But the choice was false, as was the opposition. Dubai’s rise was hard to separate from US military interventions in its neighboring countries. The UAE had allowed the United States to base equipment in the federation since 1991, and by the early 2000s, Jebel Ali was the US Navy’s busiest port of call.76 The economic boom was fed entirely by the surge in oil prices that followed the US invasion of Iraq and Afghanistan. In a telling move, the oil and construction company Halliburton relocated from its home state of Texas to the Jebel Ali Free Zone in 2007.77 When Djibouti’s Doraleh oil terminal opened, the ceremony happened on the guided missile cruiser USS Vicksburg. The US military had invested in the terminal to the tune of $30 million.78

  The close partnership between Dubai and the US military made it ironic that the loudest outcry over the emirate’s overseas expansion should come from the United States itself. Among the terminals operated by the P&O shipping company were twenty-two in the United States. When DP World bought P&O in 2006, American policymakers opposed the deal as a supposed security risk, eventually leading the Dubai company to sell off the management contracts of those terminals. The protest was particularly incongruous given that DP World’s ports were cutting-edge in their security. In fact, as the geographer Deborah Cowen observed, the United States was collaborating with Dubai to screen containers while following them in subjecting port workers to abnormally high levels of surveillance.79

  A few years later, Dubai returned to the United States by a southern back door. In March 2008, four officials from Orangeburg County, South Carolina, a district of about eighty thousand, boarded a fourteen-hour flight to Dubai to carry out negotiations on a $600 million investment by the emirate. Emphasizing what they saw as uniting flora between the two geographies, the South Carolinians brought palmetto palm tree pins and palm tree neckties. One member of the delegation expressed hope that the palm tree and crescent moon on their state flag would be welcomed by a Muslim country.80 Jafza International bought 1,300 acres of land in Orangeburg and announced plans for a business park with light manufacturing, warehousing, and distribution.81

  The union of the moons was not in the stars. Just as the Dubai model peaked, it hit the wall of the global financial crisis. In November 2008, DP World requested a suspension of repayments on its loans, and Dubai itself needed to be bailed out by Abu Dhabi.82 Jafza pulled out of Orangeburg. The Trump Tower Dubai planned for the trunk of the Palm Jumeirah was not built.

  4.

  Dubai was a new kind of state, tailor-made for globalization. Deregulation of shipping and trucking allowed for intermodal transport that supercharged maritime trade. Technical innovations in gantry cranes made it faster than ever to get ships loaded and unloaded. Wide-body long-haul aircraft allowed for a place distant from most business centers to become a key node in the global network—an “aerotropolis,” as a journalist dubbed it.83 (One textbook observed that nearly any two places in the world could be linked by a stopover in Dubai.)84 The end of capital controls and the fluidity of money turned the emirate’s gleaming towers and villas into three-dimensional tax-free savings accounts. Dubai was a perfect symbol of the global economy taking shape in the early twenty-first century.

  It is significant that the rise of Dubai in the early 2000s happened parallel to the practice of nation branding. Previously a topic for corporations, branding began to be applied to nations. Consultants and PR agencies packaged the qualities and virtues of countries into easily digestible sound bites. Nation-branding indexes quantified what average people thought of various countries in new league tables. Such indexes helped direct the flows of ever-larger numbers of tourist dollars, investments in real estate, and relocations of companies, framed in terms of livability for employees, the ease of doing business, the degree of economic freedom, and the intangible additions to the value of your product to be described as “Made in Country X.” A famous early example of nation branding was Britain, where the idea of Cool Britannia became closely linked to Tony Blair and New Labour after 1997. Another was Hong Kong, which crafted a campaign billing itself as Asia’s World City, launched in 2001.85 Uniquely Singapore was launched in 2004, Incredible India in 2005.86 Dubai’s skyline and the city’s many world records made it the flagship brand of the UAE and a leading world tourist city. In 2014, it was the fifth most visited city in the world.87

