“I think that the best can be the enemy of the good & the better, and sometimes we should be careful about saying that we have this vision of this fabulous idea, and overlook opportunities for incremental improvements to what exists now.”
Tom is an American libertarian author and theorist, a senior fellow at the Cato Institute and the executive vice president for international programs at Atlas Network.
Just prior to recording this episode, Peter Young, The Free Cities Foundation’s Managing Director was chatting with myself and Tom in our makeshift studio in Warsaw and it turned out to be such an interesting discussion that I asked Peter to come onto the podcast with us to further the conversation.
As a result, after briefly discussing Tom’s work at Atlas Network, he and Peter end up deconstructing some of the concepts underlying Free Cities and we get a very useful insight into Tom’s thoughts on the general validity of the Free Cities model itself.
I would like to say Many thanks to Tom and Peter for making this a lively and interesting dialogue
Enjoy the conversation.
Automatically Generated Summary
Section Overview: The host introduces the podcast and announces that he will be interviewing Tom Palmer, an American libertarian author and theorist, during the Weekend Kapitalizmu Conference in Poland. Peter Young, the CEO of Free Cities Foundation, joins them for the conversation.
02:30 About Atlas Network
Section Overview: Tom Palmer talks about Atlas Network, which was founded by Sir Anthony Fisher to promote freer, more just, peaceful and prosperous societies. It is a service bureau for 526 independent partner organizations in 101 countries. They act as venture capitalists by investing in their projects but do not manage or direct them.
Elevator Pitch for Atlas Network
- 02:55 Atlas Network was founded by Sir Anthony Fisher to promote freer, more just, peaceful and prosperous societies.
- 04:00 It is a service bureau for 526 independent partner organizations in 101 countries.
- 04:48 They act as venture capitalists by investing in their projects but do not manage or direct them.
Historical Background of Atlas Network
- 03:14 Sir Anthony Fisher was a British Royal Air Force pilot who fought against national socialism in World War II.
- 03:37 In 1955 he established Institute of Economic Affairs and hired pro-market economists who had a huge impact on Britain.
- 04:00 In 1981 he set up Atlas Network with 16 partners which has since grown to become what it is today.
Division of Knowledge
- 04:25 Knowledge is dispersed and cannot be assembled in one place according to fa Hayek’s understanding of the division of knowledge.
- 05:12 Local partners have knowledge that we lack about their own situation culturally, legally, economically and politically.
- 05:36 Parth Shaw, director and founder of Center for Civil Society in India, helped legalize street vendors which affected possibly the largest number of people at one go.
06:43 Legalizing Street Vending
Section Overview: In this section, the speaker talks about how legalizing street vending can help vendors grow their businesses and avoid harassment from the police.
Benefits of Legalizing Street Vending
- 07:05 Legalization provides property rights to vendors, allowing them to sell their spot on the street or buy out another vendor’s spot.
- 07:28 The legalization of street vending in Rajasthan was successful and led to 38 million people transitioning from illegality and informality to legality.
- 07:52 Street lawyers were trained to educate vendors on their rights and what to do if they are harassed by the police. This helped protect vendors from abuse.
09:13 Improving Cross-Border Trade for Women in Burundi
Section Overview: In this section, the speaker discusses how a change in policy improved cross-border trade for women in Burundi.
Challenges Faced by Women Traders
- 09:35 Women traders had to have a passport every time they crossed the border, which cost $120 and needed to be renewed every six weeks.
- 09:56 Crossing at night put women at risk of being raped by gangs or predatory men.
- 10:18 A border crossing card replaced passports, making it easier for women traders to cross the border during daytime hours without fear of violence.
- 10:39 This change led to an increase in income for women traders and lower consumer prices for society as a whole.
11:04 How Atlas Network Partners with Organizations Around the World
Section Overview: In this section, the speaker explains how Atlas Network partners with organizations around the world and shares an example of one such partnership in Burundi.
- 11:26 The founder of an organization in Burundi, Imabla Manirakiza, met the speaker at a conference and was able to communicate with her in French and Kiswahili.
- 11:51 Manirakiza set up a chapter of his organization with the help of Atlas Network and was able to make a significant policy impact.
