Uruguay Stands Up to Government Corruption

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You can tell a lot about yourself based on your most vivid memories from your childhood.

Other than building a tiny snowman with my dad in the front yard of our old home on Capitol Hill, my own early memories are full of images from films … almost entirely dystopian epics set in a world dominated by huge corporations and/or the aftermath of nuclear or biological war: Rollerball. Logan’s Run. The Omega Man. Planet of the Apes. Fahrenheit 451. Westworld. Maybe that explains my deep suspicion and dislike of unaccountable power.

Fortunately, we haven’t had a globe-destroying war yet. But we are well on our way to a world run by massive corporations who vastly overshadow democratic government. Even here in the U.S., it’s pretty clear that the average person has essentially no influence compared to the corporate sector.

That’s why I was struck by the recent actions of the “Switzerland of South America” … Uruguay.

Democracy? So Old-Fashioned, My Dear

Of the 100 largest economies in the world, 51 are now global corporations; only 49 are actual countries. The top 200 corporations’ combined sales are bigger than the combined economies of 182 of the world’s 191 countries. These corporations have twice the economic clout of the poorest four-fifths of humanity.

Contrary to the beliefs of starry-eyed true believers, this isn’t only the result of the efficiency of modern capitalism, or the miracles of 21st-century logistics and Internet technology. At least as important as private initiative and innovation is the use of raw economic and financial power to demand — and receive — preferential treatment from the world’s governments.

I’m no fan of big government. But I understand that governments arose to deal with issues that markets can’t solve — such as territorial defense, externalities and a system of justice. Many governments have taken this natural mandate and abused it, of course, but some exercise it judiciously, to preserve their citizens’ quality of life. From local zoning laws to immigration restrictions, governments have a role to play in tempering the outcomes of purely economic activity.

What would it be like to live in a world where corporations, who are answerable only to their owners, run everything … a world where the individual sovereignty inherent in citizenship counts for nothing?

We’re closer to finding out than you may realize.

Uruguay vs. Goliath

Uruguay is one of the freest societies on the planet. Its government is remarkably tolerant, and live-and-let-live is the rule. In fact, Uruguay is the only country I know that guarantees eligible immigrants the right to become citizens.

Uruguay is famed for its rich, abundant and inexpensive farmland. The economy is based on agricultural exports, but is thinly populated. So Uruguay has welcomed foreigners who want to farm, or invest in farming.

A few years ago, Uruguay passed a law restricting foreign ownership of farmland. Sometimes that’s a red flag, but this time, it was a wise move.

Global corporations and the sovereign wealth funds of countries such as Saudi Arabia and China have been buying farmland all over the planet to lock up future food supplies. If they could, they’d buy Uruguay in its entirety. But then Uruguayans would be dependent on the whims of foreigners who have no interest in them.

So Uruguay banned them from investing in its farmland.

For that reason, Uruguay today has a highly competitive, efficient, diverse and responsive agricultural sector that’s able to survive market ups and downs, and help all Uruguayans prosper.

But this — as well as Uruguay’s control over its well-regulated banking sector — made global corporations very unhappy.

So they put pressure on Uruguay’s representatives in the Trade in Services Agreement (TISA). TISA is a treaty currently being negotiated between governments and major corporations. It would severely restrict signatory countries from being able to pass laws like Uruguay’s farmland legislation.

Adios, Compadres

Earlier this month Uruguay’s government decided to end its participation in TISA. After months of intense pressure from citizens, President Tabaré Vázquez bowed to public opinion and left the U.S.-led trade agreement.

I applaud Uruguay for doing this. There’s a world of difference between a responsible government that prioritizes the interests of all its citizens and one that simply redefines those interests to be identical to whatever the global corporate sector wants.

Does that make me a “socialist” … or worse? No. It makes me someone who recognizes that the true measure of individual sovereignty is not just how much market power you have. All of us have some natural rights as well — rights that we can exercise even in the face of limitless economic power.

Fortunately, the people of Uruguay agree with me. And that’s why we at The Sovereign Society recommend the country so highly. We’ll be joined by Uruguayan experts — discussing investment and residence opportunities in country — at our Total Wealth Symposium this month in The Bahamas. But since the conference is October 14 through the 17 — next week, in fact! — I encourage you to reserve your spot today.

Kind regards,
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Ted Bauman
Offshore and Asset Protection Editor