Charter Cities — Better Than the Free State Project February 3, 2011Posted by federalist in Federalism, Government, Markets.
The United States of America was supposed to be a federation of independent states. If the Federal government hadn’t so overstepped its constitutional bounds we would presently have a great experiment in which fifty States were free to test different polities, and some measure of competition between them would over time lead to and preserve good government. Sadly, owing to Federal overreach the States have been left with less power and freedom to shape their polities, so the Great Experiment has become a Modest Experiment: States still compete for citizens and businesses through tax and regulatory policies1. But no matter where you go you’re subject to the same Federal government that controls nearly 20% of GDP and whose regulatory power dwarfs that left to the States.
The Free State Project was an effort begun a decade ago to focus the political power of a large number of libertarians on a single State (ultimately choosing New Hampshire) where they would, as citizens, work to incrementally free the State from unconstitutional Federal rule.
Recently, “Tenthers” (so named for the Tenth Amendment) have been working more broadly to restore State rights under the Constitution.
But to me nothing beats the idea of a “Charter City” as promoted by Paul Romer: This would be a territory cut free from its donor government, governed only by its own charter. The Charter City would have its authority guaranteed by a strong and stable third party — Hong Kong under British administration was an example of this. Like free trade zones and for-profit states a charter city in a relatively unfree or poorly governed region of the world would expect to attract extraordinary investment, leading to exceptional growth and prosperity, which would hopefully be contagious to its neighbors.
1 The Mercatus Center has an excellent analysis of the current differences between states in its 2009 publication Freedom in the 50 States.