The Economics of Cults and Communes

Spend a little time in Latin America and you are bound to stumble upon some shady gringos. Commonly hawking some sort of natural remedy or spiritual salvation, these folks come off bent out of shape after years of being free from social norms back home and ignoring the norms in their adopted country.

This does not mean, however, that these sweaty ex-pats are dumb: far from it. Most, in some way or another, are selling the idea or the experience of the country they now call home.

The beginners’ version of this hustle is the backpacker who takes a job at the hostel and never goes home. But some get far more elaborate.

In Ecuador, a notorious example is the so-called Rancho San Joaquim. Now, a ‘rancho’ is a Mexican thing, not an Ecuadorian one, which already tells you something. The folks who set this place up had their clientele already in mind.

Vilcabamba has been called the Valley of Longevity. The pitch is to American retirees to come and enjoy the low cost of living and the clean air and water that might just extend their life. 

That’s the sell. By contrast, for Ecuadorians Vilcabamba is a party spot where they can drive around blasting reggaeton and get a piece of all the drugs circulating to satisfy the bored gringos’ appetites.

The ‘Rancho’ pitches Vilcabamba to North Americans over the internet. It then buys the land from Ecuadorians, puts up a fence and a security guard, then charges the gringos 10 times what they paid for it.

Just a few hours drive away in the Amazon lowlands, the fruitarian commune Fruit Haven is working the same model.

Fruit Haven has purchased a sizeable chunk of the land that Ecuadorian colonists grabbed before the local indigenous people were able to win legal title to the rest of it in the 1970s. Gringos fleeing 5G can now buy a lot within the expanding commune: at the new price, of course.

COVID has been a boon to these types. Adherents will tell you they “had to get out” of North America during the pandemic, and Fruit Haven’s website happily promotes the fact that foreigners can now enter Ecuador “without any silly tests.”

The commune spruiks the benefits of yoga, meditation, and a life free of alcohol and hard drugs (no prizes for working out what’s left over from that equation), and, of course, fruit.

The diet might explain why they haven’t quite reached their self-sufficiency goal. Instead they employ local indigenous folks to work plantations on what was once their families’ lands, and buy copious quantities of bananas and custard apples at the market every Saturday.

These places are a pure arbitrage on Westerners’ imagination of Latin America versus the local reality. Unfortunately, pretty much every government in the region is more incentivised to look elsewhere and has no interest in preventing this business model.

Follow Christian on Twitter for more news updates.

Feature image courtesy of @achernenko via Unsplash.

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