Oasis: Free Cities on the US-Mexico Border

An idea whose time has come?

Imagine you’re a would-be migrant. You’re in a desperate situation, fleeing poverty, corruption, and violent crime in Central America. A private organization offers you to come to a new area that promises more security. This area has the basic services of a state—such as the protection of life, liberty, and property—but is not a traditional state.

This special jurisdiction is nested in a defined territory between two host nations.

Let’s say you agree to pay a certain amount for those services in a year. Your respective rights and obligations are laid down in a written agreement between you and the provider: a real social contract. 

It won’t be easy. You might even have to agree to have future wages garnished by the private city operator to remain. Apart from that, you can do as you choose and seek your fortunes within this zone. You are thus a contracting party on an equal footing with a secured legal position--instead of being subject to the ever-changing whims of politics or gangs. And what is more, you only become a part of it if you accept the offer. 

Again, this is an actual social contract. Would you choose it?

Oasis: Opportunity in crisis

Along the nearly 2,000-mile border between the US and Mexico lies an opportunity in crisis. Wasn’t it the stoic philosopher Seneca who said if you have lemons, make lemonade? Given the ongoing migration crises along the border, that’s just what the U.S. and Mexico governments need. But to make lemonade, they’ll have to seek a common solution. 

One such solution is to develop a private city designed to attract people from both North America and Central America. The city could grow to the size of Hong Kong--and be just as rich. Call it “Oasis.”

Map used with permission -- Juanita Sundberg

How would Oasis be set up?

Consider that both the US and Mexico have quite a bit of federal land along the border, much of which is desert. Federal lands on the U.S. side are administered primarily by the Bureau of Land Management (BLM), but creating any special zone would likely require congressional approval and the involvement of U.S. Customs and Border Protection. 

In any case, how might it be established? Let’s set it out in five steps: 

1. Draw one semi-circle 250 square miles above the US-Mexico border and another 250 square miles below the US-Mexico border, making a complete circle. A smaller jurisdiction would be fine, but we are thinking of a city-state the size of Hong Kong.

2. Convene a diplomatic meeting between the US and Mexico, then invite advisors on special economic zones and organizations dedicated to forming special jurisdictions. Draft a set of recommendations that can be turned into a streamlined treaty and/or bill to be put before each governing body.

3. Each nation’s governing bodies would establish the treaty—and therefore a zone—in an area along the border as an international joint agreement between the two nations, granting long-term leases. Instead of quibbling over which jurisdiction should hold sway, this special territory would be leased to and administered by private city operators (PCOs). 

4. Once the host countries establish the new jurisdiction, the PCOs’ governance agencies would begin contracting with service providers and other property rights for foreign direct investment and development.

5. The PCOs set up the jurisdiction details to attract investors, using international best practices, and propose a set of agreements between newcomers and the PCO. These agreements can be adjudicated and enforced by an independent mediation body established by the two host countries’ treaty. Such agreements could include a cluster contract for a series of governance and social services (see the Sandy Springs model), or the PCO could offer a menu of a la carte services.

A private zone might sound like a wacky idea to some. 

But consider that, according to legal scholar Tom W. Bell, there are already US precedents in so-called “Foreign-Trade Zones” or FTZs:

There are FTZs in every state, as well as in Puerto Rico. They appear not only at traditional ports of entry, such as Los Angeles or New York City, but also at locations far from the coast and connected to international trade only by river or air.

Examples include: number 161 in Sedgwick County, Kansas; FTZ No. 240 in Martinsburg,  West Virginia; and FTZ No. 28 in Ada and Canyon Counties, Idaho. FTZs need only be sited at a U.S. Customs and Border Protection (CBP) port of entry—locations of which there were, at last count, 328 scattered far across the United  States.

Whether this model would work within the constraints of the existing FTZ framework or require some other framework to be developed by Congress, the US would have the opportunity to mitigate the migration crisis and perhaps co-develop with Mexico a set of flourishing, cosmopolitan jurisdictions with opportunities currently unavailable. 

Why this model?

Currently, two forces work at odds. 

On the one hand, migrants seek a better life, sometimes to escape desperate situations, usually from somewhere in Central America. Under the Biden administration, these migrants were granted entry and welfare benefits. Under the Trump administration, they were once detained in Mexico, sometimes for months, while awaiting dubious approval for status as asylum seekers. Their conditions could be squalid, and in some cases, children had to be separated from their families due to concerns about human trafficking, which became rampant under Biden.

Recently, most migrants were circumventing immigration law. Most have low skills. Too many with criminal backgrounds were let in. Their arrival created downward pressure on certain domestic labor markets. Many Americans have had concerns that migrants wouldn’t easily assimilate if they either became dependent on the US welfare system or remained in the shadows of the informal sector. 

It is not our job here to come down on one side or the other of the immigration debate. Instead, we want to offer a pragmatic solution in free private cities. These special jurisdictions would split the proverbial baby by creating prosperity zones. Migrants to the US are coming in numbers that strain taxpayer resources along the border, which inflames both *sides.* A majority of US voters think too many migrants have crossed illegally and should be deported en mass. Advocates for the migrants say humane reform is needed.

If both sides have concerns, can a creative compromise be struck?

Free Private Cities

Orthodox libertarians argue in the abstract that one ought to abstain from acts of violence, constraint, or coercion in one's dealings with other human beings, whatever their nationality. A private city designed to welcome migrants and asylum-seekers would respect that principle even if other jurisdictions did not. But,

“A Free Private City is not a utopia,” says entrepreneur Titus Gebel, founder of Free Cities, “but rather a business idea whose functional elements are already known and which need only be transferred to another sector, namely that of living together.” 

As a service provider, the operator only provides the framework within which a society can develop openly, allowing orders to emerge. Gebel adds:

Once the first Free Private Cities have been successfully established, a completely new, highly lucrative asset class will emerge. This is because both the ‘software’, i.e. the legal and contractual framework, and the ‘hardware’, i.e. the master plan and infrastructure, can be reused as often as required and adapted in all directions.

We think that these free cities, administered by organizations with properly aligned incentives, will be able to serve people better than legacy governments. 

Some readers might feel uncomfortable with the very idea of private governance. But consider:

“Neither democracy, nor constitution, nor separation of powers, nor sophisticated checks and balances have proved suitable to protect the rights of individuals permanently,” says Gebel. “Over time, groups or individuals seize power and misuse it at their own discretion.”

With Free Cities, it would be possible to fire the organization if it failed to perform, and sovereign citizens of these new jurisdictions would have recourse to haul an administering PCO into court. The market and the courts make these private administrators doubly accountable compared to legacy governments. Ultimately, sovereign citizens of the jurisdiction can vote with their feet and money—and many could even become shareholders in the PCO.

Happily, these small experiments in local private governance not only have the potential to offer shelter and opportunity to some of the world’s most desperate people but also to channel their newfound freedom into a prosperity zone that could someday rival Shenzhen.