Finding Liberty in Parallel: Bitcoin and the Free Cities Movement

This article from October 27th, 2022 by Stephan Livera was originally published on Bitcoin Magazine

Last weekend, I had the pleasure of attending and speaking at Liberty In Our Lifetime, a conference organized by the Free Cities Foundation in Prague, Czechia. And it dawned on me that we’re now seeing the rise of an adjacent and relevant movement for Bitcoiners interested in citadels and what they might even look like in the real world.

The Free Cities Movement comprises a combination of Libertarians, Bitcoiners, free private city operators and investors, seasteaders, those seeking to create intentional communities, and those attempting to create parallel institutions and structures within the existing statist world of today. What lessons are there in this movement, and how can more Bitcoiners get involved?

At a high level, there is a strong crossover between the cause of many Bitcoiners and those pursuing free cities. They have a broadly Libertarian ethos and are interested in financial freedom and creating parallel structures. For people unfamiliar with the free cities movement or the free private city concept, I recommend listening to my podcast episodes with Titus Gebel (SLP161, SLP417) or reading the free private cities white paper as ways of learning more.

As a leader in the free private cities movement, Gebel opened the conference up with a reminder of why there is a fundamental need for this parallel approach. He noted that modern-day states are being driven by the “bolshie-woke” progressives. Many institutions of society have effectively been captured, bloated, and/or corrupt. Progressives simply go where their ideas do not have to work in the real world, such as universities or the media. Over time, the social and cultural degeneration has worsened, such that even a moderate or center-left person in decades gone by is now considered a “far right-wing” person.

For this reason, there is a need to create alternatives. But it is only through trial and error that we can understand which approaches work and which ones don’t. Of course, many states will resist this kind of thing. Still, some may be brought on board if the approach is “win-win” in terms of creating local jobs and opportunities for people or attracting foreign investment.

Overall, I sensed a bias toward action rather than merely speaking about the philosophy of freedom and Libertarianism, which is one I appreciate.

ZEDES: PRÓSPERA MORAZÁN AND CIUDAD MORAZÁN

Some of the most prominent projects within the free cities community are based on the idea of using Honduran Zones For Employment And Economic Development (ZEDEs) to create the conditions for good, private governance.

Now, there’s good and bad. The good is that the projects are carrying forward with building, and given a setup that promises favorable regulation and lower taxes, this could be attractive for investors, entrepreneurs, and even workers. The bad is that there are challenges on the way, and some states will resist as they could view free private cities as a challenge to their national sovereignty.

Trey Goff of Próspera spoke about the market for governance and how there is a huge market here in terms of additional potential wealth globally. How much extra wealth could be created if people worldwide had access to high-quality governance?

Could these free private cities replicate the successes of other economically free zones such as Shenzhen, Hong Kong, Singapore, or Dubai?

The Próspera governance platform was laid out like so:

Goff also noted that by providing the right circumstances, such as competitive taxes (such as a 10% flat income tax, 2.5% value-added tax (VAT), and 1% land value), along with high-quality infrastructure and dispute resolution, they might hypothetically achieve the following growth:

And it’s not all about rich businessmen and expats. There will be job opportunities for local Hondurans who could come and work for a company inside the ZEDE/free city. Some projects intend to provide work opportunities for blue-collar workers and have housing that is low-cost and accessible. Some speakers mentioned how the ZEDEs want to hire Hondurans and provide well-paid jobs, paying above what they would otherwise earn.

THE ELEPHANT IN THE HONDURAN ROOM

To be clear, there is one elephant in the room: the recent Honduran election and change in president, and the Honduran congress repealing the so-called ZEDE law to undo the ZEDE framework. There is technically a 50-year protection in place, according to the presentations, as the government is supposed to respect the “acquired right.” However, one Free City Project speaker noted that the government still controls the men with guns. So, it’s still unclear what happens with these particular ZEDEs/free private city projects as a ratification process is expected to take place next year.