12:39 Prioritizing Dignity in Development
Section Overview: In this section, the speaker explains why it is important to prioritize dignity in development.
Why prioritize dignity?
- 13:00 Prioritizing dignity puts everyone on a level playing field and respects the knowledge and insights of people about their own lives.
- 13:43 Dignity recognizes that there is a division of knowledge and wisdom that is hard to put into a spreadsheet but is dispersed throughout the human race.
- 14:31 Economic reform should not simply impose policies on other people. Respecting people first through dignity is something that all of us want.
- 14:57 Promoting more rational policies that respect the division of knowledge requires convincing people, while dignity generates immediate benefits for individuals.
Benefits of prioritizing dignity
- 15:50 Having dignity makes individuals feel like human beings and generates immediate benefits such as higher living standards, access to education, and ownership of property.
- 16:32 The speaker shares an example where receiving a property title made an individual feel dignified because they could sleep in their own home and leave something for their children and grandchildren.
17:53 Convincing Organizations to Prioritize Dignity
Section Overview: In this section, the speaker discusses whether it is difficult to convince organizations to prioritize dignity over tangible benefits.
- It may be difficult to convince organizations because dignity is relatively intangible compared to tangible benefits such as those shown on spreadsheets.
18:37 The Importance of Humility
Section Overview: In this section, the speaker talks about the importance of being humble and showing humility when asked questions.
- 18:37 It is important to be humble and show humility when asked questions.
- 19:02 Internally within organizations, there is a temptation to criticize others’ ideas. However, it is important to let them try out their ideas as they may have more knowledge about certain things than others.
- 19:53 The speaker jokes about being the most humble person you will ever meet.
20:33 Historical Precedence for Free Cities
Section Overview: In this section, the speaker discusses the historical precedence for focusing on free cities and how they were places of innovation, trade, and freedom.
Development of Civil Society
- 20:58 Civil society developed in self-governing cities that were not subject to any one imperial or royal power.
- 21:20 Andre Piran’s book “Medieval Cities” talks about the origin of freedom and commercial revival in free cities of Europe.
- 21:44 Free cities were able to experiment with different rules and copy successful ones from other cities.
Examples of Free Cities
- 22:09 Magdeburg was renowned for its fair laws which other cities would copy down.
- 22:35 The Hanseatic League was a league of free cities that had autonomy and were places of commerce and liberty.
- 22:58 Cities in Europe were places where serfs could become free after a year and a day.
23:49 Potential Problems with Free Cities Model
Section Overview: In this section, the speaker discusses potential problems with the free cities model.
Issues to be Worked Through
- 23:49 There are issues that need to be worked through with the free cities model.
Section Overview: In this section, the speaker discusses the concept of contracts and whether they are eternal. They also introduce the idea of free cities and governance models.
Free Cities and Governance Models
- 25:30 The foundation aims to create more competition in the market of living together by providing more governance models for people to choose from.
- 25:52 A self-governing territory that upholds individual rights and freedoms is called a free city. There can be multiple different models tried within this banner.
- 26:17 The speaker focuses on the free private cities model, which has prescriptive governance mechanisms within it.
- 26:38 In this model, every citizen has a contract with the governing entity that cannot be violated by either party. The contract specifies an agreed-upon mechanism for making changes.
- 27:05 Whether or not the contract is eternal depends on an entrepreneurial decision made by the city operator. It could specify an agreed term or be perpetual.
- 27:27 Citizenship is not necessarily passed down automatically to children in a private governance model. Instead, there would most likely be a specified amount that people would have to pay to become members of the city.
27:50 Private vs Conventional State
Section Overview: This section compares private governance models with conventional states.
Paying for Government Services
- 27:50 In a private governance model, there is a specified amount that people would have to pay in order to become members of the city.
- 28:15 People pay for government services through taxes and various mechanisms in conventional states.
Passing Citizenship Down
- 28:33 It wouldn’t be possible to pass citizenship onto children perpetually for free in a private governance model.
- 28:54 In the future, where there are many different private cities, the dynamic would be more that cities were competing for children.
29:13 Medieval Europe
Section Overview: This section briefly discusses medieval Europe and its councils made up of guilds.
