A Milton Friedman Disneyland

The Boston Globe reports on a smart, idealistic plan for relieving poverty in the third world--with a remarkably right-wing feel.

Paul Romer, an economist from Stanford, has decided to leave his tenured professorship to defend an idea he calls "charter cities." Basically, it means Western nations would buy (or maybe rent, to be more accurate) cities from third-world countries, put in our own form of government, and see if we can't spur economic growth that way.

"Unemployed workers and frustrated entrepreneurs from the host country would flock there for the opportunities; international firms would be drawn by the combination of First World stability and cheap labor. And from these nodes, money and expertise, laws and norms would spread throughout the rest of the country and, potentially, the developing world. Ultimately, their work done, the cities would revert to local control."

It's classic free market economics. Quality tends to propagate through the mechanism of competition. As you see potential customers flocking to a different city, chances are you will make an effort to improve your business, to give people a reason to stick around.

Of course you know what detractors will say. Those inclined to view everything in terms of power struggle will cry, "Colonialism! Imperialism!" Admittedly, there is a sort of "pragmatic paternalism" (from the article) about this whole plan. But I find it refreshing to hear a bit of free market idealism these days.

“I hope he’s right, I’m rooting for him,” says Elliott Sclar, a professor of urban planning and international affairs at Columbia University. “But history is littered with visions like this.” Romer’s charter cities, he argues, are “almost a kind of Milton Friedman Disneyland.”

And who says Milton Friedman's dreams can't come true? I think that if we really want to something about the enormous gap between rich and poor, it wouldn't hurt to try something logical.

Central to Romer’s proposal, no matter what the exact structure, is the belief that the developed world has lessons to teach poorer countries about how to deter violence, spur trade, incorporate new technologies, and train a workforce, and that we shouldn’t let political correctness blind us to that fact.

I'm sure this sounds really arrogant to someone who wants it to sound arrogant. But it's not; it's just a simple fact, as factual as me saying that I know way more math than all of my freshman calculus students. It doesn't make me a more valuable person, but it does mean they're better off coming to my class than not coming.

To me this plan contains a perfect concoction of pragmatic idealism, something I find lacking in today's political arena. I believe every person of every origin has the potential to display his own creativity in whatever form that may take, and contribute to a global, interconnected economy. And I think we can allow people to do that if we implement the right policies.

Aid programs today, [Romer] argues, think too small - they aim simply at keeping people in poor countries alive, or at making their farms more productive or their schools marginally less bad. They don’t dare to try to actually vault them into prosperity and growth, and they ignore many of the ambitions of the inhabitants, especially the young ones

“These kids don’t want to use a foot treadle generator to produce their own light to read books, they want to write apps for the iPhone,” says Romer. “And they’ll never be able to do that if they can’t go live in a major modern city.”

“Small isn’t beautiful,” he says. “Small is condescending.”

I agree. And I have to say, I'm inspired.