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.
[citation needed] for your own claim for start, dear Cringeworthy
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.