About my forthcoming book, The Proprietary State

Considerable time has passed since my last post. In the meantime, I have written a book, titled The Proprietary State. For more than a year, I have devoted almost all my time to a project that I believed, and still believe, someone simply had to undertake. I think it will prove to be an important work, perhaps even ground-breaking.

All of us are familiar with democratic governance. Although functional in many places, it pervades our societies and is rife with problems. Many societies are plagued, or at least held back in many ways, by problems such as populism, clientelism and corruption. To those who put forth an alternative, the common response is that there is simply no better system available. In my book I argue, with economic theory as my weapon of choice, that there is. My book is partly a positive economic theory and partly a proposal for a different kind of government. Simplified, its main thesis may sound quite radical, which is that governments ought to be for-profit corporations instead of democratic systems. I argue for the proprietary government – A government with shareholders instead of voters. This book makes the first science-based case for proprietarianism. While anarcho-capitalists believe that the state must be abolished and libertarians believe that it must be minimised, proprietarians believe that it must be privatised.

When I started this project, a theory of the proprietary government had not yet been developed. Some writers, like Titus Gebel in his book Free Private Cities, have explained the possibility of proprietary jurisdictions and argued well for them, but nobody has approached it from a theoretical economic angle. My book is the first to contain a rigorous theory of the proprietary jurisdiction and its proprietary government.

The Proprietary State is written in the Austrian tradition – To prove my claims, I have used the method of praxeology, the logic of action. Praxeology, the theory of human action, uses logic starting from first principles. The law of comparative advantages, for example, is a law of praxeology. Economics, forming the core of praxeology, is praxeology’s most important field of inquiry. It is the most developed part of the praxeological edifice.

Contents

The theory in my book explains most importantly what distinguishes a proprietary government. In particular, the benefits unique to it are explained, as well as what measures must be taken to ensure that these benefits are delivered as much as possible, i.e. to maximise ‘proprietary democracy’. Some shortcomings of the proprietary government are also explained, and how these shortcomings can be avoided by incorporating it into a so-called ‘hybrid system’, one that combines both the representative democratic government and the proprietary government, for the best of both worlds.

The book also addresses different ways to privatise jurisdictions, i.e. to bring jurisdictions under proprietary governance, as well as different possible variants of the proprietary government. Lastly, some historical examples of proprietary governments are addressed.

To do all this, I have revisited old themes in economic theory, challenging some ideas that are pervasive in the entire discipline. After the introductory chapters, the book starts with a theory of human cooperation from which the necessity and definition of a state follows. It also contains a new ‘Austrian’ theory of entrepreneurship and consumer sovereignty. Not unimportantly, I also explain why the theories of Spencer Heath and Spencer Heath MacCallum are fatally flawed, and why solving the fatal flaw in their theory gives us the proprietary government as I define it. Heath’s idea of proprietary administration has found much support in the emerging proprietarian movement and is important to address.

Chiefly, this book introduces a new framework to praxeological theory, what I call the ‘cooperative framework’, explains the nature and benefits of the proprietary government under certain conditions, contains a new theory of entrepreneurship and competition and explains how jurisdictions can and should be privatised. In doing so, it challenges fundamental ideas in libertarian and anarcho-capitalist ideology. Instead of anarcho-capitalism or libertarianism, I hope to convert my readers of proprietarianism.

A Pivotal Moment

In recent years, several projects similar to proprietary jurisdictions have broken ground. In Honduras, Próspera is building the jurisdiction of the future with what it probably the best governance in the world today. In several countries, more projects are currently in their first stages. We are clearly in a lift-off moment.

It is important that jurisdictions are privatised properly. As I argue in my book, institutional arrangements must be made to ensure that proprietary governance will be an improvement on democratic governance. If these arrangements are not made, or at least not to some extent, proprietary governments can benefit from doing things at the expense of the people they rule, as well as others.

In the future, people might look back on these years as a pivotal moment in history. In much of the world, democratic systems have already failed miserably. From the rent-seeker states in Latin America to the government systems in the Arab world that have been captured by dictators and radicals, democracy has a lamentable track record. In the west, democratic systems are becoming increasingly unstable. Clientelism has resulted in the mass immigration of people with ideas hostile their host societies, which is becoming increasingly evident. Populism has grown significantly on both the left and the right. The viability of democracy has been declining, and we will see its dysfunction growing. The end of the democratic world order has begun, and the proprietary world order has begun to emerge in its stead.

In that world, self-determination will have another meaning. It will not take the form of electoral participation, but of migration. People will vote with their feet. Self-determination will become more common and more effectual, as people will have more possibilities to migrate to better jurisdictions. People will become more mobile as exit costs keep decreasing and more work shifts online. Governments will find themselves competing for taxpayers, and proprietary governments will win that competition.

My book contains a blueprint for that government system. As efforts are currently being made for enabling legislation, it could not have arrived any later. The people involved will find it useful, and I think also very interesting.

Some people are currently reviewing my manuscript, after which I will give it a final update. If you are interested in reviewing it, please reach out to gakerpestein@gmail.com.