SEZs, Free Zones, Autonomous Cities, Shannon, China, Shenzhen, Dubai, UAE, Special Economic Zones, Honduras, Prospera, Democracy, Free Cities, International Cities.

Timothy Allen talks with Peter Young.

Today I have the Free Cities Foundation's managing director Peter Young back for another episode. This time we’re talking about SEZs, free zones and autonomous cities. We’re basically giving you the 101 on what we discovered during the making of our film 'Zones of Progress’ in Dubai.

There are lots of great insights here into the evolution of free zones and what their future might look like if the trend continues. Peter is super knowledgable on the subject, so pay close attention and soak up all the insights.  I personally think that understanding the history of SEZs  is hugely important if you are interested in the establishment of new autonomous territories.  

Look out too for my final penny drop moment with the concept of democracy: It's been a long journey for me on that subject, but it now appears that I may be ready to tackle Hans-Hermann Hoppe's 'Democracy, the God that Failed”.

Enjoy the conversation.

TIMESTAMPS:

0:30 - Introduction. 5:37 - Shannon Airport's history as a free zone and China's stance on special economic zones. 11:57 - China's economic transformation through special economic zones, particularly Shenzhen. 19:05 - China's economic zones and Dubai's special financial zone. 25:30 - Dubai treats its residents like customers. 39:33 - Attracting human capital is the zeitgeist. 38:55 - Free Cities will be sandboxes to explore alternatives to democracy. 43:14 - The history and reality of Charter Cities. 53:34 - The democratic system is high time preference. 57:54 - Peter's advice to governments thinking about setting up free zones.

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AI Summary of Episode:

Historical and modern special economic zones, with a focus on their autonomy and evolution.

• Peter Young discusses special economic zones, free zones, and autonomous cities.
• Historical special economic zones predate modern incarnation (1959)

• Shannon Airport in Ireland was once a refueling stop for transatlantic flights, but now it's an industrial area with 10,000 workers.
• Peter Young explains why special economic zones' policies were rolled back in Ireland.
• China's stance on special economic zones and economic debate during the 20th century.

• China experienced difficult political period under Mao, with internal debate on future leadership and economic development.
• Shenzhen's rapid growth from 30,000 to 12 million people in 30 years, 10 times Chicago's rate, made it a model for China's national policy.
• In Shenzhen, foreign direct investment was allowed with local partners, allowing for significant ownership in Chinese companies.
• Land use rights were relaxed in Shenzhen, allowing for more construction and the first ever land use sale prior to 1987.

• Peter Young: China tested policies in special economic zones before implementing nationwide.
• Timothy Allen: Dubai's special economic zones evolved from China's model, with successful results.
• Timothy Allen and Peter Young discuss the DIFC Dubai International Financial Centre, where the UAE government introduced English common law to attract international business and create high-paying jobs.
• The DIFC has been successful in attracting 4300 companies and 36,000 employees, contributing significantly to Dubai's GDP.

• Entrepreneurs and digital nomads in Dubai feel treated like customers rather than tax cattle.
• Timothy Allen: Dubai's competitiveness forced govts to vie for citizens' business.
• Peter Young: Intellectual capital, not physical equipment, drives today's economy.

• Evolution of Special Economic Zones to include lifestyle and services, with private autonomous cities as a potential next step.
• Peter Young argues governments should grant autonomy to regions to create thriving communities.
• Peter Young argues that private companies operating with long-term ownership incentives can better align with the prosperity of a country's population.
• He suggests allowing entrepreneurs to create businesses and invest in areas for a long-term future, with the right incentives in place.

• Timothy Allen and Peter Young discuss the possibility of creating autonomous zones without democracy.
• Peter Young and Timothy Allen discuss the concept of charter cities and how it was introduced in a TED talk by Paul Romer in 2009.
• Peter Young highlights the importance of good governance and institutions for economic success.
• Young suggests adopting rules and regulations from countries like Canada to improve economic development in less developed countries.

• Peter Young agrees that there is risk from host government in private autonomous city idea.
• Peter Young discusses options for creating societies prioritizing individual rights, including terra nullius, high seas, and working with existing governments.
• Peter Young discusses the potential for international arbitration centers to resolve trade disputes and the role of treaties in protecting investors.

• Investors should align with government objectives to create a win-win situation, but country's track record of reneging on agreements can be a deterrent.
• Peter Young highlights the importance of impartial arbitration in attracting international investment.

• Peter Young advises governments to establish unoccupied land for a free city, ensuring compatibility with the base economy.
• Peter Young predicts more small political entities and free trade in the future.
• Peter Young: Smaller political entities work better with closer governance, leading to more free trade and competition.
• Young: More Special Economic Zones will emerge as consumers prefer global prices and cost-effective options.