From This in Michigan…

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To This in Honduras….
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In Michigan, Republican Governor Rick Snyder has appointed an “emergency manager” to take over the city of Detroit, with the powers to over-ride the votes of local citizens and the decisions and contracts made by their locally elected mayor and city council. The manager has the power to abrogate previously signed union contracts with city workers and sell city assets to pay off the city’s creditors. The new emergency manager has ordered the appraisal of the Detroit Art Institute’s world class art collection with a view to its sale.

In Honduras, its post-coup president and legislature has signed a law allowing the government to sell or lease vast tracks of lands in habited by Honduran’s indigenous tribes, to private owners to establish “charter cities”, feudal-like city states which are to establish their own laws and form of government, free of pre-existing state laws and regulations.

As a part of Honduras’s “public-private partnership”, law, capitalist business have been invited to create new business cities in the wilderness, profit paradises to be totally controlled by the businesses which own them. Thus the ese corporate vandals are pillaging the world, its land, art and culture by liquidating previously sovereign states in their favor.

Honduras will now allow consortia of private corporations to set up their own city-states, free of virtually all pre-existing law and regulation by the country’s government. The “public” component of this “public-private partnership”, the putatively democratically elected Honduran government (post the 2009 Zelaya-coup) have voted to sell (or long term lease) large tracks of their country to private corporations and their agents. Hondurans living in these feudal city-states will have no democratic control of their environment.

The rules will be set by private charters, written by the corporate agents who shall decide who shall live in their states and who shall be excluded and where they will live and work if they allowed in. (Never mind that the likely territories involved long have belonged to indigenous tribes, who have not been consulted in this massive give-away of their land, but actively oppose it.)

It’s really not much different in Michigan.

The Michigan Model: The Emergency Manager Law

Thus, in Detroit, Republic governor, Rick Snyder, using the “Emergency Manager” law passed by his Republican majority in Michigan’s legislature, has appointed his own man to take over the city of Detroit and run it. Over the past 30 years, Detroit’s tax base has disappeared as its manufacturing companies, once the pride of U.S. capitalism, has abandoned Detroit to move their factories to Third World countries where workers’ wages are so much lower, thus increasing the companies’ profit margin. Detroit and surrounding areas, once prosperous, have been turned into a new industrial wilderness, unable to pay its running expenses.

Snyder’s selected “emergency manager” is a corporate bankruptcy attorney experienced in acting in the interest of creditors not Detroit voters. Under the Emergency Manager law, Detroit’s voters simply don’t count at all.

Carrying out the same neo-liberal policy being employed in Greece, that of privatizing capital assets and services, the emergency manager law empowers empowered the manager to close down those public services, such as schools, utilities, and emergency services which he considers “wasteful”, selling or renting the assets to charter schools and private companies and the like, while setting aside all the city’s labor contracts with the workers previously providing those services. Thus teachers, emergency and service workers, find themselves divested of jobs and facing the loss of their post-employment benefits such as pensions for which their unions long fought.

The new manager now in charge of running Detroit is Washington, D.C. attorney, Kevyn Orr. One of Orr’s most provocative acts has been to demand that the Detroit Institute of Art, holder of one of the U.S.’s most respected art collections, including the irreplaceable Diego Rivera wall murals, must have all its artwork appraised with a view to selling the works on the open market for the benefit of Detroit’s creditors. (Even Republican Attorney General, Bill Schuette, has expressed his objection to this outrage.)

The Honduran Model: The “Public-Private Charter City”

Farther South in the American continent, in Third World Central America, capitalists fleeing the high priced wages once earned by U.S. workers, have convinced the Honduran hierarchy and its questionably elected representatives to authorize the transfer of vast tracts of Honduran land, now the home of some of Honduras’s indigenous tribes, to corporately controlled fiefdoms, vast city-states where the corporate owners will build their new capitalist manufacturing centers, making all the rules for residents, and even controlling their enforcement through imported judicial systems. These corporations will make all decisions about who is permitted to reside in their cities and who will be excluded from. (The cities’s worker residents will be effectively like feudal peons. If they give the owners trouble, they can be readily exiled out of a given Charter city and blacklisted from the rest. )

In 2007, economist Paul Romer was one of the major proponents of the Charter city as a new locus of capitalist development. In a Ted presentation in 2011, Romer tells the story of Honduras’s adoption of his plan, which he characterizes as a boon of new opportunity for Honduran’s working people (“Now they won’t have to leave their families to migrate to the U.S. to work. U.S. will come to them”. He then mentiones, almost under his breath, the new opportunities for the national and international companies which would come to build their businesses in this capitalist paradise. (Well, Romer was addressing a Ted audience.)

Don’t Raise Minimum Wage, Abolish It By Charter.

Romer’s charter city concept was adopted as a model by many of those in the Honduran oligarchy after their successful ouster of Honduras’s President Manuel Zelaya in 2009.

One of the reasons for the coup itself was that President Zelaya had dared to raise the minimum wage. Nope, the oligarchs wouId have none of that! They found a quasi-legal excuse to kidnap him and send him, in his night clothes, to Costa Rica.

But the oligarchs loved Romer’s idea of starting new city-states where they could abolish minimum wage laws altogether. Thus was born Honduras’s “Public-Private Partnership law in 2011.

In his Ted presentation, Romer explains how Honduras is implementing his Charter Cities model, touting it as the answer to world poverty and lack of opportunity. (Either he is the most naive economist ever to walk down pike or the most clumsy of economic shysters as he litters his talk with references to the wonders of its built-in democratic structure and transparency a veritable end to corruption and exploitation. (Well, American universities have strictly prohibited its economic students (and their teachers) from even reading karl Marx for many years, so maybe that explains Romer’s shocking ignorance of capitalism’s ceaseless drive to increase profits by any means necessary. Corruption can be a great help to that end, so under capitalism, corruption is a feature not a bug.)

