Contract changes and adjustments to current developments are inevitable sooner or later. These are either dictated authoritatively or determined by co-determination bodies, do we not end up with the conventional systems again?
It should also be possible for arbitral tribunals and courts to decide on new types of facts using the legal principles that have been in force for centuries and a balanced, reasonable balance of interests. This is how common law works. Even the relevant principles of today’s civil law systems still correspond to those of Roman law from more than two thousand years ago. In practice, in many new areas of life there will presumably be provisions in line with the interests of the people without the intervention of case law or contractual amendments, as has happened, for example, in the credit card industry to regulate cases of fraud. After all, it is possible to offer new citizens different contracts than the existing residents and thus successively create a new order without disenfranchising anyone. The problem of amending contracts is nevertheless one of the most valid objections and in this respect reference is made to Chapter 15 of the book on Free Private Cities.
What is the main advantage of a contractual system over constitutional systems?
The key difference from traditional systems is that the operator, or even a majority elected body, cannot increasingly take on more powers and interfere with residents’ lives. Constitutions can be changed, even against the will of the people concerned, provided there is a majority. Contracts, on the other hand, only if the contracting party agrees. That is why the contract with each individual and the corresponding legal position are so important. It is about the greatest possible self-determination, not the greatest possible co-determination. If everyone is free to decide what they want to do and how they want to live, there is no real need for co-determination bodies such as parliaments. They are also always in danger of being hijacked by interest groups or the government for their own purposes. After all, any citizen with a contract can sue or withhold payments from the city operator if he believes that the contract is not being properly fulfilled. In constitutional systems, the individual citizen usually does not have the right to bring an action if the state does not fulfill its tasks properly and certainly not the right to withhold tax.
In which currency will I pay?
For the payments to the operating company of the Free Private City, a common main or regional currency will probably be specified in the citizens’ agreement. “Free banking” also applies, i.e. residents and traders can decide for themselves in which currency they want to pay or be paid.
The city operator is a kind of dictator, aren’t the inhabitants at his mercy?
The city operator is bound by the contract, which limits his competences to a few areas. Furthermore, the operator has submitted to an independent dispute settlement. Of course, the territorial monopoly on the use of force would in fact enable it to exercise a dictatorship. However, most citizens would then leave the city again and it would be impossible for the operator to successfully establish new private cities elsewhere due to the loss of reputation. In this respect, he is no different from the captain of a cruise ship on the high seas or the manager of a secluded holiday settlement. Both have the theoretical possibility of acting as dictators, but distance themselves from this because of their commercial interest.
What are the basic differences to existing city states like Singapore, Monaco, Dubai?
In these city states, there is a government or parliament that can change the rules practically at any time without asking the inhabitants. And this is at their expense and also in deviation from why most of the inhabitants actually came there. They are not customers, but subjects. The saying “whenever the parliament meets, the property and freedom of the citizens are in danger” unfortunately also applies there. The number of regulations and thus of restrictions on freedom is constantly growing.
In a Free Private City, on the other hand, you receive a contract offer from the operator, who is, so to speak, a “state service provider”. This contract clearly sets out which services are provided and what they cost you. There will also be laid down which obligations you have in the sense of peaceful coexistence, which legal system applies and the like. The operator cannot later unilaterally change these regulations or the amounts to be paid, as is common practice in politics. You have a legal claim to it. Disputes with the operator are e.g. negotiated before an independent arbitration court. This contract runs indefinitely, possibly after a certain probationary period. In accordance with a long-term insurance contract, you can terminate the contract at any time, but the operator can only terminate it in exceptional cases, for example if you have breached your contractual obligations.
What is the difference between the contribution system and taxes in conventional systems?
In conventional systems, the citizen is obliged to pay taxes without having a corresponding right to benefits. In a private free city, performance and consideration are directly related. Both parties to the contract are entitled to performance of the contract, i.e. the operator can demand payment of the fixed contribution from the citizen, but not additional amounts. The citizen, in turn, can sue the operator for compliance with his contractual obligations, for example by guaranteeing security and a functioning legal system. Anyone who becomes a victim of a crime is in principle entitled to compensation from the operator.
Free Private Cities would polarize and divide society. Elected homelands are chosen out of pure egoism: one’s own individual desire for a better life. If you think about it further, wouldn’t every society be destroyed, because in the end you’re alone on an island where nobody is admitted who doesn’t think the same way as you do?
