Send in the Clouds

Venture capitalists want to build the libertarian fantasy of a city without commons

Full-text audio version of this essay.

The stranger and more heterodox factions of the right wing have long dreamed of creating a utopia to call their own, far from the draconian tax structures and governmental intrusion they see as a brake on their genius. Examples abound: There’s the Free State Project, aiming to pack New Hampshire with thousands of true believers in political autonomy in order to refashion the state as a libertarian enclave (without fully seceding from the United States, of course). There’s also “seasteading,” perhaps the most popular retreatist gambit, in which residents would live on a boat set permanently adrift in international waters. These projects come in many flavors — from unalloyed tax haven to would-be ecotopia — and draw anarcho-capitalist bona fides from supporters like Patri Friedman and Peter Thiel. Historian Raymond B. Craib memorably defined the overall seasteading vibe as “Milton Friedman and Robinson Crusoe together, reminiscing about Burning Man, on a remodeled off-shore oil rig.”

Pronomos’s aim is to re-establish the city as a commodity, proposing to shape society not from within but from without. Its investors LARP as Promethean saviors

Take seasteading onshore and you get “charter cities,” a phrase usually attributed to economist Paul Romer’s 2009 TED talk. Rather than flee to the oceans for terra nova, Romer proposed that sovereign urban “polities” could be created by anyone on land, provided they find “free space.” In practice, as Ash Milton argues, these so-called cities end up looking like “special economic zones” (or SEZs).  The SEZ and the charter city are both more focused on securing the greatest possible profit with least governmental oversight than anything else, but the SEZ does so in a flat, affectless way. It’s a collection of tax loopholes made material. So is a charter city, to be clear, but the venal profiteering of the SEZ is elevated to the ideological firmament: It is intended to function as proof of the efficacy of libertarian ideals. Romer himself is providing the blueprint for this vision in Honduras with a project called Próspera. Próspera’s website calls it an ”economic development platform,” which roughly translated, appears to mean part colonial outpost, part entrepôt, and part maquiladora, all strained through the blandest possible solarpunk design sensibility (and crowned with luxury residences designed by Patrik Schumacher of Zaha Hadid Architects).

Though the city doesn’t really exist yet, the FAQ for Próspera offers a sketch of the future Prósperine legal system. It will be governed by a council and policed by private security forces, with personal disputes set to be resolved privately or by the Próspera Arbitration Center, an LLC based in Texas. For now, Honduran criminal law will still hold within Próspera, and residents must legally obtain Honduran citizenship. The legal system of the host overrides even the most clever delineations of freedom Romer et. al can come up with, reducing the entire exercise in classical autonomy to rather involved play-acting overseen by a nation willing (or made willing) to indulge an experiment. Internationally, Próspera is given sanction by its partners and investors (rife with other urban experimenters, but more prominently made up of a rogues’ gallery of financial millionaires with experience in government).

Próspera is nevertheless being trumpeted as a success not just for Romer but for Pronomos Capital, one of its backers. Pronomos’s whole mission is to create “startup cities,” or a “new model for urban development where the city is the product.” In the Pronomos “Knowledge Base,” this blasé ad copy gives way to pessimism about contemporary society: “When institutions are outmoded, corrupted, or failing, the result is untold human suffering. Workers are trapped in low wage jobs and dangerous working environments, children don’t get educated, adults can’t get quality health care, and people can’t start businesses to support their families.” Pronomos suggests that the issue stems from a dearth of ambition, to be remedied by building “the cities of tomorrow” and thusly “investing in the future of humanity.” The ideological edge becomes keener elsewhere: Dryden Brown, CEO of one of Pronomos’s funding recipients, Bluebook Cities, keeps a blog with similar proclamations, arguing the value of war as a “forcing function for civilizational advancement,” the “harmony of God, tradition, and technology,” and the importance of the “the frontier” for societal health.

Such statements could be dismissed as vacuous Silicon Valley hype were it not for Pronomos’s heavyweight lineup of investors and advisors, including Marc Andreesen, bitcoin maven Roger Ver, Balaji Srinivasan, Taavi Kotka (the brain behind e-Estonia), and of course Peter Thiel, from whom the majority of the firm’s $9 million stake comes from. While $9 million is a drop in the bucket by VC standards, the support of some of the tech world’s most influential funders should give pause. Pronomos’s frankly stated aim to re-establish the city as a commodity produced from scratch that can be sold and owned further represents a significant shift in techno-utopian thinking, proposing not to “nudge” or change society by degrees from within but to shape it from without. Its investors LARP as Promethean saviors, seemingly to secure humanity’s future, while crusading solely for the future of capital.

The startup city offers the creation ex nihilo of the sorts of qualities that conventional cities have developed over time through political struggle, negotiation, and social coordination. It posits the ideals of community, economy, and civility as abstractions that can be designed in advance independent of any actual residents and eventually “resolved” into the real world. For example, Srinivasan tweeted these steps for creating a startup city:

– Build a community in the cloud
– Organize economy around remote work
– Enforce laws with smart contracts
– Practice in-person norms of civility
– Simulate architecture in VR
– Eventually, crowdfund territory
– And materialize city into the real world

“Materialize” is obviously doing a lot of work here, seemingly indicating that Srinivasan thinks SimCity designs work as actual planning documents. The community is then bolstered by minimal economy, laws, and norms well before architecture or space becomes a consideration, all of which fix the community as a sovereign entity. The task, then, is to simply find complimentary extensions — accurate expressions of its supposedly sovereign, innate character. Do this right, and presto! A city comes out the other side — resplendent in the right economic, legal, and social products, and likewise inhabiting a spatial product.

