allan henderson

Libertyville, IL, United States

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116376
allan henderson
Posted over 3 years ago
Paul Romer: Why the world needs charter cities
Heron of Alexandria built steam engines. Thousands of years later, a few Englishmen took his idea and ran with it, and thus began the Industrial Revolution. I regard Professor Romer as the James Watt of competitive governance. He and his allies are presently setting into motion the most wonderful political revolution in human history: as scores of new charter cities throw open their golden doors to the world, the system of global apartheid that now immiserates billions of people will crumble, and the sun will rise over a new age of universal liberty and prosperity.
116376
allan henderson
Posted over 3 years ago
Paul Romer: Why the world needs charter cities
Nelson doesn't have the power to change the laws of his state. He's not a high official. He doesn't have enough money to buy a law. And he's not likely to found an enormous political organization that can lobby for reliable electrical service. This means that if he wants the lights to stay on, he really has only two options. He might wait and hope that political and economic forces beyond his control will end the electricity shortage. Or he might move to a jurisdiction that has successfully engineered the conditions under which reliable electrical service can be obtained. There are, in fact, some jurisdictions where everything that makes life comfortable and pleasurable abounds. But none of these islands of prosperity will let Nelson through their ports. Charter cities, on the other hand, would open their golden doors to the world. Some of them will even manage to keep the lights on, and these successful charter cities will grow and multiply, drawing in an ever-larger fraction of the world's population.
116376
allan henderson
Posted almost 4 years ago
Paul Romer: The world's first charter city?
A charter city that failed to enforce the rights of laborers would not be able to attract any residents, because no laborer would choose to move to a jurisdiction where he believed that his rights would be substantially violated, and no employer would move his business to a jurisdiction where there were no laborers to hire. Because the developers of a charter city with no residents would lose many billions of dollars, their pursuit of their narrow economic interest will lead them, as if (to coin a phrase) by an invisible hand, to build and maintain world-class institutions of rights enforcement.
116376
allan henderson
Posted almost 4 years ago
Paul Romer: Why the world needs charter cities
Transportation is so cheap these days that geography no longer matters. If you can reach a sea port by rail, you can ship your containers to the world market. The medium to long term economic prospects for a charter city will basically depend, in the first place, on how quickly its population climbs the skill ladder, and secondly, on their industriousness and inclination to save (i.e. to produce relatively more capital goods and relatively fewer consumption goods). And such things can't really be predicted. We'll just have to wait and see.
116376
allan henderson
Posted almost 4 years ago
Paul Romer: Why the world needs charter cities
Charter cities will not be enclaves of terrestrial paradise where 'true innovation' has radically altered the heartbreaking facts of our human condition. People will suffer and die in charter cities; people will work ugly and tiresome jobs in charter cities; people will needlessly harm one another in charter cities. But they will live out the tragedy of their existence in a place where wise political institutions have largely suppressed crime, tyranny and war; where they are well poised to enrich themselves through voluntary cooperation and peaceful exchange; and where they have access to all the social and spiritual advantages of a civilized urban life.
116376
allan henderson
Posted almost 4 years ago
Paul Romer: Why the world needs charter cities
Investors don't care about the distant future because the present value of revenue earned in the distant future is really small. You just have to convince them that their economic freedom will be protected by an efficient, liberal judiciary for about 20 to 60 years, depending on the business (some capital goods last longer than others). This means that a credible agreement to put a charter city under the jurisdiction of Canada for a term of 60 years would be more than enough to get the party started. Will it be credible? My guess is that it depends on how competitve the charter city market becomes. If host governments know that any attempt at rent seeking will drive business away from their hosted charter city, then they will be more likely to keep their word.
116376
allan henderson
Posted almost 4 years ago
Judging by contradictory "persuasive" & "unconvincing" ratings, charter cities must be a very polarizing issue. Lets discuss the pros & cons
There are lots of ways to finance and manage charter cities. But I think there are good reasons to believe that charter cities financed and managed by one private developer will be more successful than those structured in other ways. A charter city run by Swiss bureaucrats would have a horrible agency problem, because even Swiss bureaucrats are not saints. They'd be liable to advance their own interests at the expense of the charter city's success: by protecting their reputations by refusing to take risks, by accepting bribes from special interests, or simply by being lazy and uncreative and leaving the office early rather too frequently.