For-Profit Cities vs. ACS

To be clear, we’re not opposed to for-profit enterprises or to capitalism as a principle. We believe that ACS will become the crowning glory of capitalism, eventually completing it into what Adam Smith envisioned as a world of “universal opulence”, where people continue to play capitalist games as they may please, consistent with a given society’s Charter. (We expect that, like Lewis Carroll’s Cheshire Cat, capitalism will over time become more and more gamified and less and less significant in any practical sense, until eventually all that remains is the smile.)

However, those who favor competitive capitalism, as opposed to monopoly or oligopoly, will recognize that the label of “capitalism”, like nearly all labels in the modern world, can be and has been hijacked to serve particular narrow ideological purposes. For example, even though some like to label the Scandinavian countries as “socialist”, that is false. They are–being descriptive and not ideological– social democracies with capitalist economic systems.

Any system in which the residents decide voluntarily and consensually how that system operates in a manner respectful of others is agreeable to us, and potentially could become ACS.

In truth, there are no purely “capitalist” systems on Earth. Well, almost none.

Recently, some “for-profit” charter cities have emerged, generally in specific venues designated as politically and economically free zones under contract with existing nation-states. In this design feature of a long-term lease with independent government, similar to Hong Kong under its agreement with Britain, we are aligned.

That said, using Prospera, a for-profit libertarian city on coastal Honduras as a representative example, there are many significant differences:

LAWS AND REGULATIONS

Prospera. Has a 4,202 page set of “laws” that one must agree to uphold, merely to enter the city.

ACS. Each ACS will have its own Charter, a statement of Principles which all of its residents will swear (or solemnly affirm) to support. Visitors will similarly affirm, for the limited and specified duration of their visit. (We cannot imagine any Charter exceeding a few pages, though a body of plainly stated and briefly worded laws will also be enacted, always consistent with the Charter.)

SOURCES OF INCOME

Prospera. Most of their income comes from allowing people to incorporate businesses domiciled legally in Prospera that don’t actually exist in any physical form. While such businesses may be legally valid and even ethical, this is rife with potential for abuse.

Further, Prospera disrespects certain laws of their host country in favor of profit. (Example: a 14-story building when its host country Honduras caps building heights at 7 stories. Granted, this was contractually allowed. But is it respectful?)

All profit stays in the hands of the businesspeople of Prospera, or the owners of Prospera, not the host country, so it’s extractive.

ACS. We favor a commitment to a mutually respectful, mutually beneficial and long-term oriented relationship with each such host country, where the establishing agreement is viewed more in the Japanese manner of a source from which understandings evolve rather than as something cast in stone, awaiting litigation to settle differences, per the American legal model.

Each ACS will be founded with at least two different sources of revenue flowing from that ACS to its host country: (1) A long-term (e.g. 99 year) lease fee, or purchase price, for the land, and (2) An annual payment from the gross revenues of the ACS to the host. We envision this as 3% of the revenues.

In addition, we see each ACS as becoming a major tourist destination, with by way of example six-star restaurants offering gourmet cuisine available nowhere else in the world. This will become possible due to local, automated greenhouse growing of a number of the 1,800 fruits and vegetables now available for cultivation but not cultivated due to difficulties in growing, transportation, or storage. Only about 200 fruits and vegetables are currently grown commercially. Difficulties in growing can be greatly reduced through automated 24/7 use of sensors, robots, and AIs governing the robots; all supplemented by humans who enjoy the hobby of tending plants. Transportation and storage issues disappear with food locally grown, then harvested for immediate consumption.

LEGAL SYSTEM

Prospera. Doesn’t have a court system, but rather an arbitration board. We are uncertain how they handle those found at fault, but a for-profit jail with very long sentences for infractions considered minor elsewhere would not be against their principles. (Note that, in the US, for-profit prisons are not only a major industry, but are allowed to pay lobbyists and make campaign donations to lawmakers who then legislate into existence new crimes or lengthen the prison sentences for existing crimes. This is a perversion of justice, by any reasonable and caring understanding.)

ACS. Each ACS will have its own judicial system, with an emphasis on speedy, fair hearings (meaning: the same treatment for all, regardless of wealth or connections). In addition, the whole system will emphasize prevention, restoration, remediation, and atonement.

Never will justice be punitive, with arrest and segregation from the population–when necessary–handled with compassion and respect.

The presumption in ACS is that most conflicts are misunderstandings. Arbitration will be available, with judges as required. Given that all necessities will be provided to all by the automated systems of production, theft will be rare. Rather than heavy-handed laws and regulations, ACS will emphasize nudges toward behaviors consistent with its Charter, both through cultural aspects and use of complementary currencies.

CULTURE

Prospera. It appears that, in Prospera, anything not expressly prohibited by its 4,202 pages of laws is permitted. This would presumably, by way of example, include such things as: garish or jarring public-facing decorations or architecture, odd clothing (or nudity), smoking, loudness, and so forth. (Caveat: we haven’t read those laws, and we suspect that almost no one does.)

ACS. Everything in ACS will be established through consensus of its initial residents, then evolve based upon changes to its laws and its Charter (rare and difficult, but much easier to change than the US Constitution) made by the Citizens, who will be its government.

ACS will not be privately owned societies, but rather each will exist under a legal compact valid under international law. ACS will support private ownership of land, of means of production, and of objects and enterprises, consistent with its Charter. All activities will be permitted that are not prohibited by the Charter or by a specific law subordinate to the Charter.

TRANSPARENCY

Prospera. There is apparently zero transparency in Prospera. This leads to many issues with trust.

ACS. Everything not expressly designated as Private will, by default, be public. Public means transparent. To assure safety of the young, the elderly, and other at-risk persons, there will be universal surveillance in designated Public areas, with surveillance in Private areas only by consent of all adults present or a particular court-issued warrant. All financial transactions will be electronic and traceable, to minimize tax evasion, and thereby support very low tax rates.

CONCLUSION

Prospera aims to increase the wealth of already wealthy people by circumventing existing government laws and regulations, and by exporting profits out of the country. There will be some wealth generated for citizens of the host country, but it will be a fraction of the whole.

ACS aims to increase the prosperity of all residents (noting that Citizen is an office, hard-earned and available to all residents). By giving to the host country a fixed percentage of its gross revenues, as well as including selected elements of the host country’s culture, ACS aims to create a permanent partnership valuable for both sides. In addition, certain citizens of the host country who wish to help found that particular ACS will receive the benefits of living there, provided they abide by its Charter.

Residents of ACS will found numerous corporations, headquartered in the ACS, enjoying low, fixed tax rates and streamlined regulations–not no regulations. Each such corporation will be expected to operate in accordance with the Charter, to transparently report its cash flows, accepting and paying only in traceable electronic monies, and to donate at minimum 10% of annual profits to the general welfare fund. Through this and a simple flat tax, administered fairly, in accordance with Adam Smith’s Maxims of Good Taxation, the society will invest in public works which make it a pleasant place to live and work, and one in which–like Singapore–public service workers are well-compensated, respected, and impartial.

Those already wealthy will be welcome to live in ACS and to invest there. Their property rights will be fully respected, consistent with Charter compliance. Those who become wealthy will be lauded, given that their wealth will be generated not extractively but through honorable, enlightened service to others.