Beyond City Limits

by Juan D. Estevez

This article was originally published in SpeakFreely’s ‘Roaring Twenties Issue’ print edition, April 2022.

When new products and services are brought to market, the most successful improve the lives of the masses, not just the elites. The staggering rise of Apple is a testimony to this. Steve Jobs’ original iPhone was a product targeted not only at the elite but at the middle-class consumer.  Since the release of the first iPhone, it took only 15 years for smartphones (at a wide range of price points and with multiple features) to become available to the general public. Owning a high-tech device is no longer a luxury, because mass production and economies of scale have brought prices down and made the technology affordable. More than 80% of the world’s population now own a smartphone. Furthermore, service platforms like Uber and Deliveroo have opened the door to millions of people across the world to earn in a flexible manner. Airbnb enables the elderly couple next door to rent their daughter’s former bedroom to an exchange student. New disruptive technologies are defying what we thought was possible: bringing us innovations from meat grown in the lab to bio-printed organs.

Of course, all these amazing changes have been driven by the creativity and alertness of entrepreneurs who decided to take on risks in trying to provide a new product for their fellow humans. Sometimes entrepreneurs succeed and establish the next Spotify, Uber, or Airbnb, and sometimes they don’t. Entrepreneurs are just people who have identified an opportunity to serve others through a new product. 

We are all familiar with how our lives have been improved by entrepreneurs in spheres such as information technology, healthcare and hospitality. But there is one very large market that has long been forgotten and ignored: the Market of Living Together. Throughout history, we have seen different attempts to create sustainable, fair, and stable social systems, and it seems that after many catastrophic attempts, we have settled for modern liberal democracy as the best system for the development of our individual freedom. Indicators like the Human Freedom Index and the Index of Economic Freedom suggest that liberal democracies tend to enjoy greater individual freedom and more wealth than in other systems.

Nevertheless, in recent decades, liberal democracies have developed rigid structures. While technology keeps advancing at a great pace, bureaucrats stick to old inefficient measures – for example, in Germany, every government office still relies on fax machines (!). Politicians have expanded the power they wield over the common citizen on the pretext of combatting terrorism, lessening the impact of pandemics, or other paternalistic reasons. On the one hand, we marvel at the amazing achievements of entrepreneurship and technology. On the other, our potential is being hampered by bureaucratic hurdles and power-hungry politicians.

Imagine if our cities and states followed the same principles as the free market. Imagine if we left rigid bureaucratic structures behind and embraced competition in the Market of Living Together! But how would such a system work? Is such a thing possible?

Nowadays, special economic zones like Shenzhen in the People’s Republic of China are widely used as examples of successful autonomous zones. Countries like Dubai, Singapore, Hong Kong and the Republic of China (Taiwan) have boosted their economies by adopting a robust legal frame and free-market policies. However, these countries are still at the mercy of politicians. Our political systems enable those in power to enrich themselves and their supporters at the expense of the majority. Big enterprises and political activists lobby to try and influence how public resources are distributed – which bank will be bailed out or which NGO will receive financing. The grandma with a small bakery, the supermarket cashier, and the construction worker are all coerced to finance these actions and have little say in the outcome.

Now, imagine an alternative governance model: not a special economic zone, not a country with advantageous tax schemes, but a Free Private City. While the idea of creating a city run on totally private lines might sound crazy, private cities aren’t really that new. Medieval Paris, for example, was run by the River Seine boatmen’s corporations, and much of Florence was developed by the Medici family. We just need to revive and improve on this idea. 

A concept for how Free Private Cities would work has already been developed by German entrepreneur and theorist Titus Gebel. In his model for Free Private Cities, a contract would exist between citizens and a private company that operates the city. This “City Operator” would function as a “government service provider”. Rather than having a hypothetical social contract that can only be changed by the government, imagine having a real, written contract that can’t be changed unilaterally! In this system, the government service provider would offer you protection of life, liberty and property. They would provide security – both internal and external – and a legal and regulatory framework. For these services, you would pay a contractually fixed amount. For everything else, you would be free to handle things as you like. You would be able to do as you please, limited only by the rights of others and the contractually agreed rules of coexistence.

Entrepreneurs would provide everything demanded by citizens: from hospitals and schools to waste collection and roads. Anyone would be free to offer new products and services without authorization or licenses, and get paid in any currency they desire (for example, Bitcoin). In such a contract-based society with no parliament or central bank, political activism would cease to play a key role in our lives. And just like in every market, in the Market of Living Together, competition would ensure we have alternatives to develop and adapt our political systems.

The idea of Free Private Cities is not a utopia – but an entrepreneurial proposal applied to the Market of Living Together. Just like any revolutionary project, the greatest challenges will be at the beginning. But once the foundations are laid, it will be hard to contain such a powerful innovation.

If you want to learn more about all the details of Free Private Cities and the challenges to their development, or to learn about existing projects, check the work of the Free Cities Foundation.

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