Man is and remains a herd animal and will therefore usually give preference to community with others over living alone. For reasons concerning the defense against aggression he must probably even join forces with others. In return, he is willing to cut back on his absolute freedom. But all group formation must take place voluntarily. Let us consider only once in which associations, interest groups and other federations we are already active. Why should this suddenly change when the “state” in the form of Free Private Cities is limited to the production of security? But living together works all the better, the more the opinions of the inhabitants about the extent of the necessary restrictions on freedom are similar. There must therefore be many different ways of living together. Competition between systems ultimately results in existing societies changing towards more customer satisfaction and fewer people living in systems where they do not feel comfortable. That would not be a bad result. As far as selfishness is concerned, there are two groups of people: those who admit that they are ultimately selfish and those who try to hide it from themselves. The individual’s desire for a better life is not only legitimate, it is the reason for all human progress to date.
If Free Private Cities became established all over the world, would the socially disadvantaged not be accepted anywhere at some point?
The dividing line is not between rich and poor, but between willing and unwilling. As long as someone is able and willing to work, he will also be welcome and there will be specialized communities especially for the low-wage sector. But a society can only develop further if there are incentives to improve one’ s own behavior, for example in terms of willingness to perform, self-discipline, reliability. In this respect, there is no reason to accommodate people who are unwilling to perform in any way. They must adapt much more in order to be accepted. This benefits everyone in the end. The remaining question is simply how to deal with those who cannot actually help themselves because of disability, illness or other incapacity, which is usually no more than 5% in any social order. For most of history, they were the target of charitable aid. Free private cities will not consciously attract this clientele, but conversely will not leave those who fall into such a situation due to accident, illness or birth hanging.
Are not the weaker ones exploited by the strong ones because of the lack of a welfare state and the corresponding protective regulations?
If people voluntarily come to a private free city to accept a job there, knowing that there is no welfare state and no minimum wage, the assertion of “exploitation” of any kind is only tenable if the people concerned are denied the right to their own decision. In fact, many argue that most people are not in a position to protect their legitimate interests. In doing so, they implicitly claim that they themselves would be in a better position to do so and would therefore have the right to patronize others. In truth, this is a presumption. There is no middle ground here; either adults have the right to decide for themselves or they do not.
Moreover, even in a private free city, the weak are not defenseless, because there is a civil code that protects, for example, against unexpected clauses in contracts. Finally, the objection ignores the fact that the protection of the weak and help for the really needy, who cannot help themselves, can be guaranteed even without state coercive systems. And without their harmful side effects. Free private cities will thus be more social as a result than so-called welfare states. The question of social security is dealt with in detail in Chapter 21 of the book on Free Private Cities.
How do Free Private Cities finance themselves?
In principle, through contributions that cover expenses for security, a legal system and a certain infrastructure. The operator will probably have to finance something in advance for the first few years. This is profitable above a certain number of inhabitants, because security forces, dispute resolution bodies and infrastructure do not have to be doubled in order to provide the same level of service. In practice, the operating company will generate a large part of its income from real estate transactions by buying land early, which will then increase in value as a result of the establishment of a stable and demanded private city system. The land can then be parceled out and sold or leased. The corresponding revenues can then cross-finance the expenditure and lower the contribution level.
Do Free Private Cities not use the infrastructure of the host state surrounding them and its military protection, so could they not exist on their own at all?
Almost no state in the world is truly self-sufficient. This is still no problem if the services used, such as infrastructure or military protection, are compensated (e.g. payments). It can also be assumed that successful Free Private Cities like Singapore will build up sufficient infrastructure and defensive capacity over time.
Why should states even decide to partially abandon control over part of their territory? Which laws of the state would continue to apply and which would be repealed?
States can only be won over to such a concept if they hope to gain benefits from it. Take Hong Kong, Singapore or Monaco as examples. A cordon of densely populated and, compared to the rest of the country, quite prosperous areas has formed around these city states. Its inhabitants often work in the neighboring city-state, but pay taxes in the motherland. If one now assumes that such developments take place in a formerly structurally weak or completely uninhabited area, then the host state can only win. Ideally, none of its laws will continue to apply. For practical and political reasons, this will probably not be possible in its pure form. What degree of inner autonomy the respective free private city actually has is ultimately a matter for negotiation.
