 This is Just Asking Questions, a show for inquiring minds, one reason. What does a city need a state to exist? Just Asking Questions. I'm Zach Weissmuller here with Liz Wolfe, associated at Ederit Reason, and we're coming to you from an island off the coast of Honduras known as Roatan, and we're actually inside of a special jurisdiction known as Prospera. And we're physically sitting inside a giant dome. And we're at the Alternative Visions for Governance Conference that's being held within Prospera, an autonomous zone for economic development known as AZEI, that was made possible by a 2013 law passed by the National Congress. The current status of that law is somewhat up in the air, which is something we might get to later, but Prospera is here, up and running, and protected by an international treaty. Joining us today to talk about Prospera, Charter City's Alternative Governance, and more are Mark Lutter, founder of the Charter Cities Institute, and Patrick Friedman, founder and board member of Pronomos Capital, a VC firm that has invested in Prospera and several other startup cities. You've both been involved at various levels and watched the development of Prospera for many years now. Being here in 2024 at its current state of development, just what are your impressions? Well, I'm really into dirt these days, meaning like I used to just have renderings and dreams that I told the people, and now there's places like Prospera that are real, like we're here on a stage and the stage is on rocks and the rocks are on dirt. So I do think it's super exciting that there's a project up and running where you can do really neat things. I've gotten in the habit of getting crazy medical treatments when I'm here that are only available in Prospera. Show us your Tesla hand. This, I have an implant that will let me open my Tesla with my hand and also you'll be able to bump your phone and get my contact card. And this is as of when? Last night. Okay, so the medical procedure, speed of ease of scheduling and turnaround time here, I would say it's pretty efficiently done. Definitely. What happens when you get a new Tesla? So the way it works is that you read, this is a passive device with an ID and you add that ID to the access control list for the car. So that's not an issue. And can you spell that out for our viewers and listeners a little bit more? What about Prospera makes this the place to get Tesla key implants in your hand? Well, I mean this is just what I did this time. Like two trips ago I got gene therapy to make me stronger and faster and last trip I got my mouth bacteria replaced with genetically engineered mouth bacteria so that I'll never get cavities. So there's a lot of stuff going on here but Prospera follows the Hunter and Constitution and treaties and criminal law but they get to write basically all of their commercial law which includes many things like medical regulations and so companies have worked with Prospera to create, there's two main regulatory systems, one based around informed consent and the other based on kind of a mini regulator and these companies are using the informed consent one and so they're able to deliver these cutting edge medical treatments that you can't get anywhere else in the world. So I'm obviously not antagonistic to body modifications, right? Like you could tell by looking at me but what happens when there's like a medical malpractice suit? Has that bridge been crossed? It seems like Prospera is beginning to develop a little bit of a reputation as a biohacking zone. So as I understand it the way this works in international law is that there is something called criminal negligence so I looked into this on cruise ships back in the day because they were density studying. So if you for example have not been to any medical school or your procedure is totally different than what you say it is then that's criminal negligence and you can be prosecuted kind of that's a different thing that's criminal law, it's not like the medical regulations but if you've been like accurate in the information you gave from informed consent if the procedure is what it says it is and you are trained how you say you are then I don't think you can be sued for malpractice. Let me bring Mark in, give us as the founder of the Charter Cities Institute where does Prospera at its current stage of development fit into that bigger project that you're pursuing? Sure, so right, Paul Romer gave a TED talk for Charter Cities in 2009 and he was advocating for a high income country to act as the guarantor meaning to administer a city in a low income country. He went to Madagascar, met with the Madagascar president there was a lot of interest and attention there and then there was a change in government that led to that project not moving forward. At the time of his TED talk this was a really big deal, a lot of excitement, right? It was being talked about in the Economist and the Financial Times, somewhat supportive, somewhat critical, accusations of neocolonialism. Paul Romer then came to Honduras and Honduran politicians had already been thinking about Charter City like legislation and so Honduras came in kind of helped bring international attention to it, helped craft the law. In a few years there was a falling out with Paul and Honduras and the current legislation was passed in 2013 and so in terms of kind of the modern Charter City movement Prospera was the first and after, I think they announced in 2020-2021 so they were able to get things moving after there being a long time period from when the law was passed to actually get it implemented. We've seen this in other occasions like for example Tatu City which is kind of a suburb outside of Nairobi with a special economic zone law. It's not nearly as extensive as the one in Honduras but Kenya had a special economic zone law and Tatu City basically it wasn't implemented so Tatu City had to work with the government to figure out how to implement that law and I guess another kind of point building on what Patry was discussing is Prospera is really focused on being cutting edge, right? On figuring out how to offer cutting edge medical devices kind of this really innovative, unique regulatory framework and so they're really pushing the frontier on some of these issues of government, some of these issues on kind of medical innovation