The charter city connected to the dreams of Silicon Valley, but also to the context of larger geopolitics. Romer talked about the need to “rethink sovereignty” as if this were a new idea. But the United States had been rethinking sovereignty in earnest since its invasion and occupation of Afghanistan in 2001 and Iraq in 2003. When Romer gave his first charter cities lecture, the United States still had 130,000 troops in Iraq. His presentation at Stanford was attended by Condoleezza Rice, who had just walked away from the calamities she helped conduct as secretary of state in the Bush administration, taking on a prestigious new position as director of the Hoover Institution—the West Coast outpost of Mont Pelerinians.34 Romer referred to her by her nickname, mentioning Condi in the audience.35 The actual existing rethinkers of sovereignty were Romer’s colleagues.

  The wars in the Middle East had untethered the world-making imagination of many US and UK elites. Assorted historians and public intellectuals mused that empire had been maligned and needed rehabilitation.36 One such cheerleader, Niall Ferguson, adjunct fellow at Hoover, called himself a “fully paid-up member of the neoimperialist gang.”37 With the failures of American “nation building” a constant thrum in the daily news, the press was happy to showcase Romer’s dreams for a less militarized version of imperialism with economic freedom as its goal.

  The few critical voices pointed out that the coverage of Romer’s ideas glossed over the nature of the government in Honduras he was dealing with. Just as with coverage of the Chicago school’s influence on Pinochet’s Chile, the innovative quality of Romer’s economic proposals were reported without attention to the thousands of illegal detentions and the murders and disappearances of protesters and activists.38 One of the lawyers who filed a complaint against the constitutionality of the scheme for REDs was shot dead in what appeared to be an assassination, just hours after a television interview in which he denounced the ceding of land to investors for self-governing “model cities.”39 But what were such isolated episodes of police violence and human rights violations compared to the death toll of attempting to bring (back) popular elections to the Middle East? US foreign policy and Romer’s charter city proposals worked in tandem to shift the Overton window on the idea of alien rule. If the world’s most prestigious publications could get behind a project of colonialism by invitation, what else might be possible? Curtis Yarvin was, as usual, willing to say the quiet part out loud. He wondered why Romer insisted his charter cities were not colonialism. They were “exactly colonialism,” he wrote, and this was no reason for apology. Non-European populations did better when they were ruled by Europeans, he proclaimed. Romer was blazing the trail toward what Yarvin called a “colonialism for the 21st century,” and he was thrilled.40

  2.

  Those who became most excited about Romer’s plan for Honduras were not existing states like Canada but entrepreneurial libertarians who thought it might be nice to have a mini-state of their own. The conference where Peter Thiel speculated about a world of a thousand nations? Romer was scheduled to speak there too. The positive reception of the charter cities idea (not to mention the boom for military contractors and construction companies in the Middle East) suggested that the taboo against subdividing and recolonizing territory was weakening. Why shouldn’t private citizens get in on the act of government, the most lucrative line of business yet created? Patri Friedman pointed out that government services accounted for 30 percent of global GDP. “People talk about disrupting medicine or energy or education,” Friedman said. “Those are small potatoes. This is the big one.” Government was the biggest cartel in the world. “Let’s think of countries as firms and citizens as customers,” he proposed. If there was such a thing as state failure, then “can we cash in on it as entrepreneurs?”41As a pure enterprise, start-up cities looked like a field waiting for an investor with enough guts to enter.

