Portland or Polycentria?

There are shithole cities, planned cities, and emergent cities. Let's move toward the latter.

Hong Kong. Source: Simon Zhu

When Portland’s downtown CVS closed recently, it was emblematic of a trend. Within a decade, progressive politics had turned Stumptown into Dumptown. Portland, once an environmentalist stronghold, is now littered with filth. Today, Portland boasts the second-highest crime rate in America behind Memphis.

No sooner had New York’s Red-Green-Black axis come off the high of electing Zorhan Mamdani than did denizens discover piles of snow, trash, and homeless people who succumbed to hypothermia. Despite this rough start, Mamdani has proposed a 9.5% property tax increase, which would give New Yorkers what they voted for, good and hard. Cea Weaver, one of Mamdani’s inner circle, openly admitted that the aim of democratic socialist policy should be to make home values “worth less,” that homeownership is a “weapon of white supremacy,” and to “seize private property” for collectivized housing.

San Francisco’s problems with homelessness and urban decay are now legendary. It all started with then-Mayor Gavin Newsom. As SF refugee Michael P. Gibson writes,

If you can stomach all that blandness, I wish you luck with the appalling. Up and down the city’s disorienting hills, you notice homeless men and women — junkies, winos, the dispossessed — passed out in the vestibules of empty storefronts on otherwise busy streets. Encampments of tents sprout in every shadowy corner: under highway overpasses, down alleys. Streets are peppered with used syringes. Strolling the sidewalks, you smell the faint malodorous traces of human excrement and soiled clothing. Crowded thoroughfares such as Market Street, even in the light of midday, stage a carnival of indecipherable outbursts and drug-induced thrashings about which the police seem to do nothing.

All of this despite an embarrassment of riches lavished on the city in the form of taxes on tech-bros. Some say SF has turned a corner since the AI boom, but gentrification doesn’t quite displace the tenants of tent cities the way a visit from Xi would.

Portland, New York, and San Francisco were once beautiful, opulent, and grand.

All have become shithole cities.

Emergent Cities

Emergent Cities are paradoxically more ideal but less idealistic. And they are not without precedent. Some say we could be planners who pluck aspects from many different sources—including emergent cities—and reconfigure them to create something even more ideal if one could start from scratch.

Perhaps, but I’m skeptical.

In any case, there is a vast chasm between the “is” of current reality and the “ought” I’m going to present, but I’m comfortable with the paradox. There are precedents for more radical reform measures that nevertheless preserve the blessings of emergence, both in tabula rasa zones and existing cities with histories and existing incentive systems.

People just have to decide they’ve had enough of shithole governance.

Be Our Guest?

Elle Griffin of Elysium offers us a reminder of what’s possible:

By the time he published a video revealing his plans for EPCOT, Disney had spent years quietly purchasing 27,400 acres of contiguous land in Florida—the size of San Francisco—and negotiating municipal sovereignty from the state.

Promising to bring in god-like levels of money, jobs, and tourism to the state of Florida, he secured the autonomy to build roads, zone land, run police-style security, operate fire stations and EMS departments, manage utilities and waste management, build and maintain public transportation, and manage all public infrastructure. It could even issue its own bonds!

Disney’s new Reedy Creek Improvement District was granted more than city- or even county-level authority.

Now, I’ve mixed it up plenty with Griffin elsewhere, but we share a lot in common, particularly our commitment to decentralization and localization. Griffin is shrewd and pragmatic enough to appreciate the benefits of experimentation à la Disney, even if she veers too far into utopian taxing and planning for my tastes and moral-political priors.

More on this in a moment.

Disney World became one of those places where you could eat off the streets. “Be our guest,” they sing, and view their denizens as customers—not milk cows for the political class.

But we must not forget: Disney World is designed for visitors, not citizens. Curiously, Griffin sings its praises as a paradigm utopian city-state. Then bizarrely, Griffin poo-poos the nascent ZEDEs, Próspera and Ciudad Morazán, in a more recent article, perhaps in a vain attempt to argue that planned cities are better than emergent ones, though both Próspera and Ciudad Morazán are about the same age as my fifth-grade son and formed against incredible odds. Yet these special jurisdictions, despite circling socialist vultures from the Honduran mainland, persisted, survived the worst, and continue to attract investment and people.

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Since the recent electoral ouster of the socialist government, ZEDEs will have a chance to grow into something that can reasonably be assessed without comparing apples to oranges, or early and mature development. Griffin seems unaware of the obstacles that the ZEDEs had to overcome, and refers to them in the past tense. She writes as if she could craft a better paradise if she were the Philosopher Queen with taxing authority and imagination.

Criticize by creating is our mantra.

Alas, Elle Griffin, smart as she may be, is no Lee Kuan Yew. Indeed: “If you’re interested in economics,” said Yew, “I would read Hayek. I think he’s right—if you have a planned economy, you will fail.” Cowpersthwaite and Yew were close intellectual cousins, which is why Singapore and Hong Kong are both great cities.

