The other day I came across the Free Private Cities whitepaper. The idea of Free Private Cities tackle a few of the problems I’ve been noticing and thinking about myself for some years. I don’t know if the implementation of Free Private Cities would solve these problems, or if they are even feasible. But what it is clear to me is that it is healthy to start actively and openly discussing new ideas that challenge the way in which the critical systems of our current societies work; especially when many of the incentive systems our societies are built upon are broken and failing to deliver the expected results.
The Problem
“In current political systems, the actions of both rulers and the governed are shaped by wrong incentives. Rulers have no liability and face no economic disadvantage if they make poor decisions. The governed are made to believe that “free” benefits can come into existence through the power of their votes. This politicizes the state monopoly on force and leads to constant changes to the “social contract“ and an endless struggle to influence the direction of this change.”
I don’t know what is your experience these days, but at least for me, it feels like with each passing year politicians are more worried about making short-term decisions to keep them in power after the next election than to design long-terms plans to benefit the entire population. Whether we like it or not, governments are yet another company giving service to their citizens. When we hire our Internet access, or we choose our electricity company, we look for the company that gives us the best service for a better price. Through competition we can choose the service that better suits our needs. These companies are incentivized to do a good job an design efficient systems for end-users to choose them. The rules of the game are clear, and competition make them better and benefit the customer.
But what happens when there is no competition? And when the incentives don’t reward the one doing it better, but the one that is bettar at luring the population and winning elections? It is not a matter of ideology, but a result of the broken systems that promote unprepared individuals to the positions of power.
Quick disclaimer: Many of these statements are the result of my personal observations of how the state, the government, and politicians operate in my country. Many of my comments may not apply for you, so feel free to just focus in the quoted text to get a quick grasp of the idea of Free Private Cities, and use my comments as anecdotes from some far-away place.
When the management team of a company fails to execute what is best for the company and seeks its own benefit, they are usually forced (or need) to step down. Why do politicians managing a country lack of this level of accountability?
“In his famous book “Leviathan”, Thomas Hobbes argued that a state monopoly on force creates a peaceful order that ultimately benefits all of the state’s inhabitants. It is indeed the case that innovation, division of labour, trade, scientific progress and flourishing of the arts cannot be achieved in an environment plagued by violence. However, a substantial part of this advantage is lost if the state uses its monopoly on force to achieve goals that go beyond the enforcement and protection of peace.”
[…]
“In current political systems, the relationship between citizens and governments is analogous to the relationship between somebody who wants to buy a car and the car dealer — while the car dealer (the government) insists that he will choose the model, the colour, the size of the motor, the interior, as well as the price the buyer (the citizen) has to pay for it. And furthermore, there is no choice in the deal: everyone must buy.”
And honestly, I am sick of buying by the force. Because it’s always the same that are forced to buy. And to make matters worse, at least every year (although since COVID it feels like every other month) the “social contract” between governments and citizens change. And change in unpredictable ways for the citizen.
If you (like me) are of the kind that likes to plan ahead, you design your plans and systems according to the current rules of the game. But how can someone make informed decisions if rules are constantly changing?
You thought you were paying X% in taxes? Well, not anymore, now is X+Y (out of the blue). You thought money was backed by gold? No way! Now is just backed by me, myself, and what Powell says. You thought you were paying taxes to improve the health system and education? Nej, the government needs more advisors, and politicians deserve higher salaries (of course), the health system can wait. And is there something we can do to express our discomfort with these constant changes in the social contract? Sadly, the only thing we can do as individuals is choose to live somewhere else. As a society, we don’t have the means to do anything else, because our options are limited.
“Politicians or rulers who advocate cuts in benefits will sooner or later be voted out of office or replaced by more “supportive” and “generous” mandate holders. Over and above that, the respective rulers have no incentive to behave sustainably, since they bear no economic consequences for their decisions. They remain legally immune from liability and have no enforceable obligations towards those whom they rule.”
Good example of this: endebting our children and grandchildren in exchange for a few more months in power and to ensure social tranquility for a few months is not OK (although apparently it is).
Government as a service
“A Free Private City is a sovereign or semi-autonomous territory with its own legal and regulatory framework. It has its own tax, customs and social regime, as well as its own administration, security forces and an independent dispute resolution system (autonomous regulation and administration).
Free Private Cities are run by an operating company as a for-profit business (“Operator”). The Operator guarantees inhabitants of the Free Private City protection of life, liberty and property which it provides in exchange for a fixed basic fee (Protection by Operator).
Each individual resident or residing entity has concluded a written “Citizens’ Contract” with the Operator, which clearly defines their mutual rights and obligations. This includes the services to be provided by the Operator and the fees to be paid to them for their services; there are no taxes. It also outlines rules that apply in the Free Private City: both for the citizens and the Operator. A defining aspect of the Citizens’ Contract is that it cannot be unilaterally changed by either party. It represents the “personal constitution” of every contract citizen (real and reliable social contract).
Participation and residence in the Free Private City is voluntary (voluntary participation).
There is no legal claim to admission to the Free Private City; to fulfil the security promise, the Operator decides on immigration according to his criteria and his discretion (immigration policy).
Furthermore, contract citizens can do as they please, provided that they do not violate the rights of others or the rules laid down in the Citizens’ Contract (the live and let live principle).
Any citizen can terminate the contract at any time and leave the Free Private City, but the Operator can only terminate the contract for good cause, for example for breach of contractual obligations such as continued non-payment of the fee (unilateral free contract cancellation).
Coercion by the city operator can only be used to enforce the predefined and agreed rules. Serious or repeated violations lead to exclusion from the Free Private City (contract-violation-based exclusion possible).
In the event of conflicts with the Operator, each party is entitled to appeal to independent (arbitration) courts that are not part of the Operator’s organization (independent arbitration).”
This tweet from Paul Graham perfectly summarizes what would be, in my opinion, a good outcome from the idea behind Free Private Cities. The same way we have a framework for anyone to be able to found their own company, we should enable a group of individuals with the resources (and the investment) to found their own country. I am not saying it should be easy, or affordable to everyone, but at least it should be feasible.
When NASA wasn’t focusing on the hard problem of getting us to Mars, Elon Musk founded SpaceX to tackle the problem efficiently using alternative approaches and challenging our rooted conceptions. Would states and governments benefit from operating under these same rules? Maybe.
Building alternative systems
I don’t know how feasible Free Private Cities are. I don’t even know if implementing such a structure would solve all of the aforementioned problems, or we would end up worse than we were. Maybe, “a known evil is better than an unknown good”. What is clear to me is that acknowledging the issues of our systems, and building thought experiments (as the one presented in the whitepaper), is always beneficial to explore alternatives and see if we could be doing things better. We shouldn’t be taking certain things for granted.
Apart from the aforementioned whitepaper, a few books I like to read (and re-read) to challenge my assumptions of how society works are:
Brave New World - Huxley (of course)
Ada Palmer’s Terra Ignota series (the idea of organizing ourselves in hives instead of nation states and giving individuals the right to choose their hive independently of the place one is born presents a thought provoking alternative for society).
