#018 - Free Private Cities: Why Governments Are Obsolete Relics of the Past /w Dr. Titus Gebel

Show Notes

Episode Contents

This episode talks to Dr. Titus Gebel about how Free Private Cities could fundamentally change the way we view government as a whole and force governments to compete for their citizens. We also explore why the structure of government hasn’t changed much throughout history and why democratic welfare states eventually all decline and create social unrest among its societies.

In this episode I talk to Titus and discuss some of the following topics:

  • What “Free Private Cities” are, how they differ from “Special Economic Zones” and other similar models
  • Historic and successful examples of Free Private Cities and why they didn’t prevail
  • Why the structure of government hasn’t changed much throughout history and why moving to another country isn’t always a viable option
  • If Free Private Cities have majority appeal
  • How and why democracies around the world have been failing us
  • Why democratic welfare states eventually all decline and creates social unrest among their societies
  • Why small countries with a limited government and countries with little social structures tend to be more hospitable and have more tight-knit communities
  • Real-life examples of Free Private Cities from around the world along with their biggest challenges
  • How social welfare, education, taxes, crime, and other issues would be handled in Free Private City

 

Summary

  • I think it’s safe to say that we should have much more competition among governments and have various societal models, or products if you will. And, this is probably very hard for people to accept, that democracy might not be the end-all-be-all solution (or even the best solution) to all of the problems we face today.

Here’s are some additional thoughts that listeners should ruminate on:

  • If you believe that people (at a certain age) can and should take responsibility for their lives, then that has to include the fruits of their labor as well as taking responsibility for their own mistakes.
  • And if you view humans in a positive light, then you have to allow people to do what they want, they’re going to make a ton of mistakes, they’ll do more things right than wrong, but in either case, you don’t have a right to intervene. But politics is about amassing power to tell other people what to do.
  • As we’ve seen throughout history and countries around the world, even in liberal-democratic constitutions, that these democracies violate their own civil laws, especially if these countries have a welfare state (some countries even have a warfare state as well). This welfare state forces one person to live at the expense of another, simply because social groups demand the redistribution of wealth.
  • Don’t forget, this redistribution is only possible by taking away the fruits of others’ labor. The consequences? Never-ending fights for distribution.
  • Just ask yourself: How do you legally justify expropriating a citizen through a third party (namely the government) that uses coercion? Even instances of misfortune don’t really justify the exploitation of others with force.
  • Most defenders of the welfare state will probably object and state that "solidarity" and "social justice" could not be established without the government.
  • Is there really someone that believes that solidarity forced under the threat of violence is solidarity. And “what is “Social justice”? Doesn’t that depend on where you are in any particular system? And if you believe that this justifies one person to live at the expense of another, who decides what each person gets and what fair is?
  • Or simply put taxation is theft. It’s taking your money by force and giving it to another group (that screams the loudest or has the most organized interest groups).
  • Those in favor of income tax should remember that this always assumes that 100% of your income belongs to your government and it then decides what part of that you get to keep. Don’t forget, you have to declare all of your income to the state. In other words, if you have a tax burden of say 40-50% in a given country, you are essentially working 5-6 months solely for the government, before you work for yourself.

 

It’s important to know why these patterns recur. Titus explains this quite nicely in his book* and briefly mentioned parts of it in this episode, which I’ll summarize, as it’s an extremely important point to make:

  1. Almost everyone on this planet wants to increase their standard of living, ideally in the easiest way possible.
  2. And the easiest way to increase your standard of living is to take something away from others.
  3. However, most people find it difficult to simply march into a shop and take goods without any form of payment or take their neighbor’s nice BMW.
  4. So it’s easier for them to hire a third party to do the job, who will tell them a nice story about why the whole thing is legal, morally justified, and should make them feel all warm and fuzzy.
  5. That’s the reason why people turn to the state (actually a cartel would describe it more accurately). Remember, the state is the only institution that can take away the fruits of others' labor without any legal repercussions. But, this does not change the character of this so-called “process” which, in the same society, would otherwise constitute theft or robbery. This is one of the hardest pills to swallow for most people.
  6. Governments and politicians serve these market demands, otherwise, they would be voted out of office or removed in favor of those who do cater to this demand.
  7. Over time more and more social groups find out how to use the power of the state for their own interests. Then, in turn, the state, not actual economic activity, becomes the main source for raising your standard of living.
  8. Fewer and fewer people end up working in the productive sector, evident by the fact that government never seems to reduce in size. Fights over distribution intensifies and public debt spirals out of control.
  9. Finally, the state runs out of money. The result: A crisis leading to radical reforms or politicians promising “change”.
  10. And the whole process starts again, reminding the citizens of Groundhog Day.

 

  • Sadly the majority believes that if the government doesn’t provide a certain service or infrastructure then it wouldn’t exist at all. In almost all cases the market (as long as it's truly free) can provide a better service at a lower price than the state can. Remember, citizens, don’t get an itemized receipt with the exact amount of taxes they paid for that particular service, which by the nature of government is always more expensive than without government intervention and its monopoly. There are no free lunches - no matter how hard you believe in Santa Clause.
  • Most will disagree and state the example of “free” education. But ask these people if their professors work for free and if the building maintenance they study in is also free. You'll never hear a “yes” to that question. Instead, you'll hear that that’s what taxes are for. And yet, you have yet to be presented with an itemized bill for the taxes that are being used for education or any other governmental service. It's almost guaranteed that the price is going to be much more than in a real free market, but you’re still being billed the higher price through your taxes.
  • There’s also an important principle I want to mention and should give you some food for thought. That’s is, if third parties pay your bills or advance that payment on your behalf, be it in healthcare or otherwise. If you pay these bills yourself before getting reimbursed by your insurance, then you’ll likely take a much closer look at the bill and what you were charged for.
  • Another important aspect we have to consider is the way we create value today. That has changed drastically over the past 100-150 years and will continue to do so exponentially over the coming decades.
  • Karl Marx himself once said: “if you change the dominant mode of production that underpins a society, the social and political structure will change too.”
  • And since it’s easier than ever to work remotely, we’ve become much more mobile in the process.
  • The free market can not only create spontaneous order but also helps with the discovery process in finding new solutions to problems that are or have plagued the human race.
  • And probably the most important aspect of them all, that rarely gets discussed, is competition. Competition has proven itself as humanity’s only known, permanently effective means of limiting human power.
  • Shouldn’t this reason alone be enough to convince skeptics that we need more innovation and diversity of ecosystems?
  • As we’ve already learned from podcast episode #17 with Tony Ingesson, the decision-makers are almost always too far removed from the actual problems to make well-informed decisions.
  • Knowledge is always decentralized from authority. Yet, according to the principle of subsidiarity, problems should be dealt with at the most immediate (or local) level or in other words, the smallest group or the lowest level of an organizational hierarchy, being the citizen.
  • When applied to communities, this implies either dividing the community when it grows beyond a certain size or introducing additional levels of autonomy, which is something we see in nature as well.
  • Thus, we can conclude that diversity and competition are necessary not only as a means of limiting power but also for gaining knowledge and further development.
  • So, if we want to live in freedom and self-determination, then we need more not less diverse systems.
  • Why not apply these same principles to our societies and have multiple products competing against each other and satisfying even the needs of the minority in this way.
  • There should be a market for these new concepts alongside traditional governments. Let the people decide. Isn’t that what democracy claims to be its strength? Letting people decide?
  • At the end of the day, I believe every citizen has essentially two options: Vote or exit. Meaning you can either vote or engage in the political process, if you still believe that that can make an impact or exit, leave the country and move to one that better suits your views and where you’re treated much better.
  • Why not let these different systems or products flourish and unleash more innovation so we can see what works and what doesn’t? What’s the worst that can happen? We learn something useful from these experiments? The impact on the existing taxpayer of the old system is zero as they’re not involved at all - only those who volunteer and are accepted and will have the bear the responsibility. So, the more products any country can create and launch (and this applies to companies as well), the higher the odds will be that they’ll find something that works better than their current product.

 

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Episode Transcript - Click to Expand

Note: This transcript of the episode was machine-generated and has not been edited for correctness. It’s provided for your convenience when searching. Please excuse any errors.

 

00:00:00 Guest (Dr. Titus Gebel): If you consider that 90% of the states are making losses every year and at least according to Paul's in the UK and the US 80% of the people are not satisfied with how they are governed. So you have 80% dissatisfied customers and 90% market participants that are making losses. Man, there must be something for entrepreneurs.