I sympathize with the people operating, investing, and promoting the ZEDEs, as they are likely subject to unfair mainstream media treatment. Bitcoiners know this feeling well, as they are subject to being told that “Bitcoin is dead” (for the thousandth time) or that “Bitcoin boils the oceans” (while the mainstream cites a statist central bank blogger with an ax to grind). From what I could tell, ZEDE operators seem to want to provide liberty, choice, and improved prosperity.

ZEDES FROM A BITCOIN PERSPECTIVE

Interestingly, for Bitcoiners, Próspera is open in terms of legal tender, and there is no capital gains tax, permitting free spending of Bitcoin without accounting and record-keeping headaches. Also of note is that the island of Roatán (Próspera is located on this island) also has focused on Bitcoiner education.

Dusan Matuska spoke at the conference about his educational efforts with AmityAge Academy, Honduras’s first Bitcoin education center. Bitcoin workshops, restaurants, and pubs on the island accept Bitcoin, and even Bitcoin education projects and events are planned, such as the Bitcoin hill run.

SEASTEADERS

Some influential people from the seasteading movement, such as Patri Friedman and Joe Quirk, were also present. The tagline I noticed was, “Stop arguing. Start seasteading, ” which I can understand given the attitude of many statists around the world who proactively stop Libertarians and other free-minded people from having freedom.

If all (or most) of the land on earth is claimed and ruled by statists, is the answer really to go and set up shop on the seas? I saw various approaches and ideas being shared in this way, such as creating a SeaPod (or perhaps to be stylized as a “SeaBNB”), which could be set up so that the visitors/inhabitants get a full 360-degree view of the sea.

Various technological and almost sci-fi ideas were shared, too, such as drone delivery, helipads, and intelligent voice assistants (that don’t “phone home” to Apple, Google, Amazon, etc.).

Separate from the SeaPod, there were also ideas presented on how to gradually create a community of like-minded seasteaders who would first get together in their boats in marinas around the world and then slowly and gradually shift out in stages, the idea being to form connected floating platforms that permit freer markets out at sea, and to have the ability for people to join, leave or to reconfigure their components of the joint floating platform, all within a free market voluntary context.

FLAG THEORISTS

Of course, from the Libertarian world, there is “flag theory, ” we saw some consultancy services such as Katie The Russian’s Plan B Passport and Staatenlos’ talk about playing the geo-arbitrage game.

This could mean using various kinds of “flags”: citizenships, residencies, business structures, bank accounts, phone service, insurance, and various other components to select from choices worldwide — instead of being locked into one country. This crowd is very familiar with using Bitcoin as part of an overall strategy to gain freedom. Generally, they are comfortable transacting using Bitcoin.

BITCOINERS

Of course, Bitcoiners were present, too. I gave a talk about some practical tools and examples of people or organizations using Bitcoin as a parallel system.

We also saw some well-known Bitcoiners present and host a panel discussion on Madeira, an autonomous region of Portugal. Daniel Prince, Knut Svanholm, Andre Lojas, Jeff Booth (virtually), Greg Foss (virtually), and Lawrence Lepard (virtually) presented on the Free Madeira initiative.

And, of course, while in town in Prague, the Bitcoiner crew visited Paralelní Polis, a unique organization known for promoting liberty and crypto anarchy. There, you can pay with Bitcoin on-chain or through Lightning!

SUMMING UP

These various projects and methods are additive and help the overall cause of freedom. For example, the flag theorists encourage individuals to acquire additional residencies or passports and play the jurisdictional arbitrage game; this helps reinforce the idea that countries or states have to compete with each other to attract talented individuals or businesses. The creation of new free city projects also helps provide new opportunities. The seasteading efforts (though perhaps not my cup of tea) are still additive in providing new opportunities for people to express their desire for freedom and to choose a different jurisdiction.

Of course, most powerfully, Bitcoin has a big role to play in enabling these other projects and initiatives to operate, even despite the fiat banking system’s resistance. We should all look for ways that we can act more freely and grow our parallel financial system: Bitcoin.