I’ve been tossing around the idea of starting a private town. Recent news of North Dakota legislation to review presidential executive orders and determine their constitutionality and therefore determine if the state should follow them has given me hope for the revitalization of Federalism and autonomy. The idea of a private municipality is in its infancy as I do not know the method of funding, nor do I know the extent of autonomy a town has in determining taxes. Ideally, it would be a place free of all taxes that a municipality can determine. There would need to be a method of funding, however. I was thinking of something along the lines of a fee-system based on capitalization rate of the town. To incentivize businesses and individuals, the fee would need to diminish relatively with increasing cap rates. Meaning, that as cap rate increases, the absolute dollar amount of the fee may increase, but the relative percentage of fee would decrease. I need to work out the details, and I would love input on the matter. Are there places such as this that already exist or existed? If so, what did they do that worked or didn’t work?
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13 replies on “Privately-Owned Town”
Many thanks for the input, everyone. I guess another way of imaging this thought experiment would be a government-free town instead of a cooperation-owned town. I guess what I am floating is a reimaging of an unincorporated area. Many times unincorporated areas are under the influence of the county or parish to provide things such as law enforcement, effectively defeating the purpose of the avoidance of a city counsel. What I would propose is an area not governed by localities, neither city nor county (and preferably neither state nor country for that matter) in which the police force, fire department, etc. could be free to privatize. This would avoid the issue of needing to collect “taxes”, but rather let the city organize itself
I’m an old sea steading veteran and libertarian free state project person since the 1980’s. Private towns are well discussed in that context. Its a useful tool only if you have a definable alternative revenue stream. A resort town may be more viable. Ironically the majority of those tend to be well tanned nudist colonies. Lol. They come unstuck very badly when it happens. These are condominiums, gated resorts, residential golf clubs like mar a largo. Disney’s residential real estate on both coasts has had to implement taxation to get over a revenue hole. Many left and those leaving could recoup the value of their investment.
Revenue is king. If you have a new system then there is no need for the private town. You have the money solution to take over the country.
Remember federals law applies to individuals. Private town that go against federal law tend to loose in the supreme court. Many still do it because they want to get the questions to the supreme court. They are often disappointed. The Supremes like being paid and that’s tax money they are being paid with. Tax does not pay for government anyway; borrowing against future tax revenues does. Also they only find buyers for the debt because government law mandates a percent of pensions, insurances and currency portfolios hold government bonds.
How about limiting voting within the town? Only stockholders get a vote. Only property owners get a vote. Period. Unless you have skin in the game, you have no say in the operation.
I know it is Constitutional originalism. Yeah, I know.
How about we go back to 1790 rules, with the knowledge, going forward, of what DID NOT WORK!?
I don’t know if this fits what you’re describing and I can’t remember which one it is (maybe Utah? It’s in that region.) but a state just recently proposed allowing corporations to establish localities where the company is the government. I don’t think it’s in effect yet but it’s getting serious consideration.
I think corporate towns are a potentially very bad idea. There were such things in the 1800s to early 1900s during the “Robber Baron” era of the Great Railroads. And if you lived in one, you were effectively, if not legally, a serf.
In my mind – you can’t go full corporate and you can’t go full government. The best systems I’ve heard of or experienced personally were those where the government provides enforcement of the overall rules in service to profit and freedom to pursue such. You also need a mix of public, corporate and private businesses.
One corporation controlling a town… or a culture… well… Just go walk around the Google campus in Cali and see how much POISON is in THAT subculture.
I don’t pretend to know all the answers. But the language of “Corporate Government” or “Corporate Town” makes my danger sense twitch.
I agree about the problems with “company” or “corporate” towns. I have a question about this, though:
Corporations are private businesses. And why should there be “public” – i.e. government-owned – businesses? That’s straight-up socialism.
Unless you mean publicly traded businesses. But those are also private businesses. For all businesses, either the government owns it or one or more private citizens own it. Those are what the classifications “public” and “private” mean. “Corporate” isn’t a separate classification from those two.
I’m not sure publicly traded businesses are helpful to the problem either. My wife works in accounting and is constantly bumping her nose against the fact that once there are stockholders, the focus of company policy shifts toward pleasing the stockholders, and away from pleasing the customers.
Yes, I understand that there has to be a way to fund the company’s growth other than just the sole proprietor digging into his own pocket. But the lifetime of that investment has to have a limited lifespan, other wise you end up right back at the “the stockholders are important, screw the customers” stage.
Every corporation, publicly traded or not, has at least one stockholder. When I had my S-Corp, I was the only stockholder of my company’s 100 shares.
Also, if the company is rational about it, the best way to make shareholders happy is to make customers happy.
“When I had my S-Corp, I was the only stockholder of my company’s 100 shares.”
This suggests to me that the commonly held definition of “stockholders,” meaning as many as feel like buying in, is a case of too many cooks spoiling the broth.
If one guy runs a hardware store, and owns all the stock, he’s in no danger because he knows the business of running a hardware store.
If he has a thousand shareholders, how many of them have any tiniest understanding of running a hardware store? And how many don’t understand anything except the share price?
“Don’t understand anything except the share price” is the source of people failing to understand the concept that “the best way to make shareholders happy is to make customers happy.”
It’s a variation on the same theme as my work. I’m a truck driver. In order for my job to go smoothly, I have to make what I do understandable to the people in the office, who see nothing whatever of my job except for a spreadsheet entry.
Ay least as far as publicly traded corporations go, the vast majority of shareholders aren’t involved in actually running the business. They get their shareholder’s vote once a year and that’s it. And even most of the issues voted on are (a) chosen by the board and (b) almost always approved by the shareholders. So “too many cooks” doesn’t apply. If there’s only a small number of shareholders, it’s nearly universal that those are involved in the business because they’re usually either involved in starting it up anyway or they’ve put money in (e.g. venture capitalists) and want to have a hand in how their investment is managed.
It’s true that the overwhelming majority of stockholders in publicly traded markets only ever look at the stock price, taking that as a proxy for how well the business is being run. That’s not necessarily a bad thing but it can fail just as often as it succeeds – you’re basically flipping a coin. The smart investor should know enough about the company they’re buying into to make an intelligent decision. If they’re not going to do that, they should just buy SPX or pick a decent mutual fund.
Now, for the people you work with, to do their jobs as well as possible, they should understand your job. It is similar to only watching a stock price, except that they don’t have anything to lose as long as they’re doing what they’re paid to do. But if they want to advance beyond their current jobs, they should understand as much as they can about the company, what it does and how it does it. And, of course, it’s to your benefit for you to get them to know more about what you do than that spreadsheet entry. It’s not obvious how exactly that will benefit you without knowing a lot more about your situation but their having that knowledge can only be good for you.
I understand the skepticism of a “coporate town”, but personally I have far greater skepticism of a “government town”
I understand that sentiment – especially these days. What I hope is that people will start making government more about the local and regional rather than national. After all – we really don’t have a choice. The National government of the US is so utterly out of touch that we have to take control at the lower level and ignore any ridiculous un-constitutional edicts and executive orders that come from Washington.
How do we ignore if they choose to enforce?