00:00:22 It must be possible to make the world better and freer and, uh, and the mod justice.

00:00:31 Intro: welcome to innovation, no correctness, a podcast, all about innovation and transformation hosted by David Luna, author keynote speaker and founder of gamma digital and beyond David and his guests discuss real-world practical advice on how to best harness the creativity of your employees and go from idea to product giving you unique perspectives and insights into their success all while separating, hype from reality and replacing bullshit bingo.

00:00:59 With common sense, let's jump right into the show.

00:01:05 Host (David C. Luna): Welcome back to another episode of the innovation correctness podcast. In today's episode, I talked to Dr. Titus Geebo to explore how free private cities could fundamentally change the way we view government as a whole and force governments to compete for their citizens.

00:01:21 Titus is a German entrepreneur with a PhD in international law. He has also worked as a manager for various companies in the biotechnology, venture capital and commodities industries. He was also the former CEO of an exploration company with his own production of gold, silver tungsten, and various other commodities.

00:01:41 And he was also the managing director of Ryan petroleum. Today. Titus works as an entrepreneur and advocates for new special economic zones, particularly in developing countries. He's also the founder and president of free private C's incorporated a board member of the seasteading Institute with Peter teal and 00:02:00 Patri Friedman, as well as a partner at new way, capital with three private cities, Titus wants to push and evolve the idea of entirely new ways of living and working together.

00:02:10 He has basically dedicated the rest of his life to making free private cities, a reality, which I found the most remarkable aspects. So essentially someone that walks the talk enough talk, let's call me Titus.

00:02:27 So welcome to the podcast Titus. So do you want to briefly introduce yourself to the listeners and explain who you are and what you do?

00:02:36 Guest (Dr. Titus Gebel): Sure. My name is Titus Gebel. I'm an entrepreneur, but a jurist by education. I started my career in Germany as a lawyer, but after a couple of years, I found out that this is not, uh, what I wanted to answer the rest of my life.

00:02:50 And I wanted to create something. And then became an entrepreneur for us as a venture capitalists investor. Then I started my own company and eventually ended in the resources business, found a successful company that has an, a production mining, oil and gas. And I went public and could retire at the end of 2014.

00:03:12 And then I focused. What I'm going to talk today about is free private CT and new model of living together. Okay. Wow. That's a very broad, uh, career that you have had. So would you mind giving the listeners your, uh, let's say elevator pitch for the free private cities so that the listeners know what we're going to discuss throughout the episode mentioned of a private company offers you the protection of life, liberty, and property, and you pay a fixed amount for that per year and your rights and obligation.

00:03:46 Other than that are also written down in a contract, um, which is a real social contract. And this contract cannot be changed by either side, not by me as the operator, not by us, the 00:04:00 resident that also means you cannot interfere in the contract of the others. And other than this, you're free to do as you choose.

00:04:09 And of course, if you don't like these models, you just stay away and you can also leave any time. Um, this is called a free private.

00:04:17 Host (David C. Luna): Okay. So before we go into a little more detail, maybe there are some listeners out there that have heard of say special economic zones or even charter cities. Can you briefly mention what the differences between those models?

00:04:32 Guest (Dr. Titus Gebel): Yes. The special economic zone is probably most known. I would say, especially with . Normally I say every special economic zone in the world, and they're supposedly 5,000, but I would say only about 500 are really active or active, innovative that they're making a profit and our success, especially becoming so anomaly has some extra rules with regards to taxes, labor laws, some regulation import-export, some people know to try and free trade zones, but today it's more common especially economics.

00:05:04 Every one of those songs is a confession of the state. Obviously the roots, their roots are not the best. Otherwise, it would be no need to establish that to someone. And some of those songs are very prominent and very famous and successful like, um, Jebel Ali in Dubai, one of the biggest songs in the world, then you have to do by the international financial center, which even has its own courts and an old legal system.

00:05:29 And then you have the very old one Shannon perform our plot in Ireland, also successful design. This is all more or less established. Charter CD is a new type and concept developed by Paul Roma, a well-known economist. And he has a phone out that, um, one of the most obstacles for development in third and second via countries is a lack of good institutions.

00:05:56 It's corruption in transparency inefficiency, and his idea was, Hey, why 00:06:00 don't we just. A successful illegal system, but not only the laws, because this is already happening, but together with the administration and his example was creating a new Hong Kong in the Caribbean, this Canadian public officer, something like that.

00:06:17 It's still a traditional top-down approach. Didn't turn out very well in practice because obviously, countries do not want to have a foreign. Well, foreign rules and foreign public officers in their territory. And in so far that didn't really come together. But now Charles city, the definition's a little bit broader.

00:06:36 So basically every racial economic zone that is not only for, for companies, but also for residents and which has some more special routes than just Texas and tax. Uh, but so far we have only a handful of developments that you could really say did these are maybe something like a charter city charter stands for, they have own rules that they have own charter, which is different from, from dress or country.

00:07:00 The ideal example would be Hong Kong. Indeed. It's had a prejudice common law within a Chinese legal system. It was the same loss, one country, two systems. But, um, obviously the Chinese are not sticking to the agreements they have made in 1997. Uh, when they took over, uh, free privacy is, is going one step further saying, no forget about other countries, bringing their public officers.

00:07:24 We had just, um, making this as a private company as a state service provider, because what people really want is security in dispute resolution and some infrastructure. And frankly, you do not need a state for that nor a Monarch, nor a dictator, a private company can do that. And that is what free private CD.

00:07:44 It's making different from Trotter cities and from, from special economic songs, sisters, this is a, there's no trial, there's a contract. And the contract is, is protecting you much, much better than any trial, which will be interpreted by politicians, by courts, by 00:08:00 administrators. Um, whereas if you violate it in your contract, you have a direct claim.

00:08:04 You can directly go to independent arbitration, which is also part of the model that any dispute between these free private city operators and the free private CD resident is not dealt with by free private city courts, but you would go to outside independent arbitration. So we have a clear legal standing.

00:08:23 You are basically a client and the operators are service provider. And I think. This is much superior to any of the other models, including the states of today, because it's something we already know. It's, there's an, there's a as a product on the market and the operator has a, has a profit incentive. That means these many people think that's a bad thing, but the opposite is true because the profit Mo profit need for profit, um, forces me not to waste resources, especially not to waste the resources of my clients because they otherwise will leave.

00:08:59 Or new clients slash residents will not come. And I eventually will go bankrupt. So I have to treat my customers well, and I have to stick to my own rules and I don't have to raise money and they have constantly to be on the lookout. For how can I improve my model so that people still satisfy despite new competitors out there, maybe a charter city, maybe a, whatever.

00:09:23 Um, that came up with a new idea and it's obviously very, very attractive. So this unkind of, of market pressure of comp competitive pressure that we already know from the, from the goods and services. No, I'm just transferring that to our coexistence because I think this is also a market. I call it the market of living together and I can not force people to come into my model.

00:09:48 Right. So the free private city would start just from scratch. So nobody's there. So you guarantee that is 100% voluntary residence and informed consent. So they know what the rules are and they sign 00:10:00 it, sign the contract and then know what they have to pay per year. Probably not more than 1005 from the Euro or soul per person per year.

00:10:08 And then, um, I cannot just change that and say, Hey, by the way, you have to pay double next year, but you get out of services that you didn't order that is not possible in the free private city.

00:10:18 Host (David C. Luna): So when I first heard about your free private city concept, my initial thought went straight to iron rans Atlas.

00:10:26 We are one of the protagonists named John Galt steals, the most productive entrepreneurs of that collapsing country into a private secluded valley, seeing the country then devolving into a dictatorship. So where did you originally get the idea of.

00:10:42 Guest (Dr. Titus Gebel): Well, interestingly that was indeed part of it. Um, I also read Ayn Rand and this interim solution that you just described, that people are hiding in a, in a hidden valley and, and start their business there.

00:10:55 And I go in together with people who are like-minded. It was not to find final solution in Iran's novel. Right at the end, there is, I think somebody writes a famous judge, writes a new constitution. And I think this, this is the wrong solution because the solution, what will happen to this constitution is what tapped into other constitutions before have you been interpreted against the letter of the law?

00:11:18 It will be interpreted in the current tight guy's fashion or whatever the politicians in power want. So I think the interim solution is to find a solution that is people just move together with their peers, with people who are like-minded. And that doesn't mean that people are all like to have the same wealth or.

00:11:37 Exactly the same opinion. But if you think live and let live, the classical liberal concept is a good concept. Then you should not live together with people who think you should obey leadership. You should only do what your whole book is telling you. And if you don't do that, we will kick you out of society or people who say that property is theft, 00:12:00 right?

