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Sign of Model City Revival in Honduras

January 26, 2013

The news

By a large majority (110 votes to 128), the Honduran Congress approved the modification of three articles of the country’s constitution, giving powers to Congress to create areas subject to special arrangements, referred to as “Model Cities” that were declared unconstitutional last October for being considered “states within a state.” reports that “The law consists of two approved articles. The first amending Articles 294, 303 and 329 of Decree 131 of January 11, 1982 containing the Constitution, which divided the country into departments. These ‘are divided into autonomous municipalities administered by corporations elected by the people, in accordance with the law’.
Without prejudice to the provisions of the preceding two paragraphs, Congress can create areas under special schemes in accordance with Article 329 of this Constitution ‘.

The reforms also include the jurisdiction of the Supreme Court when it has to do with Article 303, which says: ‘The power to dispense justice emanates from the people and is administered on behalf of the State free of charge, by judges and independent judges, subject only to the Constitution and laws ‘. It goes on to say:’ the judiciary is comprised of a Supreme Court of Justice, the Court of Appeals, the Courts, by tribunals with exclusive jurisdiction of the country in areas subject to special regulations established under to the Constitution, and other entities established by law ‘.

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Voice & Exit Event in Austin, March 9th

January 25, 2013

Learn more here:

Voice & Exit is about:
•    Advocating non-coercive means of making social change
•    Highlighting people who roll up their sleeves to make change without political power
•    Celebrating the creation of new rules and ways of organizing communities

Voice & Exit
 is an event in Austin, TX to be held on Saturday, March 9th, 2013—in parallel with the SXSW interactive conference. Eleven fascinating movers and shakers will take the stage to present eleven short-form (TED-style) talks about innovations in social entrepreneurship and radical community. Each talk will be filmed for high-quality web distribution following the event.

Developer Pitches Charter City on Island Near Detroit

January 14, 2013

ImageFrom the Detroit News

As the broken city thinks big and radically about its future, a developer is stepping forward with a revolutionary idea: Sell the city’s Belle Isle park for $1 billion to private investors who will transform it into a free-market utopia.

The 982-acre island would then be developed into a U.S. commonwealth or city-state of 35,000 people with its own laws, customs and currency.

City officials are likely to reject the plan. But on Jan. 21, supporters including Mackinac Center for Public Policy senior economist David Littmann, retired Chrysler President Hal Sperlich and Clark Durant, co-founder of Detroit’s Cornerstone Schools, will present the Commonwealth of Belle Isle plan to a select group of movers and shakers at the tony Detroit Athletic Club.

This American Life on the Charter City Episode in Honduras

January 13, 2013


A young idealist named Octavio Sanchez is chief of staff to the president of Honduras. He gets an idea: What if you could cure all your country’s ills by just … starting over? In one little spot, you could create a whole new, perfect city. Do all the reforms you want to do in that one place — and if it works, it could spread to the whole country. But how could he pull off such a radical project?

Karl Marx and Milton Friedman Would Agree: We need Innovation in Government

January 2, 2013

This is a guest post by Edan Yago. He is a entrepreneur who studied neuroscience and philosophy. He comes from a long line of rebels and freedom fighters. His family fought Nazis as partisans and fought the Apartheid government of South Africa. Yago has continued this tradition in Israel where he was a conscientious objector to the military and has volunteered in both Jewish and Arab schools teaching the principles of freedom.  –Editor

The future is going mainstream. Publications like the Economist, Forbes and the New York Times have finally figured out something that has been obvious to us for a while now – technology is moving at breathtaking pace; but, at the same time, we are experiencing a “great stagnation”, because vested interests are doing their best to limit change. Specifically, innovations like P2P sharing, virtual currencies, 3D printing, online education and DIY health monitoring are threatening the business models of large established players – everyone from big media to taxi unions. These vested interests are fighting back by smothering innovation with a blanket of labyrinthine regulations and patents.

What this boils down to is that our future is being stolen from us – because of a mismatch between the pace of technological change and governmental change.



For the last couple of decades, starry-eyed futurists, singulatarians and transhumanists have espoused a crazy “techo-utopian” idea: Technology is going to make things so cheap that abundance, rather than scarcity, will become the norm. Futurists have been the recent champions of this idea but they did not invent it. Intellectual giants of the past have been animated by this vision, which they could see as clearly emerging from the trends of technological progress.

John Maynard Keynes published an essay in 1930 – Economic Possibilities for Our Grandchildren – in which he predicted that, by 2030, society would become so rich that “for the first time since his creation man will be faced with his real, his permanent problem — how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.” Not long after, in 1932, Bertrand Russell wrote “In Praise of Idleness”, where he suggested that technological and scientific progress should make it possible to reduce the work day to only 4 hours. However, way ahead of these two giants and far more influential, was a thinker for whom the increasing productivity provided by capitalism was the central idea in this thought.  In 1848, Karl Marx described in the “Communist Manifesto”, a “society that has conjured up such gigantic means of production” that it needs to deal with an “epidemic of over-production.”

