Axtually, I was thinking of Grafton, New Hampshire, but similar experiments in minarchist government have been tried in other cities here and there, with comparable results.
>So for example, when you buy land in Próspera, you’ll have to sign a Covenant Restricting Vice Industry Uses - ie you can’t turn your house into a joint brothel+casino and do unethical medical experiments in the basement. Even the strictest libertarian has to admit this is fair; if you sign a contract, you’ve got to follow it.
For human rights, as with a lot of the more complicated and controversial areas, it seems like the answer is basically "we promise we won't do anything bad" and Honduran law still applies. Which seems a problem when the original problem this was seeking to solve is endemic corruption in Honduras.
More gerenally a lot of these things seem to rely on it being written into the law/founding documents that they won't do bad things. But what the law says is not particularly relevant when the people who decide how the laws are enforced are the same people who would profit off corruption. So it essentially relies on a group of unelected leaders being ethical enough to not do things that are in their own self interest
It's definitely true that a key failing of laws is that they mean nothing if people don't actually follow and enforce them. But I think your concern has already been addressed in the article.
One of the key points is that law enforcement isn't supposed to rely merely on the the ethics of the leaders. It's also a business proposition. "We have good government" is the product the company is selling. "Profiting from corrupt government" is the business model they're trying to replace. It's what Honduras is already doing. They're trying to create an alternative to that, where the business model is "profit from good government" instead.
Now, maybe it's the case that corruption is always more profitable than good government. If so, then you're right, law enforcement would rely wholly on ethical leaders ignoring their economic incentives. And then, I suppose, the experiment wouldn't last very long: the company would realize they're not profitable, then they'd do something corrupt to try and turn a profit. And every time that happens, their core business proposition evaporates a little more, or becomes more fake, and they get less and less different from Honduras, and eventually vanish as soon as the VC dries up.
I mean, the obvious argument regarding those is "and why would you do that to yourself?"
The obvious counterarguments are leonine contract and 5000-page-fine-print contract, but outside of those situations there are decent arguments for allowing it.
(I will note that "enforceably leasing yourself into servitude" is to a restricted extent practiced in all countries with a military.)
> You could tell similar stories about the success of Hong Kong and Singapore, two other polities with little to recommend themselves other than a different and more competent regime than the surrounding regions.
I had to stop to comment here - I think both have something very important to recommend them. They're both Alpha+ gateway cities which control massive trade flows. Singapore is at the tip of the Malacca straits, which means absolutely massive shipping volumes flow past it, from which it can derive huge amounts of wealth. Hong Kong is at the mouth of the Pearl River delta and sees a similar dynamic. They were both already extremely important cities long before they had interestingly different governance regimes. I think the arrow of causality is pointing the wrong way here - it's not that interesting governance allowed these uniquely important cities to spring up ex nihilo, it's that when your city has such a massive natural advantage, it ends up with interesting political structures.
Right, and they're both inherently defensible islands which can more easily resist external regime change (although those days appear to now be over in Hong Kong).
They're also a prime example of survivorship bias. Nobody remembers Dertu, Kenya, which was presented just as glossily as this was...until the VC money dried up, and Dertu was left worse off than it was before.
Yeah. Hong Kong and Singapore grew up organically because they were serving needs. Unless you manage to call back the ghost of Stamford Raffles to get your new city off the ground, I think just plopping one down next to a golf course and crossing your fingers and hoping "shiny tech!" will work miracles is asking a lot.
It is asking a lot. On the other hand, the rewards for getting it right are so high that I'm happy to see this kind of thing tried over and over again until someone discovers the recipe to get it right.
The only recipe that comes to mind is eugenics. A polity is made of people, and you can no more build Utopia out of the stock H. sapiens model than you can build the Burj Dubai out of bricks made of sun-dried mud.
Not a great example, because neither is anywhere near equilibrium. If I took Germany in 1945 (a smoking ruin) and compared it to 1955 (in the middle of the Wirtschaftwunder) one would naturally say wow! but neither was anywhere near an equilibrium state. Same idea.
Anyway, it's not a good counterexample because China now is nowhere near utopia, only (at best) approaching what has already been achieved in many other places and times. Extrapolating China's improvement 1970-2020 -- or for that matter that of the US 1930-2020, or Britain 1970-onward -- says approximately squat about the plausibility of a *further* hypothetical tripling of the humanity and success human civilizations can enjoy. You would need entirely different evidence.
there is a funny "long term share of global GDP by country" chart i saw once that basically shows China recent economic rebound is just bringing them back to where they were 200 years ago. I.e. China in 1970 was the outlier and today is the reversal to norm. A lot easier to do (can build on underlying human and cultural capital and natural country advantages that even communism and a century of war couldn't wipe out) than to work your way up from bottom to a place you've never been before.
No, it's not everything, but it is the ultimate limit to everything. You can never build a machine better than the quality of its components. And I suggest that building the Burj Khalifa is at least one order of magnitude easier than building a utopian society.
Hong Kong was an unimportant backwater island when the British took over in 1842, all they wanted out of it was a safe place to drop anchor and store cargo near China.
This. Hong Kong is a *decent* place to put an international trade hub; Guangzhou/Canton is better in every respect but legal. Hong Kong's legal advantages made it worth the trouble of building out the port facilities, mainland rail connections, etc. If Prospera prospers to the same relative extent (scaled to Honduras rather than China), something similar could happen. Though the bit where it's an island rather than a peninsula means you can't just build some railroads and turn it into a transshipment point for low-value bulk goods from the interior.
Yes, I was about to say - how is this not simply a tax haven? Of course 10% won't be enough to fund any sort of health or education system, say, and of course people in high income brackets in Central America wouldn't be caught dead using state-provided services in either categories. But what happens to lower-income people living in Próspera? And how is this system supposed to scale up at all? If the best argument is that, as you say, the wealthy in Honduras are extremely successful at tax evasion anyhow...
My guess would be as happened with other similar plans if it ever gets off the ground the majority of the blue collar labour will be provided by people who aren't officially Prosperan citizens, living in slums on the other side of the border. (See guest workers in dubai and Singapore). Might still be a net benefit if its giving jobs and economic growth there wouldn't be otherwise, but but as utopian as it sounds
That's pretty much my take on it as well. You'll have the very wealthy (if you can entice them) living in the deluxe areas with their VTOL runabout, you'll have gradations from that down. There have to be 'service' categories along with the smart rich people, and those include the professions like doctors, nurses, teachers and so on. Whatever about doctors and lawyers, the nurses are not going to be rubbing elbows with the rich and hoity-toity in the same neighbourhoods.
It may become necessary to introduce something like the London Weighting - an allowance to cover the cost of living in an expensive region in order to make sure certain classes of employees can afford to live where they work (or at least relatively near to it): https://en.wikipedia.org/wiki/London_weighting
And then you keep going down the line: the people working in retail and customer service jobs. Maids and housekeepers and groundskeepers for the nice "Zaha Hadid"-style buildings, be they the gleaming towers of the commercial and financial quarters or the modular dwellings on the hillsides. After all, you can't expect the high-value, creative, wealth-producing smart citizens to scrub their own bathrooms or clip their own hedges!
And those are the people that will, as you say, be living in the rest of Honduras and coming in by public transport to work in Próspera. Unless the notion of "servants' quarters" is re-introduced and you have the room under the eaves for the maid, and I don't know if that is appealing to the rich smart folks. Maybe we'll get the revival of "company towns" or "model villages" - parts of Próspera set aside for 'the workers' to live, which can be paternalistic benign areas like the Quaker mercantile families set up https://en.wikipedia.org/wiki/Bournville or the bad versions like some American models https://en.wikipedia.org/wiki/Company_town "I owe my soul to the company store" but most likely I think it will be service and low-paid workers commuting in and back out once their working hours are done.
Like every city, there is going to be inequality baked in - unless they truly mean that only the high-worth people are going to live in their shiny dream, and unless you have complete automation and robots, those high-worth people will want someone to work in the coffeeshops and fashion outlets and be on hand to tend to their teeth and so forth. That's going to (a) make Próspera attractive for criminals, from the opportunistic muggers and pickpockets to the organised provision of sex and drugs and other illicit pleasures and (b) foster resentment - it's all very well telling the low-paid workers "hey, you are earning more than the average Honduran manual worker", but the comparison between "I am working for people getting a million a year and a flying car on top of that" is still going to be evident.
No more poverty! Opportunity for all! is a lovely slogan, but the fact of the matter is that unless you have androids doing the servile work, not every single person in Próspera can be a merchant banker or movie producer or fancy high-tech something or other.
There is a ton of inequality already baked in. But it's worth noting that very corrupt places with a lot of crime and the police mostly on the take (like Honduras) are usually especially bad places to be poor. Living in a small apartment with little extra income in a place with little crime and honest police and judges is probably a lot better than living at the same material standard of living in a place with lots of crime and dishonest police and judges.
Regarding (a): As long as they have effective police, I doubt crime will be much of an issue, especially given how small the community will be in the beginning. As for (b), being paid what your labor is worth shouldn't foster resentment as long you are treated well, and have at the least the opportunity for upward mobility.
> Interested parties who don’t want to move to Roatan can seek “virtual residency” / “e-residency”, a concept pioneered by Estonia in 2014. This mostly allows virtual residents to set up companies in Próspera, governed by Prósperan law.
Or more specifically, a front for a tax evasion scheme.
10% is plenty to fund a health and education system and a lot besides, provided that your country is populated mostly by people whose incomes are high enough that they're keen to move to a tropical resort to avoid paying tax in their home countries.
Monaco and Liechtenstein seem to have a functioning healthcare and education system.
Monaco made its money off the back of gambling and has attracted an influx of migration, from the wealthy trying to use it as a tax haven to the usual migrant workers:
"Monaco has the world's highest GDP nominal per capita at US$185,742 GDP PPP per capita at $132,571 and GNI per capita at $183,150. It also has an unemployment rate of 2%, with over 48,000 workers who commute from France and Italy each day. According to the CIA World Factbook, Monaco has the world's lowest poverty rate and the highest number of millionaires and billionaires per capita in the world.
One of Monaco's main sources of income is tourism. Each year many foreigners are attracted to its casino and pleasant climate. It has also become a major banking centre, holding over €100 billion worth of funds. Banks in Monaco specialise in providing private banking, asset and wealth management services. The principality has successfully sought to diversify its economic base into services and small, high-value-added, non-polluting industries, such as cosmetics and biothermics.
The Blancs [casino operators that the royal family sold the licence to operate gambling to] ...quickly petitioned Charles III to rename a depressed seaside area known as "Les Spelugues (Den of Thieves)" to "Monte Carlo (Mount Charles)." They then constructed their casino in the newly dubbed "Monte Carlo" and cleared out the area's less-than-savoury elements to make the neighbourhood surrounding the establishment more conducive to tourism.
The Blancs opened Le Grand Casino de Monte Carlo in 1858 and the casino benefited from the tourist traffic the newly built French railway system created. Due to the combination of the casino and the railroads, Monaco finally recovered from the previous half-century of economic slump and the principality's success attracted other businesses. ...By 1869, the casino was making such a vast sum of money that the principality could afford to end tax collection from the Monegasques—a masterstroke that was to attract affluent residents from all over Europe in a policy that still exists today."
Basically, Monaco is a Mediterranean Las Vegas. Attracting the rich to have a good time resulted in support industries - from jewellers to banks - following along and setting up. This is certainly a successful business model, but you can't eliminate poverty by setting up multiple new cities based on gambling. And as noted, the very wealthy live on the hillsides with their yachts in the bay, while the blue and pink collar workers trek in daily from France and Italy.
Liechetenstein picked itself up off the ground after the Second World War by deliberately turning to financial enticements and setting itself up as a tax haven:
"Despite its limited natural resources, Liechtenstein is one of the few countries in the world with more registered companies than citizens; it has developed a prosperous, highly industrialized free-enterprise economy and boasts a financial service sector as well as a living standard that compares favourably with those of the urban areas of Liechtenstein's much larger European neighbours. ...Liechtenstein has previously received significant revenues from Stiftungen ("foundations"), financial entities created to hide the true owner of nonresident foreigners' financial holdings. The foundation is registered in the name of a Liechtensteiner, often a lawyer. This set of laws used to make Liechtenstein a popular tax haven for extremely wealthy individuals and businesses attempting to avoid or evade taxes in their home countries."
Your examples certainly work, but they work by "if you attract lots of already very wealthy people to come live here and bring their money with them, and then you cater to them becoming even wealthier, your area will do well" which may work for Próspera *if* they can attract and retain already very wealthy people. If they can't, their shiny model housing won't do a damn thing towards success. I think a lot of comment on here is justifiably sceptical that it may turn out to be, like Liechtenstein, run on a "brass plate company" model for any success: https://en.wikipedia.org/wiki/Brass_plate_company
I don't see a principled reason why 10% isn't enough to fund the basic services you need from government, particularly when your charter city isn't likely to be providing anything like welfare payments.
I briefly looked at their labor code. It looks like, by default, 25% of an employee's salary would go into a withholding fund, from which one can draw for certain purposes, such as medical expenses or pension. One could sign an opt-out where it would go down to 10%.
Is this withholding fund sensibly invested? If so, that seems like a really good default for most people. See also libertarian paternalism. Although the actual libertarian paternalist in me wants people to be able to opt out entirely. Plus I'm worried that it's not invested at all or else is invested in "prospera" which seems downright evil.
It says that opportunities to invest up to 90% may be offered.
On the other hand, it seems like it could be used for quite a lot of things, including 13th and 14th month (vacation) pay (for those who don't sign the opt-out), so the 25% may be insufficient.
By saying "how is this not simply a tax haven?" aren't you ignoring the several dozen paragraphs where it discusses other features? Can't it be a tax haven AND a bunch of other cool stuff -- in which case, it would be "very complexly a tax haven".
Prediction: this will be a great success on its own terms, and a bad thing for Honduras. It is pretty much the reference implementation of a tax haven, will all the obvious negative externalities it employs, and it will also drag down Honduran wages and labour standards through competition.
I'd say most of the talk about a "libertarian paradise" was written by hostile and/or opportunistic journalists. From the inside, it was never intended as a "libertarian paradise." It was intended as higher quality law and governance in order to create broad-based prosperity. Certainly Octavio Sanchez only wanted to see his country become prosperous.
Provided ZEDEs draw in capital investment and creating jobs, why wouldn't wages and labor standards rise broadly under this framework? As any economy liberalizes, the gains are broadbased and the standards of living rise. Generally, the more free markets, the higher the standard of living.
"Liberalize" sounds weird in context. Honduras seems never had had any kind of attempt at non-liberal / socialist bloc style of economy (unlike Venezuela or Nicaragua), but rather seems to have been relatively free export market oriented country; Wikipedia article tells "banana republic" was coined to describe Honduras. https://en.wikipedia.org/wiki/Honduras
Quote:
"Banana-exporting companies, dominated until 1930 by the Cuyamel Fruit Company, as well as the United Fruit Company, and Standard Fruit Company, built an enclave economy in northern Honduras, controlling infrastructure and creating self-sufficient, tax-exempt sectors that contributed relatively little to economic growth. American troops landed in Honduras in 1903, 1907, 1911, 1912, 1919, 1924 and 1925."
Wikipedia article turned out very interesting.
True to name of "banana republic", according to same Wikipedia article and clicking at the presidents, since the United Fruit they have had military coups, leftist presidents (with land reform and other leftist agenda) elected then deposed by military coups (halting the said reforms), a Football War with El Salvador, more coups, including one coup president ousted by another coup in 975 after U.S. SEC found out the firstly mentioned president had taken bribes from United Fruit Company to deduct banana export taxes, a return to evidently chaotic democracy, US military and CIA presence to help fight a war Marxist militias and support Contras in Nicaragua in 1980s, military , drug cartels in 00s, US military presence to fight said drug cartels, and another coup in 2009.
Today Honduras exports also textiles, coffee and ores in addition to bananas (production of bananas was seriously hurt by hurricane Mitch in 1998, which was significant, or no one has updated the Wikipedia page on Honduran economy since 00s). The economy Wikipedia tells me that textile industry is based on system of "Maquiladoras"; related, the government opened tariff free trade zone in Puerto Cortés (a major port and railway connection since the banana company era) already in 1975 and then elsewhere, followed by privately run "Export Processing Zones".
No doubt one country's history is more complicated than summary of its Wikipedia summary, but countries that are dysfunctional often also have a dysfunctional history. A couple of things stand out: People with guns historically seem to have lots of sway in Honduran politics: this has some implications on running a governance experiment without monopoly of violence. Honduras seems to have a history of many independence proclamations and constitutions. It could make the investors less confident in Prospero written in Hondurasian constitution or the safeguard of lots of promised human rights.
Another more striking thing, according to Wikipedia, Honduras has seen various versions of publicly and privately run enclaves and free trade zones for over century: bananas since the 20th century, textiles in 1970s. So maybe one should not be surprised to see a charter city initiative there of all places. On the other hand, while the preceding economic zones probably have helped to create the manufacturing economy that exists in Honduras (or existed in 00s when the Wiki was updated), they have not been stellar success to the effect of Hong Kong. Maybe iterative development works, and now they got it right when they have the zone set up its own kind of legal and investment framework in this one particular way that targets medical tourists?
You definitely know more about Honduras's history than I do.
Re: Liberalisation, my understanding (I spent 25-30 hrs in due diligence on this project) is that with combination of positive opportunities gives this project a very strong chance of success: supermajority approval of the zones, affirmed by the supreme court, approved by CAMP, supported by various treaties, 12% revenues to Honduras, best in world laws/regs/taxes/ownership, none of the perverse incentives of traditional govt, low labor costs, locations near shipping lanes, supply chain disruptions leading to repatriation near/within US, draconian reactions to pandemic elsewhere, decentralization movements, etc....
And at $3k/GDPperCapita, it doesn't take much upside to make this have a dramatic effect on this country.
All make this iteration of attempts at new govt models pretty attractive. Risks still clearly remain but there's lots of high impact reasons for this to be successful and all incentives for stakeholders are aligned.
12.0.1 - Did they consider naming it something that doesn't sound like a brand name prescription drug? "Ask your economist if Próspera is right for you."
You do know that the entirety of London these days pretty much depends on the financial industry? And that's one reason for all the hand-wringing over Brexit, that it might completely annihilate the finance industry in London and therefore the entire British economy. I'm less well-versed in the value of medical tourism, but given how healthcare is exploding as a percentage of GDP here in the US, I'm thinking it's primed for growth.
Financialization makes for fragile and corrupt democracies, so maybe Brexit will end up being a good thing to correct for the over-reliance on financial services.
Dubai seems to be turning towards medical tourism to help stimulate its economy (one of the reasons I snorted when I saw the picture of Dubai alongside Shenzen in the "then and now" photos was because I never thought all the artificial islands and luxury hotels rash of building was anything more than a vanity project to add some glitz to the image of the UAE and cover over the less savoury aspects of life there): https://skift.com/2020/01/20/medical-tourism-emerges-as-a-bright-spot-for-flagging-dubai/
It's not about generating income or jobs (after the initial construction work provides temporary jobs boost), it's about attracting rich people to come park their wealth there, use it as investment opportunities (like the London property market), companies to headquarter there (we here in Ireland know all about that https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp) and become a hub for financial trading and high-tech R&D in various industries. I don't imagine there will be traditional manufacturing industries, but what do I know? Maybe they will set up business parks where the pharma companies, as mentioned elsewhere in this thread, can happily engage in creating new drugs and letting Jack sit on sixteen boards with no conflict of interest where he can sign off on Greg getting 500% bonus and Greg, by virtue of the fifteen boards he sits on, can sign off on Jack getting 600% bonus for the hard work they are doing.
The pictures of Dubai and Shenzhen next to each other also help make clear how much Shenzhen has actual urbanism, while Dubai just has the "skyscrapers-in-an-interchange" version of Le Corbusier's old "towers-in-the-park" idea.
This really stuck with me - https://www.nytimes.com/2019/08/09/business/medical-tourism-mexico.html - Before reading and researching the basis of the article, I had heard of medical tourism but had a hard time imagining doing something like this but no more. Yes, there's a market for it and quite a large one.
....Manufacturing, logistics, maintainance, building large aircraft/ships, agriculture, software, near-shoring, infrastructure, various supply chain service businesses, and more
I know a Belgian guy named Leopold who has made a really convincing case to numerous world authorities as to why he should control underdeveloped land.
These home prices are astonishingly expensive by US standards (which in general has a fairly low cost of construction). $3750/m2 is about $350 per square foot. For reference, outside of very expensive metro areas, typical single family home construction in the US comes in around $110-$150 per square foot, and apartment construction is even cheaper, perhaps $90-$100. A mobile home comes in even cheaper, at maybe $40-$60 a square foot.
Even their "affordable" beta residency comes in shockingly expensive - they look like they can't be more than 200 square feet or so, which isn't a great deal for $40,000.
This isn't exactly a ringing endorsement for the removal of overly strict building codes as a mechanism ushering in low-cost construction.
(the obvious caveat here is that the US makes it hard to build really small homes, which is true to some extent).
Trey here (from the article). That is the price of our most premium/lux offering. Our lower cost co-live units which will launch next year are less than $2,000/m2 construction cost, and will be sold and built in far greater numbers.
Thanks for the reply. That still seems expensive, but I remembered you're building on a small island - am I right in assuming that just getting stuff to the island is a major cost driver?
Scott mentioned the building code briefly, I'd love to know more about it/your construction plans in general, if there's anything you can share. briancpotter@gmail.com
I have no localized knowledge of the shipping costs in the Caribbean, but I'm painfully aware that bulk shipping costs, especially delay-sensitive shipping costs, that remotely touch any point between, oh, let's say Shanghai and Penang, are on average roughly double what they were eighteen months ago. One guess as to the root cause.
Hello Trey, my father's company has a building solution that might allow you to produce much of the building material on the spot and in light-weight while being very suitable for your needs and a great isolation material (making costs of cooling for example much lower). Reach me at work ( a t ) dnesic ( d o t ) com if you'd like to discuss a bit more. I'm also curious about the educational systems there, although I'll read up on your website first before asking you more questions!
I am piggybacking on this random comment just to say that I think this idea is awesome, I want it to succeed and I wish there was a way I could contribute! Just the fact that you're trying stuff like this is so heartening. Good luck!
Given the normal wages for construction workers and similar professions in Honduras it seems you'll have to subsidise housing or pay then significantly more if the plan is for them to also live in Prospera. Or is the plan that they live elsewhere?
When I visited Roatan about 15 years ago there were lots of shanty villages. Its possible that it has changed to be completely covered by resorts but when I visited most of it was still pretty poor. I would imaging that most of the laborers would not live in Prospera.
No idea where you can build right now for as little as $110/sf unless you're doing it yourself and even then it would be only the cheapest of materials and not including land costs. Builders in way upstate NY are quoting $250/sf right now (not including land costs) which yes, our higher labor rates are hurting us but the cost of materials is affecting everyone, everywhere right now. Sheet of standard grade plywood at the local Lowe's just hit $50.
Regardless of whether the city's COVID restrictions were dumb or pretextual, the CEO flouting them does not bode well for Próspera's outlook as Honduran Sovereignty Respecters. You yourself seem to be seeding this in the article rather ham-fistedly at the end of 10.2 with some "if they do, it's not that bad!" hand-waving. You are ultimately trusting their judgment to only flout the bad laws and not the good ones. This trust does not seem to have been earned.
Also, there is a big contradiction between 10.1 and 10.4. It sounds to me like if workers are being abused, they CAN'T just walk 500 feet and be back in regular Honduras, since as you point out regular Honduras isn't made up of five-star resorts or golf courses. Suppose an employer pays a domestic worker to move to their house under false pretenses and then refuses to return their passport (a situation which I imagine was pretty rare in Irvine but happens every single day in Dubai). How long to get to regular-regular Honduras?
Roatan is like Hawaii - lots of resorts, but also real people who live there and normal towns. There's also a $30 ferry to the mainland, which is only a few days' wages even for poor Hondurans.
The part where you sarcastically say the territorial integrity of Honduras is the most important thing ever, foreigners shouldn't have an hand in the institutions, etc. Well, the CEO apparently feels that accomplishing the Randian feat of constructing three buildings entitles him to break COVID restrictions. How is he going to act when there's actual businesses there?
Please note that the example I gave was a foreign worker, not a Honduran. So if there isn't some consulate on the island, or if they need to show the ID their employer seized to use the ferry, they're SOL. Again, this is an extremely common happenstance in Dubai, where the slave laborers are mostly south Asian migrants and not natives. You talked up the Dubai experience of the principals. If you're really going to steel-man the case against it you could probably start there.
There's pretty unlikely to be substantial foreign labor - the law says they need 90% Honduran labor, and the remaining 10% is probably going to be highly skilled First Worlders they can't find a Honduran replacement for. Also, I think UAE just didn't have very many people and the people were too rich from oil subsidies to work - usually you don't have domestic labor shortages in developing countries.
I am not sure how ultra-nationalism about letting foreigners choose a legal code is related to Brimen seeming kind of like a loose cannon. If Brimen violates regular Honduran law while in regular Honduras, he should get arrested like anyone else. How does that relate to whether letting some parts of Honduras have different laws than other parts is a good idea?
stucchio's anecdotal observations are an incredibly weak defense of the kafala system. He admits in a sibling comment how vulnerable his observations are to survivorship bias - the people who actually manage to come back to India are not the ones who are being abused after having their passports stolen. He's not talking to people with no options who have been tricked by traffickers with lies about their prospects and working conditions. In contrast, the evidence that systematic abuses take place is overwhelming. See eg this academic report https://scholarcommons.usf.edu/cgi/viewcontent.cgi?article=1302&context=jss or this popular article https://aeon.co/essays/are-the-persian-gulf-city-states-slave-societies
I'm a little concerned about that paper - it's not itself a primary source, and the linked source for most of the most serious allegations is an article by Johann Hari (cited six times, almost 20% of the total citations of the article), who got fired for committing various types of journalistic fraud, but who is more famous in my circles as one of the most egregious psychiatric crackpots.
I will look into the other sources to see if they are any better.
"Well, the CEO apparently feels that accomplishing the Randian feat of constructing three buildings entitles him to break COVID restrictions."
He broke COVID restrictions because people were complaining that he allegedly hadn't explained what he was doing adequately to the locals. So he held a session to explain, which automatically broke COVID restrictions regardless of the manner in which he conducted it (unless he was supposed to, I dunno, hold a Zoom meeting with a bunch of poor subsistence fishermen who don't have computers?), damned if you do, damned if you don't.
> If you're really going to steel-man the case against it
I was really startled by the whole-heartedly negative presentation of Próspera critics in this post. "You can read what actual anti-Próspera people have to say here...But I can’t stress enough how misleading and awful most of it is." The critics sound like they believe things that only a stupid or crazy person would believe.
Of course, it's only startling because I learned steel-manning from this blog, which provides an example that I've tried to learn to live up to. But it's hard to imagine that Próspera opponents would see this as passing their ideological Turing test.
I take back the "please note" above because my hypothetical was not explicit about the domestic worker being non-Honduran. (This is the sort of oversight I would edit out in the old comments). I'm still concerned by the hypothetical but should have specified it more.
Honduran criminal laws still apply. At least in theory, they can walk into a Honduran police station and report that their employer stole their passport.
I've also never understood to what extent confiscating employees' passport in Gulf countries prevents them from leaving. I'd assume if you walk into your country's embassy and say that your employer confiscated your passport (or just say that you've lost it), they will generally give you a temporary passport you can use to return to your country, at least if you have some way to identify yourself. Is this not the case? Or is confiscating their passport more about limiting their options within the country than preventing them from leaving?
The situation in some Gulf countries is that if a contract worker doesn't like the contract, breaking it may incur financial penalties that the worker can't afford and they would be prevented from leaving the country if that debt is not settled, as trying to leave the country without paying local debts is a criminal offence in e.g. UAE as far as I understand, you simply won't be permitted to board the plane if you haven't settled any fines, all the loans, leasings, rent, credit cards, etc locally. So not having "settled properly" with the employer may be sufficient to be prevented from returning even if you get a replacement passport; the passport is just a visible way to prevent the worker from running off unexpectedly, if they try to do it with a dispute and claiming a lost passport, there are also other legal restrictions that ensure that the negotiating power lies with the local employer and not with the immigrant worker.
I had intended to cover the white paper myself, but here I am scooped.
Full disclosure, I know a bunch of people invested in the project for a while now, and am personally quite excited by it. This is all close to the mark from what I recall from older papers and presentations, though i'm not fully caught up at the moment.
The pitch back then focused explicitly on attracting industry by providing a lot of freedom and looser restrictions on pharmaceutical and biotech research. Some of the people involved are closer to Friedman anarchists, for whom Prospera is a stepping stone to more ambitious projects like private law. They would certainly be okay with your house being in Prospera and your neighbor being in regular old Honduras.
I can't say for sure, not having spoken to most of the investors, but I do sense a strong idealistic streak out of the project, and the earnest belief that it will improve lives. I'm admittedly hopeful.
"The pitch back then focused explicitly on attracting industry by providing a lot of freedom and looser restrictions on pharmaceutical and biotech research."
Excuse me while I sink my head in my hands. We have experience in my country of enticing in pharmaceutical industries, and it works great - for a certain area. But you do end up putting all your eggs in one basket. And it does not necessarily turn the surrounding areas into newly rich everybody. (Ask Scott his impressions of Cork city, and if there was poverty and crime there, even though Ringaskiddy and the pharma industries there are on the doorstep https://www.siliconrepublic.com/careers/biotech-pharma-companies-ireland). There is also the perennial threat of "as soon as there is the hint of an economic downturn, the parent companies shutter foreign plants and concentrate on US domestic base".
Also, "come set up here and you can be Victor Frankenstein!" is not a great look. Whether or not we believe that Covid-19 escaped from the Wuhan lab, making a selling point of "our regulations are so loose unlike the fuddy-duddies elsewhere!" doesn't make my heart leap up with joy that there is not going to be a similar "whoops!" incident.
It's much more likely they meant looser *financial* and business regulation than plain old occupational health & safety regs. As in, none of this crap about who can sit on what board without a conflict of interest, the creative "crime" of insider trading, and the nest of brambles that is IP law. I rather doubt anyone has the idea that they should just dispense with any fuddy-duddy restrictions on pouring methyl mercury down the drain or storing your anthrax spores in an open jar in the lunchroom fridge.
Loose financial regulation often results in a culture of "ah sure, pour that down the sink, it would cost too much to dispose of it in the recommended way and anyway, three of our directors also sit on a board with the ex-civil servant who worked for the environment ministry, it's all sorted, he can use his contacts there to keep us clear of any penalties".
It wasn't till I read 19th century pulp detective stories that I realised the many and varifold ways 'insider trading' could be done to rig the market and relieve pigeons of all their investment money. But I'm sure that 'light touch' regulation will never ever result in any body like Bernie Madoff popping up again to thrive in such an environment!
In case it wasn't abundantly apparent, I am *extremely* sceptical when it comes to opportunities for money-making because I do think that human nature being what it is, people *will* take every opportunity to trouser as much cash as physically possible, and companies become piggy banks for the executives to plunder while the duty to the customers comes far, far behind. The Savings and Loan collapse of the 80s where deregulation was supposed to solve their problems? Enron? Lehman Brothers going kablooey in the 2008 crisis? The banking crisis in my own country of that period https://en.wikipedia.org/wiki/Post-2008_Irish_banking_crisis that cratered our economy for decades after and resulted in austerity budgets? Anglo Irish Bank example was a fucking outrage, but that was the attitude at work: how can we extract as much blood from the stone as possible: https://en.wikipedia.org/wiki/Anglo_Irish_Bank_hidden_loans_controversy
So yeah, I don't come down on the side of "cut away the red tape shackling our bold entrepreneurs!" because revolving door appointments onto boards lead to a select little group treating the rest of us as pigeons to be plucked https://en.wikipedia.org/wiki/Revolving_door_(politics)
I damn well *do* want limits on how many boards Jack can sit on and all conflicts of interest transparent, so it won't be Jack handing a plum contract to his brother-in-law using taxpayer money to pay for it, and brother-in-law George paying Jack kickbacks out of that.
An interesting hypothesis, but since it strikes me -- and I know something about those environments, having worked in them personally -- as dubious, I would need some empirical evidence to consider it seriously.
As opposed to operating a business in Honduras, where, of course, the incorruptible and dilligent regulators will never allow an externality to go unpaid-for?
Well, there's no need to set up a libertarian paradise for that, which is probably one reason why prior attempts to set up similar ventures in third world countries haven't exactly met with success.
To be fair, Galt's Gulch, Chile, one of the more famous examples, was hamstrung by the fact that the founders didn't understand the legal system they were setting up in. In other words, whatever you may think of their ideology, their incompetence was a bigger and more immediate problem.
Yeah, the missing ingredients are rich natural resources/trade routes/a huge tax base (Hong Kong, Singapore, Dubai) and a huge injection of tax money from the government (Shenzen, pretty much all the Chinese special zones, NEOM, the USSR if you want to get historical). Próspera has neither of these things and so I predict it will be another one of the many failures or mediocrities. The truth is such projects are huge drains on national resources and most electorates simply don't have the stomach for it, which is why this strategy is almost exclusively in less than democratic regimes. The Chinese could spend 70% of their entire budget developing three provinces because the other provinces didn't get a vote. And they certainly didn't have anything as pedestrian as "human rights concerns."
Democracies can grow rich, stable, and prosperous. In fact, they do so more commonly than dictatorships. But they can't use the same tools as dictatorships, which closes off those paths to them. Which, to be clear, is a good thing. Most of those examples include massive humans rights abuses! But you can't imitate dictatorial models without having dictatorial powers or an electorate willing to vote for policies that have historically proven hugely unpopular.
> OTOH, it'd be quite the acid test to see a bunch of libertarians sucessfully run a polder.
Exactly how so?
At the time the Hollanders build those in the Netherlands, they were the most liberal (in the libertarian sense of the word) place in Europe, possibly the world.
I'm confused by why people seem to think sea levels are likely to rise significantly on a "decade or two" timescale, when they haven't risen significantly over the past couple of decades. Fossil fuels weren't invented in 2015.
I'm also old enough to remember reading predictions that New York City would be underwater by 2020, though.
Just for fun, I worked out the steady-state thermal power input required to melt enough ice to raise the world ocean level by 2m in 20 years. It comes out to 0.38 PW (0.38 petawatts). That's a pretty big number (world energy production is about 0.02 PW), although it's small compared to the total thermal power the Sun delivers over the entire daylight side of the Earth, which is about 175 PW. It's big compared to typical fluctuations in solar flux, though -- the sunspot cycle is accompanied by a periodic variation in solar luminosity of about 0.1%.
A) It's not just about ice melting but also about thermal expansion of water, which is the bigger deal.
B) The increased CO2 levels cause an increase in retained energy, so that 0.38PW can be spread out over however many years.
C) This doesn't immediately become a concern when we're at 1.99m of sea level rise. The journey to 1.99m involves huge amounts of refugees fleeing disasters.
(A) As far as I know only the IPCC asserts that as much of 75% of sea-rise can be attributed to thermal expansion, and in my opinion that group has become too corrupted by ideology to be trusted. There's plenty of other work that suggests a more modest contribution -- which means you still need to melt a lot of ice. Anyway, I wasn't making a definitive calculation, only a back of the envelope order of magnitude estimate, and if it's off by only a factor of 2 or 3 (even the IPCC estimate only suggests a factor of 3) that would actually be rather good.
(B) Energy flux is always in balance, the question is how high does the temperature need to be to get the energy out to space equal to the energy incoming. It's a Wien's Law question, roughly, although an excellent primer on the complete physics can be found here:
In any event, what I calculated is a *power* not an *energy change* (which is why the units are watts instead of joules), that is, I have already assumed the energy required is spread out over the time mentioned.
(C) Maybe, maybe not, but in any event this was not something I addressed. Or care to, since it involves massive assumptions about human nature and human society and those are not my fields of competence.
Nice, now add black body thermal radiation into space. Are clouds positive or negative? (block solar, but keep in thermal) And what about polar icecaps?
New York metro has an official plan regarding this: http://fourthplan.org/action/climate. Looks like the concern for 2050 isn't so much everything will be permanently underwater as flood regions will be much larger than they are today. As in, the storm surge from Sandy was a lot worse than it would have been in 1950, but by 2100, it'll be catastrophic without serious changes. They are apparently planning to remove all infrastructure from the Meadowlands and effectively cede that to the ocean, though.
"So for example, when you buy land in Próspera, you’ll have to sign a Covenant Restricting Vice Industry Uses - ie you can’t turn your house into a joint brothel+casino and do unethical medical experiments in the basement. Even the strictest libertarian has to admit this is fair; if you sign a contract, you’ve got to follow it. But you can tell HPI plans to have the town be ship-shape, well-organized, and family-friendly, instead of the sort of Wild West vibe some people associate libertarianism with."
My emi-serious suggestion. Democratic governments should just claim all land in their jurisdiction as their property, and make it clear that it not owned, just leased out on conditions. The governments themselves should claim to be cooperatives jointly owned by their citizens. Then functionally equivalent rules to the property and tax laws that currently exist would count as a libertarian utopia.
You can object that if they were to do this now, they would be stealing the land from its current owners, and sure this would offend the libertarian ethic- but all the land in the world has been stolen at some point, and after a while, Libertarians seem content to let the claims of those the land was stolen from be extinguished.
So presumably, if the US were to declare itself a kind of corporation owned by its citizens and expropriate all the land, in a hundred years it would count as a libertarian utopia.
Perhaps this tells us that the libertarian concept of freedom is excessively formal/procedural and not substantiative enough.
Basically, property rights on a large enough scale amount to big government anyway. The only difference is that the system of property rights the libertarian imagines usually is not conducive to even nominal democracy.
I was thinking the same thing, that even if you split everything into independent charter cities, they could combine and buy each other up until you have the same situation as we have now. Perhaps the defense would be that it's impossible for one group to buy literally everything, there's always going to be holdouts and dissidents. But then you can point out that there are multiple countries, which in effect achieves the same thing.
The libertarian concept of freedom is heuristic. It arose in the real world and in response to its conditions. In the real world, property owners do a lot less oppressing than governments. Could it change? Absolutely. It might even be changing right now, and it might turn out horribly in Prospera. Might the reason why this hasn't been the case be because property owners had fewer opportunities to oppress than governments? Sure. But I think it's worth the experiment.
I don't think most libertarians are that interested in democracy for its own sake, and I think that's by design. Certainly, I don't put much stock in it for its own sake. Might you say that I can say that because I live in one? Sure. But it's also because a democracy could theoretically do exactly what you suggested it might: expropriate all the land and return it only on condition, or not at all. That would be Bad, especially from a libertarian perspective. Winston Churchill actually had an interesting critique of landlords, and pointed out (among other things) quite rightly that land is the source of all wealth. With the government owning all of it, how is there anything left but slavery?
To a libertarian, democracy is good to the extent that it protects the rights of minorities, of personal freedom (i.e., able to go where and do what I want without harming others) and of property. Same with libertarian philosophies and policies (if any such exist). If one or the other ceases to do what it was designed to do, better head back to the drawing board.
And when I say that, you should know I'm thinking of Churchill's critique; that is, if pure application of what we today think of as libertarian principles leads or replicates massive monopolies on land that prevent any kind of real independence from one behemoth or another, it will need to be reconsidered and reformed. What would such a reform look like? No clue, but fortunately we're not there yet. We have this new (or new-ish) thing to try, and in a world where it appears that respecting property rights and personal liberties leads to prosperity.
The only even close examples I can think of of this kind of thing being tried would be Chile under Pinochet. I know that a lot of Chicago school/monetarist/Mises/Hayek types went there to try to build some kind of rightish/libertarian "utopia," but that was firstly grotesque and secondly doomed to failure since it was a personal dictatorship designed to maximize and maintain the power of one person and of the state, and a military dictator no less, which is about the least libertarian thing I can think of. On the other hand, that shameful chapter did have a happier ending than most dictatorships, left or right wing, with him losing a referendum and stepping down. I believe today Chile is one of the most competitive economies in South America, if too dependent on mining.
I don't mean to be too glib here, but I think you'll be interested to know that this mass expropriation of land has actually been tried before, and even in the name of democracy. In the latter cases, it was done in many if not all communist countries, all of which claimed to be perfect democracies. We know the truth of that. To the extent that it has worked out with things like the Shenzhen area, that was from going back on such ideas about communal ownership.
It was also the concept that underlay many monarchies. The King was the owner of all land in the kingdom, and enfeoffed his vassals with such portions of the land as he elected on condition that they provide services and/or taxes. A mass expropriation actually did occur after the Norman invasion of England, when the Norman kings explicitly took ownership of all the land (I'm not super familiar with land tenure under the Anglo-Saxon kings, but I do believe the Norman policy was an innovation) and handed it back out to his cronies and a handful of English noblemen who were too powerful or too far north to ignore. When they rose up, that was corrected.
It was only after this system had been sufficiently eroded that things improved.
So I think one has more favorable antecedents than the other, and we should go with that one, especially on the scale of 59 acres.
I think the thing to say here is that there isn't one libertarian view. Some libertarians think you can derive the correct answer to every political question from the belief that everyone can do whatever they like with themselves and their property (provided they don't use their property to attack others, or to damage other people's property). Others have much more sophisticated views. But some of the definitions of liberty given by the former may indeed allow for a government that exercises super-strong control through property ownership.
> My emi-serious suggestion. Democratic governments should just claim all land in their jurisdiction as their property, and make it clear that it not owned, just leased out on conditions. The governments themselves should claim to be cooperatives jointly owned by their citizens. Then functionally equivalent rules to the property and tax laws that currently exist would count as a libertarian utopia.
This is kind of like solving medical malpractice by advocating that the doctor who messed up a procedure claim to own the physical body he was working on.
> all the land in the world has been stolen at some point, and after a while, Libertarians seem content to let the claims of those the land was stolen from be extinguished.
This is a misrepresentation of the libertarian position on titles.
> Perhaps this tells us that the libertarian concept of freedom is excessively formal/procedural and not substantiative enough.
It does tell us that your interpretation of such is like that.
No libertarian philosopher has ever given a deontically grounded and coherent account of ownership, transmission and origination of titles, counterexample free, which achieves anything like the objective of establishing that existing property relations are wholly or partially justified.
Locke and Nozick's accounts, for example, have been shot full of holes. To the extent that such accounts work, they often imply that there should be massive redistribution of ownership, or that we should "start afresh" and go from there.
In practice then, without a formal alternative framework, the really existing libertarian framework consists in treating existing property rights as mostly valid, unless a particular individual has a very recent and better claim.
Since existing property relations are mostly based on "theft" and the consequences of a market built on "theft", then, whatever their wishes to the contrary, the ultimate justifier of property relations for the actually existing deontic libertarian in practice is custom, time and, ironically, property law.
> the really existing libertarian framework consists in treating existing property rights as mostly valid
I can't speak for all the libertarians out there, but I believe that if it can be shown that A appropriated B's land and sold it to C, then B is entitled to restitution; but the form of that restitution is a cash payment from A, not the return of the land from C, since C (or more likely Z, many transactions later) in most cases is unaware that the land was appropriated, and is likely to have placed a great deal of reliance on his use of the land. If that's not the case, then B can always buy the land off C with some of the cash. (Conversely, if the rule is that B gets the land from C and C gets the money from A, then C can buy the land back off B if it's worth more to him. But since this is more likely to need the trade to reach the highest-valued use, and causes a bunch of uncertainty, I think considerations of transaction cost lead us to prefer the version I initially described.)
But I also oppose instituting a reparation system like this under our current governance systems, because I have no confidence that it would be administered according to fair and impartial justice. Common law and custom provide a local optimum that's at least somewhat resistant to political manipulation, which is why I (and I suspect many other libertarians) favour keeping it around for now as a *temporary hack*.
I think this is a perfectly respectable as a position, but it sounds like you're leaving behind a strict rights-based view for maximizing something, thus going beyond the scope of what I'm objecting to here.
In my opinion, all valid deontologies are grounded in consequentialism. That is, the proper use of notions like "rights" or "natural law" is as a way to construct Schelling fences on slippery slopes, because we meat-heads are so bad at coördination that we can't even follow rule-utilitarian ethics ourselves, let alone codify them into law, without creating huge screwups through failing to properly account for uncertainty. ObEric: http://esr.ibiblio.org/?p=4878
Consider also the centrality of 'optimisation' to Yudkowsky's definition of intelligence. We all choose our positions on the basis of maximising something, it's just that not everyone is honest about that (even with themselves). In fairness, sometimes that's because the social control mechanisms used to coördinate that optimisation rely on belief in divine command or whatever — a widely-shared delusion can become load-bearing (possibly a spandrel/exaptation?)
I don't know whether it is even possible to get the vast bulk of society to understand the consequential reasoning behind libertarian positions; it may be that for a stable libertarian society, many people would need to believe deontically in the NAP ("strict rights-based view"), just as in (say) a Christian society the laity mostly believe in the divine command of (the priesthood's interpretation of) Christian morality, while the priesthood have different reasons. I hope this is not necessary, because the idea of 'fooling the people for their own good' is distinctly icky (it involves arrogantly assuming that one is _of course_ not fallible oneself, unlike those poor ordinary people; hence see previous remarks about consequential reasoning under uncertainty). But at any rate I am not prepared to criticise natural-rights libertarians too harshly, since their belief system might in fact be the best way for humans to live happily together.
“ No libertarian philosopher has ever given a deontically grounded and coherent account of ownership, transmission and origination of titles, counterexample free, which achieves anything like the objective of establishing that existing property relations are wholly or partially justified.”
Thats quite a sweeping response to the observation that you’re failing to correctly represent libertarians on their ideology.
“ Locke and Nozick's accounts, for example, have been shot full of holes. To the extent that such accounts work, they often imply that there should be massive redistribution of ownership, or that we should "start afresh" and go from there.”
Its fine for you to say those accounts are unpersuasive to you. “They have been shot full of holes” is just a value laden characterization essentially based on your dislike of those accounts.
“ In practice then, without a formal alternative framework, the really existing libertarian framework consists in treating existing property rights as mostly valid, unless a particular individual has a very recent and better claim.”
It took you a long way and a lot of unnecesary prior statements to get to the restatement of the basic fact “property rights are presumed valid unless disputed” which is not even a libertarian idea, just a consequence of the nature of property rights.
“ Since existing property relations are mostly based on "theft" and the consequences of a market built on "theft", then, whatever their wishes to the contrary, the ultimate justifier of property relations for the actually existing deontic libertarian in practice is custom, time and, ironically, property law.”
You’re conflating property rights under the current non-libertarian system with property rights as imagined by libertarians who are not even agents of the government. Its hard to see how you would be so sloppy if you were considering these ideas charitably.
"Its fine for you to say those accounts are unpersuasive to you. “They have been shot full of holes” is just a value-laden characterization essentially based on your dislike of those accounts."
I am describing the very near consensus of professional philosophers who have studied Nozick and Locke's respective theories in detail. It's a bit more than just a personal hunch of mine.
You're of course free to present your own account if you think you've got it solved.
""“ In practice then, without a formal alternative framework, the really existing libertarian framework consists in treating existing property rights as mostly valid, unless a particular individual has a very recent and better claim.”
It took you a long way and a lot of unnecesary prior statements to get to the restatement of the basic fact “property rights are presumed valid unless disputed” which is not even a libertarian idea, just a consequence of the nature of property rights."
These two statements aren't the same at all though, are they? Valid unless ("A very recent and better claim" [with claims based on a historical conception of distributive justice]) vs valid unless "disputed". All property claims are "disputed". You're conflating a strong and hugely debatable claim, that property rights are valid unless extensive conditions around a better historical can be met, with an absurdly weak claim, that property rights are valid if no one disputes them.
"You’re conflating property rights under the current non-libertarian system with property rights as imagined by libertarians who are not even agents of the government. "
No, I'm saying that actually existing libertarians already do this themselves by treating existing property rights as generally valid. The motte is a promissory note saying that a fully fleshed out historical theory of distributive justice will be provided, the bailey that is returned to once scrutiny is removed is just generally accepting existing property relations.
"Its hard to see how you would be so sloppy if you were considering these ideas charitably."
"I am describing the very near consensus of professional philosophers"
an argument from authority seems to be an entirely inappropriate method of challenging libertarian doctrine.
"You're of course free to present your own account if you think you've got it solved."
I'm sure any difficulties you have with the orthodox account could be cleared right up if you articulated them.
"These two statements aren't the same at all though, are they? Valid unless ("A very recent and better claim" [with claims based on a historical conception of distributive justice]) vs valid unless "disputed"."
Presenting a claim (that you presume to be better [otherwise why would you present it?]) would be commensurate with the act of disputing it.
"All property claims are "disputed"."
Manifestly false.
"You're conflating a strong and hugely debatable claim, that property rights are valid unless extensive conditions around a better historical can be met, with an absurdly weak claim, that property rights are valid if no one disputes them."
Lets try it this way, what does it mean to you that property rights are "valid"? Is validity of property rights an objective thing that can be tested in a laboratory? Or is it a social construct?
"No, I'm saying that actually existing libertarians already do this themselves by treating existing property rights as generally valid."
That sounds like you're treating some subset of libertarians you have dialogued with as authoritative emissaries of libertarian dogma.
"The motte is a promissory note saying that a fully fleshed out historical theory of distributive justice"
Plenty of books on the subject but I'm not sure I have heard anyone since Ayn Rand claim that it was fully fleshed out, in fact the opposite.
"the bailey that is returned to once scrutiny is removed is just generally accepting existing property relations."
Your experience is not representative of the community or the literature, according to my experience.
"Language, please my dear."
I call 'em like I see 'em. Plenty of libertarians are opposed to indigenous expropriation, such as occurs today. Look up the Belo Monte Dam where the government expropriated the natives of land, again, even though those indigenous people should have untouchable title to their land. This stuff is still going on.
I've been trying to make this same point for years now, although it never seems to move anyone. What's funny to me, is that in the US the government already allots land not as allodial titles, but fee simple, which in plain English means you don't, and never have, "owned" it in the way the libertarian-capitalist sense of ownership. This is why, for example, eminent domain or other taxes are not theft. To claim otherwise would be to demand a legal property right that you were never originally granted.
But since the whole libertarian gimmick is to define "freedom" as being anti-government coercion, but pro-private coercion (i.e., pro "property rights" in the libertarian-capitalist sense), they have to think of some reason why the government is uniquely *bad* compared private ownership.
And their go-to explanation is that the government steals from you via taxation and such, while private individuals don't. But even if we ignore the face-value problems with framework (for example, don't private actors also do plenty of actual theft, here in the real world?), the argument is simply untrue on its own merits! Even by libertarian-capitalist logic, the government has not sold the "bundle of rights" that contains "Power of Taxation" on its land titles.
(The second go-to argument for why states=bad and private property=good, is that they say you get to choose which rule of private property you are subject to, but you don't get to choose which rule of states. But obviously, people are born not just into states, but also onto private property holdings without their say in the matter. Literally no one [I'm pretty sure] is born onto a private property claim which they already own, as a newly birthed infant. And likewise, you free to leave both your state and your private property that you live under [once you turn 18 at least], so long as another state and/or private property claim is willing to let you in. So this distinction falls apart upon a moment's worth of thought. And for those of you who think I'm strawmanning here, Scott repeats this ridiculous distinction in this very essay.)
The libertarian position is that the government never had any right to that land in the first place. For this reason, libertarians will not be swayed by your argument.
It's true that I didn't cover that base. Mainly because most libertarians in the rationalist sphere are of the Bryan Caplan persuasion, and have taken to abandoning that line of argumentation. (https://www.econlib.org/archives/2012/09/do_indians_righ.html)
The basic counter-argument to "homesteading" from the left, is that all sovereignty claims in the US were stolen from Native Americans during the 1500-1800's. So if state's sovereignty claims in the US are illegitimate because they weren't initially appropriated via homesteading+voluntary transaction, then private property claims must be so as well.
Caplan and Rothbard note the power of this arg. They counter that if no living victims exist and the person currently in possession isn't the thief themselves, then the title should revert to whoever current possessor may be. This is a fine work-around, but it has the side effect of disregarding the necessity of "homesteading+voluntary transaction chains" for BOTH private and state claims.
By taking this route, Caplan and Rothbard were able to rescue private property claims from "homestead" based attacks against their legitimacy, but only by throwing away their own ability to launch "homestead" based attacks against the legitimacy of the state. So yeah, I don't hear this often anymore, it's becoming a somewhat old-school arg.
But the private claims are still stronger than the government claims, because they have a basis in homesteading, whether or not that land was legitimately unowned prior to that homesteading, whereas government claims are (mostly) empty claims, with no homesteading. So one can reject the latter without having to reject the former.
I think almost every use of the phrase "the libertarian position" should be replaced with "a libertarian position." Don't expect ideological uniformity from the nonconformists' club.