00:12:00 They shouldn't live together with people who say no, no private property is what makes bell for creates wealth and freedom. Uh, otherwise it will be endless political struggles. So I think my model of a free private city of course, is for the, the likes of John God, for the likes of people who are creative, but also for people who just want to be left alone.

00:12:20 And for people who just may be looking for a job and raise a family, but it's not for the people of. Really have a strong desire to impose their will upon others, which is sort of quite big number in society. So in so far, I would say, Hey, I'm not pretending this is the ideal solution. I just tell you, this is a market product, a niche product for a certain type of people.

00:12:45 Other people might prefer other models. Look, if a free private city operator is a, is a for-profit company, they can come. Maybe can come up with the idea. Let's create a free private city for Catholic people, right? So that is all conceivable. And I have absolutely no problem with that. I've even not a problem with communism, as long as participation is voluntary, like in my mind.

00:13:07 Host (David C. Luna): If we take a look at history, at least this idea of a free private city doesn't seem to be completely new. You've just taken it to the next step if you will. So maybe you can give some examples throughout history that were similar to private city showing that it's not that radically new and it's something that has existed at least in parts throughout.

00:13:32 Guest (Dr. Titus Gebel): Yeah, no, we, you have, you have kind off of private societies, for example, in resorts you have kind of a homeowner association or take a cruise ship, right? A cruise ship is a private enterprise. It belongs to a cruise ship company. And you maybe do your booking with a travel agent. Uh, but when you're on the high seat, There's only one ruler.

00:13:57 This is the captain, right? And in 00:14:00 principle, the captain could do whatever he want. Right? You could flock you if you didn't dress up well enough at the captain's dinner, you could even change di direction. And instead of going to the Caribbean, going directly to a, an article, but he's not going to do that.

00:14:14 Why not? By the way, because the moment you were would be back on land, you would Sue the car. Right. Well, you wouldn't care who the captain is. You're J Hey, I had a contract cruise in the Caribbean, not being flogged was a site thing of the contract, I would say so on. That is, that is not happening. And that is keeping the captain from doing what he wants is this threat of being sued for his behavior being liable.

00:14:36 And the company doesn't want that because they eventually fall bankrupt. So you, this is a kind of comparable to free private cities. The other thing is that we had in the middle ages in central Europe and the Holy Roman emperor empire of germination, as it was called this free Imperial city. Now, what was that?

00:14:56 It was a development over several hundred years where cities were really coming into existence. Right? Because you have to know that the, after the Roman empire for. The for several hundred year old, a vest Roman emperor, several hundred years, there were no such things as cities in central Europe, right?

00:15:15 It was really kind of dark ages. And only in, in one time, the year 2000 1100 Dave CDs popped up again. And then the people in the city became more aware of what their capacities were and that the rulers, which were territorial monarchs, princess bishops, um, there were not really caring what they did and they didn't even really know better how to rule.

00:15:40 And so they came up with becoming more and more independent. The end of the story was that ever a directly subordinate to the emperor, the emperor was far away and was weak at that time. So they were basically independent cities. And for the first, I would say one or 200 years deep, the monarchs really 00:16:00 fighted against those cities because they I'm losing power.

00:16:03 Right. And is in a way, the reason why we do have special economic zones today. So you can see there is a chance for free private cities. Normally one might say, Hey, why should, why should any country agree with that? Right. It's it's a semi-autonomous, uh, model. The current situation is that. We are not seeking to full autonomy.

00:16:26 We're going to governments and say, look, we want to make our own internal routes. We are still subject to your server entity, your foreign policy, your military defense. We stick to the international agreements. You have conducted and some parts of your rules that are to be negotiated. But other than that, we want to have the right to make this resident contract, make our own limited regulation.

00:16:49 And why countries would say yes to that is it's the same situation, the special economic zones or the free Imperial city of the middle ages. It's only. Right. It's a win-win situation. If you start something like that and an area where nothing happened before and suddenly something like a Singapore was popping up or a Hong Kong, or even a small Monaco, this is definitely a big plus for all surrounding areas, which are still then in the territory of the, of the host nation.

00:17:17 And they're all paying Texas to the Haas nation. So this is why this can could happen in, in the reality in is not just only a utopian idea.

00:17:27 Host (David C. Luna): If past examples in Germany and elsewhere, it was so successful. Why do you think they didn't really prevail? At least let's say Germany.

00:17:36 Guest (Dr. Titus Gebel): I mean, take Venice. For example, Venice, um, was also an independent city and they lasted for 1100 years.

00:17:44 Without a single government overthrown. So this is stability that an independent city can reach. And what happened to when this also happened to the, to the German free CDs, eventually a big territorial power came in in the case of Venice's wasn't Apollyon 00:18:00 in, in the case of Germany, this was often also Napoleon, uh, but other city survived until, um, the, uh, the end of world war one.

00:18:08 Right. And then it was just thrown into basically one central government, still the federal system. And you'll still have. Nominally independent cities, which are reciting for middle ages, which is humbug and Brandman. Uh, but they're just federal states, right? City-states. Those are, they're not really independent any longer, but you can say, yeah, this may happen again that a big power, a big Imperial power is coming.

00:18:31 But if you take that time, that Ben is Ben is, is, was established out of the, I would say the remnants of the east Roman empire bid sons. And it was formally, still part of the sons, but, but in principle, he was more and more independent and eventually it became fully independent, had an old Navy, uh, one of the strongest at that time.

00:18:54 So it's survived 1100 years and then Napoleon came and it's 200 years since then. So I think you cannot say it doesn't work. It hasn't worked in the past for a very long time and it can work again. And I think we will always have times where. People are aware that there may be better off in smaller entities and that they have more freedom, more wealth and more self-determination there.

00:19:19 And then there will always be a time where big there's always a tendency to expand, right? If a big empire is now, the European Union is trying to become such an empire. They are they're coming up. But I think I'm in the goal of today, the level of, um, of the standard of living that we have today, they probably cannot be kept, uh, applied by big empires who, uh, who.

00:19:46 Tell everybody what they have to do. And I think some of those smaller entities have survived and do today. Even in Europe, you have very small states like Mona called the Gleason Stein submarine, or take all these 00:20:00 small states, Iceland, Switzerland, Singapore. They normally have a much higher standard of living as their peers.

00:20:07 They are big countries in the neighborhood. And I mean, this is a sign and I think people are going to recognize that and we will see. I left in 100 years from the US from the European union. And even from big China.

00:20:20 Host (David C. Luna): Why do you think we need a new construct. And why now, and why do you think democracy needs new products?

00:20:28 Guest (Dr. Titus Gebel): Instead of say an update, you mentioned some of the reasons, but maybe you can also explain to adding upon that. What do you think the structure of government hasn't changed very much over the last say hundreds of years. Yeah. True. It is indeed that you are basically, you're running all 200 countries with very old models, right?

00:20:47 And in the rest of the market, you have the possibility to introduce new models. Then we will see if this works or not. Right. And then the market of living together, it's extremely hard to get into that. It's basically, you have to make a revolution or as a session or things that are related to violence and big power.

00:21:07 To create a new product and even failing products like the Soviet union. And I mean, every reasonable scholar, like lucky for me is a state predicted that this is not going to work because you have no price signal. You don't not know you have no indicator of scarcity, so it is going to fail true. But it took 70 years for the people to find that out.

00:21:28 Right then that is something that is a real problem. So I think it's not necessarily that, that we need a special reform on democracy. We need in general, more and new and other products in the market of living together. And then people can see and they can find out what works best. I mean, even if you take him democracy, you have a big variety of products, right?

00:21:50 You have a country like North Korea, Which calls itself to democracy, right? Yeah. I mean, China calls itself a democracy. Uh, the Soviet union was calling himself a 00:22:00 democracy and then you have countries with has direct marcosi like Switzerland. Um, you have more presidential democracies, like the U S or France, and you have a party democracy like in Germany where parties actually ruling the country.

00:22:13 So, and so if you say, Hey, let's reform democracy. You first have to answer the question, which, which democracy. Right? And now here's the problem, which I see in all systems, but especially in democracies, but this is the same problem you would have in a dictatorship because a dictator also somehow needs the support of at least the large group in the country.

00:22:37 Or if people are really feeling totally pissed, tender is a, is a tendency that it will be accrued the towel, whatever new parties coming in, or a military cooler or whatever. So this is what I'm describing now, which I call the political circle. This is the problem. It's a problem democracy, but it's a problem.

