Free Private Cities

“A Free Private City is therefore not a utopia, but rather a business idea whose functional elements are already known and which need only be transferred to another sector, namely that of living together. Basically, as a service provider, the operator only provides the framework within which the society can develop openly in the sense of a spontaneous order.” — Titus Gebel

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In this work, Titus Gebel develops the idea of free private cities and their delves into how they can be implemented. First, it is important to define what is meant by the concept: A Free Private City is in many senses similar to a charter city: It is a special zone with great autonomy to choose its own legal system. The difference, however, lies in the underlying basis for the governance structure, which in this case is an individual contract between the city operator and the citizen.

Rest assured, basing relations on a contract has many implications for the legal structure of the municipality. Many operational changes are derived from shifting the governance paradigm from traditional states to private law with explicit consent, such as the possibility of suing the city operator in independent courts for breaches of contract, as well as the citizen being able to terminate the relation at any time.

Regarding the community’s ownership, different models are proposed and evaluated, but none is obligatory. Both proprietary communities and HOA-styled citizen-owned cities are considered permissible, and participation mechanisms such as shareholder-democracy and double-democracy are also deemed applicable.

While the author does elaborate on the policies and services of his ideal city — a city with free markets and strong individual rights, he himself states that the broader Free Private City concept can be applied to many different societal models, the only requirement being that people voluntarily choose them by contract.

In fact, this inter-model competition is actively encouraged. One of the biggest advantages the author sees in having several cities with various legal systems following this arrangement is that it increases the array of models to choose from. Moreover, more choice in this segment would increase jurisdictional competition, as the citizens-customers vote with their feet and investments. This, coupled with the right alignment of incentives present in private enterprise, allows market forces to operate with greater extent in the governance sector. The benefits of market-based systems would then manifest themselves in this “market of living together”.

The book is divided in 4 parts composed of 27 chapters, in which Titus first lays the groundwork for the model, explains the concept as well as issues regarding implementation and finally shares his thoughts on future perspectives for the development of this kind of enterprise.

Creators of zones and societies should refer to chapters 12 to 24 for the whole ‘nuts and bolts’ of organizing and implementing a Free Private City.

Policymakers and analysts can read chapters 6 to 8 as well as 25 to 27 to understand what a Free Private City can offer to their region, what advantages they bring and what objections can be made to them.

Scholars and experts ought to take a look at chapters 1 to 5 to learn what societal issues the concept tries to tackle and chapters 9 to 11 for a description of comparable historical and contemporary examples along with precedents for this kind of private regulation.

The book can be found here.

The author also founded a homonymous company seeking to put this idea into practice. The website can be found here.

Written by: Francisco Litvay

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Institute for Competitive Governance

The Institute for Competitive Governance is a nonprofit institution which studies special jurisdictions throughout the world.