Marx realized that at some point, capitalism would make things so cheap, that capitalists could no longer be able to make a profit. When this happened, the capitalists would fight to limit abundance. Marx also predicted something else, that Big Business would try and capture whatever benefit could be squeezed out of technology to reduce its reliance on labor. So workers (the 99 percent) would find themselves, on the one hand, competing with technology for an ever decreasing slice of the pie and, on the other hand, forbidden by law to take advantage of technologies that could empower them. In other words, Marx predicted both DRM and outsourcing. It is this combination of being restricted from either end that brings Karl Marx and Milton Friedman to agreement – this is not a free market, it’s a rigged game.

Which is why we are now seeing right-leaning publications like the the Financial Times agree with the likes of Paul Krugman. The FT noted that “companies have an interest in sabotaging progress and efficiency because not doing so could lead to the sort of abundance that might make it impossible to monetise anything” and linked this to thoughts by Krugman, who believes this helps account for decades of wage stagnation in America.

This war, with technology and individuals on one side and Big Business and Big Government on the other side has only just begun. As technology increasingly has the potential to empower individuals at the expense of centralized power, the steps that vested interests will need to take to hold back the tide of progress will become increasingly draconian. We need to reorient our thinking around this problem. In a world where Marx and Friedman would agree with Krugman, Keynes and even Ray Kurzweil, the old political divides are increasingly irrelevant. Technological change is the dominant fact of our modern existence. We must figure out how to adapt our governments and rules to take advantage of progress. The new dividing line in politics is between those who are ready for an evolution in society and those who want the past to control the future.

NPR’s All Things Considered on Seasteading

December 18, 2012

Listen here.

UpdateTSI responds to the story:

Our biggest grievance was the segment’s failure to recognize seasteading as a movement to enable multiple competing visions of governance. Professor Holly Folk, the expert featured to provide a counter-argument to seasteading, demonstrated her incomplete understanding of our strategy by focusing on potential problems with starting a new libertarian intentional community. She alleges a desire by seasteaders to “game the global system,” and claims libertarians have “a worldview that’s going to be attractive to people who are in some ways probably not hard-wired to behave and take orders very well.” The segment contains no evidence for the first allegation. Folk’s second claim might have some validity, but only if we were advocating a single community based on a contrarian philosophy.

Another disappointment was the labeling of our supporters as “rich techies,” a framing which hardly does justice to the diverse composition of our movement. The defining feature of our local meetup attendees has always been passion for alternatives to the governing status quo, and dedication to enabling a broad range of new communities experimenting with innovative solutions. Being so close to Silicon Valley, many of our local supporters are naturally interested in harnessing recent technological progress to advance humanity in other realms, such as the rules for organizing into peaceful and prosperous societies.

Additionally, the references to profits as the motivation behind our efforts are overdone. Yes, the Institute explores ideas for making seasteads economically sustainable, but profits merely exist to signal which seasteads are meeting the demands of citizens and customers, and to encourage innovation. Seastead communities will not be “built around profits” any more than existing communities on land, which of course depend on the existence of economic opportunity to support their citizens.

As diverse as our support is, it continues to frustrate us when the media pigeonholes the concept of seasteading as exclusively libertarian. Fortunately, history will not remember us for a particular ideology, but instead for our pioneering of a movement to improve all of humanity’s relationship to its governments, and to the planet. We are hopeful our true vision will still reach many of NPR’s listeners, and we appreciate the opportunity to be showcased to their audience.

More Complications to the Tiebout Model

December 17, 2012

The Tiebout model proposes that because entry and exit out of commuter towns are relatively easy, we should expect a competitive market in local governance. If, like Gerard Depardieu, you don’t like what you’re getting, you flee somewhere more amenable. Each town offers a bundle of goods–schools, street cleaning, parks, police–and each bundle has a price collected as taxes. And because people desire these goods in different degrees, we see, as the communities sort themselves out, a difference in the quantity and quality of amenities any town provides.

Bryan Caplan started things off recently by highlighting some absurd conclusions of the model: it implies local governments will not redistribute wealth from one population segment to another (and yet we see that it does) and it suggests we should see little waste in the provision of these local goods (and yet we know how our public schools are run).

Arnold Kling followed up with some more difficulties for the theory: exit is not frictionless and the bundling of local goods helps to pile on lots of pork.

David Friedman added a note for Bryan’s post:

What’s wrong with [the model] is that land can’t move. If the local government engages in exploitative taxation, pocketing the money, people move out. As they move out, land values fall. They stop moving when the drop in land value just balances the cost of the exploitative taxation. The implication, if the rulers are smart, is that they will produce an efficient bundle of services, but tax away the land value and pocket it.

One more point I’ll add to Arnold’s thought. Our friends and the networks we create take time to develop. As a child, I hated moving to a new school because it meant I lost my friends and had to make new ones. The same effect holds for growing networks in an industry. For example, there’s some evidence that startups located in a founders’s home region outperform those started in unfamiliar places. In addition, we come to grow attached to the businesses and vendors in a neighborhood. Routines enable trust. And so, whenever we move communities, we also lose the Hayekian local knowledge about where we live, all the little tricks such as what roads to run on and where to find parking places at the train station. Sure, all these difficulties can be overcome, but the pebble problems add to the burden of exit.

Patri’s P.S.  Also see Bryan’s paper “Standing Tiebout on his Head” (linked at the end of his essay), and my response: Seasteading, Tiebout, and Federalism: Seasteading FTW


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