Yes, it is my attempt at the strongest libertarian position given the constraints posed by the argument. No actual libertarians were harmed in the making of the counterarguments.
This seems a valid position for e.g. middle of USA, but it's not universally applicable - in the "old world" the equivalent of homesteading of unclaimed land happened before multiple radical regime changes, conquests, and mass redistributions of property, so there's effectively no land at all for which you could trace a legal claim to an original "homesteader" without multiple cases of what most libertarians would call theft. So if that's the criteria, currently *every* single owner of the land - no matter if government or private - has eventually obtained it from someone who stole it. Well, perhaps their great-great-great-grandfather obtained it from someone who stole it, but it doesn't change the legitimacy. *All* land around me has been stolen multiple times (and sometimes returned to the previous owners, again multiple times), and for a particular plot you could name many "rightful owners" depending on just how many centuries of thefts you're willing to look at.
Among those libertarians absolutist enough about property to otherwise be vulnerable to your suggestion, approximately none of them believe that merely "declaring everything as your property" is a sufficient condition to own all those things.
In practice such absolutist libertarians don't have a properly worked out theory of property acquisition, transfer etc which isn't full of counterexamples and in the absence of such basically treat conventionally recognized property as legitimate. Until the promissory note of a fully worked out deontic theory of property rights is filled in, it seems to me that libertarians mean by property *that which is conventionally recognised as property*, even if they don't admit this. So I think the objection stands, because "whoever is recognized as the holder and has been for a long time" seems to be what they end up meaning in practice.
Again, at least till an alternative theory is worked out.
Simply declaring the government's powers to be private-property rights does not work the magic of private property, any more than accounting for inputs in a state-managed economy with a bunch of made-up prices and profits works the magic of the price system.
This seems like an interesting idea, but it feels like it won't scale up very well to its stated goals. They're specifically looking for professionals and remote workers to move in, and seem to have relatively high land costs (for Honduras). This may very well turn out great, but it'll just be a city of tech workers. I don't really see a good way for those in poverty to get a foot in the door.
I'm also curious how the education system will work. They have guidelines for how it should be run, but the schools will also be private? Is the government going to create some schools, and are they going to set the price or leave it up to the market? For that matter, almost half the taxes go to handling sanitation and power and similar, does that mean those will be subsidized in some way?
So Prospera says it will offer Honduras's poor a better life in neighborhoods untouched by violence and poverty... and I get the impression that anyone who breaks Prospera's social contract gets kicked out? Is that correct?
Somehow this reminds me of the charter schools that expel disruptive students and brag about their high test scores.
In other words, it sounds like Prospera will filter out anyone who doesn't function well in Prospera, which unfortunately might be a lot of poor Honduran applicants whose violence-afflicted lives have left them with all the flaws you would expect to see in people who bear the burdens of trauma and low education. This kind of dilutes my enthusiasm with Prospera's "win-win" claims that it's offering poor Hondurans a better life. Instead, I imagine cities like Prospera skimming the high-performing people (probably coming from good neighborhoods) and concentrating the ill and the troubled outside its walls.
I mean, considering the existence of cities that kind of parallel Prospera in some ways, is there another way to see this side of the issue? A counterargument, if you please?
A system that actually benefits the average Honduran (not just the high-performing Honduran from a good family in a good neighborhood) might, I imagine, offer services that would allow immigrants to learn new skills and repair the damage done to their mental health by growing up in one of the world's murder capitals. But who would put up the money for that?
It sounds like you're talking about Ciudad Morazán? They kick out people who don't follow the rules. At least in this description it doesn't really say what happens to people who break laws. Honduran criminal law still applies, so presumably they just turn them over to the relevant authorities. For civil issues, I guess they just have insurance for it, and if they can't pay, maybe then they get kicked out somehow? If it's mentioned, I didn't catch that part.
I do agree that it seems to skim off the top, if you will. I think the economic part alone will do that though, without even getting to the social aspect. But as you say, even if they solve the economic thing, you might have another filter where laws are actually enforced better in Próspera.
I think you're right- even putting aside the effects of economic disparity, the greater legal competence of Prospera will also act as a filter to catch anyone who was flying under the radar before they moved. Which is very sensible for a society that advertises itself as a bastion of personal freedom, since some people are bound to look at it as an opportunity to get with away with harmful activities they couldn't get away with back home.
Check that... reverse it. I think you're right about the econ bit too. BTW, are you, like, in the process of starting a blog? I clicked on your link and found, well, exactly what I would write if I were just starting to draft something bloglike.
I'm not completely unsympathetic to this perspective. But I think the school analogy is a good one. You get forced together with some pretty awful (hopefully not literally murderous) people, they hurt you and abuse you and hold you back for a while and you're trapped there and there's nothing you can do, and you get told you're a bad person for wanting to escape them.
Then you escape and go found a commune with your friends who are nice people and all of you live happily ever after (or at least that was what happened to me).
I am kind of okay with people who are not murderous being able to go somewhere to escape the people who are murderous. I realize that the people committing the murders have a lot of trauma and that it's not cosmically their fault that they're like that. But someone being an abusive husband isn't cosmically their fault either, and I think their wife should be allowed to leave them if she wants to.
I see your point regarding the school analogy-- I mean, I felt pretty terrible when my parents got me into a private school on scholarship after six years in a very working class elementary school environment with lots of traumatized poor kids from rough families, but in the end I benefited from moving into an environment where I could thrive, and I want this for others. I agree, it's good for the abused wife to escape her husband (I'm still waiting for my aunt to do this) and for the kids from murderous neighborhoods to escape the murderous neighborhoods, even if there's a little guilt involved. There's a part of me that wishes I could go air lift them out of those neighborhoods right now.
But the thing that inspired my criticism is the fact that I struggled when I suddenly switched environments, and not for a lack of brain power. I struggled because I had a lot of baggage the people around me didn't remotely understand. And I acted out as a result, and I got put on disciplinary probation and threatened with expulsion. Things turned out fine in the end. I calmed down, pulled off some good grades, connected with my teachers, and really actually liked school a lot. But I've known a lot of non-murderous people who just couldn't turn their ship around, and they might have succeeded if only they had some kind of extra support. I'm talking about very bright people who floundered because they were overcome by their demons.
I truly, genuinely, want Prospera to work. It sounds exciting and it clearly provides amazing opportunities to anyone who can adapt to its system. But I also feel for the bright ones who are destined to slip through the cracks because moving from murder capital to utopia is bound to be challenging. Prospera isn't immoral for not solving this problem. But I wish it had a solution.
There *is* no way for a poor person to have a genuinely different life *other than* working very hard to overcome whatever circumstances and/or consequential character flaws have led to him being poor in the first place, and ipso factor most people who try will not succeed. TANSTAAFL.
Or in other words, if you're waiting for a system where all the children can be above average, you'll need to wait for The Rapture.
But it would be kind of nice if all the children who *can* be above average -- obviously far less than half of them -- actually have the chance to experience it, rather than everyone squatting in the mud of universal mediocrity waiting for a miracle.
You are right. Leaving poverty takes a lot of very hard work.
My point is that we can expect the average performance / functionality of transplants from a high-stress environment such as Murderville to be far lower than we would expect from more developed and less violent regions recruiting high-performing professionals to live and work in Prospera. This is due to trauma's effects on amygdala/hippocampus/PFC; drug affected babies; the higher likelihood of schizophrenia etc under stress conditions; the substandard education students get when their lives are constantly disrupted by violence and loss; the fact that the most ambitious and resilient Hondurans are leaving Honduras, etc.
Therefore the percentage of the poor Honduran population who is high-functioning enough to make it in Prospera might be lower than we'd expect when we hear the architects of Prospera proclaim that they are helping to lift the people of Honduras out of poverty. What they're really doing is letting people migrate through a filter.
Of course it's not unethical for Prospera to establish a system that doesn't benefit everyone around them. It sounds like Prospera will bring net-benefits to Honduras. If instead they said "An added benefit of our project is it will offer work opportunities for Hondurans" and left it at that, I would have no criticism to make.
It seems to me that lifting people out of poverty in regions with high rates of violence means investing in a lot of messed up people who won't yield enough of a return to make it profitable in the short term, with the hope that at least you'll prevent a few deaths and make it easier for their kids. If you know of an example of an entity profiting by improving prospects for the low-functioning poor, I'd love to hear it. The topic interests me because it's hard to find examples of this actually happening.
Sure, google "micro-lending" for some very interesting forms of low-capital-investment financial innovations that have had a real impact in the Third World while earning good (if not FU) money for investors. For that matter, the cell phone itself has had a transformative effect on populations that lack the Internet/computing infrastructure we take for granted in the First World. This topic isn't especially new (cf. E. F. Schumacher's famous book "Small is Beautiful" umpty years ago), and there are creative people who have thought about it a long time. I fear they sometimes disappear when you have big splashy ideas, like this one (and more power to it, but I am skeptical), or the One Laptop Per Child people.
Yes, it essentially always involves some kind of filter to pull out of the misery eco-system the people who *can* improve when transplanted somewhere else. I'm not quite as skeptical as you, I think, but I certainly agree some people are just hopeless cases and the best you can hope for is to impact the next generation.
Thanks. I've been meaning to read up on micro-lending. Also, decentralized banking via cellphones has made a huge impact on Tanzania where my father's family lives.
I think it's okay to solve some of the problems even when you don't solve all of the problems.
A charter or private school can provide a good education in a safe environment to some kids, but there are some kids who won't be able or willing to abide by the rules needed to support that, and they will kick those kids out. That solves a real problem (well-behaved kids who want to go to school to learn instead of to get terrorized by thugs, parents who want their kids sitting in orderly classrooms instead of loud and largely uncontrolled ones). It doesn't solve all the problems (badly behaved kids, kids with various special needs that can't follow the program), but that's okay--it's permissible to make the world a better place by solving some problems without building heaven on Earth--something nobody will ever manage.
In the same way, a private neighborhood or city that can kick people out for bad behavior, and that manages a non-corrupt, efficient private police force, might solve the problem of unsafe streets and high murder rates that exists now in Honduras. It won't solve all the problems, because nothing ever does. It won't solve the fact that people get mixed up into crime sometimes, and we'd like to save them from that. It won't solve the fact that some people have violent tempers or mental illnesses or drinking/drug problems that make them unpleasant neighbors. All it will do is maybe let the community keep most of those folks out, and convince the remainder to keep a lid on their bad behavior to avoid getting kicked out.
I agree with you about the ethics of Prospera and charter schools being net positive. I just don't buy the idea that Prospera will actually help end poverty in Honduras.
As Scott hopefully put it:
"Yes, this is about startup governments and investment opportunities and blah blah blah, but it's also about trying to fight global poverty by radically changing the rules of the game that makes it possible."
And I imagine the architects of Prospera really believe they are making life better for Hondurans. A small minority of Hondurans. Which is fine, but it's not the same as fighting poverty. Not until the rest of Honduras changes, which Scott suggested might happen in the same way that China made national changes after the success of Shenzhen. But that would require the Honduran government to follow through using the model of Prospera's urban experiment, which seems lower probability than China following through using the model of its own urban experiment.
It might still be the case that it's better for the less privileged people to have the more capable and privileged people move together somewhere, prosper, and payed the rest some taxes, than keeping them locked in a bad environment.
I really like Shenzhen and its green fields in 1980 better than the city in 2018. I don't understand what's good in big cities with noise, pollution and crowds? I hope that Prospera will never be like that.
Some cursory searching says that it went from being a market town of 30,000 in 1980 to a metropolis of 20 million in 2019. That's *fast* and I wonder how the original people felt about that change? A bunch of bureaucrats hundreds of miles away decide your town is going to be a Special Economic Zone and attract foreign investment. Millions start pouring in over the years and it certainly has changed vastly. It's a very impressive achievement but yeah, I too prefer the green field Shenzen.
Yes, but if you concentrate on cities, the rural areas get neglected and lose many services. In my childhood I lived in the countryside (in Latvia) and it had more services available in nearby villages then – schools, hospitals, libraries, shops, public transportation etc. Gradually roads were improved, people got richer and could afford cars. The available local services were reduced due to efficiency because now people can go to the city when needed. Eventually they decided to move to cities altogether and I just don't understand. It's not that we had not need for more efficiency in the past. Maybe previous generations valued their environment more than money?
My understanding is that a pretty constant trend in ~all human civilizations has been people moving into cities because it turns out that being near lots of other humans is really valuable in a lot of ways (I think mostly because people who specialize in one skill are way way better at it than people who try to do everything for themselves?)
I think in the past it was not technologically feasible to move as much to the cities (e.g. cars help make this more feasible), rather than people in the past having different values.
Workers move where their labor is needed. A century ago - and in Latvia even a couple decades ago, due to USSR farming policy reasons - farming needed much more people than today, so many people had to live away from others - now the primary production can be effectively handled by much fewer people and everyone else has a choice. The remote countryside has always had less services and cultural options than various population centers, there's a natural drive towards urbanization (even in e.g. classic Mesopotamia) that has been historically limited by the locality of farming/mining jobs.
'Most land is not cities, so people who don’t like cities have plenty of options' Presumably the existence of large cities changes what options are available elsewhere, for better or worse, so it's not as simple as that. (Though I am personally fairly confident having large cities is a net benefit to humankind.)
For the same reason that the feelings of the non-shareholders don't matter one s*** about the shareholders of a company deciding to issue more shares or not — because the true stakeholders aren't the outsiders wanting to impose their way, but those with original skin in the game.
I understand the benefits from big cities but those 30,000 original residents are just 0,15% of the current 20 million that practically it doesn't even matter and no one even cares if they liked the previous life more. People who moved in probably never saw what the place looked before. But showing how the place has changed over time is like a question which one do you like more and I prefer the old one.
I agree that Shenzhen is terrible. "Be like Shenzhen" is an awful ambition for any city. It's an ugly, smoky, polluted hellhole populated almost entirely by dormitory-dwelling factory pseudo-slaves and ruled by a genocidal dictatorship.
The idea of building a rich first-world city somewhere, on the other hand, sounds nice. I like beautiful rich first-world cities.
That is complete nonsense. Have you ever even been to Shenzhen? It is not "smoky." It's got blue skies almost every day. It's got clean water. It has many attractive parks. You are completely uninformed.
>Próspera is well versed on the myriad environmental, climate, and humanitarian concerns with automobile traffic. As such, Próspera hopes to enable the creation of the world's first truly affordable and safe air taxi system between its various Prosperity Hubs through the use of VTOL drones.
And they expect VTOL drones will be better for the environment? Powered flight uses much more energy than ground vehicles.
For me, this is a big signal that they haven't thought things through.
That, and the utter lack of any mention of how this population will get fed and watered were huge for me. One of the primary things that eventually torpedoed the Millennium Villages was the persistent difficulties of getting adequate water to the towns--something the project didn't really appear to think about while loftily dreaming about modern classrooms with laptops. While the problems here are not as complicated as finding water in sub-Saharan Africa, quick googling is telling me that about 1/10 of Hondurans experience chronic food insecurity, and 15% of the country does not have access to clean water. They are hurdles the project will have to overcome (and they are achievable hurdles, don't get me wrong)...and yet they're promising VTOL taxis that don't even exist yet, and not explaining where their food and water is going to come from. If you're going to import it all, that's quite expensive. If you're going to grow it, where and how?
Potentially not, but it seems like the sort of thing that should be accounted for (it's torpedoed at least one similar project!) And snazzy visuals of vertical aquaponics are all the rage among the cohort that would bite on this sort of project, I think, especially if you then boast about how you can grow enough food to provide aid to Honduras or something.
Given that the idea *is* that the population will grow significantly larger, and given that this project seems so concerned with not harming Hondurans, the lack of any discussion of food or water strikes me as very odd. A tenth of Honduras cannot get enough to eat; whether or not wealthy foreigners moving here will take food from them seems like the sort of thing thing sort of project ought to be taking into account at this stage, especially before going to "and we're not going to have a ferry, guys--we're going to have FLYING TAXIS."
Sure, but the whole point of a libertarian paradise is that the government doesn't do those things. It relies on (1) the fairly universal desire of people to have enough to eat and clean water to drin, and (2) private ingenuity and private organizations to arise in order to supple those at a price everyone is willing to pay. The argument in favor of the proposition is that as soon as you try to execute these things in a top-down way, via government, you introduce such horrible inefficiencies and opportunities for parasitism that you get...well, the Honduras...with one tenth of the population struggling to get enough to eat et cetera.
Whether this hypothesis would be backed up by empirical data is the point of the experiment, I think.
You can't do all that within one square mile of libertarian paradise. Your sewage treatment plant, your dump, your power stations and your farms are just too big and too smelly. They'll have to be in Honduras proper.
No argument. But I think they're trying to come up with a structure that can work even if they get much bigger. Almost certainly planning far too far in advance of their reality, but...well, people wanting to cadge investment dollars (or people) are like this.
Their government is leaving the questions of food and water to their residents to figure out, while spending their time and power wrangling flying taxis and expensive modern architects?
Well, that would explain why every "libertarian paradise" attempt has ended in laughable disaster...
Well not running water, that's part of city infrastructure so Jane Jacobs (the general contractor building infrastructure) will take care of it along with roads/electricity AFAICT.
For food I'm counting 3-4 grocery stores withing walking distance (<2km) of the site. That probably works fine for the first couple thousand residents.
Well that's not *quite* as nutty as it sounds. The thing is, food and water are extremely basic concepts with an immediate payoff (you don't starve to death), so even the shortest-sighted private enterprise can probably deal competently with it.
On the other hand, flying taxis, looking at this as a metaphor for big technological advances, is the kind of *long-term* payoff investment that private enterprise often neglects, because of the risk. Government is about the only institution that *can* have the very long time horizons and tolerance for capital investment risk to successfully contemplate these things.
That's why we can rely on Pfizer to optimize mRNA vaccines to deal with COVID, but the *original research* into mRNA 20-30 years ago had to be funded by government -- Pfizer would never have done it, on the off chance that it would pay off in 25-50 years.
I realize this has about boo to do with the particular government structure at hand, which is tiny, but I think the general point is worth making. That is, food and water are such basic human needs and so obvious in terms of whether you're doing it right that the libertarian argument that it should be left in individual private hands is strong: there's not much of a collective action problem there, and humans have figured out how to do it without massive social structures (like government) for millenia. But very long time horizon stuff -- as a species, and on the private level, we are not so good at this, and getting that right *is* something, in principle at least, which government can usefully do. (Of course, there's no guarantee it *will* get it right, alas.)
They're not claiming to be self-sufficient, and they're not even saying that they'll try to be so. What's wrong with importing food and water? Why would it be "quite expensive"? The "true" Honduras is extremely close, there's no prohibitive transport expenses, for someone in Prospera buying food from Honduras is just as expensive as for a nearby Honduran.
Also, the Hondurans who experience food and water insecurity don't do so because Honduras lacks agriculture or water, they do so because they're very poor and can't trade their labor for adequate compensation (or receive social services from Honduran society) - in that regard, if a neighboring Prospera city is importing some food, the revenue only helps the poor Honduran farmers. And those Hondurans isn't a problem that Prospera is trying to solve directly - they aren't adopting an existing population with whatever mix it has, they're starting from scratch at an empty place and selecting a population to immigrate there; anyone who can't afford food or clean water won't be able to join Prospera as they won't be able to afford the application fees.
>1/10 of Hondurans experience chronic food insecurity
This is true of the United States too:
>In 2019, 89.5 percent of U.S. households were food secure throughout the year. The remaining 10.5 percent of households were food insecure at least some time during the year, including 4.1 percent (5.3 million households) that had very low food security.
>And they expect VTOL drones will be better for the environment? Powered flight uses much more energy than ground vehicles.
At this point, most of the people developing "VTOL drones" are developing battery-powered electric VTOL drones. And that's probably feasible for intra-Prosperan and Roatan-La Ceiba use.
It does raise the question of where Prospera's electricity is going to come from, but that's true regardless of what their transport infrastructure is going to come from. If the power plant has to be inside the special economic zone, that's probably going to be diesel generators. If they can get the economic zone extended offshore, maybe offshore wind farms? Don't know whether the prevailing winds are reliably strong enough. Otherwise, they're going to be dependent on electricity coming from non-Prospera Honduras, which could be a problem.
Unless they cleverly negotiated their agreement to leave it entirely up to the Prosperan administration what sort of nuclear reactors they're allowed to build in Prospera, but I doubt that's going to work out well.
Thanks for posting this! I need to read this in-depth some other day (it's past midnight in my timezone), but from a skim I have to say that regardless of the specific government shape in Próspera, I hope this'll work out better for Honduras Próspera Inc than the French Polynesia prototype seastead deal worked out for The Seasteading Institute.
My understanding is that some Honduran economists came up with the idea independently of Romer, then after they heard of Romer's charter cities they recruited him to provide prestige-by-affiliation. When that failed it struck me that there's an obvious conundrum for this approach: it's supposed to be most useful in countries with terrible governance, but you can't expect a terrible government to tolerate your charter city rather than screw it up like they do everything else.
That is not obvious. Even individuals are capable of recognizing that they need a certain kind of change or help, but are unable to do it themselves, and so make a decision to turn over their fate to some external agency to effect the change. We might think of the ZEDE experiment as the nation-level equivalent of checking yourself into the Betty Ford Center.
I was going to quibble over some details, but first: This is an excellent case for the moral urgency of new jurisdictions. The fact that Scott captured this aspect so powerfully is the most important aspect of this post.
Quibbles:
1. Everyone gives Romer credit for coming up with the idea. But I knew dozens of people who were talking about new jurisdictions with higher quality law and governance long before Romer. Octavio Sanchez, the primary architect of this legislation within Honduras, gets some credit in this for having his own vision separate from Romer in this NPR piece,
In addition to Sanchez and several of his colleagues, who had worked on Hernando de Soto land titling issues in an earlier administration, Mark Klugmann, an American advisor to the Honduran government, was also involved in the early design of the project,
The story I got from Sanchez, Klugmann, and others when I was involved (I led Grupo MGK, the entity that signed the first agreement that led to Romer pulling out), was that they had pretty much had the idea developed when Romer did his TED talk and they then realized he would be a powerful external advocate to push the project across the finish line. Everyone else involved had always envisioned a partnership between Honduras and a private entity - Romer's one innovation was to promote an external government as guarantor, which everyone regarded as way too neocolonial.
Milton Friedman was discussing the idea of a "Hong Kong" in Mexico back in the 1990s with Ricardo Valenzuela, a Mexican banker, who was scouting sites along the US-Mexico border back then. Mark Frazier, a free zone industry consultant, sold me on this concept around 2003. Bob Haywood, former ED of the World Economic Processing Zones Association, was promoting a similar concept much earlier. Giancarlo Ibuerguen, deceased former president of UFM, had this idea much earlier as well. I'm missing dozens of people with whom I discussed these ideas prior to Romer. Once one realizes that poverty is caused by dysfunctional governments, it is not a big imaginative leap to realize that a jurisdiction with higher quality law and governance is the next move. Zone 2.0 had been in the air for a long time - without the neocolonial aspect of Romer's version.
2. Scott's other ahistorical comment is here, "But if someone did own an entire city, and you chose to be in that city, theoretically they should be able to make whatever laws they wanted, and not even the most zealous libertarian could protest. The issue hadn’t really come up before. But here we are."
There is a large libertarian literature on proprietary communities that has been discussing these issues for many decades. Spencer MacCallum and his grandfather Spencer Heath were early figures, but for those following this literature this is an old issue. Anyone familiar with HOAs gets the basic idea.
3. The most accurate description of both the origins of the Honduran legislation as well as the dispute between Romer and the Honduran government is this article,
We had the Honduran government sign a formal statement saying that the Transparency Commission did not exist before signing an MOU with them. Romer's vision was for a $5 billion city with a foreign nation as a guarantor. I spoke with a leading industrial park owner in Honduras who had met with Romer. When Romer told him that was trying to raise $5 billion, the businessman asked, "Do you have your first billion raised?" Romer said, "No." The businessman replied, "It is not going to happen."
While I give Romer credit for promoting arguably the most morally important idea of our time, his version of the project was never going to happen. Small, quick start, privately run projects are far more realistic than are grand, state-managed megaprojects. The Hondurans were smart to go with a framework that allows countless such small scale experiments.
Re 3D property rights - yeah New York has a hackish system of "air rights" that formed organically when somebody wrote a deed for the part of Blackacre above the rooftop of the building currently standing there, and the deed registry said "sure, why not?" I know of only one example of this actually being used to put a building on top of another, that being Madison Square Garden (owned by the Dolan family) above the underground Penn Station (owned by Amtrak). More often this is used to transfer zoning rights from a lot with a short building to one where a taller one is going to be built, either by actually deeding the airspace over or by declaring two lots to be a single one for zoning purposes without an explicit transfer. A full explanation would require diving into NYC's convoluted zoning rules, beyond the scope of this post, but suffice it to say it increases the already big economic incentive to leave the current rules in place as opposed to my preference for ripping them up and letting a thousand Equitable Buildings bloom.
There are also two common ways that ownership of parts of an individual building can be transferred, without all this voxel nonsense. One, mostly unique to New York, is cooperative ownership, in which the leases on units of the building are tied to shares in the corporation that owns and manages the whole thing. The other, which exists nationwide, is the condominium, where each unit is a separate transferable parcel and the "common elements" are managed by an association of the owners. Condos are much more common in new construction, while co-ops are generally buildings that predate the condominium act of [looks it up] 1964 or to former rental buildings that converted to common ownership. I'm in the process of buying a co-op unit, which unlike a condo requires board approval for the sale, and let's just say I can see why condos are the norm everywhere else.
Given that condominiums have existed for over half a century, I'm sure there's plenty of precedent on what to do when 99 out of 100 units want to tear it down and build something new and the 100th stubbornly refuses. (Checking the New York condo law - dissolving a condominium requires 80% approval, though the condo's own rules may require a higher proportion, perhaps even unanimity.)
I might have read your post too quickly, but I must have missed the part that keeps Próspera from having the same murder rate as the rest of Honduras, especially given that they are obliged to use Honduras's criminal justice system.
If I'm understanding right they can have their own police force/private security, so (assuming they can run it better than mainland Honduras) they could potentially deter crime better.
That said they don't seem to have a lot of specific ideas for how to do that (except maybe "our people will be richer so they'll be able to hire more guards", which might work).
I had this question as well. I assume that there will be essentially a gated community for Prospera, but Roatan was pretty crime ridden at least when I visited. We rented a house outside of a resort and it was broken into the first night we got there while we were out to dinner. The police took two days to show up and take our statement.
I don't know if it will work in practice, but I think a big expectation is that the type of people who will move there (or afford to move there) will not be criminals or tolerate criminality. It's very hard to be a criminal - especially a low level thug type - without community support in terms of a place to live, basic necessities, etc.
If criminals are somehow removed from the community and the incentive is for non-criminals to move into the community, the crime rate could be very low.
Given that it's located within a country with such a high crime rate, what stops the crime spilling over into Prospera? I guess the individual corporate and residential buildings will have private security, but people considering moving to Prospera will want to walk safely through the streets at night without being attacked by criminal gangs from the next town.
The city itself contracts for private security (from a company already providing private security services to resorts on Roatan, Bulldog Security). Also Roatan in general is (apparently) much safer than mainland Honduras.
Semi-relatedly - why is El Paso one of the lowest crime rate cities in America, while its Mexican half has incredibly high crime rates? And is there a way to replicate that here?
I lived in El Paso for 2 years. My understanding is that the basic reason is that they have a very high number of police per capita and pay them very well. They're also separated from Mexico by the famous 20-ft high fence, although many of my patients were smugglers or others from Central America who fell off the fence trying to cross.
Of course, on the other side of the border is Juarez, which is relatively violent. But these cities are in two completely different countries with two different legal systems, so it is no surprise that crime is quite different as well. My understanding is most of the local Mexican crime stays within Mexico because it is not profitable for various reasons for the criminals to bring that violence or other crime to America.
That is interesting. To clarify the weird thing to me isn't why el paso has lower crime than Juarez, it's why it has low crime by american standards (despite having high poverty and low education rates, which would generally correlate with high crime).
From your description it sounds like maybe having Juarez right there across the border is a motivator to take it seriously and have an effective police department.
Two other random things I know are that (1) the violent crime rate has been rising a bit over the past few years in El Paso and (2) multiple native Pasoans believed the police were goosing the issue by ignoring property crime in many neighborhoods in order to make their numbers look better.
I have no idea about the epistemic status of (2). I suppose if they could cook the nonviolent reports, they could just as easily cook the violent ones.
Hyde Park, on the south side of Chicago, wherein lies the University of Chicago. Within that little enclave, it's remarkably safe (for Chicago). Outside, particularly to the west, it's like Lebanon during its civil war.
Shenzen had literal fences: "To enforce law and order in the city, the Shenzhen government erected barbed wire and checkpoints between the land borders of the main sections of the SEZ and the SEZ outskirts, as well as the rest of China, in 1983, which was known as the second line". These were taken down in 2010, but imagine Prospera with its own version of "The Wall" to keep out the criminals and gangs from Honduras proper.
A city, measuring roughly a square mile in area that's highly autonomous and is exempt from many laws that apply to the sourrounding country. Where have I heard that before? (https://www.youtube.com/watch?v=LrObZ_HZZUc)
I wonder whether, like The City, Prospera will grow until it becomes the CBD of a much larger urban area, with more people commuting in from normal Honduras than there are residents. (note that 80% of votes for the Common Council of the City of London Corporation are cast by commuting employees rather than residents)
In that case, I hope they've worked out how to provide interfaces between prospero and the rest of honduras for services like public transport.
"Próspera wants to give these people a better option by bringing American-style institutions to Honduras."
But these are not American-style institutions, at least not when it comes to political institutions. Próspera, as you note, is not a democracy, what with the (unelected) 4 HPI council members; my understanding of American (and Western) institutions is that one of their most fundamental advantages is democracy itself. And the institutions are also different on what might be considered the "positive" side, like the weeklong referendum possibility and the like.
I think there are a host of other issues related to charter cities, but this seems the most fundamental: it is not trying to give the native population the same rights (in particular, political representation) that those in Western democracies have, but seem to suggest that those rights can be looked after by benevolent Westerners. Which seems to be anathema to the very institutions on which Western countries pride themselves.
To put things a little more sharply, but I can't help but think in these terms: couldn't charter cities essentially be called "voluntary colonialism"? Perhaps one could argue that this is an oxymoron, but there are many arguments against colonialism that don't seem to necessitate it being an involuntary arrangement, especially relating to political representation and accountability.
Couldn't immigration essentially be called "voluntary invasion"? If you don't have a good intuitive feel for something, and you reach for examples to compare it to, you can always find examples of things that are bad.
I think "invasion" is specifically negative due to it being involuntary on the part of the invaded, whereas as I noted I think there are criticisms of colonialism that apply irrespective of whether it started "voluntarily". In particular, while I realize this is only one view, I believe a fundamental objection to colonialism is that it lacks political accountability and representation, and we simply do not trust the benevolence of the colonizer, no matter how supposedly enlightened, to act on behalf of the colonized. The British after all had a good claim to have one of the most, if not the most, "enlightened and benevolent" institutions in the West during the colonial period, yet its rule is still viewed critically, even if e.g. Indian self-rule was (and remains) rife with corruption, violence and poverty. Indeed, it seems to me that democracy tends to be counted as both one of the most fundamental elements of "Western institutions" as well as one of the most crucial to their success.
But all this aside, do you not agree that there is a problem with saying that the Prósperans will be living under American-style institutions when they will not be living in a democracy they elect? Economic institutions are one thing, but certainly political institutions are a big part of the institutional story, no?
If they immigrated to America instead, they wouldn't be able to vote either (until/unless they go through the very lengthy citizenship process). Próspera will provide at least that much of American institutions. In fact, it'll provide more given they can vote for a lot of the Board.
When people refer to "American-style institutions" I think they have in mind the institutions American citizens live under, not the institutions toward non-citizens. I don't think the idea is that America is successful because of how it treats non-citizens, but that American institutions are good for its citizens.
I'm saying all this under the premise, under which I believe "charter cities" are founded, that a major reason for the success of Western countries is their political and economic institutions. That's the entire reason to try to carve out a space for those institutions for the betterment of the people. I'm personally not entirely convinced by this idea. But even taking it at face value, that means that the people in the charter city should be placed under the supposedly successful institutions in the West-- which does not fit with the institutions as put into practice here.
Firstly, there is a terminology dispute here. When talking about institutions, I guess Scott refers to what the government does, not how the government is chosen.
The more important question is whether democracy is prerequisite of getting Western-style results when it comes to what the government does. For a counter-example, until recently, Hong Kong had Western-style (or freer) institutions under China and previously the British, not only regarding the economy, but also personal liberty.
The main reason to like democracy is that it definitely almost always works better than dictatorship. But should we expect the proposed Prósperan system to come with the typical disadvantages of dictatorship? I have a few arguments that we shouldn't:
• It's not a democracy, but neither a dictatorship. Neither the elected council members nor the appointed ones could do much without the cooperation of the other.
• It would be subject to Honduran criminal law. The human rights abuses typical of dictatorships would run afoul of it.
• Strong exit options: everyone would have a country he could legally go to; in the case of Honduran citizens, the rest of Honduras would be a few kilometers away, with no language or culture barrier.
Since it would differ from both democracies and dictatorships, there is no immediate reason to expect it to function like a dictatorship, but that doesn't mean we should expect it to function like a democracy: it means we can't estimate what it would work like based on existing political systems. It's mainly because of the exit options that I'd expect it to function relatively well.
I think there are lots of cases in which people voluntarily waive their political representation. For example, you may live in an apartment complex with no rights over how it is run, or join a company with no rights over how it's run, or send your kids to a private school with no rights over how it's run, or join the military with no rights over how it's run. In all these cases, it's okay because you join voluntarily, and have the right to leave if you want (well, except the military). It would be easy to make apartments, companies, and private schools that do give the people involved rights over how it's run, and some places do, but there is relatively little demand for this, and most people prefer the places that don't.
This expands the same situation to cities (or maybe province-level entities, Prospera seems like more than "just" a city). I don't think a Martian approaching the situation with no prejudices would say it's obvious that schools and companies don't need pure democracy to work, but cities/provinces do. I think it's a different system, one which has worked well in other environments, and it's worth checking to see whether it will work here too.
I fully understand and I think I may not have clarified my main point well, sorry about that.
There are perfectly good arguments for prosperity and welfare without democracy, whether examples like Singapore or the fact that almost every wealthy country today industrialized when it was not a democracy.
But it remains the case that these are not American or American-style institutions, because a major aspect of American institutions is democracy. Maybe you meant economic institutions, but many (e.g. Acemoglu and Robinson and the like) would argue that political and economic institutions are strongly linked, so at the very least political institutions are a significant part of the picture to be noted. I actually think that your analogy to joining a company is apt: to me this project seems more like Amazon choosing where to put its headquarters than anything else-- and that does lead to real good, which I don't dismiss. But I don't think this fits the "marketing" so to speak of charter cities, which is about carving out a space for "good" institutions drawn from the successful cases of America/West/wherever in the midst of "bad" institutions, because I don't think these institutions represent what American/West/wherever actually have.
This may sound like a quibble over the term "American-style institutions", but it gets to the heart of the problem I have with the way charter cities tend to be framed. This is not an implementation of Western institutions; it is inviting people to live under dictatorial institutions that may do some good. And I think that's something that is often only clear when one looks at the fine print (as you did when e.g. noting the significance of the 51% eligible voter referendum clause).
I think an underlying idea here is that voting with your feet is a better guarantor of good outcomes than voting with a ballot. But I have no idea what the best governance structure for a private city is--I'm not convinced that it's an elected city council hiring a professional set of managers (a common way small-medium US cities are run), say, but I'm also not convinced that's *not* the best solution. I'd say experimentation is the only way to work out the answer/
You should look into the Marxist term "comprador bourgeoisie" and other criticisms of colonialism and neocolonialism. "Neo-Colonialism, the Last Stage of Imperialism" by Kwame Nkrumah may be helpful for you.
I don't know if it's an "example" per se, but the colonizer here is the corporation: it decides the rules and institutions (with some limited input from the people), it extracts some amount of profit, it is essentially the "sovereign" for all intents and purposes. So in the framework of the colonization analogy it is the "mother country" (as Switzerland was supposed to be in the original idea).
You’re overrating the importance of democracy relative to the rest of the “better institutions”. China and Singapore aren’t very democratic, but they are pretty economically successful.
I strongly disagree and know many others who would as well, but this is besides the point. While you can argue that democratic institutions are not necessary for prosperity, which is perhaps the main goal here (one I do not dismiss by any means), you cannot then argue that the Prósperans are then living in American-style or Western-style institutions. And because the institutional story is so crucial here, with the idea being that we need to carve out a space for "successful" institutions in the midst of "unsuccessful" ones, it's crucial to note that the (political) institutions you'd be putting in place are not in fact those that govern any Western or indeed nearly any successful economy in the world.
(Singapore's institutions are not fully democratic but they are nothing like what is described here, and by my understanding from a study in 2016, it was the only non-democratic, non-oil-rich country in the world above a certain income, so it's not clear that its lead can be easily followed on this)
Can someone direct me towards a thorough explanation of Singapore's system of governance? Some articles portray it as a somewhat autocratic on social issues but basically sound democratic system that has never been tested by a transition of power. Others make it sound like something more similar to modern day China, where despite democratic sounding committees and elections etc, they are functionally a dictatorship. I think it stands to reason that they're the most important case study for people interested in specially zones cities like Prospera, and yet I haven't found a SSC style lucid explanation of their system as it actually operates.
I unfortunately don't have a much better external source than freedomhouse.org, but from conversations with a Singaporean I worked with and various other materials, I think it could be described as the ultimate "illiberal democracy", i.e. a democracy in the sense of free voting but none of the other trappings we generally associate with democracy such as free speech or a level playing field between the ruling party and others. So, for example, gerrymandering is used extensively to minimize the political clout of any area that votes against the ruling party; elections take place within weeks of their being announced, and the ruling party is able to use media and such to a far greater extent than any other party; demonstrations, media and speech are heavily restricted though not prohibited entirely.
The upshot is that it can claim to be a democracy, and indeed if the people overwhelmingly wanted to vote out the ruling party, they could, but they would have to overcome a huge number of hurdles to get there. But there's an argument to be made that this leaves enough space for accountability and concern of being tossed out of power that some of the mechanisms of democracy do take place there.
But I'm far from an expert and would be glad to hear other views. That said, as mentioned before, Singapore is literally a unique case-- being the only wealthy non-democracy, non-oil-rich country in the world-- so I don't think it would be wise to rely on their example in a political novelty like próspera.
I suggest the *successful* American (and indeed Anglosphere) institutions are *not* founded on democracy at all. Having everybody involved in every decision, constantly debating and voting on it, is a recipe for stagnation, paralysis, and tribal rage, as any number of online "communities" demonstrate beautifully these days.
The successful Anglosophere form of laissez-faire republicanism is better described as a punctuated democratically-validated oligarchy. Roughly speaking, at regular intervals we elect a bunch of practical mostly non-idealistic scoundrels, who proceed to rule in a mix of legitimate and sleazy ways while we go about our ordinary lives largely blissfully unaware of government -- nobody attends City Council meetings except weirdos and obsessives -- and when next we're given an opportunity to vote on the scoundrels, after a few years, we say 'sure keep going' if things have been pretty A-OK or throw the bums out if not.
The key part of the whole business to me seems to be the benign neglect of what's going on between elections, where we don't inquire closely (or even at all) into *how* the oligarchs are getting stuff done, we just judge 'em on the results at intervals short enough that they are motivated to indeed get stuff done, but long enough that they have time to act without the constant bickering, factionalism, and committee-borne paralysis that plagues democracies with a highly active demos. Kind of like the old Roman Republic model perhaps.
Indeed, my observation over my political lifetime (~35 years) is that far more people are deeply involved in political thought and debate every day than they were long ago -- and our republic functions much more poorly, with more alarming lurches away from values of individual liberty and mutual respect and cooperation. For that matter, most of the modest-scale (dozens to hundreds of members) of pure democracies I've experience have been exhausting and exasperating experiences, in which only antisocials and nutcases who live to argue thrive.
Either way, I'm sure you'd agree that whatever we call American/Anglosphere institutions, they aren't similar to what is being planned for Próspera. Especially the part about being able to "throw the bums out" per their outcomes.
Well, a better question, given this is founding a new institution, is how close they are to what the earliest American settlements were like. And actually they're not super different -- the earliest American colonies were pretty autocratic. Kind of a survival necessity, until you generate enough experience and social mythology ("we do it this way because it worked in the past, and now everyone understands that").
I agree that their (Prospera's) imaginations of what will work 50 years hence, if they succeed, are almost certainly laughable -- many of the early American compacts and agreements on governance did not survive that long either, particularly when reality (e.g. cold weather) exercised its vote.
I don't think these institutions are particularly close to early American settlements (I honestly don't know to what extent any modern institutional arrangement can be), but I also don't think that the charter city philosophy of importing "good institutions" has those of early American settlers in mind. Admittedly I think this is a broader problem with the charter city idea: what we consider today the most fundamental and praiseworthy elements of Western institutions-- democracy, free speech, equality before the law, etc.-- were rare to nonesxistent in the periods when the West became the dominant force in the world, so it's hard to argue that these are the keys to emulate for countries to achieve success as the West did. But in all this I'm trying to take the underlying premises of charter cities as given and show that this framework does not work even under those assumptions. I also think the assumptions are questionable, but that's an entirely separate and much longer debate.
Judging by the number of Americans who bother to vote in local elections, democratic town government is not terribly important to American-style institutions. How the interaction between the democratic-ish Honduran government and the not so democratic Prosperan authorities goes, will be more important (and uncertain).
Right, I'm mostly thinking of this as a system mostly independent of the Honduran institutions, closer to an independent state than to a town within an existing state. Naturally to the extent that it's subject to the Honduran institutions it kind of defeats the purpose (at least in terms of the broader charter city philosophy-- it can still improve welfare and provide jobs in the same way that a corporate headquarters would).
But, between the constraints of its agreement with Tegucigalpa and those of its own constitution, not independent enough to do any of the things that really motivate Americans to vote in national election. The things the Prosperan government can actually do, are mostly things a US city government can do. And Americans are mostly content to ignore their city government. In part because they trust that if it does anything *too* outrageous, the Feds will set things right, and in part because it's easier to move to another city than to undertake a democratic reform movement.
The founding generation of Prosperans will by definition be people who are comfortable moving between nations in pursuit of friendly local politics. And the Honduran government will almost certainly send in the army if e.g. the Prosperan elites that it's really all about tricking poor Hondurans with promises of good jobs and then turning them into caged medical research subjects and sex slaves.
The important question is the extent to which the Honduran government will intervene in the case of lesser deviations by the Prosperan government from either what the Prosperan people want, or what the Honduran government wants. The ideal case for the first generation is I think for Tegucigalpa to keep its hands off as long as they get their cut, there aren't any grade-A human rights violations, and nobody is stopped from leaving (with their personal wealth and property).
I don't really know what "things a US city government can do". Without doing any extensive research, I'd guess that the range of what US cities can and can't do is extremely large, and that what Honduran cities can and can't do probably fall in a similar range. I also don't think a corporation more or less running the place is similar to any arrangement, city or state, that I know of. So I don't think that gets us closer to "American-style institutions".
In the end, you can say that the effective institutions in Próspera will be somewhere between the state institutions of Honduras and the corporate-dictatorship-hybrid institutions of Próspera. To the extent that the latter dominates, it's far from American institutions because of the aforementioned reasons; to the extent that the former dominates, we're back with the supposedly failed Honduran institutions. But nowhere here do I see anything that gets us closer to the institutions Americans live under.
I'll say again that I think that this experiment can be justified as a a kind of "Let Amazon move its headquarters there and give it wide berth in designing a company town". If a rich corporation is moving in it may well create jobs, clean spaces, etc., which can be valuable. But I think it fails at the idea of being a more ambitious upgrading of institutions. At best, this is a radical new experiment to see if a corporation can run a polity, not "what happens if we transplant American institutions in the middle of Honduras".
"If you got all the laws and values just right, maybe you could prevent poverty and corruption from finding their first footholds. Do the "liberty and justice for all" thing, but for real."
Well, yeah, that's lovely. Except - until we get actual robots who can do all this stuff, and we're probably getting there - there will be the need for people to sweep floors and empty bins and do that kind of manual labor/lower level white, pink and blue collar jobs.
And they're going to be housed in places that are not near where the rich people live, and they are not going to be the same as rich people houses, and they won't have access to the same levels of entertainment and service as the rich people, because of course not. This is not to say they won't have (reasonably) nice houses and the possibility of a health service and all the rest of it, but you are going to have inequality built in to your nice, shiny new city.
And out of inequality does come poverty and corruption, because after a while... well, the rich and smart people are the productive ones, right? The ones who make things happen? While the poorer people - you can get them three for a pound. They can come from anywhere. Giving them relatively nice things costs money, and that may be money they don't make up. So you have to take it from your rich, smart people and why do they have to pay more than their fair share to support the non-productive who don't make things happen and who don't create value and who will probably be replaced by the robot flying cars anyway within a couple of years?
So the poorer places get that bit less nice. You build the housing that bit cheaper, pack them in a bit more densely. The rich, smart people get first pick of the nicest things going - because they're worth it! and they genuinely are!
And then we get the "well, do the street sweepers really *have* to live in Prospera itself? Can't they just, like, come in on buses from outside to their jobs, then go back home on those buses in the evenings?" and here we go round the mulberry bush again.
"But they’re also interested in poorer Hondurans looking for construction and service jobs, and expats after a slice of paradise on a tropical beach."
"They included Ronald Reagan’s adopted son, the foreign minister of Oman, US low tax campaigner Grover Norquist, and - in case there was a single conspiracy theorist anywhere in the world not already on high alert - a member of the Habsburg family. I would say this raises a lot of questions, but really the only question anyone had at the time was “what?”
Out of that entire project, my feeling that the *least* problematic element was the Hapsburg 😀 If you're going to build a fantasy kingdom, why not have a genuine Imperial head of state?
The *idea* is lovely and I really would like to think it could work, but my fear is that it would either be a boondoggle, or end up some kind of combination tax haven/investment dumping ground where rich foreign nationals sink money into buying up expensive apartments etc. as a means of getting their fortunes out of the claws of their own government.
> Except - until we get actual robots who can do all this stuff, and we're probably getting there - there will be the need for people to sweep floors and empty bins and do that kind of manual labor/lower level white, pink and blue collar jobs.
Yeah, that sounds bad. Better let those poors die a poor and violent death instead, right?
> or end up some kind of combination tax haven/investment dumping ground where rich foreign nationals sink money into buying up expensive apartments etc. as a means of getting their fortunes out of the claws of their own government.
Sounds like an excellent plan, primarily because, that way, those rich foreign nationals can compound the growth of the wealth they create, much faster than they could do back home. 7% tax savings is a doubling of wealth within a few years — and that wealth is productive wealth, not just some bars of gold stored somewhere that don't contribute to the economy and well-being of everybody else.
> This is no different than what everyone on the outskirts of every city in the world has had to experience as those cities grow, but it’s another possible bad thing. At least if you’re a renter there. If you own property there, I guess you’re now super-rich.
Theoretically super-rich, maybe, because of increasing land values, but in practice suddenly everything got super-expensive around you, your lifestyle is threatened, and you're basically forced to give up on your home and village and community. And even these theoretical riches are not guaranteed, as people in such places are often taken advantage of and driven away from their lands for a pittance by real estate companies, because they're not used to large land transactions like this especially under such dramatic changes and the Fear, Uncertainty, and Doubt that these companies create in them for this reason.
Not saying anything about the project overall, but I've seen this particular story of expanding cities or otherwise increased land values play out too many times to believe that it's going to be a net positive for the current owners of the land or make them "super-rich".
> Theoretically super-rich, maybe, because of increasing land values, but in practice suddenly everything got super-expensive around you, your lifestyle is threatened, and you're basically forced to give up on your home and village and community
Is that a big deal? I don't live in the place I grew up. Most of the people I know don't live in the places they grew up either.
That fishing village nearby speaks English - which is, in effect, an obscure local language. Those people aren't from some other part of the country. I'd bet most of them have the same last names as the village's founders.
Ha, I half expected a comment like this. Urban people in general don't think much of having to uproot yourself and move your life elsewhere, and similarly the richer someone is the less they think it matters (and this seems to apply doubly so with Americans). But people in rural communities, on the poorer end, have a lot attached to their locality and the community built there and their identity as part of it. Their "country" is a small fact that affects their lives in some ways, but their village and community are what they really think of themselves as belonging to. So it's on the scale of being "a big deal" as someone being exiled from their country and asked to start a new life in a different one.
If you're a poor person in a long-term rural or urban community, the main resource you own is connection to a community of locals that know each other and help each other do things. The biggest actual problem of gentrification is that as these people are priced out, they don't all simultaneously relocate to another neighborhood together, so all the people lose their one resource and have to start over in a new place with both no money *and* no social connections.
Middle class re-locators at least have money when they arrive in the place without social connections.
"The idea behind charter cities is: Shenzhen, Dubai, Hong Kong, Singapore, and the rest of the rich world aren’t rich because their citizens are morally superior to those of their poorer neighbors. They’re rich because they have better legal systems, less corruption, stronger rule of law, and more competent administrators."
I think this misses the fundamental reason why these places succeed. It's culture. All of the laws, respect for laws and competence flow from the norms and behaviors embedded in the culture. This means a culture that emphasizes strong nuclear families, delayed gratification, an aversion to violence, an affinity for high social trust, education etc.
It is why immigrants from these types of cultures can move anywhere in the world and thrive, whereas people from cultures that lack these attributes often arrive in competent systems and don't thrive.
Unfortunately, culture is a lot harder to fix than a corrupt parliament or incompetent politician.
Not that culture doesn’t matter, but this claim doesn’t make in context?
So Shenzhen just had a massive cultural change starting in 1980? Dubai had a really large culture change too? That’s what explains their rapid success? Hard to argue that imo
They had good cultural software but bad institutional hardware. Once the hardware changed the cultural software was free to thrive. The point is there are some cultures with bad software and changing the hardware makes little difference. Whereas other places with good cultural software will eventually adopt better hardware as we've seen in India and China.
The reason I don’t buy this is that don’t think you’d be making these arguments 50 years ago. This view of Chinese and Indian cultures as “good” is new, and I think
Culture is endogenous to institutions as well: Shitty institutions do not reward “good” culture. If the payoff to hard work is low, people will do it less.
Again, I don’t think that culture doesn’t matter, but I think that if you have terrible institutions, you can’t plausibly discern what is the underlying culture vs. the effect of those bad institutions very easily.
And you can’t just look at success of different immigrant groups: You need to compare people coming from the same “class” from different groups, if you want to even try to do this disentangling.
But regardless, it’s quite obvious that good institutions help even if your “culture” is not conducive to economic success. See work by Acemoglu and that whole literature.
But I could also make these arguments 200 years ago and a thousand, when Chinese culture equaled and surpassed other cultures on the planet. China rose and fell as emperors opened and closed trade, just as Western cultures rose and fell as rulers embraced liberalism or tyranny - but they did rise when allowed to. The cultural software was conducive to rising.
And I don't buy the argument about 'class' of immigrants at all. Vietnamese, the Hmong and Koreans arrived in the US with absolutely nothing after devastating wars. How long did it take for them to rise? Now compare to refugees from Somalia who have arrived in a much richer and more welcoming America with vastly more expansive welfare support. Over 80% of Somali migrants live in or near poverty today despite arriving in the 1990s.
The Vietnamese thrived in America just as they are thriving in Vietnam today now that free markets are back. Now of course there's a positive feedback loop between culture and institutions, with the latter influencing the former. I'm just saying that fundamentally real change can only come with cultural change.
1. I'm not talking about the state of America when the migrants arrived, I'm talking about the class of the immigrant when they arrive. So the fact that (poor) Somali migrants came here in the 1990s doesn't affect my argument. By comparison, Nigerian immigrants are one of the most successful groups in America - This is largely explained, imo, by the fact that Nigerian immigrants who arrive here were wealthier and more highly educated when they arrived.
2. Hmong are not a high-achieving group in the US at all.
3. I don't reject the argument that culture matters, but the idea that good institutions won't have a positive effect on a place because the culture is bad seems silly to me.
4. You state that culture influences institutions. But you ignored my point, that institutions influence culture as well. That seems trivially true to me: If you're in a civilization where you are not allowed or are unable to reap the rewards from education or hard work, your culture will evolve with this in mind.
But ultimately, it seems like you are trying to make the point that good institutions can't help groups with bad cultures, and that Hondurans have a culture that is not conducive to success, so the project will be useless (or something). Again, I would argue that these things are hard to disentangle, and not static. A lot of factors influence success: Geography, history, culture, institutions, luck. All of these affect each other. But I firmly reject the idea that good institutions are not important and cannot help.
