I am breaking my silence — for the moment, at least — because I see a faint ray of hope for liberty. The source is not electoral politics, which has become liberty’s burial ground.

The source is an initiative that seems to be modeled on a proposal that I made almost almost seven years ago, in this post. There, I proposed an arrangement that I call the “zone of liberty.” What is it? As I explain here, it

would be something like a “new city” — with a big difference. Uninhabited land would be acquired by a wealthy lover (or lovers) of liberty, who would establish a development authority for the sole purpose of selling the land in the zone. The zone would be populated initially by immigrants from other parts of the United States. The immigrants would buy parcels of land from the development authority, and on those parcels they could build homes or businesses of their choosing. Buyers of parcels would be allowed to attach perpetual covenants to the parcels they acquire, and to subdivide their parcels with (or without) the covenants attached. All homes and businesses would have to be owned by residents of the zone, in order to ensure a close connection between property interests and governance of the zone.

Infrastructure would be provided by competing vendors of energy, telecommunications, and transportation services (including roads and their appurtenances). Rights-of-way would be created through negotiations between vendors and property owners. All other goods and services — including education and medical care — would be provided by competing vendors. No vendor, whether or not a resident of the zone, would be subject to any regulation, save the threat of civil suits and prosecution for criminal acts (e.g., fraud). Any homeowner or business owner could import or export any article or service from or to any place, including another country; there would be no import controls, duties, or tariffs on imported or exported goods and services.

The zone’s government would comprise an elected council, a police force, and a court (all paid for by assessments based on the last sale price of each parcel in the zone). The police force would be empowered to keep the peace among the residents of the zone, and to protect the residents from outsiders, who would be allowed to enter the zone only with the specific consent of resident homeowners or business owners. Breaches of the peace (including criminal acts) would be defined by the development of a common law through the court. The elected council (whose members would serve single, four-year terms) would oversee the police force and court, and would impose the assessments necessary to defray the costs of government. The council would have no other powers, and it would be able to exercise its limited powers only by agreement among three-fourths of the members of the council. The members, who would not be salaried, would annually submit a proposed budget to the electorate, which would have to approve the budget by a three-fourths majority. The electorate would consist of every resident who is an owner or joint owner of a residence or business (not undeveloped land), and who has attained the age of 30.

A zone of liberty would not be bound by the laws (statutory and otherwise) of the United States, the individual States, or any of political subdivision of a State. (The federal government could impose a per-capita tax on residents of the zone, in order to defray the zone’s per-capita share of the national budget for defense and foreign affairs.) The actions of the zone’s government would be reviewable only by the U.S. Supreme Court, and then only following the passage of a bill of particulars by two-thirds of each house of Congress, and with the concurrence the president. (A zone could be abolished only with the approval of four-fifths of each house of Congress, and with the concurrence of the president.)

Now comes a proposal for the establishment of the Commonwealth of Belle Isle, which seems to be modeled on my zone of liberty. The following explanatory material is from the FAQ page for the Commonwealth:

Where is Belle Isle?

Belle Isle is a 982 acre island located in the Detroit River, which separates the cities of Detroit, Michigan and Windsor, Ontario.

What is Belle Isle used for currently?

It is owned by the City of Detroit. It is uninhabited and functions as a public park.

What happens to Belle Isle … ?

Belle Isle is sold by the City of Detroit to a group of investors for $1 billion. The island is then developed into a city-state of 35,000 people, with its own laws and customs, under United States supervision as a Commonwealth. Set 29 years into the future, the book is a fictional, although the main characters are based on real people.

Is it possible to put 35,000 people on Belle Isle?

Yes. The city-state of Monaco has 33,000 people on land half the size of Belle Isle.

What are expected to be the primary industries of Belle Isle?

The primary industries are expected to be finance, insurance and investments. As land is very limited, no large plants will be built on Belle Isle. However, it is highly likely plants will be built across the Detroit River in Detroit, with the engineering and management functions on Belle Isle. Companies from all over the world will locate on Belle Isle, bringing massive amounts of capital and GDP to the area. Detroit, the State of Michigan and the U.S. will benefit from this influx of capital and ongoing GDP growth.

