenes in the national economy.


Writer Jody Paterson, formerly of Victoria, recently packed up her life and moved to Honduras, where she is doing volunteer work for Cuso International. She continues to blog, and a recent post contains enough errors that it will take a few posts to address them all. Let’s begin at the beginning –

“We were commiserating over breakfast yesterday with the owner of the little hotel in Tegucigalpa where we stay when on Cuso International business. He described Honduras as a capitalist country without the balance of a social structure, which struck me as a near-perfect description of the place.

Honduras is the real-life embodiment of the kind of governance that conservative political forces in Canada, the U.S. and Great Britain think they want for their own countries. It has a free-market economy with very little government interference, a political structure built around the needs of business and the upper-class, and a distinct absence of social supports.”

This particular hotel owner appears to be a poor source of high-quality economic analysis. According to the 2012 edition of the “Index of Economic Freedom“, Honduras is ranked 98th in the world. In case you are wondering, this is not good. Not only is the Honduran economy labeled Mostly Unfree, but it is also below both the world AND regional averages for economic freedom –

“… completing licensing requirements remains costly. Labor regulations are burdensome and outmoded. A large part of the labor force relies on the informal sector for employment. The government continues to regulate the prices of key products and services.”

Expensive licensing requirements, burdensome labour regulation, and price controls are hallmarks of economic policies designed to manipulate economies so as to maintain or increase state power by favouring special interests. Although it is all too common for critics of free enterprise and limited government to blame troubles on those institutions, we can see quite clearly that that is not the situation in this case. Hondurans may have many things, but of free markets and limited governments they have none.


Ashley Johnston says

I’m not sure how the following analysis applies to Honduras, but the freedom of a place cannot be judged by the laws alone. I have heard that many central american countries have oppressive laws but lack the resources to enforce them. In such a situation you might have to operate in the black market, but the ease of operating in the black market is a kind of freedom.

— April 28, 2012

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