Privatized cities are experiments in freedom, not feudalism
by Sal Rodriguez | January 16, 2026
As long as there have been people and organized societies, there have been people who want to break out of existing jurisdictions to form new ones governed by different ideas and different rules.
A recent feature published by the Financial Times (“Tech elites are starting their own for-profit cities”) puts a critical spotlight on a growing movement in the tech community in support of exploring and establishing what are variously called start-up cities, pop-up cities, charter cities or, special jurisdictions.
What these concepts basically have in common is the goal of creating communities where innovation and experimentation can occur. As the Financial Times story documents, this can range from visions of entirely new cities to zones within existing communities, with varying styles of governance, and span the purely theoretical to actualized initiatives.
There’s Próspera and the other Zones for Employment and Economic Development (ZEDEs) in Honduras. Established by constitutional amendment in 2013, the ZEDEs permit a high degree of autonomy in specific zones in which administrators are obligated to follow national criminal laws and international treaties, but otherwise are free to experiment with their own regulatory systems. Home to about 1,000 people and hundreds of businesses, Próspera is run by a Delaware-based company and markets itself to entrepreneurs looking for a place to do their thing cheaper and faster, with the ability to effectively pick their own regulatory framework.
There’s Patri Friedman, the grandson of the famed economist Milton Friedman. Friedman’s latest venture, Pronomos Capital, has the goal of building “prosperous cities that uplift entire regions” through charter city models they hope can replicate the success of cities like Shenzhen, China, which was designated the country’s first special economic zone in 1980. He’s currently exploring locations in Africa where he’s “proposing initiatives that will develop around their existing economic engine, whether that is agriculture or cheap renewable power.”
And there are advocates like Mark Lutter, founder of Charter Cities Institute, which likewise promotes the concept of cities “granted special jurisdiction to create a new governance system and enact policy reforms,” with the aim of creating “a competitive business environment that attracts investment and accelerates economic growth in developing countries to help them achieve prosperity faster than ever before.” (Despite the same name, these models go beyond current American charter cities, which are typical cities with a little more independence.)
Think what you will of these particular actors and their prospects for success, they’re all looking to transcend the limitations of existing regulatory regimes. They’re all in pursuit of different, ideally better ways of doing things without all the constraints of the ordinary political processes and legacy bureaucracies. And the most serious of them all recognize they need to get the permission and really the buy-in of national governments in order to let them actually make their ideas happen.
Of course, thinkers and projects in this space have their critics. As the Financial Times piece notes, the harshest critics denounce such all of this as “an attempt to avoid red tape,” “part of a broader rise in techno-fascism,” “neocolonialist,” or even “really feudal,” among many lines of attack.
Well, to the first depiction: It is certainly an attempt to avoid red tape. That’s the whole point. If it were so easy to work within existing political and governance structures to reform themselves in a way that indisputably encourages investment and innovation, there wouldn’t be so much interest here.
But now to the more serious accusations, all of which fall flat upon simple reflection.
Techno-fascism is more of a smear than a concrete concept, but taking it on its face it doesn’t make much sense here no matter how one parses it. Fascism historically entails an all-powerful, authoritarian state with the power to coercively reorder society in the interests of nationalism or at the whim of the despot in charge. “Techno-” here is either an objection to the prominence of tech investors in this space or implies some sort of sinister technological surveillance state is in play.
Whatever one means here, these critics ought to get a grip. What we’re talking about are calls for zones of economic freedom, voluntarily entered into as an alternative to the many other jurisdictions in the world and generally bound by the criminal laws of the surrounding nation.
With respect to neocolonialism, this likewise appears to be a sloppy use of the concept. While neocolonialism entails exploitation and a deleterious influence or control over a sovereign nation, these proposals are nothing of the sort. They seek approval from the host country, for one, and two, aim to be wealth generators that will ultimately benefit the host country. In addition, these proposals entail the legal purchase of property that would be used for these new cities.
Finally, there’s the complaint of Guillaume Long, research fellow with the Center for Economic Policy and Research, who told the Financial Times there was “a really feudal aspect” to Próspera. With feudalism, serfs and lords were historically born into their status and serfs were generally limited from exiting. By contrast, people are free to move and do business in Próspera or not. If they don’t like it, they don’t have to go there or stay in it. They can go to the capital of Tegucigalpa or try their luck in San Pedro Sula if it better suits their lives and businesses.
Of course, there is plenty of room for criticism and critique for specific thinkers in this space and particular variants for how to do things. Some proposals or concepts may seem better than others, for example. Some are probably better considered as thought experiments. As with any private enterprise, some are great and others not so great.
There is also the critique of creating new communities at the expense of trying to make existing communities better, including from the anarcho-capitalist economist Murray Rothbard, who once wrote, “One would think that if man can really learn from experience, then the total and abject failure of each and every one of these cockamamie stunts should have sent all of their supporters a ‘message’; namely, to come back to the real world and fight for liberty at home.”
Ultimately, like any city, not all of these proposals are going to be for everyone. These still very limited experiments in novel forms of governance are hardly worth being afraid of and in their best form can be invigorating to think about. And who knows, they might even inspire better ideas in cities that already exist. One can hope.
