Posted by on November 13, 2019 10:50 am
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By Erik Sass, TES Editor-in-Chief


One interesting (and paradoxically characteristic) aspect of our frenetic modern world is how rarely we found new cities. After all, for thousands of years it was perfectly normal to “pick up sticks” and start a new settlement. Most of the great cities of Europe are products of Greek, Phoenician, or Roman colonization or later settlement in the medieval period, while virtually every city in the Americas was founded in the last five centuries, or re-founded on an earlier indigenous settlement.


Nowadays, even as more and more people live in cities, most of us still seem to view them in static terms: you can choose to live in “the city” or move to “the country” or compromise on “the suburbs.” But what about getting together with a bunch of people to found a new city – your city, tailored to your wants and needs? With legacy urban areas facing issues like overcrowding, sclerotic bureaucracy, and challenges to democratic governance, maybe the idea isn’t as crazy as it sounds. Is it time to revive the age-old tradition of starting from scratch?


That’s the compelling vision presented by Dr. Titus Gebel, founder of Free Private Cities, a company that offers people the chance to found or join entirely new towns based on principles they endorse, to an audience at the 8th International Austrian Conference on “The Austrian School of Economics in the 21st Century,” hosted by free market think tanks in Vienna on November 13. Crucially, the creation of a new civil space allows the incorporation of free market principles from the outset, if the founders so wish, according to Gebel: “It’s basically creating a special economic zone plus a special administrative zone.”


A quick overview of the basics: the residents of a free private city are citizen-shareholders who pay a fixed amount to live there, with a private “Government Service Provider” responsible for protecting life, liberty and property. Continued residence is entirely voluntary, so residents can leave any time.


From the global perspective, Gebel depicted the problem of government as both a market problem and opportunity: “Governance is the world’s largest industry by GDP,” at 30% of GDP compared to 26% for manufacturing. “But it’s highly concentrated and ineffective,” he went on, as “5% control 80% of the market, and 90% lose money every year.” On the customer side, “80% [of people in the world] are dissatisfied with how their nation is governed.”


Free Private Cities aims to fill this yawning market gap, according to Gebel, ticking off the advantages: first, the operator has “skin in the game,” with an incentive to treat customers well and not waste resources (by contrast, “for politicians, the worst that can happen is they are voted out of power with a full pension”). Second, there is “no forum for people to impose their will upon others,” for example by levying redistributionist taxes. Legally, “the city operator can be held liable” for any breaches in contract, compared to city bureaucracies which often enjoy de facto impunity. For host countries, the foundation of new cities can provide a powerful spur to economic development and innovation, by serving as SEZs.


Although the project has libertarian idealist roots, Gebel was quick to acknowledge that Free Private Cities must work in the real world, meaning new cities must obviously conform to national laws when these cannot be relaxed in the creation of special administrative zones. For example, a new Free Private City project in Central America has no rules restricting firearms but cannot allow drug use, in keeping with the host country’s legal strictures.


Libertarian roots notwithstanding, Gebel also reminded the audience that Free Private Cities allows anyone to create a new settlement along whatever lines they like, citing “religious” or “communist” models as equally plausible options.