No matter how ambitious or hard working you are, if you grow up in a place with an extremely high murder rate, extreme corruption, where the returns to hard work are low, you're going to have a much lower chance of success, and all of the positive cultural features you emphasized are going to be diminished.
Wait, Chinese culture 200 years ago is relevant to modern Chinese culture? I would have thought that for the things that matter, cultures change far faster than that.
"America is a better place to live than Honduras. This isn't because Americans are smarter, or harder-working, or morally superior. It's because Honduras has bad institutions."
Again, why do second-generation immigrants from Central America lag other Americans and immigrant groups in education and salary? Why do poor migrants from India and China excel while those from Honduras struggle? While in America they are subject to the same institutions, so why the differences? The answer of course is culture, beliefs and behavior. And these characteristics are fundamentally what makes you 'smart.' Smart people do things that improve their lives.
Isn't that like saying someone will travel faster in a plane than on a cart? The point is that there are characteristics of cultures that make them thrive or fail - that lead them to invent a plane or a cart. It's the awareness of these characteristics, and acting on them, that makes people 'smart.'
Look, I firmly believe that a Honduran has the same potential as an American or immigrant from India. But I don't believe they will reach this potential if we pretend that an external force is holding them back, instead of some fundamental yet changeable set of beliefs.
To make the argument pro-Próspera, you only need to argue that a non-negligible part of Honduras under development is explained by poor institutions, corruption, etc. This seems like a pretty safe bet, even if there are cultural factors contributing to Honduras underdevelopment too.
On a PPP or nominal basis? And is 6 even a big number? If poor immigrants from the Chinese hinterland make 100x what they did at home, then 6x isn't the positive evidence it might seem to be.
Immigrants from Honduras are from different class groups than immigrants from India and China. The US largely only allows highly skilled Indian and Chinese immigrants in, whereas Hondurans are much more likely to be poorer, refugees, etc. I think a lot of those cultural arguments ignore that aspect.
There are more illegal migrants in the US from India than from Honduras. In any case, the gaps in attainment persist into the second and third generations. I don't know why it's so difficult to accept that different approaches to life can result in different outcomes.
I agree with the sentiment, but that doesn't make me negative about it, but neutral (it's neither good nor bad, as more likely than not it will go nowhere), or rather slightly positive (it probably goes nowhere, but on the off chance it does, it's much more likely good than bad). I feel like those who are negative generally have different objections than "it will go nowhere".
There's always more possible comments to write on the theme of "How things could go wrong" than "I guess that would be pretty nice if it all works as intended".
Every one of those lefties who (secretly or openly) wants Próspera to fail — because they hate libertarians and don't want to see libertarian ideas prove their ideology wrong — *ipso facto* hates brown and poor people, because Hondurans are, by and large, both brown and poor, and a Próspera failure would mean the obvious thing that Hondurans would not benefit from its success.
Most of the lefties don't say they *want* Próspera to fail in the sense that it's allowed, but it works out badly. They predict that it *will* fail. Or they want it to fail in the sense that it is not allowed, because they believe that if allowed, it will turn out badly for the locals.
Now, I wouldn't be surprised if some of the lefties secretly wanted it to turn out badly; to be honest, I sometimes have similar feelings (with political sides swapped). I think the reason for these kinds of feelings is that they believe that these kinds of policies would work badly in general, and that if Próspera worked out well, it would probably be a fluke; but if it works out well, it will be widely used as an argument for similar policies elsewhere, which will do more harm in total than the good done to Próspera itself. Not that they hate brown or poor people.
It wasn't hard to deduce what that comment was trying to say, but it was a highly uncharitable and bogus accusation.
This always seemed strange to me, because Slate Star Codex wasn't like this. The SSC commentariat was <i>much</i> more right-wing. Given the fact that ACX exists because Scott got into a tiff with the (left-wing) New York Times, I would have expected the political shift to go the other way. What's up with that?
Most of the right wing commenters have stayed on DataSecretsLox, which was a forum established in the interim. The moderation is much more right-friendly than the old SSC, and probably than here as well. Scott has a link to it under bulletin board near the top of the page.
Envy? If Prospera were being built 20km from Commenter X, and he were sufficiently young and mobile enough for it to be entirely practical to take advantage of it, if he chose, you might see both less broad principled hostility and at the same time more pointed practical questions.
It sounds a lot like a 50 acre resort/tax heaven. Albeit with some cute housing pods for the menial workers. Nothing wrong with that but it sounds like they are trying to pitch it as something grand and society changing.
Any medicine approved in developed countries is approved in Prospera. Any licensed professional from developed countries can practice in Prospera. You can build according to any country or locality's building codes. Disputes are handled through private arbitration picked by the parties in advance. This sounds like *a lot more* than a 50 acre resort/tax haven.
The licensing reciprocity is nice, although a doctor has to be from a developed country. In Dubai a doctor can get medical reciprocity easily, and they have excellent doctors from Iran, Thailand etc- undeveloped countries . And with abortion being outlawed in Prospera it seems that medical professionals are allowed freedom until they offend the local regulatory authorities. And the doctors must choose what country they are going to be regulated by, so for example one might have the freedom of a French doctor, minus the ability to do abortion or access French medical infrastructure and drug market. Sounds like more red tape. So for medical stuff I am skeptical, and arbitration deals etc are just what you would expect in a tax heaven.
(Trey here from the article)--I expected comments like this; it's always easier to try to poke holes in something than to build something of value for others. I have been cathartically reading the Hacker News comments on Brian Armstrong's original post about launching Coinbase as a useful reminder that people literally always respond to new things this way.
The whole prospectus here about what marvellous things will be built reminds me of the Sunday Friend who works for the Moralintern in the game "Disco Elysium". All the wonderful jargon about the wonderful progress that is going to happen someday, just you wait, if everyone is good and obedient and follows the plan, meanwhile Revachol (the Martinaise district) is deliberately left as a slum hellhole to remind everyone of what the Coalition did in the past and can still do if anyone gets any pesky ideas about not being 100% down with the technocratic business industrial city re-invention.
And I'm a Moralist/Centrist in the game myself! But I really disliked this guy:
Currently playing through the new updated "Final Cut" version. Having voiceovers for the different skills is disconcerting, but at the moment I am still enjoying it greatly.
I can't tell you how many of my choices have been influenced by "yeah, I *could* do this, but that would disappoint Kim, and I don't want to disappoint Kim". I think everyone who plays this game ends up ride or die for Kim Kitsuragi 😁
I maintain that VTOLs are a stupid idea that will never work (for noise pollution reasons if nothing else), but aside from that this sounds potentially exciting. Unlikely to actually work, but also the sort of long shot like SpaceX that could be pretty big if it did.
Has anyone else done things like this? Yes. Seasteading and the Chilean Galt's Gulch were failures.If this is the libertarian experiment that works, it will be because the libertarians aren't having everything their own way.
Perhaps I'm missing something, but it's unclear to me what prevents an unworkable number of Próspera's underprivileged neighbours from flooding into the city and bringing their problems with them. In the same way that Próspera's residents can easily leave if they would prefer to live elsewhere ('Honduras is 500ft away'), why wouldn't almost every local Honduran seek the vastly higher quality of life offered next door? I understand that - to some extent - this is the very purpose of the ZEDE's existence, but there inevitably comes a point where the city can no longer support more residents on its limited acreage. In this situation, I don't see any reason to think Próspera would escape the same kind of immigration issues which most rich territories bordering poor territories tend to face, while also lacking - as far as I can tell - the kind of security measures usually in place to counter such demand. This being the case, it seems probable to me that Próspera will either not become a large-scale success, or its success will precipitate a decrease in the standard of living which it can provide.
Well, that's what you pay these guys for - that and making sure any gangs who get ideas about moving in on the turf keep out of town and instead run the provision of unattainable leisure services from across the water in Honduras proper https://www.constellis.com/
Both Irvine and a lot of the other places mentioned have actual or planned architecture that seems soulless or silly, with some of it in Roatan making me think that the architect grew up watching "The Jetsons" and always dreamed of building something just like it. Irvine looks dreadful. Maybe if you grew up in a place where the landscape was dominated by steel and glass rectangular shapes, this looks cool. If you actually want a human life, it's horrifying. Take a look at traditional architecture that has lasted and that people like, after centuries, and you'll see something much more attractive. There's a problem with architects. They mostly grew up in awful places. If you go to Bali, where most people grew up in a lovely place, almost any house or small hotel is more attractive than almost anything in the horrorshow modern cities that blight the world. We should learn from them and from the beautiful towns of Greece, Italy, and Spain. This stuff is all going to look weirdly like the Seattle World's Fair of 1960, if it is ever built. "What hicks thought the future would be like."
Wright's houses still look pretty kickass. I'm up for more wild innovating in architecture, it's a field with a lot of recent innovations in tech that create untapped potential, but large investment costs and correspondingly slow experimentation
"I don’t envy the PAC if they have adjudicate disputes involving, say, a doctor who has chosen to be regulated by the medical code of Norway suing her office building regulated by the laws of Houston, Texas."
Yes indeed, this was the main thing occupying my thoughts as I read through this article. One can't help but imagine that it will be very expensive to resolve legal disputes in Próspera, and I worry then about access to justice for the cleaners and cooks who live there. I don't know that much about modern libertarianism but I can't picture Próspera providing good free legal representation?
I was wondering about this too. Seems likely that the local arbitration agencies would develop their own set of precedents on how to interpret Norwegian regulatory law, and actual Norwegian regulators would have no interest in fixing their misinterpretations and making it work the way actual Norwegian regulation does.
A more specific question: how does tort law work? If you make a contract, you can choose an arbitration tribunal, OK. But let's say you accidentally damage your neighbor's property, without any preexisting contractual relationship between you, and you can't agree on an arbitration tribunal. Does it go to the PAC? And what guarantees that the PAC will make a fair decision if, say, either you or your neighbor is associated with the same entity that appoints the judges of the PAC?
IIRC there is some mechanism for using the American Arbitration Association instead under some circumstances. I don't know if those extend to a tort claim between to nominally private parties in Próspera itself on the basis that Próspera can't be impartial.
I... I want this to be possible. I want this to work. I want the world to be a place where a bunch of visionaries can set up something like this and it becomes the envy of the world.
I will bet at 10 to 1 odds that it won't work. I really wish I was invested enough to come up with reasonable and testable metrics for "won't work", so that I can be systemically virtuous about that claim. Instead I'll just sound out my reasoning. They have a golf course and three buildings. Most golf courses with three buildings do not go on to revolutionize city government. Technically, they have a golf course with three buildings, a website, some very nice pictures, and three thousand pages of totally untested legal codes.
You might object that they have top tier talent, wealthy backers, resources. They have had those for years, and what they have produced with those resources is a golf course, three buildings, a website, and three thousand pages of totally untested legal codes.
I will not be shocked if this succeeds, I will be confused. I will suspect foul play.
This seems like it might actually be somewhere I'd want to live if I worked remotely, and they competently execute their vision. There's some small but important stuff they'd need to get right in order to make it really attractive though:
- Low latency high bandwidth internet. StarLink might help a lot here.
- Reasonably fast shipping of random consumer goods available in first-world countries. Ideally this might look like having a US address where you can ship anything to and then having some kind of air freight deal that forwards all packages that arrive at that address to Prospera within a day or two via the hold of a regular flight. This would also presumably help them a lot with latency on getting things like schools and businesses built and set up.
- Not-unreasonable air travel to US destinations. Hopefully this is mostly sorted by it already being a vacation destination.
- Ensure someone has a business doing short-term furnished AirBnB rentals so you can try out living there for a month without committing to a big move.
If they nail execution on getting the actual buildings built, and get those things right, I can see it being a pretty nice place to live.
The case for being bored here is that the path of least resistance for Prospera is to become a hub for some high tech industries that feature particularly low labor intensity. Think data centres and finance.
Why? Prospera has a population of basically zero right now. All of the examples of special economic zone success had populations to begin with. Labor already lived there, so the lowest friction option was for those people to live under the new system. Living under the more liberal system an ecosystem of businesses emerged at different levels of capital and labor intensity because of the range of people and bank accounts that were there. For Prospera, we should ask who is most likely to want to be there.
The answer seems to be those with the most capital. The costs to move to Prospera and to live there are fairly static, but the benefits should scale well with earning potential due to the low taxes ans strong property right. Since no businesses currently exist there the benefits actually scale with capital to create earning potential.
So in a place with no labor and high earning potential for capital, what should we expect to see? Capital intensive business that requires little labor. That's the boring take. Propera will succeed at becoming a regional business hub, but will fail at all the interesting things it wants to do like becoming a model for how poor people can become rich people.
At least for the medium term I think the best case for Prospera would be kind of like another Bermuda, Caymans, or Jersey. A well managed place for tax avoidance and regulatory arbitrage inhabited almost exclusively by high skilled upper income people (Bermuda and Grand Cayman are not all upper income but they are also entire islands).
Yeah. It's based on a resort island, its neighbours are all tourist trap types of places. It'll be the city for rich smart people who fancy living and working on a 'tropical island paradise' site - if they can solve things like the power supply https://www.cubiclethrowdown.com/10-things-i-wish-i-knew-before-i-moved/
So one major concern that I didn't see addressed here is that large parts of Honduras are basically controlled by a couple of criminal networks. The biggest ones are Mara Salvatrucha and the 18th Street Gang (both started in Los Angeles, which is a longer story). These groups are treated as normal street gangs by the American media, but in Honduras and El Salvador they are more akin to what Isis is in Afghanistan. They are more powerful than the government in a lot of the country, and they operate kidnapping and extortion networks. They also commit a lot of murders. That is a big part of the reason that the US sees many more refugees from Honduras and El Salvador than from Guatemala or Nicaragua (which are comparably poor countries, but the criminal networks aren't as widespread there).
So won't the foreigners who move to Prospera be really good targets for kidnapping by these groups? Won't Prospera inevitably become part of the extortion/shakedown economy, unless the Honduran government somehow becomes more effective at cracking down on these groups? Honduras would seem to be one of the worst places in the world to start a planned city for digital nomads with lots of beautiful architecture.
Private security to discourage any gangs with notions of kidnapping rich foreigners. The island itself seems pretty okay as far as that goes, and it looks like the Honduran government doesn't want to kill the goose that lays the golden eggs so it invests in safety:
"Roatán and the Bay Islands are geographically separate from the mainland and experience lower crime rates even when compared with other Caribbean islands. However, visitors have reported being robbed while walking on isolated beaches. Thefts, break-ins, assaults, rapes, and murders do occur. Additionally, illegal drugs are for sale in many of the popular tourist areas during the evening hours.
The government lacks resources to investigate and prosecute cases; police often lack vehicles/fuel to respond to calls for assistance. Police may take hours to arrive at the scene of a violent crime or may not respond at all. As a result, criminals operate with a high degree of impunity. The government places specially trained police forces in areas tourists frequent (e.g. the Copan Mayan ruins and Roatán)."
So - ordinary Honduran on the mainland, or even deemed-to-be-rich foreigner: not that great and you're out of luck with the cops, buddy. Tourist areas that generate a lot of revenue - much better, package tour companies know the ropes and keep the visitors in the safe places and the cops are motivated to make sure nothing happens to the golden geese.
I don't know what the situation would be if a new development with wealthy foreigners as permanent residents set up, that might seem like tasty pickings for gangs to move over from the mainland, but by the same token I'd expect *plenty* of beefing-up via private security contractors to avoid this very thing.
The question will be what is cheaper, paying private security, or paying protection money. Or the latter disguised as the former: the private security company will be one of the gangs under a different name.
I love this post, and I love the idea of Próspera. I think it could probably make hondurans 5-10x richer and much freer, and probably better off than any other system I know could make them. But not to the level of singapore (probably not even to the level of Mexico). I have to nitpick on some depressing IQ related themes because truth is a very high priority terminal value.
Perhaps it was wise to not comment on IQ stuff the OP -- it could perhaps alienate some leftists that you were trying to convince. But I'd prefer you left it out entirely instead of actively denying that intelligence is one of the causes of utility differences between countries: "America is a better place to live than Honduras. This isn't because Americans are smarter, or harder-working, or morally superior. It's because Honduras has bad institutions."
Honduras has bad institutions indeed, but it also has people with an average IQ of 81, and some of the highest criminality in the world, either ignorantly or willfully voting for corrupt and horrible politicians. The people collectively bear some of the blame for the institutions they created.
Singapore doesn't just have better government than its neighbors. It has an IQ of 108 compared to Malaysia's 93. That's about the same size as the US black-white IQ gap or the Finland-Turkey IQ gap. It is populated mostly by overseas Chinese (descended from a self-selected sample of Chinese who were a bit smarter and more enterprising than the average Chinese because they chose to migrate out of China).
Honduras has an IQ of 81. That's almost as much dumber than Malaysia as Malaysia is dumber than Singapore. With even the best institutions in the world, they're not going to rise that high in international rankings.
If Honduras' GDP per capita ever got to $60k+ like Singapore is now (in current dollars adjusted for inflation, anytime in the next 30 years, without strong AI or genetic engineering or a natural resource windfall or a huge in-migration of higher IQ peoples) that'd falsify my views of race and IQ.
It'd be like finding rabbits in the precambrian. If it happens, I will donate half my net worth to malaria prevention.
I would be even willing to generalize it to cover any Singapore-isomorphic transformation occuring in any country with an IQ below 90. Fifty years to 80x GDP per capita, ending up richer than the US, without strong AI or massive oil or massive eugenic migration or massive genetic engineering. If It happens anywhere, I donate half my net worth to malaria prevention.
Related graph. Y axis is GDP per capita, X axis is a composite of standardized test scores. The only dumb countries that got really *rich* are the ones whose economies are mostly oil. https://imgur.com/a/j6JgLOa
One more thing: if you don't have a problem with a ZEDE having admissions criteria and enforcing them, then you shouldn't have a problem with a regular state having admissions criteria and enforcing them. The US is a good place to live partly because of its ability to deny entry to the 5 billion people who'd rather live here than wherever they're currently living. There isn't anything magical about the dirt over here. The people create the institutions.
It's possible to raise children's IQ about one standard deviation with early childhood education. That reduces what seems genetic to, basically, nothing, except for a few groups that have extraordinarily high cognitive endowments (most notably Ashkenazi Jews).
Look into Project Headstart's DISTAR projects. They did it. Could be done again.
Childhood IQ gains mostly disappear by adulthood (I would say completely based on the sporadic research I've seen but I think epistemic humility is important).
Less than one standard deviation, and the difference from controls fades away quickly after they graduate from the program. Nobody has found any large and long-lasting intervention (or set of interventions) that raises IQ more than 5 points except avoiding EXTREME malnutrition.
It is simply a standardized test, so of course its scoring is affected by family wealth, stability, nutrition, obviously education, experience & confidence with other standardized test, etc. Your statement is easily disproven
I said INTERVENTIONS, as in variables we can control and replicate. Not gesturing vaguely at the Flynn effect. The Flynn effect exists, but it's not on g and nobody knows exactly what causes it and it's dead/reversed in developed countries. All the randomized trials of actual INTERVENTIONS show small temporary benefits that fade away into nothingness by adulthood (if they even bother to do a follow-up) Shared environment explains ~0% of adult IQ in twin studies and adoption studies [citation: literally any twin study or adoption study that bothered to follow up and measure adult IQ scores]
You don't think society-wide improvements in education & general wealth count as 'interventions' that we can 'control'? Your original comment seemed to contain a lot of generalizations about race or ethnicity and IQ, as with the Hondurans. Do you have a specific response to the documented examples of how say East German IQs increased in our lifetime? Much less past white American immigrants, etc. (I'm still looking for that paper I read that showed a similar increase in Ireland as it grew wealthier in the late 20th century)
Not an experimental intervention that we can test experimentally (except maybe through a visa lottery -- someone should do that study!)
Another problem with your theory is that the Flynn effect is concentrated in the least-heritable and least-g-loaded subtests, while the racial gaps are concentrated in the most-heritable and most-g-loaded subtests. Across subtests, the size of the flynn effect is negatively correlated to the size of the racial gap. So flynn effects and racial gaps probably don't have the same causes.
Long story short, standard measures of IQ from African countries (i.e., very low) are wildly inconsistent with the academic success of African immigrants to the UK and France. Also, many world class scrabble players come from African countries (Nigeria for English scrabble, Gabon for French). To quote Friedman, this would be nearly impossible if the African IQ estimates were correct.
In many cases, going to graduate school in the UK/US is their ticket into the UK/US.
There certainly are some environmental effects holding Africa's scores down, but absent those effects they'd perform more like US blacks, not tiny elite immigrant groups.
> But it is doubtful that there is strong selection on IQ.
Self-selection is incredibly strong. I would know — I am a migrant.
> It doesn't take a genius to figure out that life in Europe is better than in Africa.
But it does take above-average intelligence and mental skills in demand to actually /make/ it in Europe. Hence why many migrants just... return back home, and many of those who stay... stay poor.
Right, and the standard measures of IQ of African countries actually measured the IQ of immigrants from African countries. Hence those standard measures cannot be trusted.
Regardless of all of this race debating, the first sentence (5x-10x) of your first post on this subject still stands. It also lines up perfectly with the UFM study done on the ZEDEs about the leapfrog effect. A 5x-10x improvement says most of what needs to be said about the power of free markets and institutions built without perverse incentives.
I do think we can expect this project to reach more than the 5x-10x impact and there are large pools of capital in south america that could easily find a home in a financial center and best in world aims of this project.
You stupid, stupid asshole. The right's fetishism with IQ is as wrong as the left's obsession with colonialism. Drop somebody with high IQ in the middle of the fucking jungle and see how rich they become.
Also, you have no fuckig clue of what you are talking about: US and Singapore have like 5 times the income per capita at Purchasing Power Parity than Honduras, and Mexico like 2 times. And yet you say that it will make Hondurans 5 to 10 times richer, but not even to the level of mexico??
If they're selling it as a libertarian do-what-you-want-with-your-land scenario, what mechanism is going to make people hire Zaha Hadid to design their apartment buildings and not Zombie Le Corbusier?
I phrased that kind of snarkily, but I'm genuinely wondering - how can you say "this is what the buildings in our city will look like" when your only control over that is the laws (which presumably don't mandate Zaha Hadid architecture) and how big a parcel of land you sell?
Right now the answer is they're the ones doing the building and selling the units, so they have a good idea of what they'll end up with. Obviously it's not a long-term answer, but it works for the first people moving in.
And if you want to stop your neighbor from razing their unit and replacing it with Pagano-Brutalism or whatever, you write up a contractual agreement of some sort (HOAs basically).
Ceteris paribus, if people would rather live in the appartment block designed by Hadid than Le Corbusier, they'll be willing to pay higher rents so the developers who hired Hadid end up richer.
The Coventry City Architect's Department, for instance, was operating under no such economic incentives. The results were predictably grey and concretey and James C. Scott angering.
But the issue is that I'd rather live in a building surrounded by walkable buildings than in a building surrounded by concrete parking garages. Right now, in the United States, zoning usually ends up mandating the parking garages. But without some sort of zoning, you do have to worry about these externalities being placed all around you.
Prediction: Próspera will have fewer than half of its projected 10,000 residents by 2025. 80% confidence.
Reasoning: My impression is that projects like this tend to sputter out, often for seemingly stupid reasons. In particular I'm concerned about changing political conditions in Honduras. It's easy to say "we commit to do X" and "X is in our long-term self-interest" but if a state like Honduras were capable of consistently honoring its commitments or acting in its long-term self-interest, it wouldn't be in this mess to begin with.
There's also the danger of loss of support among the project's funders / leaders, either organically or because Vice-style ideological actors are putting political pressure on them. For similar reasons it's possible that there just won't be a critical mass of people from developed countries (because let's face it, the project's funding is premised on attracting them) who actually want to move there.
>Almost every libertarian agrees that you can make rules (even arbitrary rules) about what people can do on your own property, and anyone who wants to stay on your property has to follow your rules. But what’s the difference between that, versus a government “owning” its territory and making rules for its citizens?
I often joke that the UK is a Libertarian society run by its owner Elizabeth Windsor.
This is sort of like how Eastern European kings used to invite German settlers to settle in their special towns with German-based law. In the grand scheme of things that didn't end well (World War II), but my understanding is that it was a moderately successful public policy for first 100 years or so
Of course, you have to pick the country that is current being governed by a coup/stolen election combo in order to implement your libertarian-fascist (but I repeat myself) dystopia. No functioning democracy would tolerate it.
My favorite part is where you repeat talking points that you already yourself debunked in the anti-libertarian FAQ back in the day. So are you actively getting dumber? Or do the social democratic takes just not rake in the cash like the billionaire boot-licking ones?
Scott, I know that moderation is a thankless task, especially when it involves reading every single comment rather than scrolling through a list of "SELECT * FROM reported_comments ORDER BY times_reported DESC".
If you are interested in community feedback w.r.t. prioritization of missing Substack features, a "report comment" button would be my #1 request (by a wide margin).
Agreed. The quality of comments has become much more of a mixed bag since the ACX transition, made even worse by the presence of a few inflammatory youtube/reddit/average msm news site commenters.
Oh, seems to be the problem here? Was it uncouth of me to mention that Scott "just happened" to be chatting with Prospera's Chief of Staff, and then decided to write a 10,000 word essay giving project glowing praise? With three tiers less of intellectual rigor than he usually devotes to his interests?
It takes a special person to sell "the mother of all tax havens, enshrined into irreversible constitutional law by coup government perpetuating its power via election fraud" as a beautiful, revolutionary act. Looks like Prospera's found their guy!
I think my favorite part of this essay is when Scott uses the word "statism" in a derogatory sense TWICE, despite devoting the entire opening to his anti-libertarian faq to arguing why calling ideologies "statist" was an anti-intellectual rhetorical ploy.
Clearly, his heart isn't in it anymore (but the $$$ is). He was paid to write this. If he tells you otherwise, he's lying. He lies a lot, actually. Go read the leaked emails regarding the NRX faq if you want an eye opener.
Dude, this is so fucking rude! If I had a blog, this would be an instant ban.
This is the kind of behavior people do on internet, because in real life the responses would range from being punched in the face to being politely but firmly told to leave the room and never return again.
So, would you please be so kind and increase the cultural and intellectual level of this forum by fucking off and never returning again? The door is that way --> twitter.com
This comment is a bit disappointing, because you managed a really good and non-abusive critique of (a particular version of) libertarianism upthread, and it's possible some of the people on the right here who aren't beyond the reach of argument might learn from it. But they won't if you also go around being a jerk and abusive. That'll just give them an excuse to dismiss your objectively good critique.
I'm extremely proud to say I don't know who any of these people are, or even what you're really trying to say. A quick google tells me that "Stonetoss" is some kind of white-supremacist comic guy? I'm sure he's just hilarious xD
Amazing article, the immense gap to the typical media coverage shows again how bad journalism has become and how it is saved by independent writers. We at the Free Private Cities Foundation (freeprivatecities.com) in Switzerland support projects like Próspera and the many more currently in development. We would love to republish your article (linking back here, of course) if that is possible! Can also provide much more information on this "industry" or "movement" (depends on how you look at it), if needed.
Rahim, thank you to you and Titus and the rest of your team for the work you are doing. There is so much opportunity for additional prosperity and the (elephant in the room) obstacle is rent-seeking publicly run/funded government/agencies.
Regarding your questions about the kuwait-honduras investment treaty: This seems to be a standard Bilateral Investment treaty. They are very common nowadays, most nations have negotiated at least a few, industrial Nation often have a ton of them. Their purpose is to give foreign companies (in this case: those from Kuwait) some protection from the state they are investing in, guaranteeing certain rights and often providing for an arbitration clause in case of disputes, so that the private investor does not have to sue the state before its own courts.
My spanish is horrible, but this particular treaty seems to include such an arbitration clause providing for an ad hoc arbitration Tribunal, meaning if Honduras were to decide to simply expropriate Prospera, the Company could sue them before such a tribunal for damages. Kuwait itself would likely not get involved, and these types of Investor-state proceedings tend to be a mess because they take forever to resolve and enforcement of awards can be tricky. They are not uncommon however, and this does give the project at least some protection. If you want to see some examples of these types of proceedings, check out this database: https://arbitration.org/awards/icsid
Looking through the comments, even the average snarky critical comment here is so much more insightful than any mainstream media article on the subject I have come across so far. If you attribute a high chance of failure to Próspera, bear in mind that it is only one project and the initial notion of a Hong Kong or Singapore in the Carribean was misleading or mistaken because it does not fit this specific project (for a number of reasons, some of them various critical commenters have pointed out). Still, it has done some pioneering work in a very difficult industry which has a lot of potential.
Long-time lurker here but, unexpectedly, I am an expert on one of the key items in that post: the Honduras-Kuwait Treaty for the Reciprocal Protection of Investments. I didn't expect such a treaty to figure here, especially since I think the argument made by Prospera is bogus. Let me explain.
That's a Bilateral Investment Treaty (BIT), of which there are thousands in force around the world. The typical story of BITs is that most of them were signed in the 80s and 90s whenever two states were meeting and sought a pretext to sign or do anything. The texts of these treaties are therefore rarely negotiated - it revolves around a few models, mostly imposed by powerful, Northern states, with boilerplate standards of protection that come down to "don't mistreat foreign investors, come on". Importantly, most BITs provide for what's called investor-state dispute-settlement (ISDS): if an investor from one of the two states is mad about something the other state did, they can sue before an international tribunal. This is a controversial, yet highly-lucrative part of modern international law (lucrative for the lawyers who act as counsel and/or arbitrators, I mean - it's very expensive for states, but the theory is that it spurs investments in return).
I can't find that particular treaty in the main databases of BITs, or in the UN Treaty Series, but the fact that it was published in the Official Gazette would indicate it has been ratified by Honduras; I found Arabic news online saying it was also ratified by Kuwait's National Assembly, so I think it's genuine.
The first thing to realise here is that the fact they provided for ZEDE in the text of the treaty indicates that the concept of ZEDE has permeated deep enough in the Honduran government that their foreign policy has been impacted. This shows a very deliberate intent to showcase this experiment as, again, typically diplomats would not negotiate this kind of treaty, and apart from the provisions relating to ZEDEs, the treaty text is the usual boilerplate I see everywhere. (It does seem, however, that this is the only BIT they signed in this respect, but states have relatively cooled in signing new BITs for the past ten years so this is unsurprising.)
But the second thing is that it does not provide any protection or "guarantee" to Prospera itself. Article 16 BIT only says that the legal framework for ZEDEs would be guaranteed for 50-years, but for Kuwaiti investors only. Only them can benefit from this guarantee, not anyone who put trust on Prospera, or who moved there.
Now, I read from Prospera's material that they refer then to "most-favoured nation" (MFN) legal concept: the idea is that other treaties with a MFN clause could benefit from that guarantee. But that depends on the particular language of the MFN clause (in BITs, they typically cover "treatment", not this kind of long-term guarantees), and you still need to qualify under another treaty to invoke that clause. Apart from investment treaties (which would protect only investors), I am hard-pressed to think of any treaty with an MFN clause that could extend to this 50-year guarantee. And Honduras has actually but a few BITs: while they include the US, UK, France and other wealthy countries, this remains limited, and investors from most of the world wouldn't be covered.
Finally, what would happen under international law if Honduras renege on that guarantee ? Well, not much. To be sure, Honduras can't just abolish ZEDEs at will, but the consequences under international law would depend on the existence of an aggrieved party that can sue - and few can. (Having "rights without a remedy" is a common, if not the main situation, under international law). Investors covered by a BIT (from Kuwait, or elsewewhere if there is BIT with an adequate MFN clause and an ISDS mechanism) could start arbitral proceedings, and try to show that the abolition of the ZEDE framework caused them harm. If they win, they would receive damages (or, more accurately, an award against Honduras, which they will then struggle to enforce if Honduras refuses to pay). End of the story.
So, in conclusion, and while I understand why they are excited about this treaty, the ZEDE proponents are overstating their case here, whatever it is: this treaty does not bring much to the table, except as evidence that Honduras takes ZEDEs seriously enough to protect ... future, hypothetical Kuwaiti investors.
Update: shortly after writing this, I realised that Prospera Inc. itself could probably qualify as a "US Investor" (they seem to have entities in Delaware and Wyoming), and there is a Honduras-United States BIT with an ISDS mechanism. But the BIT's MFN clause is exactly what I mentioned: focused on "treatment", not guarantees, and there is jurisprudence indicating the distinction matters. Legally, this is not a clear win for the investor.
And yet again, at most Prospera could claim damages. Besides, that's something they could do directly under the Honduras-US BIT (which protects against unfair treatment); I don't think the 50-year guarantee brings much to the analysis.
I used to really love it when a random SSC lurker turned out to be an expert on some entirely esoteric topic - glad to see that proud tradition has carried over to ACX!
Thanks so much for writing this by the way, I found it very enlightening
Since you mentioned a couple of times a possibility that Switzerland could somehow help manage Prospera, I would like to note that Switzerland doesn't really have any entities that would be appropriate for managing an organization like Prospera.
Switzerland is very federated and self-governed. The kind of questions that Prospera is likely to face are usually decided on the local level, often by the referendum. Social services like education and healthcare are managed on the cantonal level, while city services are managed locally on the level of municipality. For example a municipality may run a referendum to decide whether to increase the building height limit or whether to develop a new commercial district. In some places you can still vote by raising your family sword (https://www.swissinfo.ch/eng/democracy-at-its-most-direct-in-appenzell/245320).
So it would sound very weird if a Swiss canton or a municipality with its self-government tradition would decide to manage a foreign piece of land thousands of kilometers away.
Nice article Scott, I appreciate the richness of the history. You describe what the optimistic vision of Próspera will look like, but I don't have a very good sense of how likely you think it is to 'succeed' versus it either fizzling out or being implemented but not being transformative. Metaculus currently assigns a 20% chance to a successful seasteading venture with at least 100 participants before 2035 (https://www.metaculus.com/questions/6721/successful-seasteading-by-2035/). How about some probabilistic predictions for Próspera? Some examples below, but feel free to change the numbers/dates or propose totally different ones:
1. Próspera will have at least 50,000 residents by 2035.
2. Conditional on having 50,000 residents, the median income in Próspera will be 20% greater than the median income in Honduras by 2035
3. Honduras doesn't eliminate ZEDEs by 2064
4. Another Latin American country introduces ZEDEs by 2064
(I'd be pretty keen to see a variant on 2 that doesn't resolve positively if all Próspera does is cream skim the most productive Hondurans but nothing immediately comes to mind)
1. 40% (I am interpreting "by" as inclusive - if it gets 50,000 residents before 2035, but loses them and is below that in 2035, it still resolves as true).
2. 99% (I agree with you that this will likely be partly from skimming. Also, Roatan itself has an average income twice Honduras, so for this to fail would require that Prospera be poorer than the rest of Roatan.)
3. 40%
4. 75% (though a lot of this will hinge on what the difference between an SEZ and a ZEDE is.)
To me it seems, like it has the same problems all these projects have. Namely they are designed and not grown. A designer simply can't see or reproduce everything you need. Switzerland is like it is, because it grew this way. It's debatable if you could transplant its system, even to its very similar neighbor Germany. The people, mindset, traditions, inertia, expectations, conception of oneself, matter of course all play a role, and all can't be designed.
I really hope that they're not relying too heavily on the perceived benefits of the "air-taxi" thing. Having worked as part of a team trying to design one, the idea suggested here that the plan is to rummage around for a set of regulations and insurers that will let them put one in the air is a little bit worrying. They are certain to be expensive, likely to be dangerous, and the level of traffic required for them to be the primary solution to connect different city hubs into a unfied whole would be stunningly expensive and really quite frightening.
I like the sound of this project a lot, but I would put good money on this part being shelved or dropped entirely.
I definitely agree that it's a moonshot and quite unlikely to reach their vision - but god damn I find this incredibly exciting and would love to see it succeed! Innovation in governance has the potential for huge positive spillover effects.
It seems almost grotesquely overambitious compared to the actual backing. I expect either a whimper as it never gets properly going, or a glorious train-wreck. In the latter case, at least we will be able to learn from it.
Yeah, basically this. There doesn't seem to be any substance to it. If it had been backed by tens of billions of dollars, things might be different. These people look like adventurers.
The other project mentioned, with vastly more backing and far lower ambitions, sounds a LOT more credible.
"Unlike anywhere else in the world, it also displaces the rest of the jurisdictions’ provision of services in that area. So if an intrepid individual wants to create a better community with better rules and administration than we have, we invite them to come do it! Test drive your Marxist commune in Próspera! Maybe it will work this time. If it does, then people can move out of the rest of Próspera and into your little community, and the ZEDE will have to adapt its meta institutions accordingly."
If Trey read Marx he would see that Marx argued against this kind of arrangement.
As you've been repeatedly asked, when you make a claim like this, it'd be nice if you actually backed it with anything other than "if X read Marx they'd know Y isn't true". If you want to actually convince people, please put in the work to be actually convincing: i.e. provide evidence for your statements.
"The undeveloped state of the class struggle, as well as their own surroundings, causes Socialists of this kind to consider themselves far superior to all class antagonisms. They want to improve the condition of every member of society, even that of the most favoured. Hence, they habitually appeal to society at large, without the distinction of class; nay, by preference, to the ruling class. For how can people, when once they understand their system, fail to see in it the best possible plan of the best possible state of society?
Hence, they reject all political, and especially all revolutionary action; they wish to attain their ends by peaceful means, necessarily doomed to failure, and by the force of example, to pave the way for the new social Gospel.
Such fantastic pictures of future society, painted at a time when the proletariat is still in a very undeveloped state and has but a fantastic conception of its own position, correspond with the first instinctive yearnings of that class for a general reconstruction of society."
You might also be interested in Marx's criticisms of Proudhon, e.g.:
"Just as the economists are the scientific representatives of the bourgeois class, so the Socialists and Communists are the theoreticians of the proletarian class. So long as the proletariat is not yet sufficiently developed to constitute itself as a class, and consequently so long as the struggle itself of the proletariat with the bourgeoisie has not yet assumed a political character, and the productive forces are not yet sufficiently developed in the bosom of the bourgeoisie itself to enable us to catch a glimpse of the material conditions necessary for the emancipation of the proletariat and for the formation of a new society, these theoreticians are merely utopians who, to meet the wants of the oppressed classes, improvise systems and go in search of a regenerating science. But in the measure that history moves forward, and with it the struggle of the proletariat assumes clearer outlines, they no longer need to seek science in their minds; they have only to take note of what is happening before their eyes and to become its mouthpiece. So long as they look for science and merely make systems, so long as they are at the beginning of the struggle, they see in poverty nothing but poverty, without seeing in it the revolutionary, subversive side, which will overthrow the old society."
You might also be interested in Engel's analysis of the utopian socialists:
"This historical situation also dominated the founders of Socialism. To the crude conditions of capitalistic production and the crude class conditions correspond crude theories. The solution of the social problems, which as yet lay hidden in undeveloped economic conditions, the Utopians attempted to evolve out of the human brain. Society presented nothing but wrongs; to remove these was the task of reason. It was necessary, then, to discover a new and more perfect system of social order and to impose this upon society from without by propaganda, and, wherever it was possible, by the example of model experiments. These new social systems were foredoomed as Utopian; the more completely they were worked out in detail, the more they could not avoid drifting off into pure phantasies."
Capitalists like to say "So why don't YOU just build your socialist system within the framework of a capitalist state??" like its some sort of own.
I dunno, why don't THEY just try to build a make-believe capitalist system within the framework of a socialist state? There's nothing that would prevent workers and owners from role-playing their old roles under socialism, if they wanted to, like some sort of sadomasochistic BDSM thing.
But it's funny, when workers are given actual institutional power they never seem to want to do that...
> I dunno, why don't THEY just try to build a make-believe capitalist system within the framework of a socialist state?.. But it's funny, when workers are given actual institutional power they never seem to want to do that...
My comment is that in USSR there was a large network of private factories even though they were illegal and workers and tsekhoviks faced harsh sentences for this activity. My parents' more fashionable peers would get jeans and other nice things produced in these factories from spekulanty - a large networks of illegal sellers.
When in the 80s some of this activity was allowed - still within socialist planned economy - they came out from the shadows and eventually became the backbone of the New Russians class of the 90s.
If a worker's state is unable to do the basic law-and-order governance of preventing widespread private expropriation, then I would argue that those workers have not yet achieved institutional power. And thus cannot be used as a counter-argument for the workers having wanted to voluntarily to enter such an arrangement.
People tried to do capitalist things in eg the USSR all the time - for example, the black market, or importing foreign goods. If they were caught, they went to jail. If people had formed an entire town devoted to doing capitalist things, they definitely would have gone to jail. During the Cultural Revolution people were murdered just because it seemed like they might be less than 100% against someone doing something capitalist at some point.
If the Soviet Union or Maoist China had said "you can buy some land and do capitalist stuff on it as long as you pay some taxes", millions of people would have done that and the history of the world would have been completely different. Saying this was permitted (eg you could sell crops you grew on your own land) was one of the Deng reforms that changed the face of China.
As far as I know, capitalist countries *do* say that you can buy some land and do socialist stuff on it as long as you pay some taxes, and some people have formed socialist communes (or worker-owned companies). I'm not sure how you think these situations are equivalent.
Black markets and importing foreign goods are describing MARKET activity, not capitalist activity. One reason we know this is true, is that even in capitalism you cannot do unauthorized market transactions within someone else's property (e.g, I cannot unilaterally set up a lemonade stand in your front yard). And you also cannot import goods (foreign or otherwise) onto someone else's property without their permission. Capitalism makes no guarantees of markets within its own borders of ownership.
This is all old hat, but I'm going to keep repeating it: Capitalism is defined as private ownership, and the inherent authority that comes with it. Not markets. This isn't a weird socialism definition: This is the opening sentence on Wikipedia. https://en.wikipedia.org/wiki/Capitalism It's true that capitalists often rhetorically champion markets. But they are also opposed to markets when it conflicts with their private property claims, as I pointed out earlier.
So this whole discussion is...a little confused from this point.
We do have small-scale socialized aspects of government in the west, for instance National Parks and such, that can be used as examples. By "role playing capitalism", I was thinking something more like voluntarily sending a check to the people whose property was expropriated by eminent domain every time you visit (as a pretend "user fee"), or just abstaining from visiting National Parks at all on grounds of it "trespassing". There's nothing in the law that precludes you from role-playing capitalism within this socialist system! Yet no one ever does.
I think it's impossible to have everyone voluntarily coordinate capitalism within a socialist system, since there are high transaction costs, hard coordination problems, and no way to enforce anything. But if you could found a town (even a charter city!) within a socialist country and have capitalist things happen there, that seems like it should work. Do you agree the same is true in reverse?
Also, I think if you were allowed to start a capitalist (ie shareholder-owned, non-worker-run) company under socialism, that would work fine if permitted. Do you think a socialist (eg worker owned and run) company would work fine under capitalism?
If you understand why the National Park scenario is be highly unsatisfactory for libertarian-capitalists, then you should also understand why "just do co-ops within our capitalist government and institutions" is unsatisfactory for socialists.
Suppose I gave you 1000 acres of land in Nebraska, including some houses and farms. The US government requires taxes, and bans some things like gambling and opening a medical practice without a license, but otherwise gives you the same latitude it gives everyone else. Why can't you create a socialist commune there?
Re US Infrastructure vs China . . . . The US electorate wouldn't tolerate the amount of eminent domain seizures a government high-speed rail system would require. China doesn't have a meaningful electorate.
The US also wouldn't tolerate the accident rate and fundamental design flaw of the Chinese rail system that allows the driver to ignore a "Track Blocked" signal and continue at 300kph.
When I lived there, I rode it, it was great, much nicer than flying similar routes. But "railway telescope" is a rather nasty sort of wreck.
As far as I've heard (and I'm pretty plugged into China journalism, having once worked in that field myself) there have been no major accidents since the Wenzhou derailment a decade ago (such things are nearly impossible to simply "cover up"). They did considerably overhaul their safety procedures after that and correct the issues, so given the expansion since then, I'd guess it worked.
"Libertarian Co-op Collective" doesn't have the same ring to it as 'Prospera' which implies this fantastical utopia where none of the real-world problems of running a city-state exist. On paper, it sounds great but upon further reading, it really begins to sound like the libertarian utopian fantasy that it is where a bunch of "really smart", "smarty smart", "tech-genius-smart", and "smart" people can opt-out of the actual society they currently participate in, to live in Prospera where they can pretend real-world issues stop existing.
I do think it's ironic that a bunch of libertarians are going to live in co-op buildings with a bunch of other libertarians where the stratification of humanity still occurs and the individual foibles of living next to an obnoxious neighbor will still apply. Anyone who thinks NIMBYs won't pop up in Prospera has never had to work with high-worth individuals who think the world is supposed to bend to their will. I don't find it too surprising that Patrik Schumaker (ZHA) would throw his hat into this proposal considering his long-standing opinions that building regulations, zoning, publics spaces, and community engagement are feckless endeavors. Prospera also affords Shumaker to pursue his dream of creating a city from nothing without having to work for the authoritarian regimes that normally give him carte blanche.
It's great that these people are thinking of not-new-ways to deliver the not-new-idea of modular, pre-fabricated housing/buildings to a charter city with no resources or infrastructure. Where everything is imported and negative impacts externalized/socialized into the wider Guatemalan landscape. But hey, it's not like we haven't seen the Captains of Industry do these types of things before in new places that gave them carte blanche to do "whatever' and then get miffed when the impacts of doing what they want then lead to people wanting regulations. This is how we got exclusive communities with a catalog of covenants that one must abide by lest you build your luxury trophy home with the wrong pediment and capitals.
I do think the ideas on the healthcare system offer an interesting take as well into how libertarians perceive the U.S. healthcare system working vs. how it works. I mean I get that taking the anecdotal evidence of my Uber driver not being able to do surgery in the US at face-value is a way to confirm a bias. The shortage of doctors in the US isn't a problem caused by hospitals, it is an artificial shortage created by the licensing boards run by doctors specifically to create a shortage and keep doctor salaries inflated. But the Prospera model takes the idea of healthcare as service one step further and turns the already existing model of concierge medical services and injects steroids where high-worth individuals will fly to Prospera to be catered to because they don't want to sit in the waiting area of their current selective-clientele doctor. This won't drive prices down, nor would it lead to medical breath-throughs that could have broader social impacts because the Prospera model isn't designed to do that.
I think the problem with Prospera is that it really does come off as a bunch of wealthy, smart people (not just wealthy, smart John Galts) taking their ball and going home because they've been asked too often to engage with other people in the game of life. It's a great way to further economic stratification and class bias by removing everyone else and living in a bubble.
I can't help thinking it will end up with a bunch of affluent professionals (programmers, analysts, architects, marketers) who work from home either way moving to Prospera because of much lower taxes (and these people are mostly hired by big foreign companies, so there's little tax evasion). It will show on paper that people living in Prospera are making lot of many, are happy, the crime is much lower, etc. and it will be tooted a great succes, even though average Honduran has since drop in public funds (it will be however completely unattributable to Prospera due to its small size)
I like their approach to medical law though (and I have personal interest, given that I've gone through almost every psychiatric drug allowed in my country and am still far from being well).
So in short: once it has been called up, it can still be put down? Okay, that's nice. But even if it SHOULD be put down, WILL it be put down? I'm sure entrenched interests will find some way to keep it alive even if it becomes increasingly clear that it has a net negative effect on the region. Sometimes I don't understand why tax havens are still around, why doesn't the USA just occupy all those Caribbean islands and demand those ultra-rich people actually pay their taxes? Support our troops!
"Honduras has a 25% tax rate but never collects" is an absurdly exaggerated statement. Despite Scott having written those words, they are not actually true. It's a one sentence hand-wave to get you to skip past the most relevant part of the entire project. You can read an actual study of the extent of tax evasion in Honduras here: https://thiagoscot.github.io/WebsiteDocs/Scot_JMP_MinimumTaxHonduras.pdf
To your second point: Prospera is a private entity governed by a board of directors. It is not a state with any internationally recognized legitimacy, and its not even a subdivision of the Honduran government. The proper term for paying them money is called "rent", not "taxation".
The upshot of this, for the members of Prospera's board, is that any company they "move" there which they are associated with results in only a 1% tax to the Honduran government, since the "10% tax rate" is essentially being paid to themselves.
I mean, why do you think GROVER NORQUIST of all people is interested in the project? This ain't exactly a conspiracy theory. Prospera is literally proposed to be a private company with a that collects "10% rent" and pays a 1% tax rate to their government, Honduras.
From what I can see, the tax revenue of Honduras is 127 756m lempira annually, which google tells me is $5,297m. Across the 9.7m inhabitants of Honduras that's a tax revenue per capita of $544.
The GDP per capita of Honduras is $2,575 (again according to Google).
That's approximately a 21% effective taxation rate - close enough to a 25% nominal tax take as makes no difference as far as I'm concerned (effectively dead on a 25% tax rate less a 17% rate of evasion as claimed in the link, which makes me think the link is probably applicable to Honduran taxation generally, not just corp tax which was my initial thought)
Therefore it seems that Prospera would have a de facto tax rate of approximately half of what Hondurans are paying at the moment. I agree with Guy in TN that there is a huge handwave here since the difference between 'never collecting' and 'collecting 21%' seems highly relevant when the comparison is between that and collecting 10%
I don't know a massive amount about any of the figures I've cited above, so maybe the OECD can't measure tax take in Honduras accurately or something (the existence of a MASSIVE black market could maybe make Scott's statement true?). But I'd want to see explicit estimates of tax evasion in Honduras before I'm satisfied that tax evasion will not form a large part of the appeal of Prospera.
25% is the top tax bracket, for people making over 563,812.30 lempiras. Median income is 344,400 lempiras. With this in mind, I'm surprised they're collecting as much as they do, even if nobody is evading.
I really hope Scott sees this and corrects the misinformation on Honduran tax revenue, but the damage is mostly done by now. It's disappointing that he neglected to fact check such an obviously biased source on such a major point. Makes this post seem like nothing more than a second-hand sales pitch.
Thanks for pointing out that Honduras actually collects taxes.
> The proper term for paying them money is called "rent", not "taxation".
From the inside there's not really a difference between rent and taxation. So it's essentially a 10% tax rate system.
Also Próspera advertises itself as having a bunch of other really cool stuff (e.g. voxel-based property, choose-your-own-legal-system, customizable modular housing, etc.) that I think it would be an absolutely wonderful place to live in even if the tax/rent rate was super high if they could fulfill some of their promises.
>The sad part is, it may very well be "successful" on its own terms, by carving out a new low in the race-to-the-bottom.
I certainly don't see anything in the world that could be called a race to the bottom in terms of taxes. If anything there's a race to the top, at least in most first-world countries, where top tax rates tend to hover around 50%.
If there _could_ be a race to the bottom, or at least a race towards a more sane tax rate around 10%, that would be great. There is no way that a government needs to tax more than 10%, if they're using that money to provide necessary services and not using it to redistribute money from the productive to unproductive people.
Redistributing money to "unproductive people" (e.g. the elderly, the disabled, children, mothers taking care of children) is absolutely the goal of a lot of human civilization.
A strange argument, assuming as it seems to the complete failure of self-interested intelligence among people and the complete dysfunction of the family unit. Normally, people transfer money to their older selves by saving and investing, so there's no obvious need to take it from strangers. Normally, mothers contract with fathers (and even grandparents) to share the economic burden of child-rearing and redistribute resources within the family for that purpose, so they do not need money from strangers for the purpose. Normally, if they are not a child in a family (vide supra) when it happens, people take out insurance against the possibility of disability, and, again, it is not necessary to extract it from strangers.
Perhaps I misunderstood you, and you are considering the social norms and small institutions (like families, insurance companies, employers, the whole network of private economic institutions that get most of everything done) are part of "human civilization," in which case your argument is both true and somewhat of a truism.
But the argument that individuals are so incompetent, and families so dysfunctional, that *government* per se must be constituted to do all these redistributions from those who work to those who can't, or can't anymore, or can't yet, seems a bit ahistorical, as well as kind of depressingly cynical about human nature.
Just because you've switched from private transfers to state transfers, doesn't mean you're not still redistributing money from productive to unproductive people. Clearly the real objection here is to the *state* doing to distributing, and this whole "productive vs. unproductive" arg is just a red herring.
I wouldn't quite call it a truism, because there are indeed people who are ideologically opposed to both public and private transfers to the unproductive.
Private transfers (and in the case of old age, simply "becoming more wealthy though life") is good of course, but they are clearly not *sufficient*, as evidenced by how much poverty would still out there if not for the welfare state.
I'm not really sure how to take the argument that the existence of poverty among children, the disabled, and the elderly poverty is "ahistorical".
My argument is not that individuals are incompetent. The distribution of wealth has a powerful political component that overshadows the comparatively small effects of competence vs. incompetence. It is generally safe to proceed with the assumption that poor people did nothing to deserve their position, and the rich people did nothing to earn it, unless strong evidence emerges otherwise for a specific case.