How will someone become a citizen of Belle Isle?

There will be an application process which will be reviewed by a citizenship board. Applicants will have to post a citizenship fee, which will probably be in the $300,000 range, plus have a working command of English. The citizenship fees will repay the investors who funded the purchase of the island from the City of Detroit, plus built the infrastructure such as sewer, water, paving, electric and gas utilities and the monorail.

Will the citizenship fee pay for the purchase of any land for homes or businesses on Belle Isle?

No- that will be an additional cost.

What are the main principles of the Belle Isle society?

There are three:

1)      Government is limited in its scope and provides only services required for the benefit of all citizens. This is the fundamental enabler of low taxation, itself a key factor in competitiveness. Competitiveness in turn drives the economy, providing both job and wage growth. Also, the government is highly transparent and overseen by an active “Anti-Corruption Group”, which employs strict measures to prevent, as opposed to catch after the fact, corruption. The government operates at or below 10% of GDP, by constitutional dictate. The social safety net is operated by charities, which are highly encouraged and supported by the government.

2)      Belle Isle has exceptional aesthetics. It is a walking community without motor vehicles, except service vehicles in the middle of the night. A monorail provides the primary transportation, both around the island and to the Transportation Center located on the Detroit side of the river. The buildings conform to high architectural standards, overseen by a talented planning director, who is advised by the best architects and planners from around the world.

3)      One of the core values is respect for all its citizens, no matter their station in life. Belle Isle doesn’t encourage anything which might cause divisiveness or envy among its citizens, by segmenting people into groups. The culture is one of bringing people together, not dividing them. Also, a command of English is required to be an immigrant, as a common language fosters common understandings. Probably the most important personal value we like to see is that of “Self-Reliance.” It is so important to individual freedom and a sense of worth, and is the key to limited government (55% of U. S. government spending is for entitlements). It was one of the key principles on which America was based and has gradually been forgotten over the years.

What is the tax system of Belle Isle?

Taxes have to conform to three basic principles. They need to be transparent, never levied on what is encouraged, and the costs of collection low. Importantly, there are no income taxes on individuals or companies, and no taxes on interest, dividends, capital gains or estates.

There are three sources of revenue. The first is user fees, which apply primarily to the monorail. A 10% sales tax provides a second source. Importantly, sales taxes encourage thrift and are collected outside the cost structure of the products. Real estate taxes provide the third, but the system is radically different than that employed in the U.S. Only the raw land value is taxed, not what the owner builds on it. This follows the principle of government only receiving compensation for what it provides. Government didn’t pay to construct buildings on the owner’s land, nor does it bear the risk of loss. We encourage development of property, not discourage it.

The goal, which is very achievable, is to have total tax expense limited to 10% of GDP of Belle Isle, compared to the 40% of GDP government expense in America.

Do Belle Isle citizens pay taxes to the United States?

Yes. As a Commonwealth of the United States, Belle Isle relies upon the United States for its defense. Belle Isle pays its share of the U.S. defense budget, based on its population. It amounts to about $2,000 per person per year.

How does Belle Isle achieve a spending level of only 10% of GDP?

Belle Isle achieves 10% in substantial measure because people here are able to take care of themselves throughout their lives. That’s where self-reliance begins. Self-reliance will be possible as a result of the abundance of jobs and strong wages arising from Belle Isle’s economic advantages. The question Washington should ask every morning is “what can we do to permit our people to become more competitive?” Small government, , low levels of taxation and taxing the right things, and competitive levels of regulation are where the conversation should start. This is the question we asked when we envisioned Belle Isle with high levels of efficiency and a minimal governmental burden on her people.

There is much more that I will not reproduce here. But I must include this:

What are the chances this vision could become reality?