  “If laws were software,” Friedman asked, then why was “America’s operating system … written in 1787?”42 Reforming domestic laws was too slow. Better to find a place where one could write new code from scratch. Friedman hoped that Honduras would be the country to make this happen. He gathered people from Thiel’s circle to back an investment group called Future Cities Development, which announced plans to bring the “Silicon Valley spirit of innovation to Honduras.” In 2011, they signed a memorandum of understanding with Honduras to build a RED.43

  A series of other investors were attracted to the Honduras project by the prospect of a free market in statecraft. Some were more politically motivated than others. One member of the Seasteading Institute board who also signed a memorandum of understanding with the government claimed he wanted to make the zones into an “anarcho-capitalist paradise.”44 He imagined zones perforating existing polities and drawing away people and capital until the surrounding territories were left as husks. “Ultimately in 20, 30, 40 years,” he said, “we’ll get to the point where the nation-state system atrophies.” He compared the nation-state to the US postal service, eroded more every day by email and private couriers. The proliferation of zones meant that the “nation state government exists like the post office for a while but at some point” it will wither away.45

  Another saw the Honduran zone as the answer to the only relevant question: “Which state would you buy?”46 He saw it as a place where “contract citizens” could come together in a true social contract, with no chance of infringement on private property in the name of “the common good.” There would be no collective politics beyond atomized individuals, who would be “the sovereign of themselves.”47 As “the old order is visibly coming to an end, but a new one has not yet been established,” he wrote, libertarians had no option but to retreat to liberated territories.48 The Honduran zone could serve as a redoubt and a bastion in a troubled time—a version of Galt’s Gulch, the millionaires’ Colorado hideaway from Atlas Shrugged, but with better beaches.

  Yet another investor, Erick Brimen, referred to his métier as “countrypreneurship,” and started a venture capital fund offering seed capital for creating new societies “from scratch.”49 Working with Patri Friedman, Brimen broke ground in May 2021 on a fifty-eight-acre zone on the island of Roatán, off the north coast of Honduras, with $17.5 million in capital.50 Called Próspera, the zone was not a RED but its legal successor, a ZEDE (zona de empleo y desarrollo económico, “zone of employment and economic development”), one of two in the country.51 ZEDEs remained under Honduran international and criminal law; they could no longer enter treaties independently, but otherwise offered a blank slate for building new internal institutions from scratch. ZEDEs were freed of import and export taxes and could have their own courts, security forces, education systems, and legal system.52 “We are a private venture in which all relationships are determined by contracts between the organizer and the individual business or residents,” said one advisor. “We are the epitome of free market principles.”53

  Luxury accommodations, offices, and laboratories were planned for the ZEDE, but one of the selling points of living in Próspera was also that you didn’t have to live there—no more than Próspera’s investors lived in the Cayman Islands, where their fund was registered. Proponents of the start-up society insisted that the twenty-first-century city was not made of concrete and glass so much as out of laws.54 True to Romer’s vision, the most important thing about a place was its rules. While earlier settlers once sought wealth in gold, crops, or railroads, the treasure of zones like Próspera in the twenty-first century was their status as a jurisdiction—their potential as a new place to pick and choose among regulations and licensing requirements. Such zones offered vivid examples of what had become standard practice in the conduct of global capitalism. When people form a business contract anywhere in the world, they already have the choice of which law they elect to use; most commercial contracts are written in either New York State or English law.55 For what one scholar calls “roving capital,” laws are selected and combined à la carte.56 The VC firm funding Próspera, for example, was registered in Wyoming.57 The business itself was registered in Delaware.58 These jurisdictions were portals to what Oliver Bullough calls Moneyland, where people can select whichever laws “are most suited to those wealthy enough to afford them at any moment in time.”59

  Próspera hoped to build a new portal to Moneyland but also to accelerate the dynamic of the choice of laws. Their vision was premised on a faith in the frictionless possibilities of governance by internet. One of their templates was the small Baltic state Estonia, birthplace of Skype, which strove to become what one journalist called a “digital republic” in the 2000s, allowing you to vote, dispute parking tickets, and even give testimony in a criminal case online.60 After 2014, Estonia launched an e-residency program, which allowed people to become “virtual residents” for a small fee, registering their business in the country and gaining access to its range of online services as well as entry to the European Union’s Digital Single Market.61 The architect of that program was an advisor.62

