Van Notten and MacCallum were first-class anarcho-capitalist fantasists, but they also needed financial backing. In 1995, van Notten partnered with American businessman Jim Davidson to focus on the first step to a post-democratic free-port clan future: building private toll roads.61 A couple of years later, the duo registered the Awdal Roads Company in the tax haven of Mauritius. The company’s website included a link to something called Freedonia, which it noted was “looking for land near Awdal.” A click took you to a page reading “Good Evening, Welcome to the Principality of Freedonia Embassy.” Freedonia, one would discover, was not just a riff on the mythical country in the Marx Brothers’ Duck Soup (1933) but had enjoyed eight years of existence, with consulates worldwide and passports available to its citizens. Like Atlantis before it, Freedonia had also created its own currency: it had coins stamped with the Freedonian crest and the word SUPERIBIMUS, a misspelling of the Latin phrase “we shall overcome.”

  Freedonia was ostensibly a principality under the reign of a certain Prince John II. More prosaically, it was the pet project of a group of young Texan men. Photographs of its treasury secretary, prime minister, and minister of defense featured them posing graduation-style in a wood-paneled basement in front of a green satin Freedonian flag with a yellow saltire and six white stars, wearing the boxy hat and brass buttons of US Marines.62 The would-be state of Freedonia was a nation without a territory: a “non-territorial nation, like Palestine,” they explained. The youths had a few ideas for addressing that shortcoming. One was “to build a large island in international waters.” Another was to “buy a small amount of land from a country (possibly Caribbean, latin american, or pacific [sic]) and buy the governing rights to the land as well.” Most ambitious was the plan beloved by libertarians from Robert A. Heinlein to Elon Musk: “claiming land on the Moon and Mars.”63

  In 1999, Prince John, now a college student, connected with Davidson, who in turn connected him to van Notten, who promised him land in Awdal.64 The jurisdiction of Freedonia seemed to have finally found a territory. Its founders aspired to make it “a part time residence for the world’s wealthy” as well as a site for incorporation, ship registration, and resource extraction through cheap labor.65 Freedonia captured in miniature much of the secessionist imagination of the late twentieth century. It also mimicked much of the offshore reality that had come into existence: the use of enclaves for concealment of assets in low-tax or no-tax jurisdictions, the registration of ocean vessels under flags of convenience, and the possibility of multiple passports.

  In January 2001, though, the secessionists felt the sting of the scorpion tail of sovereignty. According to a long and sheepish message posted by Prince John, a member of the Somali diaspora living in Toronto had faxed a printout of the Freedonian website back home.66 When local authorities discovered the young Americans were claiming they had been granted a swath of coastline for their imaginary nation, the deal was canceled and van Notten and Davidson were deported for their complicity in the scheme.67 The Texan teenage monarch’s offshore tax haven was not meant to be.

  4.

  The white man’s business clan in Somalia could also seem like a lark, the pipe dream of a pair of neocolonial eccentrics. But there was more to their flight of fancy than one might expect. The Somalia of the 1990s and 2000s did, in fact, challenge some of the basic expectations about how a state should act and how an economy should be. Beyond concern over the humanitarian calamity of the civil war, the question of how life persists without a state posed a basic sociological riddle. Somalia became a place to understand how people adapted to develop what some called “governance without government.”68 Scholars observed that the end of the state had not led to a Hobbesian war of all against all. Somalia seemed to offer a category error. Could there really be “economy without a state”? After all, as one scholar put it, “if a state were a required component, then the Somali economy could not exist.”69 And yet not only did the Somali economy exist, but something even more remarkable was happening: it was doing better than ever.

