A Path to Prosperity - The Butterfly Effect

How an academic curiosity led me on a Caribbean adventure

A Moment of Imagination

A single idea can change the course of your career. On a lonely night in a London dorm room, one such idea came to me, which has brought me to where I am now.

Since I was about sixteen, I have relished taking deep dives into economics literature, especially the books of the Austrian School (von Mises, Hayek, et cetera).¹ Whilst not being a libertarian or anything of that sort, I do appreciate the important contributions liberal economists, such as those of the Austrian School, have made to the economic sciences and to the struggle for economic liberty.

One of the prime themes in the liberal economics scene is its critical attitude towards the government or of government in general. Because as public choice theory teaches, the incentives of those in power are often poorly aligned with those they rule. The solution, to the economists of the Austrian School as well as adjacent schools of thought, is limited government, and to some even none at all.
But on this one night my mind took a different turn. I came to wonder: Why are governments themselves not for-profit companies like those offering goods and services in any other market? Citizens would become customers, and people would vote with their feet like they do in the free market. In fact, such a ‘market for governance’ would be more democratic than what we have now, since in the free market the votes of those in the minority matter just as much as those in the majority.

It does not take much thinking to see that markets need or could at least benefit greatly from a fair umpire, which such a market for governance would lack. But does this problem not also exist in the present-day international system, in which most political organizations lack the profit motive? Perhaps, if we are to believe democratic peace theory, one could posit that non-profit representative democracies are in principle more peaceful than for-profit governments. But if the rule of law can keep those in power from using their monopoly of violence to usurp foreign lands or to forbid their subjects from leaving, what is there to keep us from creating a new form of democracy by privatizing the right to govern?

Even if this would be impossible, what would keep us from privatizing a limited right to govern? Private jurisdictions with limited rights to govern and with limited abilities to use force (e.g. limited to a police force without military capabilities) could be established, subject to a democratic government that keeps the monopoly of violence vis-à-vis its private jurisdictions. Competition between private jurisdictions could then be peaceful, which, if the right conditions are satisfied, would result in a highly efficient provision of those government goods and services most preferred by citizens. This is in contrast with the inefficiencies, irrationalities and corruption endemic in our political systems today.

Down the Rabbit Hole

When thinking through this seemingly radical idea, I quickly realized that someone had probably thought of this already. Some libertarian or anarcho-capitalist, or perhaps an economist from the Austrian School, would surely have entertained this idea before. So I started searching the internet. If I could not find anything, I decided I would have to work out the theory myself.

But after a long search, I found a small Viennese think tank advocating some version of what I had in mind: The Free Private Cities Foundation.² I ordered the book ‘Free Private Cities’³ written by its founder Titus Gebel and read it right away. It is still one of the most insightful books I have ever read. The intellectual journey continued and I found two more excellent books about the concept of private jurisdictions, both recommended to the reader as well: ‘Your Next Government?’⁴ by Tom W. Bell and ‘Entrepreneurial Communities’⁵ by Calvin Duke.

Further down the rabbit hole, I learned that not only had the idea of private jurisdictions only sprung up several years ago, but a project was already underway! Honduras Próspera⁶, a private jurisdiction on the island of Roatán just off the coast of Honduras, was making headway in building the Hong Kong of Central America. The more I read, the more enthusiastic I became. These people had a plan and were not wasting any time. After checking out the LinkedIn accounts of their C-suite and board members, I could only think one thing: ‘I wanna work for these guys!’

At some point I got talking on Twitter to Gabe Delgado, Chief Development Officer of Próspera, about the possibility of regulating architecture. Corresponding to my conclusions in Architecture and Evolution, I tried to convince him that Próspera, as the prime landowner in its own jurisdiction, would profit from doing so, even if it would occasionally lead to higher development costs. Whereas officials in representative democracies do not have an incentive to make the built environment as valuable as possible to people, Próspera, by virtue of being a private jurisdiction, does. He was interested, so I sent him some papers, and we called over Zoom.

I also asked Gabe whether they do internships. They do! I suppose my enthusiasm about Próspera and my passion for all kinds of themes in the economic sciences made a good case for me coming to Roatán to work for them.

Well, here I am, writing this post from the Caribbean paradise that is Roatán!

Marching Forward

I really am impressed. They are moving faster than I initially thought. Not long ago, Próspera incorporated a golf resort and a villa resort into its jurisdiction. Together, all the lands owned by Próspera are already much larger than Monaco, enough space for a small city. The Duna Residences, a new building on Próspera’s original plot of land that will include more than 80 residential units as well as office and retail space, is well underway and expected to be finished next summer. They are also making progress with a sustainable factory, which will make the wooden components of the Beyabu residences, the upcoming flagship development designed by Zaha Hadid Architects.

I can only imagine how this will look in 15 years. Basing my proposal on my series about the science of architecture, I will soon be proposing a policy to Próspera to exclusively allow traditional architectural styles and to actively invest in highly ornamental buildings around key public spaces. If that becomes a reality, it will be a matter of time before Próspera becomes a city rivalling Florence and Venice in its beauty and grandeur, whilst rivalling Dubai and Hong Kong in its business-friendly environment. All right here on Roatán, as well as perhaps other places as the new sector of private jurisdictions progresses. Amazing things will surely happen here. Thousands of entrepreneurs, artists, and innovators will be working hard to achieve their potential, unimpaired by inefficient, ineffective, or ideological governance.

But even though things are moving fast here, there is still a long way to go. There are obstacles to overcome, things to discover, and much growth still to realize.

1. Human Action by Ludwig von Mises, for example, is a gem that I would recommend to every aspiring economist. Visit https://mises.org/library/human-action-0 for a free digital copy.

2. See https://www.freeprivatecities.com

3. See https://www.amazon.com/Free-Private-Cities-Governments-Compete/dp/1724391380

4. See https://www.amazon.nl/Your-Next-Government-Stateless-Nations/dp/1316613925

5. See https://www.amazon.com/Entrepreneurial-Communities-Calvin-Duke/dp/1944298770

6. See Astral Codex Ten, ‘Prospectus on Próspera’ for a good account of what makes them special: https://astralcodexten.substack.com/p/prospectus-on-prospera

For Próspera’s website, visit https://prospera.hn/