History of Free Cities

Before Europe had states

The practice is older than Europe. Between 800 and 300 BC more than a thousand Greek settlements of the polis type ringed the Mediterranean and the Black Sea, sharing a language, a religion and the Olympic Games while insisting absolutely on governing themselves. Each passed its own laws, minted its own coins and raised its own men. Josiah Ober’s account of why that world stayed rich for so long names three causes, and all three are arguments this movement makes without knowing it: competition between systems forced continuous technical and institutional invention, a decentralised structure held the whole together with nobody in charge of it, and rules reliable enough to invest against kept transaction costs low. Aristotle was born in Stageira, a small independent town, and did his work in a larger one.

Cities that made their own law

In medieval Central Europe the promise was personal before it was constitutional. A serf who reached a free imperial city and went uncaught for a year and a day was a free man, and the saying that city air makes you free was meant literally. The status was taken, not given. Cologne rose against its archbishop in 1074 and was put down, won an independent bench of magistrates by 1103 and a city council in 1216 over his objection, and settled the argument at the Battle of Worringen in 1288.

For several centuries in Europe the city was a jurisdiction in its own right. At the Peace of Constance in 1183 the Emperor conceded that the northern Italian communes could elect their own councils and pass their own legislation. Venice ran as a republic from the early Middle Ages until Napoleon ended it in 1797. In the Empire, a free imperial city answered to the Emperor alone and to no intervening prince, and about fifty of them still sat in the Imperial Diet in 1792.

Law travelled the way software does now. Cities adopted whole legal codes from other cities because they worked, most often Lübeck’s or Magdeburg’s, and named the Magdeburg bench as their court of appeal in unclear cases. Magdeburg had no power to enforce anything it decided. The arrangement held because the cities wanted it to.

The Hanseatic League was something else again, and the most interesting precedent for the present. It held no territory the way a state does. It was a network of towns, perhaps two hundred at its widest extent, bound by shared commercial law and anchored by four great trading houses at Novgorod, Bergen, London and Bruges, each with its own treasury, seal and rulebook. It had no constitution, no budget and no officials of its own, and no body but the Hansetag, whose decisions each city council was free to ratify or reject. Members joined and drifted away. Nothing about it looked like a country, and for three hundred years it worked.

Competition worked

Then the incumbents changed their minds. Having watched what self-government did to trade, the surrounding princes stopped fighting urban independence and began selling it, offering settlers guaranteed city rights on their own territory and copying the charters the older cities had spent generations extracting. In parts of southern Germany, villages bought their way out from under the local prince and answered to the Emperor directly. Nobody legislated any of this. The Free Cities were visibly richer, people and money moved toward them, and the rulers who wanted that revenue had to match the offer. It is the clearest case in European history of jurisdictions competing for residents and the residents winning, and it is why this period is worth more to the Free Cities movement than nostalgia.

Why they disappeared

They were not simply crushed. Hendrik Spruyt’s account of the period treats the sovereign territorial state, the city league and the city-state as three competing designs, and argues that the territorial state won on the merits of its age. It could make binding treaties, because someone could speak for the whole of it, and a league of self-interested towns could not. The imperial reorganisation of 1803 wiped out all but six Free Cities, the Congress of Vienna confirmed four, and Prussia took Frankfurt in 1866, leaving Hamburg, Bremen and Lübeck to carry the old titles as ordinary federal states.

The Hanse ended less dramatically. From the sixteenth century Lübeck drew the League into one northern war after another, and member cities tired of paying for adventures that were not theirs; as the territorial powers around them consolidated, most were pressed into leaving. The last diet met in 1669.

The Free Cities of the twentieth century were a different thing wearing the same name. Danzig, Kraków and the Free Territory of Trieste were diplomatic compromises over contested ground, administered by outside powers, and each was extinguished within a generation. Free ports lasted longer but ended for a duller reason: Hamburg closed its Freihafen in 2013 because average tariffs had fallen from roughly thirty per cent to three, and the exemption had become paperwork. What a Free City is worth has always been a function of how bad the surrounding regime is.

The thread to the present

What these cities had in common was not a political programme but a position. They sold predictable law and low friction in a world short of both, and people and capital moved to them far out of proportion to their size. Livorno’s charters of the 1590s offered exemption from guild restrictions and freedom of worship, and drew Jewish, Dutch, English and Greek merchants to a small Tuscan port. Hong Kong after 1841 did the same thing on a far larger scale. Jurisdictional variety also made it hard for any European ruler to close off every exit, which is the deeper reason this period keeps being argued over.

The modern movement is a bet that the same still holds. It runs from the founding of the Seasteading Institute in 2008 and Paul Romer’s charter cities argument in 2009, through the Honduran ZEDE law of 2013, to Titus Gebel’s Free Private Cities and the network state. The Hanse’s answer to territory, a network of places bound by common rules rather than by a border, is being proposed again by people who mostly do not realise they are repeating it.

Titus Gebel states the test plainly: a society is successful if many people want to live there voluntarily, over a long period. By that measure the record of the Free Cities is not nostalgia, it is evidence.