I suppose one could call a populace that refuses to vote for politicians who would create strong welfare states "incompetent", in the sense that they are refusing to utilize the power of the state to lift themselves up out of poverty. But the democratic will-to-law pipeline in the US has severe enough anti-democratic roadblocks (e.g. electoral college, the senate, the supreme court) that I'm not willing to go there.
Or to put it another way: It's not that the government *must necessarily* do these transfers to eliminate poverty. You are correct that it all could hypothetically be done by the private sector. In a hypothetical world where private transfers eliminated poverty, the public would have never had a reason to vote for a government that would step in and do it for them in the first place.
But of course this isn't the on-the-ground situation we find ourselves in. The private sector does not (and historically did not) choose to fully eliminate poverty on its own accord. That doesn't mean they didn't help alleviate it, just that they didn't do enough, so much so that the public was compelled to create the welfare state.
It's probably worth noting that the lack of any mention of welfare in Prospera is a good indication that this idea is indenting to serve a function other a place where people actually live, have children, and presumably grow old.
So how will the legality of children born in Prospera work? Will they be Honduran citizens even if their parents are only legal residents? How about for purposes of the Prospera social contract? Will their parents basically sign in their name until they come of age? Will they need to resign the contract as adults?
And children born in Prospera sort of undermines a lot of the philosophical backing laid out in section 6:
"Charter cities fall into an awkward crack in libertarian ideology. Almost every libertarian agrees that you can make rules (even arbitrary rules) about what people can do on your own property, and anyone who wants to stay on your property has to follow your rules. But what’s the difference between that, versus a government “owning” its territory and making rules for its citizens? In practice the difference is that going in someone’s house - or even their golf course - is a choice you made, and they have clear title of ownership. But being in a country happens involuntarily, and the President doesn’t “own” America in the same way an ordinary person might own a house.
But if someone did own an entire city, and you chose to be in that city, theoretically they should be able to make whatever laws they wanted, and not even the most zealous libertarian could protest. The issue hadn’t really come up before. But here we are.
Próspera is erring on the side of small government, because that’s what they expect will work best. But their overriding motive is making their city a nice place to live and work, and when small government conflicts with that, the city usually wins.
So for example, when you buy land in Próspera, you’ll have to sign a Covenant Restricting Vice Industry Uses - ie you can’t turn your house into a joint brothel+casino and do unethical medical experiments in the basement. Even the strictest libertarian has to admit this is fair; if you sign a contract, you’ve got to follow it. But you can tell HPI plans to have the town be ship-shape, well-organized, and family-friendly, instead of the sort of Wild West vibe some people associate libertarianism with."
The next generation will not technically have moved to Prospera voluntarily, and so having a government with 44% of its government officials selected by a corporation seems problematic.
I expect that citizenship would work in the same way as if the parents are immigrants in regular Honduras; children would probably have the citizenship of Honduras, their parents' country of origin, or both. In either case, they have a country to move to if they don't like Próspera.
I think they would be Honduran citizens or have the right to get citizenship easily. I agree this is a crack in the social contract, although it seems like a comparatively minor one - leaving Prospera is still very easy.
I think part of the reason the US is on iffy grounds social contract wise is that if an American doesn't like the US, there isn't really anywhere comparable waiting to accept them - Americans might not have citizenship anywhere else. Prosperans would at least have citizenship in regular Honduras.
It's worth noting that the U.S. also doesn't make it easy to leave cleanly; they require U.S. citizens abroad to file U.S. taxes annually, and if they make more than ~$100,000 USD/year, to be double-taxed by the U.S. and foreign country. They also require expats to report their bank account balances in all foreign accounts on something called an FBAR, and banks all around the world are asking every customer if they are a U.S. citizen because a U.S. law says they have to do this: https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca
But of course, many Americans don't know about this, and find out years after moving, and can't entirely fix the problem by renouncing U.S. citizenship, since the U.S. will in any case expect them to catch up on their paperwork and pay any "debts" from earning too much abroad. I, for one, have two foreign accounts I *can't even log into*, and the banks are physically several thousand miles away, and they would like me to visit in person to iron out the problem. The accounts probably have only a couple thousand dollars in them, but I need to get the history for the last six years in order to fill out my FBARs and I don't know how to do that, so ... I'm kind of just hoping I don't get in trouble for not filling them out. Or maybe I'll tick the box for "balance unknown" and hope it goes okay.
But technically, the penalties for not filling out FBARs are up to 300% of the account balance (50% per year for 6 years) and there are indeed cases where people have been ordered to pay more than their entire balance simply for failure to report. The only mitigating factor is that so far they've only done this for those found guilty of tax evasion, and I don't owe anything. A recent case is that of a fellow named Schwarzbaum, a German who made a huge mistake by becoming a U.S. citizen. He apparently misunderstood the FBAR rules, and was fined about $13 million for failing to report his Swiss account balances. He tried to challenge the constitutionality of this, but "the court determined that the FBAR penalties are not a fine subject to the Eighth Amendment, and therefore did not evaluate whether the penalties were excessive." It's not a "fine" but rather a "penalty", see? https://www.winston.com/en/thought-leadership/fbar-penalty-not-a-fine-subject-to-eighth-amendment-claim.html
There are countries that allow people to buy their way into permanent residency, e.g. the Philippines. So, at least the middle class and up can leave America.
(also the FBAR seems to require my SSN. I do not know what my SSN is, which AFAIK is not an officially accepted legal defense for not filing FBARs. Ugh.)
Surprised that no comments (so far) have talked about the fact that abortion is banned in Prospera under Honduran law!
That would be a complete deal-breaker for me to move there. Surely it'd be a similar concern for (many? most?) people with a uterus who currently live in a place where abortion is legal - especially the kind of libertarians who would be most interested in Prospera.
I think few women have abortions often enough that having to go abroad for them would be much of an issue. I've never heard anyone beside you express that such a thing would be a dealbreaker, despite myself having migrated to a country that does not allow abortions.
Anybody who lives in not-Honduras and even contemplates living in Prospera, is pretty much by definition someone who can afford and is comfortable with at least occasional international travel. And there will almost certainly be a whole lot of things beyond abortions that you'll probably want to do sometime during your life that you won't be able to do in Prospera, if only because Prospera will be at most a town of ~100,000 people and there's a lot that just won't fit.
When you say that people don't like it when their local government starts murdering people and stealing things, I think you underestimate the demand suburbanites have for police brutality against the poor. Particularly in areas that are considered high crime. I'm thinking that the Prospera business model sounds just like the other one, but with prettier words and pictures. It's a private security agency for upper middle class Hondurans that want to live next to a golf course and be able to sic the private police on anyone poorer than them.
Certain groups definitely have motivations for pushing a false narrative that would suggest the contrary, so I don't blame you for getting this one wrong.
Not too different from the ever-present media narrative (usually implicit, but occasionally teetering into explicit) that Donal Trump was the preference of low-income voters in either 2016 or 2020, despite all polling evidence suggesting otherwise.
Also, any time anyone talks about air taxis, I tend to assume that they're from Silicon Valley and have just given up on fixing group traffic, and haven't thought about how unpleasant it'll be when even the outdoor cafes in the middle of big plots of land will have just as much traffic next to them as the sidewalk cafes on El Camino Real.
to Steelman the Critics i wonder if we have to go historical and take in some Chomskian perspective on U.S. - Honduran relations, i.e. long U.S. suppression of democratic will in the lower Americas, justified by a Containment policy that enabled rapacious capitalist expansion, backed by death squads trained by the C.I.A.
not to make the Próspera folks guilty-by-association, but to give context for skepticism about insweeping capitalism that doesn't seem to acknowledge that the very thing it is putatively trying to fix - the misery of life many miles south of Silicon Valley - was partly caused by prior versions of insweeping capitalism, or whatever you want to call it.
but i'm not the one to do it, having piddly knowledge of the Region. probably mostly from Chomsky, so there's that bias.
The renderings of the buildings look beautiful. But in the United States, if anyone tried to build something like that, they'd say "what about fire trucks, ambulances, and deliveries?" Most places in the developed world assume motorized vehicle access on big roads to every single building, even though that is fundamentally anti-human. Maybe there are delivery entrances in the rear of these pedestrian-oriented buildings? Or maybe all services will be provided by flying taxis?
No, but I am treating humans inside vehicles as not being in the space that the vehicle is in - they are only inside the vehicle. The Dubai setting means that outdoor spaces are treated as industrial spaces that humans don't go to, and that humans are only ever indoors or in vehicles.
It's one thing to say that there should be some industrial spaces that are designed with the idea that few if any humans will ever be in them. It's another thing to say that the entire outdoors of your city is such a space, which is basically what late 20th century urban design often tended towards (and this trend has continued into much of the 21st century, particularly in places like Dubai).
It seems to me that the legal system here doesn't work. You can't just arbitrate -- there has to be something to backstop it. And if the backstop is ultimately the Honduran courts and the Honduran police, then this is functionally just as corrupt and problematic as those institutions.
On the arbitration, who exactly is enforcing these rulings? As in what, happens when I refuse to honor the ruling in the convoluted arbitration of my dispute adjudicated under Norwegian law? In the US, I can easily go to a (more or less) competent court system to enforce a judgment. Where do I go in Prospera? If I'm just headed off to Honduran court to enforce a judgment, then the arbitration is just the lengthy buildup to a process that's exactly as flawed as a Honduran court proceeding. I guess you try to find a way jurisdictionally to squeeze this into the courts of a developed country with strong rule of law, but how exactly? It seems fundamentally broken.
And in corrupt countries, one of the biggest problems is corruption in the police. What's going to stop corrupt Honduran police from coming into Prospera and shaking people down? Surely, the answer can't be physical resistance by Prosperan security forces without causing an experiment-ending incident.
Even if the police don't come into to shake someone down, what happens when Honduran gangs do? I guess Prospera is hiring Blackwater or something for security, but what happens once one of those mercenaries shoots a gang member. Now he goes on trial for murder in the Honduran courts, right? I don't see how a security force can function in a high threat environment under those circumstances.
I think the steel man critique is that any successful version of Prospera will be a massive target for criminal activity. That will bring Prospera into daily contact with the Honduran police and justice system with all the attendant problems. That probably won't work out, so the rational response for Prospera is to work to *corrupt* Honduran law enforcement to either stay out of their way or respond to their wishes through bribery and so on, ultimately degrading the overall quality of governance in both Prospera and Honduras.
My guess is Honduran courts are corrupt in the sense that rich people can bribe them, but I don't know if they're bad at punishing petty crime. I don't know if they lean too lenient, too harsh, or just right.
Probably Prospera will hire some private security to arrest petty criminals and turn them over to the Honduran court system. If they're sufficiently good at arresting them and turning them over, this probably is enough disincentive for them to stay out.
I also think Prospera has the right to ban people from entering Prospera, which should be a good backup in case they don't like the courts' decision.
In terms of worse actors like narco-gangs, I'm not sure. I don't think these generally operate in Roatan anyway.
>If I'm just headed off to Honduran court to enforce a judgment, then the arbitration is just the lengthy buildup to a process that's exactly as flawed as a Honduran court proceeding.
In many jurisdictions, enforcing an arbitration award is much easier than litigating the issue normally. Usually, the only issue is whether the contract was properly agreed to, and whether the arbitrator was unbiased.
Wonderful post. I couldn't stop thinking about "Oath of Fealty" by Niven and Pournelle. I love and fear this idea. The fear part is; what about the dumb f's that get left behind?
There's nothing about law enforcement in the article. Having lived through a transition to capitalism in Eastern Europe, I feel this may be a huge problem. How is it the enforcement going to work? What happens when narco-gangs start moving into the city? Is the city going to rely on the Honduran police? And if so, how likely is it that Honduran police is corrupt and quickly turns into a gang-like structure, if it is not one yet? Wouldn't the new and untested law offer a plenty of loopholes which the criminals would exploit faster than they could be fixed - even more so given that political structure seems to be designed in such a way as to make it hard to change anything?
Well they are professionals, you pay them well and train as much as possible... and they are human and mistakes will happen. I want to recommend again "Oath of Fealty". I like my police here in the US. (I would support more training.. money. I like Jocko Willick in this regard.)
Honduran criminal law applies, so the Honduran police will certainly have jurisdiction if they choose to exercise it. And the Prosperan authorities will almost certainly hire their own private security force to provide generally first-world levels of protection. This should redundancy against criminals exploiting loopholes, at least where crimes-with-victims are concerned as the victim always has the option of calling the Honduran cops.
It should also provide some degree of protection against corruption in *one* police force, but if they're both crooked they'll probably figure out how to collaborate.
If the local Honduran police are corrupt then I would imagine they'll demand massive bribes in order to not make life difficult for Prospera and its wealthy inhabitants.
Realistically, there's going to be a line item in the budget for "make the Roatan police chief happy", and another one for the Federales. Presumably laundered in some quasi-legal way. But honest Prosperan cops and cheap video cameras will probably be able to document the abuses of crooked Honduran cops well enough to incentivize the Roatan police chief to keep his demands reasonable and his men in line.
This is one of the most important learning experiments of the 21st century. If it fails miserably, we will learn something important (even if just not to try this again). If it works modestly, we can refine and adapt it for human well-being and prosperity. If it works well, we can expand it and scale it for human progress.
The Prospera Governing and Social Contract structures could provide a foundation for Biden’s Build Central America Better goal. It’s management of satellites could be of use.
The concept should be applied to a much larger region within Honduras; or, a series of smaller regions. The focus, unlike Prospera’s, would be on the lowest earners, bringing stability to their villages and towns. Under this umbrella, using Joe’s billions, vetted NGO’s would scale up, harness LT volunteer efforts in housing, education, agriculture, health, water projects....
Beyond the life quality goal is the preparation for investment by corporations. Trying to persuade US corporations to invest in Honduras today is a fool’s errand. The nation is not ready for the maquiladoras supply chain integration that NAFTA brought to Mexico. If attempted, it will only foster the unrest that comes with the rural > urban shift, with the unrest of those left out.
At least as far as I'm concerned, that money wouldn't have been well spent anyway. My opinions did change from "this sounds interesting but potentially worrisome" to "oh, it's a just a poorly backed pipe-dream that will likely transfer money from gullible people to less gullible ones in the process of failing", but that seems like a _downgrade_ for them.
Do we know what is planned for 2nd generation Prosperans? This issue was eventually detrimental to the Kibbutzim in Israel - the first generation is mostly people aligned with the ideology, but 2nd and 3rd generations had thoughts of their own regarding the way of life, eventually replacing many of the original ideology which led to the collapse of the Kibbutzim project
My guess is that Prospera will end up hosting a bunch of wealthy nutcase expats and a handful of server farms running complicated cryptocurrency projects and borderline-scam financial schemes.
Makes sense. For when Isle of Man, Gibraltar, or a Canadian Indian Reserve is too serious and restrictive for your weird financial instruments and dubious legal claims.
If this project is to benefit Hondurans, one would expect the efforts to be focused on providing employment opportunities to Hondurans. Given their level of economic development, this would most likely in the form of low wage manufacturing (sweatshops). That's how SEZs elsewhere have clawed their way to prosperity. Instead, most of the activity appears to be geared toward land speculation and second houses for rich expats.
Thank you Scott Alexander for such of a well-written, comprehensive and extensive recounting of where Próspera came from and where it aims to go. Subsequent analysis here has been entertaining and as one might predict your disclosure has overwhelmingly elicited attention by naysayers. Most are a sad commentary on how intelligent and educated minds cower before the threat of men of action. I’m a pragmatic person, old enough to recognize a project, which by most standards, would be inconceivable or considered too lofty for success. In most cases, it would never become more than a dream, never get off the ground, simply a wasted desire. Who would dare? Only a handful would put themselves out there and work like madmen to congeal such a dream.
I have known Erick Brimen since he was a young man in High School. Way back then the ambition and desire to help create wealth in nations where systems failed their people, such as the Venezuela he came from, was a seed planted in his brain and growing. A test he could hardly wait to meet. The magnitude of Próspera, in the impoverished country of Honduras, with its thousand and one challenges is what that seed matured for. He has shown brilliance and deliberate patience while moving from one thought-out step to the next. The correct path was set early when he reached out to find the most talented minds and experienced individuals from around the globe. You see, Brimen, believes in what he is doing. If you think this is about plopping fancy homes next to a golf course, go back and read the article. This is much more complex and deeper than that shallow task. These unconventional concepts could be transformative for an impoverished nation and in many ways, what is being proposed has not been tried before. If successful this forward motion to create a socio-political system yielding well-being for all socioeconomic levels could be emulated in other impoverished nations. Why not? As conceived, where are the losers? So the question is: Who can stop a person determined to succeed? None of the naysayers here, with their cynical mantra of; “it will fail or it can’t be done”, that’s for sure! So easy to tear down the work of others but the world owes everything to those who believed, were honest, worked hard and were unafraid. That’s Erick Brimen. By the way “First Poster,” no money has exchanged hands between me and Próspera people!
I think the criticism is worthwhile. Argumentative dialogue and questioning of a subject is a way to draw out underlying presuppositions and stimulate critical thinking. Do you want a bunch of cheerleaders?
Really enjoyed this piece. Have been interested in this subject for awhile and learned a lot about this example. Fingers crossed we’ll see more experiments like this come to fruition.
Gamaliel's defense works great for charter cities. Either they are going to work or they're not.
They might work better than existing institutions. In this case, people are going to voluntarily move to them. They will have a better economy than the rest of their host country. This will encourage reforms that improves the quality of life for more people in the host country. If this happens, then we should support charter cities because they are a good thing.
They might not work better than existing institutions. In this case, people are not going to voluntarily move to them. They will not have a better economy than the rest of their host country. If this happens, then we shouldn't care. The rich people who bought the land next door decided to turn it into a golf course, and that didn't help the locals much either.
The only cause for concern is if they both don't work and are persuasive enough to convince people to impose their reforms on people who can't leave. I don't think that this will be too big of a problem. They have picked a very visible and difficult criterion for success: a significant number of people voluntarily choose to move there. If they can't do this, then they're left with three buildings next to a golf course, which doesn't seem particularly persuasive.
I don't see how you avoid all the problems with corruption as long as you are reliant on the Honduran criminal justice system.
Fundamentally, that means any problems with bribing Honduran judges or investigators will affect Prospera residents and eliminate the supposed advantages of lower corruption and better management.
"Wouldn’t it be hard to run a single polity on so many unconnected islands and enclaves?"
I'd be concerned that poor governance from the surrounding areas would leak into the enclaves, e.g. drug lords assuming de facto rulership of an enclave. The fact that they're using the Honduran criminal justice system seems especially worrisome. I'd assume it already has severe issues given Honduras' high murder rate.
"If I get in trouble, any disputes between me and my patients will be settled by Norwegian law."
Will a Norwegian judge be contracted to adjudicate?
"For example, if the general population disagree with a law passed by the Council, they can overturn it in a referendum with a simple 50% majority. But the offer only applies within seven days of the law being passed (Trey insists that Próspera’s e-governance platform will be so good that it will be easy to know what’s going on, start a referendum, and finish voting within a seven day period). Even after the seven days, the public can repeal any law. But now it requires a 66% majority, and also this process can only repeal laws, not add them."
50% majority of all eligible voters, or 50% majority of those who show up? If the latter, there's the risk that a small vocal group (on social media say) would collaborate to overturn a law that others weren't paying attention to? I don't like the idea of living in a place where I have to monitor social media continuously to ensure that small vocal groups don't hijack the governance process.
Also if the law is overturned, can the Council retry the same law with a small tweak? Are they limited in the number of times they can do this?
There is no way a project like this could succeed long term in a country like Honduras without the threat of military force from another country. Without a military, or military backing of another country, the project is subject to the whims of future political environments (10 year guarantees are worthless when you have a weak government and weak rule of law). If this project ends up being successful, and the inhabitants materially richer than the rest of Honduras, then populist politicians will eventually end up extracting its wealth through taxation or nationalization. Even scarier, the project could end up subject to the whims of criminal enterprises more powerful than (or working with) the Honduran government/military. And if there is ever a coup, it would not be entirely surprising for the inhabitants to be targets of execution.
> speaking of suing people, the law code seems to cap damages from medical malpractice lawsuits at $250,000, which is a defensible choice, but sure not the direction that the US has gone here.
Not sure, Look at the case of neurosurgeon Christopher Duntsch. He managed to hop from hospital to hospital maiming patients in part because malpractice lawsuits were capped in Texas.
This is a good point. Let me try to figure out how this works.
In fact, Duntsch didn't get sued for malpractice at all until after his license had been revoked. So higher malpractice cap wouldn't have causally helped his patients. But possibly there being a higher malpractice cap would have incentivized people to be more careful in general? I think the people who would have had to worry about a higher malpractice cap would be his malpractice insurance. Usually for psychiatrists your malpractice insurance is not literally the same company as your employer, but maybe for surgeons at a hospital it's different? I'm not sure how this would have been expected to work. I'm also not sure whether there's some other way to sue hospitals in this case - maybe for negligence?
I think the idea is that the reason why no one bothered to sue Duntsch was because it just wasn't worth it to lawyers due to caps. Therefore hospitals weren't worried about his past misdeeds as much as they would have elsewhere. At least that's what Dr Death podcast claimed.
A well written and interesting read that brings forward many good questions.
The mention of off shore establishment seems to highlight a medium position where policy assurances will be at the most stretched to find coherent workability.
The real life fantasy painted here is very well depicted.
Thank you for the privilege of reading this insight.
Modular construction is not at all a new idea. Several millions of units were built decades ago in various parts of Europe (primarily in the Eastern Bloc and in the UK). They mostly went out of fashion due to inherent shortcomings of the principle.
https://en.wikipedia.org/wiki/Plattenbau (for some reason, there are separate English-language pages for the corresponding terms in multiple languages; at least they are all there in the see also section.)
As for aerial taxis, noise pollution goes whirrrr.
Their conception of education system is disappointingly unimaginative. If they're starting from scratch, they can do... good. Not slightly tweak the standard system.
They should separate "minor-care" and "education". Doing pre-school and early education the usual way may be sensible; once children learn to read and use the tech, it should be nearly-free-to-run system with few very well qualified people to handle things it can't handle. Not "mediocre teachers explaining things to 20 kids at a time".
I've recently wrote what I mean more comprehensively, I'll paste it below. Warning > 2k words, some content not-quite-about education, and it's still stream-of-consciousness comment not a fully-thought-out plan.
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By investing a certain amount at the beginning, perhaps a multiple of the normal cost, one could create a system that works better (educates better) and costs almost nothing once created. The books may not have been enough as far as education is concerned, so ok, maybe it wasn't possible before. But since the '90s or '00s - it's obvious.
I'll elaborate on the concepts. In years 0-III of elementary school, more or less, we have teaching as it is now. At a minimum, a child must learn to read, use a computer (write, etc.), operate the system described below, perhaps arithmetic.
In the "higher" classes, IV-VI or until the end of primary school (although this is a gross exaggeration) the child is still "taken care of" so that the parents can work (after that child is 12 years old - being concerned about it being home alone is a bit ridiculous). But this care is not for the purpose of education; it's for child supervision in a shared space. It serves only that purpose - it provides an environment.
To solve the problem of 'children will have no way to socialize' which also appears as an objection - older children and maybe even adults can also use these 'centers'. Perhaps they can even offload some of the demand for dedicated 'nannies' with their presence.
In theory, the school buildings remain, sort-of, as these shared spaces. Teachers disappear; nannies don't need elaborate education and not as many are needed. Plus, the space is more efficiently used once that's the explicit purpose. Obviously, the education system already serves this purpose implicitly: nannying children so they don't get in the way and "allowing socialization with other kids". In addition, even for adults such places should potentially exist in some way, maybe. And as a bonus, the secularization will leave some existing physical "community centers" which could be repurposed.
So, we resolved the non-educational objections (apart from one covered separately, later). IMO the costs would come out very favorably and we are getting extra bonuses with it anyway.
Now, strictly about education. Convert all knowledge in the current 'core curriculum' into a tree of atomic facts, concepts, data or procedures (like 'how to divide numbers') linked by dependencies / proximity relationships. Add to it the knowledge that is completely missing in the current system. Add metadata about practical importance of knowing this 'knowledge atom'. The tree can be multimodal: text, narrated text, animated explanations, speaking teacher (the best available), diagrams, pictures, photos, 3D models, simulation settings in simulation programs, educational mini-games -> sky is the limit, everything can be improved and developed at any time.
The tree is open, free (made with public money, after all). Despite its sophistication and awesomeness it will end up cheaper for the society than buying school books for a number of years, for each kid. Also, the whole EU+US+anyone_else can work on it together. And it'd be all open-source (although we don't have to exclude the use of non-free software and resources within it, maybe). So in fact volunteers will contribute for free too. Especially since it could be a global system with translations. Which mostly generate themselves from ML - the cost, the actual translation work drops dramatically and will continue to drop.
<<actually, this comment is a translation; I originally wrote it in Polish, I'm mostly leaving the output as-is with some minor fixes, most not even due to translation issues but because I changed my mind on a particular wording>>>.
The knowledge tree is a fairly 'static' object, through. Yes, that in itself may not be enough for providing education. Though the 'dependencies' are already encoded. That is, you can start with any of the 'basic' knowledge-atoms and work your way up. But ultimately an active teacher may indeed have some advantage. Like, a student doesn't understand one relationship somewhere deep and doesn't know it. They may not be able to move on. Or something. I don't know, I myself learned everything actually useful without such a problem but ok, maybe not everyone can.
We need to have have a way of verifying knowledge. Both for the process of learning itself and to get kids to learn if they won't quite comply.
So, convert math/chemistry/physics tasks from textbooks and such to code that will spit out algorithmically created tasks with random (+ sometimes constrained in various ways) data. Some could also be hand-crafted if need be. 'Quiz' type tasks in fact-based subjects can probably be had 'for free' from the knowledge tree itself, but can also be made from scratch/adapted.
That leaves out harder to automatically verify stuff like essay writing, foreign language pronunciation etc. "Creative", let's say. Not that it can't be done eventually (GPT-4?), but it can also be left for the human reviewers for now. These reviewers will be a handful of possibly highly competent (and paid) experts compared to the horde of mediocre teachers.
These are only the basics, of course. You can go much, much further by thinking outside of standard 18th century means/tech (of course, not really abandoning them, text isn't obsolete after all).
Model historical places and events on state-of-the-art game engines. Immersion. Simulators of physics, chemistry, etc. Make models (well, not really 'simulations' anymore) for higher-level subjects. Some of the tasks for users could be within such models. Think Kerbal Space Station, Factorio with concrete objectives. They could be part of the explanations. Sky is the limit. VR, of course. The cost of today's VR with a suitable PC for these simulations/models/etc on today's level won't be prohibitive forever. And these community centers - perfect way to provide shared tools. Cheap terminals for the really impoverished.
Anyway, we add dynamic systems around this static tree of knowledge. The system will queue the knowledge, individualized for the needs of a particular student. Use spaced repetition. If student can't proceed, some dependencies are not mastered. We trace down the tree from the closest dependencies/relations and find the problematic area. Something like Git-Bisect. We can also use ML of course which will surely crush the problem if there really is one at this point.
Anyway. When user masters what he's currently learning, we move forward. And we give a certain amount of choice to the student. They trace their own path. Partly supported by explicit dependency system, partly by the recommendation-systems-like ML models. So we really shouldn't limit the System to the somewhat arbitrary and... bad... current curriculum.
So, the system promotes 'detailed' specialization, not like it is now. Also effortless branching out, so at the same time the specialization is not limited in a way it is currently. Learning is probably even enjoyable at this point. Or neutral at worst. We add gamification, cheap-to-implement and very-motivating features. Levels, achievements, points, bonuses/buffs, rankings.
I would also add a 'carrot' in the form of literal money. Maybe very small amounts. But let's say an <average> student in the system makes $300 a month. Average. Really good ones could earn more - without exaggeration of course. You can also scale it lower at any time if it is exaggerated. Perhaps restrict withdrawals a bit, or make it scale by age if giving small children money is really that bad.
How much would it improve results, motivation, per dollar spent? It aligns incencites, gives immediate, non-abstract rewards in addition to nebulous far-off-into-the-future ones.
There's a common objection around such ideas of automated education systems: "a student might want to ask a question, and then what?". Realistically, this happens rarely in the current system. When it does happen, responses are usually not particularly... useful. The system as described will eliminate almost all of opportunities for 'misunderstanding' anyway.
But, there's a solution anyway: make a Q&A module, hire as many specialists as needed for solving ongoing problems. Some could also monitor users of the system, intervene if they stumble upon a problematic case - or take note of iffy areas for making it better. Again, nothing compared to the number of teachers and the quality could be higher.
Partly you can redirect other students to answer too. And then there is ML. GPT-3 with a correctly engineered prompt... might not really be fit for such use yet, but it gets close. For particularly obvious questions?
Then there is another big, implicit thing current edu system is tasked to "solve": Certification. The real reason why 'higher education' exists, just like the previous reason is nannying. Previous words on verifying knowledge, tasks for the users don't touch the... security aspect. How do we even know who actually solves the problems?
Soft answer: if possible do everything so that 'cheating' doesn't make sense. Reduce education in the style of cramming bare facts in the heads. Encourage effective acquisition of info in general. Make "using Google" not be a bug, but a feature. Also, tasks could be 'atomic' and time-limited. By being atomic, the time limit could be reasonable while still verifying a given fact is actually in user's head. Or accessible in seconds, which is effectively the same anyhow. Example: show a question without a keyword telling what it's actually about, when user signals readiness reveal the thing and set of possible answers.
Of course some facts are necessary, so actual full solution: you could do a controlled, external 'check', for example every year - or even more often. Students would have tests composed just the same - by the system, tailored to them - the purpose for the test being controlled is just verifying whether they are doing roughly as well as they normally do.
Forcing a sensible pace of student's learning: there are no age cohorts with a clear curriculum, every student is educated slightly differently. This doesn't mean there can't be "common" parts that apply to everyone. And it doesn't mean that it is impossible to estimate the "amount" of knowledge gained / year. The system can do that. Automatically and ~accurately.
Back to "certification". The system described produces a much better assurance of skills and knowledge than the current **joke**. We can add standardized tests to it too, why not. Useful for relative rankings, the meritocracy. Useful, for - I don't know - doctors. Occupational licencing. We can also have external components like "original research", master's theses, etc etc etc. Physical laboratory equipment for specialistic uses. Whatever is necessary.
Anyway. This system would cost, at least the basic version without super-advanced features, well, some money to implement. Not necessarily a lot. But even if it was 5 years of costs of operating the normal system, then we just increase the cost 2x and produce a version 1.0 5 years later. We lay out a clear plan, basics -> more advanced parts. And then, we don't have to wait until the current 6th grade student finishes education step in the normal system, people can be gradually migrated.
The education system would cost pennies compared to 'normal'. Though one could also allocate a huge sum of money - which would still be, say, 50% of the current costs, or even 80% - and do wonders. After all, education - real, meaningful education - would be a valuable asset. And if it's not a country the size of Poland, but the entire EU or a larger collection of countries working together - with local adjustments at most - then the costs disperse. It's mostly software, after all. Costs don't scale that much with amount of users.
And, while education costs in the EU or other countries don't seem like such a pressing problem, see the US.
And, to elaborate a bit on what a **valuable** thing actual education system would be. It would introduce much more meritocracy, removing barriers for social mobility. Your life sucks, or you just want to change careers? Want to try to become a doctor, for example (assuming they continue to earn a lot relatively to other occupations)? You can decide that on a whim at any time and immediately start studying in that direction. It doesn't matter at which hours you're free to learn, or whether you have to work. You don't formally enroll in any institution. You simply gain knowledge atomic step by atomic step.
The results could be (partially) published at will, which would be a cool feature to sift out people online who speak up on a topic without relevant knowledge. Not like you can't disagree with 'mainstream' and 'experts'. - but if someone speaks out of the 'mainstream' line without even a cursory knowledge of the mainstream 'position'...
Other neat-factors: in a similar way you could 'subscribe' to a database of people looking for jobs, indicate what kind of job you are looking for.... apart from 'jobs' it would also be very useful to have 'contracts' for certain tasks. Such a feature alone maybe gives us at least 0.1% GDP growth per year. Making the labor market more liquid.
Oh, that earlier idea about incentive pay for small users... may serve well as a precursor/add-on to the UBI. It nicely solves the "people will become degenerates without jobs" objection (which is absurd, but...).
These and similar ideas are obvious way forward, at least the basics. Instead we persist, and will most likely persist, in the pathetic status quo. Perhaps adequate 200 years ago. For no good reason. Even in the 18th century with 18th century technology we could have done (a little) better.
Now we have technological advances exactly fit for the purpose - and nothing. Nothing seems to go through anyone's head except reforms like slightly changing the curriculum and such. The US: "status quo? or status quo but we wipe out the current $T of debt? (future kids: FU)". Alternatively, another super radical option is "let the state pay those hundreds of thousands of dollars per student".
But Scott, these buildings are *incredibly ugly*! How can you have read Seeing Like a State and come away with the impression that all disgusting modernism needed to become human and beautiful was a spline curve here and there? This is thoroughly un-human, ugly, disgusting Brasília architecture and impossible to defend.
My guess is that the most likely failure mode here isn't some kind of ideologically pleasing thing where we see the libertarians or utopians or someone get their comeuppance, it's mundane stuff like not being able to keep their private security forces honest given the culture of corruption they're used to, or some business failure where they get the development half built and then run out of money.
I also think they'd be smart to spend less time being visionary and more time being incremental. Yes, there's a lot broken with first-world medical and building regulation, and I'm sure there are big improvements possible. But the stuff that's going to guarantee failure with this kind of project is mostly a lot earlier in the chain than this. Why will their private security guards or administrators be willing to refuse the traditional "plata o plomo" offer from some ruthless drug gang, especially when those guards and their families are probably living in the normal corruptly-and-ineptly-policed rest of the country? How will they ensure that their provided infrastructure works, when a lot of it will depend on the surrounding infrastructure provided and managed by Honduras? Their size and position seems like it will make them vulnerable to having concessions/tribute/donations extracted from them by the officials in control of surrounding infrastructure like roads and power systems, and those officials are presumably as corrupt as ever. (Probably the answer there involves lining some local officials' pockets--something that might be pretty familiar to people doing property development in NYC as well.)
I wonder about the literal signing of the social contract, what of children born in Próspera - sign the contract on your Bat Mitzvah? (What happens if you don't?)
Personally, I found the Prospera thing to be mainly hot air when I did try speaking with them about half a year ago.
I found the pricing for their homes to be outrageous, like, comparable to other nicely designed homes on tax-free paradise islands... except for the fact that those islands are actually tax-free, and the homes exist, and they are no surrounded by a 3rd world violent military dictatorship known for the care-free murdering of dozens of thousands and contested by cartels and foreign interests.
Second, my take was that you would probably have to pay taxes *outside* of Prospera for anything but money circulating inside of Prospera. As in, yes, your business can operate with low tax, but you the individual would need to pay Honduran tax rates on any income that they want to draw from those businesses. Though I might be wrong on this point?
On the whole, my experience as someone with the money and freedom to move into a charter city is that they seem restrictive as hell compared to other options.
Probably better if you're a local though, and that might be what's important, and maybe foreign investors that can throw large chunks of cash would get something out of it. Overall I wish them the best of luck but I see no reason why any normal person with a US/AU/EU residency would choose any of the existing "semi-independent" charter city projects to live in.
I will withhold judgement until I learn how much the surrounding 5 star resorts pay in protection fees (on top of official taxes) to keep away men in pickups with Kalashnikovs who enjoy kidnapping people for ransom.
I wonder how their rights to private security interact with having to face Honduran criminal justice. Like, I was thinking they could just go all in on having some serious security, and take the men in pickups head-on. But then let's say they kill a bunch of would-be kidnappers... if they have to face a criminal justice system that is "owned" by the same folks who run the kidnapping operation... they're going to have some trouble.
It's interesting to me that they are trying to be more family friendly Disneyland less wild west.
The real wild west's of the world seem like countries like China ten years ago or cambodia where on paper there are so many rules nobody ever follows them.
Of course this situation heavily reduces foreign investment, and western multinationals seem to be the key to development. If this works and especially if there turns out to be enough productivity growth to skim off some money and give it to the ruling Corp AND line corrupt political pockets I see no reason why this couldn't take off everywhere that is corrupt
Sometimes I think we just all agree to have Norway or Sweden rule or Singapore rule everybody.
There are some City-States and Special Economic Zones that went from Third World to First with a different legal system from its former mainland: Singapore vs. Malaysia, Hong Kong, Macao and Shenzen vs. China, P.R.C. Should we add Taiwan to this list?
However, there are also superstar cities who have become greatly rich with the same legal system as the mainland through agglomeration effects: Sillicon Valley, USA. London, UK.
Certainly institutions (both legal and cultural) play a key role on growth, but also agglomeration effects. One of the reasons why they are important are economies of Scale.
I'm completely convinced that this thing is never going to have the same economies of scale than the Special Economic Zones it aspires to be.
Perhaps if it has the entirety of Roatan with 80 km2, close to Macao's area. But that would mean expropiating land, which is what the people fear and what they've promised not to do.
Migration?
People migrate away from Honduras to ran away from gangs, and they migrate to America for the wages and because their American family lives there.
If Prospera manages to keep the crime away, it won't be enough to help with migration because the American family of the Hondurans don't live in Prospera. Even if it doubles the real income per capita of Honduras, it would only be like Costa Rica or Mexico, and it won't get close to America's who is like 5 times the real income per capita of Honduras.
Another of the comments above me is critical:
Those Special Economic Zones already had people. This doesn't, so it will likely attract more capital than labor, making it a very different beast than the rest of Honduras. Likely focusing on finance ("high skilled" labor), turism and casinos ("low skilled" labor), like Macao.
Macao, of course, it's the only place in all of China (a billion people nation) where gambling is legal.
Prospera at least it's on Roatan, a caribbean jewel.
Macao gives the dividends of its gambling to their own citizens.
If Prospera it's going to be at least a little democratic, it should make all of its citizens shareholders in the company that owns it.
If the company isn't willing to open up to democracy, Honduras should annex all of Roatán (with its 100,000 people) to prospera and then have them kick out the company, and then outlaw gambling in the rest of Honduras. The result? Roatan would become a macao-sized island with low taxes, a democratic government, and ready to be the Las Vegas of Latam.
I'm an economist. Acemoglu and Robinson say that institutions are the ultimate cause of development. All that sounds pretty neat. But they could be wrong. Maybe Shenzhen, Dubai, and the United States got rich because they have good institutions AND some other factors, such as access to large markets, some network externalities that lead to high rates or technological adoption... I mean you can take your pick! If I knew the answer I would be claiming my Nobel. So, being agnostic about the causes of the wealth of nations, I think this is an experiment on which percentage of the variance of GDP is explained by institutions. That's probably a number between 10 and 40% (my personal prior). So, if my prior is right Prospera is gonna get anywhere from 10 to 40% of the way to rich country status. That's not nothing, but its not gonna get you 100% of the way to riches. Thats basically what China did. So, even if this ZEDE thing is a success, its not gonna bring Star Trek post-scarcity to the world. Also, beats almost all of the RCT-approved programs development economists work on. I really look forward to it as a Latin American economist.
Unless Prósperans are randomly selected among Hondurans, this experiment will not tell you anything about how much of GDP is explained to institutions, as opposed to genetics, culture and other factors.
"They just want to give people who have been ill-served by statism and nationalism a choice other than traveling three thousand miles and scrambling over barbed wire fences."
But Prospera has a membership fee. $260/year for Hondurans. What happens if Hondurans decide they want to live there, but don't want to pay $260/year and cross the border without permission. Will Prospera have barbed-wire fences? Since Honduras isn't exempting Prosperans from the country's gun control laws, what will security look like? Will Prosperans be trying to defend their security from narco-gangs or bandits with pointy sticks, or will Honduran security forces be guaranteeing its territorial integrity?
* Why a flat tax? This is just begging for the rise of robber barons. If 1% own 90% of the assets, they should be paying 90% of the taxes. This is how insurance works, you pay proportional to the value of the asset and the risk of loss. Presumably, a society means we all share the same risk of loss, which means the only dial available is the value of the asset. Taxes are partly social stability insurance by ensuring some basic level of equality.
* Doctors choose the laws under which they operate, but doesn't that mean they can't presrcribe treatments that aren't approved by those countries' regulatory bodies, contra claims that patients can access any drugs approved in any country?
* Capping damages is dumb unless it's constantly adjusted for inflation.
* I don't get circular architecture. Looks nice, but wastes space.
* Re: voxels, interesting, but problematic. At what vertical limit do voxels end? Do they extend to outer space? Also, the Earth is a sphere so there are strictly more voxels directly above a particular voxel than there are below. Also, how do VTOL drones navigate all of these voxels? Finally, buying voxels to ensure your view isn't trivial; it means you'd have to buy every voxel extending out to the horizon (or whatever view you want).
>America is a better place to live than Honduras. This isn't because Americans are smarter, or harder-working, or morally superior. It's because Honduras has bad institutions.
Citation needed. The average Honduran has an IQ of ~80. If you replaced the entire population with Japanese or Germans, and left the institutions intact, it would turn into a successful country overnight.
Institutions don't magically furnish individuals with the attitudes and abilities needed to be economically competitive. That kind of socialization or cultural programming is long-term, complex, and largely outside our conscious and deliberate control.
Consider a failed state like Uganda, which in 1970 was a reasonably nice place to live. One group of people (Indians) was more capable than another (native Ugandans), and so came to dominate the economy. After Idi Amin expelled the Indian "oppressors", the economy collapsed. The same pattern occurred in Zimbabwe.
In neither case did institutions, per se, have anything to do with national dysfunction. Rather it had everything to do with the decisions made every day by thousands of ordinary people. When people make different decisions, they get different outcomes; and different groups make different kinds of decisions. Therefore different groups get different kinds of outcomes.
This is so basic and self-evident you'd need a deeply entrenched cognitive bias not to see it. Egalitarian bias also helps explain why Scott, an unusually careful thinker, would make such blatantly false (yet empirical and easily verifiable) claims as "Hondurans are as smart as Americans".
For the same reason that Indians can thrive in Uganda when Ugandans cannot, or that Rhodesians can thrive when Zimbabweans cannot, so I contend that Germans or Japanese can thrive in Honduras when Hondurans cannot.
They seemed to me focused mostly on real estate investment, and I thought they're lacking a way to attract people to come there and create businesses.
I took it on myself together with an entrepreneur from California to set up a little trip and invite other entrepreneurs to see what we can build there: https://www.buildprospera.com/
We're calling on entrepreneurs interested in Prospera to join us!
Fyre Fest, or just The Free Town Project 2.0?
Porque no los dos ?
Galt's Gluch Chile? That was a clownshow.
Axtually, I was thinking of Grafton, New Hampshire, but similar experiments in minarchist government have been tried in other cities here and there, with comparable results.
Are they promising a ball pit? Because that made DashCon so successful! 😁
>So for example, when you buy land in Próspera, you’ll have to sign a Covenant Restricting Vice Industry Uses - ie you can’t turn your house into a joint brothel+casino and do unethical medical experiments in the basement. Even the strictest libertarian has to admit this is fair; if you sign a contract, you’ve got to follow it.
What about slavery contracts?
See section 10.1, on human rights.
For human rights, as with a lot of the more complicated and controversial areas, it seems like the answer is basically "we promise we won't do anything bad" and Honduran law still applies. Which seems a problem when the original problem this was seeking to solve is endemic corruption in Honduras.
More gerenally a lot of these things seem to rely on it being written into the law/founding documents that they won't do bad things. But what the law says is not particularly relevant when the people who decide how the laws are enforced are the same people who would profit off corruption. So it essentially relies on a group of unelected leaders being ethical enough to not do things that are in their own self interest
It's definitely true that a key failing of laws is that they mean nothing if people don't actually follow and enforce them. But I think your concern has already been addressed in the article.
One of the key points is that law enforcement isn't supposed to rely merely on the the ethics of the leaders. It's also a business proposition. "We have good government" is the product the company is selling. "Profiting from corrupt government" is the business model they're trying to replace. It's what Honduras is already doing. They're trying to create an alternative to that, where the business model is "profit from good government" instead.
Now, maybe it's the case that corruption is always more profitable than good government. If so, then you're right, law enforcement would rely wholly on ethical leaders ignoring their economic incentives. And then, I suppose, the experiment wouldn't last very long: the company would realize they're not profitable, then they'd do something corrupt to try and turn a profit. And every time that happens, their core business proposition evaporates a little more, or becomes more fake, and they get less and less different from Honduras, and eventually vanish as soon as the VC dries up.
I mean, the obvious argument regarding those is "and why would you do that to yourself?"
The obvious counterarguments are leonine contract and 5000-page-fine-print contract, but outside of those situations there are decent arguments for allowing it.
(I will note that "enforceably leasing yourself into servitude" is to a restricted extent practiced in all countries with a military.)
> You could tell similar stories about the success of Hong Kong and Singapore, two other polities with little to recommend themselves other than a different and more competent regime than the surrounding regions.
I had to stop to comment here - I think both have something very important to recommend them. They're both Alpha+ gateway cities which control massive trade flows. Singapore is at the tip of the Malacca straits, which means absolutely massive shipping volumes flow past it, from which it can derive huge amounts of wealth. Hong Kong is at the mouth of the Pearl River delta and sees a similar dynamic. They were both already extremely important cities long before they had interestingly different governance regimes. I think the arrow of causality is pointing the wrong way here - it's not that interesting governance allowed these uniquely important cities to spring up ex nihilo, it's that when your city has such a massive natural advantage, it ends up with interesting political structures.
Not to mention that Hong Kong has one of the best deep water harbors in the world.
Right, and they're both inherently defensible islands which can more easily resist external regime change (although those days appear to now be over in Hong Kong).
It didn't go so well for Singapore in 1942 either.
You couldn't exactly call it an "external regime change". HK only existed at the behest of the CCP.
They're also a prime example of survivorship bias. Nobody remembers Dertu, Kenya, which was presented just as glossily as this was...until the VC money dried up, and Dertu was left worse off than it was before.
Yeah. Hong Kong and Singapore grew up organically because they were serving needs. Unless you manage to call back the ghost of Stamford Raffles to get your new city off the ground, I think just plopping one down next to a golf course and crossing your fingers and hoping "shiny tech!" will work miracles is asking a lot.
It is asking a lot. On the other hand, the rewards for getting it right are so high that I'm happy to see this kind of thing tried over and over again until someone discovers the recipe to get it right.
The only recipe that comes to mind is eugenics. A polity is made of people, and you can no more build Utopia out of the stock H. sapiens model than you can build the Burj Dubai out of bricks made of sun-dried mud.
Stock H. sapiens can at the moment build Burj Khalifa or similar in some places, and not others. Genetic stock is not everything.
The extreme end here is China in 1970 vs China now. Same people, very different outcomes.
or the default example of N and S Korea.
Not a great example, because neither is anywhere near equilibrium. If I took Germany in 1945 (a smoking ruin) and compared it to 1955 (in the middle of the Wirtschaftwunder) one would naturally say wow! but neither was anywhere near an equilibrium state. Same idea.
Anyway, it's not a good counterexample because China now is nowhere near utopia, only (at best) approaching what has already been achieved in many other places and times. Extrapolating China's improvement 1970-2020 -- or for that matter that of the US 1930-2020, or Britain 1970-onward -- says approximately squat about the plausibility of a *further* hypothetical tripling of the humanity and success human civilizations can enjoy. You would need entirely different evidence.
there is a funny "long term share of global GDP by country" chart i saw once that basically shows China recent economic rebound is just bringing them back to where they were 200 years ago. I.e. China in 1970 was the outlier and today is the reversal to norm. A lot easier to do (can build on underlying human and cultural capital and natural country advantages that even communism and a century of war couldn't wipe out) than to work your way up from bottom to a place you've never been before.
No, it's not everything, but it is the ultimate limit to everything. You can never build a machine better than the quality of its components. And I suggest that building the Burj Khalifa is at least one order of magnitude easier than building a utopian society.
Hong Kong was an unimportant backwater island when the British took over in 1842, all they wanted out of it was a safe place to drop anchor and store cargo near China.
This. Hong Kong is a *decent* place to put an international trade hub; Guangzhou/Canton is better in every respect but legal. Hong Kong's legal advantages made it worth the trouble of building out the port facilities, mainland rail connections, etc. If Prospera prospers to the same relative extent (scaled to Honduras rather than China), something similar could happen. Though the bit where it's an island rather than a peninsula means you can't just build some railroads and turn it into a transshipment point for low-value bulk goods from the interior.
Yes, I was about to say - how is this not simply a tax haven? Of course 10% won't be enough to fund any sort of health or education system, say, and of course people in high income brackets in Central America wouldn't be caught dead using state-provided services in either categories. But what happens to lower-income people living in Próspera? And how is this system supposed to scale up at all? If the best argument is that, as you say, the wealthy in Honduras are extremely successful at tax evasion anyhow...
"But what happens to lower-income people living in Próspera?"
Do we really need three guesses?
Alternatively- what lower income people?
My guess would be as happened with other similar plans if it ever gets off the ground the majority of the blue collar labour will be provided by people who aren't officially Prosperan citizens, living in slums on the other side of the border. (See guest workers in dubai and Singapore). Might still be a net benefit if its giving jobs and economic growth there wouldn't be otherwise, but but as utopian as it sounds
That's pretty much my take on it as well. You'll have the very wealthy (if you can entice them) living in the deluxe areas with their VTOL runabout, you'll have gradations from that down. There have to be 'service' categories along with the smart rich people, and those include the professions like doctors, nurses, teachers and so on. Whatever about doctors and lawyers, the nurses are not going to be rubbing elbows with the rich and hoity-toity in the same neighbourhoods.
It may become necessary to introduce something like the London Weighting - an allowance to cover the cost of living in an expensive region in order to make sure certain classes of employees can afford to live where they work (or at least relatively near to it): https://en.wikipedia.org/wiki/London_weighting
And then you keep going down the line: the people working in retail and customer service jobs. Maids and housekeepers and groundskeepers for the nice "Zaha Hadid"-style buildings, be they the gleaming towers of the commercial and financial quarters or the modular dwellings on the hillsides. After all, you can't expect the high-value, creative, wealth-producing smart citizens to scrub their own bathrooms or clip their own hedges!
And those are the people that will, as you say, be living in the rest of Honduras and coming in by public transport to work in Próspera. Unless the notion of "servants' quarters" is re-introduced and you have the room under the eaves for the maid, and I don't know if that is appealing to the rich smart folks. Maybe we'll get the revival of "company towns" or "model villages" - parts of Próspera set aside for 'the workers' to live, which can be paternalistic benign areas like the Quaker mercantile families set up https://en.wikipedia.org/wiki/Bournville or the bad versions like some American models https://en.wikipedia.org/wiki/Company_town "I owe my soul to the company store" but most likely I think it will be service and low-paid workers commuting in and back out once their working hours are done.
Like every city, there is going to be inequality baked in - unless they truly mean that only the high-worth people are going to live in their shiny dream, and unless you have complete automation and robots, those high-worth people will want someone to work in the coffeeshops and fashion outlets and be on hand to tend to their teeth and so forth. That's going to (a) make Próspera attractive for criminals, from the opportunistic muggers and pickpockets to the organised provision of sex and drugs and other illicit pleasures and (b) foster resentment - it's all very well telling the low-paid workers "hey, you are earning more than the average Honduran manual worker", but the comparison between "I am working for people getting a million a year and a flying car on top of that" is still going to be evident.
No more poverty! Opportunity for all! is a lovely slogan, but the fact of the matter is that unless you have androids doing the servile work, not every single person in Próspera can be a merchant banker or movie producer or fancy high-tech something or other.
There is a ton of inequality already baked in. But it's worth noting that very corrupt places with a lot of crime and the police mostly on the take (like Honduras) are usually especially bad places to be poor. Living in a small apartment with little extra income in a place with little crime and honest police and judges is probably a lot better than living at the same material standard of living in a place with lots of crime and dishonest police and judges.
Regarding (a): As long as they have effective police, I doubt crime will be much of an issue, especially given how small the community will be in the beginning. As for (b), being paid what your labor is worth shouldn't foster resentment as long you are treated well, and have at the least the opportunity for upward mobility.
Alternatively - things stay the same and they all remain poor?
"Ireland will get its freedom, and you still be breaking stones"
> Interested parties who don’t want to move to Roatan can seek “virtual residency” / “e-residency”, a concept pioneered by Estonia in 2014. This mostly allows virtual residents to set up companies in Próspera, governed by Prósperan law.
Or more specifically, a front for a tax evasion scheme.
Like all the shipping that gets registered under a Liberian flag? https://en.wikipedia.org/wiki/Flag_of_convenience
10% is plenty to fund a health and education system and a lot besides, provided that your country is populated mostly by people whose incomes are high enough that they're keen to move to a tropical resort to avoid paying tax in their home countries.