and I think we'll learn more as more years unfold. How are the finances of Prospera though? Like is it going well? Do we have any idea? I think we're probably the wrong people to ask about that. I mean I'm curious about like, you know, what are the issues of scalability, right? Like provision of utilities is one thing. They were going into some detail about that and about how to some degree they're still reliant on the rest of Honduras for some of this. I'm also curious about how, you know, situations with bad actors and with crimes taking place will happen. I mean given that they're still bound to follow Honduran criminal law it seems like they do need to have some cooperation with the police force and with the existing sort of judicial system in Honduras. The only problem is that's a notoriously ineffective and very like slow system and so that's something where I'm very curious to see how they'll navigate that as that becomes more of an issue. Thankfully it hasn't been too much of an issue thus far. But I have some skepticism on those fronts. So to answer the finance question, not about Prospera but kind of as I think about some of the projects I'm working on, one in Zanzibar, one in the Caribbean, there's kind of different sequences of financing. There's the initial capital that you need to negotiate with governments, to negotiate with landowners to kind of start the project. Then you have the kind of capital to acquire the land to get started, which is high risk. Then you have a physical asset so it's slower risk than the initial exploratory capital. Then at some stage it becomes kind of a supercharged real estate project where because of the jurisdiction it's much more attractive for investors, for business. But you want to finance that typically like a standard real estate project in the sense that you're building physical infrastructure and there is business models that are developed around that and kind of putting all these pieces together in the right manner is I think really important for the long term success of projects. I want to ask Liz because you're the only, I've been here before, they've been keeping an eye on this for a long time. This is your first time you spent a weekend here in Prospera. What are some of your impressions? I was not expecting such pervasive and totally dope biohacking to be taking place here. I was looking at some of the sort of graffiti or messages from people who visited through, who passed through in the coffee shop slash medical lab which apparently is a joint facility about how I'm a cyborg now or I'm one step closer to being a cyborg and on one hand it gives me the heebie-jeebies and I don't know if I'm personally ready to take the plunge on the other hand as a libertarian I am extraordinarily grateful that that type of thing exists and that there are places where willing people who have full knowledge of what's going to happen to them and the risks associated are able to consent and are able to decide look I'll be the guinea pig let me do it and that they're able to do so you know with far less regulation and I just sort of think like especially if there's one lesson that the COVID era taught me in the United States it is that the FDA is an extraordinary force for bad for evil in this world in many ways and watching medical advancement flourish in a place like this gives me a lot of hope so that's one of my biggest takeaways. I can tell you when Prosper became most real for me at the beginning of November when I sat down in the medical clinic to fill out my informed consent paperwork the medical clinic slash coffee shop? no this is a different medical clinic the Garm clinic that does it's not a bar instead of a coffee shop it's a coffee shop they do stem cells and all kinds of stuff and when I sat down to fill out my informed consent forms that said this agreement is adjudicated under the laws of the Prosperazeta disputes are arbitrated by the Prospera arbitration center like you are under a different set of laws so filling that out to get gene therapy that was real that is I feel like whenever I have my next child like the odds of me doing childbirth in a Zeta are like increasingly high right like we'll have to host an entire reason event around that or something so Prospera in particular has a lot of appealing aspects from a libertarian point of view but the Charter City movement as a whole is sort of beyond libertarianism it transcends ideology and it has a long history there's a great publication that you all put out called the Charter City Atlas that I was looking through that goes through the history of self-governed cities actually is the more appropriate term what can the history of self-governed cities teach us about the present yeah so if you look I mean self-governing cities have been kind of one of the most dominant forms of human organization throughout history right the first instances of human civilization in the Middle East were cities the Renaissance happened in city-states ancient Greece the flourishing of ancient Greece where a lot of our culture comes from was city-states even kind of the Dutch golden age in the Netherlands it was dominated by cities and so like broadly when I think about human progress and human flourishing one of the most important elements is you want a shared culture but you want competing political jurisdictions right the shared culture allows for knowledge sharing across units and allows for kind of the units to the political units to compete with each other for talent but having different political units creates a competitive element when you've got don't have a shared culture it's hard to exit but that element where different cities can compete for talent where there's the let's call it kind of status symbols are figuring out how to push humanity forward how to create great art how to create great science right that's when you get these golden ages in history that have a disproportionate impact on human history many of these golden ages had a heavy element of kind of city-states or self-governing cities could we talk a little bit I pulled up a slide here from the atlas about Athens this is a shot of the Athenian constitution the Aristotelian constitution and Athens of course the birthplace of democracy so can we look at Athens as a case study for a second what about Athens being a