More Competition in the World’s Most Important Market

by | Sep 24, 2021 | Blog

The world is in turmoil. The last year has shown that – even in the West – respect for supposedly secure human rights can be abandoned quickly without objection from the majority. Politicians have developed a taste for the greater power their populations have granted them, and climate lockdowns are already being announced. Do we have a chance to escape from the consequences of these developments? Is real freedom still possible in our lifetime or is an increasingly monitored and totalitarian world inevitable? Are alternative societies with greater freedom and a “live and let live” attitude feasible?

The answer is yes. Of course, those who feel pressure to act due to the new restrictions that have been placed on their freedom are still a small minority. But this minority is growing by the day. And those who want to evade ever closer state control have not remained inactive in recent years. In our view, the “market of living together” is actually the most important market in the world. In addition to emigration to freer countries – which we will not discuss here – three alternative models for living together have emerged. They are:


  1. Sovereign units
  2. Autonomous special zones
  3. Local communities with shared values

Sovereign units

The classic way to achieve sovereignty is through secession or revolution. Since both of these paths are difficult or perhaps undesirable, freedom lovers have come up with alternative ideas. One such path is the discovery of so-called Terra Nullius: patches of territory that are not claimed by their neighboring states. One such case is an area of ​​a few square kilometers between Croatia and Serbia, which was created because one side claims its border at the old Danube bed while the other claims it at the borderline of the new, straightened bed. As a result, an area has been created that is theoretically not claimed by either of the two neighboring states. A Czech entrepreneur “annexed” this area and proclaimed its own state under the name Liberland. The weakness of the Terra Nullius principle becomes visible in this particular case: an area is only Terra Nullius as long as the neighboring countries do not change their minds. In the case of Liberland, the Croatian security forces categorically refuse to enter. Corresponding legal proceedings by Liberland against Croatia are pending.

Another approach is seasteading, through which floating settlements are built on the high seas outside countries’ exclusive economic zones (200 nautical miles). Due to recent technical breakthroughs, the first floating platforms off the coast of Panama have been tested on an experimental basis.

Autonomous special zones

A less extensive solution is represented by autonomous special zones, for example in the form of Free Private Cities. Some of the rules of the mother state continue to apply here, but a defined autonomy is guaranteed within the zone. Special economic zones with their own jurisdiction have existed for a number of years and there is indeed a trend towards developing special economic zones in the direction of special administrative zones, with the legal situation in them increasingly deviating from that of the mother state.

Honduras has become the first country to make autonomous special zones possible by law. Honduran authorities wanted to create a kind of Hong Kong in the Caribbean based on a similar “one country, two systems” model. After a somewhat bumpy start, there are now three so-called Zone for Employment and Economic Development or “ZEDEs”. At the end of the year there could be five. Apart from Honduran criminal law, parts of the constitution and the international agreements concluded by Honduras – which must be observed – ZEDEs are free to set up their own rules that are approved by a state commission. They have their own administration, their own security forces and their own arbitration tribunals. The two largest ZEDEs, Próspera and Morazán, have explicitly adopted a private management model. While the more industrialized ZEDE Morazán is a proprietary community and only rents land out, outright purchase of land is possible in Próspera. There is a real civil contract with an “Agreement of Coexistence”, resembling some out the structures outlined in my book Free Private Cities: Making Governments Compete for You. These two zones are currently erecting their first buildings, and the first settlers are due to move in by the end of this year. It will be exciting to observe how ZEDEs develop in practice. Political opposition has already emerged, but if the zones allow Hondurans to live a better life and create plenty of jobs, they have a real chance of establishing themselves permanently and serving as a role model for other countries.

However, in practice, obtaining such extensive autonomy from a state is difficult. In the case of Honduras too, this process has been the subject of lengthy negotiations, bills and lawsuits before the constitutional court. Nevertheless, there are at least two projects in Africa that have already signed letters of intent with governments to set up similar autonomous special zones. Other projects try to expand an existing status as a free trade zone or special economic zone and to obtain additional autonomy rights from their respective governments.

Even if some of these projects fail, it is likely that more states besides Honduras will embark on a similar path in the next few years. And similar to the special economic zones, of which there were only a handful in the 1960s, and which now number more than 5000 worldwide (although perhaps only 500 of these are significant zones), it is possible that autonomous special zones could grow rapidly in number over the coming years. This is especially true if such zones also bring economic benefits to the host state. The deal would then be: more freedom for investment.

These new cities will share similarities with the free imperial cities of the Middle Ages, which were first fought for by the princes and later promoted for economic reasons after it was recognized that such places bring positive benefits to the surrounding area. It is likely that bitcoin will aid this development: serving as the base layer for parallel (monetary) structures, that can operate even without the consent of existing governments.

Local communities with shared values

The establishment of autonomous special zones is usually only possible through changes to the law or constitutional changes in target countries, which can be cumbersome and time-consuming. That is why Freedom Friends came up with the idea of ​​founding their own settlements within the existing political order, ideally within the framework of municipal autonomy, but at least as a community of owners. This step grew out of the realization that what is most important for the individual is what happens in their immediate local area. In local communities of values, coexistence can be subject to self-imposed rules, for example on the basis of contracts or associations. Over the years, at least a de facto autonomy could be achieved, as the Amish and Mennonites in North and South America have achieved. Examples of such models include Liberstad in Norway and Frenly Park in Canada. The latter aim, in the medium term, to become their own communities with appropriate local autonomy (in Saskatchewan, this is possible once the community reaches a size of 300 people). Since such projects are easier to implement compared to the first two concepts mentioned, initial efforts are also underway in German-speaking countries to build up local communities of like-minded people.

A new platform

The Free Private Cities Foundation, based in Zurich, now wants to offer all those involved in these projects a framework for sharing information, exchanging experiences, and taking part in critical discussion. For the first time this year, on October 16, we will be hosting a conference in Switzerland entitled Liberty In Our Lifetime. We hope to make this conference an annual event. Please visit our conference website to find out more and sign up to attend.