Free Cities: What could be wrong with that?

This post is an update of a previous post on The Charter Cities Debate and Democratic Theory. A new twist on Paul Romer’s idea of charter cities has come to my attention. It is promoted under the name of “free cities.” The home base seems to be the Free Cities Institute headquartered at the Francisco Marroquin University, a right-wing university in Guatemala.

The point of my previous blog was that while Paul Romer may be a normal well-meaning American liberal, his charter cities idea partakes of a much older theme, namely that classical liberalism and libertarianism (always “right-wing” unless otherwise qualified) sees no moral necessity in having political democracy.

The classical liberal view is that consent is the only bottom-line moral prerequisite in a political governance system, and democratic self-government is only one option in the marketplace of permissible governance systems. One could consent to a democratic constitution that guaranteed the rights of self-governance to the citizens–or one might consent to a non-democratic constitution, classically called a pactum subjectionis or pact of subjection, where one alienated one’s self-governance rights to become a subject of a ruler or sovereign (e.g., a corporation). Where such a non-democratic constitution is already established in a polity, then one would give consent by voluntarily moving into its jurisdiction.

The important point, from this viewpoint, is not joint self-governance in a polity but having a real choice between different types of governments that compete against each other in the governance marketplace for businesses and citizens subjects. A well-functioning democracy would be fine but so also would be a classically-liberal business-friendly rule-of-law non-democracy, like (colonial) Hong-Kong or Dubai, where the rulers were “enlightened rulers” (in the sense of having taken to heart the classical libertarian themes of, say, von Mises and Hayek).

One currently popular way of expressing this theme in libertarian circles is to rhetorically ask:

What is so important about democratically choosing a government in one place, when the real point is to be able to democratically choose which government to live under, e.g., by being able to freely migrate to a free city or charter city (and to freely exit if the government breaks its commitment to the rule of law, etc.)?

In this remarkable discourse, even the word “democracy” is bastardized into the description of a wide choice for the customer in the marketplace of governments in the variety of Hong-Kongs and Dubais and the like. For instance, on the Free Cities Institute website, they managed to squeeze in a cognate of the word “democracy” by calling for “Democratizing Choice of Law, Governance, and Regulation.”

My original post and the links there give a more expanded version of the inalienable rights argument against this view that it is OK to alienate one’s rights of self-governance to an enlightened non-democratic ruler. The libertarian case for such an alienation of self-governance rights is coupled with the possibility of exit when the rulers break their commitment to enlightened principles. Thus when things go bad (and history does seem to have some examples of “enlightened” autocrats going bad), then the customer should have the right to freely switch brands, i.e., to exit the “free city.”

In a democracy, the citizens would have the right to “exit” the governments that have gone bad, i.e., to throw the bastards out, but in the libertarian version of the “free cities,” the substitute for those rights of citizens is the right of the subjects to exit themselves, i.e., to “leave it” for some other “free city.” As the ruler-gone-bad would see his subjects leaving for competing “free cities,” then he would be pressured (by the drop in land rents/taxes) in the governance-marketplace to see the errors in his ways and to clean up his act. Thus we see the usual “logic of the competitive marketplace” applied to the question of political governance–with the notion of democracy carefully excised from the discussion except as a description for the customer-subject’s wide choice of brands of governance. For instance, one looks in vain for any discussion of democratic governance of the so-called “free cities” in the website of the Free Cities Institute.

In my previous post and on Mike Leung’s and my new Facebook theme page, I give the quotes from the classical apologists for voluntary slavery contracts and voluntary non-democratic constitutions (pacts of subject-ion) that form the intellectual history behind the classical liberal and libertarian view that the only basic requirement is consent (as opposed to coercion), so consent to such contracts is one form of permissible contractual arrangements. I also give a range of the quotes from the opposite inalienable rights tradition that descends from the Reformation and Enlightenment (with some anticipation in the Stoics) and that gives the critique of the alienable-rights tradition that finds its modern form in libertarian circles.

It is good to be aware of this inalienable rights tradition (almost entirely ignored in liberal intellectual history, e.g., in the history of the slavery debates) which seems to escape so many well-meaning modern liberals who “Like” the “free cities” rhetoric seemingly without understanding its roots in non-democratic thought.

But one might also be aware of the simple political economy behind these ideas. Political democracy, with one-person/one-vote, is the only real constraint on the total one-dollar/one-vote rule of wealth over society today. Hence the dream of many ultra-wealthy individuals and their foundations is to de-legitimize the whole idea of an inalienable right to democratic self-government in favor of applying the marketplace logic of free choice to political governance as well.

You prefer to give up your citizenship rights to be a subject of an enlightened ruler? Fine, that would be your free choice where there is a democratized choice of law, governance, and regulation in free cities and the like.

But the inalienable rights tradition has at least succeeded in removing the free choice of the voluntary slavery contract as well as the free choice of the people in any American city or town to alienate their rights of self-government to become a “free city” governed by, say, a private corporation. Another free choice that has been removed or abolished is the free choice of women to give up their legal personality in the old coverture marriage contract where “the husband and wive are one person in law, and that one person is the husband.” One wonders if all the libertarian thinkers have moral clarity (and guts)–as did Robert Nozick concerning the voluntary slavery contract and pactum subjectionis–to argue for the free choice today of the coverture marriage contract or perhaps the modern variant in Saudi Arabia. By their “logic of freedom,” the real problem in, say, the Saudi-style marriage contract is not the legal alienation of the rights of the woman (who goes from being a feme covert of her father to being a feme covert of her husband), but the lack of free choice in the marketplace of husbands and in the lack of free exit (when things go bad). May all the libertarian intellectuals in the right-wing think tanks and university institutes have the courage of their own convictions (and the convictions of their ultra-wealthy sponsors)!

While I am not really surprised at the arguments of right-wing libertarian thinkers, I am a little surprised at the well-meaning modern liberals (e.g., Paul Romer and others) who out of perfectly laudable concern for improving the lot of people in the developing countries are so willing to throw democracy under the libertarian bus.