city-state made it's the birthplace the place for political innovation democracy being a major political innovation I'm going to slightly change the question because I'm not sure I can answer that one very effectively at least not with confidence let's call it honest instead right I don't as to why like ancient Greece in particular Athens was so successful I'm sure there's a large scholar of literature that I'm not very familiar with if you look at for example the Renaissance right the Renaissance had competing city-states at the same time right it started flourishing when the Byzantine Empire fell and you had Greek scholars the Byzantine Empire was effectively a Greek Empire right in Greek scholars who had thousands of years of history had saved all the old works they came to Florence to Genoa to places like that and right that infusion of new knowledge combined with a relatively open what it's not democracy in the way we think of it today but it was democratic in the sense that like the people had impact on the policies on the rulers and that combination of things led to this flourishing this rediscovery of ancient traditions as well as pushing the frontier in new traditions I think there's something special about the size of a city you know other people have come on this where it's big enough to have meaningful economies of scale and small enough to govern effectively I think that's part of why it's been this economic unit throughout history and like the free cities you know of Europe and the second millennia it ended because of the invention of the canon it was like the wall of a city was this defensive technology could pull people inside it that was part of why it worked as a unit and so one thing that's interesting is whether it's information technology or the ability to project force we've just seen changes in the technological environment that made empires you know kind of dominate in the last couple hundred years and hopefully that's changing I think that there's more and more diseconomies of scale of government which is leading power to move back down to jurisdictions of a size that can actually wield it effectively what gives you hope in that regard because if it was modern military weaponry that hastened the end of the city-state and now you are proposing that we may be entering the new age of the city-state or something approximating it what has changed that has made this moment ripe for that I mean we have less and less warfare I mean of course we have global news that shows us the few hotspots in the world and there's some awful things going on right now but if you look at Steven Pinker's work for hundreds of years there's been less and less warfare it's just not the main way that we interact anymore so that's part of it I also just think the dominant form of government is democracy just scales really poorly you know the bigger it is the worse it works and so I think that we also have technology like you mentioned infrastructure before we have much better microgrid infrastructure now than we used to you need economies of scale far less to provision a city and so I think there's a few of these factors that are letting us operate smaller so yeah I mean I think you had Lou Beck up on the screen briefly you look at the Hanseatic League and how it formed it was embedded within a larger political unit the Holy Roman Empire but the Holy Roman Empire wasn't what we would think of as a modern state it was kind of a relatively loose confederation and the Baltic region at the time was urbanizing very rapidly so there was a demand for new urban spaces and trade was also expanding and so the Hanseatic League was formed because basically these Germanic traders realized like okay we want to trade, let's go found new villages let's go settle people in existing villages where we can link them within our trading network and many parts of the world resemble this today where you have a rapidly urbanizing population and you have a government that sometimes struggles to provide all of the goods that people in high income countries are used to governments providing and so by figuring out how to partner with governments how to solve these challenges of urbanization and improve services to local communities and these new cities that you can hopefully unlock a lot of this latent talent this latent kind of growth potential in places that currently don't have that opportunity you guys have both invested in and worked toward the development of charter cities in quite a few different regions if you had to put all of your bets on one specific region or area what would you say the ideal future of charter cities looks like the most fertile place in the world Africa very easy that's massive though which part of Africa I guess I would go with West Africa but I don't feel strongly about West Africa as about Africa so I'm very sympathetic the idea of Africa the charter cities institute has been working there we've had an office in Zambia we've now got a handful of team members in Zanzibar and I'm very bullish on East Africa Middle Eastern investment coming in as well as a lot of Indian investment so in Zanzibar for example Indian Institute of Technology which is the kind of MIT of India open to campus there it's their first overseas campus my non-profit is opening the first East Africa campus of the African School of Economics so you're seeing this like large investment that's I think benefiting the region Kenya is one of the better governed places kind of when I think about for charter cities a lot of charter cities are defined by the population you need to tap into you don't need to but it's 100 times easier to tap into existing migration patterns especially if you're rapidly urbanizing it's much easier to attract people moving from rural areas than it is to compete with cities like New York or San Francisco of the kind of migration patterns that are large enough to justify city scale development urbanization in the global south primarily Africa a lot of Asia as well as well as migration to the global north a lot of people want to be in the US want to be in Europe if you can find places nearby that can access the market the labor market the capital market of those places but have a more visa friendly regime for high potential people coming from the global south I think that also has the potential