That social values like community and civility are being discussed at all represents a significant shift in an ideological tendency that usually begins and ends with the autonomous individual. But it’s hard to imagine these attempts to create community will be done well (if at all). What’s on the agenda here is not the construction of an actual community per se but the production of a suitable “digital” framework to be passed off as a community  — a utopia with no island, a shining city without a hill. Srinivasan writes elsewhere that a community may be constructed from scratch “in the cloud.” But beyond the hubristic declarations of a new society (or “cloud country”), all he really has in mind is an elaborate private message board with some nice plugins and a particularly fanatical user base brought together via a “negative diaspora.” “We,” he writes of these would-be Romuluses, “build the embryonic state as an open source project, we organize our internal economy around remote work, we cultivate in-person levels of civility, we simulate architecture in VR, and we create art and literature that reflects our values.”

What’s on the agenda here is not the construction of an actual community per se but the production of a suitable “digital” framework to be passed off as a community

The extremely low expectations and infinitely foreclosed goal of actual sovereignty for Srinivasan’s cloud polities are part of the appeal. With no territorial existence expected or forthcoming and residents comfortable “in the cloud” there is no need to worry about any messy requirements expected by a typical population or state for shared utilities and infrastructure. Think of this as the ultimate in austerity. With no physical residents or territory, no one needs to build roads, sewers, housing, factories, parks, and so on. The cloud state is no state at all, just a ruling class in permanent exile, passing the time by pretending at governance.

When Srinivasan says that “we will simply build a society and the ways of acting in it,” his words can seem nearly believable, only because they are backed by an array of technologies that allow these abstractions (like “society”) to be treated as though they actually were material objects to be directly manipulated and instrumentalized. Cryptocurrency and blockchain tech, for example, are means for manipulating social relations as if they were digital objects. The “smart contract” converts an agreement between parties into a sacrosanct, nonnegotiable object with its own independent reality. These objects, ruling the social interactions of the citizens of the cloud, ultimately lash them tighter to a ponderous apparatus of transactional governance — the state may have been escaped, but it has by no means been transcended.

But invoking the city-as-product raises the question: If it is up for sale, who’s buying? Who is this “we” Srinivasan keeps referring to? Would any libertarians actually commit to it? At the heart of the utopian libertarian movement is a fundamental belief in the priority of “exit” as primary over “voice,” to use the canonical terms first elaborated by political scientist Albert O. Hirschman. Simply put, the potential city “buyer” will likely be a person who values their ability to walk away from a political entity they disagree with rather than staying and trying to change it with their democratic “voice.” After all, this desire for exit is what animates these projects to begin with.

There are already a suite of products that cater to the rich and mobile, such as Nomadlist or Teleport Cities, both of which score cities worldwide and allow users to escape to metropoles with more favorable climate, less business regulation, better connectivity, and cheaper cost of living. The impulse to “vote with one’s feet” can be seen even more plainly in the recent much-ballyhooed exodus of major Silicon Valley players to Miami (and Texas), fleeing San Francisco’s high taxes and rampant social problems. In Miami they have found a haven of cheap labor, zero state tax, and an obliging mayor in Francis Suarez. But what will keep these mercurial souls in Miami were things to change?

These “smart” objects, ruling the social interactions of the citizens of the cloud, lash them tighter to a ponderous apparatus of transactional governance — the state may have been escaped, but it has not been transcended

The unspoken and implicit first order of business for any successful startup city will be nailing down this tech worker nomad overclass and forcing them to quite literally put their money where their mouth is — and more important, leave it there by staying a supportive citizen of Miami. Any would-be mayor-CEO of a startup city will not only have a problem with retaining constituents but also maintaining the city systems itself, which will have been made especially vulnerable to competition by design. What’s to ensure this market won’t become a free-for-all of endlessly shifting citizenship, technological obsolescence, cities being “forked” and copied or anything else that can be imagined? A city as a product may not inspire any hometown  “loyalty,” to use another of Hirschman’s key terms; instead, they are premised on reproducing disloyal noncitizens as “free.”

The city-as-product is marketing jargon for now. But it illustrates how actual cities have been under pressure to restructure themselves into corporations that offer a service called “urban living,” competing with other service providers for a place in a crowded lifestyle-consumptionist market. They offer culture or a vibrant tech scene or other amenities, all while driving down labor costs, trimming services to the bone, and minimizing the possibility for political dissent. Though it may hurt to say, every city is a product — not just the tourist spots or the gentrified boulevards, but every facet of it, from top to bottom. The only difference is in a municipality’s willingness to admit it.

Suarez’s Miami, like Próspera in Honduras, remains bound to real territory (rapidly being lost to sea level rise). It retains a constituency that don’t make a parasitic living gambling on startups and has political demands of its own. What Balaji and Pronomos ultimately propose is excising not only the territorial requirement of cities, states, or what have you but the population requirement itself. The apogee of austerity and the logical endpoint of efforts to “trim” the public sector is to eliminate the public altogether.

This is how future urban startups can be “valued in the trillions.” As a corporation, the city is freed to pursue profit at the expense of all other functions, especially those that pertain to collective well-being. From this point of view, “realizing” a city in any form would immediately make the venture unprofitable, sapped by all the infrastructure and commons that living in a society requires. The point of the startup city, then, is not to build an actual municipality but the idea of a city that never comes.

Kevin Rogan is a writer and dilettante based in New York City.