Guilds and Business People
- 29:31 The councils in medieval Europe were made up of guilds, which were business people with authority within the city.
- 29:52 There were odd and unusual voting arrangements in terms of the numbers of voters who participated.
30:49 Guilds and Governance
Section Overview: In this section, the speaker discusses the evolution of guilds from offering public goods to becoming anti-competitive monopolists. He also talks about how revolutions can bring about peaceful transformations in governance.
Evolution of Guilds
- 30:49 Guilds initially offered a variety of public goods.
- 31:14 Over time, they became anti-competitive monopolists that excluded people from entering certain trades.
- 31:58 Good constitutions have mechanisms for changing ground rules while protecting the rights of minorities.
Revolution and Governance
- 31:34 Revolutions don’t always mean violence; they can be peaceful transformations.
- 33:29 The calculus of consent by James Buchanan and Gordon Tyler is not only about governments but also about governance of any collective enterprise.
33:55 Private Cities and Children’s Rights
Section Overview: In this section, the speaker discusses some issues that need to be addressed when considering private cities. He talks about children’s rights and what happens if someone wants to leave a private city.
- 33:55 What happens to children who are born in a private city?
- 34:20 Currently, joining a homeowners association does not make you stateless or take away your citizenship.
Leaving a Private City
- 36:18 If someone wants to leave a private city, there should be a mechanism in place so that they do not become stateless.
37:03 Free Cities and Governance Structures
Section Overview: In this section, the speaker discusses the idea of free cities and how governance structures would work in such a society. He talks about whether or not people who violate societal rules should be allowed to stay within the confines of that society, and how different cities would compete to attract people.
Competition Among Free Cities
- 37:26 The speaker believes that in a world with many free cities, there would be competition among them to attract people.
- 37:51 Shopping malls are always trying to compete to get people in, rather than keep someone who doesn’t want to be there.
- 38:13 The speaker acknowledges that there may be concerns about governance structures that dictate how people behave in public areas of a free city.
Rules for Public Behavior
- 38:34 The speaker uses the example of walking around naked in public as something that is considered an outrageous imposition in some parts of the world but not others.
- 38:58 While he wouldn’t force someone to resign for showing Michelangelo’s David to children, he acknowledges that most shoppers would find it uncomfortable if someone walked into a shopping mall naked.
- 39:20 The question arises as to whether or not religious institutions can dictate behavior within their walls.
- 39:43 However, it becomes problematic when entire free cities start dictating what is acceptable behavior based on religion or other factors.
- 40:05 The speaker argues that substantive liberalism needs to be built into these kinds of governance structures so as not to become localized tyranny.
- 40:28 The speaker raises concerns about multi-generational dimensions when it comes to dictating behavior based on religion or other factors.
- 40:54 He questions whether someone who rejects their parents’ religion should be kicked out of a free city that is based on that religion.
- 41:16 The speaker argues that the substantive liberalism that has enriched the world and respects our dignity needs to be built into governance structures in order to avoid localized tyranny.
42:54 Free Cities and Tyranny
Section Overview: In this section, the speakers discuss how free cities could operate in a market economy and why tyrannical systems would not make good business sense. They also explore the morality of imposing restrictions on individuals within a city.
Free Cities in a Market Economy
- 42:54 Small jurisdictions competing on the free market would not make tyranny a good business sense.
- 43:16 Shopping malls do not impose restrictions on customers as it excludes potential customers and is bad for business.
- 43:54 A free city could have any size, but the market would determine what economies of scale are appropriate.
Morality of Imposing Restrictions
- 44:18 Systems that are proposed as tyrannical would be marginal and wouldn’t make much business sense.
- 44:56 A free city where everyone had to wear headscarves could still exist, but there wouldn’t be many proponents if people signed up to it.
- 45:18 The morality of economics is based on whether or not people consent, but there is a gray area when it comes to children who don’t have the ability to make informed choices like adults do.
46:50 Voluntary Communities
Section Overview: In this section, the speakers discuss voluntary communities that function well with highly restrictive environments. They also address two assumptions about living in closed communities.