  Somalia first showed signs of “commerce without a state” in the 1990s.70 After the government collapsed, GDP grew, exports increased, and investment rose.71 Even life expectancy improved.72 For libertarian scholars, Somalia became “a unique test” of statelessness as a sustainable condition.73 “While Somalia lacks a central government,” one wrote, “the private sector has developed governance mechanisms to fill the void.”74 A dissertation titled “Money Without a State” described the extraordinary fact that the Somali shilling functioned as a token of exchange and a store of value long after the central bank and treasury had disappeared.75 The shilling’s value actually stabilized in relation to the dollar, and it was used for exchange into neighboring countries.76 One German anarcho-capitalist perhaps went the furthest when he gathered funds for translating the works of Ludwig von Mises, Friedrich Hayek, and Hans-Hermann Hoppe into Somali. Their writings would further aid the residents of Mogadishu from taking the “road to serfdom”—by which he meant the reestablishment of a central state.77

  In a widely cited article, a young economist named Peter Leeson made the case that Somalia was “better off stateless” in comparison to the dictatorial state that preceded it.78 He went as far as to suggest that it might actually become a template for other intractable situations. “Allowing government to crumble and anarchy to emerge” in the West African state of Sierra Leone, he suggested, “may actually improve its state of development.”79 He saw a historical parallel with nineteenth-century Angola, where the export trade—including in enslaved humans—was, he wrote, “extensive and durable, though there was no government enforcement of property rights.”80

  There was no denying that Somalia was especially well equipped for survival under conditions of statelessness. For one thing, neither the colonial nor the postcolonial states had ever attempted to capture most of the population, in the sense of incorporating them into the standard bureaucracy of education, taxation, and registration.81 While the Italians had made some effort at developing the infrastructure of a modern state, the British presence had been especially thin. With no natural resources to lure them deeper inland, the colonists had stuck to the coast. They did not seek to develop the interior, nor did they make many efforts to educate or convert the local population, which was not prone to stay in the same place for very long.

  The nomadic groups kept their wealth in their herds of livestock, traveling to find grazing land and water sources. Somalia’s postcolonial state also had little to do with the nomads, concentrating its efforts in the urban centers. So when the government vanished, the transition was not as abrupt as it would have been in other countries, leading to the emergence of a marketplace for political services and a “commodification of warlordism.”82 The territory became not stateless so much as composed of many miniature states: a “mosaic of fluid, highly localized polities—some based on traditional authority, others reflecting hybrid arrangements.”83

  Kinship was part of the glue that kept the country together. Family ties also help explain the paradox of stateless prosperity in another way: those who fled to wealthier countries often remitted money back to their relatives. Money earned elsewhere, especially by the large numbers of Somalis working in the Gulf nations, became a disproportionate source of local wealth.84 For those refugees in Western countries, some of the remittances could come from social security and other transfers. Ironically, the welfare state itself helped to subsidize the supposed anarchist miracle.85

  But there were omissions in the story that the libertarians told. They either ignored or glossed over the fact that the most successful part of Somalia after the state’s collapse was the place where a new state had been rapidly reestablished. Just months after Somalia’s central government dissolved, the Islamic Republic of Somaliland declared its independence in the north of the country, within the borders of the old British protectorate. It was here that security returned most quickly, and the basic fundamentals of the state emerged quite early. The very scholar whose work on “economy without state” spawned libertarian dissertations also pointed out that “in stark contrast to southern Somalia,” the de facto state of Somaliland had government ministries, carried out development planning exercises, and collected minimal taxes and fees.86 While van Notten’s wife advertised the statelessness of her clan’s territory to lure in overseas investors, this was hardly the case. In fact, his wife’s clan had been part of the conference that created Somaliland in 1991.87 Members of the clan were vice presidents in the Somaliland government.88