Monaco and Liechtenstein seem to have a functioning healthcare and education system.
Monaco made its money off the back of gambling and has attracted an influx of migration, from the wealthy trying to use it as a tax haven to the usual migrant workers:
"Monaco has the world's highest GDP nominal per capita at US$185,742 GDP PPP per capita at $132,571 and GNI per capita at $183,150. It also has an unemployment rate of 2%, with over 48,000 workers who commute from France and Italy each day. According to the CIA World Factbook, Monaco has the world's lowest poverty rate and the highest number of millionaires and billionaires per capita in the world.
One of Monaco's main sources of income is tourism. Each year many foreigners are attracted to its casino and pleasant climate. It has also become a major banking centre, holding over €100 billion worth of funds. Banks in Monaco specialise in providing private banking, asset and wealth management services. The principality has successfully sought to diversify its economic base into services and small, high-value-added, non-polluting industries, such as cosmetics and biothermics.
The Blancs [casino operators that the royal family sold the licence to operate gambling to] ...quickly petitioned Charles III to rename a depressed seaside area known as "Les Spelugues (Den of Thieves)" to "Monte Carlo (Mount Charles)." They then constructed their casino in the newly dubbed "Monte Carlo" and cleared out the area's less-than-savoury elements to make the neighbourhood surrounding the establishment more conducive to tourism.
The Blancs opened Le Grand Casino de Monte Carlo in 1858 and the casino benefited from the tourist traffic the newly built French railway system created. Due to the combination of the casino and the railroads, Monaco finally recovered from the previous half-century of economic slump and the principality's success attracted other businesses. ...By 1869, the casino was making such a vast sum of money that the principality could afford to end tax collection from the Monegasques—a masterstroke that was to attract affluent residents from all over Europe in a policy that still exists today."
Basically, Monaco is a Mediterranean Las Vegas. Attracting the rich to have a good time resulted in support industries - from jewellers to banks - following along and setting up. This is certainly a successful business model, but you can't eliminate poverty by setting up multiple new cities based on gambling. And as noted, the very wealthy live on the hillsides with their yachts in the bay, while the blue and pink collar workers trek in daily from France and Italy.
Liechetenstein picked itself up off the ground after the Second World War by deliberately turning to financial enticements and setting itself up as a tax haven:
"Despite its limited natural resources, Liechtenstein is one of the few countries in the world with more registered companies than citizens; it has developed a prosperous, highly industrialized free-enterprise economy and boasts a financial service sector as well as a living standard that compares favourably with those of the urban areas of Liechtenstein's much larger European neighbours. ...Liechtenstein has previously received significant revenues from Stiftungen ("foundations"), financial entities created to hide the true owner of nonresident foreigners' financial holdings. The foundation is registered in the name of a Liechtensteiner, often a lawyer. This set of laws used to make Liechtenstein a popular tax haven for extremely wealthy individuals and businesses attempting to avoid or evade taxes in their home countries."
Your examples certainly work, but they work by "if you attract lots of already very wealthy people to come live here and bring their money with them, and then you cater to them becoming even wealthier, your area will do well" which may work for Próspera *if* they can attract and retain already very wealthy people. If they can't, their shiny model housing won't do a damn thing towards success. I think a lot of comment on here is justifiably sceptical that it may turn out to be, like Liechtenstein, run on a "brass plate company" model for any success: https://en.wikipedia.org/wiki/Brass_plate_company
"asset and wealth management services"
So tax evasion and money laundering?
Basically, yes, although why rich people couldn't just move to the Bahamas, Bermuda, Panama, the Caymans, etc. is left unsaid.
Singapore and Hong Kong also have robust state-owned business sectors and universal healthcare.
If that were not enough, the government provides something like 85% of the housing in Singapore.
Singapore does not have universal health care, employees are forced to pay into a savings account which can then be used to pay for healthcare.
Thanks for the correction, and I say that without snark.
Still not a libertarian scheme.
I don't see a principled reason why 10% isn't enough to fund the basic services you need from government, particularly when your charter city isn't likely to be providing anything like welfare payments.
I briefly looked at their labor code. It looks like, by default, 25% of an employee's salary would go into a withholding fund, from which one can draw for certain purposes, such as medical expenses or pension. One could sign an opt-out where it would go down to 10%.
Is this withholding fund sensibly invested? If so, that seems like a really good default for most people. See also libertarian paternalism. Although the actual libertarian paternalist in me wants people to be able to opt out entirely. Plus I'm worried that it's not invested at all or else is invested in "prospera" which seems downright evil.
It says that opportunities to invest up to 90% may be offered.
On the other hand, it seems like it could be used for quite a lot of things, including 13th and 14th month (vacation) pay (for those who don't sign the opt-out), so the 25% may be insufficient.
> Of course 10% won't be enough to fund any sort of health or education system
Hahahahaha. Hahahahahahahahaha.
By saying "how is this not simply a tax haven?" aren't you ignoring the several dozen paragraphs where it discusses other features? Can't it be a tax haven AND a bunch of other cool stuff -- in which case, it would be "very complexly a tax haven".
Prediction: this will be a great success on its own terms, and a bad thing for Honduras. It is pretty much the reference implementation of a tax haven, will all the obvious negative externalities it employs, and it will also drag down Honduran wages and labour standards through competition.
The required minimum wage within Prospera is 10-25% above the Honduran minimum wage. See labor section here, https://prospera.hn/business/
What kind of libertarian paradise has a minimum wage? I thought libertarians hated that sort of thing.
The kind that is only vaguely sort of a government and only vaguely sort of libertarian.
I'd say most of the talk about a "libertarian paradise" was written by hostile and/or opportunistic journalists. From the inside, it was never intended as a "libertarian paradise." It was intended as higher quality law and governance in order to create broad-based prosperity. Certainly Octavio Sanchez only wanted to see his country become prosperous.
Provided ZEDEs draw in capital investment and creating jobs, why wouldn't wages and labor standards rise broadly under this framework? As any economy liberalizes, the gains are broadbased and the standards of living rise. Generally, the more free markets, the higher the standard of living.
"Liberalize" sounds weird in context. Honduras seems never had had any kind of attempt at non-liberal / socialist bloc style of economy (unlike Venezuela or Nicaragua), but rather seems to have been relatively free export market oriented country; Wikipedia article tells "banana republic" was coined to describe Honduras. https://en.wikipedia.org/wiki/Honduras
Quote:
"Banana-exporting companies, dominated until 1930 by the Cuyamel Fruit Company, as well as the United Fruit Company, and Standard Fruit Company, built an enclave economy in northern Honduras, controlling infrastructure and creating self-sufficient, tax-exempt sectors that contributed relatively little to economic growth. American troops landed in Honduras in 1903, 1907, 1911, 1912, 1919, 1924 and 1925."
Wikipedia article turned out very interesting.
True to name of "banana republic", according to same Wikipedia article and clicking at the presidents, since the United Fruit they have had military coups, leftist presidents (with land reform and other leftist agenda) elected then deposed by military coups (halting the said reforms), a Football War with El Salvador, more coups, including one coup president ousted by another coup in 975 after U.S. SEC found out the firstly mentioned president had taken bribes from United Fruit Company to deduct banana export taxes, a return to evidently chaotic democracy, US military and CIA presence to help fight a war Marxist militias and support Contras in Nicaragua in 1980s, military , drug cartels in 00s, US military presence to fight said drug cartels, and another coup in 2009.
Today Honduras exports also textiles, coffee and ores in addition to bananas (production of bananas was seriously hurt by hurricane Mitch in 1998, which was significant, or no one has updated the Wikipedia page on Honduran economy since 00s). The economy Wikipedia tells me that textile industry is based on system of "Maquiladoras"; related, the government opened tariff free trade zone in Puerto Cortés (a major port and railway connection since the banana company era) already in 1975 and then elsewhere, followed by privately run "Export Processing Zones".
No doubt one country's history is more complicated than summary of its Wikipedia summary, but countries that are dysfunctional often also have a dysfunctional history. A couple of things stand out: People with guns historically seem to have lots of sway in Honduran politics: this has some implications on running a governance experiment without monopoly of violence. Honduras seems to have a history of many independence proclamations and constitutions. It could make the investors less confident in Prospero written in Hondurasian constitution or the safeguard of lots of promised human rights.
Another more striking thing, according to Wikipedia, Honduras has seen various versions of publicly and privately run enclaves and free trade zones for over century: bananas since the 20th century, textiles in 1970s. So maybe one should not be surprised to see a charter city initiative there of all places. On the other hand, while the preceding economic zones probably have helped to create the manufacturing economy that exists in Honduras (or existed in 00s when the Wiki was updated), they have not been stellar success to the effect of Hong Kong. Maybe iterative development works, and now they got it right when they have the zone set up its own kind of legal and investment framework in this one particular way that targets medical tourists?
You definitely know more about Honduras's history than I do.
Re: Liberalisation, my understanding (I spent 25-30 hrs in due diligence on this project) is that with combination of positive opportunities gives this project a very strong chance of success: supermajority approval of the zones, affirmed by the supreme court, approved by CAMP, supported by various treaties, 12% revenues to Honduras, best in world laws/regs/taxes/ownership, none of the perverse incentives of traditional govt, low labor costs, locations near shipping lanes, supply chain disruptions leading to repatriation near/within US, draconian reactions to pandemic elsewhere, decentralization movements, etc....
And at $3k/GDPperCapita, it doesn't take much upside to make this have a dramatic effect on this country.
All make this iteration of attempts at new govt models pretty attractive. Risks still clearly remain but there's lots of high impact reasons for this to be successful and all incentives for stakeholders are aligned.
12.0.1 - Did they consider naming it something that doesn't sound like a brand name prescription drug? "Ask your economist if Próspera is right for you."
Próspera means "prosperous" in Spanish. It's basically just naming the city Prosperity.
I am having *terrible* Shadowrun: Hong Kong flashbacks.
Diaspóra? Utopitorol?
Outside of medical tourism or possibly finance, I don't see how they're going to generate income or jobs.
Oh, just those things? No way that'll work.
You do know that the entirety of London these days pretty much depends on the financial industry? And that's one reason for all the hand-wringing over Brexit, that it might completely annihilate the finance industry in London and therefore the entire British economy. I'm less well-versed in the value of medical tourism, but given how healthcare is exploding as a percentage of GDP here in the US, I'm thinking it's primed for growth.
Financialization makes for fragile and corrupt democracies, so maybe Brexit will end up being a good thing to correct for the over-reliance on financial services.
Dubai seems to be turning towards medical tourism to help stimulate its economy (one of the reasons I snorted when I saw the picture of Dubai alongside Shenzen in the "then and now" photos was because I never thought all the artificial islands and luxury hotels rash of building was anything more than a vanity project to add some glitz to the image of the UAE and cover over the less savoury aspects of life there): https://skift.com/2020/01/20/medical-tourism-emerges-as-a-bright-spot-for-flagging-dubai/
Trying to appeal to extremely wealthy people has a limited possibility of success: there are only so many days in the year and so many very very rich people, and if they're only popping in for a day or so in your snazzy new locale that's not helping for the rest of the year. Thus you end up providing plastic surgery for Irish single mothers: https://www.independent.ie/irish-news/courts/dubai-two-to-persist-withlegalchallenge-after-their-quarantine-spell-40283263.html
It's not about generating income or jobs (after the initial construction work provides temporary jobs boost), it's about attracting rich people to come park their wealth there, use it as investment opportunities (like the London property market), companies to headquarter there (we here in Ireland know all about that https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp) and become a hub for financial trading and high-tech R&D in various industries. I don't imagine there will be traditional manufacturing industries, but what do I know? Maybe they will set up business parks where the pharma companies, as mentioned elsewhere in this thread, can happily engage in creating new drugs and letting Jack sit on sixteen boards with no conflict of interest where he can sign off on Greg getting 500% bonus and Greg, by virtue of the fifteen boards he sits on, can sign off on Jack getting 600% bonus for the hard work they are doing.
The pictures of Dubai and Shenzhen next to each other also help make clear how much Shenzhen has actual urbanism, while Dubai just has the "skyscrapers-in-an-interchange" version of Le Corbusier's old "towers-in-the-park" idea.
This really stuck with me - https://www.nytimes.com/2019/08/09/business/medical-tourism-mexico.html - Before reading and researching the basis of the article, I had heard of medical tourism but had a hard time imagining doing something like this but no more. Yes, there's a market for it and quite a large one.
Why not the same way as any other town, just hopefully a bit more efficiently than the average Honduran town?
....Manufacturing, logistics, maintainance, building large aircraft/ships, agriculture, software, near-shoring, infrastructure, various supply chain service businesses, and more
“ In the original plan, charter cities would be governed by some respected and competent foreign power like Switzerland.”
Or maybe you could get the UK to do it? Huh...that sounds vaguely familiar.
I know a Belgian guy named Leopold who has made a really convincing case to numerous world authorities as to why he should control underdeveloped land.
Micro-focused comment on the home prices:
These home prices are astonishingly expensive by US standards (which in general has a fairly low cost of construction). $3750/m2 is about $350 per square foot. For reference, outside of very expensive metro areas, typical single family home construction in the US comes in around $110-$150 per square foot, and apartment construction is even cheaper, perhaps $90-$100. A mobile home comes in even cheaper, at maybe $40-$60 a square foot.
Even their "affordable" beta residency comes in shockingly expensive - they look like they can't be more than 200 square feet or so, which isn't a great deal for $40,000.
This isn't exactly a ringing endorsement for the removal of overly strict building codes as a mechanism ushering in low-cost construction.
(the obvious caveat here is that the US makes it hard to build really small homes, which is true to some extent).
Hey Brian,
Trey here (from the article). That is the price of our most premium/lux offering. Our lower cost co-live units which will launch next year are less than $2,000/m2 construction cost, and will be sold and built in far greater numbers.
Hi Trey-
Thanks for the reply. That still seems expensive, but I remembered you're building on a small island - am I right in assuming that just getting stuff to the island is a major cost driver?
Scott mentioned the building code briefly, I'd love to know more about it/your construction plans in general, if there's anything you can share. briancpotter@gmail.com
Hey Brian--you hit the nail on the head. Shipping is expensive! I'll email you today or tomorrow at the latest with more details.
I have no localized knowledge of the shipping costs in the Caribbean, but I'm painfully aware that bulk shipping costs, especially delay-sensitive shipping costs, that remotely touch any point between, oh, let's say Shanghai and Penang, are on average roughly double what they were eighteen months ago. One guess as to the root cause.
Hello Trey, my father's company has a building solution that might allow you to produce much of the building material on the spot and in light-weight while being very suitable for your needs and a great isolation material (making costs of cooling for example much lower). Reach me at work ( a t ) dnesic ( d o t ) com if you'd like to discuss a bit more. I'm also curious about the educational systems there, although I'll read up on your website first before asking you more questions!
I am piggybacking on this random comment just to say that I think this idea is awesome, I want it to succeed and I wish there was a way I could contribute! Just the fact that you're trying stuff like this is so heartening. Good luck!
Given the normal wages for construction workers and similar professions in Honduras it seems you'll have to subsidise housing or pay then significantly more if the plan is for them to also live in Prospera. Or is the plan that they live elsewhere?
When I visited Roatan about 15 years ago there were lots of shanty villages. Its possible that it has changed to be completely covered by resorts but when I visited most of it was still pretty poor. I would imaging that most of the laborers would not live in Prospera.
No idea where you can build right now for as little as $110/sf unless you're doing it yourself and even then it would be only the cheapest of materials and not including land costs. Builders in way upstate NY are quoting $250/sf right now (not including land costs) which yes, our higher labor rates are hurting us but the cost of materials is affecting everyone, everywhere right now. Sheet of standard grade plywood at the local Lowe's just hit $50.
Sure, building material supply chain issues have driven all these numbers way higher for the moment.
Regardless of whether the city's COVID restrictions were dumb or pretextual, the CEO flouting them does not bode well for Próspera's outlook as Honduran Sovereignty Respecters. You yourself seem to be seeding this in the article rather ham-fistedly at the end of 10.2 with some "if they do, it's not that bad!" hand-waving. You are ultimately trusting their judgment to only flout the bad laws and not the good ones. This trust does not seem to have been earned.
Also, there is a big contradiction between 10.1 and 10.4. It sounds to me like if workers are being abused, they CAN'T just walk 500 feet and be back in regular Honduras, since as you point out regular Honduras isn't made up of five-star resorts or golf courses. Suppose an employer pays a domestic worker to move to their house under false pretenses and then refuses to return their passport (a situation which I imagine was pretty rare in Irvine but happens every single day in Dubai). How long to get to regular-regular Honduras?
What part of 10.2 are you interpreting that way?
Roatan is like Hawaii - lots of resorts, but also real people who live there and normal towns. There's also a $30 ferry to the mainland, which is only a few days' wages even for poor Hondurans.
The part where you sarcastically say the territorial integrity of Honduras is the most important thing ever, foreigners shouldn't have an hand in the institutions, etc. Well, the CEO apparently feels that accomplishing the Randian feat of constructing three buildings entitles him to break COVID restrictions. How is he going to act when there's actual businesses there?
Please note that the example I gave was a foreign worker, not a Honduran. So if there isn't some consulate on the island, or if they need to show the ID their employer seized to use the ferry, they're SOL. Again, this is an extremely common happenstance in Dubai, where the slave laborers are mostly south Asian migrants and not natives. You talked up the Dubai experience of the principals. If you're really going to steel-man the case against it you could probably start there.
There's pretty unlikely to be substantial foreign labor - the law says they need 90% Honduran labor, and the remaining 10% is probably going to be highly skilled First Worlders they can't find a Honduran replacement for. Also, I think UAE just didn't have very many people and the people were too rich from oil subsidies to work - usually you don't have domestic labor shortages in developing countries.
I also found stucchio's observations after talking to Indians who worked in Dubai helpful: https://www.reddit.com/r/slatestarcodex/comments/by3vns/addendum_to_enormous_nutshell_competing_selectors/eqdwkf1/
I am not sure how ultra-nationalism about letting foreigners choose a legal code is related to Brimen seeming kind of like a loose cannon. If Brimen violates regular Honduran law while in regular Honduras, he should get arrested like anyone else. How does that relate to whether letting some parts of Honduras have different laws than other parts is a good idea?
stucchio's anecdotal observations are an incredibly weak defense of the kafala system. He admits in a sibling comment how vulnerable his observations are to survivorship bias - the people who actually manage to come back to India are not the ones who are being abused after having their passports stolen. He's not talking to people with no options who have been tricked by traffickers with lies about their prospects and working conditions. In contrast, the evidence that systematic abuses take place is overwhelming. See eg this academic report https://scholarcommons.usf.edu/cgi/viewcontent.cgi?article=1302&context=jss or this popular article https://aeon.co/essays/are-the-persian-gulf-city-states-slave-societies
Who is Nicholas Cooper? Why are most of the citations from a single BBC news article plus a smattering of articles from Human Rights Watch?
It looks like this is a conference paper for the IAFIE noted as being lightly edited. Why can you find nothing about his copanelists online?
I'm a little concerned about that paper - it's not itself a primary source, and the linked source for most of the most serious allegations is an article by Johann Hari (cited six times, almost 20% of the total citations of the article), who got fired for committing various types of journalistic fraud, but who is more famous in my circles as one of the most egregious psychiatric crackpots.
I will look into the other sources to see if they are any better.
Nobody who's looking to minimize costs is going to import much labor someplace with wages as low as Honduras has.
"Well, the CEO apparently feels that accomplishing the Randian feat of constructing three buildings entitles him to break COVID restrictions."
He broke COVID restrictions because people were complaining that he allegedly hadn't explained what he was doing adequately to the locals. So he held a session to explain, which automatically broke COVID restrictions regardless of the manner in which he conducted it (unless he was supposed to, I dunno, hold a Zoom meeting with a bunch of poor subsistence fishermen who don't have computers?), damned if you do, damned if you don't.
> If you're really going to steel-man the case against it
I was really startled by the whole-heartedly negative presentation of Próspera critics in this post. "You can read what actual anti-Próspera people have to say here...But I can’t stress enough how misleading and awful most of it is." The critics sound like they believe things that only a stupid or crazy person would believe.
Of course, it's only startling because I learned steel-manning from this blog, which provides an example that I've tried to learn to live up to. But it's hard to imagine that Próspera opponents would see this as passing their ideological Turing test.
I take back the "please note" above because my hypothetical was not explicit about the domestic worker being non-Honduran. (This is the sort of oversight I would edit out in the old comments). I'm still concerned by the hypothetical but should have specified it more.
Honduran criminal laws still apply. At least in theory, they can walk into a Honduran police station and report that their employer stole their passport.
I've also never understood to what extent confiscating employees' passport in Gulf countries prevents them from leaving. I'd assume if you walk into your country's embassy and say that your employer confiscated your passport (or just say that you've lost it), they will generally give you a temporary passport you can use to return to your country, at least if you have some way to identify yourself. Is this not the case? Or is confiscating their passport more about limiting their options within the country than preventing them from leaving?
The situation in some Gulf countries is that if a contract worker doesn't like the contract, breaking it may incur financial penalties that the worker can't afford and they would be prevented from leaving the country if that debt is not settled, as trying to leave the country without paying local debts is a criminal offence in e.g. UAE as far as I understand, you simply won't be permitted to board the plane if you haven't settled any fines, all the loans, leasings, rent, credit cards, etc locally. So not having "settled properly" with the employer may be sufficient to be prevented from returning even if you get a replacement passport; the passport is just a visible way to prevent the worker from running off unexpectedly, if they try to do it with a dispute and claiming a lost passport, there are also other legal restrictions that ensure that the negotiating power lies with the local employer and not with the immigrant worker.
I had intended to cover the white paper myself, but here I am scooped.
Full disclosure, I know a bunch of people invested in the project for a while now, and am personally quite excited by it. This is all close to the mark from what I recall from older papers and presentations, though i'm not fully caught up at the moment.
The pitch back then focused explicitly on attracting industry by providing a lot of freedom and looser restrictions on pharmaceutical and biotech research. Some of the people involved are closer to Friedman anarchists, for whom Prospera is a stepping stone to more ambitious projects like private law. They would certainly be okay with your house being in Prospera and your neighbor being in regular old Honduras.
I can't say for sure, not having spoken to most of the investors, but I do sense a strong idealistic streak out of the project, and the earnest belief that it will improve lives. I'm admittedly hopeful.
"The pitch back then focused explicitly on attracting industry by providing a lot of freedom and looser restrictions on pharmaceutical and biotech research."
Excuse me while I sink my head in my hands. We have experience in my country of enticing in pharmaceutical industries, and it works great - for a certain area. But you do end up putting all your eggs in one basket. And it does not necessarily turn the surrounding areas into newly rich everybody. (Ask Scott his impressions of Cork city, and if there was poverty and crime there, even though Ringaskiddy and the pharma industries there are on the doorstep https://www.siliconrepublic.com/careers/biotech-pharma-companies-ireland). There is also the perennial threat of "as soon as there is the hint of an economic downturn, the parent companies shutter foreign plants and concentrate on US domestic base".
Also, "come set up here and you can be Victor Frankenstein!" is not a great look. Whether or not we believe that Covid-19 escaped from the Wuhan lab, making a selling point of "our regulations are so loose unlike the fuddy-duddies elsewhere!" doesn't make my heart leap up with joy that there is not going to be a similar "whoops!" incident.
It's much more likely they meant looser *financial* and business regulation than plain old occupational health & safety regs. As in, none of this crap about who can sit on what board without a conflict of interest, the creative "crime" of insider trading, and the nest of brambles that is IP law. I rather doubt anyone has the idea that they should just dispense with any fuddy-duddy restrictions on pouring methyl mercury down the drain or storing your anthrax spores in an open jar in the lunchroom fridge.
Loose financial regulation often results in a culture of "ah sure, pour that down the sink, it would cost too much to dispose of it in the recommended way and anyway, three of our directors also sit on a board with the ex-civil servant who worked for the environment ministry, it's all sorted, he can use his contacts there to keep us clear of any penalties".
It wasn't till I read 19th century pulp detective stories that I realised the many and varifold ways 'insider trading' could be done to rig the market and relieve pigeons of all their investment money. But I'm sure that 'light touch' regulation will never ever result in any body like Bernie Madoff popping up again to thrive in such an environment!
In case it wasn't abundantly apparent, I am *extremely* sceptical when it comes to opportunities for money-making because I do think that human nature being what it is, people *will* take every opportunity to trouser as much cash as physically possible, and companies become piggy banks for the executives to plunder while the duty to the customers comes far, far behind. The Savings and Loan collapse of the 80s where deregulation was supposed to solve their problems? Enron? Lehman Brothers going kablooey in the 2008 crisis? The banking crisis in my own country of that period https://en.wikipedia.org/wiki/Post-2008_Irish_banking_crisis that cratered our economy for decades after and resulted in austerity budgets? Anglo Irish Bank example was a fucking outrage, but that was the attitude at work: how can we extract as much blood from the stone as possible: https://en.wikipedia.org/wiki/Anglo_Irish_Bank_hidden_loans_controversy
So yeah, I don't come down on the side of "cut away the red tape shackling our bold entrepreneurs!" because revolving door appointments onto boards lead to a select little group treating the rest of us as pigeons to be plucked https://en.wikipedia.org/wiki/Revolving_door_(politics)
I damn well *do* want limits on how many boards Jack can sit on and all conflicts of interest transparent, so it won't be Jack handing a plum contract to his brother-in-law using taxpayer money to pay for it, and brother-in-law George paying Jack kickbacks out of that.
An interesting hypothesis, but since it strikes me -- and I know something about those environments, having worked in them personally -- as dubious, I would need some empirical evidence to consider it seriously.
TL:DR: "Come here and you won't have to pay for any pesky negative externalities!"
As opposed to operating a business in Honduras, where, of course, the incorruptible and dilligent regulators will never allow an externality to go unpaid-for?
Well, there's no need to set up a libertarian paradise for that, which is probably one reason why prior attempts to set up similar ventures in third world countries haven't exactly met with success.
To be fair, Galt's Gulch, Chile, one of the more famous examples, was hamstrung by the fact that the founders didn't understand the legal system they were setting up in. In other words, whatever you may think of their ideology, their incompetence was a bigger and more immediate problem.
Lol. The regulators in honduras are corrupt because they allow externalities to go unpunished. This is just legalizing corruption.
I don't know much about Honduras, but in Ukraine, you can already do pretty much anything you can think of, as long as you pay off the right people.
All a Prospera does is make this official, and maybe consolidate your bribe expenses into a single predictable payment.
Yeah, the missing ingredients are rich natural resources/trade routes/a huge tax base (Hong Kong, Singapore, Dubai) and a huge injection of tax money from the government (Shenzen, pretty much all the Chinese special zones, NEOM, the USSR if you want to get historical). Próspera has neither of these things and so I predict it will be another one of the many failures or mediocrities. The truth is such projects are huge drains on national resources and most electorates simply don't have the stomach for it, which is why this strategy is almost exclusively in less than democratic regimes. The Chinese could spend 70% of their entire budget developing three provinces because the other provinces didn't get a vote. And they certainly didn't have anything as pedestrian as "human rights concerns."
Democracies can grow rich, stable, and prosperous. In fact, they do so more commonly than dictatorships. But they can't use the same tools as dictatorships, which closes off those paths to them. Which, to be clear, is a good thing. Most of those examples include massive humans rights abuses! But you can't imitate dictatorial models without having dictatorial powers or an electorate willing to vote for policies that have historically proven hugely unpopular.
Is this at sea level? If so, won't it be underwater in a decade or two? Or is this another case of say one thing in public and do another in private?
I don't think it's much lower than cities like Manhattan, London etc. Sea level isn't expected to rise more than 0.3m by 2050.
OTOH, it'd be quite the acid test to see a bunch of libertarians sucessfully run a polder.
> OTOH, it'd be quite the acid test to see a bunch of libertarians sucessfully run a polder.
Exactly how so?
At the time the Hollanders build those in the Netherlands, they were the most liberal (in the libertarian sense of the word) place in Europe, possibly the world.
I'm confused by why people seem to think sea levels are likely to rise significantly on a "decade or two" timescale, when they haven't risen significantly over the past couple of decades. Fossil fuels weren't invented in 2015.
I'm also old enough to remember reading predictions that New York City would be underwater by 2020, though.
Just for fun, I worked out the steady-state thermal power input required to melt enough ice to raise the world ocean level by 2m in 20 years. It comes out to 0.38 PW (0.38 petawatts). That's a pretty big number (world energy production is about 0.02 PW), although it's small compared to the total thermal power the Sun delivers over the entire daylight side of the Earth, which is about 175 PW. It's big compared to typical fluctuations in solar flux, though -- the sunspot cycle is accompanied by a periodic variation in solar luminosity of about 0.1%.
A) It's not just about ice melting but also about thermal expansion of water, which is the bigger deal.
B) The increased CO2 levels cause an increase in retained energy, so that 0.38PW can be spread out over however many years.
C) This doesn't immediately become a concern when we're at 1.99m of sea level rise. The journey to 1.99m involves huge amounts of refugees fleeing disasters.
(A) As far as I know only the IPCC asserts that as much of 75% of sea-rise can be attributed to thermal expansion, and in my opinion that group has become too corrupted by ideology to be trusted. There's plenty of other work that suggests a more modest contribution -- which means you still need to melt a lot of ice. Anyway, I wasn't making a definitive calculation, only a back of the envelope order of magnitude estimate, and if it's off by only a factor of 2 or 3 (even the IPCC estimate only suggests a factor of 3) that would actually be rather good.
(B) Energy flux is always in balance, the question is how high does the temperature need to be to get the energy out to space equal to the energy incoming. It's a Wien's Law question, roughly, although an excellent primer on the complete physics can be found here:
http://clivebest.com/blog/?p=1169
In any event, what I calculated is a *power* not an *energy change* (which is why the units are watts instead of joules), that is, I have already assumed the energy required is spread out over the time mentioned.
(C) Maybe, maybe not, but in any event this was not something I addressed. Or care to, since it involves massive assumptions about human nature and human society and those are not my fields of competence.
Thank you for calculating this.
Nice, now add black body thermal radiation into space. Are clouds positive or negative? (block solar, but keep in thermal) And what about polar icecaps?
Send me a written proposal and I will get back to you with my cost estimate. My professional consulting rate starts at $200/hour.
New York metro has an official plan regarding this: http://fourthplan.org/action/climate. Looks like the concern for 2050 isn't so much everything will be permanently underwater as flood regions will be much larger than they are today. As in, the storm surge from Sandy was a lot worse than it would have been in 1950, but by 2100, it'll be catastrophic without serious changes. They are apparently planning to remove all infrastructure from the Meadowlands and effectively cede that to the ocean, though.
On the east coast of US seas have been rising at ~1 foot/ century since we have measured and recorded them.
Libertarians have all the seasteading expertise. You'll be amazed how seamless the transition will be.
"So for example, when you buy land in Próspera, you’ll have to sign a Covenant Restricting Vice Industry Uses - ie you can’t turn your house into a joint brothel+casino and do unethical medical experiments in the basement. Even the strictest libertarian has to admit this is fair; if you sign a contract, you’ve got to follow it. But you can tell HPI plans to have the town be ship-shape, well-organized, and family-friendly, instead of the sort of Wild West vibe some people associate libertarianism with."
My emi-serious suggestion. Democratic governments should just claim all land in their jurisdiction as their property, and make it clear that it not owned, just leased out on conditions. The governments themselves should claim to be cooperatives jointly owned by their citizens. Then functionally equivalent rules to the property and tax laws that currently exist would count as a libertarian utopia.
You can object that if they were to do this now, they would be stealing the land from its current owners, and sure this would offend the libertarian ethic- but all the land in the world has been stolen at some point, and after a while, Libertarians seem content to let the claims of those the land was stolen from be extinguished.
So presumably, if the US were to declare itself a kind of corporation owned by its citizens and expropriate all the land, in a hundred years it would count as a libertarian utopia.
Perhaps this tells us that the libertarian concept of freedom is excessively formal/procedural and not substantiative enough.
*semi-serious
Basically, property rights on a large enough scale amount to big government anyway. The only difference is that the system of property rights the libertarian imagines usually is not conducive to even nominal democracy.
I was thinking the same thing, that even if you split everything into independent charter cities, they could combine and buy each other up until you have the same situation as we have now. Perhaps the defense would be that it's impossible for one group to buy literally everything, there's always going to be holdouts and dissidents. But then you can point out that there are multiple countries, which in effect achieves the same thing.
The libertarian concept of freedom is heuristic. It arose in the real world and in response to its conditions. In the real world, property owners do a lot less oppressing than governments. Could it change? Absolutely. It might even be changing right now, and it might turn out horribly in Prospera. Might the reason why this hasn't been the case be because property owners had fewer opportunities to oppress than governments? Sure. But I think it's worth the experiment.
I don't think most libertarians are that interested in democracy for its own sake, and I think that's by design. Certainly, I don't put much stock in it for its own sake. Might you say that I can say that because I live in one? Sure. But it's also because a democracy could theoretically do exactly what you suggested it might: expropriate all the land and return it only on condition, or not at all. That would be Bad, especially from a libertarian perspective. Winston Churchill actually had an interesting critique of landlords, and pointed out (among other things) quite rightly that land is the source of all wealth. With the government owning all of it, how is there anything left but slavery?
To a libertarian, democracy is good to the extent that it protects the rights of minorities, of personal freedom (i.e., able to go where and do what I want without harming others) and of property. Same with libertarian philosophies and policies (if any such exist). If one or the other ceases to do what it was designed to do, better head back to the drawing board.
And when I say that, you should know I'm thinking of Churchill's critique; that is, if pure application of what we today think of as libertarian principles leads or replicates massive monopolies on land that prevent any kind of real independence from one behemoth or another, it will need to be reconsidered and reformed. What would such a reform look like? No clue, but fortunately we're not there yet. We have this new (or new-ish) thing to try, and in a world where it appears that respecting property rights and personal liberties leads to prosperity.
The only even close examples I can think of of this kind of thing being tried would be Chile under Pinochet. I know that a lot of Chicago school/monetarist/Mises/Hayek types went there to try to build some kind of rightish/libertarian "utopia," but that was firstly grotesque and secondly doomed to failure since it was a personal dictatorship designed to maximize and maintain the power of one person and of the state, and a military dictator no less, which is about the least libertarian thing I can think of. On the other hand, that shameful chapter did have a happier ending than most dictatorships, left or right wing, with him losing a referendum and stepping down. I believe today Chile is one of the most competitive economies in South America, if too dependent on mining.
I don't mean to be too glib here, but I think you'll be interested to know that this mass expropriation of land has actually been tried before, and even in the name of democracy. In the latter cases, it was done in many if not all communist countries, all of which claimed to be perfect democracies. We know the truth of that. To the extent that it has worked out with things like the Shenzhen area, that was from going back on such ideas about communal ownership.
It was also the concept that underlay many monarchies. The King was the owner of all land in the kingdom, and enfeoffed his vassals with such portions of the land as he elected on condition that they provide services and/or taxes. A mass expropriation actually did occur after the Norman invasion of England, when the Norman kings explicitly took ownership of all the land (I'm not super familiar with land tenure under the Anglo-Saxon kings, but I do believe the Norman policy was an innovation) and handed it back out to his cronies and a handful of English noblemen who were too powerful or too far north to ignore. When they rose up, that was corrected.
It was only after this system had been sufficiently eroded that things improved.
So I think one has more favorable antecedents than the other, and we should go with that one, especially on the scale of 59 acres.
I think the thing to say here is that there isn't one libertarian view. Some libertarians think you can derive the correct answer to every political question from the belief that everyone can do whatever they like with themselves and their property (provided they don't use their property to attack others, or to damage other people's property). Others have much more sophisticated views. But some of the definitions of liberty given by the former may indeed allow for a government that exercises super-strong control through property ownership.
Sure, you can go that road, but I'm mostly using "libertarian" to refer to a kind of deontic libertarianism popularized by e.g. Nozick.
> My emi-serious suggestion. Democratic governments should just claim all land in their jurisdiction as their property, and make it clear that it not owned, just leased out on conditions. The governments themselves should claim to be cooperatives jointly owned by their citizens. Then functionally equivalent rules to the property and tax laws that currently exist would count as a libertarian utopia.
This is kind of like solving medical malpractice by advocating that the doctor who messed up a procedure claim to own the physical body he was working on.
> all the land in the world has been stolen at some point, and after a while, Libertarians seem content to let the claims of those the land was stolen from be extinguished.
This is a misrepresentation of the libertarian position on titles.
> Perhaps this tells us that the libertarian concept of freedom is excessively formal/procedural and not substantiative enough.
It does tell us that your interpretation of such is like that.
No libertarian philosopher has ever given a deontically grounded and coherent account of ownership, transmission and origination of titles, counterexample free, which achieves anything like the objective of establishing that existing property relations are wholly or partially justified.
Locke and Nozick's accounts, for example, have been shot full of holes. To the extent that such accounts work, they often imply that there should be massive redistribution of ownership, or that we should "start afresh" and go from there.
In practice then, without a formal alternative framework, the really existing libertarian framework consists in treating existing property rights as mostly valid, unless a particular individual has a very recent and better claim.
Since existing property relations are mostly based on "theft" and the consequences of a market built on "theft", then, whatever their wishes to the contrary, the ultimate justifier of property relations for the actually existing deontic libertarian in practice is custom, time and, ironically, property law.
> deontically grounded and coherent account of ownership, transmission and origination of titles, counterexample free
*cough* https://slatestarcodex.com/2018/02/21/current-affairs-some-puzzles-for-libertarians-treated-as-writing-prompts-for-short-stories/ part III
> the really existing libertarian framework consists in treating existing property rights as mostly valid
I can't speak for all the libertarians out there, but I believe that if it can be shown that A appropriated B's land and sold it to C, then B is entitled to restitution; but the form of that restitution is a cash payment from A, not the return of the land from C, since C (or more likely Z, many transactions later) in most cases is unaware that the land was appropriated, and is likely to have placed a great deal of reliance on his use of the land. If that's not the case, then B can always buy the land off C with some of the cash. (Conversely, if the rule is that B gets the land from C and C gets the money from A, then C can buy the land back off B if it's worth more to him. But since this is more likely to need the trade to reach the highest-valued use, and causes a bunch of uncertainty, I think considerations of transaction cost lead us to prefer the version I initially described.)
But I also oppose instituting a reparation system like this under our current governance systems, because I have no confidence that it would be administered according to fair and impartial justice. Common law and custom provide a local optimum that's at least somewhat resistant to political manipulation, which is why I (and I suspect many other libertarians) favour keeping it around for now as a *temporary hack*.
I think this is a perfectly respectable as a position, but it sounds like you're leaving behind a strict rights-based view for maximizing something, thus going beyond the scope of what I'm objecting to here.
In my opinion, all valid deontologies are grounded in consequentialism. That is, the proper use of notions like "rights" or "natural law" is as a way to construct Schelling fences on slippery slopes, because we meat-heads are so bad at coördination that we can't even follow rule-utilitarian ethics ourselves, let alone codify them into law, without creating huge screwups through failing to properly account for uncertainty. ObEric: http://esr.ibiblio.org/?p=4878
Consider also the centrality of 'optimisation' to Yudkowsky's definition of intelligence. We all choose our positions on the basis of maximising something, it's just that not everyone is honest about that (even with themselves). In fairness, sometimes that's because the social control mechanisms used to coördinate that optimisation rely on belief in divine command or whatever — a widely-shared delusion can become load-bearing (possibly a spandrel/exaptation?)
I don't know whether it is even possible to get the vast bulk of society to understand the consequential reasoning behind libertarian positions; it may be that for a stable libertarian society, many people would need to believe deontically in the NAP ("strict rights-based view"), just as in (say) a Christian society the laity mostly believe in the divine command of (the priesthood's interpretation of) Christian morality, while the priesthood have different reasons. I hope this is not necessary, because the idea of 'fooling the people for their own good' is distinctly icky (it involves arrogantly assuming that one is _of course_ not fallible oneself, unlike those poor ordinary people; hence see previous remarks about consequential reasoning under uncertainty). But at any rate I am not prepared to criticise natural-rights libertarians too harshly, since their belief system might in fact be the best way for humans to live happily together.
“ No libertarian philosopher has ever given a deontically grounded and coherent account of ownership, transmission and origination of titles, counterexample free, which achieves anything like the objective of establishing that existing property relations are wholly or partially justified.”
Thats quite a sweeping response to the observation that you’re failing to correctly represent libertarians on their ideology.
“ Locke and Nozick's accounts, for example, have been shot full of holes. To the extent that such accounts work, they often imply that there should be massive redistribution of ownership, or that we should "start afresh" and go from there.”
Its fine for you to say those accounts are unpersuasive to you. “They have been shot full of holes” is just a value laden characterization essentially based on your dislike of those accounts.
“ In practice then, without a formal alternative framework, the really existing libertarian framework consists in treating existing property rights as mostly valid, unless a particular individual has a very recent and better claim.”
It took you a long way and a lot of unnecesary prior statements to get to the restatement of the basic fact “property rights are presumed valid unless disputed” which is not even a libertarian idea, just a consequence of the nature of property rights.
“ Since existing property relations are mostly based on "theft" and the consequences of a market built on "theft", then, whatever their wishes to the contrary, the ultimate justifier of property relations for the actually existing deontic libertarian in practice is custom, time and, ironically, property law.”
You’re conflating property rights under the current non-libertarian system with property rights as imagined by libertarians who are not even agents of the government. Its hard to see how you would be so sloppy if you were considering these ideas charitably.
"Its fine for you to say those accounts are unpersuasive to you. “They have been shot full of holes” is just a value-laden characterization essentially based on your dislike of those accounts."
I am describing the very near consensus of professional philosophers who have studied Nozick and Locke's respective theories in detail. It's a bit more than just a personal hunch of mine.
You're of course free to present your own account if you think you've got it solved.
""“ In practice then, without a formal alternative framework, the really existing libertarian framework consists in treating existing property rights as mostly valid, unless a particular individual has a very recent and better claim.”
It took you a long way and a lot of unnecesary prior statements to get to the restatement of the basic fact “property rights are presumed valid unless disputed” which is not even a libertarian idea, just a consequence of the nature of property rights."
These two statements aren't the same at all though, are they? Valid unless ("A very recent and better claim" [with claims based on a historical conception of distributive justice]) vs valid unless "disputed". All property claims are "disputed". You're conflating a strong and hugely debatable claim, that property rights are valid unless extensive conditions around a better historical can be met, with an absurdly weak claim, that property rights are valid if no one disputes them.
"You’re conflating property rights under the current non-libertarian system with property rights as imagined by libertarians who are not even agents of the government. "
No, I'm saying that actually existing libertarians already do this themselves by treating existing property rights as generally valid. The motte is a promissory note saying that a fully fleshed out historical theory of distributive justice will be provided, the bailey that is returned to once scrutiny is removed is just generally accepting existing property relations.
"Its hard to see how you would be so sloppy if you were considering these ideas charitably."
Language, please my dear.
"I am describing the very near consensus of professional philosophers"
an argument from authority seems to be an entirely inappropriate method of challenging libertarian doctrine.
"You're of course free to present your own account if you think you've got it solved."
I'm sure any difficulties you have with the orthodox account could be cleared right up if you articulated them.
"These two statements aren't the same at all though, are they? Valid unless ("A very recent and better claim" [with claims based on a historical conception of distributive justice]) vs valid unless "disputed"."
Presenting a claim (that you presume to be better [otherwise why would you present it?]) would be commensurate with the act of disputing it.
"All property claims are "disputed"."
Manifestly false.
"You're conflating a strong and hugely debatable claim, that property rights are valid unless extensive conditions around a better historical can be met, with an absurdly weak claim, that property rights are valid if no one disputes them."
Lets try it this way, what does it mean to you that property rights are "valid"? Is validity of property rights an objective thing that can be tested in a laboratory? Or is it a social construct?
"No, I'm saying that actually existing libertarians already do this themselves by treating existing property rights as generally valid."
That sounds like you're treating some subset of libertarians you have dialogued with as authoritative emissaries of libertarian dogma.
"The motte is a promissory note saying that a fully fleshed out historical theory of distributive justice"
Plenty of books on the subject but I'm not sure I have heard anyone since Ayn Rand claim that it was fully fleshed out, in fact the opposite.
"the bailey that is returned to once scrutiny is removed is just generally accepting existing property relations."
Your experience is not representative of the community or the literature, according to my experience.
"Language, please my dear."
I call 'em like I see 'em. Plenty of libertarians are opposed to indigenous expropriation, such as occurs today. Look up the Belo Monte Dam where the government expropriated the natives of land, again, even though those indigenous people should have untouchable title to their land. This stuff is still going on.
+1 to Philosophy Bear
I've been trying to make this same point for years now, although it never seems to move anyone. What's funny to me, is that in the US the government already allots land not as allodial titles, but fee simple, which in plain English means you don't, and never have, "owned" it in the way the libertarian-capitalist sense of ownership. This is why, for example, eminent domain or other taxes are not theft. To claim otherwise would be to demand a legal property right that you were never originally granted.
But since the whole libertarian gimmick is to define "freedom" as being anti-government coercion, but pro-private coercion (i.e., pro "property rights" in the libertarian-capitalist sense), they have to think of some reason why the government is uniquely *bad* compared private ownership.
And their go-to explanation is that the government steals from you via taxation and such, while private individuals don't. But even if we ignore the face-value problems with framework (for example, don't private actors also do plenty of actual theft, here in the real world?), the argument is simply untrue on its own merits! Even by libertarian-capitalist logic, the government has not sold the "bundle of rights" that contains "Power of Taxation" on its land titles.
(The second go-to argument for why states=bad and private property=good, is that they say you get to choose which rule of private property you are subject to, but you don't get to choose which rule of states. But obviously, people are born not just into states, but also onto private property holdings without their say in the matter. Literally no one [I'm pretty sure] is born onto a private property claim which they already own, as a newly birthed infant. And likewise, you free to leave both your state and your private property that you live under [once you turn 18 at least], so long as another state and/or private property claim is willing to let you in. So this distinction falls apart upon a moment's worth of thought. And for those of you who think I'm strawmanning here, Scott repeats this ridiculous distinction in this very essay.)
The libertarian position is that the government never had any right to that land in the first place. For this reason, libertarians will not be swayed by your argument.
Okay but why
And don't say "because they do taxes, which is theft because they don't have the right to tax, because they don't have a right to the land"
The libertarian position is that land rights are established through homesteading.
It's true that I didn't cover that base. Mainly because most libertarians in the rationalist sphere are of the Bryan Caplan persuasion, and have taken to abandoning that line of argumentation. (https://www.econlib.org/archives/2012/09/do_indians_righ.html)
The basic counter-argument to "homesteading" from the left, is that all sovereignty claims in the US were stolen from Native Americans during the 1500-1800's. So if state's sovereignty claims in the US are illegitimate because they weren't initially appropriated via homesteading+voluntary transaction, then private property claims must be so as well.
Caplan and Rothbard note the power of this arg. They counter that if no living victims exist and the person currently in possession isn't the thief themselves, then the title should revert to whoever current possessor may be. This is a fine work-around, but it has the side effect of disregarding the necessity of "homesteading+voluntary transaction chains" for BOTH private and state claims.
By taking this route, Caplan and Rothbard were able to rescue private property claims from "homestead" based attacks against their legitimacy, but only by throwing away their own ability to launch "homestead" based attacks against the legitimacy of the state. So yeah, I don't hear this often anymore, it's becoming a somewhat old-school arg.
But the private claims are still stronger than the government claims, because they have a basis in homesteading, whether or not that land was legitimately unowned prior to that homesteading, whereas government claims are (mostly) empty claims, with no homesteading. So one can reject the latter without having to reject the former.
I think almost every use of the phrase "the libertarian position" should be replaced with "a libertarian position." Don't expect ideological uniformity from the nonconformists' club.
Yes, it is my attempt at the strongest libertarian position given the constraints posed by the argument. No actual libertarians were harmed in the making of the counterarguments.
This seems a valid position for e.g. middle of USA, but it's not universally applicable - in the "old world" the equivalent of homesteading of unclaimed land happened before multiple radical regime changes, conquests, and mass redistributions of property, so there's effectively no land at all for which you could trace a legal claim to an original "homesteader" without multiple cases of what most libertarians would call theft. So if that's the criteria, currently *every* single owner of the land - no matter if government or private - has eventually obtained it from someone who stole it. Well, perhaps their great-great-great-grandfather obtained it from someone who stole it, but it doesn't change the legitimacy. *All* land around me has been stolen multiple times (and sometimes returned to the previous owners, again multiple times), and for a particular plot you could name many "rightful owners" depending on just how many centuries of thefts you're willing to look at.
Rothbard's solution to that is that if there is no clear rightful owner, the land is unowned and thus becomes homesteaded by the current possessor.
Among those libertarians absolutist enough about property to otherwise be vulnerable to your suggestion, approximately none of them believe that merely "declaring everything as your property" is a sufficient condition to own all those things.
In practice such absolutist libertarians don't have a properly worked out theory of property acquisition, transfer etc which isn't full of counterexamples and in the absence of such basically treat conventionally recognized property as legitimate. Until the promissory note of a fully worked out deontic theory of property rights is filled in, it seems to me that libertarians mean by property *that which is conventionally recognised as property*, even if they don't admit this. So I think the objection stands, because "whoever is recognized as the holder and has been for a long time" seems to be what they end up meaning in practice.
Again, at least till an alternative theory is worked out.
Reminds me of Andrew Yang saying that UBI would be like paying some dividends to its owners, the citizens.
> Perhaps this tells us that the libertarian concept of freedom is excessively formal/procedural and not substantiative enough.
Have you read http://daviddfriedman.com/Libertarian/Capitalist_Trucks.html ? The reason for libertarian ethics is that (if I may completely mangle the grammar) the ceteris are rarely paribus in practice.
Simply declaring the government's powers to be private-property rights does not work the magic of private property, any more than accounting for inputs in a state-managed economy with a bunch of made-up prices and profits works the magic of the price system.
👎🏻
Speaking of which, Scott: any word on regaining a “Report Comment” feature?
This seems like an interesting idea, but it feels like it won't scale up very well to its stated goals. They're specifically looking for professionals and remote workers to move in, and seem to have relatively high land costs (for Honduras). This may very well turn out great, but it'll just be a city of tech workers. I don't really see a good way for those in poverty to get a foot in the door.
I'm also curious how the education system will work. They have guidelines for how it should be run, but the schools will also be private? Is the government going to create some schools, and are they going to set the price or leave it up to the market? For that matter, almost half the taxes go to handling sanitation and power and similar, does that mean those will be subsidized in some way?
So Prospera says it will offer Honduras's poor a better life in neighborhoods untouched by violence and poverty... and I get the impression that anyone who breaks Prospera's social contract gets kicked out? Is that correct?
Somehow this reminds me of the charter schools that expel disruptive students and brag about their high test scores.
In other words, it sounds like Prospera will filter out anyone who doesn't function well in Prospera, which unfortunately might be a lot of poor Honduran applicants whose violence-afflicted lives have left them with all the flaws you would expect to see in people who bear the burdens of trauma and low education. This kind of dilutes my enthusiasm with Prospera's "win-win" claims that it's offering poor Hondurans a better life. Instead, I imagine cities like Prospera skimming the high-performing people (probably coming from good neighborhoods) and concentrating the ill and the troubled outside its walls.
I mean, considering the existence of cities that kind of parallel Prospera in some ways, is there another way to see this side of the issue? A counterargument, if you please?
A system that actually benefits the average Honduran (not just the high-performing Honduran from a good family in a good neighborhood) might, I imagine, offer services that would allow immigrants to learn new skills and repair the damage done to their mental health by growing up in one of the world's murder capitals. But who would put up the money for that?
It sounds like you're talking about Ciudad Morazán? They kick out people who don't follow the rules. At least in this description it doesn't really say what happens to people who break laws. Honduran criminal law still applies, so presumably they just turn them over to the relevant authorities. For civil issues, I guess they just have insurance for it, and if they can't pay, maybe then they get kicked out somehow? If it's mentioned, I didn't catch that part.
I do agree that it seems to skim off the top, if you will. I think the economic part alone will do that though, without even getting to the social aspect. But as you say, even if they solve the economic thing, you might have another filter where laws are actually enforced better in Próspera.
I think you're right- even putting aside the effects of economic disparity, the greater legal competence of Prospera will also act as a filter to catch anyone who was flying under the radar before they moved. Which is very sensible for a society that advertises itself as a bastion of personal freedom, since some people are bound to look at it as an opportunity to get with away with harmful activities they couldn't get away with back home.
Check that... reverse it. I think you're right about the econ bit too. BTW, are you, like, in the process of starting a blog? I clicked on your link and found, well, exactly what I would write if I were just starting to draft something bloglike.
Not at this point. I was mostly just testing out the author UI and making sure the extension didn't break it again.
Ah ok.