Voluntary Communities with Highly Restrictive Environments
- 47:10 There are some people who like living in highly restrictive environments such as religious communities like Old Order Amish Mennonites and Hutterites.
- 47:52 These communities evolved principles that allow them to function voluntarily with control over technology use and other aspects of life.
Assumptions about Living in Closed Communities
- 48:30 The first assumption is that there are some people who like living in highly restrictive environments.
- 49:02 The second assumption is that people who live in closed communities do not have access to information or knowledge from the outside world.
00:00 Close-Knit Communities and Governance
Section Overview: This section discusses the challenges of leaving close-knit communities and the assumptions made about governance institutions.
Leaving Close-Knit Communities
- 00:00 Children in close-knit communities may rebel against forbidden activities, such as smoking or drinking.
- 00:00 Leaving a community can be difficult, with those who leave often losing everything.
- 00:00 The Amish have dealt with the issue of children leaving by accepting that they will lose about half of their children to the wider society.
Assumptions About Governance Institutions
- 00:00 There are assumed limits to what governance institutions can do to people, even if not specified in a city charter.
- 00:00 Homeowners associations or condominium associations may raise fees for repairs but cannot prescribe cruel punishments like flogging or beheading.
- 00:00 Most constitutional orders have broad language prohibiting cruel and unusual punishment.
Protecting Exit Option
- 00:00 The exit option must be protected as an absolute right.
- 00:00 Anyone who stops someone from leaving is engaged in a criminal act, but there needs to be a mechanism for punishing them.
53:37 Imposing High Exit Costs
Section Overview: In this section, the speaker discusses how governance bodies can impose high exit costs on individuals and how this affects their behavior.
Governance Bodies and High Exit Costs
- 53:37 Governance bodies are non-violent but still manage to impose an extraordinarily high exit cost.
- 54:03 The speaker gives an example of two penalties: being slapped around and losing 600 or being considered dead by everyone you know. The second penalty is clearly worse.
- 54:33 There are limits to what a governance body can do to you that they could not assess.
- 54:59 Imprisonment is the default model for punishing criminals in virtually every society.
- 56:02 Exile was used as a way of punishing criminals in the past, which was an alternative way in which the costs of that person’s crimes wouldn’t be reimposed upon the populace.
- 56:50 Some people rationally would say hey I want to voluntarily sign up to a system where there are prisons and some people could sign up to a system where going in they knew that if you do X Y and Z there would be corporal punishment.
Free Cities of Europe
- 57:45 Corporal punishment, burning at the stake, etc., were not practiced in free cities of Europe.
- 58:11 Peace was considered something more contextual and not as abstract as we use the term today. Every city had a piece that you could break, and if you broke that piece, you committed harm and had to compensate for it.
59:19 The System of Expulsion in Ancient Cities
Section Overview: In this section, the speaker discusses how ancient cities enforced their laws and punished violent or dangerous citizens.
Enforcing the System of Expulsion
- 59:19 Citizens who were violent or dangerous could be expelled from the city.
- 59:39 Cities had walls and gates that were guarded by night watchmen to prevent expelled citizens from re-entering.
- 59:59 The city council judged whether a citizen should be expelled, and if so, they were not allowed back into the city.
01:00:23 Leaving Communities and Statelessness
Section Overview: In this section, the speaker addresses concerns about people leaving communities and becoming stateless.
Providing Options for People Who Leave Communities
- 01:00:23 It is important to provide options for people who leave communities.
- 01:00:46 Amish communities exist regardless of whether free cities exist or not.
- 01:01:04 Most states have tough immigration policies because it is unclear whether new arrivals will be net contributors or impose costs on society.
Free Cities vs. Nation States
- 01:01:24 Free cities do not have government-administered welfare states, so new arrivals cannot directly impose costs on society in a mandated way.
- 01:01:46 Any aid given in free cities would be voluntary and charitable.
- 01:02:09 Some free cities may choose to have institutions to take care of the welfare of those who fall on misfortune, but others may choose a fully privately operated jurisdiction without any kind of welfare state.
01:04:32 Private Governance Systems and Helping Refugees
Section Overview: In this section, the speakers discuss private governance systems and how they can help refugees and migrants. They also talk about the limitations of state mechanisms in providing resources to those who are not contributing to the state.
