Democracy & Technology Blog The Other Gulf Green Zone

President Bush has proposed another Green Zone for the Gulf. This one is not a fortress in Baghdad, however, but a greenlined “opportunity zone” in Louisiana, Mississippi, and Alabama. Although I share concerns that Washington will shovel money South indiscriminately, the free zone portion of the proposal is just the right strategic approach. Not just because of what it might do for New Orleans and the Gulf region but for its potential follow-on effects across the nation.

China has already shown us the way. In the late 1970s, Deng Xiaoping established four Special Economic Zones in Shenzhen, Fujian, and Shanghai, where tax rates and regulations were low or non-existent. Financial and human capital poured into the zones, and they became the most prosperous and productive spots in the nation. Shenzhen was then a swamp with a few tens of thousands of people but today boasts many millions. Before long, other local officials and citizens across China were demanding more capitalism, asking for their own zones, and by the early to mid-1990s, some 8,000 free zones were established. “Zone fever” swept China and has been a fundamental source of its 25-year boom. By starting small, and in out-of-the-way places where the hardline Communists were unlikely to take notice, Deng and his successor Jiang Zemin planted the seeds of capitalism. They let the people do the rest.

In the same way, if Bush’s “opportunity zone” can be intelligently designed and implemented in the Gulf, the economic growth that is likely to result will gain admirers across the nation. Other depressed and not-so-depressed areas will agitate for their own zones of freedom. It’s too bad it’s taken a tragedy to give rise to this idea, but it could be the start of something big.

-Bret Swanson

Bret Swanson

Bret Swanson is a Senior Fellow at Seattle's Discovery Institute, where he researches technology and economics and contributes to the Disco-Tech blog. He is currently writing a book on the abundance of the world economy, focusing on the Chinese boom and developing a new concept linking economics and information theory. Swanson writes frequently for the editorial page of The Wall Street Journal on topics ranging from broadband communications to monetary policy.