00:22:55 I would say all over the place. And it starts us as following first and foremost, most people want to increase their standard of living. Let's take this as a given, right? Uh, there are certainly some people who are as kids, but now, you know, I'm getting turned off to people who want to increase the standard.

00:23:12 What is the easiest way of increasing the standard of living is just take away from other people because they did, then you don't have to work for you and you just take it from others. So now we are not like that tried. So most people have for ethical or religious or educational reasons, they are. Just robbing other people and not just going into a shop and taking money out of, out of the cashier, that's not going to happen.

00:23:36 And most people are not prepared to do that. So what do they do instead? So they're turning to the only institution that is legally entitled to take away from others, which is the state, right? And it doesn't, doesn't make a difference if there's a democracy or a dictatorship or whatever kind of system. So if the state is entitled to take away from others, then these people, and now we have a special 00:24:00 problem in the democracy.

00:24:01 They elect politicians who promise them to distribute redistribute more. If a politician is telling you, look for a party, a, you have to try as a bolder choice. Hard work, 10 hours a day, you get 100 Euro for that option B P P. So his B um, you don't broke at all. You get 100 Euro for free. You just vote for me.

00:24:27 So, and that's a problem. It's and you cannot even judge people for that. It's a, it's a minimum principle, right? We are, we, human beings are conditioned that we should, uh, we try to do as less as possible to get the biggest result, which is efficient, right. It's me. That was the reason why, if we invented.

00:24:44 Great machines that are helping us, uh, having a high standard of living. But if this minimum principle it's, I call it, uh, is, is coming together as policy political power. Then we have a problem, right? Because that is going to happen, right. People don't say, oh, give me the money of others. Not all they, they tell it let's be solidaric.

00:25:02 Let's let's share this. This is what I say, but it's, it's, there's no difference. It's just, um, um, this guy's in. So they want the other people to money. Is that really sharing? If I use force or coercion to me that wouldn't be sharing. Okay. No, they frame it like that because they say, well, you are a David, you are a bright guy.

00:25:22 You have a higher income than me, which I'm a thump guide. So I, I think it's fair that you give half of what you gain or the difference between our incomes. You give half of the, of the difference to me, that's fair sharing, right? Because you are stronger, you're more intelligent. So the problem with that approach is that over time, more and more people find out that it's much easier instead of this 10 hours hard work, just go to the state and say, we need money because we are.

00:25:52 Disadvantages victims or whatever. So over time, more and more groups in society are finding out that it's easier to, to increase the standard of 00:26:00 living by being unproductive and doing bullshit work and gain, getting paid by the state or getting direct transfers from the state and less and less people are working.

00:26:10 That leads us to a situation where the productivity is sinking and where the depth of the state is growing. Sounds familiar. That's what we have now. And because otherwise, the problem is there are, politicians are not stupid. There are politicians who discover that this is a problem, but if they say we have to reform the state and we have to leave people there more of the money, lower Texas and redistribute less, eventually they will be voted out of power by the people who say, Hey, we have enough for everyone.

00:26:41 You are entitled to a house, to a job, to a flat-screen TV. That's your human rights, right? There's you have no chance of let's say a libertarian candidate going in front of the people that grout the crowd and saying vote for me. I do nothing for you, but you have the Liberty to choose for yourself. No chance in no society.

00:27:03 So that leads us to the next level, which is intensive redistribution of fights. Because as we have heard, state is running out of money. Deaths are increasing. Now they have to print money to, uh, to lower the interest rate artificially so that the state can still to pay their debts. But at the end of the year, it will eventually come like in Venezuela.

00:27:26 And then there will be radical reforms that will maybe even be system changes, maybe even be a revolution and you know, what's happening. Then David? The circle starts a new. And now my question is, or my thought was, how can we get out of that? And my answer is what is better than a democracy that you have could code debt, termination rights.

00:27:48 Well, let's call it a food democracy where you can decide for your home and the others cannot just decide about your wealth. You decide about your well, but you can also. Decide to make all kinds of charity.

You 00:28:00 can also associate yourself with other people and you say, Hey, if we make a, um, a majority election vote on certain types of, of, of my welfare, certain types of my, my life, that is all possible, but it's not possible that people go to another person and say, Hey, we are two and you are one.

00:28:18 And we have decided that you owe us half of your wealth. So I think, um, and even the big thinkers of democracy, like, they have, uh, discovered in the beginning that they're set before you establish majority rule, you have to have an agreement that majority rules. Be applied and for disagreement, you need 100% consent.

00:28:42 And this is all make only makes sense because otherwise, just as in my example, two people would go to a third person, say we have to be a two, your one, we overvote, you know, to give us your money. And that is not, that does not work. Of course. Uh, and, and in so far we don't have, we never had such a system where people were 100% giving consent to a certain type of majority.

00:29:05 But, um, this is because our systems developed from totally totalitarian absolute monarchies. Then there was a constitutional monarchy, and the group of people who were entitled to vote is, was constantly growing. The moment. This growth is going into a group of people who are not contributing. For example, the public officers were paid out of Texas.

00:29:28 They shouldn't be allowed to vote or people who, who get just money from the state and do not pay. They should not be allowed to work because it's a conflict of interest, but this is not, this, this is not feasible in a current mass democracy. So one man, one vote or one person, one vote is the only rule.

00:29:46 The only thing people accept is that children should not vote, but even this is a, this is some dangerous at the moment. So the, the tendency that I see as a student of history is that over time, the more and more people 00:30:00 get a right to vote, the more and more countries get in ID. And at the end, um, that doesn't turn out well.

00:30:06 So we have to find better systems cause especially the 20th century has shown that overthrowing old governments is one thing, but then introducing fascist or communist regimes has led to tens of millions of deaths. I don't think that we want to repeat that. And uh, so far we have to, we have to really come up with new ideas.

00:30:29 And then the world can see not by a top-down approach or a big ruler is saying, I know how to do it. Let's make a great reset. According to my plan. No, I'm saying, Hey, wait a minute. What about the market principle? You want to buy something? You, you put your own money. For it. And then you buy it for yourself.

00:30:53 I decide for myself what I buy and I'm can only offer people, people look, here's a free private city. These are the rules, these, this the framework. Do you like it? If you like it come and we will check it, but it, it could fail and people can come. And on the basis of this informed consent and can say, Hey, we like Tito's idea.

00:31:11 Let's try it out. And then the world can see if it's working. So there's absolute no. Need for coercion. There's no need to talk people into something they don't want. There is no need for propaganda. This just PS the contract here, the roots who want to come comes, and then the world can learn from that example.

00:31:29 And we can find I'm sure if you have. Types of free private city or similar models of special auto autonomous songs. We will have enormous learning effects in very short time.

00:31:42 Host (David C. Luna): Kind of expanding on that. I think it was Thomas Jefferson that said something along the lines of democracy is mob rule where a 51% take away the rights of the other 49%.

00:31:52 I don't remember exactly which context he mentioned that, but it kind of describes that there isn't full consent. Some critics might 00:32:00 say, okay, well, why not just move to another country because isn't that an option that we have already had.

00:32:06 Guest (Dr. Titus Gebel): Yeah. Certainly, if you have this option, that's, this is kind of the lesser evil option.

00:32:10 Right. But the problem with that is that in these other countries, the rules can also change overnight, right? It could be a regime change, the good, just be a new government elected, a new president elected, and then you have the same problem again. And I think, Hey, why not giving people really contractual security, right?

00:32:29 Like in a customer. Uh, service provider relationship that would also be applicable to two countries, right? I have just last week proposed a small country to introduce the regime of a contractual citizen. Here, here has no right to vote so that you can keep your political system as you like it. But these people have guaranteed rights and there should be attractive.

00:32:51 Otherwise nobody's coming. What we today can do. Uh, people in Germany are immigrating to Switzerland. They don't have a vote there until they became Swiss after 12 years. But imagine you could go somewhere where you can just say, Hey, this is a contract. I like this contract and the operator doesn't care from which country I come, as long as I stick to the rules and there I, I have security.

00:33:14 They guarantee me security in the country. Imagine they broke into your apartment and you go to the operator and say, Hey, wait a minute. I paid for security. You're only damaged. And that's true. Right? He always, your damages. You mentioned go to your, to your government, say you owe me damages and they will laugh you out of the room.

00:33:32 This is how it should be. And in so far, I think there's so much to him. Well, of course I'm a kind of an idealist, but I think it's also a business model. If you consider that 90% of the states are making losses every year and at least according to Paulson, the UK in the US 80% of the people are somewhat, uh, not satisfied how they are governed.

