The U. S. Should Emulate, Not Censure, Honduras

When Honduras’s president Manuel Zalaya attempted recently to unconstitutionally extend his powers, in this case to thwart his term limit, Honduras’s Congress—controlled by the president’s own party—and Supreme Court acted quickly and decisively to remove him from office, and utilized the military to enforce their rulings.

In contrast, as a series of U.S. presidents has unconstitutionally extended the powers held by the executive branch (see our Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty), the U.S. Congress and Supreme Court have either stood by and done nothing, or actively aided and abetted the power grab. They have in the process also turned full discretion over the use of military power to the president, further gutting any “checks and balances”.

Which is the more Constitutional republic?

The U.S. has allied itself with the governments of Cuba, Venezuela, and other bastions of “freedom” in condemning the removal of a would-be despot from power, and has frozen its foreign aid to Honduras—a staggering $43.2 million for the year ending September 30, 2009, budgeted to increase to $68.2 million for the fiscal year starting October 1.

Honduras’s government ought to view this liberation from American patronage as an immense opportunity to become a truly free country. Freed 16 years ago from 50 years of Soviet rule that had utterly impoverished its people, Estonia chose as its Prime Minister a 32-year-old history teacher whose only knowledge of economics consisted of reading Free to Choose. He thereupon proceeded to eliminate all tariffs, implement a low, single, flat tax, and eliminate almost all government economic regulations. The results have been dramatically positive, with 10%+ compound annual growth rates. As Alvaro Vargas Llosa noted:

Thanks to bold reform, [Estonia and other] ex-communist countries have taken some 40 million people out of poverty in the last seven years. It is easy to forget that only one generation ago these republics were in the hands of regimes that had obliterated the institutional foundations of the free society.

How wonderful if Honduras were to be emboldened by its current pariah status to seize the opportunity to implement absolute economic freedom. By eliminating barriers to the productive deployment of land, labor and capital, and allowing its inhabitants to retain the fruits of their labor, Honduras could become the Hong Kong of Central America. In the process, untold numbers of investors and entrepreneurs put off by the increasing infringement of their rights in the U.S. and elsewhere, and seeking a safe haven for the deployment of their talents and treasure would likely beat a path to its borders. If Honduras put out the Welcome mat, it might just usher in the “Honduran century.”

Mary L. G. Theroux is Senior Vice President of the Independent Institute. Having received her A.B. in economics from Stanford University, she is Managing Director of Lightning Ventures, L.P., a San Francisco Bay Area investment firm, former Chairman of the Board of Advisors for the Salvation Army of both San Francisco and Alameda County, and Vice President of the C.S. Lewis Society of California.
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