March 12, 2014
Deep within the Congo basin along the banks of the Kasai River exist two native peoples– the Lele and the Bushong.
The two tribes are practically the same people, separated only by a river.
Yet when two anthropologists went to Africa in the early 1950s to study these tribes, the differences they found in their standards of living were astounding.
As Mary Douglas wrote in her book The Lele of the Kasai, “Everything the Lele have or do, the Bushong have more and can do better. They produce more, live better, as well as populating their region more densely than the Lele.”
The Bushong tribe was rich. The Lele tribe was poor. The Bushong used nets and traps to catch fish and game. The Lele did not. The Bushong had a “profit-motivated, wealth-accumulating economy”. The Lele did not.
The Bushong ate a much more abundant diet. They excelled at agriculture as well, planting five crops in succession in a two year rotation cycle. And they accumulated large pools of savings (excess food) for trade with other tribes.
The Lele barely subsisted.
As you can imagine, the Lele tribal structure was very centrally planned. The tribe imposed a rules on labor and employment, wealth redistribution was rampant, and there were heavy tithes to be paid.
This lack of economic freedom in the Lele tribe caused huge imbalances.
Just like the differences between North and South Korea, or East and West Germany during the Cold War days, there was very little that actually separated these people… very little except politics and economic freedom.
Similarly, it was the abundance of economic freedom in places like Hong Kong that led to their rapid growth and wealth.
Hong Kong had no major resources to speak of. Its prosperity is based solely on being a place where individuals were allowed to trade and thrive.
Here in Honduras, they’re trying to take a page from that playbook.
Last year the government approved a series of initiatives for what they call Zonas de Empleo y Desarrollo Económico (ZEDE), or Employment and Economic Development Zones.
The idea is that a handful of special zones in the country will be established that essentially have no taxation and their own administrative court systems (or apply laws and courts from any other country).
Naturally, a lot of folks will probably scoff at the idea– after all, what nut case would want to set up a business in what’s now a thick jungle in Honduras?
Then again, there were probably a lot of Brits in 1897 who thought the same thing about an illiterate fishing village on the South China Sea.
But history shows us that money and talent goes where it is treated best, and those places prosper far beyond all the rest.
That place might not be Honduras (it’s certainly possible this project won’t succeed)…
But as the debt and paper-based global financial system continues its terminal decline into insolvency, you can be sure that there will be a mass migration of talent and capital to the few places that still provide freedom and opportunity.
People will realize that they are being taxed more just to pay interest on a rising debt, meanwhile their money is worth less and their standard of living is falling.
Once they realize this, they’ll start looking for greener pastures elsewhere, just as human beings have always done throughout history.