Government cartels fear superior competition, but they cannot keep a lid on it forever. Just as taxi cartels eventually gave way to peer-to-peer transportation apps such as Uber and Lyft, so too will centralized states give way to competitive microstates—à la Liechtenstein.
This optimism for decentralization, express consent, and private governance might smack as utopian. After all, I have been hankering for such an outcome for two decades, since my early college years in Boston and through my days hosting The Stateless Man podcast. Pioneers in this field, such as Spencer Heath and his grandson Spencer MacCallum, hankered until their deaths. I have witnessed the fall of the ZEDEs in Honduras and reported on the Galt’s Gulch Chile fiasco.
As with cryptocurrencies, though, a little patience goes a long way. I got to meet MacCallum in 2013 at the Startup Cities Weekend in Guatemala City, hosted by Francisco Marroquín University and the Startup Cities Institute. Zachary Cáceres led that project and has resurrected it recently with a Startup Cities newsletter.
Innovative projects and dreamers carrying the torch continue to proliferate. That includes Max Borders, author of The Social Singularity (2018) and Joyce Brand, a writer with the Free Cities Foundation and the author of Pioneering Prosperity (2024). Milton Friedman’s grandson, Patri, has made disruptive governance his life’s work and founded the Seasteading Institute.
Forgive me for burying the lead here, but the question remains unresolved: why will startup cities inevitably succeed where the ZEDEs failed? To be fair, there is a slight possibility that the ZEDEs will make a comeback. At present, though, the project has no legal standing in Honduras, and confidence is severely damaged, perhaps irreparably.
Brand joined me recently for a podcast episode, and she left me with optimism. She and I agree that creating autonomous or semiautonomous zones is a difficult task. That being said, as zones with even a bit of room for innovation arise, they will demonstrate proof of concept. They can even begin as modest special economic zones, of which there are many.
There need not be a grandiose revolution and fall of the centralized, redistributive state in one foul swoop. Rather, the predatory and confiscatory state is obsolete and can die a death of a thousand cuts. As awareness spreads of innovative governance, mobile capital and labor will gravitate towards opportunities such as seapods and the Noem “made to change” city.
This emergent approach is the healthiest and most resilient. Incremental success will prove that there can be an endless line of Liechtensteins, with world-leading per capita wealth and living standards. We are gradually witnessing an awakening towards accountability in governance and choice at the local level. A longtime friend, Gabriel Scheare, led Fort Galt in Chile and has recently started the Center for Local Autonomy. He is right on cue to generate even more momentum.