How could global humanitarian problems such as environmental and climate protection be solved with a structure of Free Private Cities?
Most environmental problems are regional and can therefore also be solved at regional level. The attractiveness of a Free Private City also includes a clean environment, so the regulatory regime will take this aspect into account (more on this in Chapter 23 of the book). Free private cities or residents who impair the environment of other countries beyond their borders also find themselves exposed to legal measures by those affected. As far as supposed global human problems are concerned, the following applies: solutions are either possible without a uniform world government, as was achieved with the restriction of chlorofluorocarbons (CFCs), or the problem or the proposed therapy is so questionable that different approaches are desirable. In 1972, for example, the Club of Rome predicted that numerous metals would be exhausted by 1990. If the world had listened to this wrong prognosis, the rise of the emerging countries, which brought billions of people out of poverty, would not have taken place, and probably even millions would have died unnecessarily due to a planned and scarce economy. In this respect, it helps if there are small Gallic villages somewhere that hold differing views even on issues of supposedly urgent human problems. In truth, the biggest human problem is that people want to impose their will on other people. This problem is solved by Free Private Cities.
Is there anything that specific interested parties should still consider?
Every interested party should first think about how he wants to make a living. Of course, a Free Private City will try to attract as many companies as possible, but this question must still be answered by each individual. Enthusiasm and desire for freedom alone are not enough. Even those looking for a libertarian utopia may be disappointed. There will be rules of coexistence and a monopoly of the operator on the use of force to enforce them. Who is still interested can sign up for the newsletter on this website. As soon as the first projects get started, you will be informed there.
What are the immigration conditions? Who decides?
In principle, anyone who can support themselves and who accepts the basic rules will be allowed to immigrate. These basic rules include the payment of the contribution and some rules of conduct, which can vary from city to city, and above all that everyone can do what they want, as long as they do not interfere with the rights of others. Furthermore, there is no right to live at the expense of others. Every legally competent resident is responsible for the consequences of his own actions. In this respect, applicants who hold views from the outset that are incompatible with this order or even aimed at eliminating it, such as socialists or Islamists, will not be allowed to immigrate. The same applies to well-known ex-dictators, internationally sought-after serious criminals and the like. The corresponding suitability will be tested by questionnaire/conversation. As one can of course disguise oneself in this respect, a trial period is agreed during which the operator can cancel the contract at any time.
In questions of immigration, the operator alone decides. It is his main service to ensure for the residents that immigrants do not disturb the free order or even threaten life and limb. He can only do this if he controls immigration accordingly or can throw disturbers out as well. Otherwise it will not be possible to maintain social peace and prosperity at a high level in the long term. It would be conceivable, however, that residents who absolutely want to bring in certain persons (e.g. as employees) would provide security for them if their suitability cannot be conclusively established or if they do not (yet) have their own means.
It is inevitable that some city operators will miscalculate and go bankrupt. Are then all life plans of the inhabitants of these cities doomed?
If the operator becomes insolvent or is threatened with insolvency, there is always the possibility, as with other companies, that a competitor, some of the inhabitants or the inhabitants as a whole will take over the city themselves (“resident buy-out”). Incidentally, insolvency enables a regulated and debt-free new start. Our current world would also be a better place if bankrupt states could go through insolvency proceedings in good time.
How can residents enforce court rulings and arbitration awards against the operator?
The situation is no different from that in international commercial law. Anyone who holds a title against a foreign state that is unwilling to pay has no super-ordinate executive power to enforce it, but can try to seize assets of the state concerned in other countries. The same would apply to the operator. The operator also has an incentive to be loyal to the contract and to respect such decisions, because otherwise it reduces its profit prospects.
Political questions are not a market, neither are religion, love or science. Can states simply be managed like companies?
Free private cities create an offer for a presumed demand on a … (Market?). An ideal demand is also a demand, an ideal supply is also an offer. And it is not the case that all other areas of life in a free private city are not covered, they are only not answered “politically” by the operator. It may be that conventional states cannot be run like companies. Free private cities, in any case, are managed like companies. The answer to the question of whether this works can confidently be left to the market, even if one does not want to describe it as such.
The city operator is a kind of monopolist, at least as far as safety is concerned. Does this not lead to the usual problems of monopolies, in particular poorer quality at higher prices due to a lack of competition?