to fill a global kind of compete I like the idea of like charter cities as a brain drain mechanism like a competitor to like the US like say the US you know has long immigration wait time like long visa wait times okay well suddenly we want some brain drain from China okay well maybe charter cities are a viable competitor in that way and that feels like the optimistic take on you know US immigration policy as it currently stands right like I wonder whether there's hope to be found in brain drain you know in charter cities basically I think it's worth mentioning that there's like kind of two really different models of charter cities like one is kind of more what I worked on with seasteading which is getting a bunch of like-minded people together where you are competing with San Francisco and New York and Singapore you're trying to get people from the developed world together and and for me I'm from the developed world and that's what I want I want to get together with my tribe and go start a self-governing city together but like Mark said it's that's like so so much harder and what I mainly focus my efforts on now with with pronomos are projects like in Africa where there's tens of millions of people who are moving to cities you don't have to like compete with New York you just have to be slightly better than the other cities that are being built right and so just in terms of like your marketing there's like you don't need marketing you don't need to sell people like your customers are lining up and your cities are for the locals and it's just it's really really different and I think that the bread and butter is cities for locals now someplace like Prospera they're kind of doing a hybrid right so this is both for Hondurans and for people from the developed world coming in doing this biotech but you know I think a lot of people have it in their mind what's he's saying there are no locals right so it's like okay a bunch of us are gonna get together and go make Iran City or whatever but that's not what the bread and butter that's not what most charter cities are today and what I think is easiest so this is kind of funny because usually I'm doing pottery's line but I'm gonna I guess take a slightly different tack I agree with pottery's point but I've actually become a little bit more sympathetic to kind of competing with global talent Vitalik Buterin organized Uzzalu last year which was a pop-up city in Montenegro and currently they have Vitalia pop-up city at Prospera and this kind of made me realize that there is an existing digital mad community that is kind of pretty nomadic and open to looking for new places and new experiences I don't think you can populate a city with these people but you can use them to help seed a charter city in in Zanzibar for example what we're looking at is kind of competing with other east African countries to attract talent so I don't think we're gonna get Americans who are working in tech and SF to move there but if you're working in tech in Nairobi or maybe you're working in tech in Johannesburg we think we might be a competitive option for you and so thinking about how these dynamics, what customer level you're focusing at I think is really critical as you think about how to develop the charter city. Totally agree on competing regionally. So if you're talking about this kind of market in governance where the mechanism for consent in this scenario is that it's voice and exits, you're exiting you're voting with your feet and that is how you are opting into the system you know Patry you mentioned your perception that democracy doesn't scale well what is the relationship between democracy and startup cities? So we're talking about alternative governance and so I think part of what charter cities are is a way to open a space of trying out new ways to govern people so I liken government to an industry and I would say that constitutional representative democracy as pioneered by the United States 250 years ago which people in Europe said was completely crazy that would never work is now the industry standard it's what a lot of countries do, it's what most successful countries do not all but you know it was invented 250 years ago and we have new technologies we have new scientific understanding I think it would be absurd to think of that as kind of like the end of history that to me governance is a technology it's much more like engineering than like objectivism there's all kinds of different things you can do different arrangements you have different tech you can create different types of institutions and so I think that it can it can keep evolving but when you don't have a way to try out new systems to try out new institutions then of course it's not going to move forward so I see charter cities I mean today they're an alternative to democracy just because that's the dominant thing but in general what they are is a startup sector a way to try out alternatives to whatever the paradigm is today so that we can find new ways of governing that work better now that could be a tweak on democracy right you could do some kind of like representative or liquid democracy where people voted like every day transfer their proxies try to make democracy work better it could be something totally undemocratic it could be anything else but the idea at a meta level is let's try alternatives and look it maybe that would be like Athens right there was a time and place well the alternative that was tried was democracy right it's just when that was like a new thing let me can I broaden that for you Mark because beyond democracy there's also just the idea of liberalism that's what a lot of people here are interested in just you know individual freedoms liberty that's what attracts a lot of libertarians to this project is the idea that this will result in jurisdictions that are more libertarian but what what do you view the relationship between liberalism broadly defined and charter cities this is a very big question to I guess kind of thinking about it I'm I think a bigger fan of democracy than patria is I think democracy does scale to an extent right like Thomas Jefferson when he said right the tree of liberty needs to be watered with the blood of patriots he said like we need a new constitution every 20 years I think right are there a lot of things that could be improved