That is the $64 dollar question! The hurdle is entirely political. Will the U.S. allow this experiment to happen? There are other commonwealths of the United States- namely Northern Marianas and Puerto Rico, so there is existing precedent. The compelling political argument in favor of letting this happen is the benefit of Belle Isle being a game-changer for Detroit, which many will argue is the city in the U.S. most in need of a turnaround. The influx of capital and jobs will be staggering. The author [of the book on which the Commonwealth is based] estimates 200,000 job years will be created in the construction phase alone…. The author has no doubt, if allowed, it will happen as the book describes. And once the discussion turns to the feasibility of the ideas in the book, rather than the politics of permitting it, the “impossible” will become the “inevitable.” Detroiters will see this vision as the answer to their prayers, and how could the federal government deny Detroit a chance to turn itself around, accelerate its re-birth, all at no cost to the taxpayer? How could they deny this long suffering population of over 700,000 their first real shot at the American dream.

Leftists will oppose the Commonwealth of Belle Isle for fear of its success, which would undercut their claim that a people cannot prosper and coexist peacefully absent heavy-handed government. Invoking”compassion” and “fairness,” the left will agree to the establishment of the Commonwealth only if it is subject to all of the laws and regulations of the United States — the same laws and regulations that now stifle Americans’ liberty and prosperity. Leftists will begin by insisting that the citizenship fee and language requirement are discriminatory and should not be imposed. They will go from there to demand acceptance of affirmative action, recognition of labor unions, conformance with edicts of the U.S. Treasury and Federal Reserve, and compliance with the myriad regulations and tariffs that burden America’s social and economic liberty — and prosperity — in the name of the children, the environment, fairness, consumerism, and the bogus threat du jour (e.g., anthropgenic global warming).

That said, any step toward a libertarian regime within the United States would be a step in the right direction. Let us hope that the developers of the Commonwealth have the political savvy and connections required to take that step successfully. Their success would be a step toward the establishment of a New Republic.

Obamacare and Zones of Liberty

Posted on July 2, 2012 by Loquitur Veritatem

Uwe Reinhardt, a professor of economics at Princeton, offers this tantalizing idea:

Let us set up two distinct systems for health care within our nation. Call one the Social Solidarity system and the other the Libertarian system. Ask young people — at age 25 or so — to choose one or the other.

People joining the Social Solidarity system would know that they will be asked to subsidize their less fortunate fellow citizens in health care through taxes or premiums or both. They would also know, however, that the community will take care of them, and they will not go broke, should serious illness befall them.

People choosing the Libertarian system would not have to pay taxes to subsidize other people’s health care, and they would pay actuarially fair health insurance premiums — low for healthy people and high for sicker people.

Libertarians, however, would not be allowed to come into the Social Solidarity system, unless they were so pauperized as to qualify for Medicaid. Hospitals would have every right to use tough measures to make them pay their medical bills in full, to prevent freeloading at the expense of others.

Furthermore, care would have to be taken to prohibit the kind of estate planning that now often permits well-to-do individuals to take advantage of Medicaid benefits. [“Health Care: Solidarity vs. Rugged Individualism,” in Economix, The New York Times, June 29, 2012]

Reinhardt’s suggestion has much merit — his loaded labels aside. The “social solidarity” model really amounts to freeloading, or the futile attempt to freeload. The “rugged individualism” model really amounts to a preference for making one’s own decisions instead of having decisions rammed down one’s throat by government — in other words, a preference for liberty.

But, as I say, the suggestion has merit. And the merit extends far beyond the matter of health care. As John Goodman puts it, “why restrict the choice to health care?”

Which leads to my immodest proposal for zones of liberty:

The 50 States (and their constituent municipalities) are incompatible with the kind of federalism envisioned by the Framers. Today’s State and municipal governments are too bureaucratic and too beholden to special interests; they have become smaller versions of the federal government. For, in today’s populous States and municipalities, coalitions of minority interests are able to tyrannize the populace. (The average State today controls the destinies of 25 times as many persons as did the average State of 1790.) Those Americans who “vote with their feet” through internal migration do not escape to regimes of liberty so much as they escape to regimes that are less tyrannical than the ones in which they had been living.

The kind of federalism envisioned by the Framers — and the kind of federalism necessary to liberty — would require the devolution to small communities and neighborhoods of all but a few powers: war-making, the conduct of foreign affairs, and the regulation of inter-community commerce for the sole purpose of ensuring against the erection of barriers to trade. With that kind of federalism, the free markets of ideas and commerce would enable individuals to live in those communities and neighborhoods that best serve their particular conceptions of liberty.

