Private Countries

History

Raymond Craib:

“Meanwhile, moneyed tech titans in Northern California have proposed building a new city on thousands of acres they surreptitiously bought over the previous decade in Solano County. El Salvador’s president Nayib Bukele is planning a Bitcoin City on the slopes of a volcano while his government profits from the imprisonment of people illegally deported from the United States. Argentina is currently presided over by Javier Milei, a chain saw–wielding, self-professed anarcho-capitalist. Post-Brexit Tories wanted to create multiple semiautonomous special economic zones (SEZs) in UK port cities, an idea that has survived the shelf life of both Liz Truss and a head of lettuce. They all promise the same thing (cue Mel Gibson in a kilt): FREE-DOM!

The exuberance with which libertarian communities are being marketed suggests that their advocates are attempting to make up in print what they have been unable to accomplish in reality. Yet all the media attention and promotional hyperbole has obscured the fact that most of this stuff is not particularly new. In the 1960s, private sovereignty schemes were common, inspired, on the one hand, by the rise of private homeowner associations and gated communities and, on the other, by Ayn Rand’s Galt’s Gulch, in her 1957 novel ­Atlas Shrugged­, a fictional capitalist retreat high in the Rockies (and named after John Galt, the book’s capitalist hero) to which the managerial class decamps while awaiting the supposed downfall that will result from the withdrawal of their “labor.” That they have no labor to withdraw (they’re managers) is beside the point. Men such as land developer Michael Oliver, pharmaceutical engineer Werner Steifel, and Leicester Hemingway (Ernest’s younger brother) sought to build private countries on the ocean during this period. Aspiring to take advantage of a new era of decolonization and political volatility, they were, however, foiled by the law, weather, and obdurate political realities in those places they sought to colonize. Building platforms on reefs or outfitting barges for international waters proved much more difficult than crafting constitutions, forging currencies, designing flags, and proclaiming oneself monarch.

Private countries waxed and waned but seemed primed for a new lease on life in the 1990s with the emergence of Silicon Valley and platform capitalism. Anti-statist ideologies appealed to coders opposed to the regulation of cyberspace, their position articulated in John Perry Barlow’s 1996 manifesto. At the same time, analog libertarians continued to explore the possibilities of creating new and private countries, whether at the 1995 New Country meeting held in New York City or via Laissez Faire, Inc., whose founders advertised their project—“What would Ayn Rand do?”—in the pages of The Economist that same year.

James Dale Davidson and William Rees-Mogg would interweave these two threads in their 1997 book The Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State, recently reissued with an introduction by Peter Thiel. That book turned investment strategies for high-net-worth individuals into a political theory of private sovereignty. “As new, more market-driven forms of protection become available,” Davidson and Rees-Mogg wrote, “it will become increasingly evident to the large numbers of able persons that most of the supposed benefits of nationality are imaginary.” They envisioned a time when the individual entrepreneur would be able to navigate through and across various jurisdictions at will, in the process rationally calculating his or her “protection costs,” which is what recent commentators have termed jurisdictional arbitrage. Newer versions of private sovereignty build on those ideas and also draw inspiration from Burning Man, although most of their manifestations up to this point more closely resemble Billy McFarland’s ill-fated Fyre Festival. (If anything best captures the likely reality of individualistic private communities walled off from society, it is a $500 soggy grilled cheese delivered in a Styrofoam package.)

In the early 2000s, charter cities gained traction. First proposed in 2008 by economist Paul Romer, charter cities are privately run urban complexes created from scratch on land given over, through lease or purchase, by a nation-state to an international oversight board. The cities are supposed to have their own legal systems and laws, labor codes, and regulatory apparatus, all laid out in a contract signed by residents. There would be no voting or representative government. You could opt in or out, but the contract would stand as law.

Since first proposed, charter cities have had a predictably tough go of it. Madagascar and Honduras were the initial sites for experimentation. A 2009 coup in Madagascar brought that dream to an abrupt end; a coup in Honduras a few months later gave it new life. Those very same years saw the creation of the Seasteading Institute (TSI), originally financed with support from Peter Thiel and under the direction of Patri Friedman (son of anarcho-capitalist David D. Friedman and grandson of University of Chicago economist Milton Friedman), which seeks to create private floating platform communities on the high seas. In the 2010s, the Free State Project sought to move 20,000 libertarians to New Hampshire to experiment with libertarian governance. A few years later, in Chile in 2013, a group sought to create a libertarian haven in Curacaví, just west of Santiago, under the name Galt’s Gulch Chile, a callback to Atlas Shrugged. (Other Randians have declared themselves adherents of Anthemism, an ideology of individualist private state-making based on Rand’s short 1938 novel Anthem, made famous by Canadian rock trio Rush in the 1970s and ’80s.)

Fast-forward another decade, and interested investors with a cryptocurrency sensibility can seek out Satoshi Island off the coast of Espiritu Santo in the archipelago of Vanuatu, invest in Bukele’s Bitcoin City in El Salvador, buy digital citizenship in the 58-acre Próspera development on the Honduran island of Roatán, or do whatever it is Brock Pierce and his fellow puertopians think they are doing in Puerto Rico. In the Balkans, there is the Free Republic of Liberland, on the Croatian banks of the Danube, and Montelibero in the mountains of Montenegro, both inflected with a libertarian crypto ethos. Further afield are dreams of orbital space pods and Mars colonization.

