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
- 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:
- Almost everyone on this planet wants to increase their standard of living, ideally in the easiest way possible.
- And the easiest way to increase your standard of living is to take something away from others.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Finally, the state runs out of money. The result: A 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. 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.
Links & Resources Mentioned
- Free Private Cities | FAQs about free private cities model and its implementation
- Wikipedia: Charter city
- FEE (Foundation for Economic Education): Private Cities: A Path to Liberty
- Forbes: Inside The Rise Of Private Cities: ‘Priority Of Management Is Profit, Not The Needs Of Citizens’
- The Australian Financial Review: If you don't like the way your country is run, build your own Utopia
- Reason: Anarchy in Detroit
- FEE (Foundation for Economic Education): The Tale of the Slave
- Forbes: A New Study Investigates Why College Tuition Is So Expensive
- Forbes: How Unlimited Student Loans Drive Up Tuition
- Free Private Cities: Making Governments Compete For You (English Edition), Titus Gebel | Audible Version
- Atlas Shrugged, Ayn Rand
- Anarchy, State, and Utopia, Robert Nozick (Free on Audible)
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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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