00:33:55 So you have 80% dissatisfied customers and 90% market participants 00:34:00 that are making losses. Man, there must be something for entrepreneurs. It must be possible to make the world a better and a freer and a more just place just by introducing a mechanism that we already know, which is supply and demand competition.

00:34:17 And you're not forced to buy things you do not want.

00:34:20 Host (David C. Luna): Yeah, that makes perfect sense. And I see similarities to Germany and its federalism. So let's say if I was a parent and had two children and I didn't like the school system and say, but very I'm one of the states in Germany, then I could at least go to say or another state where I believe the school system is better suited for my, for my children or whatever.

00:34:44 So that federalism has an advantage for me as a parent, I can move to another state versus having to leave the country. But on the other hand, a lot of Germans, maybe I'm wrong, seem to dislike federalism. Why do you think that. And is that the case?

00:35:00 Guest (Dr. Titus Gebel): I don't think that they really dislike it, but they have been educated. And that includes me, right. I'm a German tool by, uh, nationality. And I was raised in Germany and in school, there was, we learned that before there was the unification, uh, from 1,870 or before Napoleon came, there were several hundred sovereign territories in the Holy Roman nation. And then Napoleon came and reduced this number to, uh, I don't know, 40 or 50, then it was to reduced 1,871 when the first of age was established to the Federalist states that we have today, uh, minus what we've lost in the wars.

00:35:42 But we have been constantly told in school and everybody, since when I was young, was in the seventies, eighties that these small states that was really, that didn't work. Right. And the main reason was that you had had a border control, every five-kilometer. I mean, we just do, which is, 00:36:00 which is a nice sense of your, if you're trading, but I mean, this is not an unsolvable problem.

00:36:04 You just make a trade union. Right. Other than that, I think it's not true that Germans are against federalism because it's still there. Right. And it's still the tradition and it's a very, very long-reaching tradition. Bavaria is the oldest state in Europe. It has a statehood going back, I don't know, 1200 years or something.

00:36:24 It's still there, but you're also right that it's disappearing. Um, because centralism is a, is a force that is increasing by itself. And if people do not really understand that and are not taught the, the advantages from, from federalism, from having different models, then, uh, it will disappear over time.

00:36:44 And it's indeed. The differences between the German states are relatively small compared to the differences you have in the U S and Canada, or even in Switzerland, where, where municipalities have a large amount of the taxes. And, um, uh, in, in Germany, he has no real tax tools, small taxes, uh, trade tags and, and dock taxes, stuff like that.

00:37:10 So it's, it's really, really is not much left from the federalism. At the same time, there are people rediscovering the beauty of small units and they look at Switzerland and say, Hey, these people, this system is more stable. People are less following, less crazy ideas. And, and the reason for that is because a lot of decisions are made on the local level.

00:37:32 And the local level in the democracy is much it's working much better because, you know, You're your neighbor, you know, to respect his different viewpoints. And you know, that you just cannot take him away to money because of some lunatic idea that is in the media, because, you know, then he will suffer in here, you know him, and he can come to you and say, why did you do that?

00:37:53 So this is why this is working better on a, on the local municipal level. If you do not agree with the 00:38:00 free privacy model, I think it's in everyone's interest that you have more competitions because that happens in the past, uh, in Germany, for example, of good to, he moved to a Saxon Weimar, which was a small set of 200,000 people, um, because he felt he could be more influential Dera than, uh, in bigger hassle or other parts of Germany, which were bigger states.

00:38:21 Now want to escape Europe. Well, you have nearly to leave the continent and the same in the US so that's a problem. And I think it should be in everybody's interest that we go back to smaller entities. And it's always possible that these entities agree on a common market or even a common army. If you still have all the other parts of life, where you have different approaches, that you have different ideas and different mechanisms, different.

00:38:47 Then you can go into the system that best fits your personality, or maybe even your age, right? Maybe that's, if you're older, you tend to be more conservative and prefer other systems. And when you're young and this would all be possible in such a world.

00:39:02 Host (David C. Luna): So I have this working hypothesis, uh, this seems to be related is that small countries with less government. So not the big government spending types with less social structures and a much smaller welfare state or the lack of welfare state are, or tend to be much more hospitable and have much more tight-knit communities that help each other out. And I believe that's correlated in, in some fashion. Am I right with my hypothesis? Or what is your take on that?

00:39:36 Guest (Dr. Titus Gebel): Absolutely. I mean, I, I have made several examples in my book. The social question is social security is a big thing that you have to deal with. If you, you are offering a system like I do. And what I've found out is that people really now have lost everything that makes you a good person, which is taking care of your family, right?

00:39:59 In the 00:40:00 past, you had to take care of your brothers and sisters, and even for other uncles and aunts and the legislators. you're just now are responsible for your parents and your children. So then you say good, but my brother is driving. Not my problem. The next thing is, um, you're entitled to all kinds of benefits and they cannot even check if this is true, what you're claiming, for example, leads that more and more people on, uh, on social value.

00:40:30 The mayor of the city of airlift and in Germany, Heidelberg, before I left the country at that time, he said, well, in the 1960s, every, I think 16th child was on social welfare. And today it's every fourth and it's not, Germany has become a developing country in that time. Right. It's just, people feel entitled and you can make another point.

00:40:53 If they're feeling untitled, they say, well, I have a right to get that. I don't I'm, I'm not even grateful for the people who've provided these funds to me because I'm entitled. So gratefulness is gone. Then responsibilities also gone because I would say in a small community, everybody knows. Hey, somebody is falling ill.

00:41:13 Somebody has a problem. Somebody is handicapped and you would go to one of the bigger entrepreneurs in the country and say in, in the town and would say, can you find some job for this guy? I mean, he's handicapped, but just said he has something. I know such entrepreneurs who are doing that. I say, I know we don't really need him, but he's feeling a valuable if he's if he can support us in a way, uh, and, and clean some things or whatever, and I'll be a guard and that was solved.

00:41:40 But not today, today. And foreigners would say, I have all kinds of obligations and they should. I do that. There's the state who is taking. So you have, from both sides here for the risk recipient side was ungrateful and the other side, which is not feeling obliged any longer, because well, it's all kept by the state and that makes 00:42:00 people becoming less hospital, less friendly, less responsible, less social.

00:42:07 So then the social state is making people unsocial. And I, I bring two examples in my book. It's an in the 19th century, they brought you even the trade unions. They had their own self-help groups, self-help groups for illness. And every, every worker had to pay a small amount every, every month. And then if you were ill out of this fund, you would be paid until you would be recovered, but the trade unionists, they would visit you every single day to see if you're really ill or just pretending.

00:42:39 So they had social control and that was like, this was working and it was Bismarck. Destroyed dead system. It wasn't the social Democrats. It was Bismarck who top-down came up with the social of Efrat state to say, Hey, we have to somehow bind the workers to the state and make them feel that the state is a good thing for them.

00:43:01 And he just tried the dysfunctioning system of the trade unions and other clubs. And another example from contemporary Germany, they've lost the chief of the, uh, railway workers union. And there was a big strike. I think it was five or six years ago was a big strike in Germany. And suddenly he wasn't, he disappeared.

00:43:22 Uh, in, in the heydays of the, of the fight of the struggle for higher wages, he was not there. And then everybody was wondering what happened. And the newspaper said maybe there was a, uh, was an internal power struggle, but then it turned out that he had, um, he went away for treatment for medical treatment because he was entitled for the treatment.

00:43:43 And he had postponed it three times. And if he would have postponed it again, it would be void. So his, his claim would be void. So instead of sticking with his people in front of his troops, he will say this social security claim, I have to 00:44:00 grab it right in, otherwise, it's going away. And so he left his troops in, in the, in the midst of the fight to get his social effort claim.

00:44:10 I mean, this really happened and it, it shows. How crazy this system is making people. And, um, what values are transported? Such systems are no good values. And at the end of the day, it's water. As I described it, people want more and more and more and politicians promise more and more and more to get elected.

00:44:32 And then eventually the state is running out of money. And what we are currently seeing is just a trick to avoid that, but it's only kicking the can down the road, a zero interest rates, the central banks are factually buying state bonds. This is printing money, nothing else. And eventually. This will be, um, come to an end and then we will have a big problem that will be big termites and a very, very troubling times are I have a lot of,

00:45:02 Host (David C. Luna): So to kind of back up, what you just said is the fact that Germany has one of the highest taxation and deductions in the world. And now many people argue well that's for the welfare state. So we can spread all the wealth that has been created all around. So it's a little more equal. But the funny thing is, even though we have the highest taxes, we have one of the lowest median net wealth in Europe. Yes. And the ironic thing is where I find that very ironic is that with bailing out Greece and to some extent, Italy that have a much higher median network.