by American governments yes of course did it work better than I suspect a lot of the original people had anticipated probably also when I think about I guess where charter cities can play a role it's in this kind of working with governments partnering with them improving capacity improving delivery of public goods creating the opportunity for locals to get better jobs perhaps this evolves into something more perhaps it doesn't I'm relatively agnostic on this I come from this from a little bit more of a economic development angle I think more broadly the question of kind of where does this fit in the liberal framework there's been some talk about post liberalism right are we in the end of the liberal era to me that's I think kind of the wrong I guess question right a lot of people think about liberalism they basically think about new deal liberalism or great society liberalism but if you look at right liberalism has a centuries old tradition in the Anglo world and part of Europe and also different traditions in other parts of the world those are kind of the dominant in modern society and these idea of right individual rights of private property rights of organizing government to meet the needs of the people I think are really embedded in liberalism and now it's become to mean like certain subsets of these things plus the welfare state plus kind of government engagement but those aren't necessarily tied to liberalism they're tied to one sub sector of liberalism that has come out so I do believe kind of charter cities self governing cities are in this broad tradition of liberalism where society can choose how to organize themselves in a manner that they think best suits their needs and hopefully this kind of opens the door up to alternative forms of governance right maybe people like living in liberal democratic societies great maybe they want slightly more competition in a charter city that's a subset of that liberal democratic society I think we should be open to a large plurality of institutional arrangements and see which ones work I live in a surfer community in Queens in New York City and it's really fun because we have a bunch of surfers and people who are extreme adrenaline junkies and then we have a bunch of working class normal Queens folks and then we have a bunch of people who live in public housing who you know frequently work at the airport nearby JFK the point being I don't exist in this community of other intellectuals of other reason employees of other libertarians of other even like laptop class type workers I have a very you know unique and special community and I feel like I get a lot out of that exchange of perspectives what does this look like when we have you know many thousands or hundreds of thousands of charter cities but there's a little bit of self sorting that happens and we end up with this homogeneity that ends up making it so that we never interact with people who think differently than we do are you worried about this risk at all not really I mean Robin Hansen gave an interesting talk last night about the importance of having multiple different cultures something I'm quite sympathetic to I view the internet as a giant sorting mechanism and first it sorted subcultures online and those subcultures have began to instantiate in the real world and so right if you look at American history there used to be Democrats and Republicans both living in cities sometimes cities would even elect Republican mayors right that like never happens anymore and so this sorting mechanism exists it's going on if people choose to associate with people who share their beliefs who share their interests sometimes it's going to be ideological beliefs sometimes it's just going to be lifestyle right I want to live in a healthy neighborhood and I think if people sort along those lines like why not I mean look there's just pros and cons right like if you sort with people like you in a certain way you get the advantage of being able to live together in that way and learn together and you get the disadvantage of being exposed to less views so I really think it depends like we have to break it down to which specific attributes and like those attributes that really only work if the whole community agrees I think we should be sorting into them a lot more because like the pros are worth the cons with attributes where like you're not really going to have the same laws right I mean there's a lot of health things you know banning microplastics or something that like you would really need a whole community to do and so let's sort that way and then but I think there is some risk that people will maybe like over sort we see that on the internet but I just think that that's small compared to the gains I hear that Mark your point makes a lot of sense of like there's already been a little bit of over sorting in the sense that like I lived in homogeneous Brooklyn right before this and there was a certain degree to which it felt like you know I'm entirely surrounded by essentially social justice oriented wokeness believing Bushwick and you know Bed-Stuy hipsters and getting away from like there's already a high degree of homogeneity that exists in a lot of our cities right now and so it's like well you know charter cities might be homogenous but would they necessarily be more homogenous than what we're already living in in a lot of cases I mean Mark you live in D.C. right like that's a I think it also relates to kind of the previous discussion we were having about who the target customer is right I visited see that morta's on before coming to Prospera and they're targeting working class Hondurans and most of these working class Hondurans are happy to have a home that's safe their kids can play outside it's somewhat close to their job they're looking for right ideological friends they're looking for a good home and when you target people I think on the lower income end of the spectrum they're really looking to better their lives right kind of living with people who share ideological beliefs and culture is a luxury belief and so given that the potential market of low income people who are rapidly urbanizing is probably two three orders of magnitude larger than high income people who might live in a charter city right just functionally the market is going to provide for those people and they're