The approach of admitting competing security service providers with their own rules and thus competing legal systems may seem theoretically attractive for reasons of preventing monopolies. In practice, the associated costs and inconveniences (the so-called transaction costs) are probably too high. It would take years for rules to emerge on the market on how to resolve collisions between the various providers and legal systems. Organised crime can easily infiltrate such systems and provide even the strongest security forces.
The resulting inability of the operator to guarantee security probably leads to the relative unattractiveness of such orders, especially for families and companies. Abuse of power by the operator is unlikely due to the requirement of paying customers and their enforceable contractual position, including against the operator or its security forces, and competition with other local authorities. If the security situation is poor or if the security forces regularly exceed the powers granted to them in the citizens’ agreement, the city will not be successful in the long term. New customers will fail to arrive, contract citizens will migrate and the value of the business will fall, not rise. There are therefore sufficient incentives for the operator to behave in accordance with the contract also with regard to its monopoly on the use of force.
Isn’t this all too simple? Doesn’t an increasingly complex world also need complex rules?
The approach of free private cities is to counter the hyper-complexity of the present by simple, robust frameworks and not by complex laws, which then again have unexpected side effects and offer various loopholes for abuse and advantage taking. Only a simple regulatory framework that offers sufficient space for the emergence of spontaneous orders can harness the decentralized knowledge of countless individuals in a fruitful way
Are Free Private Cities Only for the Rich?
Not at all. The estimated costs for the mandatory basic package, i.e. security and the court system, do not amount to more than a thousand euros per year. If a minimum social security is added, it is a few thousand euros per year. Most people should be able to afford that. The fact that no taxes are levied should relieve the burden considerably, especially on single entrants to the labour market, but also on all middle-income earners. The funds freed up are available for their own health and pension savings plans or membership of self-help institutions, as well as for the children’s education. Free Private Cities offer considerable incentives, especially for companies, to settle in them. As a result, jobs will also be created for low and middle-income earners. Why should they not live in the city, given the low taxes and other benefits?
Aren’t Free Private Cities reclaimed by the Host State at the first opportunity? Even if they are independent and able to defend themselves, they have no chance against great powers.
The host state has a contract with the city operator, which may also contain common investment protection clauses; in this respect, the risk of being exposed to considerable financial demands after occupying the Free Private City, which could also result in a seizure of its foreign assets. Nevertheless, the Free Private City will try not to let it get that far at all, for example by a combination of different means such as public relations, diplomatic contacts to other states and a certain defensive ability, which at least combines the taking of the Free Private City with a price. Moreover, it can be pointed out in good time that the residents are highly mobile and in such a case would quickly leave the city, which makes them an unattractive takeover target. Very few states have a chance against major powers, and in this respect there is real sovereignty only if the major powers allow it. Nevertheless, even powerful states cannot simply occupy other territories without further justification. This brings other powers onto the scene and can become dangerous for the respective rulers in domestic politics. If this were different, all small states would no longer exist today.
Doesn’t the concept result in rich and white people fleeing into their own private city ghettos and evading their responsibilities?
Black people like whites, rich people like poor people, Jews like Japanese and all other groups that define themselves as such have every right in the world to decide with whom they want to live. Anything else would mean forcing them against their will to do something they do not want. That is totalitarian. Systems that must threaten their inhabitants with violence or expropriation so that they remain in them will not last in the long run. As far as responsibility for others is concerned, each individual is of course free to feel a moral obligation towards completely foreign people beyond his or her own family. From this, however, no objective obligation can be derived, for example for particularly talented people, to provide for people they do not know. There is no right to live at the expense of others.
What is the difference to Smart Cities?
Smart cities use new technologies to facilitate daily life and processes in a city. In this respect, private cities can also be smart cities. But not everything that is technically feasible is desirable. Smart cities can also mean total surveillance of citizens. In independent private cities, on the other hand, there would be a contractual guarantee that this would not happen. The decisive point is the question of a guaranteed legal position and the corresponding freedom of action for citizens. In this respect, it is more important to live in a Free City than in a Smart City.
Do free private cities grant their own citizenship?
No, because Free Private Cities are not independent, sovereign entities, but a kind of special administrative zone within existing states. This means that each inhabitant of a Free Private City first retains his or her own citizenship. The Free Private City only issues residence permits, not passports. In the long run, however, some Free Private Cities could develop into independent city states.