  Anarcho-capitalists long dreamed of making the metaphor of the “social contract” discussed by political theorists into a literal contract, printed on paper or displayed on a screen, which a customer would sign to agree to be bound by certain rules. This was brought to life in the classic speculative novel of anarcho-capitalism, Alongside Night from 1979, in which the United States has collapsed into a currency crisis and true believers in the free market have gathered in enclaves and strongholds run by an underground organization known as the Cadre. Members hail one another with their greeting—“Laissez-faire!”—and enjoy libraries stocked with Mises, Rand, and Rothbard and services provided by the First Anarchist Bank and Trust Company, NoState Insurance, and the TANSTAAFL Café (short for There Ain’t No Such Thing as a Free Lunch).63

  To enter one of the redoubts, you first had to sign a General Submission to Arbitration, which bound you to settle all future disputes of any kind through third-party private courts. Parts of such a system already exist in the commercial world. A business contract usually includes a note about where a dispute would be settled should a disagreement arise. Cross-border cases are often handled by international centers, with London, Hong Kong, and Singapore being leading seats of arbitration. In Alongside Night, this extends to all aspects of civil law and conduct. Nobody who refused the contract was allowed to enter, and those who rejected a judgment were submitted to boycott and ostracism, “a ‘casting out’ that is virtually equivalent to being turned naked over to one’s enemies.”64

  As in the strongholds of the Cadre, arbitration in Próspera would cover everyday affairs unrelated to business.65 The “agreement of co-existence” signed on joining the ZEDE meant that infractions would be treated not as crimes but as breaches of contract. The senior arbiters of the Próspera Arbitration Center that governed disputes were three elderly white men from Arizona.66

  This was a different vision of government than one based on rights and obligations, let alone popular sovereignty. It was a self-conscious choice to make corporate governance the foundation of human community, a fulfillment of the anarcho-capitalist blueprint drafted by David Friedman and many others.

  A Próspera advisor praised the decision of Honduras to surrender control over the territory. “Honduras is letting go,” he said, “and that’s an absolutely unique phenomenon in the world. You have to be very desperate as a territory and as a political class to understand that the problem might be that you have to … let others take over.”67 The symbolism of the ZEDE as an act of desperation was not lost on the Honduran population. Debate over the zones reopened a larger conversation in the country about fragmentation of national territory. Critics saw a through line in the historical perforation of national sovereignty, from the banana enclave to the maquila sweatshops to the start-up zones.68 One journalist noted the fact that zones were legalized on the hundred-year anniversary of General Manuel Bonilla’s granting similar privileges to US banana companies.69 Another pointed out that one ZEDE was planned for the place where William Walker, the nineteenth-century American mercenary who declared himself the president of Nicaragua, was eventually tried and executed by the Honduras government.70 Locals complained of an “invasion of model cities created for the benefit of the rich.”71

  The charter city dream in Honduras was made possible only by a violently repressive government, by thousands of illegal detentions and the murders and disappearances of protesters and activists.72 The project was rolled out even as the government launched a campaign of terror against its opponents, with women and LGBTQI activists as specific targets.73 The ZEDEs became a focal point of anger at the regime and the complicity of the United States and other foreign powers in upholding it. In June 2021, a National Movement Against ZEDEs and for National Sovereignty, formed by human rights lawyers and church representatives, complained that Próspera had broken the provisions of the International Labour Organization by failing to consult Indigenous residents before going ahead with the development.74 The ZEDEs drew criticisms from not just locals but also UN representatives in Honduras, who worried about oversight against discrimination in the zones, and the nongovernmental National Anti-Corruption Council.75

  In September 2020, Brimen had a shouting confrontation with Roatán locals as his security guards stood off against local police.76 He appeared on a local news station in an attempt to smooth over the conflict. “When you think about Roatán Próspera,” he said, “you need to think about a platform.” Yes, he said, the goal was a low-tax environment, but “the whole point of Próspera is to create an environment where human rights and property rights are both protected and defended.” As he put up slides of statistics from the accounting firm Ernst & Young and headshots of advisors from Tallinn, Dubai, and London, Brimen seemed unable to understand why people with centuries of history of subordination to more powerful countries were so sensitive about his campaign to “disrupt” their government.77 It was grimly humorous for Brimen to disparage foreign aid as “colonialism with a human face” while he himself operated a territorial concession governed by foreign laws and overseen by foreign advisors.78

  3.

