Lack Of Government Regulation ≠ No Regulation

Dave Killion — September 25, 2012

The CEO of MKG Group, Michael Strong, has declared that the model city his outfit will be building in Honduras will be organized with the goal of being “the most economically free entity on Earth“. For Paul Willcocks, the prospect raises questions he appears to be incapable of answering for himself. Perhaps I can help –

“…does that mean no minimum wage, no employment standards, no health and safety rules?”

No. It means that wages, employment standards, and health and safety rules will be negotiated by workers and employers, rather than politicians and activists. The willingness of poor Hondurans to accept low wages for tough, dangerous working conditions means that there will be a flood of investment in their country, offering them levels of prosperity and opportunity they have previously only dreamt of.

….”who will pay for the vision of better health care, education and policing(?)”

Consumers will pay, but they will be paying for their vision, rather than that of some elite. Each one will pursue the goods and services in the quantities he desires most, based on criteria only he himself is capable of evaluating.

Honduras is an unhappy place, and has been an unhappy place for a long time. The government is untrustworthy, and investors will need strong incentives before they are willing to come to the table. Demand too much in the way of regulation, and entrepreneurs will take their money to places that may be less profitable, but are also less risky. Let the state keep its distance, and great things will happen.

 

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