  The territory of Somaliland is a peculiar place. Although it functions like a state, it lacks UN recognition so has been called “a country that does not exist.”89 Still, reestablishing the institutions of government gave investors confidence. Lack of UN recognition did not prevent France’s Total from spending $3.5 million refurbishing its oil storage facility there, in exchange for a monopoly on oil supply and distribution.90 Lack of recognition did not keep five airlines and five private telecommunications companies from setting up shop within the first decade in Hargeisa, Somaliland’s capital.91 Somaliland has also experimented with its own kind of old-fashioned politics. In December 2002, six months after van Notten died, what he had dubbed the “monster of democracy” returned when half a million people voted in the first multiparty elections held in the region since the 1960s.92 Subsequent competitive elections have seen smooth transfers of power between opposing parties.93 To many outside observers, Somaliland was an “overlooked success story” not of ordered anarchy but of decentralized post-conflict democracy.94

  The port of Berbera, on the Somaliland coast, embodied well the model of development that worked best. It was the greatest economic success story in the region. For more than a thousand years, goods from the African interior had arrived there to be shipped to the Middle East, onward to South and East Asia, and up the Red Sea to Cairo, Alexandria, and Europe. During the time of the British protectorate, it served as the colonial capital. After independence, Berbera was a classic site of Cold War competition. The Soviets built one wharf; the Americans built another.95 In the 1980s, three-quarters of the still-intact nation of Somalia’s foreign currency came from exports from the port.96 After state collapse in the 1990s, it exported more than it had the decade before.97 In June 2021, a new terminal big enough for the world’s largest ships opened in Berbera with a half-billion-dollar investment from Dubai.98 The company has an agreement with Somaliland to manage its port for thirty years in return for a 65 percent stake in the venture, complete with plans to build an adjoining free zone for foreign manufacturers to set up factories.99

  The wealthy emirate was a lifeline for the Somali economy in the years of statelessness. Mobile phone networks and mobile payment systems were established by companies headquartered in Dubai. Electric generators purchased in Dubai were attached to local homes by local entrepreneurs (or rentiers) who charged by the lightbulb.100 Planes leased by Somali carriers were parked in Dubai in the evenings. Somalis had already traveled in large numbers to work as laborers in the Gulf. Now the Gulf came to them.

  The recipe for success in the age of high globalization, it seemed, lay not in the Somali clan but in becoming an outpost of Dubai.

  9

  The Legal Bubble-Domes of Dubai

  Dubai

  If there is any place in the world that has contributed to global zone fever as much as the Asian juggernauts of Hong Kong and Singapore, it is Dubai. In a few short decades, the emirate on the Persian Gulf staged a dizzying ascent from a gold-smuggling outpost with houses built of coral and sand to the gilded home of the world’s tallest hotel, the world’s only ski slope in a desert, and the world’s highest tennis court, among many other records. In 2003, plans were announced for an amusement park three times the size of Manhattan.1 The same year, ground broke—or emerged—on an archipelago of three hundred artificial islands loosely shaped like a map of the world. The developer soon announced a sequel: the Universe, an archipelago of planets and the moon.2 In the first decade of the 2000s, Dubai’s economy grew by 13 percent a year on average, outpacing even China.3 Skyscrapers were built at the rate of a floor every three days.4 In six years, the city’s population doubled and its footprint quadrupled.5

  “When you first arrive in Dubai and see the glitzy high-rise buildings, you think you could be driving through Canary Wharf,” wrote a British employee of a construction company. Then you realized how much larger it was. “The scale of things is scary.” A major property development in the UK would be 150 acres; the main free zone in Dubai was a hundred times larger. Things got done. “In two years they have built and opened a metro system,” he said. “In the UK it would take that long to refurbish one station.”6 Dubai made use of the most advanced forms of engineering and architecture to achieve visually stunning, gravity-defying feats in the built environment. It was unapologetic in its ostentatious celebration of wealth unburdened by hang-ups about inequality.