Perhaps the most hyped recent entry in the—what to call it: proprietary state? private sovereignty?—sweepstakes is self-professed Stanford “lifer” Balaji Srinivasan’s Network State, detailed in his book of the same name, which has generated an enormous amount of heavy breathing in Silicon Valley. Srinivasan has been hailed as “a visionary,” “one of the most brilliant thinkers alive”—and, by Marc Andreessen, as the person with “the highest rate of output per minute of good new ideas of anybody I’ve ever met.” With such acclaim, one can be forgiven for thinking there is more to the network state than there is. The basic premise is that the network state inverts the logic of the nation-state: if the latter is geographically stable and ideologically fluid, the former is ideologically stable and geographically fluid. It begins as a cloud community, little more than Facebook or any other digital collective, made up of ideologically like-minded individuals, but eventually coalesces somewhere on land. In other words, it begins as a social network but aspires to be more: it has a “national consciousness,” is held together in part by an “integrated cryptocurrency” and “a consensual government limited by a social smart contract,” and, importantly, is composed of “an archipelago of crowdfunded physical territories” with “a large enough population, income, and real-estate footprint to attain a measure of diplomatic recognition.” The multiplicity of linked territories is what distinguishes Srinivasan’s network state from others.

Srinivasan is clearly interested in history. “To build a new society,” he writes, “it’d be helpful to have some knowledge of how countries were built in the first place, the logistics of the process.” This is indisputably true, but unfortunately, Srinivasan’s conceptualization of history reads like a fairy tale. If, as he asserts, “new countries begin with new stories,” it is worth looking at the story Srinivasan tells. It pivots on an anomalous 20th century in which technologies, information, and knowledge were centralized, and conformity and conservatism were the norm; in which government and corporate monoliths undercut individual freedom and innovation; in which the shared experience of watching I Love Lucy was a portent of homogenization and a lack of critical thinking. So far, not so bad. This kind of critique of capitalist alienation and conformity was brilliantly articulated, among other places, in Erich Fromm’s 1941 book Escape from Freedom. But then things go awry when Srinivasan offers his solution: a libertarian escape route. Doubling down on the disenchanted individualism that undergirds monopolistic capitalism, he embraces the tired frontier thesis invoked by Trump in his Freedom Cities speech, with its sanitized celebration of westward expansion as the inevitable outlet for “ambitious men” keen to find freedom from the state.

The internet thus may be a place to forge preliminary new communities, but with “sufficiently good technology,” interested parties could rediscover (“reopen”) a territorial frontier on “remote pieces of land, on the sea, and eventually in space.” Srinivasan calls this his “generalized Frontier thesis” (invariably with tech bros, it is never enough to merely make an assertion; even the most anodyne of claims needs to be celebrated as a “thesis,” a “law,” or an “axiom”). This all sounds like what it is: colonization. Exactly what this will entail for those living in the places where networkers land is unclear, but we can imagine what is likely to happen. Here, Srinivasan would have done well to consult the works of historians such as Richard Slotkin or Greg Grandin to understand the violence, and the inevitable displacement, that accompanied the “opening” of the US frontier. That he did not is perhaps a function of his theory of history—that it should be written “to the ledger” rather than “by the winners.” I have no idea what this means. His further suggestion that history as written to the ledger—apparently the blockchain—is the “most rigorous form of history yet known to man, a history that is technically and economically resistant to revision,” does not help.

A generous reading would be that Srinivasan has fallen victim to the noble dream of objectivity—of an irrefutable past, known, fixed, and stable. A more likely conclusion is that he has little idea of what history is, or how it is written, interpretated, and reinterpreted. In any case, Srinivasan’s ledger is not history. It could be, depending on the questions one wishes to ask, an archive. But history? Not even close. With no grammatical structure, no narrative motion, and no interpretive meaning, the ledger is bookkeeping, and Srinivasan is a CPA.

Few, if any, terrestrial privatized communities have emerged from the ether and become concrete realities. Liberland has garnered positive commentary from Milei, Argentina’s anarcho-capitalist head of state, but its status is ambiguous at best, and no one has settled there permanently. Satoshi Island is a lease-held property and part of the state of Vanuatu. No matter how many “Citizenship NFTs” you purchase, you still need a legitimate passport to pass through Vanuatu customs and immigration. No matter how many “Land Deed NFTs” you purchase, the land is lease-hold and dependent on renewal by custom owners—which makes you, in effect, a renter with a long commute. Galt’s Gulch Chile imploded soon after its creation. One of its main promoters, Jeff Berwick, moved on to Mexico where he founded the annual libertarian gathering advertised as Anarchapulco, the subject of a recent six-part HBO documentary misleadingly titled The Anarchists, which ends with the deaths of three of its protagonists. The Free State Project succeeded in attracting a slew of people to New Hampshire, but the subsequent negative impact of anti-government infiltration of municipal councils on public space, municipal services, and quality of life in towns such as Grafton serves as fair warning for those who think government has little to offer. The wet dream of seasteading remains just that.

Despite TSI’s promotional strategy, floating platforms on the high seas are nowhere to be found. A modest project like the libertarianesque “SeaPod” in a sea zone (a special economic zone on the water) off the coast of Panama flopped when a prototype dwelling teetered over in front of the crowd gathered for its grand opening. Meanwhile, Roatán’s Próspera, a charter city born under the aegis of a regime installed by a Honduran military coup d’état, is more akin to a country club than a country, albeit one dedicated more to rounds of non-FDA-approved life-extension experiments than to golf. And just in case it isn’t already obvious, Mars colonization has little chance of coming to fruition in the near future.”

(https://lareviewofbooks.org/article/the-private-fiefdom-as-planetary-project/)