Free Cities and Commonwealths: A Bridging Strategy to Freedom

July 8th, 2015   Submitted by Anthony Caprio

FreeCityAs next year’s election cycle draws near perhaps you, like me, are already exhausted (and disgusted) with the political process. There are no interesting ideas circulating on either end of the political spectrum. The average voter has absolutely no influence on the political process. Oligarchy is here and the traditional political process seems pretty pointless. The famous Gilens and Page Study actually provides hard data that what voters want is irrelevant. Special interests alone dictate whether or not a bill passes or a candidate gets into office. So, even if 90% of American citizens want to audit the Federal Reserve it’s not going to happen under the current system. So, if the political process is a game where the individual is set up for failure, then what are the solutions? How do we address problems like crime, crumbling infrastructure, economic growth, and national defense if the political system is not an option? The simple answer is that the market can best address all these issues. The difficult question is how do we go from the era of the nation state to the era of free markets and free individuals?

In today’s world, in order to travel and do business a person must use government controlled instruments such as: money, passports, and contracts. The blockchain has already offered us an alternative to government currency. Now it is providing alternatives to passports (blockchain IDs), and contracts (blockchain contracts). One can foresee a future where an individual uses Bitcoin to purchase an airline ticket, shows their blockchain ID at the customs counter and rents a car with a blockchain contract. Once individuals can travel and do business without a government sanctioned document it’s easy see large behemoth nation states becoming irrelevant and disappearing altogether. How do we bridge that gap? How do we get a blockchain ID or a blockchain contract to be accepted in Canada or France or Uruguay? In other words how do we get a peer-to-peer technology to be accepted by a government?

On one hand we need government recognition of blockchain technologies like currency, ID’s and contracts. On the other hand we need a private solution that can quickly respond to demands for infrastructure, security, and economic growth. I believe the solution to all these problems is “private cities” that partner with an existing nation state under a “commonwealth” system.

What is a private city? A private city is one where all the land, infrastructure, and utilities are privately owned. The money used for upkeep of all these things comes from service fees, not taxes. What’s the difference between a service fee and a tax? It’s the difference between not paying your utility bill and not paying your taxes. If you don’t pay your taxes you can expect to go to jail, have liens placed against your earnings and property, or even have your passport pulled. In short, your life can easily be ruined. If you don’t pay your utility bill you can expect to have your power turned off. At worst you might have a lower credit rating. The beauty of private cities is they rely on happy customers to stay in business instead of tax slaves. The following are some examples of this concept currently at work: shopping malls, theme parks and resorts, cruise ships, gated communities, private schools and universities. The beauty of private cities is market competition at work instead of the democratic process. Don’t like the way one city does things? Try another. Over time it’s easy to imagine private cities cropping up to cater to every belief, lifestyle, desire, and preference. Just think of the current variety of themed cruises, amusement parks, gated communities, and shopping malls. There is a choice for every taste and budget. Contrast this with our current democratic process where we are constantly faced with choosing the lesser of two evils, compromising one set of beliefs so we can get some of what we want politically, usually to find out that we are getting none of what we want anyway.

Private cities are not some far off concept. They exist today and are expanding rapidly. The following are just a few examples: Gurgaon India, Eko Atlantic Nigeria, King Abdullah Economic City Saudi Arabia, Sandy Springs Georgia USA, ZEDEs Project Honduras, and Disney World. The city of Irvine in California started as a private development and is largely still run as a private enterprise. Perhaps the most telling thing about the overall success of the private cities model is the criticism that gets levelled against it. The criticism is not against the quality of the services provided by private communities. It’s that private cities don’t allow for the redistribution of wealth. Look at this criticism from the article I linked to about Sandy Springs, GA:

“Evan McKenzie, author of ’Privatopia: Homeowner Associations and the Rise of Residential Private Government.’ Worries that rich enclaves may decide to become gated communities writ large, walling themselves off from areas that are economically distressed.”

No complaints about the power going out or trash not being picked up. The complaint boils down to “hey you’re making it harder for us to take your money and give it to someone else.” Another criticism of private cities is that they are “undemocratic.” But isn’t that the point of private property? It’s not owned by everyone and doesn’t suffer from the tragedy of the commons. Do I really need to run down the list of failed public sector democratic enterprises that can’t deliver basic services without taxpayer subsidies?