  After all the talk in the 1990s about democracy and capitalism going together, one thing that nation-branding consultants discovered early on was how little value democracy added when it came to a country’s reputation. In fact, it was undemocratic countries like Dubai and Singapore that ranked especially high with tourists and investors. There was an important lesson to be learned here. Winning the capitalist game globally seemed to have little to do with abstract questions of democratic liberty. People in the industry saw this as no coincidence: centralizing power in a CEO-like head of state allowed for a unity of message.88 Democracy was messy. It folded in different visions of a country, left loose ends and dangling, ragged narratives. Capitalism without democracy could hit the target every time. Indeed, if one judged countries the way one judged companies—as everything about the global market was saying we should—then Dubai won in all metrics. What was a dismal Freedom House ranking compared to the world’s tallest skyscraper? Next to land valuations that rose 10 percent a year, what was a place at the bottom of the World Press Freedom list? Concerns over political and civil liberties could seem like sentimental anachronisms of an earlier time, indulgences one could no longer afford in the constant combat of global competition.

  An urban planner notes how Dubai creates monumental infrastructure while hiding it from sight.89 The Port of Jebel Ali is behind barbed wire. The epic land reclamation projects of the World and Palm Jumeirah are gated communities inaccessible to the public. Dubai is both hyperreal—reproduced endlessly in glossy pictures of the skyline and dramatic aerial footage—and impossible to grasp, a place seen only from above and not at street level, where the buses with bars in place of windows shuttle workers to their encampments. It is perhaps the way Dubai offers itself deliberately as a projection screen that makes it available for constant reappropriation.

  Mainstream reportage about Dubai is careful not to follow the script of the Brand Dubai media office (opened in 2009) too closely. Journalists tend to note the absence of democracy as part of Dubai’s dark side, along with sex trafficking, child jockeys, and the exploited and often unpaid workforce. Reactionary thinkers like Yarvin found this unnecessary. Instead, he pushed the success of Dubai to more radical conclusions. He proposed his own solution for Iraq that would borrow the virtues of fragmented governance from Dubai. Begin by breaking it up, he wrote, back into its Ottoman-era provinces. Then put each territory under the control of a for-profit “sovereign security corporation.” These companies would be privately owned, privately run, and publicly traded on the Dubai financial exchange. The “new emirates of Mesopotamia” would have a dual share structure. People born in the former Iraq would get a share in the corporation but no vote. Shares with voting rights would be sold at auction in Dubai. Internal dissent would not be tolerated, nor would there be protection for political or civil freedoms. Under the sovereign security companies, Yarvin wrote, “the business of Iraq will be business, just as in Dubai.”90

  This was not so far from the de facto administration of Iraq by private contractors. Yarvin wrote his piece in the spring of 2007. In the first quarter of 2008, there were as many contractors in Iraq as military personnel.91 The involvement of private interests in the war was unprecedented and highly lucrative. The Financial Times found the top earner was KBR, part of Halliburton until 2007, which gained at least $39.5 billion in federal contracts in Iraq.92 Halliburton got in on a no-bid contract.

  Yet even if “Dubai Inc.” was the template, the emirate was not literally a corporation. Dubai did still have citizens, albeit a minuscule minority of the people living in the emirate, and it did still have a traditional head of state, albeit one unaccountable to the people and ruling through the privilege of bloodline. In other words, Yarvin’s dream was only half-realized. He wondered if it was possible for sovereign corporations, or sovcorps, to do Dubai one better by eliminating the hereditary monarch and moving to the more traditional corporate model of anonymous public ownership.93 Imagine if Dubai could do an IPO, he wrote.94

  In one of his provocative asides, Yarvin mused on whether it would be a good idea to let Dubai’s Sheikh Al Makhtoum run Baltimore.95 In the coming years, others in his circle would ask another version of the same question: What if Silicon Valley ran Honduras? Something like the sovcorp was about to come closer to reality.