  In one of his many glosses on the charter city idea, Paul Romer said elliptically that they were an attempt “to propose a different metarule for changing the rules in developing countries, one that could, in some sense, circumvent many of the roadblocks that stop changes in rules.”79 Of course, the “metarule” was the cession of territorial control to a foreign power, and the “roadblocks” it detoured around were the domestic democratic control over decisions made in or about that territory. But as we have seen, economic freedom without political freedom was no paradox for libertarians. In fact, when a libertarian think tank published a historical retrospective analysis of economic freedom, it ranked Honduras under the 1975 military dictatorship as the second most economically free territory in the world—second only to Hong Kong.80

  The start-up city was the same fantasy that had drawn libertarians and neoliberals to Hong Kong in the 1970s, Singapore in the 1990s, and Dubai in the 2000s: the dream of capitalism without democracy. They sometimes described this as “shrinking the state,” but a Honduran fisherman offered a better metaphor: the ZEDEs, he said, allowed investors to “kidnap the state.”81

  Late in 2021, the old-fashioned mechanism of popular elections creaked its levers and democracy took its revenge. A new government came to power in Honduras: the election was won by Xiamaro Castro, the wife of the president deposed in Pepe Lobo’s 2009 coup. She put the ZEDEs at the top of her list of targets, seeking to revise the constitutional amendment that allowed for the creation of zones, or to put their continued existence to a popular vote.82 Meanwhile, the champions of start-up cities hoped that their foothold would be defended by treaties such as the Dominican Republic–Central America–United States Free Trade Agreement, which permitted investors to sue host governments if their investments were negatively affected by legal changes.83 As one former investor put it without irony, “Libertarians don’t like international trade law but it turns out international trade law is tremendously helpful.”84

  The mounting opposition put the long-standing model of the enclave under inspection. In April 2022, Xiomara Castro’s predecessor, who had overseen the creation of ZEDEs, was extradited to the United States on charges of trafficking tons of cocaine and using the proceeds to fund his political operations.85 The same month, the Honduran congress voted unanimously to overturn the ZEDE law as unconstitutional. Existing ZEDEs, such as Próspera, were slated to be abolished within a year.86

  Might the future move away from anarcho-capitalist paradises after all? Another member of Próspera’s board of advisors was Oliver Porter, the godfather of charter cities, who had overseen the secession of Sandy Springs, Georgia, from Atlanta in 2005—a move that cut off tax revenue to the inner city and outsourced all government services to private providers, in what Naomi Klein called “the glimpse of a disaster-apartheid future.”87 Porter spoke often and glowingly about Próspera. Yet he never mentioned the fact that Sandy Springs had struck its own reverse course in 2019, bringing government services back in-house. As with many other instances where privatization of publicly owned utilities led to higher prices and less choice, private contractors in Sandy Springs had become too expensive. The city’s leaders concluded the public option was cheaper and turned their back on the open market.88

  The road of secession, pointing toward the illusory promised land of unencumbered economic freedom, was not a one-way street. In the 2020s, convening a constituent assembly to revise a country’s constitution has gained popularity as a tool for rewriting the contract between state and people. Castro proposed one for her new government, carrying through her husband’s plans that got derailed by the coup. Farther south, Chile is seeking to revise the constitution put in place under the military dictatorship of Augusto Pinochet. The government in Peru is also hoping to create a new constitution. The vision of the earth’s surface as a circuit board with swappable components still has a formidable opponent in the elusive dream of people speaking in a democratic voice.