not going to sort ideologically they're going to sort based on like job location internal amenities etc my my only concern with optimizing or prioritizing for the for economic growth and kind of being agnostic about let's first of all let's acknowledge like that there's serious problems in Honduras this is just the ease of doing business scale ranked you know 133 you can see all sorts of terrible rankings here starting a business 170 dealing with construction permits huge problem 158 so economic growth the theory the libertarian theory put forth by Milton Friedman was that political freedoms would follow economic freedoms but then we look at the massive economic growth in place like China we see like the engine of growth that Shenzhen has been and it's not clear to me if that's exactly true that the political freedoms will necessarily follow and so is that a risk if you're disentangling liberalism from the charter cities movement that we're just going to create a bunch of little tyrannical fiefdoms around the world I mean I think that it turns out to not be all the way true that political freedom leads to economic freedom what I would say instead is that political freedom seems to lead to moderate levels of economic freedom but the high levels of welfare state and inefficiency and capture and all of this stuff and that places like Singapore and Dubai that have the highest levels of economic freedom you know Singapore is a one-party state and so I think that what we see is that you don't get the highest levels of economic freedom and economic growth from democracies it's like it's the safe path to do like pretty well but not better than that what about the inverse the political and freedoms and civil liberties following the economic growth because that's the more concerning picture to me that you know China has experienced economic growth but their people live behind the great firewall they don't have free speech they're surveilled I don't know do charter cities solve that we're trying to make a world where more people can start more jurisdictions and where there's more choice and I think if people get to shop for jurisdictions I mean I believe in markets and I believe in people being able to choose for themselves I think that they will get places that match them better than they do today with fewer options I mean people in China a lot of them can't easily leave there's a lot of places that won't take them in so more jurisdictions more choice it's going to serve people better and if they turn out not to want something that we think they should want like maybe we should we think that they shouldn't want to be surveilled but they actually don't care you know again that's their choice to decide where they want to live yeah I think to echo Patry's point right one of the best things you can do to help Chinese people today is to kind of open up the doors for Chinese migrants and say hey look if you have some level of education like come to this country and work and we won't let you near government or sensitive industries because maybe you're a spy but beyond that like please come and that would be one of the best things to do today to help China I think I mean another way to answer your question is like look it's possible to have multiple values right like I like charter cities I love charter cities I'm dedicating my career to them however like I also like forms of liberalism some degree of like quote-unquote constitutional rights right like civil liberties things like that I think those things are quite valuable it's possible there's a tension there and one way that I I mean navigating the tension is for example many of the projects that we are working with are in democratic countries I think all of them might be and so it's possible kind of given that this movement is small to choose and focus to work on these projects in places that have some degree of value alignment that have some degree of an understanding of right like even though charter cities are going to have their own incentive structure and eventually it becomes an industry that might take over but like the initial conditions matter a lot and the initial culture and initial values matter a lot as kind of ideologies and industries evolve and I think us the people in this room can play a role in hopefully setting that foundational level that can hopefully guide this to not only want charter cities per se but also have some sense of charter cities that hopefully reflect the values that we have as well and I articulated something that's very wise and that I didn't realize was such a significant part of the charter cities movement before coming here but a sense that these are not remote work villages for expats you are working under local conditions and you know with local people and attempting to be selective in terms of which areas and which populations are sort of fertile ground for this type of thing to actually materially improve people's lives I think I had formerly almost thought of it more as like a sea-studding type thing and I appreciate the emphasis that both of you guys are placing and that other people we've encountered here are placing on working with local talent and trying to legitimately make sure that you're not reinventing the wheel but that you're kind of being selective with where you're trying to pursue this Yeah I really hope that like Prospera and Praxa succeed at making places that are great for lots of like tech nomads because that's more like what I am but as an investor like that just seems a lot harder and like let's build cities for locals and get experience and get reputation and get capital like to me that's where the market's at You know to Prospera it's interesting the political environment that this emerged under because it the law that enabled this to come into being sort of slipped through when there was briefly a semi-sympathetic administration okay I don't agree with slip through or briefly 2009 to 2021 okay so in power for 13 years okay so it was able to get through when there was a sympathetic administration administration chose to back it and push it through it didn't get through like on its own like it doesn't have agency to law the administration that was voted in and that ran the country that thought it was a good idea and so they backed it as kind of one of their big policy