I'm not completely unsympathetic to this perspective. But I think the school analogy is a good one. You get forced together with some pretty awful (hopefully not literally murderous) people, they hurt you and abuse you and hold you back for a while and you're trapped there and there's nothing you can do, and you get told you're a bad person for wanting to escape them.
Then you escape and go found a commune with your friends who are nice people and all of you live happily ever after (or at least that was what happened to me).
I am kind of okay with people who are not murderous being able to go somewhere to escape the people who are murderous. I realize that the people committing the murders have a lot of trauma and that it's not cosmically their fault that they're like that. But someone being an abusive husband isn't cosmically their fault either, and I think their wife should be allowed to leave them if she wants to.
I see your point regarding the school analogy-- I mean, I felt pretty terrible when my parents got me into a private school on scholarship after six years in a very working class elementary school environment with lots of traumatized poor kids from rough families, but in the end I benefited from moving into an environment where I could thrive, and I want this for others. I agree, it's good for the abused wife to escape her husband (I'm still waiting for my aunt to do this) and for the kids from murderous neighborhoods to escape the murderous neighborhoods, even if there's a little guilt involved. There's a part of me that wishes I could go air lift them out of those neighborhoods right now.
But the thing that inspired my criticism is the fact that I struggled when I suddenly switched environments, and not for a lack of brain power. I struggled because I had a lot of baggage the people around me didn't remotely understand. And I acted out as a result, and I got put on disciplinary probation and threatened with expulsion. Things turned out fine in the end. I calmed down, pulled off some good grades, connected with my teachers, and really actually liked school a lot. But I've known a lot of non-murderous people who just couldn't turn their ship around, and they might have succeeded if only they had some kind of extra support. I'm talking about very bright people who floundered because they were overcome by their demons.
I truly, genuinely, want Prospera to work. It sounds exciting and it clearly provides amazing opportunities to anyone who can adapt to its system. But I also feel for the bright ones who are destined to slip through the cracks because moving from murder capital to utopia is bound to be challenging. Prospera isn't immoral for not solving this problem. But I wish it had a solution.
There *is* no way for a poor person to have a genuinely different life *other than* working very hard to overcome whatever circumstances and/or consequential character flaws have led to him being poor in the first place, and ipso factor most people who try will not succeed. TANSTAAFL.
Or in other words, if you're waiting for a system where all the children can be above average, you'll need to wait for The Rapture.
But it would be kind of nice if all the children who *can* be above average -- obviously far less than half of them -- actually have the chance to experience it, rather than everyone squatting in the mud of universal mediocrity waiting for a miracle.
You are right. Leaving poverty takes a lot of very hard work.
My point is that we can expect the average performance / functionality of transplants from a high-stress environment such as Murderville to be far lower than we would expect from more developed and less violent regions recruiting high-performing professionals to live and work in Prospera. This is due to trauma's effects on amygdala/hippocampus/PFC; drug affected babies; the higher likelihood of schizophrenia etc under stress conditions; the substandard education students get when their lives are constantly disrupted by violence and loss; the fact that the most ambitious and resilient Hondurans are leaving Honduras, etc.
Therefore the percentage of the poor Honduran population who is high-functioning enough to make it in Prospera might be lower than we'd expect when we hear the architects of Prospera proclaim that they are helping to lift the people of Honduras out of poverty. What they're really doing is letting people migrate through a filter.
Of course it's not unethical for Prospera to establish a system that doesn't benefit everyone around them. It sounds like Prospera will bring net-benefits to Honduras. If instead they said "An added benefit of our project is it will offer work opportunities for Hondurans" and left it at that, I would have no criticism to make.
It seems to me that lifting people out of poverty in regions with high rates of violence means investing in a lot of messed up people who won't yield enough of a return to make it profitable in the short term, with the hope that at least you'll prevent a few deaths and make it easier for their kids. If you know of an example of an entity profiting by improving prospects for the low-functioning poor, I'd love to hear it. The topic interests me because it's hard to find examples of this actually happening.
I think you meant to write ipso facto.
Sure, google "micro-lending" for some very interesting forms of low-capital-investment financial innovations that have had a real impact in the Third World while earning good (if not FU) money for investors. For that matter, the cell phone itself has had a transformative effect on populations that lack the Internet/computing infrastructure we take for granted in the First World. This topic isn't especially new (cf. E. F. Schumacher's famous book "Small is Beautiful" umpty years ago), and there are creative people who have thought about it a long time. I fear they sometimes disappear when you have big splashy ideas, like this one (and more power to it, but I am skeptical), or the One Laptop Per Child people.
Yes, it essentially always involves some kind of filter to pull out of the misery eco-system the people who *can* improve when transplanted somewhere else. I'm not quite as skeptical as you, I think, but I certainly agree some people are just hopeless cases and the best you can hope for is to impact the next generation.
Thanks. I've been meaning to read up on micro-lending. Also, decentralized banking via cellphones has made a huge impact on Tanzania where my father's family lives.
I think it's okay to solve some of the problems even when you don't solve all of the problems.
A charter or private school can provide a good education in a safe environment to some kids, but there are some kids who won't be able or willing to abide by the rules needed to support that, and they will kick those kids out. That solves a real problem (well-behaved kids who want to go to school to learn instead of to get terrorized by thugs, parents who want their kids sitting in orderly classrooms instead of loud and largely uncontrolled ones). It doesn't solve all the problems (badly behaved kids, kids with various special needs that can't follow the program), but that's okay--it's permissible to make the world a better place by solving some problems without building heaven on Earth--something nobody will ever manage.
In the same way, a private neighborhood or city that can kick people out for bad behavior, and that manages a non-corrupt, efficient private police force, might solve the problem of unsafe streets and high murder rates that exists now in Honduras. It won't solve all the problems, because nothing ever does. It won't solve the fact that people get mixed up into crime sometimes, and we'd like to save them from that. It won't solve the fact that some people have violent tempers or mental illnesses or drinking/drug problems that make them unpleasant neighbors. All it will do is maybe let the community keep most of those folks out, and convince the remainder to keep a lid on their bad behavior to avoid getting kicked out.
I agree with you about the ethics of Prospera and charter schools being net positive. I just don't buy the idea that Prospera will actually help end poverty in Honduras.
As Scott hopefully put it:
"Yes, this is about startup governments and investment opportunities and blah blah blah, but it's also about trying to fight global poverty by radically changing the rules of the game that makes it possible."
And I imagine the architects of Prospera really believe they are making life better for Hondurans. A small minority of Hondurans. Which is fine, but it's not the same as fighting poverty. Not until the rest of Honduras changes, which Scott suggested might happen in the same way that China made national changes after the success of Shenzhen. But that would require the Honduran government to follow through using the model of Prospera's urban experiment, which seems lower probability than China following through using the model of its own urban experiment.
It might still be the case that it's better for the less privileged people to have the more capable and privileged people move together somewhere, prosper, and payed the rest some taxes, than keeping them locked in a bad environment.
Shadowrun universe! Shadowrun universe!
I really like Shenzhen and its green fields in 1980 better than the city in 2018. I don't understand what's good in big cities with noise, pollution and crowds? I hope that Prospera will never be like that.
What's good in big cities is the people work to create goods and services, and transaction and travel costs are low because things are close together.
Maybe Shenzhen was better to look at in 1980 but the people living there were much richer in 2018.
The good thing about cities is all the other people living there who can do stuff for you (and buy stuff from you)
Some cursory searching says that it went from being a market town of 30,000 in 1980 to a metropolis of 20 million in 2019. That's *fast* and I wonder how the original people felt about that change? A bunch of bureaucrats hundreds of miles away decide your town is going to be a Special Economic Zone and attract foreign investment. Millions start pouring in over the years and it certainly has changed vastly. It's a very impressive achievement but yeah, I too prefer the green field Shenzen.
Most land is not cities, so people who don’t like cities have plenty of options.
My understanding is that most Chinese are understandably thrilled about becoming 10x richer over a generation.
Yes, but if you concentrate on cities, the rural areas get neglected and lose many services. In my childhood I lived in the countryside (in Latvia) and it had more services available in nearby villages then – schools, hospitals, libraries, shops, public transportation etc. Gradually roads were improved, people got richer and could afford cars. The available local services were reduced due to efficiency because now people can go to the city when needed. Eventually they decided to move to cities altogether and I just don't understand. It's not that we had not need for more efficiency in the past. Maybe previous generations valued their environment more than money?
My understanding is that a pretty constant trend in ~all human civilizations has been people moving into cities because it turns out that being near lots of other humans is really valuable in a lot of ways (I think mostly because people who specialize in one skill are way way better at it than people who try to do everything for themselves?)
I think in the past it was not technologically feasible to move as much to the cities (e.g. cars help make this more feasible), rather than people in the past having different values.
Another factor is the decline in population growth in much of the world. Urbanization without population growth naturally implies rural depopulation.
Workers move where their labor is needed. A century ago - and in Latvia even a couple decades ago, due to USSR farming policy reasons - farming needed much more people than today, so many people had to live away from others - now the primary production can be effectively handled by much fewer people and everyone else has a choice. The remote countryside has always had less services and cultural options than various population centers, there's a natural drive towards urbanization (even in e.g. classic Mesopotamia) that has been historically limited by the locality of farming/mining jobs.
'Most land is not cities, so people who don’t like cities have plenty of options' Presumably the existence of large cities changes what options are available elsewhere, for better or worse, so it's not as simple as that. (Though I am personally fairly confident having large cities is a net benefit to humankind.)
Why should the feelings of the original 30,000 trump the feelings of the 20 million - 30,000 who moved in?
For the same reason that the feelings of the non-shareholders don't matter one s*** about the shareholders of a company deciding to issue more shares or not — because the true stakeholders aren't the outsiders wanting to impose their way, but those with original skin in the game.
Well, that reason is not persuasive to me, and apparently it isn't persuasive to the Chinese. Oh well.
Most of those people are actually wealthy, from what people say.
I understand the benefits from big cities but those 30,000 original residents are just 0,15% of the current 20 million that practically it doesn't even matter and no one even cares if they liked the previous life more. People who moved in probably never saw what the place looked before. But showing how the place has changed over time is like a question which one do you like more and I prefer the old one.
I agree that Shenzhen is terrible. "Be like Shenzhen" is an awful ambition for any city. It's an ugly, smoky, polluted hellhole populated almost entirely by dormitory-dwelling factory pseudo-slaves and ruled by a genocidal dictatorship.
The idea of building a rich first-world city somewhere, on the other hand, sounds nice. I like beautiful rich first-world cities.
That is complete nonsense. Have you ever even been to Shenzhen? It is not "smoky." It's got blue skies almost every day. It's got clean water. It has many attractive parks. You are completely uninformed.
My family's been there and they would second this. It's got parks and a decently blue sky. Definitely not smoky.
>Próspera is well versed on the myriad environmental, climate, and humanitarian concerns with automobile traffic. As such, Próspera hopes to enable the creation of the world's first truly affordable and safe air taxi system between its various Prosperity Hubs through the use of VTOL drones.
And they expect VTOL drones will be better for the environment? Powered flight uses much more energy than ground vehicles.
For me, this is a big signal that they haven't thought things through.
That, and the utter lack of any mention of how this population will get fed and watered were huge for me. One of the primary things that eventually torpedoed the Millennium Villages was the persistent difficulties of getting adequate water to the towns--something the project didn't really appear to think about while loftily dreaming about modern classrooms with laptops. While the problems here are not as complicated as finding water in sub-Saharan Africa, quick googling is telling me that about 1/10 of Hondurans experience chronic food insecurity, and 15% of the country does not have access to clean water. They are hurdles the project will have to overcome (and they are achievable hurdles, don't get me wrong)...and yet they're promising VTOL taxis that don't even exist yet, and not explaining where their food and water is going to come from. If you're going to import it all, that's quite expensive. If you're going to grow it, where and how?
Probably not a major issue on the resort island starting zone, or at least not until the population is significantly larger.
Potentially not, but it seems like the sort of thing that should be accounted for (it's torpedoed at least one similar project!) And snazzy visuals of vertical aquaponics are all the rage among the cohort that would bite on this sort of project, I think, especially if you then boast about how you can grow enough food to provide aid to Honduras or something.
Given that the idea *is* that the population will grow significantly larger, and given that this project seems so concerned with not harming Hondurans, the lack of any discussion of food or water strikes me as very odd. A tenth of Honduras cannot get enough to eat; whether or not wealthy foreigners moving here will take food from them seems like the sort of thing thing sort of project ought to be taking into account at this stage, especially before going to "and we're not going to have a ferry, guys--we're going to have FLYING TAXIS."
Sure, but the whole point of a libertarian paradise is that the government doesn't do those things. It relies on (1) the fairly universal desire of people to have enough to eat and clean water to drin, and (2) private ingenuity and private organizations to arise in order to supple those at a price everyone is willing to pay. The argument in favor of the proposition is that as soon as you try to execute these things in a top-down way, via government, you introduce such horrible inefficiencies and opportunities for parasitism that you get...well, the Honduras...with one tenth of the population struggling to get enough to eat et cetera.
Whether this hypothesis would be backed up by empirical data is the point of the experiment, I think.
You can't do all that within one square mile of libertarian paradise. Your sewage treatment plant, your dump, your power stations and your farms are just too big and too smelly. They'll have to be in Honduras proper.
No argument. But I think they're trying to come up with a structure that can work even if they get much bigger. Almost certainly planning far too far in advance of their reality, but...well, people wanting to cadge investment dollars (or people) are like this.
Their government is leaving the questions of food and water to their residents to figure out, while spending their time and power wrangling flying taxis and expensive modern architects?
Well, that would explain why every "libertarian paradise" attempt has ended in laughable disaster...
Well not running water, that's part of city infrastructure so Jane Jacobs (the general contractor building infrastructure) will take care of it along with roads/electricity AFAICT.
For food I'm counting 3-4 grocery stores withing walking distance (<2km) of the site. That probably works fine for the first couple thousand residents.
Well that's not *quite* as nutty as it sounds. The thing is, food and water are extremely basic concepts with an immediate payoff (you don't starve to death), so even the shortest-sighted private enterprise can probably deal competently with it.
On the other hand, flying taxis, looking at this as a metaphor for big technological advances, is the kind of *long-term* payoff investment that private enterprise often neglects, because of the risk. Government is about the only institution that *can* have the very long time horizons and tolerance for capital investment risk to successfully contemplate these things.
That's why we can rely on Pfizer to optimize mRNA vaccines to deal with COVID, but the *original research* into mRNA 20-30 years ago had to be funded by government -- Pfizer would never have done it, on the off chance that it would pay off in 25-50 years.
I realize this has about boo to do with the particular government structure at hand, which is tiny, but I think the general point is worth making. That is, food and water are such basic human needs and so obvious in terms of whether you're doing it right that the libertarian argument that it should be left in individual private hands is strong: there's not much of a collective action problem there, and humans have figured out how to do it without massive social structures (like government) for millenia. But very long time horizon stuff -- as a species, and on the private level, we are not so good at this, and getting that right *is* something, in principle at least, which government can usefully do. (Of course, there's no guarantee it *will* get it right, alas.)
They're not claiming to be self-sufficient, and they're not even saying that they'll try to be so. What's wrong with importing food and water? Why would it be "quite expensive"? The "true" Honduras is extremely close, there's no prohibitive transport expenses, for someone in Prospera buying food from Honduras is just as expensive as for a nearby Honduran.
Also, the Hondurans who experience food and water insecurity don't do so because Honduras lacks agriculture or water, they do so because they're very poor and can't trade their labor for adequate compensation (or receive social services from Honduran society) - in that regard, if a neighboring Prospera city is importing some food, the revenue only helps the poor Honduran farmers. And those Hondurans isn't a problem that Prospera is trying to solve directly - they aren't adopting an existing population with whatever mix it has, they're starting from scratch at an empty place and selecting a population to immigrate there; anyone who can't afford food or clean water won't be able to join Prospera as they won't be able to afford the application fees.
>1/10 of Hondurans experience chronic food insecurity
This is true of the United States too:
>In 2019, 89.5 percent of U.S. households were food secure throughout the year. The remaining 10.5 percent of households were food insecure at least some time during the year, including 4.1 percent (5.3 million households) that had very low food security.
Source: https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/food-security-and-nutrition-assistance/#:~:text=In%202019%2C%2089.5%20percent%20of,than%202018%20(11.1%20percent).
>And they expect VTOL drones will be better for the environment? Powered flight uses much more energy than ground vehicles.
At this point, most of the people developing "VTOL drones" are developing battery-powered electric VTOL drones. And that's probably feasible for intra-Prosperan and Roatan-La Ceiba use.
It does raise the question of where Prospera's electricity is going to come from, but that's true regardless of what their transport infrastructure is going to come from. If the power plant has to be inside the special economic zone, that's probably going to be diesel generators. If they can get the economic zone extended offshore, maybe offshore wind farms? Don't know whether the prevailing winds are reliably strong enough. Otherwise, they're going to be dependent on electricity coming from non-Prospera Honduras, which could be a problem.
Unless they cleverly negotiated their agreement to leave it entirely up to the Prosperan administration what sort of nuclear reactors they're allowed to build in Prospera, but I doubt that's going to work out well.
> And they expect VTOL drones will be better for the environment? Powered flight uses much more energy than ground vehicles.
Energy is life, and use of energy is good for the environment and for us, not bad.
https://www.amazon.com/Where-My-Flying-Car-Memoir-ebook/dp/B07F6SD34R
Thanks for posting this! I need to read this in-depth some other day (it's past midnight in my timezone), but from a skim I have to say that regardless of the specific government shape in Próspera, I hope this'll work out better for Honduras Próspera Inc than the French Polynesia prototype seastead deal worked out for The Seasteading Institute.
My understanding is that some Honduran economists came up with the idea independently of Romer, then after they heard of Romer's charter cities they recruited him to provide prestige-by-affiliation. When that failed it struck me that there's an obvious conundrum for this approach: it's supposed to be most useful in countries with terrible governance, but you can't expect a terrible government to tolerate your charter city rather than screw it up like they do everything else.
That is not obvious. Even individuals are capable of recognizing that they need a certain kind of change or help, but are unable to do it themselves, and so make a decision to turn over their fate to some external agency to effect the change. We might think of the ZEDE experiment as the nation-level equivalent of checking yourself into the Betty Ford Center.
So are charter cities = trying to install Liechtenstein in part of your country?
Is there any way to invest in prospera?
The sections on education and health care are both numbered 7.2
I was going to quibble over some details, but first: This is an excellent case for the moral urgency of new jurisdictions. The fact that Scott captured this aspect so powerfully is the most important aspect of this post.
Quibbles:
1. Everyone gives Romer credit for coming up with the idea. But I knew dozens of people who were talking about new jurisdictions with higher quality law and governance long before Romer. Octavio Sanchez, the primary architect of this legislation within Honduras, gets some credit in this for having his own vision separate from Romer in this NPR piece,
https://www.npr.org/sections/money/2012/11/09/164813887/episode-415-can-a-poor-country-start-over
In addition to Sanchez and several of his colleagues, who had worked on Hernando de Soto land titling issues in an earlier administration, Mark Klugmann, an American advisor to the Honduran government, was also involved in the early design of the project,
https://leapzones.wordpress.com/
The story I got from Sanchez, Klugmann, and others when I was involved (I led Grupo MGK, the entity that signed the first agreement that led to Romer pulling out), was that they had pretty much had the idea developed when Romer did his TED talk and they then realized he would be a powerful external advocate to push the project across the finish line. Everyone else involved had always envisioned a partnership between Honduras and a private entity - Romer's one innovation was to promote an external government as guarantor, which everyone regarded as way too neocolonial.
Milton Friedman was discussing the idea of a "Hong Kong" in Mexico back in the 1990s with Ricardo Valenzuela, a Mexican banker, who was scouting sites along the US-Mexico border back then. Mark Frazier, a free zone industry consultant, sold me on this concept around 2003. Bob Haywood, former ED of the World Economic Processing Zones Association, was promoting a similar concept much earlier. Giancarlo Ibuerguen, deceased former president of UFM, had this idea much earlier as well. I'm missing dozens of people with whom I discussed these ideas prior to Romer. Once one realizes that poverty is caused by dysfunctional governments, it is not a big imaginative leap to realize that a jurisdiction with higher quality law and governance is the next move. Zone 2.0 had been in the air for a long time - without the neocolonial aspect of Romer's version.
2. Scott's other ahistorical comment is here, "But if someone did own an entire city, and you chose to be in that city, theoretically they should be able to make whatever laws they wanted, and not even the most zealous libertarian could protest. The issue hadn’t really come up before. But here we are."
There is a large libertarian literature on proprietary communities that has been discussing these issues for many decades. Spencer MacCallum and his grandfather Spencer Heath were early figures, but for those following this literature this is an old issue. Anyone familiar with HOAs gets the basic idea.
3. The most accurate description of both the origins of the Honduran legislation as well as the dispute between Romer and the Honduran government is this article,
https://reason.com/2013/05/13/the-blank-slate-state/
We had the Honduran government sign a formal statement saying that the Transparency Commission did not exist before signing an MOU with them. Romer's vision was for a $5 billion city with a foreign nation as a guarantor. I spoke with a leading industrial park owner in Honduras who had met with Romer. When Romer told him that was trying to raise $5 billion, the businessman asked, "Do you have your first billion raised?" Romer said, "No." The businessman replied, "It is not going to happen."
While I give Romer credit for promoting arguably the most morally important idea of our time, his version of the project was never going to happen. Small, quick start, privately run projects are far more realistic than are grand, state-managed megaprojects. The Hondurans were smart to go with a framework that allows countless such small scale experiments.
Re 3D property rights - yeah New York has a hackish system of "air rights" that formed organically when somebody wrote a deed for the part of Blackacre above the rooftop of the building currently standing there, and the deed registry said "sure, why not?" I know of only one example of this actually being used to put a building on top of another, that being Madison Square Garden (owned by the Dolan family) above the underground Penn Station (owned by Amtrak). More often this is used to transfer zoning rights from a lot with a short building to one where a taller one is going to be built, either by actually deeding the airspace over or by declaring two lots to be a single one for zoning purposes without an explicit transfer. A full explanation would require diving into NYC's convoluted zoning rules, beyond the scope of this post, but suffice it to say it increases the already big economic incentive to leave the current rules in place as opposed to my preference for ripping them up and letting a thousand Equitable Buildings bloom.
There are also two common ways that ownership of parts of an individual building can be transferred, without all this voxel nonsense. One, mostly unique to New York, is cooperative ownership, in which the leases on units of the building are tied to shares in the corporation that owns and manages the whole thing. The other, which exists nationwide, is the condominium, where each unit is a separate transferable parcel and the "common elements" are managed by an association of the owners. Condos are much more common in new construction, while co-ops are generally buildings that predate the condominium act of [looks it up] 1964 or to former rental buildings that converted to common ownership. I'm in the process of buying a co-op unit, which unlike a condo requires board approval for the sale, and let's just say I can see why condos are the norm everywhere else.
Given that condominiums have existed for over half a century, I'm sure there's plenty of precedent on what to do when 99 out of 100 units want to tear it down and build something new and the 100th stubbornly refuses. (Checking the New York condo law - dissolving a condominium requires 80% approval, though the condo's own rules may require a higher proportion, perhaps even unanimity.)
I might have read your post too quickly, but I must have missed the part that keeps Próspera from having the same murder rate as the rest of Honduras, especially given that they are obliged to use Honduras's criminal justice system.
If I'm understanding right they can have their own police force/private security, so (assuming they can run it better than mainland Honduras) they could potentially deter crime better.
That said they don't seem to have a lot of specific ideas for how to do that (except maybe "our people will be richer so they'll be able to hire more guards", which might work).
They'd be a plum target, too. Hard to know which way that would shake out.
The real question then is who keeps you safe from the private police force. Especially if you're poor
Castle walls.
I had this question as well. I assume that there will be essentially a gated community for Prospera, but Roatan was pretty crime ridden at least when I visited. We rented a house outside of a resort and it was broken into the first night we got there while we were out to dinner. The police took two days to show up and take our statement.
I don't know if it will work in practice, but I think a big expectation is that the type of people who will move there (or afford to move there) will not be criminals or tolerate criminality. It's very hard to be a criminal - especially a low level thug type - without community support in terms of a place to live, basic necessities, etc.
If criminals are somehow removed from the community and the incentive is for non-criminals to move into the community, the crime rate could be very low.
Given that it's located within a country with such a high crime rate, what stops the crime spilling over into Prospera? I guess the individual corporate and residential buildings will have private security, but people considering moving to Prospera will want to walk safely through the streets at night without being attacked by criminal gangs from the next town.
The city itself contracts for private security (from a company already providing private security services to resorts on Roatan, Bulldog Security). Also Roatan in general is (apparently) much safer than mainland Honduras.
"Also Roatan in general is (apparently) much safer than mainland Honduras." That's what I'd expect for a fancy tourist area.
Semi-relatedly - why is El Paso one of the lowest crime rate cities in America, while its Mexican half has incredibly high crime rates? And is there a way to replicate that here?
I lived in El Paso for 2 years. My understanding is that the basic reason is that they have a very high number of police per capita and pay them very well. They're also separated from Mexico by the famous 20-ft high fence, although many of my patients were smugglers or others from Central America who fell off the fence trying to cross.
Of course, on the other side of the border is Juarez, which is relatively violent. But these cities are in two completely different countries with two different legal systems, so it is no surprise that crime is quite different as well. My understanding is most of the local Mexican crime stays within Mexico because it is not profitable for various reasons for the criminals to bring that violence or other crime to America.
That is interesting. To clarify the weird thing to me isn't why el paso has lower crime than Juarez, it's why it has low crime by american standards (despite having high poverty and low education rates, which would generally correlate with high crime).
From your description it sounds like maybe having Juarez right there across the border is a motivator to take it seriously and have an effective police department.
This is not a bad theory.
Two other random things I know are that (1) the violent crime rate has been rising a bit over the past few years in El Paso and (2) multiple native Pasoans believed the police were goosing the issue by ignoring property crime in many neighborhoods in order to make their numbers look better.
I have no idea about the epistemic status of (2). I suppose if they could cook the nonviolent reports, they could just as easily cook the violent ones.
Hyde Park, on the south side of Chicago, wherein lies the University of Chicago. Within that little enclave, it's remarkably safe (for Chicago). Outside, particularly to the west, it's like Lebanon during its civil war.
Shenzen had literal fences: "To enforce law and order in the city, the Shenzhen government erected barbed wire and checkpoints between the land borders of the main sections of the SEZ and the SEZ outskirts, as well as the rest of China, in 1983, which was known as the second line". These were taken down in 2010, but imagine Prospera with its own version of "The Wall" to keep out the criminals and gangs from Honduras proper.
I would recommend a 200m belt of antipersonnel mines instead. Cheaper, easier maintenance, and doesn't block the view.
Is this facetious? I can't tell.
A city, measuring roughly a square mile in area that's highly autonomous and is exempt from many laws that apply to the sourrounding country. Where have I heard that before? (https://www.youtube.com/watch?v=LrObZ_HZZUc)
I wonder whether, like The City, Prospera will grow until it becomes the CBD of a much larger urban area, with more people commuting in from normal Honduras than there are residents. (note that 80% of votes for the Common Council of the City of London Corporation are cast by commuting employees rather than residents)
In that case, I hope they've worked out how to provide interfaces between prospero and the rest of honduras for services like public transport.
"Próspera wants to give these people a better option by bringing American-style institutions to Honduras."
But these are not American-style institutions, at least not when it comes to political institutions. Próspera, as you note, is not a democracy, what with the (unelected) 4 HPI council members; my understanding of American (and Western) institutions is that one of their most fundamental advantages is democracy itself. And the institutions are also different on what might be considered the "positive" side, like the weeklong referendum possibility and the like.
I think there are a host of other issues related to charter cities, but this seems the most fundamental: it is not trying to give the native population the same rights (in particular, political representation) that those in Western democracies have, but seem to suggest that those rights can be looked after by benevolent Westerners. Which seems to be anathema to the very institutions on which Western countries pride themselves.
What am I missing?
To put things a little more sharply, but I can't help but think in these terms: couldn't charter cities essentially be called "voluntary colonialism"? Perhaps one could argue that this is an oxymoron, but there are many arguments against colonialism that don't seem to necessitate it being an involuntary arrangement, especially relating to political representation and accountability.
Couldn't immigration essentially be called "voluntary invasion"? If you don't have a good intuitive feel for something, and you reach for examples to compare it to, you can always find examples of things that are bad.
I think "invasion" is specifically negative due to it being involuntary on the part of the invaded, whereas as I noted I think there are criticisms of colonialism that apply irrespective of whether it started "voluntarily". In particular, while I realize this is only one view, I believe a fundamental objection to colonialism is that it lacks political accountability and representation, and we simply do not trust the benevolence of the colonizer, no matter how supposedly enlightened, to act on behalf of the colonized. The British after all had a good claim to have one of the most, if not the most, "enlightened and benevolent" institutions in the West during the colonial period, yet its rule is still viewed critically, even if e.g. Indian self-rule was (and remains) rife with corruption, violence and poverty. Indeed, it seems to me that democracy tends to be counted as both one of the most fundamental elements of "Western institutions" as well as one of the most crucial to their success.
But all this aside, do you not agree that there is a problem with saying that the Prósperans will be living under American-style institutions when they will not be living in a democracy they elect? Economic institutions are one thing, but certainly political institutions are a big part of the institutional story, no?
If they immigrated to America instead, they wouldn't be able to vote either (until/unless they go through the very lengthy citizenship process). Próspera will provide at least that much of American institutions. In fact, it'll provide more given they can vote for a lot of the Board.
When people refer to "American-style institutions" I think they have in mind the institutions American citizens live under, not the institutions toward non-citizens. I don't think the idea is that America is successful because of how it treats non-citizens, but that American institutions are good for its citizens.
I'm saying all this under the premise, under which I believe "charter cities" are founded, that a major reason for the success of Western countries is their political and economic institutions. That's the entire reason to try to carve out a space for those institutions for the betterment of the people. I'm personally not entirely convinced by this idea. But even taking it at face value, that means that the people in the charter city should be placed under the supposedly successful institutions in the West-- which does not fit with the institutions as put into practice here.
Firstly, there is a terminology dispute here. When talking about institutions, I guess Scott refers to what the government does, not how the government is chosen.
The more important question is whether democracy is prerequisite of getting Western-style results when it comes to what the government does. For a counter-example, until recently, Hong Kong had Western-style (or freer) institutions under China and previously the British, not only regarding the economy, but also personal liberty.
The main reason to like democracy is that it definitely almost always works better than dictatorship. But should we expect the proposed Prósperan system to come with the typical disadvantages of dictatorship? I have a few arguments that we shouldn't:
• It's not a democracy, but neither a dictatorship. Neither the elected council members nor the appointed ones could do much without the cooperation of the other.
• It would be subject to Honduran criminal law. The human rights abuses typical of dictatorships would run afoul of it.
• Strong exit options: everyone would have a country he could legally go to; in the case of Honduran citizens, the rest of Honduras would be a few kilometers away, with no language or culture barrier.
Since it would differ from both democracies and dictatorships, there is no immediate reason to expect it to function like a dictatorship, but that doesn't mean we should expect it to function like a democracy: it means we can't estimate what it would work like based on existing political systems. It's mainly because of the exit options that I'd expect it to function relatively well.
I think there are lots of cases in which people voluntarily waive their political representation. For example, you may live in an apartment complex with no rights over how it is run, or join a company with no rights over how it's run, or send your kids to a private school with no rights over how it's run, or join the military with no rights over how it's run. In all these cases, it's okay because you join voluntarily, and have the right to leave if you want (well, except the military). It would be easy to make apartments, companies, and private schools that do give the people involved rights over how it's run, and some places do, but there is relatively little demand for this, and most people prefer the places that don't.
This expands the same situation to cities (or maybe province-level entities, Prospera seems like more than "just" a city). I don't think a Martian approaching the situation with no prejudices would say it's obvious that schools and companies don't need pure democracy to work, but cities/provinces do. I think it's a different system, one which has worked well in other environments, and it's worth checking to see whether it will work here too.
I fully understand and I think I may not have clarified my main point well, sorry about that.
There are perfectly good arguments for prosperity and welfare without democracy, whether examples like Singapore or the fact that almost every wealthy country today industrialized when it was not a democracy.
But it remains the case that these are not American or American-style institutions, because a major aspect of American institutions is democracy. Maybe you meant economic institutions, but many (e.g. Acemoglu and Robinson and the like) would argue that political and economic institutions are strongly linked, so at the very least political institutions are a significant part of the picture to be noted. I actually think that your analogy to joining a company is apt: to me this project seems more like Amazon choosing where to put its headquarters than anything else-- and that does lead to real good, which I don't dismiss. But I don't think this fits the "marketing" so to speak of charter cities, which is about carving out a space for "good" institutions drawn from the successful cases of America/West/wherever in the midst of "bad" institutions, because I don't think these institutions represent what American/West/wherever actually have.
This may sound like a quibble over the term "American-style institutions", but it gets to the heart of the problem I have with the way charter cities tend to be framed. This is not an implementation of Western institutions; it is inviting people to live under dictatorial institutions that may do some good. And I think that's something that is often only clear when one looks at the fine print (as you did when e.g. noting the significance of the 51% eligible voter referendum clause).
I think an underlying idea here is that voting with your feet is a better guarantor of good outcomes than voting with a ballot. But I have no idea what the best governance structure for a private city is--I'm not convinced that it's an elected city council hiring a professional set of managers (a common way small-medium US cities are run), say, but I'm also not convinced that's *not* the best solution. I'd say experimentation is the only way to work out the answer/
You should look into the Marxist term "comprador bourgeoisie" and other criticisms of colonialism and neocolonialism. "Neo-Colonialism, the Last Stage of Imperialism" by Kwame Nkrumah may be helpful for you.
Who owns the colony in your example? Honduras, American-style institutions you refer to below, or the corporation?
I don't know if it's an "example" per se, but the colonizer here is the corporation: it decides the rules and institutions (with some limited input from the people), it extracts some amount of profit, it is essentially the "sovereign" for all intents and purposes. So in the framework of the colonization analogy it is the "mother country" (as Switzerland was supposed to be in the original idea).
You’re overrating the importance of democracy relative to the rest of the “better institutions”. China and Singapore aren’t very democratic, but they are pretty economically successful.
I strongly disagree and know many others who would as well, but this is besides the point. While you can argue that democratic institutions are not necessary for prosperity, which is perhaps the main goal here (one I do not dismiss by any means), you cannot then argue that the Prósperans are then living in American-style or Western-style institutions. And because the institutional story is so crucial here, with the idea being that we need to carve out a space for "successful" institutions in the midst of "unsuccessful" ones, it's crucial to note that the (political) institutions you'd be putting in place are not in fact those that govern any Western or indeed nearly any successful economy in the world.
(Singapore's institutions are not fully democratic but they are nothing like what is described here, and by my understanding from a study in 2016, it was the only non-democratic, non-oil-rich country in the world above a certain income, so it's not clear that its lead can be easily followed on this)
Can someone direct me towards a thorough explanation of Singapore's system of governance? Some articles portray it as a somewhat autocratic on social issues but basically sound democratic system that has never been tested by a transition of power. Others make it sound like something more similar to modern day China, where despite democratic sounding committees and elections etc, they are functionally a dictatorship. I think it stands to reason that they're the most important case study for people interested in specially zones cities like Prospera, and yet I haven't found a SSC style lucid explanation of their system as it actually operates.
I unfortunately don't have a much better external source than freedomhouse.org, but from conversations with a Singaporean I worked with and various other materials, I think it could be described as the ultimate "illiberal democracy", i.e. a democracy in the sense of free voting but none of the other trappings we generally associate with democracy such as free speech or a level playing field between the ruling party and others. So, for example, gerrymandering is used extensively to minimize the political clout of any area that votes against the ruling party; elections take place within weeks of their being announced, and the ruling party is able to use media and such to a far greater extent than any other party; demonstrations, media and speech are heavily restricted though not prohibited entirely.
The upshot is that it can claim to be a democracy, and indeed if the people overwhelmingly wanted to vote out the ruling party, they could, but they would have to overcome a huge number of hurdles to get there. But there's an argument to be made that this leaves enough space for accountability and concern of being tossed out of power that some of the mechanisms of democracy do take place there.
But I'm far from an expert and would be glad to hear other views. That said, as mentioned before, Singapore is literally a unique case-- being the only wealthy non-democracy, non-oil-rich country in the world-- so I don't think it would be wise to rely on their example in a political novelty like próspera.
I suggest the *successful* American (and indeed Anglosphere) institutions are *not* founded on democracy at all. Having everybody involved in every decision, constantly debating and voting on it, is a recipe for stagnation, paralysis, and tribal rage, as any number of online "communities" demonstrate beautifully these days.
The successful Anglosophere form of laissez-faire republicanism is better described as a punctuated democratically-validated oligarchy. Roughly speaking, at regular intervals we elect a bunch of practical mostly non-idealistic scoundrels, who proceed to rule in a mix of legitimate and sleazy ways while we go about our ordinary lives largely blissfully unaware of government -- nobody attends City Council meetings except weirdos and obsessives -- and when next we're given an opportunity to vote on the scoundrels, after a few years, we say 'sure keep going' if things have been pretty A-OK or throw the bums out if not.
The key part of the whole business to me seems to be the benign neglect of what's going on between elections, where we don't inquire closely (or even at all) into *how* the oligarchs are getting stuff done, we just judge 'em on the results at intervals short enough that they are motivated to indeed get stuff done, but long enough that they have time to act without the constant bickering, factionalism, and committee-borne paralysis that plagues democracies with a highly active demos. Kind of like the old Roman Republic model perhaps.
Indeed, my observation over my political lifetime (~35 years) is that far more people are deeply involved in political thought and debate every day than they were long ago -- and our republic functions much more poorly, with more alarming lurches away from values of individual liberty and mutual respect and cooperation. For that matter, most of the modest-scale (dozens to hundreds of members) of pure democracies I've experience have been exhausting and exasperating experiences, in which only antisocials and nutcases who live to argue thrive.
Either way, I'm sure you'd agree that whatever we call American/Anglosphere institutions, they aren't similar to what is being planned for Próspera. Especially the part about being able to "throw the bums out" per their outcomes.
Well, a better question, given this is founding a new institution, is how close they are to what the earliest American settlements were like. And actually they're not super different -- the earliest American colonies were pretty autocratic. Kind of a survival necessity, until you generate enough experience and social mythology ("we do it this way because it worked in the past, and now everyone understands that").
I agree that their (Prospera's) imaginations of what will work 50 years hence, if they succeed, are almost certainly laughable -- many of the early American compacts and agreements on governance did not survive that long either, particularly when reality (e.g. cold weather) exercised its vote.
I don't think these institutions are particularly close to early American settlements (I honestly don't know to what extent any modern institutional arrangement can be), but I also don't think that the charter city philosophy of importing "good institutions" has those of early American settlers in mind. Admittedly I think this is a broader problem with the charter city idea: what we consider today the most fundamental and praiseworthy elements of Western institutions-- democracy, free speech, equality before the law, etc.-- were rare to nonesxistent in the periods when the West became the dominant force in the world, so it's hard to argue that these are the keys to emulate for countries to achieve success as the West did. But in all this I'm trying to take the underlying premises of charter cities as given and show that this framework does not work even under those assumptions. I also think the assumptions are questionable, but that's an entirely separate and much longer debate.
Judging by the number of Americans who bother to vote in local elections, democratic town government is not terribly important to American-style institutions. How the interaction between the democratic-ish Honduran government and the not so democratic Prosperan authorities goes, will be more important (and uncertain).
Right, I'm mostly thinking of this as a system mostly independent of the Honduran institutions, closer to an independent state than to a town within an existing state. Naturally to the extent that it's subject to the Honduran institutions it kind of defeats the purpose (at least in terms of the broader charter city philosophy-- it can still improve welfare and provide jobs in the same way that a corporate headquarters would).
But, between the constraints of its agreement with Tegucigalpa and those of its own constitution, not independent enough to do any of the things that really motivate Americans to vote in national election. The things the Prosperan government can actually do, are mostly things a US city government can do. And Americans are mostly content to ignore their city government. In part because they trust that if it does anything *too* outrageous, the Feds will set things right, and in part because it's easier to move to another city than to undertake a democratic reform movement.
The founding generation of Prosperans will by definition be people who are comfortable moving between nations in pursuit of friendly local politics. And the Honduran government will almost certainly send in the army if e.g. the Prosperan elites that it's really all about tricking poor Hondurans with promises of good jobs and then turning them into caged medical research subjects and sex slaves.
The important question is the extent to which the Honduran government will intervene in the case of lesser deviations by the Prosperan government from either what the Prosperan people want, or what the Honduran government wants. The ideal case for the first generation is I think for Tegucigalpa to keep its hands off as long as they get their cut, there aren't any grade-A human rights violations, and nobody is stopped from leaving (with their personal wealth and property).
I don't really know what "things a US city government can do". Without doing any extensive research, I'd guess that the range of what US cities can and can't do is extremely large, and that what Honduran cities can and can't do probably fall in a similar range. I also don't think a corporation more or less running the place is similar to any arrangement, city or state, that I know of. So I don't think that gets us closer to "American-style institutions".
In the end, you can say that the effective institutions in Próspera will be somewhere between the state institutions of Honduras and the corporate-dictatorship-hybrid institutions of Próspera. To the extent that the latter dominates, it's far from American institutions because of the aforementioned reasons; to the extent that the former dominates, we're back with the supposedly failed Honduran institutions. But nowhere here do I see anything that gets us closer to the institutions Americans live under.
I'll say again that I think that this experiment can be justified as a a kind of "Let Amazon move its headquarters there and give it wide berth in designing a company town". If a rich corporation is moving in it may well create jobs, clean spaces, etc., which can be valuable. But I think it fails at the idea of being a more ambitious upgrading of institutions. At best, this is a radical new experiment to see if a corporation can run a polity, not "what happens if we transplant American institutions in the middle of Honduras".
"If you got all the laws and values just right, maybe you could prevent poverty and corruption from finding their first footholds. Do the "liberty and justice for all" thing, but for real."
Well, yeah, that's lovely. Except - until we get actual robots who can do all this stuff, and we're probably getting there - there will be the need for people to sweep floors and empty bins and do that kind of manual labor/lower level white, pink and blue collar jobs.
And they're going to be housed in places that are not near where the rich people live, and they are not going to be the same as rich people houses, and they won't have access to the same levels of entertainment and service as the rich people, because of course not. This is not to say they won't have (reasonably) nice houses and the possibility of a health service and all the rest of it, but you are going to have inequality built in to your nice, shiny new city.
And out of inequality does come poverty and corruption, because after a while... well, the rich and smart people are the productive ones, right? The ones who make things happen? While the poorer people - you can get them three for a pound. They can come from anywhere. Giving them relatively nice things costs money, and that may be money they don't make up. So you have to take it from your rich, smart people and why do they have to pay more than their fair share to support the non-productive who don't make things happen and who don't create value and who will probably be replaced by the robot flying cars anyway within a couple of years?
So the poorer places get that bit less nice. You build the housing that bit cheaper, pack them in a bit more densely. The rich, smart people get first pick of the nicest things going - because they're worth it! and they genuinely are!
And then we get the "well, do the street sweepers really *have* to live in Prospera itself? Can't they just, like, come in on buses from outside to their jobs, then go back home on those buses in the evenings?" and here we go round the mulberry bush again.
"But they’re also interested in poorer Hondurans looking for construction and service jobs, and expats after a slice of paradise on a tropical beach."
Uh-feckin'- huh, I bet they are. Because expat and immigrant labour works so beautifully and non-abusively in the Emirates https://en.wikipedia.org/wiki/Treatment_of_South_Asian_labourers_in_the_Gulf_Cooperation_Council_region or the German gastarbeiters https://en.wikipedia.org/wiki/Gastarbeiter or that thing with the Windrush generation in Britain a couple of years back when Caribbean immigrants who had been enticed to work in the UK due to a labour shortage and had been in the country for decades were suddenly told "you may be deported as an illegal immigrant" https://www.bbc.com/news/uk-43782241
"They included Ronald Reagan’s adopted son, the foreign minister of Oman, US low tax campaigner Grover Norquist, and - in case there was a single conspiracy theorist anywhere in the world not already on high alert - a member of the Habsburg family. I would say this raises a lot of questions, but really the only question anyone had at the time was “what?”
Out of that entire project, my feeling that the *least* problematic element was the Hapsburg 😀 If you're going to build a fantasy kingdom, why not have a genuine Imperial head of state?
The *idea* is lovely and I really would like to think it could work, but my fear is that it would either be a boondoggle, or end up some kind of combination tax haven/investment dumping ground where rich foreign nationals sink money into buying up expensive apartments etc. as a means of getting their fortunes out of the claws of their own government.
"
> Except - until we get actual robots who can do all this stuff, and we're probably getting there - there will be the need for people to sweep floors and empty bins and do that kind of manual labor/lower level white, pink and blue collar jobs.
Yeah, that sounds bad. Better let those poors die a poor and violent death instead, right?
> or end up some kind of combination tax haven/investment dumping ground where rich foreign nationals sink money into buying up expensive apartments etc. as a means of getting their fortunes out of the claws of their own government.
Sounds like an excellent plan, primarily because, that way, those rich foreign nationals can compound the growth of the wealth they create, much faster than they could do back home. 7% tax savings is a doubling of wealth within a few years — and that wealth is productive wealth, not just some bars of gold stored somewhere that don't contribute to the economy and well-being of everybody else.
> This is no different than what everyone on the outskirts of every city in the world has had to experience as those cities grow, but it’s another possible bad thing. At least if you’re a renter there. If you own property there, I guess you’re now super-rich.
Theoretically super-rich, maybe, because of increasing land values, but in practice suddenly everything got super-expensive around you, your lifestyle is threatened, and you're basically forced to give up on your home and village and community. And even these theoretical riches are not guaranteed, as people in such places are often taken advantage of and driven away from their lands for a pittance by real estate companies, because they're not used to large land transactions like this especially under such dramatic changes and the Fear, Uncertainty, and Doubt that these companies create in them for this reason.
Not saying anything about the project overall, but I've seen this particular story of expanding cities or otherwise increased land values play out too many times to believe that it's going to be a net positive for the current owners of the land or make them "super-rich".
> Theoretically super-rich, maybe, because of increasing land values, but in practice suddenly everything got super-expensive around you, your lifestyle is threatened, and you're basically forced to give up on your home and village and community
Is that a big deal? I don't live in the place I grew up. Most of the people I know don't live in the places they grew up either.
That fishing village nearby speaks English - which is, in effect, an obscure local language. Those people aren't from some other part of the country. I'd bet most of them have the same last names as the village's founders.
Ha, I half expected a comment like this. Urban people in general don't think much of having to uproot yourself and move your life elsewhere, and similarly the richer someone is the less they think it matters (and this seems to apply doubly so with Americans). But people in rural communities, on the poorer end, have a lot attached to their locality and the community built there and their identity as part of it. Their "country" is a small fact that affects their lives in some ways, but their village and community are what they really think of themselves as belonging to. So it's on the scale of being "a big deal" as someone being exiled from their country and asked to start a new life in a different one.
If you're a poor person in a long-term rural or urban community, the main resource you own is connection to a community of locals that know each other and help each other do things. The biggest actual problem of gentrification is that as these people are priced out, they don't all simultaneously relocate to another neighborhood together, so all the people lose their one resource and have to start over in a new place with both no money *and* no social connections.
Middle class re-locators at least have money when they arrive in the place without social connections.
"The idea behind charter cities is: Shenzhen, Dubai, Hong Kong, Singapore, and the rest of the rich world aren’t rich because their citizens are morally superior to those of their poorer neighbors. They’re rich because they have better legal systems, less corruption, stronger rule of law, and more competent administrators."
I think this misses the fundamental reason why these places succeed. It's culture. All of the laws, respect for laws and competence flow from the norms and behaviors embedded in the culture. This means a culture that emphasizes strong nuclear families, delayed gratification, an aversion to violence, an affinity for high social trust, education etc.
It is why immigrants from these types of cultures can move anywhere in the world and thrive, whereas people from cultures that lack these attributes often arrive in competent systems and don't thrive.
Unfortunately, culture is a lot harder to fix than a corrupt parliament or incompetent politician.
Not that culture doesn’t matter, but this claim doesn’t make in context?
So Shenzhen just had a massive cultural change starting in 1980? Dubai had a really large culture change too? That’s what explains their rapid success? Hard to argue that imo
They had good cultural software but bad institutional hardware. Once the hardware changed the cultural software was free to thrive. The point is there are some cultures with bad software and changing the hardware makes little difference. Whereas other places with good cultural software will eventually adopt better hardware as we've seen in India and China.
The reason I don’t buy this is that don’t think you’d be making these arguments 50 years ago. This view of Chinese and Indian cultures as “good” is new, and I think
Culture is endogenous to institutions as well: Shitty institutions do not reward “good” culture. If the payoff to hard work is low, people will do it less.
Again, I don’t think that culture doesn’t matter, but I think that if you have terrible institutions, you can’t plausibly discern what is the underlying culture vs. the effect of those bad institutions very easily.
And you can’t just look at success of different immigrant groups: You need to compare people coming from the same “class” from different groups, if you want to even try to do this disentangling.
But regardless, it’s quite obvious that good institutions help even if your “culture” is not conducive to economic success. See work by Acemoglu and that whole literature.
But I could also make these arguments 200 years ago and a thousand, when Chinese culture equaled and surpassed other cultures on the planet. China rose and fell as emperors opened and closed trade, just as Western cultures rose and fell as rulers embraced liberalism or tyranny - but they did rise when allowed to. The cultural software was conducive to rising.
And I don't buy the argument about 'class' of immigrants at all. Vietnamese, the Hmong and Koreans arrived in the US with absolutely nothing after devastating wars. How long did it take for them to rise? Now compare to refugees from Somalia who have arrived in a much richer and more welcoming America with vastly more expansive welfare support. Over 80% of Somali migrants live in or near poverty today despite arriving in the 1990s.
The Vietnamese thrived in America just as they are thriving in Vietnam today now that free markets are back. Now of course there's a positive feedback loop between culture and institutions, with the latter influencing the former. I'm just saying that fundamentally real change can only come with cultural change.
A few counterpoints:
1. I'm not talking about the state of America when the migrants arrived, I'm talking about the class of the immigrant when they arrive. So the fact that (poor) Somali migrants came here in the 1990s doesn't affect my argument. By comparison, Nigerian immigrants are one of the most successful groups in America - This is largely explained, imo, by the fact that Nigerian immigrants who arrive here were wealthier and more highly educated when they arrived.
2. Hmong are not a high-achieving group in the US at all.
3. I don't reject the argument that culture matters, but the idea that good institutions won't have a positive effect on a place because the culture is bad seems silly to me.
4. You state that culture influences institutions. But you ignored my point, that institutions influence culture as well. That seems trivially true to me: If you're in a civilization where you are not allowed or are unable to reap the rewards from education or hard work, your culture will evolve with this in mind.
But ultimately, it seems like you are trying to make the point that good institutions can't help groups with bad cultures, and that Hondurans have a culture that is not conducive to success, so the project will be useless (or something). Again, I would argue that these things are hard to disentangle, and not static. A lot of factors influence success: Geography, history, culture, institutions, luck. All of these affect each other. But I firmly reject the idea that good institutions are not important and cannot help.
No matter how ambitious or hard working you are, if you grow up in a place with an extremely high murder rate, extreme corruption, where the returns to hard work are low, you're going to have a much lower chance of success, and all of the positive cultural features you emphasized are going to be diminished.
Wait, Chinese culture 200 years ago is relevant to modern Chinese culture? I would have thought that for the things that matter, cultures change far faster than that.
Shenzhen was a success due to Hong Kong's culture, not Shenzhen's.
"America is a better place to live than Honduras. This isn't because Americans are smarter, or harder-working, or morally superior. It's because Honduras has bad institutions."
Again, why do second-generation immigrants from Central America lag other Americans and immigrant groups in education and salary? Why do poor migrants from India and China excel while those from Honduras struggle? While in America they are subject to the same institutions, so why the differences? The answer of course is culture, beliefs and behavior. And these characteristics are fundamentally what makes you 'smart.' Smart people do things that improve their lives.
Hondurans in America make about six times as much money as Hondurans in Honduras, so it goes both ways.
Isn't that like saying someone will travel faster in a plane than on a cart? The point is that there are characteristics of cultures that make them thrive or fail - that lead them to invent a plane or a cart. It's the awareness of these characteristics, and acting on them, that makes people 'smart.'
Look, I firmly believe that a Honduran has the same potential as an American or immigrant from India. But I don't believe they will reach this potential if we pretend that an external force is holding them back, instead of some fundamental yet changeable set of beliefs.
To make the argument pro-Próspera, you only need to argue that a non-negligible part of Honduras under development is explained by poor institutions, corruption, etc. This seems like a pretty safe bet, even if there are cultural factors contributing to Honduras underdevelopment too.