  How did they do it? Authoritarianism was part of the answer. Dubai was a case study in capitalism without democracy. Through the early 2000s, it ranked as one of the least politically free places in the world, owing to the absence of popular elections, protection of free expression, and rights for noncitizens, as well as the arbitrary use of police force and practice of forced labor.7 As early as 1985, the CIA reported that in Dubai “ideology is dismissed as irrelevant to business.”8 Of course, dismissing ideology in favor of business amounted to an ideology of its own. But what kind of ideology? Most striking was the resemblance to corporate governance. Both power and ownership were concentrated entirely in the figure of the sheikh, who was frequently referred to as the CEO of Dubai, Inc. The city-state’s executive council was made up of the heads of state-owned enterprises rather than elected officials.9 The result was a short-circuiting of public deliberation—indeed, the elimination of any idea of the public at all. “The delays, the disputes, the litigation, the whole messy business of ‘Not in My Back Yard’ simply doesn’t exist in the country,” one architectural critic wrote. The city was an advertisement: “Look at what enlightened, corporate, efficient and non-democratic government can do.”10

  “Milton Friedman’s beach club” is what Mike Davis called Dubai in 2006, “a society that might have been designed by the Economics Department of the University of Chicago.”11 It had “achieved what American reactionaries only dream of—an oasis of free enterprise without income taxes, trade unions or opposition parties.”12 But the charm of Dubai was lost on Friedman himself, who never mentioned it. The emirates were not discussed at the meetings on designing an Economic Freedom of the World index, where Hong Kong, Singapore, and even Ciskei were the stars. Dubai’s fans sat further right on the spectrum. In the early 2000s, the emirate began to catch the attention of market radicals less of the Chicago school variety than the anarcho-capitalist strain.

  What the Financial Times called Dubai’s “paradoxical blend of laissez-faire and rigid authoritarianism” was no paradox to right-wing libertarians.13 One German anarcho-capitalist wrote that Dubai was the best evidence that Hans-Hermann Hoppe was right: monarchy was superior to democracy, since monarchs tended to the long-term wealth of their territories while elected officials plundered theirs during their time in office.14 Two Dutch anarcho-capitalist authors wrote that the absence of democracy was not a problem but rather the key to the city-state’s success. Elections would only decrease economic freedom.15 The meteoric rise of Dubai offered the best evidence yet that democracy and capitalism need not go together.

  Perhaps the most impassioned take on the emirate came from the self-described neo-reactionary and tech worker Curtis Yarvin, who blogged under the pseudonym Mencius Moldbug and moved in the same circles as Patri Friedman and Peter Thiel.16 Along with Singapore and Hong Kong, Dubai proved to Yarvin that “politics is not necessary to a free, stable and productive modern society.”17 Dubai was run like a business, and this was as it should be, he said. Instead of citizens, it had customers, who expected nothing more from the state than that which was outlined in their contract.18 He felt that bonds of citizenship were mere instruments for extorting the state for benefits, which, in turn, had to be extorted from others through taxation. Abstract ideas of civic belonging or obligation had no place in Dubai. By the early 2000s, Dubai’s population was, by some estimates, 95 percent foreigners.19

  If Dubai’s rejection of democracy was one attraction for Yarvin, another was its scale. Like Hoppe and Rothbard before him, he thought the smaller the jurisdiction, the better.20 Dubai had a massive free trade zone but the entire polity was smaller than the smallest US state, Rhode Island. Yarvin’s term for his normative ideal was a “patchwork”—“a global spiderweb of tens, even hundreds, of thousands of sovereign and independent mini-countries.”21 Patchwork was also a term used by scholars to describe what Dubai became in the 2000s, holding the real secret of the emirate’s charm for the anarcho-capitalist.22

  From the outside, Dubai was marked by its dazzling gigantism, its quality of having sprung straight from the high-definition screen of an architectural rendering. But this wasn’t what made it attractive to the right-wing libertarians. What they liked was harder to see: it was Dubai’s embrace of radical legal pluralism and its willingness to design bespoke jurisdictions to satisfy investors. Dubai was not just a “city-corporation.”23 It was one state with many systems, and a test run of Yarvin’s patchwork in practice.