Yet Griffin claims, for example, that Singapore is superior to Hong Kong because Singapore is slightly more top-down (planned), while Hong Kong is slightly more bottom-up (market-oriented)—even though both use long-term leasing models favored by Georgists. Griffin is a utopian, which means she fancies her notions of the good/social welfare ought to be universalized and implemented top-down, when value is subjective, and life is full of trade-offs.

Consider that Hong Kong edges out Singapore in health outcomes and life expectancy. And while Griffin complains that Hong Kong is expensive, Singapore is more expensive. Singapore is ethnically diverse but arguably offers less cultural richness and nightlife than Hong Kong. Hong Kong is slightly more populous but conserves more natural areas. Both cities share almost identical Gini Coefficients (inequality measures) and poverty rates, yet Singapore taxes more. In any case, to assert without evidence that “Hong Kong did not create the same quality of life that Singapore did” depends on what any given denizen thinks constitutes quality of life.

Scarcity. Subjective value. Tradeoffs. Concepts foreign to Utopians.

The Man Who Outsourced Government

Now let’s fly over to Sandy Springs, Georgia, which has become known for its unconventional approach to municipal government. Instead of the traditional model, Sandy Springs ended up contracting out the vast majority of city services to private companies rather than maintaining a large public workforce.

The city of roughly 100,000 residents had been dangerously in the red. But the city saved hundreds of millions of dollars by changing models in the crisis. Much of the credit for pioneering this model goes to Oliver Porter, whose work has earned him coverage in the New York Times and an interview with yours truly.

When I asked Porter about his experience, he said,

The Sandy Springs model is a public-private partnership (PPP) in which the city contracts with private industry for all of its basic services other than public safety—that is, police, fire, and courts. The model has been an outstanding success, both financially and in response to citizens’ service needs, over the seven years since the city’s incorporation. Financially: The city has not increased tax rates at all; has paid for a major capital improvement program from savings in the operating budget; has built a $35 million reserve fund despite a recession; and has no long-term liabilities—that is, no loans, no bonds, and of most importance, no unfunded liabilities for pensions and other benefits.

At the time of that interview, Detroit was America’s #1 shithole city. I asked Porter what the “emergency” city manager ought to do for beleaguered Motown.

“If you are in a deep hole, quit digging!” In a crisis, small, incremental steps are not sufficient. Bold initiatives are required. First, look for alternative service methods such as a PPP to produce operating savings; and second, consider the privatization of the city’s assets, to raise funds to be applied to the debt.

Portland could use a heavy dose of Porter, but instead, they chose progressivism.

I have concerns, then and now, about public-private partnerships (PPPs) because they can be vectors of corruption. But Porter could not have gotten away with building Shangri-La. We can point to the pragmatism of Porter’s success with outsourcing government services to private companies through competitive bidding. This approach at least tightens feedback loops and eliminates an entrenched, less-accountable public sector.

I would love to see the Sandy Springs model applied to police, fire, and courts, as well. Indeed, such could be in the offing for our next prospective example.

Free Cities

Let’s turn to Free Cities. I don’t mean free as in costless, but free as in consensual.

Meet Titus Gebel: one part lawyer, one part entrepreneur, one part mad scientist. Gebel is a German entrepreneur and legal theorist who developed the concept of Free Cities—a model for creating entirely new, privately operated jurisdictions that compete for residents the way businesses compete for customers.

The core idea is straightforward: a private company (”the operator”) negotiates a contract with a host nation to govern a defined territory. Residents voluntarily move there and sign a citizen’s contract, agreeing to pay a fixed annual fee in exchange for governance services — security, infrastructure, rule of law, and dispute resolution. Crucially, the relationship is contractual rather than political. The operator cannot simply change the rules; residents have legally enforceable rights against the governing entity itself.

Gebel argues this solves a fundamental problem with modern states: citizens have almost no real recourse against their governments. Voting is a blunt instrument. Officials can be bought. And charters (much less constitutions) are hardly contracts. In a Free City, like in a Sh*thole City, dissatisfied residents can load up the UHaul, but the Free City operator—motivated by profit and reputation—has stronger incentives to deliver quality governance and services at reasonable prices.

Citizens become customers.
Officials become operators.
It’s governance-as-a-service, and service contracts are binding.

The model draws on historical precedents such as medieval merchant cities, as well as Hong Kong, Singapore, and modern special economic zones. But the model goes further by making the entire governance structure subject to contract law rather than to public codes and ordinances.

Gebel’s model goes even further than Próspera’s, but he has not yet had to wrestle as extensively with the contextual realities of implementation that Próspera has. Yet Gebel founded the Free Cities Foundation to promote the concept globally and has been in active discussions with several nations, particularly in the developing world, where governments may be willing to lease territory in exchange for investment, development, and opportunity.

Criticism is Free

Some have objections to Free Cities, of course, which I represent in italics.