00:45:37 Is the Germans that have a lower median at wealth or baling, the more wealthy countries out. So essentially to all those proponents that say, well, good social welfare state is good and it works well. If you look at Germany, the biggest redistributor of wealth in the world, well, that ain't seem to be working.

00:45:58 Guest (Dr. Titus Gebel): Yeah. That works a 00:46:00 certain time. The point is that you made to right the examples of Greece and Italy. I mean, these people, these countries are a country where the government is not very functional. Let's put it that way compared to Northern European standards. But people have learned over time that they should take care of themselves.

00:46:17 So they have all houses right there. Most of them are house owners. And that, that is what makes the majority of their wealth have bigger welts in Germany about most people live in rental apartments and they think, yeah, if you tell people, you know, what you're paying in is immediately redistributed to the young, to the old.

00:46:37 And if you have fewer young people, more old people, the system will eventually collapse. But the point here is David, the people in Germany. That's why I left the country dead. Do not want to listen. They, of course, they want to tell themselves that the social effort, this is the best of all worlds. And if you are saying, Hey, I'm warning you that this is not sustainable.

00:46:57 They don't want to hear you. And so they have to learn. And unfortunately, this is the case, right? And this is also what made me come up with this free private city model because I do not need a majority in the country to make it happen. Of course, I need a majority to allow this, this model, but I don't need the majority of the people to move into a free private city.

00:47:19 It's it's enough. If a small percentage is just trying to. And then people can just see if it's working or not. And I think you and I, bill appearance in our lifetime that the, the social welfare state in Germany will collapse. And then it will be good if we had an automotive on hand. And that's why I'm starting my free private city miles, of course, in countries that are not very attractive, but they have to do something.

00:47:45 Um, and then so far they are open to their models and I hope I can return to. With just model one day and people are accepting it voluntarily.

00:47:53 Host (David C. Luna): So up until now, we've talked about the theory and the concept of free private city, but how would such 00:48:00 a city work in detail? Do you just go to some third-world dictator and ask them something late?

00:48:06 Hey, uh, I would like to set up a free private city in your country over here, where nobody is living in. You don't need that land anyway and play some monopoly. Obviously, this is over-exaggeration and oversimplification, but do you have some concrete examples where such a private city is actually being built and how that's being implemented in a practical manner?

00:48:29 Guest (Dr. Titus Gebel): I have three examples all on a. That's started Honduras because I'm Doris was a little bit, they were early, they were before the free private cities, before the charter cities idea, they were there. They really wanted to create a Hong Kong in the Caribbean people from the Honduran government, a jurist, a group of jurors, because they say our country is not reformable.

00:48:50 The entrenched interests are too big and we have tried everything and it's not working. And we have zero trust in India in the international community. So let's copy Hong Kong. We bring a common law system. Uh, we bring judges from London or other Commonwealth countries, and they should just try to replicate that model.

00:49:10 And so they created a law which was also formed like the hon Hong Kong, basic law a bit it's called a SAIDI law. Uh, put a long story short. It's a kind of a charter city top-down model. And I was involved people after I've published my book, people approach me and say, Hey, are you interested in joining one of Don Durham projects?

00:49:30 And I said, Hey well, yesterday even changed the constitution to make it possible. That's great, but it's not a private governance model. Um, but we can make it one. And so we created a kind of a hybrid where you have public-private partnerships or the actual governance is done by a private company. This law probably because some libertarian advisors smarter the Dean has, has even for a, seen an agreement of coexistence.

00:49:54 So there is a resident contract possible, and I was, um, instrumental with, 00:50:00 for the first CD CD stands for sown, for economic development and employment. Um, they have huge autonomy. Actually. They only have to follow the Honduran criminal law, some parts of the constitution and international agreements.

00:50:15 Other than that, it can completely create a new law, uh, which they did, uh, with my help, um, and others. So the common law system was created within Honduras. The city of prospering announced the first permit at the city. It has, as I said, there's a hybrid model between public and private governance, but it would say it comes to relatively close to a free private CDI would say about 70% free private city is possible.

00:50:39 According to the Honduran city law, you have two other projects now. And what I said is competition is already starting. They have all different models of one is a propriety community where cannot acquire property. It's a remains August, the operating entity. You only have a kind of a, of the rental agreement and then you have to follow all the rules.

00:51:02 Where is a prosperous seeded, the first CD that I mentioned, uh, you can acquire property and you get you're protected by a contract. It's it's what I said, basically. What, what are the advantages of a free private city are? And of course, because I was part of the project and the people invited me because of the ideas I had.

00:51:21 And then we have a third saving now, which just is different. It's basically a one company say they it's more for Hondurans and just, uh, producing. And then you have two other projects which are supposed to come to get an, uh, government approval this year, so that you have five models and all are different.

00:51:44 And that is, I think, approve. Of course, there's a lot of opposition. As usual research projects, but there's a constitutional amendment. There's a law. Do you have an international treaty with Kuwait, which is guaranteeing this law 00:52:00to be bedded for 50 years, even if it's this strong? So I would say we are already seeing the first fruits of these ideas of the charter city, free private cities ideas.

00:52:11 And of course, because the Honduran government people were reasonable enough to, and basically brave enough to, to, to try it out. And, uh, this is the first example. The second example is normally people approach me and say, Hey, here's a country where you can make it happen. I say, Hey, here's 10 points of autonomy that we need for free.

00:52:33 You will first check if this is really feasible in your country. And in 90% of the time, I never heard back from those persons because it's just too hard to negotiate that kind of autonomy, but sometimes it happens. And, um, then it's normal that we sell this as a kind of special economics on plus which larger autonomy with reserving need on administration.

00:52:56 We need the right to make only inflation, at least in some areas and own security and on cords. Otherwise, we are not coming. It make sense for us. We are currently in advanced negotiations as an African state, they said, okay, We understand that. And we think we can make it happen because all other, other plans to become a hub for this and that we're so special economic zones that failed.

00:53:19 And I said, yeah, because you didn't create a new system in a small country where everybody knows everybody, it's extremely hard for new commerce to start some things, you really have take the judges, right. Even in, come in the successful countryside, monocle, the judges are not from the country because the country is too small and they would be related to everyone or they would have to do a favor to everyone.

00:53:43 So they are importing judges from France and other countries. So this is, has nothing to do with colonialism. This makes perfect sense in small countries that you implore judges or take just other, uh, other courts from other areas, which might also be other small countries. And this 00:54:00 was convincing to the people and, um, We are currently, we have our law in parliament.

00:54:05 We have to support of the biggest parties and hopefully, this is coming together. Uh, but, um, the third model was a country where also a group in Tania men said, okay, via becoming a corrupt country. This is a country that must become independent, uh, only 30 years ago. And they said, we are becoming more and more corrupt, and we want to stop that.

00:54:27 And, uh, can you establish something like a free private city in our country? We support you. Um, but the government had said you put 10 million on the, uh, on the escrow account that you see that you are serious and we are not willing to give you full autonomy, but a limited autonomy, according to a special economic zone law, which, which was significantly extended, I would say, yeah, I could live with that.

00:54:51 So the deal in negotiation, trying to find investors, um, for, for that, uh, 10 million, but the point is. That's how it works, right? It's you want to create a win-win situation for the country in Honduras, for example, 12% of the income of such a CD zone has to go to a, uh, a fund of the Honduran government for infrastructure, communities, military, everything, and is also a fair deal, right?

00:55:17 Because they are using some of their infrastructures. Um, you are using their military protection, serenity, things like that. And that's only fair that you pay something for that. When it comes to two rules, it's all in negotiation. In some areas of the world. I can't do. You cannot come with, Hey, let's make drugs free.

00:55:36 Forget about it. Not in Honduras, but they don't have a problem, your honor, running around with a gun. Right. Because everybody's doing it in other parts of the world will be the other way around. Right. Marihuana is not a problem, but can ownership who doesn't grow here. So this is just to give you an understanding.

00:55:51 I mean, at the end, it's big bargaining, like it ever has been, but, and we try to bargain enough autonomy so that we 00:56:00 really can make it. If we have only out of the 10 points, I'm asking if you're only three, it's not enough, right. But if you have 5, 6, 7, we can start does this reality. This is how it's going to start.