While private cities are criticized as being undemocratic, elitist, snob fests, one thing they haven’t been criticized for is delivering effective services to their customers. At one point in time things like light bulbs, telephones, automobiles, airplanes, and computers were considered to be toys of the rich. Now all these things are tools of the masses giving us all countless hours of productivity that has improved the lives of billions. There is no reason that private communities cannot be scaled for the poor and middle class. Indeed master planned communities such as Daybreak, Utah have already emerged to service upper middle class customers. With scalability and competition it’s not hard to imagine private cities and communities serving the poor far better than the government does. In the same way that supermarkets do a better job of providing food for the poor than “government cheese” programs do.

Private cities can solve the problems of infrastructure, and economic growth. Unfortunately, private cities cannot issue passports, arbitrate contracts or enforce property rights. So, how do we bridge that gap between providing private infrastructure to providing documents traditionally issued by governments?

A common wealth has all the benefits of an independent nation. They get to make their own laws, decide their own tax rate, and raise their own defenses. But they also have the benefit of having a large nation “vouch” for their legitimacy. Think about the benefits. When a new nation emerges it often has to struggle to gain recognition. This means that citizens of the new nation may not have their passports and visas recognized by other nations they wish to visit. The beauty of the commonwealth system is that when new nations like The Cayman Islands, Belize, Pitcairn, Cook Islands, or Bermuda became independent from Great Britain they gained recognition almost immediately.

If we take this model and apply it to private cities we can easily imagine a system where a private city (under the umbrella of a host nation) sets its own laws, appoints its own judges (or allows for competing arbitration firms), permits private security firms, and allows the city to issue its own passports. In fact, all these services could be set up with blockchain peer-to-peer technology. The idea is not as far-fetched as it may seem. Numerous countries have their own special economic zones (SEZs). China’s nearly meteoric economic rise is credited almost exclusively to its SEZs. Honduras has already passed legislation for the creation of Zones for Economic Development and Employment or ZEDEs.

The United Arab Emirates created a special economic zone called Dubai that has turned out pretty great. Dubai not only has low taxes and few regulations but also laws that are based on British Common Law and Judges that are specialists in common law.

In each case the host country has given up some level of autonomy in order to improve their economy, and in most cases the tradeoff has paid big dividends. The one thing that has not yet been tried is allowing a private jurisdiction to issue a passport under a commonwealth umbrella.

In his book “The State in the Third Millennium” Prince Hans Adam puts forth the “radical” notion of the state as a service provider. Indeed this is the role the nation of Lichtenstein has played for over 150 yrs. In order to stay “competitive” with larger neighbors like Switzerland, Germany, and Austria. Lichtenstein has offered lower taxes, and strong property rights. It has eliminated departments that were too costly to maintain (like the military). The result has been a clean environment, the world’s highest per capita GDP and a land untouched by war for over a century.

The elements for the new model of private city/commonwealth hybrid seem to be in place already and if the overwhelmingly positive response to Liberland is any indication there is a strong market for a physical jurisdiction that can issue passports, and has a strong emphasis on personal liberty and free markets. This solution may be here sooner than we think as a result of peaceful market forces instead of voting or violent revolution.

21 Responses to “Free Cities and Commonwealths: A Bridging Strategy to Freedom”

  1. HReardenNo Gravatar says:

    I enjoyed reading your piece on free cities. Do you think there should be a free city project?

  2. VanmindNo Gravatar says:

    Enticing as it is to set up shop today in a semi-autonomous place like Gurgaon (foward-thinking as well), a much more effective freedom strategy would be to focus on assisting each individual meatspace avatar wherever they happen to be living. That way at the arrival of any so-called 100th monkey moment, instead of requiring those 100 to be a bunch of cities & regions which somehow attracted enough people (who for some reason believed themselves incapable of freedom without first moving somewhere that someone said was a special kind of place) and somehow achieved full autonomy (picture yet another false dichotomy of “government workers” versus “freedom neighbors” and how long it would be before the government workers ever said “Our bad” and pretended to be in a position to grant the freedom neighbors full autonomy) … instead of all that the moment would envelop an entire planet’s worth of mankind at once. Natural, not engineered. Individuals demonstrating black market self-respect within their own personal jurisdiction, not narcissists manufacturing artificial jurisdictional aggregates by way of make-believe personality traits like “leader” (the terms “leader” and “follower” being mere temporal metaphors).