That's a really low bar, considering the US has 25x the GDP per capita of Honduras.
On a PPP or nominal basis? And is 6 even a big number? If poor immigrants from the Chinese hinterland make 100x what they did at home, then 6x isn't the positive evidence it might seem to be.
Nominal. Is the Hondurans in America vs Hondurans in Honduras income comparison PPP or nominal?
Well then. I expect the cost of a really nice house in Honduras is a tiny fraction of what it costs in Irvine, ha ha.
Immigrants from Honduras are from different class groups than immigrants from India and China. The US largely only allows highly skilled Indian and Chinese immigrants in, whereas Hondurans are much more likely to be poorer, refugees, etc. I think a lot of those cultural arguments ignore that aspect.
There are more illegal migrants in the US from India than from Honduras. In any case, the gaps in attainment persist into the second and third generations. I don't know why it's so difficult to accept that different approaches to life can result in different outcomes.
https://cmsny.org/publications/essay-2017-undocumented-and-overstays/
I’m shocked at the negativity in these comments. Prospera sounds awesome!
We're a cold, cynical, hard-hearted bunch, 'tis true!
Many of us have seen ritzy ads like this before. The city doesn't even exist yet; of course it sounds awesome.
I agree with the sentiment, but that doesn't make me negative about it, but neutral (it's neither good nor bad, as more likely than not it will go nowhere), or rather slightly positive (it probably goes nowhere, but on the off chance it does, it's much more likely good than bad). I feel like those who are negative generally have different objections than "it will go nowhere".
There's always more possible comments to write on the theme of "How things could go wrong" than "I guess that would be pretty nice if it all works as intended".
This comment section is full of lefties that hate libertarians, brown people, poor people, and modernity. What did you expect?
Libertarians, sure. Modernity, eh, maybe. Lefties who hate brown people or poor people? Seriously? Name one.
Every one of those lefties who (secretly or openly) wants Próspera to fail — because they hate libertarians and don't want to see libertarian ideas prove their ideology wrong — *ipso facto* hates brown and poor people, because Hondurans are, by and large, both brown and poor, and a Próspera failure would mean the obvious thing that Hondurans would not benefit from its success.
That was not difficult to deduce.
Most of the lefties don't say they *want* Próspera to fail in the sense that it's allowed, but it works out badly. They predict that it *will* fail. Or they want it to fail in the sense that it is not allowed, because they believe that if allowed, it will turn out badly for the locals.
Now, I wouldn't be surprised if some of the lefties secretly wanted it to turn out badly; to be honest, I sometimes have similar feelings (with political sides swapped). I think the reason for these kinds of feelings is that they believe that these kinds of policies would work badly in general, and that if Próspera worked out well, it would probably be a fluke; but if it works out well, it will be widely used as an argument for similar policies elsewhere, which will do more harm in total than the good done to Próspera itself. Not that they hate brown or poor people.
It wasn't hard to deduce what that comment was trying to say, but it was a highly uncharitable and bogus accusation.
This always seemed strange to me, because Slate Star Codex wasn't like this. The SSC commentariat was <i>much</i> more right-wing. Given the fact that ACX exists because Scott got into a tiff with the (left-wing) New York Times, I would have expected the political shift to go the other way. What's up with that?
It's because I've been too busy with real life to comment much since ACX was founded ;)
Most of the right wing commenters have stayed on DataSecretsLox, which was a forum established in the interim. The moderation is much more right-friendly than the old SSC, and probably than here as well. Scott has a link to it under bulletin board near the top of the page.
I don't see it
Envy? If Prospera were being built 20km from Commenter X, and he were sufficiently young and mobile enough for it to be entirely practical to take advantage of it, if he chose, you might see both less broad principled hostility and at the same time more pointed practical questions.
It sounds a lot like a 50 acre resort/tax heaven. Albeit with some cute housing pods for the menial workers. Nothing wrong with that but it sounds like they are trying to pitch it as something grand and society changing.
Any medicine approved in developed countries is approved in Prospera. Any licensed professional from developed countries can practice in Prospera. You can build according to any country or locality's building codes. Disputes are handled through private arbitration picked by the parties in advance. This sounds like *a lot more* than a 50 acre resort/tax haven.
The licensing reciprocity is nice, although a doctor has to be from a developed country. In Dubai a doctor can get medical reciprocity easily, and they have excellent doctors from Iran, Thailand etc- undeveloped countries . And with abortion being outlawed in Prospera it seems that medical professionals are allowed freedom until they offend the local regulatory authorities. And the doctors must choose what country they are going to be regulated by, so for example one might have the freedom of a French doctor, minus the ability to do abortion or access French medical infrastructure and drug market. Sounds like more red tape. So for medical stuff I am skeptical, and arbitration deals etc are just what you would expect in a tax heaven.
I agree!
(Trey here from the article)--I expected comments like this; it's always easier to try to poke holes in something than to build something of value for others. I have been cathartically reading the Hacker News comments on Brian Armstrong's original post about launching Coinbase as a useful reminder that people literally always respond to new things this way.
Cheers to building!
Seconded.
Thought it was really cool when I read it, but didn't have much to say; maybe there are many people in the same camp.
The whole prospectus here about what marvellous things will be built reminds me of the Sunday Friend who works for the Moralintern in the game "Disco Elysium". All the wonderful jargon about the wonderful progress that is going to happen someday, just you wait, if everyone is good and obedient and follows the plan, meanwhile Revachol (the Martinaise district) is deliberately left as a slum hellhole to remind everyone of what the Coalition did in the past and can still do if anyone gets any pesky ideas about not being 100% down with the technocratic business industrial city re-invention.
And I'm a Moralist/Centrist in the game myself! But I really disliked this guy:
https://www.reddit.com/r/DiscoElysium/comments/fca3io/the_sunday_friends_little_slip/
Thank you so, so much for citing one of the greatest computer RPGs ever created.
Currently playing through the new updated "Final Cut" version. Having voiceovers for the different skills is disconcerting, but at the moment I am still enjoying it greatly.
I can't tell you how many of my choices have been influenced by "yeah, I *could* do this, but that would disappoint Kim, and I don't want to disappoint Kim". I think everyone who plays this game ends up ride or die for Kim Kitsuragi 😁
I maintain that VTOLs are a stupid idea that will never work (for noise pollution reasons if nothing else), but aside from that this sounds potentially exciting. Unlikely to actually work, but also the sort of long shot like SpaceX that could be pretty big if it did.
Has anyone else done things like this? Yes. Seasteading and the Chilean Galt's Gulch were failures.If this is the libertarian experiment that works, it will be because the libertarians aren't having everything their own way.
Is there a good way to invest in this, or make a financial bet on its success or failure?
Aside from moving there?
That'd be a pretty big investment.
Look at where financiers live. Do any of those places look like Prospera?
Perhaps I'm missing something, but it's unclear to me what prevents an unworkable number of Próspera's underprivileged neighbours from flooding into the city and bringing their problems with them. In the same way that Próspera's residents can easily leave if they would prefer to live elsewhere ('Honduras is 500ft away'), why wouldn't almost every local Honduran seek the vastly higher quality of life offered next door? I understand that - to some extent - this is the very purpose of the ZEDE's existence, but there inevitably comes a point where the city can no longer support more residents on its limited acreage. In this situation, I don't see any reason to think Próspera would escape the same kind of immigration issues which most rich territories bordering poor territories tend to face, while also lacking - as far as I can tell - the kind of security measures usually in place to counter such demand. This being the case, it seems probable to me that Próspera will either not become a large-scale success, or its success will precipitate a decrease in the standard of living which it can provide.
In practice, if the town is successful, then the average Honduran won't be able to afford to live there.
Well, that's what you pay these guys for - that and making sure any gangs who get ideas about moving in on the turf keep out of town and instead run the provision of unattainable leisure services from across the water in Honduras proper https://www.constellis.com/
Both Irvine and a lot of the other places mentioned have actual or planned architecture that seems soulless or silly, with some of it in Roatan making me think that the architect grew up watching "The Jetsons" and always dreamed of building something just like it. Irvine looks dreadful. Maybe if you grew up in a place where the landscape was dominated by steel and glass rectangular shapes, this looks cool. If you actually want a human life, it's horrifying. Take a look at traditional architecture that has lasted and that people like, after centuries, and you'll see something much more attractive. There's a problem with architects. They mostly grew up in awful places. If you go to Bali, where most people grew up in a lovely place, almost any house or small hotel is more attractive than almost anything in the horrorshow modern cities that blight the world. We should learn from them and from the beautiful towns of Greece, Italy, and Spain. This stuff is all going to look weirdly like the Seattle World's Fair of 1960, if it is ever built. "What hicks thought the future would be like."
Wright's houses still look pretty kickass. I'm up for more wild innovating in architecture, it's a field with a lot of recent innovations in tech that create untapped potential, but large investment costs and correspondingly slow experimentation
"I don’t envy the PAC if they have adjudicate disputes involving, say, a doctor who has chosen to be regulated by the medical code of Norway suing her office building regulated by the laws of Houston, Texas."
Yes indeed, this was the main thing occupying my thoughts as I read through this article. One can't help but imagine that it will be very expensive to resolve legal disputes in Próspera, and I worry then about access to justice for the cleaners and cooks who live there. I don't know that much about modern libertarianism but I can't picture Próspera providing good free legal representation?
I was wondering about this too. Seems likely that the local arbitration agencies would develop their own set of precedents on how to interpret Norwegian regulatory law, and actual Norwegian regulators would have no interest in fixing their misinterpretations and making it work the way actual Norwegian regulation does.
A more specific question: how does tort law work? If you make a contract, you can choose an arbitration tribunal, OK. But let's say you accidentally damage your neighbor's property, without any preexisting contractual relationship between you, and you can't agree on an arbitration tribunal. Does it go to the PAC? And what guarantees that the PAC will make a fair decision if, say, either you or your neighbor is associated with the same entity that appoints the judges of the PAC?
IIRC there is some mechanism for using the American Arbitration Association instead under some circumstances. I don't know if those extend to a tort claim between to nominally private parties in Próspera itself on the basis that Próspera can't be impartial.
I... I want this to be possible. I want this to work. I want the world to be a place where a bunch of visionaries can set up something like this and it becomes the envy of the world.
I will bet at 10 to 1 odds that it won't work. I really wish I was invested enough to come up with reasonable and testable metrics for "won't work", so that I can be systemically virtuous about that claim. Instead I'll just sound out my reasoning. They have a golf course and three buildings. Most golf courses with three buildings do not go on to revolutionize city government. Technically, they have a golf course with three buildings, a website, some very nice pictures, and three thousand pages of totally untested legal codes.
You might object that they have top tier talent, wealthy backers, resources. They have had those for years, and what they have produced with those resources is a golf course, three buildings, a website, and three thousand pages of totally untested legal codes.
I will not be shocked if this succeeds, I will be confused. I will suspect foul play.
systemically->epistemically
I think the golf course is a neighbor. I don't think they have it.
This seems like it might actually be somewhere I'd want to live if I worked remotely, and they competently execute their vision. There's some small but important stuff they'd need to get right in order to make it really attractive though:
- Low latency high bandwidth internet. StarLink might help a lot here.
- Reasonably fast shipping of random consumer goods available in first-world countries. Ideally this might look like having a US address where you can ship anything to and then having some kind of air freight deal that forwards all packages that arrive at that address to Prospera within a day or two via the hold of a regular flight. This would also presumably help them a lot with latency on getting things like schools and businesses built and set up.
- Not-unreasonable air travel to US destinations. Hopefully this is mostly sorted by it already being a vacation destination.
- Ensure someone has a business doing short-term furnished AirBnB rentals so you can try out living there for a month without committing to a big move.
If they nail execution on getting the actual buildings built, and get those things right, I can see it being a pretty nice place to live.
The case for being bored here is that the path of least resistance for Prospera is to become a hub for some high tech industries that feature particularly low labor intensity. Think data centres and finance.
Why? Prospera has a population of basically zero right now. All of the examples of special economic zone success had populations to begin with. Labor already lived there, so the lowest friction option was for those people to live under the new system. Living under the more liberal system an ecosystem of businesses emerged at different levels of capital and labor intensity because of the range of people and bank accounts that were there. For Prospera, we should ask who is most likely to want to be there.
The answer seems to be those with the most capital. The costs to move to Prospera and to live there are fairly static, but the benefits should scale well with earning potential due to the low taxes ans strong property right. Since no businesses currently exist there the benefits actually scale with capital to create earning potential.
So in a place with no labor and high earning potential for capital, what should we expect to see? Capital intensive business that requires little labor. That's the boring take. Propera will succeed at becoming a regional business hub, but will fail at all the interesting things it wants to do like becoming a model for how poor people can become rich people.
At least for the medium term I think the best case for Prospera would be kind of like another Bermuda, Caymans, or Jersey. A well managed place for tax avoidance and regulatory arbitrage inhabited almost exclusively by high skilled upper income people (Bermuda and Grand Cayman are not all upper income but they are also entire islands).
Yeah. It's based on a resort island, its neighbours are all tourist trap types of places. It'll be the city for rich smart people who fancy living and working on a 'tropical island paradise' site - if they can solve things like the power supply https://www.cubiclethrowdown.com/10-things-i-wish-i-knew-before-i-moved/
Links post a few days ago: "Here's an article about problems in the planned city of Songdo."
Today: "One of the people who worked on Songdo is also working on this project, so it seems like they've got the right sort of expertise."
Sure, Songdo is probably doing better than anywhere in Honduras, but it does make me wonder if this guy is going to learn from his mistakes...
So one major concern that I didn't see addressed here is that large parts of Honduras are basically controlled by a couple of criminal networks. The biggest ones are Mara Salvatrucha and the 18th Street Gang (both started in Los Angeles, which is a longer story). These groups are treated as normal street gangs by the American media, but in Honduras and El Salvador they are more akin to what Isis is in Afghanistan. They are more powerful than the government in a lot of the country, and they operate kidnapping and extortion networks. They also commit a lot of murders. That is a big part of the reason that the US sees many more refugees from Honduras and El Salvador than from Guatemala or Nicaragua (which are comparably poor countries, but the criminal networks aren't as widespread there).
So won't the foreigners who move to Prospera be really good targets for kidnapping by these groups? Won't Prospera inevitably become part of the extortion/shakedown economy, unless the Honduran government somehow becomes more effective at cracking down on these groups? Honduras would seem to be one of the worst places in the world to start a planned city for digital nomads with lots of beautiful architecture.
Private security to discourage any gangs with notions of kidnapping rich foreigners. The island itself seems pretty okay as far as that goes, and it looks like the Honduran government doesn't want to kill the goose that lays the golden eggs so it invests in safety:
"Roatán and the Bay Islands are geographically separate from the mainland and experience lower crime rates even when compared with other Caribbean islands. However, visitors have reported being robbed while walking on isolated beaches. Thefts, break-ins, assaults, rapes, and murders do occur. Additionally, illegal drugs are for sale in many of the popular tourist areas during the evening hours.
The government lacks resources to investigate and prosecute cases; police often lack vehicles/fuel to respond to calls for assistance. Police may take hours to arrive at the scene of a violent crime or may not respond at all. As a result, criminals operate with a high degree of impunity. The government places specially trained police forces in areas tourists frequent (e.g. the Copan Mayan ruins and Roatán)."
So - ordinary Honduran on the mainland, or even deemed-to-be-rich foreigner: not that great and you're out of luck with the cops, buddy. Tourist areas that generate a lot of revenue - much better, package tour companies know the ropes and keep the visitors in the safe places and the cops are motivated to make sure nothing happens to the golden geese.
I don't know what the situation would be if a new development with wealthy foreigners as permanent residents set up, that might seem like tasty pickings for gangs to move over from the mainland, but by the same token I'd expect *plenty* of beefing-up via private security contractors to avoid this very thing.
The question will be what is cheaper, paying private security, or paying protection money. Or the latter disguised as the former: the private security company will be one of the gangs under a different name.
I love this post, and I love the idea of Próspera. I think it could probably make hondurans 5-10x richer and much freer, and probably better off than any other system I know could make them. But not to the level of singapore (probably not even to the level of Mexico). I have to nitpick on some depressing IQ related themes because truth is a very high priority terminal value.
Perhaps it was wise to not comment on IQ stuff the OP -- it could perhaps alienate some leftists that you were trying to convince. But I'd prefer you left it out entirely instead of actively denying that intelligence is one of the causes of utility differences between countries: "America is a better place to live than Honduras. This isn't because Americans are smarter, or harder-working, or morally superior. It's because Honduras has bad institutions."
Honduras has bad institutions indeed, but it also has people with an average IQ of 81, and some of the highest criminality in the world, either ignorantly or willfully voting for corrupt and horrible politicians. The people collectively bear some of the blame for the institutions they created.
Singapore doesn't just have better government than its neighbors. It has an IQ of 108 compared to Malaysia's 93. That's about the same size as the US black-white IQ gap or the Finland-Turkey IQ gap. It is populated mostly by overseas Chinese (descended from a self-selected sample of Chinese who were a bit smarter and more enterprising than the average Chinese because they chose to migrate out of China).
Honduras has an IQ of 81. That's almost as much dumber than Malaysia as Malaysia is dumber than Singapore. With even the best institutions in the world, they're not going to rise that high in international rankings.
If Honduras' GDP per capita ever got to $60k+ like Singapore is now (in current dollars adjusted for inflation, anytime in the next 30 years, without strong AI or genetic engineering or a natural resource windfall or a huge in-migration of higher IQ peoples) that'd falsify my views of race and IQ.
It'd be like finding rabbits in the precambrian. If it happens, I will donate half my net worth to malaria prevention.
I would be even willing to generalize it to cover any Singapore-isomorphic transformation occuring in any country with an IQ below 90. Fifty years to 80x GDP per capita, ending up richer than the US, without strong AI or massive oil or massive eugenic migration or massive genetic engineering. If It happens anywhere, I donate half my net worth to malaria prevention.
Related graph. Y axis is GDP per capita, X axis is a composite of standardized test scores. The only dumb countries that got really *rich* are the ones whose economies are mostly oil. https://imgur.com/a/j6JgLOa
One more thing: if you don't have a problem with a ZEDE having admissions criteria and enforcing them, then you shouldn't have a problem with a regular state having admissions criteria and enforcing them. The US is a good place to live partly because of its ability to deny entry to the 5 billion people who'd rather live here than wherever they're currently living. There isn't anything magical about the dirt over here. The people create the institutions.
It's possible to raise children's IQ about one standard deviation with early childhood education. That reduces what seems genetic to, basically, nothing, except for a few groups that have extraordinarily high cognitive endowments (most notably Ashkenazi Jews).
Look into Project Headstart's DISTAR projects. They did it. Could be done again.
Childhood IQ gains mostly disappear by adulthood (I would say completely based on the sporadic research I've seen but I think epistemic humility is important).
Less than one standard deviation, and the difference from controls fades away quickly after they graduate from the program. Nobody has found any large and long-lasting intervention (or set of interventions) that raises IQ more than 5 points except avoiding EXTREME malnutrition.
The second sentence is just untrue man. Aside from the well-known Flynn effect- the IQs of first & second generation Italian, Irish & Polish immigrants to the US were quite low, but increased over the decades. https://www.jstor.org/stable/pdf/6403.pdf The black-white IQ gap has narrowed over time https://journals.sagepub.com/doi/abs/10.1111/j.1467-9280.2006.01802.x There is some evidence that Ireland & East Germany, in becoming wealthier, saw even more dramatic increases than the 'normal' Flynn effect (remember that in the US, scores increased 22 points from the 30s until the 21st century! https://scholar.google.com/scholar_lookup?journal=International+Journal+of+Testing&title=American+IQ+gains+from+1932+to+2002:+The+WISC+subtests+and+educational+progress&author=JR+Flynn&author=LG+Weiss&volume=7&issue=2&publication_year=2007&pages=209-224&)
It is simply a standardized test, so of course its scoring is affected by family wealth, stability, nutrition, obviously education, experience & confidence with other standardized test, etc. Your statement is easily disproven
I said INTERVENTIONS, as in variables we can control and replicate. Not gesturing vaguely at the Flynn effect. The Flynn effect exists, but it's not on g and nobody knows exactly what causes it and it's dead/reversed in developed countries. All the randomized trials of actual INTERVENTIONS show small temporary benefits that fade away into nothingness by adulthood (if they even bother to do a follow-up) Shared environment explains ~0% of adult IQ in twin studies and adoption studies [citation: literally any twin study or adoption study that bothered to follow up and measure adult IQ scores]
You don't think society-wide improvements in education & general wealth count as 'interventions' that we can 'control'? Your original comment seemed to contain a lot of generalizations about race or ethnicity and IQ, as with the Hondurans. Do you have a specific response to the documented examples of how say East German IQs increased in our lifetime? Much less past white American immigrants, etc. (I'm still looking for that paper I read that showed a similar increase in Ireland as it grew wealthier in the late 20th century)
Not an experimental intervention that we can test experimentally (except maybe through a visa lottery -- someone should do that study!)
Another problem with your theory is that the Flynn effect is concentrated in the least-heritable and least-g-loaded subtests, while the racial gaps are concentrated in the most-heritable and most-g-loaded subtests. Across subtests, the size of the flynn effect is negatively correlated to the size of the racial gap. So flynn effects and racial gaps probably don't have the same causes.
https://emilkirkegaard.dk/en/wp-content/uploads/Is-the-Flynn-effect-on-g-A-meta-analysis.pdf
Here's the paper I was looking for on East German IQs rising rapidly after reunification http://www.iapsych.com/iqmr/fe/LinkedDocuments/roivainen2012.pdf
Here David Friedman's reviews some evidence on Race & IQ. http://daviddfriedman.blogspot.com
Long story short, standard measures of IQ from African countries (i.e., very low) are wildly inconsistent with the academic success of African immigrants to the UK and France. Also, many world class scrabble players come from African countries (Nigeria for English scrabble, Gabon for French). To quote Friedman, this would be nearly impossible if the African IQ estimates were correct.
Immigrants are not a representative sample of the source population.
Sure. But it is doubtful that there is strong selection on IQ. It doesn't take a genius to figure out that life in Europe is better than in Africa.
In many cases, going to graduate school in the UK/US is their ticket into the UK/US.
There certainly are some environmental effects holding Africa's scores down, but absent those effects they'd perform more like US blacks, not tiny elite immigrant groups.
> But it is doubtful that there is strong selection on IQ.
Self-selection is incredibly strong. I would know — I am a migrant.
> It doesn't take a genius to figure out that life in Europe is better than in Africa.
But it does take above-average intelligence and mental skills in demand to actually /make/ it in Europe. Hence why many migrants just... return back home, and many of those who stay... stay poor.
Right, and the standard measures of IQ of African countries actually measured the IQ of immigrants from African countries. Hence those standard measures cannot be trusted.
BTW, in case anyone is confused by race and IQ stuff, there's a nice FAQ: https://jaymans.wordpress.com/jaymans-race-inheritance-and-iq-f-a-q-f-r-b/
Thank you for the link.
Regardless of all of this race debating, the first sentence (5x-10x) of your first post on this subject still stands. It also lines up perfectly with the UFM study done on the ZEDEs about the leapfrog effect. A 5x-10x improvement says most of what needs to be said about the power of free markets and institutions built without perverse incentives.
I do think we can expect this project to reach more than the 5x-10x impact and there are large pools of capital in south america that could easily find a home in a financial center and best in world aims of this project.
https://trends.ufm.edu/en/report/honduras-zede-2020/
You stupid, stupid asshole. The right's fetishism with IQ is as wrong as the left's obsession with colonialism. Drop somebody with high IQ in the middle of the fucking jungle and see how rich they become.
Also, you have no fuckig clue of what you are talking about: US and Singapore have like 5 times the income per capita at Purchasing Power Parity than Honduras, and Mexico like 2 times. And yet you say that it will make Hondurans 5 to 10 times richer, but not even to the level of mexico??
If you need some IQ, I have got some to give you.
World bank says Singapore is 17x richer than honduras in PPP terms (much more in nominal terms)
GDP per capita, PPP (current international $) - Honduras = $5981
GDP per capita, PPP (current international $) - Mexico = $20944
GDP per capita, PPP (current international $) - Singapore = $101649
https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=HN-MX-SG
5x was a wild guess (https://slatestarcodex.com/2013/05/02/if-its-worth-doing-its-worth-doing-with-made-up-statistics/) of the nominal improvement. Cost of living will be higher in Prospera because it'll be more desirable to live there than in the rest of Honduras. 10x is probably too optimistic on second thought, even in nominal terms.
If they're selling it as a libertarian do-what-you-want-with-your-land scenario, what mechanism is going to make people hire Zaha Hadid to design their apartment buildings and not Zombie Le Corbusier?
I phrased that kind of snarkily, but I'm genuinely wondering - how can you say "this is what the buildings in our city will look like" when your only control over that is the laws (which presumably don't mandate Zaha Hadid architecture) and how big a parcel of land you sell?
Right now the answer is they're the ones doing the building and selling the units, so they have a good idea of what they'll end up with. Obviously it's not a long-term answer, but it works for the first people moving in.
And if you want to stop your neighbor from razing their unit and replacing it with Pagano-Brutalism or whatever, you write up a contractual agreement of some sort (HOAs basically).
Ceteris paribus, if people would rather live in the appartment block designed by Hadid than Le Corbusier, they'll be willing to pay higher rents so the developers who hired Hadid end up richer.
The Coventry City Architect's Department, for instance, was operating under no such economic incentives. The results were predictably grey and concretey and James C. Scott angering.
But the issue is that I'd rather live in a building surrounded by walkable buildings than in a building surrounded by concrete parking garages. Right now, in the United States, zoning usually ends up mandating the parking garages. But without some sort of zoning, you do have to worry about these externalities being placed all around you.
Prediction: Próspera will have fewer than half of its projected 10,000 residents by 2025. 80% confidence.
Reasoning: My impression is that projects like this tend to sputter out, often for seemingly stupid reasons. In particular I'm concerned about changing political conditions in Honduras. It's easy to say "we commit to do X" and "X is in our long-term self-interest" but if a state like Honduras were capable of consistently honoring its commitments or acting in its long-term self-interest, it wouldn't be in this mess to begin with.
There's also the danger of loss of support among the project's funders / leaders, either organically or because Vice-style ideological actors are putting political pressure on them. For similar reasons it's possible that there just won't be a critical mass of people from developed countries (because let's face it, the project's funding is premised on attracting them) who actually want to move there.
This has ended up looking like a pretty good prediction!
>Almost every libertarian agrees that you can make rules (even arbitrary rules) about what people can do on your own property, and anyone who wants to stay on your property has to follow your rules. But what’s the difference between that, versus a government “owning” its territory and making rules for its citizens?
I often joke that the UK is a Libertarian society run by its owner Elizabeth Windsor.
This is sort of like how Eastern European kings used to invite German settlers to settle in their special towns with German-based law. In the grand scheme of things that didn't end well (World War II), but my understanding is that it was a moderately successful public policy for first 100 years or so
Buda did not allow Hungarians to live there, for a long time.
This is the first stage of Terra Ignota (https://www.goodreads.com/book/show/26114545-too-like-the-lightning?from_search=true&from_srp=true&qid=87YaOTgndi&rank=1). Basically in the novel series one can choose one's own government regardless of physical location. Over time the number of viable governments coalesces to seven or so (it's been a while since I read these). Interesting concept, and I hope it works out for them.
Right down to the flying cars!
How much were you paid to write this drivel lol
Of course, you have to pick the country that is current being governed by a coup/stolen election combo in order to implement your libertarian-fascist (but I repeat myself) dystopia. No functioning democracy would tolerate it.
My favorite part is where you repeat talking points that you already yourself debunked in the anti-libertarian FAQ back in the day. So are you actively getting dumber? Or do the social democratic takes just not rake in the cash like the billionaire boot-licking ones?
Scott, I know that moderation is a thankless task, especially when it involves reading every single comment rather than scrolling through a list of "SELECT * FROM reported_comments ORDER BY times_reported DESC".
If you are interested in community feedback w.r.t. prioritization of missing Substack features, a "report comment" button would be my #1 request (by a wide margin).
Agreed. The quality of comments has become much more of a mixed bag since the ACX transition, made even worse by the presence of a few inflammatory youtube/reddit/average msm news site commenters.
Oh, seems to be the problem here? Was it uncouth of me to mention that Scott "just happened" to be chatting with Prospera's Chief of Staff, and then decided to write a 10,000 word essay giving project glowing praise? With three tiers less of intellectual rigor than he usually devotes to his interests?
It takes a special person to sell "the mother of all tax havens, enshrined into irreversible constitutional law by coup government perpetuating its power via election fraud" as a beautiful, revolutionary act. Looks like Prospera's found their guy!
You weren't uncouth so much as boring.
I think my favorite part of this essay is when Scott uses the word "statism" in a derogatory sense TWICE, despite devoting the entire opening to his anti-libertarian faq to arguing why calling ideologies "statist" was an anti-intellectual rhetorical ploy.
Clearly, his heart isn't in it anymore (but the $$$ is). He was paid to write this. If he tells you otherwise, he's lying. He lies a lot, actually. Go read the leaked emails regarding the NRX faq if you want an eye opener.
You see? Your "statism" comment was much more interesting than your original one, which was content-free.
Good catch on the statism thing.
Could you link to those leaked emails? I'm curious.
Yes, I'm curious about these as well (especially as this is the first I've heard of them).
Here comes the censorship of ideas.
Nah, just censor people being an asshole.
Dude, this is so fucking rude! If I had a blog, this would be an instant ban.
This is the kind of behavior people do on internet, because in real life the responses would range from being punched in the face to being politely but firmly told to leave the room and never return again.
So, would you please be so kind and increase the cultural and intellectual level of this forum by fucking off and never returning again? The door is that way --> twitter.com
This comment is a bit disappointing, because you managed a really good and non-abusive critique of (a particular version of) libertarianism upthread, and it's possible some of the people on the right here who aren't beyond the reach of argument might learn from it. But they won't if you also go around being a jerk and abusive. That'll just give them an excuse to dismiss your objectively good critique.
Eugh. I don't think I could have conceived commentary worse in quality than a Vaush rant. Until I read *yours*.
People who "think" like you are the reason why most Stonetoss comics are legendarily funny (not my words, Vaush's) — you are the butt of those jokes.
I'm extremely proud to say I don't know who any of these people are, or even what you're really trying to say. A quick google tells me that "Stonetoss" is some kind of white-supremacist comic guy? I'm sure he's just hilarious xD
Amazing article, the immense gap to the typical media coverage shows again how bad journalism has become and how it is saved by independent writers. We at the Free Private Cities Foundation (freeprivatecities.com) in Switzerland support projects like Próspera and the many more currently in development. We would love to republish your article (linking back here, of course) if that is possible! Can also provide much more information on this "industry" or "movement" (depends on how you look at it), if needed.
Rahim, thank you to you and Titus and the rest of your team for the work you are doing. There is so much opportunity for additional prosperity and the (elephant in the room) obstacle is rent-seeking publicly run/funded government/agencies.
Regarding your questions about the kuwait-honduras investment treaty: This seems to be a standard Bilateral Investment treaty. They are very common nowadays, most nations have negotiated at least a few, industrial Nation often have a ton of them. Their purpose is to give foreign companies (in this case: those from Kuwait) some protection from the state they are investing in, guaranteeing certain rights and often providing for an arbitration clause in case of disputes, so that the private investor does not have to sue the state before its own courts.
My spanish is horrible, but this particular treaty seems to include such an arbitration clause providing for an ad hoc arbitration Tribunal, meaning if Honduras were to decide to simply expropriate Prospera, the Company could sue them before such a tribunal for damages. Kuwait itself would likely not get involved, and these types of Investor-state proceedings tend to be a mess because they take forever to resolve and enforcement of awards can be tricky. They are not uncommon however, and this does give the project at least some protection. If you want to see some examples of these types of proceedings, check out this database: https://arbitration.org/awards/icsid
What level of protection does that give you if you're not from Kuwait? Seems like this treaty would be extremely situational.
Looking through the comments, even the average snarky critical comment here is so much more insightful than any mainstream media article on the subject I have come across so far. If you attribute a high chance of failure to Próspera, bear in mind that it is only one project and the initial notion of a Hong Kong or Singapore in the Carribean was misleading or mistaken because it does not fit this specific project (for a number of reasons, some of them various critical commenters have pointed out). Still, it has done some pioneering work in a very difficult industry which has a lot of potential.
Long-time lurker here but, unexpectedly, I am an expert on one of the key items in that post: the Honduras-Kuwait Treaty for the Reciprocal Protection of Investments. I didn't expect such a treaty to figure here, especially since I think the argument made by Prospera is bogus. Let me explain.
That's a Bilateral Investment Treaty (BIT), of which there are thousands in force around the world. The typical story of BITs is that most of them were signed in the 80s and 90s whenever two states were meeting and sought a pretext to sign or do anything. The texts of these treaties are therefore rarely negotiated - it revolves around a few models, mostly imposed by powerful, Northern states, with boilerplate standards of protection that come down to "don't mistreat foreign investors, come on". Importantly, most BITs provide for what's called investor-state dispute-settlement (ISDS): if an investor from one of the two states is mad about something the other state did, they can sue before an international tribunal. This is a controversial, yet highly-lucrative part of modern international law (lucrative for the lawyers who act as counsel and/or arbitrators, I mean - it's very expensive for states, but the theory is that it spurs investments in return).
I can't find that particular treaty in the main databases of BITs, or in the UN Treaty Series, but the fact that it was published in the Official Gazette would indicate it has been ratified by Honduras; I found Arabic news online saying it was also ratified by Kuwait's National Assembly, so I think it's genuine.
The first thing to realise here is that the fact they provided for ZEDE in the text of the treaty indicates that the concept of ZEDE has permeated deep enough in the Honduran government that their foreign policy has been impacted. This shows a very deliberate intent to showcase this experiment as, again, typically diplomats would not negotiate this kind of treaty, and apart from the provisions relating to ZEDEs, the treaty text is the usual boilerplate I see everywhere. (It does seem, however, that this is the only BIT they signed in this respect, but states have relatively cooled in signing new BITs for the past ten years so this is unsurprising.)
But the second thing is that it does not provide any protection or "guarantee" to Prospera itself. Article 16 BIT only says that the legal framework for ZEDEs would be guaranteed for 50-years, but for Kuwaiti investors only. Only them can benefit from this guarantee, not anyone who put trust on Prospera, or who moved there.
Now, I read from Prospera's material that they refer then to "most-favoured nation" (MFN) legal concept: the idea is that other treaties with a MFN clause could benefit from that guarantee. But that depends on the particular language of the MFN clause (in BITs, they typically cover "treatment", not this kind of long-term guarantees), and you still need to qualify under another treaty to invoke that clause. Apart from investment treaties (which would protect only investors), I am hard-pressed to think of any treaty with an MFN clause that could extend to this 50-year guarantee. And Honduras has actually but a few BITs: while they include the US, UK, France and other wealthy countries, this remains limited, and investors from most of the world wouldn't be covered.
Finally, what would happen under international law if Honduras renege on that guarantee ? Well, not much. To be sure, Honduras can't just abolish ZEDEs at will, but the consequences under international law would depend on the existence of an aggrieved party that can sue - and few can. (Having "rights without a remedy" is a common, if not the main situation, under international law). Investors covered by a BIT (from Kuwait, or elsewewhere if there is BIT with an adequate MFN clause and an ISDS mechanism) could start arbitral proceedings, and try to show that the abolition of the ZEDE framework caused them harm. If they win, they would receive damages (or, more accurately, an award against Honduras, which they will then struggle to enforce if Honduras refuses to pay). End of the story.
So, in conclusion, and while I understand why they are excited about this treaty, the ZEDE proponents are overstating their case here, whatever it is: this treaty does not bring much to the table, except as evidence that Honduras takes ZEDEs seriously enough to protect ... future, hypothetical Kuwaiti investors.
Update: shortly after writing this, I realised that Prospera Inc. itself could probably qualify as a "US Investor" (they seem to have entities in Delaware and Wyoming), and there is a Honduras-United States BIT with an ISDS mechanism. But the BIT's MFN clause is exactly what I mentioned: focused on "treatment", not guarantees, and there is jurisprudence indicating the distinction matters. Legally, this is not a clear win for the investor.
And yet again, at most Prospera could claim damages. Besides, that's something they could do directly under the Honduras-US BIT (which protects against unfair treatment); I don't think the 50-year guarantee brings much to the analysis.
I used to really love it when a random SSC lurker turned out to be an expert on some entirely esoteric topic - glad to see that proud tradition has carried over to ACX!
Thanks so much for writing this by the way, I found it very enlightening
Since you mentioned a couple of times a possibility that Switzerland could somehow help manage Prospera, I would like to note that Switzerland doesn't really have any entities that would be appropriate for managing an organization like Prospera.
Switzerland is very federated and self-governed. The kind of questions that Prospera is likely to face are usually decided on the local level, often by the referendum. Social services like education and healthcare are managed on the cantonal level, while city services are managed locally on the level of municipality. For example a municipality may run a referendum to decide whether to increase the building height limit or whether to develop a new commercial district. In some places you can still vote by raising your family sword (https://www.swissinfo.ch/eng/democracy-at-its-most-direct-in-appenzell/245320).
So it would sound very weird if a Swiss canton or a municipality with its self-government tradition would decide to manage a foreign piece of land thousands of kilometers away.
Nice article Scott, I appreciate the richness of the history. You describe what the optimistic vision of Próspera will look like, but I don't have a very good sense of how likely you think it is to 'succeed' versus it either fizzling out or being implemented but not being transformative. Metaculus currently assigns a 20% chance to a successful seasteading venture with at least 100 participants before 2035 (https://www.metaculus.com/questions/6721/successful-seasteading-by-2035/). How about some probabilistic predictions for Próspera? Some examples below, but feel free to change the numbers/dates or propose totally different ones:
1. Próspera will have at least 50,000 residents by 2035.
2. Conditional on having 50,000 residents, the median income in Próspera will be 20% greater than the median income in Honduras by 2035
3. Honduras doesn't eliminate ZEDEs by 2064
4. Another Latin American country introduces ZEDEs by 2064
(I'd be pretty keen to see a variant on 2 that doesn't resolve positively if all Próspera does is cream skim the most productive Hondurans but nothing immediately comes to mind)
Thanks for coming up with these questions!
1. 40% (I am interpreting "by" as inclusive - if it gets 50,000 residents before 2035, but loses them and is below that in 2035, it still resolves as true).
2. 99% (I agree with you that this will likely be partly from skimming. Also, Roatan itself has an average income twice Honduras, so for this to fail would require that Prospera be poorer than the rest of Roatan.)
3. 40%
4. 75% (though a lot of this will hinge on what the difference between an SEZ and a ZEDE is.)
To me it seems, like it has the same problems all these projects have. Namely they are designed and not grown. A designer simply can't see or reproduce everything you need. Switzerland is like it is, because it grew this way. It's debatable if you could transplant its system, even to its very similar neighbor Germany. The people, mindset, traditions, inertia, expectations, conception of oneself, matter of course all play a role, and all can't be designed.
Counterpoint: Meiji-era Japan copied Western (mostly British/Prussian) institutions and quickly became a regional power.
See https://astralcodexten.substack.com/p/the-consequences-of-radical-reform
I really hope that they're not relying too heavily on the perceived benefits of the "air-taxi" thing. Having worked as part of a team trying to design one, the idea suggested here that the plan is to rummage around for a set of regulations and insurers that will let them put one in the air is a little bit worrying. They are certain to be expensive, likely to be dangerous, and the level of traffic required for them to be the primary solution to connect different city hubs into a unfied whole would be stunningly expensive and really quite frightening.
I like the sound of this project a lot, but I would put good money on this part being shelved or dropped entirely.
corporate cities are nice but this is not a corporate city, this has hints of jonestown, fyre festival and some other awful stuff in it
I thought of https://en.wikipedia.org/wiki/The_Mosquito_Coast .
For anybody wanting more juicy content I'd heartily recommend the Charter Cities Podcast interview with the founder: https://www.chartercitiesinstitute.org/post/charter-cities-podcast-episode-12-erick-brimen
I definitely agree that it's a moonshot and quite unlikely to reach their vision - but god damn I find this incredibly exciting and would love to see it succeed! Innovation in governance has the potential for huge positive spillover effects.
The typo
"Ciudad Morazán offers freedom of fear..."
Turns their statement into a halfway decent villainous monologue.
It seems almost grotesquely overambitious compared to the actual backing. I expect either a whimper as it never gets properly going, or a glorious train-wreck. In the latter case, at least we will be able to learn from it.
ZEDEs strike me as a good idea. I'm worried that Próspera will be a high-profile failure and ruin it.
Yeah, basically this. There doesn't seem to be any substance to it. If it had been backed by tens of billions of dollars, things might be different. These people look like adventurers.
The other project mentioned, with vastly more backing and far lower ambitions, sounds a LOT more credible.
"Unlike anywhere else in the world, it also displaces the rest of the jurisdictions’ provision of services in that area. So if an intrepid individual wants to create a better community with better rules and administration than we have, we invite them to come do it! Test drive your Marxist commune in Próspera! Maybe it will work this time. If it does, then people can move out of the rest of Próspera and into your little community, and the ZEDE will have to adapt its meta institutions accordingly."
If Trey read Marx he would see that Marx argued against this kind of arrangement.
Is that because Marxist utopias work better when people are not allowed to leave them?
Marx was not interested in utopias.
As you've been repeatedly asked, when you make a claim like this, it'd be nice if you actually backed it with anything other than "if X read Marx they'd know Y isn't true". If you want to actually convince people, please put in the work to be actually convincing: i.e. provide evidence for your statements.
Of course I can do that, it's even in the most famous short work he ever wrote, The Communist Manifesto:
https://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch03.htm
"The undeveloped state of the class struggle, as well as their own surroundings, causes Socialists of this kind to consider themselves far superior to all class antagonisms. They want to improve the condition of every member of society, even that of the most favoured. Hence, they habitually appeal to society at large, without the distinction of class; nay, by preference, to the ruling class. For how can people, when once they understand their system, fail to see in it the best possible plan of the best possible state of society?
Hence, they reject all political, and especially all revolutionary action; they wish to attain their ends by peaceful means, necessarily doomed to failure, and by the force of example, to pave the way for the new social Gospel.
Such fantastic pictures of future society, painted at a time when the proletariat is still in a very undeveloped state and has but a fantastic conception of its own position, correspond with the first instinctive yearnings of that class for a general reconstruction of society."
You might also be interested in Marx's criticisms of Proudhon, e.g.:
https://www.marxists.org/archive/marx/works/1847/poverty-philosophy/ch02.htm
"Just as the economists are the scientific representatives of the bourgeois class, so the Socialists and Communists are the theoreticians of the proletarian class. So long as the proletariat is not yet sufficiently developed to constitute itself as a class, and consequently so long as the struggle itself of the proletariat with the bourgeoisie has not yet assumed a political character, and the productive forces are not yet sufficiently developed in the bosom of the bourgeoisie itself to enable us to catch a glimpse of the material conditions necessary for the emancipation of the proletariat and for the formation of a new society, these theoreticians are merely utopians who, to meet the wants of the oppressed classes, improvise systems and go in search of a regenerating science. But in the measure that history moves forward, and with it the struggle of the proletariat assumes clearer outlines, they no longer need to seek science in their minds; they have only to take note of what is happening before their eyes and to become its mouthpiece. So long as they look for science and merely make systems, so long as they are at the beginning of the struggle, they see in poverty nothing but poverty, without seeing in it the revolutionary, subversive side, which will overthrow the old society."
You might also be interested in Engel's analysis of the utopian socialists:
https://www.marxists.org/archive/marx/works/1880/soc-utop/ch01.htm
"This historical situation also dominated the founders of Socialism. To the crude conditions of capitalistic production and the crude class conditions correspond crude theories. The solution of the social problems, which as yet lay hidden in undeveloped economic conditions, the Utopians attempted to evolve out of the human brain. Society presented nothing but wrongs; to remove these was the task of reason. It was necessary, then, to discover a new and more perfect system of social order and to impose this upon society from without by propaganda, and, wherever it was possible, by the example of model experiments. These new social systems were foredoomed as Utopian; the more completely they were worked out in detail, the more they could not avoid drifting off into pure phantasies."
Capitalists like to say "So why don't YOU just build your socialist system within the framework of a capitalist state??" like its some sort of own.
I dunno, why don't THEY just try to build a make-believe capitalist system within the framework of a socialist state? There's nothing that would prevent workers and owners from role-playing their old roles under socialism, if they wanted to, like some sort of sadomasochistic BDSM thing.
But it's funny, when workers are given actual institutional power they never seem to want to do that...
https://en.wikipedia.org/wiki/Tsekhovik
Illegal activities do not operate within the framework of the state, they operate outside of it.
This is like you saying "well, why don't you just do your socialism within a capitalist state?", and me linking to the article on the https://en.wikipedia.org/wiki/Russian_Revolution
I was replying to this:
> I dunno, why don't THEY just try to build a make-believe capitalist system within the framework of a socialist state?.. But it's funny, when workers are given actual institutional power they never seem to want to do that...
My comment is that in USSR there was a large network of private factories even though they were illegal and workers and tsekhoviks faced harsh sentences for this activity. My parents' more fashionable peers would get jeans and other nice things produced in these factories from spekulanty - a large networks of illegal sellers.
When in the 80s some of this activity was allowed - still within socialist planned economy - they came out from the shadows and eventually became the backbone of the New Russians class of the 90s.
If a worker's state is unable to do the basic law-and-order governance of preventing widespread private expropriation, then I would argue that those workers have not yet achieved institutional power. And thus cannot be used as a counter-argument for the workers having wanted to voluntarily to enter such an arrangement.
> Illegal activities do not operate within the framework of the state, they operate outside of it.
This is blatantly false. Not even going to bother refuting it, I'll just state the obvious: you lie.
I...don't think this makes any sense?
People tried to do capitalist things in eg the USSR all the time - for example, the black market, or importing foreign goods. If they were caught, they went to jail. If people had formed an entire town devoted to doing capitalist things, they definitely would have gone to jail. During the Cultural Revolution people were murdered just because it seemed like they might be less than 100% against someone doing something capitalist at some point.
If the Soviet Union or Maoist China had said "you can buy some land and do capitalist stuff on it as long as you pay some taxes", millions of people would have done that and the history of the world would have been completely different. Saying this was permitted (eg you could sell crops you grew on your own land) was one of the Deng reforms that changed the face of China.
As far as I know, capitalist countries *do* say that you can buy some land and do socialist stuff on it as long as you pay some taxes, and some people have formed socialist communes (or worker-owned companies). I'm not sure how you think these situations are equivalent.
Black markets and importing foreign goods are describing MARKET activity, not capitalist activity. One reason we know this is true, is that even in capitalism you cannot do unauthorized market transactions within someone else's property (e.g, I cannot unilaterally set up a lemonade stand in your front yard). And you also cannot import goods (foreign or otherwise) onto someone else's property without their permission. Capitalism makes no guarantees of markets within its own borders of ownership.
This is all old hat, but I'm going to keep repeating it: Capitalism is defined as private ownership, and the inherent authority that comes with it. Not markets. This isn't a weird socialism definition: This is the opening sentence on Wikipedia. https://en.wikipedia.org/wiki/Capitalism It's true that capitalists often rhetorically champion markets. But they are also opposed to markets when it conflicts with their private property claims, as I pointed out earlier.
So this whole discussion is...a little confused from this point.
We do have small-scale socialized aspects of government in the west, for instance National Parks and such, that can be used as examples. By "role playing capitalism", I was thinking something more like voluntarily sending a check to the people whose property was expropriated by eminent domain every time you visit (as a pretend "user fee"), or just abstaining from visiting National Parks at all on grounds of it "trespassing". There's nothing in the law that precludes you from role-playing capitalism within this socialist system! Yet no one ever does.
I think it's impossible to have everyone voluntarily coordinate capitalism within a socialist system, since there are high transaction costs, hard coordination problems, and no way to enforce anything. But if you could found a town (even a charter city!) within a socialist country and have capitalist things happen there, that seems like it should work. Do you agree the same is true in reverse?
Also, I think if you were allowed to start a capitalist (ie shareholder-owned, non-worker-run) company under socialism, that would work fine if permitted. Do you think a socialist (eg worker owned and run) company would work fine under capitalism?
(2)
If you understand why the National Park scenario is be highly unsatisfactory for libertarian-capitalists, then you should also understand why "just do co-ops within our capitalist government and institutions" is unsatisfactory for socialists.
Still confused.
Suppose I gave you 1000 acres of land in Nebraska, including some houses and farms. The US government requires taxes, and bans some things like gambling and opening a medical practice without a license, but otherwise gives you the same latitude it gives everyone else. Why can't you create a socialist commune there?
Re US Infrastructure vs China . . . . The US electorate wouldn't tolerate the amount of eminent domain seizures a government high-speed rail system would require. China doesn't have a meaningful electorate.
The US also wouldn't tolerate the accident rate and fundamental design flaw of the Chinese rail system that allows the driver to ignore a "Track Blocked" signal and continue at 300kph.
When I lived there, I rode it, it was great, much nicer than flying similar routes. But "railway telescope" is a rather nasty sort of wreck.
It looks like China had some bad collisions in 2008-2011 - did they fix things since then? Or is Wikipedia just out of date?
https://en.wikipedia.org/wiki/List_of_rail_accidents_in_China
As far as I've heard (and I'm pretty plugged into China journalism, having once worked in that field myself) there have been no major accidents since the Wenzhou derailment a decade ago (such things are nearly impossible to simply "cover up"). They did considerably overhaul their safety procedures after that and correct the issues, so given the expansion since then, I'd guess it worked.
"Libertarian Co-op Collective" doesn't have the same ring to it as 'Prospera' which implies this fantastical utopia where none of the real-world problems of running a city-state exist. On paper, it sounds great but upon further reading, it really begins to sound like the libertarian utopian fantasy that it is where a bunch of "really smart", "smarty smart", "tech-genius-smart", and "smart" people can opt-out of the actual society they currently participate in, to live in Prospera where they can pretend real-world issues stop existing.
I do think it's ironic that a bunch of libertarians are going to live in co-op buildings with a bunch of other libertarians where the stratification of humanity still occurs and the individual foibles of living next to an obnoxious neighbor will still apply. Anyone who thinks NIMBYs won't pop up in Prospera has never had to work with high-worth individuals who think the world is supposed to bend to their will. I don't find it too surprising that Patrik Schumaker (ZHA) would throw his hat into this proposal considering his long-standing opinions that building regulations, zoning, publics spaces, and community engagement are feckless endeavors. Prospera also affords Shumaker to pursue his dream of creating a city from nothing without having to work for the authoritarian regimes that normally give him carte blanche.
It's great that these people are thinking of not-new-ways to deliver the not-new-idea of modular, pre-fabricated housing/buildings to a charter city with no resources or infrastructure. Where everything is imported and negative impacts externalized/socialized into the wider Guatemalan landscape. But hey, it's not like we haven't seen the Captains of Industry do these types of things before in new places that gave them carte blanche to do "whatever' and then get miffed when the impacts of doing what they want then lead to people wanting regulations. This is how we got exclusive communities with a catalog of covenants that one must abide by lest you build your luxury trophy home with the wrong pediment and capitals.
I do think the ideas on the healthcare system offer an interesting take as well into how libertarians perceive the U.S. healthcare system working vs. how it works. I mean I get that taking the anecdotal evidence of my Uber driver not being able to do surgery in the US at face-value is a way to confirm a bias. The shortage of doctors in the US isn't a problem caused by hospitals, it is an artificial shortage created by the licensing boards run by doctors specifically to create a shortage and keep doctor salaries inflated. But the Prospera model takes the idea of healthcare as service one step further and turns the already existing model of concierge medical services and injects steroids where high-worth individuals will fly to Prospera to be catered to because they don't want to sit in the waiting area of their current selective-clientele doctor. This won't drive prices down, nor would it lead to medical breath-throughs that could have broader social impacts because the Prospera model isn't designed to do that.
I think the problem with Prospera is that it really does come off as a bunch of wealthy, smart people (not just wealthy, smart John Galts) taking their ball and going home because they've been asked too often to engage with other people in the game of life. It's a great way to further economic stratification and class bias by removing everyone else and living in a bubble.
I can't help thinking it will end up with a bunch of affluent professionals (programmers, analysts, architects, marketers) who work from home either way moving to Prospera because of much lower taxes (and these people are mostly hired by big foreign companies, so there's little tax evasion). It will show on paper that people living in Prospera are making lot of many, are happy, the crime is much lower, etc. and it will be tooted a great succes, even though average Honduran has since drop in public funds (it will be however completely unattributable to Prospera due to its small size)
I like their approach to medical law though (and I have personal interest, given that I've gone through almost every psychiatric drug allowed in my country and am still far from being well).