00:56:12 And I'm really looking forward to the other projects in Honduras because we will really see in a lifetime in real-time. How different models develop and we all can only learn through.

00:56:23 Host (David C. Luna): So if we take issues like social welfare taxes, education, that's a fairly important point for most people. You mentioned some other issues like drugs and weapons and maybe add crimes in there.

00:56:37 How would that work? Would that all be contractual with the free private city or how would those issues be dealt with, or is everyone on their own?

00:56:46 Guest (Dr. Titus Gebel): There's a set of rules. You can, as I said, protection of lively, but to your property means there is a kind of security. There's the police, there's a kind of crime, right?

00:56:54 If you are not allowed to do some things, and if you do this, uh, we either kick you out or you, you, you spend some time in prison and then you get kicked. Um, because if you just get kicked out and Dennis, the only sanction, then people would maybe come as tourists and kill other people because nothing can happen to them other than they being kicked out.

00:57:12 So they have to be some, some criminal deterrence, but this would all be in the contract, right. It would say, okay, here's the contract, that's what you pay for the protection of life, liberty, and property. And there will be minimal social security. So nobody will be starved to death on the road. This will be included in your annual fee and there will be probably an app for, for newcomers and say, here's a list of social security, possibilities, insurances, self-help groups, charities, whatever, um, make your own choice.

00:57:43 And we recommend this on that. Probably we don't recommend, but if you list just those, uh, and that's the same for, for education and health care, it is our job as a service provider to create an attractive environment. That means we are actively looking looking for 00:58:00 providers for those services. And if they're not willing to.

00:58:03 We have to set them up by ourselves in the beginning. And for example, the hospital or a school, and then later sell it to a, to somebody who's doing this on a for-profit on a private basis because they normally are specialized and can do a better, better job than we can. And there are already a lot of, especially for third world countries, a lot of private cheap school providers.

00:58:25 Uh, I've seen this in Honduras and so far, you would have a direct claim against me for these basic things. And for the other things, we would at least help you in finding the right provider. And they would secure the days, at least one provider. So that is the situation in free poverty. And eventually over time.

00:58:46 That there's a variety of service providers for all kinds of services, so that you get like in other markets, more competition means better quality, lower price. That is hopefully also development in our case. And as a start, we guarantee you the protection of life, liberty, and property. And I can tell you that this is already quite a lot in many countries, those who are really interested in some more objections that they might have.

00:59:12 Host (David C. Luna): I mean, your book really illustrates a lot of these objections and I can highly recommend the book for sure. So to kind of sum up the concept, you're basically not saying. Your idea is supposed to replace all democracies around the world. You're just basically saying you want to try a new product, which you believe is superior to other products on the market.

00:59:32 But I see the whole construct of free private cities requires or gives a lot of freedom, be it through free private cities or other constructs. And it implies people take responsibility for their own lives, for their successes, but also for their failures. So they can't just privatize profits. And then if something goes wrong, socialize it all.

00:59:53 So to me, it seems that the free private city might not have mass 01:00:00 appeal because I see the majority of the population. As you mentioned throughout this episode, it's actually a lot of too much common sense. And as we know, surgeons tend to vote for people that, you know, promise the freest stuff free always sounds good.

01:00:14 And, but today we see, especially in the. A very different trend where you have a one size fits all approach. That's basically a supernational, undemocratic and bureaucratic state that disregards any referendums. As we've seen multiple times, TenMarks Holland, Ireland, Sweden, France. I mean, there's so many, so it doesn't seem to be having majority appeal, but I think it's good that there are multiple products because ultimately I think there's, for me, it was the key takeaway is that competition is much more powerful in controlling centralization and these disadvantages of democracies better than having the majority rule.

01:00:53 Does that summarize that fairly accurately?

01:00:55 Guest (Dr. Titus Gebel): Excellent. That is really in a nutshell, the model. And if, if your listeners have had more objections, I, I invite you to have a [email protected] website of the free private cities foundation. There's a FAQ list. And as you said in the book, I have a whole chapter of about objections.

01:01:14 I invite everybody to have a closer look at the model ELLs or a couple of videos, as you said, it's a, it's a, it's a product, maybe not for everyone, but it's existence. Can change, uh, the wall to the better. And maybe at some point in time, people come and say, we don't want to live in a free private city, but we liked this contract idea.

01:01:34 I want a contract from your government as well. So that might be a side effect of just having a new idea, a new product, which at the end benefits, everyone was there some.

01:01:43 Host (David C. Luna): What are your like top three key learnings that you have had with the free private cities that you say didn't have five or 10?

01:01:52 Guest (Dr. Titus Gebel): Yeah. First, you have to be really flexible and not dogmatic because at the end, I think it's just a core of 01:02:00 things that just give your people as much freedom as possible and stick to your contract. It's not about at the fringes, like drugs and weapons and all these libertarian dogmas that make, make a big difference.

01:02:12 And even if you, you have to introduce some elements of democracy, we can live with dad, right? So this is not a problem. So I think you have to what I've learned that you have to adapt really to what. What is it available? A in the market of governance and B what is acceptable to governments and see that depends on the region, right?

01:02:33 In some regions, they have other preferences than in others. And if I was a fundamentalist, I would have said, no, I don't do that because it's not a purely private model, like in Honduras or in this African or another country, I would say, no, I don't have all my 10 points. So I, I'm not doing it. I think it's better.

01:02:52 Um, I might be wrong, but I think it's better to start where you have maybe six points out of 10, maybe not two, but if you have five or six out of 10, I think it's worth a trial. That's what I have around. And I'm, I hope that I will continue in starting such projects. And if I fail, I invite everybody. Who has heard about the idea has read my book. It's your term.

01:03:14 Host (David C. Luna): Yeah. And I'll be sure to link the book, the audio book in the show notes as well. And if people want to get in touch with you, what's the best way of doing so?

01:03:21 Guest (Dr. Titus Gebel): It depends if you want to invest in a, in a concrete project. And I would just say, go through the typology website, send me a message through LinkedIn.

01:03:31 Or if you want a more interested in the philosophical idea and have own project ideas of then go through the free privacy's website, deciles on email there.

01:03:41 Host (David C. Luna): Okay. Perfect. Thanks for being on the podcast. It was definitely very interesting talking about free private cities of thanks again for being on the podcast.

01:03:49 Guest (Dr. Titus Gebel): My pleasure.

01:03:50 Host (David C. Luna): Wow. What an interesting interview. I hope you enjoyed this episode as much as I did, and if you're a regular follower and listener of this podcast, you know that I always try 01:04:00 to summarize this episode and give you some additional thoughts. Unfortunately, we didn't have enough time to cover all aspects of this fascinating idea of free private city things such as are these cities only something for the ultra-rich.

01:04:15 What happens if a free privacy operator changes the contract or just skimps on maintenance? How are the citizen of free private cities protect us from this type of behavior? And couldn't the free private city extort it citizen as it has basically a regional monopoly, similar to toll roads. And how do you prevent the host country from taking over your free private city after it has become too successful or too painful for that host country, but you can find all these answers in Titus's book or audiobook that's even free.

01:04:49 If you have an audible account. So by the end of this episode, I think it's safe to say that we should have much more competition among governments and have various societal models or products if you will. And this is probably very hard for people to accept that democracy might not be the end all be all solution or even the best solution to all of the problems that we face today.

01:05:14 Now, the most obvious example was, uh, Germany's recent flood disaster. Guess who failed to guess who was the first to be on-site and working on solutions completely voluntary, harnessing the power of spontaneous order and compassion. Surely wasn't the German government. They not only failed, but they were completely incompetent using this as a welcome opportunity to gain more votes for the upcoming election.

01:05:40 And yet it was a private citizen and private companies around the world that pulled the. To help the people in need, again, completely voluntary without the state coursing anybody. And this also reminds me of the time after the financial crisis, where in Detroit, you had some parts of the city that were 01:06:00 basically NRG.

01:06:00 So most people assume that NRK is chaos, social unrest, but nothing like that occurred there. Now, how is that possible? Well, the community pulled together and even offered paid services for a second. And guess what police did not show up, but it was private companies and no one got killed or harmed because they were preventing crime instead of arresting someone when crime has already occurred.

01:06:24 So if you're interested in that, there's a four-part mini-series that are in the show notes. That's well worth a watch here. Also some additional thoughts that you, as a listener should ruminate on as well. So if you believe that people at a certain age at least can and should take responsibilities for their lives, then that has to include the fruits of their labor, as well as taking responsibility for their own mistakes.