Indeed, transparency was an important part of Romer’s model, so much so that Romer himself was initially appointed to be one of a five member commission who would insure transparency in the charters and contracts with the new capitalist owners. But his Transparency Commission soon disappeared into the Realpolitik of the Honduran ether. (See details below.)

Romer, when he still had visions of Honduras creating a transparent, peaceful capitalist-labor paradise, tells us in his Ted video that his projected corporate city-states will be built on “uninhabited land” in Honduras, He neglects to notice that its current inhabitants have been fighting to retain their land from colonialist usurpers for centuries. The land area projected for the three city sites is currently inhabited by those same indigenous peoples. (Well, uninhabiting native populations was exactly how the American West “ was won”, so there’s an app for that.)

So, with the help of the Honduran government, putatively referred to as the public wing of the Public-Private Partnership, “uninhabited” land will be transferred to its new corporate charter city owners. The new owners will have total sovereignty over the ceded lands, pre-existing laws and regulations will cease to apply to them, so they will have no worries about pre-existing legal land claims, labor rights, occupational health and safety laws, environmental protections, civil rights or even basic democratic procedures such as voting. Undoubtedly their only corporate responsibility will be to maximize profits, just as any other capitalist corporation must do. (Mr. Romer, this is part and parcel of Capitalism’s basic system. Try reading Marx.)

Romer, a staunch supporter of allowing his corporate city-states to begin with a totally “clean slate”, doesn’t bother to mention that this “clean slate” is already soaked in the blood of the native peoples who have been killed trying to protect their land. The native peoples in Honduras, such as the Garifuno tribes where one of the charter cities is to be located, have been fighting for their land against oligarchic usurpers for several hundred years, despite winning a number of legal battles in modern Honduran courts. The big landowners (those likely to buy into the new city-states) haven’t hesitated to ignore the legal verdicts and continue to murder the indigenous leaders (and their lawyers) who won them.

Supreme Court Throws Wrench into Charter Cities, So Its Judges Are Dismissed.

Indeed, the Honduran Supreme Court, by a four to one decision in 2011, enunciated a new set-back for the big land owners. They held that the legislation enabling the transfer of land and sovereignty to the “Public-Private Partnerships” was an unconstitutional alienation of the country’s public sovereignty, and set the law aside.

The post-Zelaya, dubiously elected Porfirio Lobo Sosa government responded to the decision against it pet corporate give-away by firing the four Supreme Court judges of the majority decision and making a few decorative amendments to the legislation, which was then duly passed by another legislative majority. It is unlikely that the newly appointed replacement judges will worry about loss of state sovereignty. Nor is the Lobos government any longer worried about the need for any inconvenient transparency. He disappeared it.

Transparency Disappears Into Wind of Potential Profits

Romer was initially appointed to be one of a five member Transparency Committee who would insure transparency by vetting the contracts with the new capitalist owners. The appointments of that “Transparency Commission” were, however, never officially gazetted by the Lobos government, which then refused to allow Roner and the other commission members to actually read the proposed contracts — on the grounds that their Commission did not legally exist. As a result, Romer withdrew from further connection with the whole project.

Interestingly, one of the initial foreign financial backers of this corporate heist in Honduras, Michael Strong, was so dismayed over the Honduran Supreme Court’s rejection of the first version of this law that he withdraw from the Honduran project, stating that he would likely take his “Public-Private Partnership” investment north, to the city of Detroit, (where presumably, the Michigan legislature and its supreme court would be more amenable to selling the city to private corporate benefactors. It was nice of Michigan’s Republican governor to appoint an emergency manager with the potential power to sell the city to its corporate benefactors, without the burden of pre-existing labor contracts and other liabilities, thus turning Detroit into a third world country almost as attractive as Honduras as the site for a new Charter City.)

This is a world-wide phenomenon. For an excellent discussion of the how modern capitalism has, over the last thirty years, abandoned its previous capitalist centers of Europe, the U.S. and Japan, to establish itself in Third World countries, such we see in Asia and now Honduras, see economist Richard Wolff’s June, 2013 Brecht forum presentation, republished on his website, www.rdwolff.com or see video below.

Wolff, a rare U.S. Marxist economist, argues that the U.S.’s lost manufacturing and, increasingly, white-collar jobs will only return to the home country when the wages (and thus living conditions) of U.S. workers are on a par with Third World countries to which their old jobs have moved.

Wolff demonstrates that capitalism follows the path of highest profits, wherever it leads. Only labor can produce their profits, and cheap labor produces a much higher volume of profits. He provides the economic proof to show that the relatively high-paying jobs that the U.S. lost as a result of the 2007-2008 economic debacle have not come back — and are not likely coming back.

The working and middle classes are not enjoying the putative recovery acclaimed by main street economists and their pundits, as high paying jobs have disappeared, the new jobs are almost exclusively low paying. Only the financial elite, gaining new profits from their Third World capital and low paid workers, are enjoying improvements to their bottom lines.

Wolff hopes that the current economic reality is so glaringly exposing the un-sustainability of the capitalist system of production, that the American working class, once the most privileged in the world, will be forced to confront the need for a new economic system.

One hopes that this will occur sooner, rather than later, as too many people throughout the world are suffering the cruelties of an economic system whose only goal is profits, not the health and well-being of the majority of the world’s inhabitants. There is a better way!

That way is a democratic socialist economic system whose objective is to improve the quality of the lives of its citizens, not increase the profits of private capitalists.