Sunny Ray talks with Alex Boss, an economist trained at the University of Chicago whose Austrian economics leanings led him from mergers and acquisitions work in healthcare finance into the world of free private cities. After being approached by the author of the book 'Free Private Cities: Making Governments Compete for You,' Alex became an ambassador and later co founder of a project company building these jurisdictions in practice. The conversation covers how a free private city differs from ordinary government through an explicit voluntary contract rather than an implied social contract, the spectrum from special economic zones to Honduras's ZEDE model, and real world examples like Prospera on Roatan and a manufacturing focused ZEDE near San Pedro Sula. They also discuss currency choice, tax structure, competitive private security, outsourced hospitals and schools, buying three dimensional land parcels, and the long term vision of letting spontaneous order shape these emerging communities.
An economist turned free private city builder explains how contract based, government free cities are being tested right now in Honduras.
Can you give some background on yourself and how you got into this space?
I'm a lifelong US citizen from the Midwest who studied economics at the University of Chicago, but a high school coach pushed me toward Austrian economics too, so I went down the mises.org rabbit hole alongside my formal training. After graduating I worked in healthcare mergers and acquisitions, but it didn't feel fulfilling. Around that time the author of 'Free Private Cities: Making Governments Compete for You' reached out about becoming an ambassador for his organization, which eventually turned into co founding a project company to actually build these cities.
What actually is a free private city, versus a normal city that's already somewhat public or private?
What separates a free private city is that autonomy within the jurisdiction is entirely given to a for profit city government operator. We think of local government services as just that, services, not top down authority. We provide security, community, maybe public goods like parks or bridges, and citizens agree with us on a contract before moving in. You pay us an amount, we provide the service, and the only thing you can't do is break the contract or violate others' rights.
Doesn't 'you have to abide by the contract' just sound like government again, especially since I never had to sign anything to live where I live now?
That's my loose language more than anything deeper. You have to abide by the contract, but you voluntarily entered it to live in our city, and you could choose to live anywhere else instead. We agree with libertarians that the so called social contract most people live under is mythical, nobody actually signs it. In a free private city you sign an actual physical contract spelling out both parties' rights and responsibilities, unlike in Toronto or Chicago where politicians decide things for you without your say.
Has anything like this actually been tried anywhere in the world?
We haven't seen a fully private city yet, but special economic zones exist by the tens of thousands globally, mostly for manufacturers rather than residents. Closer to a free private city are the ZEDEs in Honduras, zones for economic development and employment, created after Honduras changed its constitution. These zones are still subject to Honduran criminal law but set their own civil, legal and regulatory code entirely, including elections, business law, and building permits, with no say from the national government.
What prompted Honduras to allow people to create their own laws like this?
I don't have the full backstory, but the idea seems inspired by places like Singapore and Shenzhen, where special zones with real autonomy grew into hugely successful cities. Honduras wanted to try that on a small scale to see if similar freedom could work there too. Things weren't going great in the country, so it was seen as a chance for innovation, to attract foreign investment and grow GDP without applying these changes nationwide.
How does money work in these cities?
Honestly, we don't know yet, and that's intentional, because we won't dictate how people handle their money. There's no central bank, and people can use cryptocurrencies, fiat, or anything else. Our company will likely designate three or four accepted payment currencies, almost certainly including bitcoin, plus local fiat depending on the region. But what people transact in among themselves is entirely up to them. We want a healthy competition where the market decides what money should be.
How does the fee or tax structure actually work for residents?
It depends on the project. Current Honduran ZEDEs are legally required to charge at least one tax, typically an income tax between five and ten percent. It doesn't have to stay that way everywhere. On another project we're working on in Africa, if we can build it as a truly free private city rather than a lower autonomy prosperity zone, it might be just one to three percent income tax or a fixed fee instead.
How does someone actually join, and do they get land?
It depends on the project. In Prospera you can buy land, but what you're really buying is a three dimensional cube of space you control, so you can secure a certain footprint and even a view. Prospero currently sits on roughly 25 hectares but could grow past 700 soon. We're small investors there, not the lead operator, so I don't have every number memorized, but prices now are low since early buyers take on pioneer risk.
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