Private Governance Systems for Refugees
- 01:04:54 Private governance systems can provide more opportunities for people trying to get out of a bad situation in their family.
- 01:05:16 Charitable sectors can help people that are in need, even if they cannot receive resources through a state mechanism.
- 01:06:27 Enterprise zones or special economic zones could be created where refugees can come and work without fear of being hurt.
Problems with Refugee Camps
- 01:06:50 The refugee camp approach that the UN has put forward is a nightmare as it creates perpetual dependents on handouts from organizations like UNICEF.
- 01:07:56 Having enterprise zones would allow refugees to work, start businesses, and make a future for themselves instead of sitting in refugee camps forever.
- 01:09:07 Self-governing groups may want to have a providential fund for people who have fallen on hard times.
- 01:09:38 Friendly societies can be an important part of self-governing communities.
01:10:14 The Concept of the Deserving Poor
Section Overview: In this section, the speaker discusses the concept of the deserving poor and how it was established by laboring classes.
Laboring Classes and Deserving Poor
- 01:10:14 The laboring classes governed themselves and established their own principles of who was deserving of aid.
- 01:10:37 The concept of the deserving poor came from the laboring classes, not from ruling or rich classes.
- 01:10:59 Friendly societies were funded on a completely voluntary basis and were hugely important in Britain before National Insurance.
- 01:11:33 Private cities could encourage a resurgence of friendly societies where people voluntarily opt into these systems.
01:11:54 Ideal Governance System
Section Overview: In this section, the speaker shares his thoughts on an ideal governance system.
- 01:12:16 An incremental improvement approach should be taken instead of smashing everything to have a new system.
- 01:13:17 Looking at it as an incremental improvement means that we don’t abandon constitutional limitations on predatory states.
Public Goods Issue in Ukraine
- 01:14:25 There is a public goods issue in Ukraine due to a predatory horde invading and destroying everything.
- 01:14:47 Atlas Network Partners have put about four million dollars into ambulances, medical gear, field hospitals, etc. to help with this issue.
01:15:34 Incremental Improvements to Taxation and Governance
Section Overview: In this section, the speaker discusses how incremental improvements can be made to taxation and governance systems within existing nation-states. These improvements can lead to a more free, less burdensome, just, fair, prosperous, and secure society.
Benefits of Improved Taxation System
- 01:15:34 A better tax system that doesn’t penalize investment isn’t complicated.
- 01:15:54 It would raise as much or even more revenue as a consequence to be able to defend the country.
- 01:16:14 It is an incremental improvement that doesn’t require smashing the nation-state.
Innovation through Decentralized Systems
- 01:16:38 Decentralized systems like innovation hubs have the potential to unleash permissionless innovation that drives human betterment.
- 01:17:08 The ability to experiment is what drives innovation and raises incomes of poor people tremendously.
- 01:17:32 Prospera is implementing this idea by creating sandboxes for experimentation in their community.
Spillover Benefits of Innovation
- 01:17:53 Entrepreneurs who come up with new ways of doing things reap benefits from their innovations.
- 01:18:23 All available evidence shows that a tiny slice of total benefits generated goes to all the rest of humanity and raises incomes of poor people tremendously.
01:21:35 The Concept of a Free Person
Section Overview: In this section, the speakers discuss the concept of a free person and how it is embedded in legal and moral evolution.
The Evolution of Legal and Moral Concepts
- 01:21:35 Contracts are used to enforce agreements between parties.
- 01:21:59 There are limits on what individuals can agree to, such as being someone’s slave.
- 01:22:26 The concept of a free person has evolved over thousands of years through legal and moral evolution.
- 01:22:49 Common law is the system adopted in Prospera for resolving disputes.
01:23:32 A Hypothetical Question
Section Overview: In this section, the speakers answer a hypothetical question about what they would do if they had unlimited wealth for one year.
Unlimited Wealth for One Year
- 01:23:32 If given unlimited wealth for one year, Tom would work on improving his French language skills and continue doing what he does now.
- 01:24:47 When asked a similar question in the past, Tom said he would have a bigger apartment and go skiing more often.