pushes and then a hospital administration came to power and has put a target on Prospera so far they seem to have survived that um so far they seem to have survived that um so far they seem to have survived that um those attempts to dismantle it um partly because they made an agreement that seems to protect them and hold the they have an international treaty protecting them they have an agreement that holds them liable for between like 10 and 11 billion dollars what are the major lessons that you take from that I guess one lesson is Latin America is really hard Latin America has like left and right parties but they tend to be much further left than much further right so the policy swings between different administrations tend to be much higher than in the US Europe African countries African countries some of them do but many of them don't have kind of parties that are socialist um two I think the importance of international protection treaties right I think Prospera has been able to help survive in part because of the legislation and has these international treaties that back it that allow them to push back on the government I think three is the importance of creating a lot of jobs early Prospera right launched in 2020-2021 so it was seven, eight years after the Zedah legislation if they were able to get started earlier and create a lot of local jobs they believe they would be a little bit more secure Orchidea one of the others the government I believe they tried to take the kind of take the customs official that the government had appointed and Orchidea is located in a rural region a rural town where there aren't a lot of jobs and the town basically rose up and defended them and they were like look we need these jobs these are only jobs we have we don't like subsistence farming like come on guys and the government back down and so when you're able to serve the local population in a meaningful way that's the best protection that you can have creating jobs for locals, creating tax revenue for the government the challenge is that often takes a lot of time to get started and so figuring out how to have that opportunity to really get started provide value I think can help ensure that the government's not going to change their mind in the future that is always a risk I mean I'll be kind of polly anish on this one I was really worried when the administration change happened here but now I think the lesson is like holy crap these defenses work like it was a campaign promise of President Castro to shut down the Zedas, there's a full-time official in the government whose job it was to try to do it and they haven't been able to and I think something a lot of people don't know is that the defenses of the Zedas legally we're not crafted at all like by us that there are these existing international rules which say that if a country breaks a contract with a company that you can essentially sue that country and recover damages that other countries will seize their assets and give them to you and this is really without this then less stable countries wouldn't be able to work with companies it would be awful for global development because if you couldn't trust a country not just to take whatever your factory, your refinery, whatever then you wouldn't invest there companies wouldn't build there and that's part of international infrastructure one with which Senator Elizabeth Warren and 22 Democratic lawmakers signed a letter last year saying this is terrible that Prospera is suing Honduras this poor country like Biden administration please do the maximum you can with your executive privilege to not enforce these investor treaties there is no chance everyone who does any international business or is exposed to it at all depends on these and so we depended on them and it's working and I think one of the main principles is to oppose literally whatever Elizabeth Warren is doing always and everywhere Elizabeth Warren is wrong which I understand is a little dogmatic but I think I'm right explain this because I feel like we've been talking about Prospera and visiting Prospera and doing all of this but we haven't actually delved deeply into the campaign by the administration to basically ensure that it gets eradicated could you detail that for us a little bit more and explain sort of like the gravity of that situation just give us like a one minute primer on what the hell happened so President Castro had in her campaign she said Prospera is the enemy of the Honduran people and she vowed to shut it down I think that being a very far left administration meaning that she cruises up to Venezuela and Cuba this is not just I'm a libertarian calling someone a leftist but very far left they don't like the concept of the Zetas they don't like the ideology they represent I think like Mark said about early jobs is that the earlier project is the more people look at it from an ideological lens as opposed to like how it actually is in practice and so she made these declarations and then the government has done some things they're like collecting certain like sales taxes they're not supposed to but Prospera's been able to continue operating because that's how the constitutional amendment was written that's how the law was written it's grandfathered in it's protected by these treaties and so Prospera kept writing letters to the administration saying like hey this was a campaign promise but like please give us an official word are we allowed to keep operating under Honduran law or are you saying that we need to shut down and the Castro administration wouldn't answer any of those letters like my guess as to why is that if they said yes you have to shut down that grounds for immediate legal action against them with huge potential liability the U.S. State Department report on the economy of Honduras two years ago specifically said okay we get that some people didn't like the Zeta program but Honduras trying to shut it down exposes Honduras to huge legal liability this is a declaration from like the great power in the region so it's really dangerous for them and of course if they say yes you can continue operating because that's what the law says we're going to follow the law I think to them that would be like betraying their base and those campaign promises so they just didn't answer and so eventually they're not willing