  10

  Silicon Valley Colonialism

  Honduras

  In 2009, a Stanford economics professor named Paul Romer gave a talk on reviving colonialism. He asked the following: Why had some countries grown rich while some remained poor? It was not just about having the right location or the right natural resources, he said. It was about something more intangible: the right set of rules. Rules meant the laws that set tax rates, regulated labor, and protected property. They also meant the overall style of government. At a deeper level, rules were cultural norms, values, and beliefs. They were the way we were made to behave, but also the way we behaved without thinking. The history of capitalism was a history of struggle among rules. The nations with the best rules won.

  Hong Kong—a scrap of coastline organized under different rules than the adjacent mainland since the nineteenth century—was Romer’s prime example. When China imported the Hong Kong model to the Pearl River Delta in the late 1970s, he said, a “process of copying” helped China begin catching up to the West. Romer waved away objections that Hong Kong was undemocratic. Until the handover, the colony’s governor was appointed by the UK parliament, which was elected by British voters. Hong Kong was a democracy—“it just happened to be not a democracy that involved the local residents.” As for the Opium Wars—the violence that had made the whole thing possible—Romer insisted they were incidental. In his telling, Hong Kong got to where it was because of the “historical accident” of being colonized by the British.1

  How could such historical accidents be made to happen again? The shortcut to Hong Kong that Romer offered was called the charter city. The formula: persuade poor nations to surrender patches of uninhabited territory to be managed by richer ones. Pollinate the empty land with rules known to make capitalism work and watch it grow. This would be colonialism by consent, occupation by invitation. Using the jargon of Silicon Valley, he called them “start-up political jurisdictions.”2 Charter cities could happen anywhere. Displaying a nighttime map of Africa unlit by artificial light, he pointed out the “enormous amount of land on earth that’s very underutilized.”3 Leaders only had to face the fact that sovereignty under conditions of globalization was already moot. Why not go all the way and give over your country to external management? You had nothing to lose and Hong Kong to gain.

  1.

  The tech sector at the turn of the millennium was defined by the relentless search for the next world-changing “killer application,” or killer app. The way Silicon Valley saw it, the world was full of problems in need of technological fixes.4 Airbnb set out to solve the hotel. Uber set out to solve the taxi. Theranos set out to solve the blood test. The idea of the charter city borrowed its sheen from the idea of charter schools, the privately backed start-up educational institutions that tripled in number from 2000 to 2012.5 The Wall Street Journal made the connection, comparing Romer’s charter city model to a charter school “free of union contracts and public bureaucracy.”6 For mainstream America in the 2000s, charter schools were targeting the outmoded institutions of public schools. Charter cities targeted the outmoded institution of nation-states.

  The first place where Romer’s plan touched down was on the island of Madagascar, off the southeastern coast of Africa. His ally was Marc Ravalomanana, a dairy tycoon who became president of Madagascar in 2002. Ravalomanana made headlines six years later with revelations of a scheme to lease 1.2 million hectares of agricultural land free of charge for ninety-nine years to a South Korean conglomerate.7 The deal was one of the most prominent attempted land grabs in Africa as richer nations sought to secure overseas agricultural sites after a spike in world food prices.8 Host countries were offering land for nothing, or next to nothing, in hopes of securing some jobs for locals and spillover effects from foreign investment. Romer saw Ravalomanana as a man willing to rethink sovereignty even in the face of controversy. He flew to Madagascar to pitch the charter city model and was delighted when the president agreed to create two of them.9 Other elites were less persuaded by the subdivision of the nation. They backed a coup, which overthrew Ravalomanana in 2009.10

  As one coup closed a door, another opened one. This time, the site was Honduras. Honduras had been an enclave economy in the nineteenth century, with plantations run by foreign companies. From the 1960s onward, it fell under successive US-supported military dictatorships.11 In 1976, the country joined the first wave of export processing zones, giving tax breaks to companies in Puerto Cortés, a port city on the Caribbean coast named after the conquistador who landed there in 1526. From there, zones spread to ever more locations, until finally a 1998 law decreed that EPZs could be created anywhere in the country.12 The zones sucked in workers, with manufacturing mostly in the low-wage textile sector. The labor force in EPZs grew from nine thousand in 1990 to a hundred thousand a decade later,13 though by the 2000s the very success that Romer highlighted in the manufacturing zones of China was beginning to undercut Honduras’s wage advantage.14

