History is simplifying the choice ahead in terms of solving socio-economic problems: increase coercion or increase freedom. The legacy systems--nation-states and their core institutions--want to increase their power to coerce everyone as the ideal solution, while those being coerced want more choices and freedom, not less. The legacy power structures seek more centralized control, those under the thumb of monopolies and centralized powers want decentralized, localized options.
Stripped of PR niceties, the legacy systems view any problem as a threat to their power: every problem boils down to this: how do we protect the status quo from any change, because the current configuration is the source of our wealth, authority and power.
To the leadership of legacy systems, freedom and agency are the problem and coercion is the solution. To those being coerced, freedom and agency are the solution and coercion is the problem.
Actually solving the problem to the benefit of the citizenry is not viewed as the issue: the issue is how to secure and protect a sclerotic, corrupt status quo ruled by the few at the expense of the many.
This describes every centralized hierarchy in every nation-state, province and city, and in every sector from Big Tech to healthcare to higher education. The goal is not to welcome change and expand citizen-customer options and transparency, it's to restrict anything and everything that doesn't increase their control. That includes decentralization and localization and the expansion of agency and freedom.
From the point of view of the elites at the top of the status quo, the problem is once the masses escape the smothering grip of corruption, exploitation and servitude, they won't choose to remain exploited and controlled.
To secure their power, elites must suppress choice, transparency and the autonomy of citizens and customers, for if given the opportunity to move to a freer, more transparent system, autonomous people will abandon oppressive kleptocracies, both public and private.
And once the productive sheep have fled, who will the elites shear to pile up their wealth? This is why coercion and suppression are increasing globally: the elites in charge of failing legacy systems know they're failing their citizens and customers, and so their only option is to lock down the populace so they have no option but to comply.
The classical forms of coercion include a proliferation of punitive laws, regulations and taxes, show trials, whisking dissidents away so their voices can no longer be heard, suppression of free expression, and so on.
These classical forms are now augmented with new forms of coercion via disempowerment: shadow banning non-cheerleaders of the status quo, demonetizing dissidents via sending them to Digital Siberia, and loading young people up with so much debt that their energy is completely drained by the servitude of debt-serfdom.
A key disempowerment tool is fostering addictions which drain the masses of agency and autonomy: once the populace is addicted to phones, screens, social media, gaming, gambling, meds and junk food, they're too distracted and deranged to pose much of a threat.
Inflation is another form of disempowerment, as it forces everyone to work harder just to keep their head above water. Who has time to escape the matrix when you're stretched thin just to pay all the bills and seek the sad solace of addictions?
The classical forms of coercion are Orwell, the disempowerment forms are Kafka:
Are You Loving Your Servitude Yet? (7/25/12)
Orwell and Kafka Do America: How the Government Steals Your Money--"Legally," Of Course (3/24/15)
Truth Is What We Hide, Cover Stories Are What We Sell (6/2/20)
These are all forms of coercion via disempowerment: sapped of energy and autonomy by the servitude of debt-serfdom, precarity and stress, distracted by addictions and health problems, and impoverished by inflation and junk fees, the masses have no will to contest the erosion of their autonomy, options and freedom.
This is why the legacy states and institutions are all failing: their "solution" to every problem is to increase their power to coerce and disempower those trapped in their systems so they have no choice but to comply. The goal isn't to actually solve problems, it's to protect the elites' power, perquisites and wealth so they can't be threatened by actual solutions.
The problem with this approach is life demands adaptation, and adaptation requires flexibility, freedom of movement, transparency, trial-and-error, experimentation and the potential for innovations to remake the system from the ground up. The law of Nature is simple: adapt or die, and by choosing to protect elites' wealth and power at the expense of potentially transformative adaptations, the legacy states have chosen to decay and fail.
The alternative problem-solving approach is to offer a range of choices and enable everyone to choose their own path in a transparent system of governance. In this approach, every system, entity and institution is competing to attract the most productive people, and to compete they must offer a level playing field (i.e. the rule of law that limits elite predation and monopolization of control), opportunities and transparency.
This approach is the solution to the uneven growth and corruption plaguing many developing (a.k.a. Global South) economies. When the current status quo is little more than a dysfunctional, corrupt bureaucratic quagmire, the primary export is the most ambitious and talented people, who flee to the developed world for opportunities. This isn't a solution, it's a problem, as this talent is precisely what developing economies need to retain and foster.
Rather than attempt the futile project of transforming the sprawling, well-defended monopolies and dysfunctional institutions of the status quo, the better approach is to create an entirely new model that is hosted by existing nation-states--the one state, two systems approach exemplified by the long-established, successful models of Special Economic Zones (SEZ) and Special Administrative Regions (SAR), which are in effect quasi-autonomous jurisdictions within a nation-state that are not crippled by the status quo's corrupt, dysfunctional bureaucracy.
Special Economic Zones are basically business parks / warehouses that are exclusively economic in nature; people come to work and then go home. No one is allowed to live there.
There is a new model which advances these existing templates to from merely economic entities to cities with residents, infrastructure and amenities. It's called the International City model (also known as the Free City model), a fully functioning city that has contracted with the host national government for local autonomy in how the city is run.
Here is a description of the model from the Free Cities Foundation:
"Free Cities are self-governing territories that uphold individual rights and freedoms.
Free Cities usually have a special legal status within their host state, which grants them autonomy to make decisions that affect their local community. This autonomy may allow Free Cities to make their own laws, introduce regulations, raise public funds, and deliver public services independently.
Free Cities differ from other kinds of autonomous territories in that they emphasize upholding individual rights and freedoms. Unlike many other special jurisdictions common in the world today -- such as Free Trade Zones -- Free Cities are focused on providing more freedom and a better life to full residential communities, rather than simply offering advantages to businesses."
The nation-state provides national security and criminal justice laws, but these laws are enforced within the Free City by the Free City staff, not state personnel. In other words, one state, two systems: in exchange for the economic growth generated by the Free City, the city is granted semi-autonomy by the national government, just as governments grant SEZs and SARs the right to trade without duties and other semi-autonomous privileges.
The core difference between the Free City model and the status quo is in the Free City model, government is a service provider which competes with other entities to attract residents and enterprises. The Free City offers residents a contract which obligates the city authorities to secure the pubic safety of residents and their property rights, services which the resident agrees to pay for at a rate / fee stipulated in the contract.
As with any fee-for-service contract, neither party can unilaterally change the terms of the contract. Any changes must be agreed by both parties, and any disputes settled by a contractually stipulated mediation process.
This is an entirely different model of governance, one that is refreshingly competitive and transparent. No one is coerced into signing the residency contract, they do so of their own free will. The Free City obligates itself to protect and enforce basic security and rights, but it doesn't guarantee financial success nor is it attempting to "save the world" all by itself.
As with any open, competitive and transparent system, cities that fail to fulfill their obligations will be abandoned as residents will migrate to competing cities that are successfully fulfilling their contractual obligations to residents.
Compare this to the legacy states and institutions, which fail in their most basic obligations but are impervious to reform because there is no competitive pressure for them to perform: where else can citizens go that is truly functional and responsive? The only way to escape the consequences of dysfunction and incompetence is to move to less coercive, dysfunctional places.
The International City offers a hopeful, practical model for transforming the global economy by giving people a choice. This choice will introduce competitive pressure for the first time on legacy systems to start providing the core services citizens need to be productive.
Richard Bonugli, myself and Titus Gebel, founder of the Free City Foundation, discuss the transformative advantages of this model in this podcast: Opportunities and Benefits of International Cities and Special Administrative Zones (49 min)
(Download the podcast in MP3 format here.)
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