Paul Romer was one the first ambassadors around the idea of a new charter city. During his TED talk titled "Why the world needs charter cities" Romer announced a radical and audacious proposal for how to speed up development by two countries – a "host" and a "guarantor" – to form a mutually beneficial partnership.
Hong Kong used to be the original inspiration for many international charter city advocates like Romer. Seen as a proof of concept: a city that had operated for decades with a British framework in Asia, and then a unique political and economic system within China. International charter cities work like this: a new city is created within a sovereign country but is free to experiment with its own political and economic system – usually one with low taxes and scant regulations. A foreign country could even act as the administrator of the city – the idea being that a spillover effect from this city will boost the economy of the developing-world country it is built within.
There are surely other examples creating a "special administrative zone" e.g. in Guantanamo Bay, on the southeastern tip of Cuba, that would be administered by Canada, and "connect the modern economy and the modern world" to Cuba. This is similar to how China created a special economic zone in Shenzhen to connect the country to the rest of the world along greater economic freedom to experiment without a wholesale change of the national economic system.
Titus Gebel and the concept of Free Private Cities
In his 2018 book Free Private Cities, Titus Gebel modified Paul Romer's Charter City concept. Instead, in a so-called free private city, a private company offers residents protection of life, liberty, and property in a demarcated area as "government service providers". His paid model is for him rather an alternative order to the conventional nation state.
Furthermore this would be another way of limiting power in the competition between legal systems. In emerging and developing countries, the legal system there does not inspire confidence. If you want to achieve something, you usually don't get anywhere by normal means. Therefore, corruption and nepotism are dominant there.
That may sound utopian, but it is not. Historically, there have been numerous successful examples. The city-states of antiquity, the imperial cities or the Hanseatic League of cities (Hansestadt) in the Middle Ages, to name but a few, have existed for centuries. Today's nation state is rather a recent invention. In the Middle Ages, anyone who wanted to gain freedom from serfdom had to enter a free imperial city and stay there for a year without being captured. "City air makes free" was therefore literally valid. Free cities were historically hoards of freedom.
There is a rising number of (actually very) different projects happening around the world. Nevertheless what I am sketching out here is at its early stage. I try to look at those examples in the most neutral way and can't foresee their commercial success or political, econonimical or environmental difficulties.
Still under construction is the city of Prospéra on the Caribbean island of Roatán, which belongs to Honduras. It is not an independent state, but a Zona de Empleo y Desarrollo Económico (ZEDE). This is a special zone that officially continues to belong to Honduras, but has its own legal system and administration under the Honduran constitution.
A subsidiary of the Technical University of Munich is at the forefront of this development. InSITE BAVARIA says it is developing the economic activities of the zone and intends to manage a planned industrial site in the coastal town of La Ceiba in the future. The operating company (Honduras Prospéra LLC) concludes contracts with potential immigrants. There is also a "government" of the ZEDE, which is monitored by the state of Honduras. So Prospéra is not a purely "private city", but a kind of public-private partnership with the state of Honduras, which actually comes very close to Titus Gebel's ideal. Some of the services include a non-corrupt police force, efficient courts and of course a minimum level of infrastructure. Since unfortunately Honduras is still one of the most criminal territories in the world; it will be interesting to watch if this influences (the rather secure) island of Roatàn e.g. by various rebel groups or even cartels.
Zaha Hadid Architects, the Computational Engineering Team at akt II and environmental engineering company Hilson Moran have developed a digital architectural platform to create homes – all which addresses specific ecological and social responses to the climate, terrain and culture of Roatàn in the Carribean. This includes a modular system called "Voxels" that uses sustainable timber, sourced nearby from certified forests on the Honduran mainland and treated locally, to form the main structural elements. Digital information technologies will optimize the use of all parts of the sustainably-forested logs to minimize waste and pollution. All contributing to reduce the embedded construction energy and carbon footprint of the development. The "Voxels" will be algorithmically computed to fit within their chosen arrangement. Each voxel is 35 square meters in plan-area and 4 meters high.
The system itself goes way further and allows home-owners to plan their homes and connect with local suppliers, accommodate the specific spatial needs of family members, share resources and costs with neighbours and allows flexibility for communal modules such as a children's play area.
Honduras itself possibly expects more investments and more jobs from this project. To achieve this, Próspera offers companies a very high degree of economic freedom combined with a low level of regulation. With a common law legal framework, familiar and flexible regulations, a bill of rights, low taxation, and protections for the environment, Próspera enables entrepreneurs to solve problems structurally and responsibly. As a country, Honduras is only in 133rd place in the World Bank's business friendliness ranking and the consulting firm Ernst & Young has determined that the legal framework of Próspera would put the zone in 9th place on this list.
NEOM (Kingdom of Saudi Arabia)
NEOM is a planned cross-border city in the Tabuk Province of northwestern Saudi Arabia. The city was announced by Saudi Crown Prince Mohammad bin Salman at the Future Investment Initiative conference in Riyadh, Saudi Arabia on October 24, 2017. The Crown Prince said the city will operate independently from the "existing governmental framework" with its own tax and labor laws and an "autonomous judicial system". NEOM will include towns and cities, ports and enterprise zones, research centers, sports and entertainment venues, and tourist destinations. Even if NEOM will grow organically in line with its development, the expectation is that NEOM will be home to 1 million residents by 2030.
The initial budget is $US500 billion and it is backed by the vast wealth of the House of Saud. Lately Saudi Arabia’s energy ministry is to offer assistance so that Neom can be completed on schedule. The 26,500 square km development, first revealed in 2017 with a planned completion in 2025, will include high-tech projects powered by wind and solar energy. The project is part of the "Saudi Vision 2030" plan that aims to attract foreign investment and create jobs in a bid to wean the kingdom off reliance on oil.
Liberland is a self-declared "sovereign state (a Micronations not unlike seaforts close to a cost or territorial or spots like Minerva). The micronation encompasses 700 hectares (7 square kilometers) of land, which is situated on disputed territory between Croatia and Serbia. Napredak encompasses approximately 5 hectares of former industrial land, situated within Apatin, about 10km down the Danube River from Liberland. Liberland and Napredak have no zoning, no mandatory segregation between commercial, residential, retail, municipal and leisure districts.
Liberland is an incubator and role model for a society founded on the ideology of liberty and principles of anarcho-capitalism. It is founded on the idea that the societal movement towards individual and collective freedom, prosperity and peace will not emerge through bigger governments with increased control, but rather through the distributed intelligence of autonomous innovators and agents of change through “the politics of discourses”. Their aspirations foster "individual and collective freedom, autonomy, minimal governance, voluntarism, charity, fair free markets, non-aggression, non-coercion, diplomatic goodwill, radical innovation, entrepreneurship and ecological responsibility, all supported by a distributed and transparent peer-to-peer network (blockchain)."
Models like Charter- and Free Private Cities are not a utopia, but rather a business idea whose functional elements are already known (i.e. providing contracted services) and which need only be transferred to another sector, namely that of living together. Basically, as a service provider, the operator would only guarantee the framework within which the society could develop openly in the sense of a "spontaneous order" (F.A. von Hayek).
Competition is an extremely fruitful mechanism in human coexistence, because it serves simultaneously as a method of discovery, a quality filter and a means of disempowerment. Only by creating small units that try out new things can competition between systems be set in motion. After all, if citizens, that is to say customers, can easily migrate to the nearest supplier, then governments will also have to be careful what they do. The larger states are, the less this is the case.
- Free Private Cities: Making Governments Compete For You; Titus Gebel
- What Has Government Done to Our Money?; Murray N. Rothbard (Ludwig von Mises Institute)
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