01:06:49 And if you view humans in a positive light, which I help you. Then you'll have to allow people to do what they want. They're going to make a ton of mistakes. They're going to do more right than wrong. But in either case you don't really have the right to intervene, but politics is about amassing power to tell other people what to do as we've seen throughout history and countries around the world, even in liberal democratic constitutions is that these democracies violate their own civil laws.

01:07:17 Especially if these countries have a welfare state and some even have a warfare state as well. So this welfare state forces one person to live at the expense of another simply because social groups demand the distribution of wealth. Don't forget this redistribution is only possible by taking away the fruits of others.

01:07:39 The consequences, never-ending fights for redistribution. Just ask yourself, how do you legally justify expropriating a citizen through a third party, namely the government that uses coercion, even instances of misfortune, don't really justify the exploitation of others with. Now 01:08:00 most fenders of the welfare state will probably object and state that solidarity and social justice could not be established without the government, but let's be honest.

01:08:10 Is there really someone that believes that solidarity forced under the threat of violence is solidarity and what is even social justice doesn't that really depend on where you are in that particular system. And if you believe that this justifies one person to live at the expense of another, and who decides what each person gets and what fair is.

01:08:32 Or simply put taxation is theft. It's taking your money by force giving it to another group that basically screams the loudest or has the most organized interest groups. Those in favor of income tax should remember that this always assumes that 100% of your income belongs to the government and it alone decides what part of that you get to keep, don't forget.

01:08:56 You have to declare all of your income to the state. In other words, if you have a tax burden of say 40 to 50% in a given country, you are essentially working five to six months solely for the government before you work for yourself. And that's why it's considered slavery. Now, if you might say, wait and wait a minute, taxation in slavery, I can highly recommend the very, very famous story.

01:09:20 The tale of the slave by Roberts Nozick, which explains this more in detail and is a very short read, something like two to three pages. And I'll post that in the show notes as. And it's also important to know why these patterns we occur. Titus explains this quite nicely in his book, and briefly mentioned parts of it in this episode, which I will summarize as I think this is one of the most important points to make the beginning.

01:09:46 Almost everyone on the planet wants to increase their standard of living, ideally in the easiest way past. And the easiest way to increase your center of living is to take something away from others. Now, however, most 01:10:00 people find it kind of difficult to simply March into a shop and take the goods without any form of payment or take the be nice BMW from their neighbor.

01:10:08 So it's easier for them to hire a third party, to do the job who will tell them a nice story about buy. The whole thing is legal and morally justified and make them feel all warm and fuzzy. That's the reason why people turn to the state, actually, a cartel would describe it more accurately. Remember the state is the only institution that can take away the fruits of others labors without any legal repercussions.

01:10:34 But this does not change the character of this so-called process, which in the same society would otherwise constitute theft or robbery. This is one of the hardest pills for most people to see. Governments and politicians serve these market demands. Otherwise, they would be voted out of office or removed in favor of those who cater to this exact demand.

01:10:58 So over time, more and more social groups find out how to use the power of the state for their own interest. This in turn, the state not actual economic activity becomes the main source for raising your standard of living fewer and fewer people end up working in a productive sector evidenced by the fact that government never seems to reduce in size fights over redistribution, intensifies and public debt spirals out of control.

01:11:28 And finally, the state runs out of money. The results are crisis leading to radical reforms or politicians promising change. And the whole process starts again, reminding the citizens of Groundhog day. Sadly, the majority believes that if the government doesn't provide a certain service or infrastructure, then it wouldn't exist at all.

01:11:51 But in almost all cases, the market, as long as it's truly free, can provide a better service at a lower price than the state can. The 01:12:00 citizens don't really get an itemized receipt with the exact amount of taxes they paid for a particular service, which by the nature of government is always more expensive than without government intervention.

01:12:11 And it's a monopoly. There are no free lunches, no matter how hard you believe in Santa Claus. So most will disagree and state the example of in quotes free education. But I always ask these people if their professors work for free, and if the building maintenance day studying is also free, I've never really heard a yes to that question.

01:12:34 Instead, I hear that that's what our taxes are for. I have got to be presented with an itemized bill for the taxes that are being used for education or any other governmental service. I can almost guarantee you that the price is going to be much, much more than in a real free market, but you're still being built a higher price through your taxes.

01:12:58 Another important aspect we should also consider is the way we create value today that has changed dramatically over the past. Say a hundred to 150 years and we'll continue to do so exponentially over the coming decades. Karl Marx himself once said, if you change the dominant mode of production that underpins a society, the social and political structural will change too.

01:13:22 And since it's easier than ever to work remotely, we've become more and more mobile in the process. The free market can not only create spontaneous order, but also helps with the discovery process and finding new solutions to problems that are or have plagued us humans. Probably the most important aspect of the Mar that rarely gets discussed is competition.

01:13:46 Competition has proven itself as humanity's only known prominently effective means of limiting humans. Shouldn't this reason alone, be enough to convince skeptics that we need more 01:14:00 innovation and diversity of ecosystems. And as we've already learned from podcast episode number 17, with 20 Inglis and the decision-makers are almost always too far removed from the actual problems to make well-informed decisions, knowledge is always decentralized from authority yet.

01:14:19 According to the principle of subsidiarity problems should be dealt with at the most immediate or local level, or in other words, the smallest group or the lowest level of an organizational hierarchy being the citizen. So when applied to community, this also implies either dividing the community when it has grown beyond a certain size or introducing additional levels of autonomy, which is sometimes something we see in nature as well.

01:14:47 Thus, we can also conclude that diversity and competition are necessary not only as a means of limiting power but also for gaining knowledge and further development. So if we want to live in freedom and soft determination, then we need more, not less diverse systems, why not apply the same principles to our societies and have multiple products competing against each other.

01:15:13 And so satisfying. Even the needs of the minority in this way, there should be a market for these new concepts alongside traditional governments, but the people decide isn't that what democracy claims to be its strength planning, people decide. At the end of the day, I believe every citizen has essentially two options vote or exit meaning you can either vote and engage in the political process.

01:15:40 If you still believe that that can make an impact or exit, leave the country and move to one that better suits your views and where you're treated much. Why not let these different systems or products, flourish and unleash more innovation so we can see what works and what doesn't, what's 01:16:00 the worst that can happen.

01:16:01 We learned something useful from these experiments, the impact on the existing taxpayer of the old system or traditional governments is zero. As they're not involved at all. Only those who want to volunteer and are accepted will have to bear the responsibility. The more products any country can create and launch.

01:16:20 And this also applies to companies as well. The higher, the odds will be that we'll find something that works much better than our current product. That being said, I'll finish with a quote from an Apple ad that seems to fit perfectly in this case. Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes, the ones who see things differently, they're not fond of rules and they have no respect for the status quo.

01:16:52 You can quote them, disagree with them glorify or vilify them. And about the only thing you can't do is ignore them because they change things. They move and push the human race. And while some may see them as crazy, we see genius because the people who are crazy enough to think they can change the world are the ones that do.

01:17:15 Thank you so much for listening. If you enjoyed this episode, there's plenty more where that came from. Just head to our podcast website, innovational correctness.com or gamma beyond.com or just follow us on LinkedIn. There, you will also find long-form articles, videos, and other podcast episodes about innovation and transformation. And if I could ask you for one small favor, it would be this, please.

01:17:33 Don't forget to subscribe and leave us a rating or review on iTunes over. What are the podcast app of your choice? It really helps us out by encouraging more people, to find our podcast and reach hard to get guests last but not least. If you have any suggestions for further episodes of guests that we should invite on a podcast, or just have feedback, you have three options.

01:17:50 Emailing us filling out our anonymous feedback, format, innovation or correctness.com or leaving us a voice message with your question or feedback so that it can be included in the podcast. In all listeners can 01:18:00 profit, just go to innovation. correctness.com links are in the show notes.

 


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This podcast looks at innovators and companies that are changing the game and how they took their initial idea and created a game-changing product or service, while giving you unique perspectives and insights you’ve probably haven’t heard elsewhere.

David and his guests discuss real-world practical advice on how to best harness the creativity of your employees and go from idea to product or service that has the potential to radically transform your business.

They also share lessons they’ve learned along the way to effectively accelerate, incubate and scale innovations within small, medium and large enterprises, all while separating hype from reality and replacing bullshit bingo with common sense.

The show is hosted by David C. Luna, author, keynote speaker and founder of GAMMA Digital & Beyond.

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