    Here’s what an intelligent meatspace avatar says: “That person thousands of miles away is doing things right so I must strive to improve myself.”

    Here’s what an unintelligent meatspace avatar says: “That person thousands of miles away is doing things right so I must move to where they live and prostrate myself at their totally non-narcissist feet.”

    Also, a blockchain is not a panacea and no blockchain-based currency is sound (besides which: the very concept of a passport implies a coercive fraud known as kidnapping & extortion while voluntary contracts in any format are acceptable so long as each signing party is agreeable — not to the technology of ink or binary but rather to the actual terms). Less show-your-bitID newbie-talk, please.

  3. JohnNo Gravatar says:

    “The mystery of government is not how Washington works but how to make it stop.”

    https://en.wikiquote.org/wiki/P._J._O%27Rourke

    There is an election?

    Do not cast your vote. Rand Paul is not his father. Some say go vote and write in Mickey Mouse or JFK or Ron Paul – no! If you do that, they can still fake your vote, but the fact that you went can be noticed. Since there was foot traffic, the system must be working.

    Imagine nobody showed up to the voting booths. How would they spin that? Doctor the footage from the previous cycle?

    • VanmindNo Gravatar says:

      “Seeing” by Jose Saramago (be sure to read “Blindness” first).

    • macsnafuNo Gravatar says:

      By all means, if you think voting is insignificant, irrelevant, or immoral, then don’t vote. But as a strategy for ending government or changing government behavior, it’s a total washout. Only about 25% of the population votes, and all it seems to do is give us more dangerous politicians like Dubya, Hillary, Obama, and Trump. Perhaps I’m wrong and it’s a sign of desperation in the electoral system, a last gasp before everyone ignores the government, but it sure doesn’t seem that way to me. The fewer people that vote, the more power those voters have over the rest of us.

      • Fritz KneseNo Gravatar says:

        mac, I basically agree that not voting will not topple the state. Neither will voting. The state will survive until a large enough percentage of the populace recognize it as the enemy and stop supporting it. But your assumption that not voting places more power in the hands of those who do vote is naive. The elections are controlled one way or another. Through media manipulation of mass psychology or through control of the computers. Assuming that an utterly corrupt entity like government would leave the final arbitration of power to chance is absurd. The ruling elite let us think we have control while manipulating everything to keep and consolidate their power and perqs.

  4. Seth KingNo Gravatar says:

    I’d love to see one get set up in New Hampshire. Hell, I’d be happy to see a gated community of libertarians/anarchists get set up.

    • JohnNo Gravatar says:

      I call myself libertarian. I am recovering from Ebola and alcoholism. My hobbies include drums, electric guitar, DIY fireworks, feeding and domesticating wild bears. I am the president at the Annoying People Need Love Too charitable foundation. I am really really good at intimidating parking enforcement people. My record speaks for itself – three of them committed suicide. Another big plus is that I do not have a sense of smell.

      I wanna live next door to you. We will get along great! The only thing that matters in a neighbor is whether they both like Ron Paul.

    • Anthony CaprioNo Gravatar says:

      I think there is a strong market for exactly what your talking about (just look at Galts Gulch) and I think NH is a much better location for it then Chile.

  5. DaveNo Gravatar says:

    The bigger problem is what state-lovers would try to do to freedom-loving people in a city. How do you stop that?