The model could entrench inequality by creating enclaves for the wealthy while leaving the unwashed masses outside the lines.

There is no reason to treat the least advantaged as liabilities to be managed by elites. And there’s no reason free city residents couldn’t or wouldn’t establish mutual aid associations, social ventures, and subsidized housing for the less well-to-do—similar to the way housing was built for mill- and company-town workers in past eras, or Masonic hospitals sprouted for charity care.

If democratic accountability is replaced by contractual accountability, the latter may offer weaker protections in practice if the operator is more powerful than individual residents.

That’s certainly possible, but that also depends upon the integrity of the courts, arbitration firms, or dispute-resolution mechanisms in place.

Democratic governance doesn’t seem to be doing much to stop the slow-motion suicide of shithole cities—high taxes, bad reputations, and elections notwithstanding. The democracy objection isn’t strong enough to preclude the experiment, especially since we could conduct the comparative analysis. Free Cities, like other cities, thrive on revenue and reputation. But the pain is more acute for Operators than Mayors when customers vote with their UHauls.

There are also questions about how external threats, environmental issues, or humanitarian crises would be handled without the broader apparatus of statehood.

If you have a robust Common Law context, this need not be an issue.

We mustn’t forget that the broader apparatuses of statehood are the world’s largest polluters. The CCP is the world's number 1 polluter. The US federal government is the largest polluter in the US.

Free participation, contractual protections, legal liability, regulation by insurance premiums, and competitive pressure create stronger accountability than in democratic systems—where majorities can override minority rights, and politicians face too few consequences for failure.

Beyond Free Cities?

While Free Cities are a really good idea, might it be possible to take the concept even further? Under the Free Cities conception, the Operator is structured as a municipal monopoly. But monopolies are shielded from the forces of competition.

No doubt, a Free City is likely to subcontract municipal services, as with Sandy Springs. An operator might allow citizen-customers to contract certain services directly from one of multiple providers. But introducing competitive dynamics doesn’t need to stop there.

We can imagine unbundling more of a city's administrative and service functions to enable competing firms to engage more directly with citizen-customers. We can imagine a jurisdiction divided into even smaller, competing local monopolies, or fully non-monopolistic municipalities that operate in overlapping ways.

Polycentria

In a fully private, competitive city—call it “Polycentrica”—non-monopolies could emerge through voluntary associations, market-driven innovation, and tech-enabled decentralization. What follows extends that idea, building on the unbundling concept through a series of escalating possibilities, each pushing competition further while keeping everything consensual and exit-friendly.

The key here is not to plan so much as to overcome failures of imagination that central planners thrive on.

We can imagine residents in Polycentria subscribing to competing “governance bundles” from multiple providers. One might offer a premium package—high-end security drones, AI-mediated small-dispute resolution, eco-friendly waste management—while a budget-friendly rival focuses on bare-bones essentials delivered through a single subscription or club goods via Dominant Assurance Contracts (similar to Kickstarter). Switching providers could be as frictionless as canceling a subscription, with portable data (property records, reputation scores) transferring seamlessly via a blockchain to prevent lock-in.

We can also imagine a city-state evolving into a set of fluid, overlapping micro-jurisdictions defined not by fixed geography but by smart contracts and augmented-reality overlays. Picture walking down a street where your AR glasses reveal different rulesets, zone by zone. One zone enforces strict noise curfews under a conservative provider, while the next permits parties under a more libertarian one, with micro-fees based on usage and low-cost arbitration services. Providers compete by vying for residents and traffic through better amenities, lower costs, or niche appeals.

The idea is not one big utopian Operator plan, nor Elle Griffin’s plan, but a galaxy of small experiments.

Might standards and coordination functions be anchored by a “meta-operator” that acts as a neutral platform? Could the metaoperator provide necessary interoperability protocols without controlling the services built on top of them? The meta-operator might provide the protocol layer, the Civic OS, if you will. Think of it as an app store for completing city functions (“apps”).

Independent developers compete on everything from road maintenance—robot fleets bidding in real-time auctions for repair jobs—to education, with schools offering gamified curricula and AI-assistance rated by parent reviews and tokens. The meta-operator earns transaction fees, but users could easily fork the platform if it grew extractive, spawning rival meta-operators and triggering the emergence and evolution of novel, fully decentralized urban ecosystems.

A Note on Utopianism

I hope with the above that readers don’t think I’m being Utopian myself. I’m simply helping skeptics overcome failures of imagination. As I suggested, the powerful thrive when people concede too much power to Utopian planners who believe they know what’s best for everyone and should be granted the authority to impose it.

The creative dynamics of citizen customers and entrepreneurs unfold in unpredictable yet often surprising ways when collective intelligence is unleashed, as people both compete and cooperate to better serve one another.

From shitholes to symbiotes.

The question is not how a dreamer can dream up the best city in the world. The question is how best to design protocols that unleash a city full of dreamers who operate under conditions of scarcity, trade-offs, subjective value, and pluralism.