So in short: once it has been called up, it can still be put down? Okay, that's nice. But even if it SHOULD be put down, WILL it be put down? I'm sure entrenched interests will find some way to keep it alive even if it becomes increasingly clear that it has a net negative effect on the region. Sometimes I don't understand why tax havens are still around, why doesn't the USA just occupy all those Caribbean islands and demand those ultra-rich people actually pay their taxes? Support our troops!
In Propsera's case, the tax haven is the point. Everything else is just fluff to sell it to the gullible.
The sad part is, it may very well be "successful" on its own terms, by carving out a new low in the race-to-the-bottom.
AFAICT Próspera is supposed to be *much* more than a tax haven. Also,
> Honduras has a 25% tax rate but never collects; Próspera plans to have a 10% tax rate and collect every cent
"Honduras has a 25% tax rate but never collects" is an absurdly exaggerated statement. Despite Scott having written those words, they are not actually true. It's a one sentence hand-wave to get you to skip past the most relevant part of the entire project. You can read an actual study of the extent of tax evasion in Honduras here: https://thiagoscot.github.io/WebsiteDocs/Scot_JMP_MinimumTaxHonduras.pdf
To your second point: Prospera is a private entity governed by a board of directors. It is not a state with any internationally recognized legitimacy, and its not even a subdivision of the Honduran government. The proper term for paying them money is called "rent", not "taxation".
The upshot of this, for the members of Prospera's board, is that any company they "move" there which they are associated with results in only a 1% tax to the Honduran government, since the "10% tax rate" is essentially being paid to themselves.
I mean, why do you think GROVER NORQUIST of all people is interested in the project? This ain't exactly a conspiracy theory. Prospera is literally proposed to be a private company with a that collects "10% rent" and pays a 1% tax rate to their government, Honduras.
From what I can see, the tax revenue of Honduras is 127 756m lempira annually, which google tells me is $5,297m. Across the 9.7m inhabitants of Honduras that's a tax revenue per capita of $544.
https://stats.oecd.org/Index.aspx?DataSetCode=REVHON
The GDP per capita of Honduras is $2,575 (again according to Google).
That's approximately a 21% effective taxation rate - close enough to a 25% nominal tax take as makes no difference as far as I'm concerned (effectively dead on a 25% tax rate less a 17% rate of evasion as claimed in the link, which makes me think the link is probably applicable to Honduran taxation generally, not just corp tax which was my initial thought)
Therefore it seems that Prospera would have a de facto tax rate of approximately half of what Hondurans are paying at the moment. I agree with Guy in TN that there is a huge handwave here since the difference between 'never collecting' and 'collecting 21%' seems highly relevant when the comparison is between that and collecting 10%
I don't know a massive amount about any of the figures I've cited above, so maybe the OECD can't measure tax take in Honduras accurately or something (the existence of a MASSIVE black market could maybe make Scott's statement true?). But I'd want to see explicit estimates of tax evasion in Honduras before I'm satisfied that tax evasion will not form a large part of the appeal of Prospera.
25% is the top tax bracket, for people making over 563,812.30 lempiras. Median income is 344,400 lempiras. With this in mind, I'm surprised they're collecting as much as they do, even if nobody is evading.
I really hope Scott sees this and corrects the misinformation on Honduran tax revenue, but the damage is mostly done by now. It's disappointing that he neglected to fact check such an obviously biased source on such a major point. Makes this post seem like nothing more than a second-hand sales pitch.
Thanks for pointing out that Honduras actually collects taxes.
> The proper term for paying them money is called "rent", not "taxation".
From the inside there's not really a difference between rent and taxation. So it's essentially a 10% tax rate system.
Also Próspera advertises itself as having a bunch of other really cool stuff (e.g. voxel-based property, choose-your-own-legal-system, customizable modular housing, etc.) that I think it would be an absolutely wonderful place to live in even if the tax/rent rate was super high if they could fulfill some of their promises.
>The sad part is, it may very well be "successful" on its own terms, by carving out a new low in the race-to-the-bottom.
I certainly don't see anything in the world that could be called a race to the bottom in terms of taxes. If anything there's a race to the top, at least in most first-world countries, where top tax rates tend to hover around 50%.
If there _could_ be a race to the bottom, or at least a race towards a more sane tax rate around 10%, that would be great. There is no way that a government needs to tax more than 10%, if they're using that money to provide necessary services and not using it to redistribute money from the productive to unproductive people.
Redistributing money to "unproductive people" (e.g. the elderly, the disabled, children, mothers taking care of children) is absolutely the goal of a lot of human civilization.
A strange argument, assuming as it seems to the complete failure of self-interested intelligence among people and the complete dysfunction of the family unit. Normally, people transfer money to their older selves by saving and investing, so there's no obvious need to take it from strangers. Normally, mothers contract with fathers (and even grandparents) to share the economic burden of child-rearing and redistribute resources within the family for that purpose, so they do not need money from strangers for the purpose. Normally, if they are not a child in a family (vide supra) when it happens, people take out insurance against the possibility of disability, and, again, it is not necessary to extract it from strangers.
Perhaps I misunderstood you, and you are considering the social norms and small institutions (like families, insurance companies, employers, the whole network of private economic institutions that get most of everything done) are part of "human civilization," in which case your argument is both true and somewhat of a truism.
But the argument that individuals are so incompetent, and families so dysfunctional, that *government* per se must be constituted to do all these redistributions from those who work to those who can't, or can't anymore, or can't yet, seems a bit ahistorical, as well as kind of depressingly cynical about human nature.
Just because you've switched from private transfers to state transfers, doesn't mean you're not still redistributing money from productive to unproductive people. Clearly the real objection here is to the *state* doing to distributing, and this whole "productive vs. unproductive" arg is just a red herring.
I wouldn't quite call it a truism, because there are indeed people who are ideologically opposed to both public and private transfers to the unproductive.
Guy in TNjust now
Private transfers (and in the case of old age, simply "becoming more wealthy though life") is good of course, but they are clearly not *sufficient*, as evidenced by how much poverty would still out there if not for the welfare state.
I'm not really sure how to take the argument that the existence of poverty among children, the disabled, and the elderly poverty is "ahistorical".
My argument is not that individuals are incompetent. The distribution of wealth has a powerful political component that overshadows the comparatively small effects of competence vs. incompetence. It is generally safe to proceed with the assumption that poor people did nothing to deserve their position, and the rich people did nothing to earn it, unless strong evidence emerges otherwise for a specific case.
I suppose one could call a populace that refuses to vote for politicians who would create strong welfare states "incompetent", in the sense that they are refusing to utilize the power of the state to lift themselves up out of poverty. But the democratic will-to-law pipeline in the US has severe enough anti-democratic roadblocks (e.g. electoral college, the senate, the supreme court) that I'm not willing to go there.
Or to put it another way: It's not that the government *must necessarily* do these transfers to eliminate poverty. You are correct that it all could hypothetically be done by the private sector. In a hypothetical world where private transfers eliminated poverty, the public would have never had a reason to vote for a government that would step in and do it for them in the first place.
But of course this isn't the on-the-ground situation we find ourselves in. The private sector does not (and historically did not) choose to fully eliminate poverty on its own accord. That doesn't mean they didn't help alleviate it, just that they didn't do enough, so much so that the public was compelled to create the welfare state.
It's probably worth noting that the lack of any mention of welfare in Prospera is a good indication that this idea is indenting to serve a function other a place where people actually live, have children, and presumably grow old.
So how will the legality of children born in Prospera work? Will they be Honduran citizens even if their parents are only legal residents? How about for purposes of the Prospera social contract? Will their parents basically sign in their name until they come of age? Will they need to resign the contract as adults?
And children born in Prospera sort of undermines a lot of the philosophical backing laid out in section 6:
"Charter cities fall into an awkward crack in libertarian ideology. Almost every libertarian agrees that you can make rules (even arbitrary rules) about what people can do on your own property, and anyone who wants to stay on your property has to follow your rules. But what’s the difference between that, versus a government “owning” its territory and making rules for its citizens? In practice the difference is that going in someone’s house - or even their golf course - is a choice you made, and they have clear title of ownership. But being in a country happens involuntarily, and the President doesn’t “own” America in the same way an ordinary person might own a house.
But if someone did own an entire city, and you chose to be in that city, theoretically they should be able to make whatever laws they wanted, and not even the most zealous libertarian could protest. The issue hadn’t really come up before. But here we are.
Próspera is erring on the side of small government, because that’s what they expect will work best. But their overriding motive is making their city a nice place to live and work, and when small government conflicts with that, the city usually wins.
So for example, when you buy land in Próspera, you’ll have to sign a Covenant Restricting Vice Industry Uses - ie you can’t turn your house into a joint brothel+casino and do unethical medical experiments in the basement. Even the strictest libertarian has to admit this is fair; if you sign a contract, you’ve got to follow it. But you can tell HPI plans to have the town be ship-shape, well-organized, and family-friendly, instead of the sort of Wild West vibe some people associate libertarianism with."
The next generation will not technically have moved to Prospera voluntarily, and so having a government with 44% of its government officials selected by a corporation seems problematic.
I expect that citizenship would work in the same way as if the parents are immigrants in regular Honduras; children would probably have the citizenship of Honduras, their parents' country of origin, or both. In either case, they have a country to move to if they don't like Próspera.
Wikipedia says that Honduras has birthright citizenship, so I believe those children would be Honduran citizens.
I think they would be Honduran citizens or have the right to get citizenship easily. I agree this is a crack in the social contract, although it seems like a comparatively minor one - leaving Prospera is still very easy.
I think part of the reason the US is on iffy grounds social contract wise is that if an American doesn't like the US, there isn't really anywhere comparable waiting to accept them - Americans might not have citizenship anywhere else. Prosperans would at least have citizenship in regular Honduras.
It's worth noting that the U.S. also doesn't make it easy to leave cleanly; they require U.S. citizens abroad to file U.S. taxes annually, and if they make more than ~$100,000 USD/year, to be double-taxed by the U.S. and foreign country. They also require expats to report their bank account balances in all foreign accounts on something called an FBAR, and banks all around the world are asking every customer if they are a U.S. citizen because a U.S. law says they have to do this: https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca
But of course, many Americans don't know about this, and find out years after moving, and can't entirely fix the problem by renouncing U.S. citizenship, since the U.S. will in any case expect them to catch up on their paperwork and pay any "debts" from earning too much abroad. I, for one, have two foreign accounts I *can't even log into*, and the banks are physically several thousand miles away, and they would like me to visit in person to iron out the problem. The accounts probably have only a couple thousand dollars in them, but I need to get the history for the last six years in order to fill out my FBARs and I don't know how to do that, so ... I'm kind of just hoping I don't get in trouble for not filling them out. Or maybe I'll tick the box for "balance unknown" and hope it goes okay.
But technically, the penalties for not filling out FBARs are up to 300% of the account balance (50% per year for 6 years) and there are indeed cases where people have been ordered to pay more than their entire balance simply for failure to report. The only mitigating factor is that so far they've only done this for those found guilty of tax evasion, and I don't owe anything. A recent case is that of a fellow named Schwarzbaum, a German who made a huge mistake by becoming a U.S. citizen. He apparently misunderstood the FBAR rules, and was fined about $13 million for failing to report his Swiss account balances. He tried to challenge the constitutionality of this, but "the court determined that the FBAR penalties are not a fine subject to the Eighth Amendment, and therefore did not evaluate whether the penalties were excessive." It's not a "fine" but rather a "penalty", see? https://www.winston.com/en/thought-leadership/fbar-penalty-not-a-fine-subject-to-eighth-amendment-claim.html
But at least the U.S. does not go around kidnapping its citizens abroad, like China does: https://foreignpolicy.com/2018/03/29/the-disappeared-china-renditions-kidnapping/
There are countries that allow people to buy their way into permanent residency, e.g. the Philippines. So, at least the middle class and up can leave America.
(also the FBAR seems to require my SSN. I do not know what my SSN is, which AFAIK is not an officially accepted legal defense for not filing FBARs. Ugh.)
Surprised that no comments (so far) have talked about the fact that abortion is banned in Prospera under Honduran law!
That would be a complete deal-breaker for me to move there. Surely it'd be a similar concern for (many? most?) people with a uterus who currently live in a place where abortion is legal - especially the kind of libertarians who would be most interested in Prospera.
I think few women have abortions often enough that having to go abroad for them would be much of an issue. I've never heard anyone beside you express that such a thing would be a dealbreaker, despite myself having migrated to a country that does not allow abortions.
Anybody who lives in not-Honduras and even contemplates living in Prospera, is pretty much by definition someone who can afford and is comfortable with at least occasional international travel. And there will almost certainly be a whole lot of things beyond abortions that you'll probably want to do sometime during your life that you won't be able to do in Prospera, if only because Prospera will be at most a town of ~100,000 people and there's a lot that just won't fit.
When you say that people don't like it when their local government starts murdering people and stealing things, I think you underestimate the demand suburbanites have for police brutality against the poor. Particularly in areas that are considered high crime. I'm thinking that the Prospera business model sounds just like the other one, but with prettier words and pictures. It's a private security agency for upper middle class Hondurans that want to live next to a golf course and be able to sic the private police on anyone poorer than them.
Don't poorer people usually express stronger pro-police and want-more-police attitudes than richer people do?
If anything, the opposite is true according to polling
https://docs.google.com/spreadsheets/d/1Dqrs3SWryjxUDAoExwBL0cNnaZECwCcVdwybok3-KBw/edit?ts=5edea75a#gid=0
Certain groups definitely have motivations for pushing a false narrative that would suggest the contrary, so I don't blame you for getting this one wrong.
Not too different from the ever-present media narrative (usually implicit, but occasionally teetering into explicit) that Donal Trump was the preference of low-income voters in either 2016 or 2020, despite all polling evidence suggesting otherwise.
Also, any time anyone talks about air taxis, I tend to assume that they're from Silicon Valley and have just given up on fixing group traffic, and haven't thought about how unpleasant it'll be when even the outdoor cafes in the middle of big plots of land will have just as much traffic next to them as the sidewalk cafes on El Camino Real.
to Steelman the Critics i wonder if we have to go historical and take in some Chomskian perspective on U.S. - Honduran relations, i.e. long U.S. suppression of democratic will in the lower Americas, justified by a Containment policy that enabled rapacious capitalist expansion, backed by death squads trained by the C.I.A.
not to make the Próspera folks guilty-by-association, but to give context for skepticism about insweeping capitalism that doesn't seem to acknowledge that the very thing it is putatively trying to fix - the misery of life many miles south of Silicon Valley - was partly caused by prior versions of insweeping capitalism, or whatever you want to call it.
but i'm not the one to do it, having piddly knowledge of the Region. probably mostly from Chomsky, so there's that bias.
The renderings of the buildings look beautiful. But in the United States, if anyone tried to build something like that, they'd say "what about fire trucks, ambulances, and deliveries?" Most places in the developed world assume motorized vehicle access on big roads to every single building, even though that is fundamentally anti-human. Maybe there are delivery entrances in the rear of these pedestrian-oriented buildings? Or maybe all services will be provided by flying taxis?
> fundamentally anti-human
Are you under the impression that vehicles are built for and driven by non-humans?
No, but I am treating humans inside vehicles as not being in the space that the vehicle is in - they are only inside the vehicle. The Dubai setting means that outdoor spaces are treated as industrial spaces that humans don't go to, and that humans are only ever indoors or in vehicles.
It's one thing to say that there should be some industrial spaces that are designed with the idea that few if any humans will ever be in them. It's another thing to say that the entire outdoors of your city is such a space, which is basically what late 20th century urban design often tended towards (and this trend has continued into much of the 21st century, particularly in places like Dubai).
It seems to me that the legal system here doesn't work. You can't just arbitrate -- there has to be something to backstop it. And if the backstop is ultimately the Honduran courts and the Honduran police, then this is functionally just as corrupt and problematic as those institutions.
On the arbitration, who exactly is enforcing these rulings? As in what, happens when I refuse to honor the ruling in the convoluted arbitration of my dispute adjudicated under Norwegian law? In the US, I can easily go to a (more or less) competent court system to enforce a judgment. Where do I go in Prospera? If I'm just headed off to Honduran court to enforce a judgment, then the arbitration is just the lengthy buildup to a process that's exactly as flawed as a Honduran court proceeding. I guess you try to find a way jurisdictionally to squeeze this into the courts of a developed country with strong rule of law, but how exactly? It seems fundamentally broken.
And in corrupt countries, one of the biggest problems is corruption in the police. What's going to stop corrupt Honduran police from coming into Prospera and shaking people down? Surely, the answer can't be physical resistance by Prosperan security forces without causing an experiment-ending incident.
Even if the police don't come into to shake someone down, what happens when Honduran gangs do? I guess Prospera is hiring Blackwater or something for security, but what happens once one of those mercenaries shoots a gang member. Now he goes on trial for murder in the Honduran courts, right? I don't see how a security force can function in a high threat environment under those circumstances.
I think the steel man critique is that any successful version of Prospera will be a massive target for criminal activity. That will bring Prospera into daily contact with the Honduran police and justice system with all the attendant problems. That probably won't work out, so the rational response for Prospera is to work to *corrupt* Honduran law enforcement to either stay out of their way or respond to their wishes through bribery and so on, ultimately degrading the overall quality of governance in both Prospera and Honduras.
My guess is Honduran courts are corrupt in the sense that rich people can bribe them, but I don't know if they're bad at punishing petty crime. I don't know if they lean too lenient, too harsh, or just right.
Probably Prospera will hire some private security to arrest petty criminals and turn them over to the Honduran court system. If they're sufficiently good at arresting them and turning them over, this probably is enough disincentive for them to stay out.
I also think Prospera has the right to ban people from entering Prospera, which should be a good backup in case they don't like the courts' decision.
In terms of worse actors like narco-gangs, I'm not sure. I don't think these generally operate in Roatan anyway.
>If I'm just headed off to Honduran court to enforce a judgment, then the arbitration is just the lengthy buildup to a process that's exactly as flawed as a Honduran court proceeding.
In many jurisdictions, enforcing an arbitration award is much easier than litigating the issue normally. Usually, the only issue is whether the contract was properly agreed to, and whether the arbitrator was unbiased.
Wonderful post. I couldn't stop thinking about "Oath of Fealty" by Niven and Pournelle. I love and fear this idea. The fear part is; what about the dumb f's that get left behind?
(flying cars are silly and scary.)
There's nothing about law enforcement in the article. Having lived through a transition to capitalism in Eastern Europe, I feel this may be a huge problem. How is it the enforcement going to work? What happens when narco-gangs start moving into the city? Is the city going to rely on the Honduran police? And if so, how likely is it that Honduran police is corrupt and quickly turns into a gang-like structure, if it is not one yet? Wouldn't the new and untested law offer a plenty of loopholes which the criminals would exploit faster than they could be fixed - even more so given that political structure seems to be designed in such a way as to make it hard to change anything?
Oh I think the number one thing about any place like this is that it has it's own security force. You sign on to obey them.
Hm, how would that work? Would they import incorruptible police officers from Norway or something?
Well they are professionals, you pay them well and train as much as possible... and they are human and mistakes will happen. I want to recommend again "Oath of Fealty". I like my police here in the US. (I would support more training.. money. I like Jocko Willick in this regard.)
Honduran criminal law applies, so the Honduran police will certainly have jurisdiction if they choose to exercise it. And the Prosperan authorities will almost certainly hire their own private security force to provide generally first-world levels of protection. This should redundancy against criminals exploiting loopholes, at least where crimes-with-victims are concerned as the victim always has the option of calling the Honduran cops.
It should also provide some degree of protection against corruption in *one* police force, but if they're both crooked they'll probably figure out how to collaborate.
If the local Honduran police are corrupt then I would imagine they'll demand massive bribes in order to not make life difficult for Prospera and its wealthy inhabitants.
Realistically, there's going to be a line item in the budget for "make the Roatan police chief happy", and another one for the Federales. Presumably laundered in some quasi-legal way. But honest Prosperan cops and cheap video cameras will probably be able to document the abuses of crooked Honduran cops well enough to incentivize the Roatan police chief to keep his demands reasonable and his men in line.
This is one of the most important learning experiments of the 21st century. If it fails miserably, we will learn something important (even if just not to try this again). If it works modestly, we can refine and adapt it for human well-being and prosperity. If it works well, we can expand it and scale it for human progress.
The Prospera Governing and Social Contract structures could provide a foundation for Biden’s Build Central America Better goal. It’s management of satellites could be of use.
The concept should be applied to a much larger region within Honduras; or, a series of smaller regions. The focus, unlike Prospera’s, would be on the lowest earners, bringing stability to their villages and towns. Under this umbrella, using Joe’s billions, vetted NGO’s would scale up, harness LT volunteer efforts in housing, education, agriculture, health, water projects....
Beyond the life quality goal is the preparation for investment by corporations. Trying to persuade US corporations to invest in Honduras today is a fool’s errand. The nation is not ready for the maquiladoras supply chain integration that NAFTA brought to Mexico. If attempted, it will only foster the unrest that comes with the rural > urban shift, with the unrest of those left out.
Scott, did any money exchange hands between you and Prospera people?
No.
At least as far as I'm concerned, that money wouldn't have been well spent anyway. My opinions did change from "this sounds interesting but potentially worrisome" to "oh, it's a just a poorly backed pipe-dream that will likely transfer money from gullible people to less gullible ones in the process of failing", but that seems like a _downgrade_ for them.
Do we know what is planned for 2nd generation Prosperans? This issue was eventually detrimental to the Kibbutzim in Israel - the first generation is mostly people aligned with the ideology, but 2nd and 3rd generations had thoughts of their own regarding the way of life, eventually replacing many of the original ideology which led to the collapse of the Kibbutzim project
I don't see why this would require any more ideological buy-in than any other city; it's not a communal project.
They may need to sign the Social Contract at Age of Majority, since it is an explicit document.
My guess is that Prospera will end up hosting a bunch of wealthy nutcase expats and a handful of server farms running complicated cryptocurrency projects and borderline-scam financial schemes.
Makes sense. For when Isle of Man, Gibraltar, or a Canadian Indian Reserve is too serious and restrictive for your weird financial instruments and dubious legal claims.
(Also, casinos.)
But what are they going to do when the Tongan Navy shows up?
https://en.wikipedia.org/wiki/Republic_of_Minerva
If this project is to benefit Hondurans, one would expect the efforts to be focused on providing employment opportunities to Hondurans. Given their level of economic development, this would most likely in the form of low wage manufacturing (sweatshops). That's how SEZs elsewhere have clawed their way to prosperity. Instead, most of the activity appears to be geared toward land speculation and second houses for rich expats.
Those second houses will need maids, gardeners etc though. And the rich expats will need cafes, bars, restaurants, grocery stores, etc.
Thank you Scott Alexander for such of a well-written, comprehensive and extensive recounting of where Próspera came from and where it aims to go. Subsequent analysis here has been entertaining and as one might predict your disclosure has overwhelmingly elicited attention by naysayers. Most are a sad commentary on how intelligent and educated minds cower before the threat of men of action. I’m a pragmatic person, old enough to recognize a project, which by most standards, would be inconceivable or considered too lofty for success. In most cases, it would never become more than a dream, never get off the ground, simply a wasted desire. Who would dare? Only a handful would put themselves out there and work like madmen to congeal such a dream.
I have known Erick Brimen since he was a young man in High School. Way back then the ambition and desire to help create wealth in nations where systems failed their people, such as the Venezuela he came from, was a seed planted in his brain and growing. A test he could hardly wait to meet. The magnitude of Próspera, in the impoverished country of Honduras, with its thousand and one challenges is what that seed matured for. He has shown brilliance and deliberate patience while moving from one thought-out step to the next. The correct path was set early when he reached out to find the most talented minds and experienced individuals from around the globe. You see, Brimen, believes in what he is doing. If you think this is about plopping fancy homes next to a golf course, go back and read the article. This is much more complex and deeper than that shallow task. These unconventional concepts could be transformative for an impoverished nation and in many ways, what is being proposed has not been tried before. If successful this forward motion to create a socio-political system yielding well-being for all socioeconomic levels could be emulated in other impoverished nations. Why not? As conceived, where are the losers? So the question is: Who can stop a person determined to succeed? None of the naysayers here, with their cynical mantra of; “it will fail or it can’t be done”, that’s for sure! So easy to tear down the work of others but the world owes everything to those who believed, were honest, worked hard and were unafraid. That’s Erick Brimen. By the way “First Poster,” no money has exchanged hands between me and Próspera people!
Good for you! Nice to see some optimism on the internet for a change.
I think the criticism is worthwhile. Argumentative dialogue and questioning of a subject is a way to draw out underlying presuppositions and stimulate critical thinking. Do you want a bunch of cheerleaders?
Really enjoyed this piece. Have been interested in this subject for awhile and learned a lot about this example. Fingers crossed we’ll see more experiments like this come to fruition.
Gamaliel's defense works great for charter cities. Either they are going to work or they're not.
They might work better than existing institutions. In this case, people are going to voluntarily move to them. They will have a better economy than the rest of their host country. This will encourage reforms that improves the quality of life for more people in the host country. If this happens, then we should support charter cities because they are a good thing.
They might not work better than existing institutions. In this case, people are not going to voluntarily move to them. They will not have a better economy than the rest of their host country. If this happens, then we shouldn't care. The rich people who bought the land next door decided to turn it into a golf course, and that didn't help the locals much either.
The only cause for concern is if they both don't work and are persuasive enough to convince people to impose their reforms on people who can't leave. I don't think that this will be too big of a problem. They have picked a very visible and difficult criterion for success: a significant number of people voluntarily choose to move there. If they can't do this, then they're left with three buildings next to a golf course, which doesn't seem particularly persuasive.
I don't see how you avoid all the problems with corruption as long as you are reliant on the Honduran criminal justice system.
Fundamentally, that means any problems with bribing Honduran judges or investigators will affect Prospera residents and eliminate the supposed advantages of lower corruption and better management.
"Wouldn’t it be hard to run a single polity on so many unconnected islands and enclaves?"
I'd be concerned that poor governance from the surrounding areas would leak into the enclaves, e.g. drug lords assuming de facto rulership of an enclave. The fact that they're using the Honduran criminal justice system seems especially worrisome. I'd assume it already has severe issues given Honduras' high murder rate.
"If I get in trouble, any disputes between me and my patients will be settled by Norwegian law."
Will a Norwegian judge be contracted to adjudicate?
"For example, if the general population disagree with a law passed by the Council, they can overturn it in a referendum with a simple 50% majority. But the offer only applies within seven days of the law being passed (Trey insists that Próspera’s e-governance platform will be so good that it will be easy to know what’s going on, start a referendum, and finish voting within a seven day period). Even after the seven days, the public can repeal any law. But now it requires a 66% majority, and also this process can only repeal laws, not add them."
50% majority of all eligible voters, or 50% majority of those who show up? If the latter, there's the risk that a small vocal group (on social media say) would collaborate to overturn a law that others weren't paying attention to? I don't like the idea of living in a place where I have to monitor social media continuously to ensure that small vocal groups don't hijack the governance process.
Also if the law is overturned, can the Council retry the same law with a small tweak? Are they limited in the number of times they can do this?
There is no way a project like this could succeed long term in a country like Honduras without the threat of military force from another country. Without a military, or military backing of another country, the project is subject to the whims of future political environments (10 year guarantees are worthless when you have a weak government and weak rule of law). If this project ends up being successful, and the inhabitants materially richer than the rest of Honduras, then populist politicians will eventually end up extracting its wealth through taxation or nationalization. Even scarier, the project could end up subject to the whims of criminal enterprises more powerful than (or working with) the Honduran government/military. And if there is ever a coup, it would not be entirely surprising for the inhabitants to be targets of execution.
> speaking of suing people, the law code seems to cap damages from medical malpractice lawsuits at $250,000, which is a defensible choice, but sure not the direction that the US has gone here.
Not sure, Look at the case of neurosurgeon Christopher Duntsch. He managed to hop from hospital to hospital maiming patients in part because malpractice lawsuits were capped in Texas.
This is a good point. Let me try to figure out how this works.
In fact, Duntsch didn't get sued for malpractice at all until after his license had been revoked. So higher malpractice cap wouldn't have causally helped his patients. But possibly there being a higher malpractice cap would have incentivized people to be more careful in general? I think the people who would have had to worry about a higher malpractice cap would be his malpractice insurance. Usually for psychiatrists your malpractice insurance is not literally the same company as your employer, but maybe for surgeons at a hospital it's different? I'm not sure how this would have been expected to work. I'm also not sure whether there's some other way to sue hospitals in this case - maybe for negligence?
I agree there are potential advantages to very high malpractice costs, but I also hear a lot of stories about them which leave me worried - see eg https://slatestarcodex.com/2014/06/23/court-ing-disaster/ .
I think the idea is that the reason why no one bothered to sue Duntsch was because it just wasn't worth it to lawyers due to caps. Therefore hospitals weren't worried about his past misdeeds as much as they would have elsewhere. At least that's what Dr Death podcast claimed.
A well written and interesting read that brings forward many good questions.
The mention of off shore establishment seems to highlight a medium position where policy assurances will be at the most stretched to find coherent workability.
The real life fantasy painted here is very well depicted.
Thank you for the privilege of reading this insight.
Eh, a bit too much like colonialism with extra steps. Sovereignty is nothing to scoff about.
Modular construction is not at all a new idea. Several millions of units were built decades ago in various parts of Europe (primarily in the Eastern Bloc and in the UK). They mostly went out of fashion due to inherent shortcomings of the principle.
https://en.wikipedia.org/wiki/Plattenbau (for some reason, there are separate English-language pages for the corresponding terms in multiple languages; at least they are all there in the see also section.)
As for aerial taxis, noise pollution goes whirrrr.
Their conception of education system is disappointingly unimaginative. If they're starting from scratch, they can do... good. Not slightly tweak the standard system.
They should separate "minor-care" and "education". Doing pre-school and early education the usual way may be sensible; once children learn to read and use the tech, it should be nearly-free-to-run system with few very well qualified people to handle things it can't handle. Not "mediocre teachers explaining things to 20 kids at a time".
I've recently wrote what I mean more comprehensively, I'll paste it below. Warning > 2k words, some content not-quite-about education, and it's still stream-of-consciousness comment not a fully-thought-out plan.
----
By investing a certain amount at the beginning, perhaps a multiple of the normal cost, one could create a system that works better (educates better) and costs almost nothing once created. The books may not have been enough as far as education is concerned, so ok, maybe it wasn't possible before. But since the '90s or '00s - it's obvious.
I'll elaborate on the concepts. In years 0-III of elementary school, more or less, we have teaching as it is now. At a minimum, a child must learn to read, use a computer (write, etc.), operate the system described below, perhaps arithmetic.
In the "higher" classes, IV-VI or until the end of primary school (although this is a gross exaggeration) the child is still "taken care of" so that the parents can work (after that child is 12 years old - being concerned about it being home alone is a bit ridiculous). But this care is not for the purpose of education; it's for child supervision in a shared space. It serves only that purpose - it provides an environment.
To solve the problem of 'children will have no way to socialize' which also appears as an objection - older children and maybe even adults can also use these 'centers'. Perhaps they can even offload some of the demand for dedicated 'nannies' with their presence.
In theory, the school buildings remain, sort-of, as these shared spaces. Teachers disappear; nannies don't need elaborate education and not as many are needed. Plus, the space is more efficiently used once that's the explicit purpose. Obviously, the education system already serves this purpose implicitly: nannying children so they don't get in the way and "allowing socialization with other kids". In addition, even for adults such places should potentially exist in some way, maybe. And as a bonus, the secularization will leave some existing physical "community centers" which could be repurposed.
So, we resolved the non-educational objections (apart from one covered separately, later). IMO the costs would come out very favorably and we are getting extra bonuses with it anyway.
Now, strictly about education. Convert all knowledge in the current 'core curriculum' into a tree of atomic facts, concepts, data or procedures (like 'how to divide numbers') linked by dependencies / proximity relationships. Add to it the knowledge that is completely missing in the current system. Add metadata about practical importance of knowing this 'knowledge atom'. The tree can be multimodal: text, narrated text, animated explanations, speaking teacher (the best available), diagrams, pictures, photos, 3D models, simulation settings in simulation programs, educational mini-games -> sky is the limit, everything can be improved and developed at any time.
The tree is open, free (made with public money, after all). Despite its sophistication and awesomeness it will end up cheaper for the society than buying school books for a number of years, for each kid. Also, the whole EU+US+anyone_else can work on it together. And it'd be all open-source (although we don't have to exclude the use of non-free software and resources within it, maybe). So in fact volunteers will contribute for free too. Especially since it could be a global system with translations. Which mostly generate themselves from ML - the cost, the actual translation work drops dramatically and will continue to drop.
<<actually, this comment is a translation; I originally wrote it in Polish, I'm mostly leaving the output as-is with some minor fixes, most not even due to translation issues but because I changed my mind on a particular wording>>>.
The knowledge tree is a fairly 'static' object, through. Yes, that in itself may not be enough for providing education. Though the 'dependencies' are already encoded. That is, you can start with any of the 'basic' knowledge-atoms and work your way up. But ultimately an active teacher may indeed have some advantage. Like, a student doesn't understand one relationship somewhere deep and doesn't know it. They may not be able to move on. Or something. I don't know, I myself learned everything actually useful without such a problem but ok, maybe not everyone can.
We need to have have a way of verifying knowledge. Both for the process of learning itself and to get kids to learn if they won't quite comply.
(continuing in next comment)
So, convert math/chemistry/physics tasks from textbooks and such to code that will spit out algorithmically created tasks with random (+ sometimes constrained in various ways) data. Some could also be hand-crafted if need be. 'Quiz' type tasks in fact-based subjects can probably be had 'for free' from the knowledge tree itself, but can also be made from scratch/adapted.
That leaves out harder to automatically verify stuff like essay writing, foreign language pronunciation etc. "Creative", let's say. Not that it can't be done eventually (GPT-4?), but it can also be left for the human reviewers for now. These reviewers will be a handful of possibly highly competent (and paid) experts compared to the horde of mediocre teachers.
These are only the basics, of course. You can go much, much further by thinking outside of standard 18th century means/tech (of course, not really abandoning them, text isn't obsolete after all).
Model historical places and events on state-of-the-art game engines. Immersion. Simulators of physics, chemistry, etc. Make models (well, not really 'simulations' anymore) for higher-level subjects. Some of the tasks for users could be within such models. Think Kerbal Space Station, Factorio with concrete objectives. They could be part of the explanations. Sky is the limit. VR, of course. The cost of today's VR with a suitable PC for these simulations/models/etc on today's level won't be prohibitive forever. And these community centers - perfect way to provide shared tools. Cheap terminals for the really impoverished.
Anyway, we add dynamic systems around this static tree of knowledge. The system will queue the knowledge, individualized for the needs of a particular student. Use spaced repetition. If student can't proceed, some dependencies are not mastered. We trace down the tree from the closest dependencies/relations and find the problematic area. Something like Git-Bisect. We can also use ML of course which will surely crush the problem if there really is one at this point.
Anyway. When user masters what he's currently learning, we move forward. And we give a certain amount of choice to the student. They trace their own path. Partly supported by explicit dependency system, partly by the recommendation-systems-like ML models. So we really shouldn't limit the System to the somewhat arbitrary and... bad... current curriculum.
So, the system promotes 'detailed' specialization, not like it is now. Also effortless branching out, so at the same time the specialization is not limited in a way it is currently. Learning is probably even enjoyable at this point. Or neutral at worst. We add gamification, cheap-to-implement and very-motivating features. Levels, achievements, points, bonuses/buffs, rankings.
I would also add a 'carrot' in the form of literal money. Maybe very small amounts. But let's say an <average> student in the system makes $300 a month. Average. Really good ones could earn more - without exaggeration of course. You can also scale it lower at any time if it is exaggerated. Perhaps restrict withdrawals a bit, or make it scale by age if giving small children money is really that bad.
How much would it improve results, motivation, per dollar spent? It aligns incencites, gives immediate, non-abstract rewards in addition to nebulous far-off-into-the-future ones.
There's a common objection around such ideas of automated education systems: "a student might want to ask a question, and then what?". Realistically, this happens rarely in the current system. When it does happen, responses are usually not particularly... useful. The system as described will eliminate almost all of opportunities for 'misunderstanding' anyway.
But, there's a solution anyway: make a Q&A module, hire as many specialists as needed for solving ongoing problems. Some could also monitor users of the system, intervene if they stumble upon a problematic case - or take note of iffy areas for making it better. Again, nothing compared to the number of teachers and the quality could be higher.
Partly you can redirect other students to answer too. And then there is ML. GPT-3 with a correctly engineered prompt... might not really be fit for such use yet, but it gets close. For particularly obvious questions?
Then there is another big, implicit thing current edu system is tasked to "solve": Certification. The real reason why 'higher education' exists, just like the previous reason is nannying. Previous words on verifying knowledge, tasks for the users don't touch the... security aspect. How do we even know who actually solves the problems?
Soft answer: if possible do everything so that 'cheating' doesn't make sense. Reduce education in the style of cramming bare facts in the heads. Encourage effective acquisition of info in general. Make "using Google" not be a bug, but a feature. Also, tasks could be 'atomic' and time-limited. By being atomic, the time limit could be reasonable while still verifying a given fact is actually in user's head. Or accessible in seconds, which is effectively the same anyhow. Example: show a question without a keyword telling what it's actually about, when user signals readiness reveal the thing and set of possible answers.
Of course some facts are necessary, so actual full solution: you could do a controlled, external 'check', for example every year - or even more often. Students would have tests composed just the same - by the system, tailored to them - the purpose for the test being controlled is just verifying whether they are doing roughly as well as they normally do.
Forcing a sensible pace of student's learning: there are no age cohorts with a clear curriculum, every student is educated slightly differently. This doesn't mean there can't be "common" parts that apply to everyone. And it doesn't mean that it is impossible to estimate the "amount" of knowledge gained / year. The system can do that. Automatically and ~accurately.
Back to "certification". The system described produces a much better assurance of skills and knowledge than the current **joke**. We can add standardized tests to it too, why not. Useful for relative rankings, the meritocracy. Useful, for - I don't know - doctors. Occupational licencing. We can also have external components like "original research", master's theses, etc etc etc. Physical laboratory equipment for specialistic uses. Whatever is necessary.
Anyway. This system would cost, at least the basic version without super-advanced features, well, some money to implement. Not necessarily a lot. But even if it was 5 years of costs of operating the normal system, then we just increase the cost 2x and produce a version 1.0 5 years later. We lay out a clear plan, basics -> more advanced parts. And then, we don't have to wait until the current 6th grade student finishes education step in the normal system, people can be gradually migrated.
The education system would cost pennies compared to 'normal'. Though one could also allocate a huge sum of money - which would still be, say, 50% of the current costs, or even 80% - and do wonders. After all, education - real, meaningful education - would be a valuable asset. And if it's not a country the size of Poland, but the entire EU or a larger collection of countries working together - with local adjustments at most - then the costs disperse. It's mostly software, after all. Costs don't scale that much with amount of users.
And, while education costs in the EU or other countries don't seem like such a pressing problem, see the US.
And, to elaborate a bit on what a **valuable** thing actual education system would be. It would introduce much more meritocracy, removing barriers for social mobility. Your life sucks, or you just want to change careers? Want to try to become a doctor, for example (assuming they continue to earn a lot relatively to other occupations)? You can decide that on a whim at any time and immediately start studying in that direction. It doesn't matter at which hours you're free to learn, or whether you have to work. You don't formally enroll in any institution. You simply gain knowledge atomic step by atomic step.
The results could be (partially) published at will, which would be a cool feature to sift out people online who speak up on a topic without relevant knowledge. Not like you can't disagree with 'mainstream' and 'experts'. - but if someone speaks out of the 'mainstream' line without even a cursory knowledge of the mainstream 'position'...
Other neat-factors: in a similar way you could 'subscribe' to a database of people looking for jobs, indicate what kind of job you are looking for.... apart from 'jobs' it would also be very useful to have 'contracts' for certain tasks. Such a feature alone maybe gives us at least 0.1% GDP growth per year. Making the labor market more liquid.
Oh, that earlier idea about incentive pay for small users... may serve well as a precursor/add-on to the UBI. It nicely solves the "people will become degenerates without jobs" objection (which is absurd, but...).
These and similar ideas are obvious way forward, at least the basics. Instead we persist, and will most likely persist, in the pathetic status quo. Perhaps adequate 200 years ago. For no good reason. Even in the 18th century with 18th century technology we could have done (a little) better.
Now we have technological advances exactly fit for the purpose - and nothing. Nothing seems to go through anyone's head except reforms like slightly changing the curriculum and such. The US: "status quo? or status quo but we wipe out the current $T of debt? (future kids: FU)". Alternatively, another super radical option is "let the state pay those hundreds of thousands of dollars per student".
But Scott, these buildings are *incredibly ugly*! How can you have read Seeing Like a State and come away with the impression that all disgusting modernism needed to become human and beautiful was a spline curve here and there? This is thoroughly un-human, ugly, disgusting Brasília architecture and impossible to defend.
nice writeup! and maybe a nice city until the narcos move in.
My guess is that the most likely failure mode here isn't some kind of ideologically pleasing thing where we see the libertarians or utopians or someone get their comeuppance, it's mundane stuff like not being able to keep their private security forces honest given the culture of corruption they're used to, or some business failure where they get the development half built and then run out of money.
I also think they'd be smart to spend less time being visionary and more time being incremental. Yes, there's a lot broken with first-world medical and building regulation, and I'm sure there are big improvements possible. But the stuff that's going to guarantee failure with this kind of project is mostly a lot earlier in the chain than this. Why will their private security guards or administrators be willing to refuse the traditional "plata o plomo" offer from some ruthless drug gang, especially when those guards and their families are probably living in the normal corruptly-and-ineptly-policed rest of the country? How will they ensure that their provided infrastructure works, when a lot of it will depend on the surrounding infrastructure provided and managed by Honduras? Their size and position seems like it will make them vulnerable to having concessions/tribute/donations extracted from them by the officials in control of surrounding infrastructure like roads and power systems, and those officials are presumably as corrupt as ever. (Probably the answer there involves lining some local officials' pockets--something that might be pretty familiar to people doing property development in NYC as well.)
Can the cycle be broken? Only perseverance will tell.
Interesting at the very least.
I wonder about the literal signing of the social contract, what of children born in Próspera - sign the contract on your Bat Mitzvah? (What happens if you don't?)
Reminds me of an article I read years ago about Gaviotas, Colombia, a sort of unintentional utopia. Not sure if this is the original article or not but it's a jumping off point: https://www.motherjones.com/politics/1998/03/nothing-wasted-everything-gained/
Personally, I found the Prospera thing to be mainly hot air when I did try speaking with them about half a year ago.
I found the pricing for their homes to be outrageous, like, comparable to other nicely designed homes on tax-free paradise islands... except for the fact that those islands are actually tax-free, and the homes exist, and they are no surrounded by a 3rd world violent military dictatorship known for the care-free murdering of dozens of thousands and contested by cartels and foreign interests.
Second, my take was that you would probably have to pay taxes *outside* of Prospera for anything but money circulating inside of Prospera. As in, yes, your business can operate with low tax, but you the individual would need to pay Honduran tax rates on any income that they want to draw from those businesses. Though I might be wrong on this point?
On the whole, my experience as someone with the money and freedom to move into a charter city is that they seem restrictive as hell compared to other options.
Probably better if you're a local though, and that might be what's important, and maybe foreign investors that can throw large chunks of cash would get something out of it. Overall I wish them the best of luck but I see no reason why any normal person with a US/AU/EU residency would choose any of the existing "semi-independent" charter city projects to live in.
How long until southern Europe is broke enough for ZEDEs? Just imagine: low taxes, pan con tomate, smelly cheeses, Mediterranean climate, no guns...
I will withhold judgement until I learn how much the surrounding 5 star resorts pay in protection fees (on top of official taxes) to keep away men in pickups with Kalashnikovs who enjoy kidnapping people for ransom.
I wonder how their rights to private security interact with having to face Honduran criminal justice. Like, I was thinking they could just go all in on having some serious security, and take the men in pickups head-on. But then let's say they kill a bunch of would-be kidnappers... if they have to face a criminal justice system that is "owned" by the same folks who run the kidnapping operation... they're going to have some trouble.
It's interesting to me that they are trying to be more family friendly Disneyland less wild west.
The real wild west's of the world seem like countries like China ten years ago or cambodia where on paper there are so many rules nobody ever follows them.
Of course this situation heavily reduces foreign investment, and western multinationals seem to be the key to development. If this works and especially if there turns out to be enough productivity growth to skim off some money and give it to the ruling Corp AND line corrupt political pockets I see no reason why this couldn't take off everywhere that is corrupt
Sometimes I think we just all agree to have Norway or Sweden rule or Singapore rule everybody.
There are some City-States and Special Economic Zones that went from Third World to First with a different legal system from its former mainland: Singapore vs. Malaysia, Hong Kong, Macao and Shenzen vs. China, P.R.C. Should we add Taiwan to this list?
However, there are also superstar cities who have become greatly rich with the same legal system as the mainland through agglomeration effects: Sillicon Valley, USA. London, UK.
Certainly institutions (both legal and cultural) play a key role on growth, but also agglomeration effects. One of the reasons why they are important are economies of Scale.
I'm completely convinced that this thing is never going to have the same economies of scale than the Special Economic Zones it aspires to be.
Perhaps if it has the entirety of Roatan with 80 km2, close to Macao's area. But that would mean expropiating land, which is what the people fear and what they've promised not to do.
Migration?
People migrate away from Honduras to ran away from gangs, and they migrate to America for the wages and because their American family lives there.
If Prospera manages to keep the crime away, it won't be enough to help with migration because the American family of the Hondurans don't live in Prospera. Even if it doubles the real income per capita of Honduras, it would only be like Costa Rica or Mexico, and it won't get close to America's who is like 5 times the real income per capita of Honduras.
Another of the comments above me is critical:
Those Special Economic Zones already had people. This doesn't, so it will likely attract more capital than labor, making it a very different beast than the rest of Honduras. Likely focusing on finance ("high skilled" labor), turism and casinos ("low skilled" labor), like Macao.
Macao, of course, it's the only place in all of China (a billion people nation) where gambling is legal.
Prospera at least it's on Roatan, a caribbean jewel.
Macao gives the dividends of its gambling to their own citizens.
If Prospera it's going to be at least a little democratic, it should make all of its citizens shareholders in the company that owns it.
If the company isn't willing to open up to democracy, Honduras should annex all of Roatán (with its 100,000 people) to prospera and then have them kick out the company, and then outlaw gambling in the rest of Honduras. The result? Roatan would become a macao-sized island with low taxes, a democratic government, and ready to be the Las Vegas of Latam.
At least "laws against ... most gun ownership" means I don't have to care any more.
I'm an economist. Acemoglu and Robinson say that institutions are the ultimate cause of development. All that sounds pretty neat. But they could be wrong. Maybe Shenzhen, Dubai, and the United States got rich because they have good institutions AND some other factors, such as access to large markets, some network externalities that lead to high rates or technological adoption... I mean you can take your pick! If I knew the answer I would be claiming my Nobel. So, being agnostic about the causes of the wealth of nations, I think this is an experiment on which percentage of the variance of GDP is explained by institutions. That's probably a number between 10 and 40% (my personal prior). So, if my prior is right Prospera is gonna get anywhere from 10 to 40% of the way to rich country status. That's not nothing, but its not gonna get you 100% of the way to riches. Thats basically what China did. So, even if this ZEDE thing is a success, its not gonna bring Star Trek post-scarcity to the world. Also, beats almost all of the RCT-approved programs development economists work on. I really look forward to it as a Latin American economist.
Unless Prósperans are randomly selected among Hondurans, this experiment will not tell you anything about how much of GDP is explained to institutions, as opposed to genetics, culture and other factors.
End of 2022? At least we won't have to wait long to point and laugh when it inevitably falls through. But it is an admirable effort at least.
"They just want to give people who have been ill-served by statism and nationalism a choice other than traveling three thousand miles and scrambling over barbed wire fences."
But Prospera has a membership fee. $260/year for Hondurans. What happens if Hondurans decide they want to live there, but don't want to pay $260/year and cross the border without permission. Will Prospera have barbed-wire fences? Since Honduras isn't exempting Prosperans from the country's gun control laws, what will security look like? Will Prosperans be trying to defend their security from narco-gangs or bandits with pointy sticks, or will Honduran security forces be guaranteeing its territorial integrity?
Some interesting ideas, but I'm skeptical:
* Why a flat tax? This is just begging for the rise of robber barons. If 1% own 90% of the assets, they should be paying 90% of the taxes. This is how insurance works, you pay proportional to the value of the asset and the risk of loss. Presumably, a society means we all share the same risk of loss, which means the only dial available is the value of the asset. Taxes are partly social stability insurance by ensuring some basic level of equality.
* Doctors choose the laws under which they operate, but doesn't that mean they can't presrcribe treatments that aren't approved by those countries' regulatory bodies, contra claims that patients can access any drugs approved in any country?
* Capping damages is dumb unless it's constantly adjusted for inflation.
* I don't get circular architecture. Looks nice, but wastes space.
* Re: voxels, interesting, but problematic. At what vertical limit do voxels end? Do they extend to outer space? Also, the Earth is a sphere so there are strictly more voxels directly above a particular voxel than there are below. Also, how do VTOL drones navigate all of these voxels? Finally, buying voxels to ensure your view isn't trivial; it means you'd have to buy every voxel extending out to the horizon (or whatever view you want).
>America is a better place to live than Honduras. This isn't because Americans are smarter, or harder-working, or morally superior. It's because Honduras has bad institutions.
Citation needed. The average Honduran has an IQ of ~80. If you replaced the entire population with Japanese or Germans, and left the institutions intact, it would turn into a successful country overnight.
[citation needed] for your own claim for start, dear Cringeworthy
Institutions don't magically furnish individuals with the attitudes and abilities needed to be economically competitive. That kind of socialization or cultural programming is long-term, complex, and largely outside our conscious and deliberate control.
Consider a failed state like Uganda, which in 1970 was a reasonably nice place to live. One group of people (Indians) was more capable than another (native Ugandans), and so came to dominate the economy. After Idi Amin expelled the Indian "oppressors", the economy collapsed. The same pattern occurred in Zimbabwe.
Here's a good documentary on the subject: https://youtu.be/p-i0JVip9N4
In neither case did institutions, per se, have anything to do with national dysfunction. Rather it had everything to do with the decisions made every day by thousands of ordinary people. When people make different decisions, they get different outcomes; and different groups make different kinds of decisions. Therefore different groups get different kinds of outcomes.
This is so basic and self-evident you'd need a deeply entrenched cognitive bias not to see it. Egalitarian bias also helps explain why Scott, an unusually careful thinker, would make such blatantly false (yet empirical and easily verifiable) claims as "Hondurans are as smart as Americans".
https://worldpopulationreview.com/country-rankings/average-iq-by-country
For the same reason that Indians can thrive in Uganda when Ugandans cannot, or that Rhodesians can thrive when Zimbabweans cannot, so I contend that Germans or Japanese can thrive in Honduras when Hondurans cannot.
Do a blog on Liberia.
Ideally they'll use modern voting methods like approval voting, score voting, or STAR voting. This would hugely improve their odds of success.
Ideally they would not allow voting at all. Who wants a second Honduras?
https://hondurasnacionymundo.blogspot.com/2021/06/zedes-una-mirada-prospera-en-honduras.html I needed it in Spanish for my country Honduras, there are your credits and the corresponding links. I hope not to cause inconvenience and in advance thank you very much it is an excellent article
Nice try, yet I would still need citation.
Here is one that is not that relevant:
https://www.google.co.uk/url?q=https://cli.re/ZWwm4Z
It has 3 buildings in a distant country and the leftist press is already raving mad about them. There is no way they can possibly be sucessful.
I took part in a few calls with the management.
They seemed to me focused mostly on real estate investment, and I thought they're lacking a way to attract people to come there and create businesses.
I took it on myself together with an entrepreneur from California to set up a little trip and invite other entrepreneurs to see what we can build there: https://www.buildprospera.com/
We're calling on entrepreneurs interested in Prospera to join us!
(Sorry for the promotion, but Scott seemed to me to explicitly allow it: "Some people have requested guidance for when you can advertise your own blog/website/etc in the comments here. I would say: on regular posts, only if it’s something very relevant, so relevant you would post it even if it wasn’t yours." https://astralcodexten.substack.com/p/open-thread-208?token=eyJ1c2VyX2lkIjozNzg1NTkzLCJwb3N0X2lkIjo0NzYwNTQyNCwiXyI6InN1UVRLIiwiaWF0IjoxNjQzMDI3MzkwLCJleHAiOjE2NDMwMzA5OTAsImlzcyI6InB1Yi04OTEyMCIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.nn3t7Rvr85cMkveEzd-IqWl1DBTWufHLgeEcC_7FCFM)