  The coup in 2009 was carried out by the National Party of Porfirio “Pepe” Lobo. Among his advisors were graduates of elite US universities. Like Romer, they were seeking solutions and gimmicks, ways to extend what they saw as the success of the EPZs. One of their ideas was upgrading them into something closer to the nineteenth-century concession. They floated the label “superembassy,” described by one advisor as “an area governed by another country’s laws.”15 Lobo’s team was primed for Romer’s arguments, and when his charter city talk was posted online, they contacted him. By late 2010, the Honduran leadership had met with Romer and agreed to make their country “the site of an economic experiment.”16

  The legal form for the charter city in Honduras was the Región Especial de Desarrollo (special development region), or RED, an extraterritorial entity to be managed by a foreign partner country.17 Created by the National Congress of Honduras through a constitutional amendment, REDs would be veritable colonies within the nation. A foreign nation would establish and staff courts; train police; set up schools, health-care systems, and prisons.18 Policy would come from a nine-member Transparency Commission and governor appointed by the Honduran president in the first instance and internally thereafter.19 REDs resembled nineteenth-century concessions but, in some ways, went beyond them. Most remarkable was the fact that they would have their own juridical standing: REDs could enter treaties with other nation-states, determine their own immigration policies, and conduct diplomacy alongside the Honduran government.20 In terms of international law, the REDs would have at least as much autonomy as the Special Administrative Region of Hong Kong. True to Romer’s rhetoric, the model was “one country, two systems.” Freeing patches of territory from national oversight and granting all state functions to a foreign country, the REDs put sovereignty on the auction block.

  “Who wants to buy Honduras?” asked the New York Times, reporting the expectation that Romer would be the “chairman” of a charter city of ten million people (in a country where the entire population currently numbered eight million).21 The Wall Street Journal praised Romer’s supervision of “the development of an instant city.”22 The Economist marveled at the prospect of “Hong Kong in Honduras,” reproducing Romer’s publicity to imagine “scores of skyscrapers and millions of people” around a natural harbor.23 The Atlantic asked, “Should Struggling Countries Let Investors Run Their Cities?” and answered yes: “It may very well be easier to solve the country’s systemic governance challenges by starting afresh, even within small parts of its territory.”24 Voices from the libertarian corner were even more effusive. The Freeman called the REDs “a revolution in governance.”25 Populated by “citizen-customers,” they could be a site of “field testing” for other experiments in governance.26 One British libertarian blogger effused: “These zones are a frontier. They are a new thing, an adventure, and a new addition to humanity.”27

  Romer had managed to secure the necessary domestic conditions in the host country, but he was having trouble finding a patron state, a richer country willing to manage the charter city. One of his dream candidates was Canada. In early presentations of the charter city, he fantasized about Canadians taking over the Cuban enclave of Guantánamo Bay from the United States and turning the notorious prison of the Global War on Terrorism into a bustling commercial hub for the region.28 He pitched Canada on a similar role for Honduras.29 This was no humanitarian mission, he insisted; it was a business proposition.

  Canada was already one of the primary investors in Honduras, accounting for an average of 28.7 percent of foreign direct investment in the early 2000s, more than the United States. The Canadian company Gildan, producer of socks, T-shirts, and other clothing, was the single biggest employer in the Honduran EPZs.30 A charter city in the country would be a captive market and a client for Canadian services. Canada could offer education, health care, environmental management, and tax administration on a fee-for-service basis.31 Romer even imagined a Caribbean contingent of the Royal Canadian Mounted Police patrolling the zones with wages drawn from land revenues.32 He repeated a popular slogan: “The world wants more Canada.”33 But Canada demurred.