to come to the table or even give an answer to initiate this legal action how do you convince heads of states that this is not a threat to their sovereignty because this is what this is the rhetoric that you hear from the Honduran administration that this is an attack on our sovereignty or going to expand and take over everything and this is like you know this if you're thinking of the state as this thing that just wants to survive it's in threat mode what do you do with that when you're talking to leaders about you know trying to persuade them I'll talk about other leaders but like in Honduras like it was an exercise of sovereignty for them to set up the program they amended they amended their constitution they passed legislation in their congress through a normal process like it is an exercise of sovereignty to bind future governments so yeah I guess I find that kind of ludicrous like building on that point historically some of the hallmarks we think of with liberal democracy in terms of like an independent judiciary an independent monetary policy these are government actions to create institutions that are not reflective to the immediate popular will and I think charter cities can be seen as an extension of that when we meet with governments what they tend to be interested in is like look who are the best practices where has this been done before in the Caribbean for example we brought some examples from the Middle East and they said okay but these are all authoritarian governments where do you what examples do you have from democracies and we're like that's a good question here are some examples from democracies and so it is really figuring out how to work with the governments make them understand that this is beneficial they tend to be very interested in job creation they are many governments are quite worried about their sovereignty and figuring out how there can be appropriate government oversight as well as the legal protections necessary to attract capital and to create jobs the line is going to be different in every country but I think like ultimately these are partnerships with government and if you form the partnerships in the right way and create the value it's going to be some risk but I think that can be minimized especially when you don't have these wild electoral swings like much of Latin America does and just a mental health tip is I do my best now to never convince anyone of anything and I think that you'll find that the less you ever try to convince anyone of anything the better your mental health will be fortunately you know there are world leaders who are super interested and right now your focus the focus of the movement the most promising prospects as we've talked about here are in developing countries badly in need of economic growth but you've said Patry that you really want this as an option for everyone, for yourself what are the prospects of that are you optimistic that America would have charter cities people really want stuff in America and they always ask me and the closest thing there is is the Kataba digital economic zone which is on Indian land in North Carolina and Native Americans have greater than US state level autonomy which is that's really awesome but for me I judge programs by what percentage of the taxes are collected at the jurisdictional level that we're creating what percentage of the laws are written there and in the US two thirds of taxes are at the federal level I would say the vast majority of laws are at the federal level there's such great competition between cities and counties and states that those laws work a lot better and so the percentage of laws that you could write even you know as a US state is just way way lower than here where I would say that all commercial law I would argue that's like 90% of every word of laws is written here whereas with a US state maybe that's 10% and so it just doesn't meet my bar you know Trump has floated the idea of these I think he's called them freedom cities that would be on federal land what's your take on that kind of thing I'll tell you what I think the US should do which is to turn military bases into charter cities it's like the 21st century storage supply shares turning this old military power into like economic soft power to counter to Chinese Belt and Road and we already have the land we already have treaties that give us jurisdiction over the land I think that's what a smart US would do yeah we've we've looked into briefly for example turning Guantanamo Bay into a charter city which it's it's beautiful imagery right like okay we used to torture people here and now like any Cuban please welcome like the Cubans will probably put up a wall and try to stop them but like how how do you win the hearts and minds of the world how do you demonstrate that the American model is the best how do you demonstrate that freedom works I think that's a very good way to answer your question about Trump and freedom cities I mean like California can't build like apartment buildings the US government I don't think is competent enough to build large new cities and then additionally it doesn't like make sense American cities are pretty good there's not a rapidly urbanizing population like we're able to handle people moving to the Sun Belt reasonably well because they have liberal zoning codes like charter cities should be used to solve like they are ideological in a sense but they have a very substantial practical element and they should be able to use to solve those practical challenges and not used as just like this is sexy and cool so let's do it the US is just really big so like I I have one company in Nigeria but generally work with very small countries and just like when you're working with a huge country it's really hard to get them to do anything or to pay attention right it's just would be so hard to pass a law in the US versus a country with like a million or less people I really hope that in the future we're all smoking a doobie in the Guantanamo Bay charter city reflecting on all of the successes that we were all so present enough to predict I just want to thank you guys for talking to reason and for for being guests on just asking questions thank you to our live audience here for enduring yet another discussion about charter cities we hope this was enlightening and helpful in some ways