    • JohnNo Gravatar says:

      This! You cannot win without popular support. It is the progress made by free market that will eventually dismantle the state.
      * Supporters of legal weed are winning, could not be done without popular support. FEDS are losing => less money for the prison industrial complex.
      * Uber is making the taxi business hurt. Airbnb is now the biggest hotel chain. The public is slowly realizing that a) screw licencing, b) it is enjoying the benefits of “price gouging” => another dent. Someone will come up with a public transportation killer (like ad-hoc private bus routes). That will be something.
      * Online educational material is making home-schooling much easier. Some parents will put together high quality study material on YouTube.
      * Elon Musk, the NSA slut, is pouring a lot of energy into making batteries better and cheaper. There will be breakthroughs. Battery prices will come way down in the next 5-10 years => no more Enron scandals as more and more people become self-sufficient with regards to energy.

      Maybe the right thing to do is to just relax and watch state slowly lose its power.

  6. Nikos SakkasNo Gravatar says:

    Visionary text Anthony !

    What do you mean by “have already emerged to service upper middle class customers”? In what sense can private cities be scaled for the poor and middle class?

    I’ d like to have your view on a more general question, maybe not directly linked to your topic here. In a no-state setting how would we deal with people objectively disadvantaged, such as disabled, etc? Also, a lot of the success or failure of business endeavor is a matter of sheer luck. How would we deal with the issue of “luck” in a no state setting. Perhaps large business can manage luck; new and small business cannot do so equally well.

    At the end, I think we need some concept that won’t allow pockets of large poverty to develop in our state-free societies. There is nothing that upsets me when I come across a lazy laggard, no matter how poor he may be. But I reckon poverty is not only due to laziness but predominantly to other factors, uncontrollable by the individual.

    Some may believe that some human automation may resolve these issues. I am not happy with laying a lot of expectations on the human factor. Communists had their own over ambitious expectations from human nature, but history did not confirm them at all.

  7. Anthony CaprioNo Gravatar says:

    Private cities can be scaled to serve the poor and middle class in the same way that grocery stores scale to serve all classes. Private cities for the poor might not have the nice amenities, like valet parking or pet spas. But basic services like arbitration and security would be standard. The poor and disadvantaged are better served by private charities than any government program.

  8. Fritz KneseNo Gravatar says:

    Nice idea, but I do not see it as advancing freedom much for if it were to start doing so both governments and oligarchs would come down strong on such cities for fear of undercutting their power base.

  9. Michael HendricksNo Gravatar says:

    You can talk about the stuggle or you can BE the struggle. I too want to BE the struggle.

    Main criticism: Dunbar’s number allows us to use a democratic process while avioding the tragedy of the commons, we don’t have to exclude left libertarians and indeed there can be a level of cooperation there. Consider the difference between credit unions and banks. Credit Unions distribute dividends to users, and users are allowed to vote for leadership, neither is the case for banks. Credit Unions are socialist banks are capitalist.

    On another note: Micronations and seasteads are other possible manifestations of theory.

    • Fritz KneseNo Gravatar says:

      Mike, I live in the backwoods in a stone house I built by myself and am off the grid. I think I walk the walk as well as talk the talk.
      You speak of using the democratic process, but that virtually never happens. The ruling elite use the so called “democratic process” to fool most folks into thinking they have some say in what is going on and are “free”. Law and freedom are antithetical. Individual liberty is inversely proportional to the number and strength of society’s laws. Police and soldiers are the teeth of governmental oppression. Their job is to protect the ruling elite’s power and perqs usually by denying the common man his freedom.
      Banks and credit unions are manifestations of today’s misuse of government, and neither has any real connection to the true free market though either could theoretically exist in a free market. Communism can exist within anarchism. It need only be voluntary. The ultimate free market, what I call the real free market, can only exist within an anarchistic society for government is always attempting to control the market since government’s purpose is the protection of the elite.
      Micronations and seasteads are interesting concepts. Many years ago Irwin Strauss wrote a book on forming your own nation. It was and is very impractical. Why? Because governments will run over any successful such project in its zeal to deny common men liberty. Government politicos only respect power. Ultimately that means some form of physical power. Thus the huge importance of protecting what is left of the 2nd amendment and attempting to arm the citizenry. Truly peaceful protest is laughed at by those in power. It can even be counter productive like with the Viet Nam War. It likely would have ended many years earlier than it did, but most politicians did not dare look like they supported the hippy peaceniks.