The Moral Case For Free Private Cities

Our Chairman of the Board, Titus Gebel, has written a whitepaper called “Free Private cities — A New Operating System for Living Together.” The whitepaper makes the moral case for Free Private Cities and addresses some common objections, in a concise twelve pages. I highly recommend you read the full whitepaper for yourself. 

Free Private Cities: A New Operating System For Living Together begins with a definition of Free Private Cities. A Free Private City is run by a for-profit corporation known as an “Operator” who provides services and security, with an outside mediator acting in cases of arbitration.

He talks about how the current social contract of government and citizens is essentially a bad deal, where the citizen has virtually no real options on their side. Government has a monopoly on force and often oversteps its place due to interest groups and politicization, and how it is fundamentally untenable unless all can agree to it. 

Titus then proposes criteria for an alternative system. In order for such a system to remain “inherently stable”, those in charge must be required to: 

  • “Be unable to grant special benefits to individual groups or citizens (avoidance of lobbying, corruption and struggles over state largess).”
  • “Be held liable for errors (coupling of power and responsibility).”
  • “Have an economic interest in the success of the society (skin in the game).”
  • “Allow their citizens to leave or secede at any time without imposing financial or other obstacles (enabling competition).”
  • “Have clearly defined written obligations, changeable only with the consent of both the governed and the rulers (a real social contract, legal certainty, predictability).”
  • “Be suable by the parties concerned in the event of differences before independent courts or arbitration bodies (neutral dispute resolution).”

He continues by describing what Free Private Cites are: government as a service. That they are:

  • Fully or semi autonomous with their own legal and regulatory framework.
  • Run by a for-profit company known as “The Operator”.
  • The Operator’s duties are to guarantee protection of life, liberty, and property in exchange for a fixed basic fee.
  • Residents enter into a “true” social contract, one that cannot be unilaterally changed by either party.
  • Participation and residence is voluntary.
  • There is no legal claim to admission and immigration policy is solely controlled at The Operator’s discretion. 
  • Citizens have the right to do as they please, so long as they do not violate the rights of others as agreed to in the Citizen’s Contract.
  • Any citizen can terminate their contract at any time and leave, but The Operator can only do so for a good cause (e.g. violating the Citizen’s Contract or continuous missing payments.

The last two points I leave for Titus himself to say:

  • “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).”

Titus goes on to discuss the nature of the Citizen’s Contract in more detail, essentially where citizen’s only pay for what they agree to and that with Free Private Cities,

“there is no platform for paternalists and rent-seekers to hijack. Political activism, missionary zeal, distributional struggles and the stirring-up of social groups against one other would disappear, because of the simple lack of a benefit for the executing party.”

Because of the limited powers and responsibilities of The Operator, this would allow a “spontaneous order” to arise within the city based on the voluntary actions of the citizens. 

Titus continues by going over the main principles of Free Private Cities, such as live and let live, don’t do unto others that you wouldn’t want done to you, and that everything is voluntary and there is no coercion. He discusses the “Profit Motive” and how this acts as a good incentive for The Operator to operate at maximum efficiency which ultimately leads to citizen happiness. Competition is good, and the Free Private Cities model encourages competition and a diverse range in experimental makeup of societies, allowing for trial and error and social selection of the best methodologies. He argues that Free Private Cities are the next stage of evolution to Special Economic Zones, and that while they may likely never reach complete independence, they are still a win-win for both The Operator and the Host Nation. 

Titus wraps up by discussing additional considerations, such as:

  • Free Private Cities target all income groups as well as all businesses. The estimated costs for the mandatory basic package, consisting of infrastructure, security and the legal and dispute resolution system, will amount to approximately USD 1,500 per person per year (less than an ounce of gold).”
  • Free Private Cities will allow for the establishment of voluntary, multi-layer support networks for those with disability, illness or other incapacity. Collective self-help institutions, private insurance providers, as well as support by family and friends and charities would be encouraged.”
  • Free Private Cities have an interest in maintaining a clean environment as a means of attracting residents. In principle, environmental protection in the Free Private City is based on the protection of individual rights. Environmental damage is unthinkable without affecting property, possessions or persons.” 
  • “With the evolution of a governance system from one of majority rule to one of self-determination, there is no more principal-agent problem arising from the fact that agents might prefer their own interests over the interests of those they represent. If everyone can decide which products and projects continue to exist and which do not, there is more democracy in the sense of a rule of all than in a majoritarian system.”

Further considerations include:

  • The monopoly on force is virtually impossible due to the voluntary nature of the Citizen’s Contract, and the damage to the Operator’s reputation if violated.
  • The Citizen’s Contract cannot be unilaterally changed by either party, as compared to a state’s constitution, which can.
  • The Operator would most likely have to front the initial infrastructure costs, but would make the money back in the short term time scale once a threshold of 10,000 citizens is passed. 
  • That “the agreement between the Operator and the Host Nation will contain common investment protection and arbitration clauses”, which would dissuade any notions of a hostile takeover by the Host Nation.

Titus ends by stating that Free Private Cities is not a utopia, but a business idea based on decentralized values for a modern, more interconnected, self-deterministic world, and compares it to the idea and success of Bitcoin, with Free Private Cities as the governmental equivalent. 

I highly encourage you once more dear reader to read Titus Gebel’s Free Private Cities: A New Operating System For Living Together for yourself. For while I feel I have done a fair summation of Titus’s whitepaper, it does not hold a candle to the nuanced way Titus shows you his vision for Free Private Cities. It’s certainly a read worthy of your time.