Today’s systems provide incentives for those in power to enrich themselves and their supporters at the expense of society, to waste other people’s money to enhance their own fame, and to buy votes through alleged free benefits. The so-called social contract can be changed by the government with its parliamentary majority de facto at will.
But there is no way around this insight: a system that is legitimate in any way, which by law provides for expropriations in favor of third parties (e.g. in the form of taxes and social security contributions) and which not all those affected have agreed to in advance, can in the long run create neither a peaceful nor a predictable coexistence. It destroys the foundations and results of voluntary cooperation through state power. Thus, it successively destroys what makes a society successful and attractive, leading to a battle of all against all for the enforcement of favorable regulations.
It is therefore time to introduce new products into the “market of living together”.
Now imagine a system in which a private company as a “government service provider” offers you protection of life, liberty and property. This service includes internal and external security, a legal and regulatory framework, and independent dispute resolution. You pay a contractually fixed amount per year for these services. Besides that, you take care of everything else by yourself, but you can also do as you please, limited only by the rights of others and the contractually agreed rules of coexistence.
The government service provider as the operator of the community cannot unilaterally change this “citizens’ contract” with you at a later date. Disputes between you and the government service provider will be heard before independent arbitration tribunals, as is customary in international commercial law. If the operator ignores the arbitral awards or abuses his power in any other way, his customers leave and he goes bankrupt. He therefore has an own economic risk and therefore an incentive to treat his customers well and in accordance with the contract.
Innovative service providers such as Uber or Airbnb are not prohibited but a matter of course. There are private entrepreneurs who cover everything that is in demand, from hospitals, schools and kindergartens to waste collection. If desired, residents can insure themselves privately against all eventualities of life or set up self-help groups, be it to protect against illness, death, need of care or accidents. Anyone can offer new products and services without authorization or license and get paid in any desired currency, including Bitcoin. There is also use for unskilled workers – for lack of minimum wage regulations. New drugs and treatment methods are available to any adult who wants to test them with knowledge of the potential risk. Environmental thresholds apply only to truly dangerous products and processes as determined by serious scientific research. Crime and vandalism hardly exist, you can even let your children out on the streets at night without worrying about them.
People are not stirred up against each other by politics, which no longer plays a significant role. There is neither Parliament nor a Central Bank, but comprehensive self-determination. Due to the low density of regulation, residents produce many innovations and achieve a high level of productivity. Since free trade prevails, and everyone can import everything duty-free, and no taxes are payable apart from the annual contribution, even low-income earners have a high standard of living.
Because neither currency nor interest rates can be manipulated by the government, the purchasing power of the residents is constantly increasing. The pension scheme can be planned and allows for retirement whenever the person concerned considers the level reached to be sufficient.
Political activism, missionary zeal, distributional struggles and the stirring-up of social groups against each other have practically disappeared. Residents know that they cannot interfere in the contracts of fellow citizens and respect each other’s different views and assessments. People are once again responsible for taking care of themselves and are thus automatically more self-confident, more stable and more realistic in their assessments. After two generations at the latest, Free Private Cities would be wealthier, freer and more peaceful than anything we have known so far.
The establishment of a Free Private City therefore requires a contractual agreement with an existing state. In this agreement, the Host Nation grants the operating company the right to establish the Free Private City on a defined territory in accordance with the agreed conditions. But why should existing states agree to this?
As with all barter transactions, there is only one reason: one’s own interests. States can agree to surrender some of their powers for a given territory if they expect benefits from it. A win-win situation must therefore be created. The establishment of Free Private Cities in structurally weak areas not only increases the attractiveness of the surrounding region, but also creates jobs and investments there, which ultimately benefits the host state.
In a Free Private City, everyone is the Sovereign of Himself (or Herself) who, by voluntary agreement, has concluded a genuine contract with a more or less ordinary service provider, the Citizens’ Contract. Both parties have the same formal rights and are therefore legally on an equal footing. The relationship between authority and subject is replaced by the relationship between customer and service provider. In contrast to conventional systems, where the citizen is obliged to pay tax without having a corresponding right to benefits, in a Free Private City service and consideration are directly related. Both contracting parties are entitled to fulfillment of the contract, i.e. the operator can demand payment of the fixed contribution from the contract citizen, but no additional fees. In turn, the contract citizen can sue the operator for compliance with his contractual obligations, for example by ensuring security and a functioning system of civil law. Who is currently in charge of the operating company or to whom it belongs is of no relevance for the functioning of the model.
A Free Private City is therefore not a utopia, but rather a business idea whose functional elements are already known and which need only be transferred to another sector, namely that of living together. Basically, as a service provider, the operator only provides the framework within which the society can develop openly in the sense of a “spontaneous order” (Hayek).
Once the first Free Private Cities have been successfully established, a completely new, highly lucrative asset class will emerge. This is because both the “software”, i.e. the legal and contractual framework, and the “hardware”, i.e. the master plan and infrastructure, can be reused as often as required and adapted in all directions.
We have founded a company, Free Private Cities Inc., and are currently working on a reusable standard model for Free Private Cities. If you would like to find out what investment opportunities exist in Free Private Cities, please contact us at [email protected]
If you would like to set up a Free Private City or Special Zone yourself, you can get help from our consulting subsidiary TIPOLIS CONSULT.
The new book on Free Private Cities by Titus Gebel presents the theoretical foundations, looks at examples from the past and present and gives practical hints on how to build a Free Private City in the real world. It is a must-read for everyone who wants to get involved in this new market or is interested in the concept of Free Private Cities and alternatives to traditional political systems.
The first part of the book deals with fundamental questions that every social order has to face. The concept of Free Private Cities described in the second part is derived from this; historical and current models are also considered.
The third part discusses concrete questions of implementation in the establishment of Free Private Cities. Finally, the fourth part gives an outlook on future developments.
The book is available as a paperback, as an audio book as well as an e-book on Amazon and Apple books.
Spread the Idea
On the market of living together, Free Private Cities are currently the only non-totalitarian alternative to Western democracies. Once the idea is in people’s minds, it won’t go away again. That is why it is so important to spread the concept. Free Private Cities are also an opportunity for developing and emerging countries to catch up more quickly and can contribute to easing the migration crisis.
The easiest way for everyone to support the idea is to link the website, the book or our videos or blog articles on social media. Giving the book a review on Amazon and Goodreads also helps. Also, you can also wear our merchandise if you’d like to show your support of the idea.
Live or Invest
Any interested party can subscribe to the newsletter, which reports quarterly on the latest status of the establishment of private cities and special zones.
Furthermore, we are looking for at least one ambassador in each country who will propagate the idea and ideally also has contacts in politics. This person would also be the local contact person for interested parties.
Finding a location
If you think that a certain country could be considered as a host country, please have a look at our wish list first. Please discuss it with people you know who have insights or influence in the politics of the country and tell us which of these points are feasible. Further plans for the establishment of a Free Private City can be made once these questions are answered.