What do I have in mind? A zone of liberty would be something like a “new city” — with a big difference. Uninhabited land would be acquired by a wealthy lover (or lovers) of liberty, who would establish a development authority for the sole purpose of selling the land in the zone. The zone would be populated initially by immigrants from other parts of the United States. The immigrants would buy parcels of land from the development authority, and on those parcels they could build homes or businesses of their choosing. Buyers of parcels would be allowed to attach perpetual covenants to the parcels they acquire, and to subdivide their parcels with (or without) the covenants attached. All homes and businesses would have to be owned by residents of the zone, in order to ensure a close connection between property interests and governance of the zone.

Infrastructure would be provided by competing vendors of energy, telecommunications, and transportation services (including roads and their appurtenances). Rights-of-way would be created through negotiations between vendors and property owners. All other goods and services — including education and medical care — would be provided by competing vendors. No vendor, whether or not a resident of the zone, would be subject to any regulation, save the threat of civil suits and prosecution for criminal acts (e.g., fraud). Any homeowner or business owner could import or export any article or service from or to any place, including another country; there would be no import controls, duties, or tariffs on imported or exported goods and services.

The zone’s government would comprise an elected council, a police force, and a court (all paid for by assessments based on the last sale price of each parcel in the zone). The police force would be empowered to keep the peace among the residents of the zone, and to protect the residents from outsiders, who would be allowed to enter the zone only with the specific consent of resident homeowners or business owners. Breaches of the peace (including criminal acts) would be defined by the development of a common law through the court. The elected council (whose members would serve single, four-year terms) would oversee the police force and court, and would impose the assessments necessary to defray the costs of government. The council would have no other powers, and it would be able to exercise its limited powers only by agreement among three-fourths of the members of the council. The members, who would not be salaried, would annually submit a proposed budget to the electorate, which would have to approve the budget by a three-fourths majority. The electorate would consist of every resident who is an owner or joint owner of a residence or business (not undeveloped land), and who has attained the age of 30.

A zone of liberty would not be bound by the laws (statutory and otherwise) of the United States, the individual States, or any of political subdivision of a State. (The federal government could impose a per-capita tax on residents of the zone, in order to defray the zone’s per-capita share of the national budget for defense and foreign affairs.) The actions of the zone’s government would be reviewable only by the U.S. Supreme Court, and then only following the passage of a bill of particulars by two-thirds of each house of Congress, and with the concurrence the president. (A zone could be abolished only with the approval of four-fifths of each house of Congress, and with the concurrence of the president.)

Absent such an experiment, I see only one hope for liberty — albeit a slim one — a Supreme Court that revives the Constitution. Politics as usual will only take us further down the road to serfdom.

I wrote that two years ago, and it is based on a post that is now more than six years old. Much has happened since, almost all of it to the detriment of liberty. Would our rulers dare allow at least a few of us to undertake an experiment in liberty? It is doubtful, because they fear the possibility that the experiment would succeed. And if it did, they would face the prospect of demands for more of the same. And where would that leave them? Without vast power. Scratch the idea of asking the federal government or any State government for a zone of liberty.

But maybe it isn’t necessary to ask. Suppose that a new (unincorporated) city were to spring up in, say, an isolated county with a friendly government. Suppose, further, that the new city’s citizens were to do nothing to organize themselves but (a) set up a police department and (b) hire legal counsel to ensure that the residents obey those State and federal laws that they must obey. And suppose that the city were to be an economic and social success, despite the absence of all of the codes and ordinances that ensnare the residents and businesses of today’s typical city.

Isn’t it worth a try? And doesn’t it beat trying to entice libertarians to move to New Hampshire (brrr!) or to live in international waters (pirates off the bow)?

Politics and Prosperity

“Government is a disease masquerading as its own cure.”

Tag Archives: zones of liberty

Restoring Constitutional Government: The Way Ahead

A Zone of Liberty in the Making?

Obamacare and Zones of Liberty

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