By: Christopher DeBoy et. al.
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- Spooky Lights
This essay is not a work of pure political philosophy. It does not pretend to offer a principled account of how the state ought to be abolished, only a practical account of how it might be. The mechanism described here treats state power as legitimate to a degree — a concession that will make principled anarchists uncomfortable. That discomfort is a good sign. It means you're principled. This essay does not ask you to abandon those principles, only to consider whether a mechanism that works within the existing system's logic might produce better outcomes than one that refuses to engage with it at all.
This is not pragmatism in the philosophical sense — we are not asserting that truth is whatever works, nor are we abandoning principle for expedience. We are begrudging in this solution. We are Objectivists and anarcho-capitalists first, and we make this concession the way the British abolitionists made theirs when they compensated slaveholders for their "property" in human beings: not because the claim was legitimate, but because the slaves got freed. That's what mattered.
With that caveat firmly established, let us proceed.
The state is not going anywhere voluntarily. This is the fundamental problem confronting all anarchist theory, anarcho-capitalist or otherwise. You can demonstrate with airtight logic that the state is an illegitimate criminal enterprise — and you would be correct — but the people running it have guns, legal monopolies on their use, and every incentive to maintain their position. Moral arguments for liberty rarely move people whose livelihood depends on its absence.
Existing anarcho-capitalist approaches to dissolution — education, agorism, seasteading, and the building of parallel institutions — are valuable and necessary, and this mechanism is not proposed as a replacement for any of them. Education changes minds and reduces consent for the state. Agorism builds parallel economies that erode the state's economic base through counter-economics. Seasteading represents the exit strategy — creating entirely new sovereign territory outside any existing state's jurisdiction, bypassing the state entirely by leaving its reach. Each attacks the problem from a different angle, and all of them should be pursued simultaneously with the mechanism described here.
What none of these approaches addresses directly is the conversion problem: how do you bring the people currently running the state — people with every incentive to resist change — to actively participate in dissolving their own power? Education may eventually reach them, but eventually is doing a lot of work in that sentence. Agorism bypasses them rather than converting them. Seasteading exits the problem rather than solving it.
The mechanism proposed here fills this gap by doing something none of the existing approaches attempt: it makes the rational self-interest of the people running the state point directly toward its own dissolution. It does not require statesmen to become libertarians. It requires only that they act in their own financial self-interest — which they have demonstrated, consistently and reliably, throughout all of human history.
The concept of the Special Economic Zone (SEZ) is not new. Hong Kong, Singapore, Dubai, and Shenzhen all demonstrate that a sufficiently free economic environment can generate extraordinary prosperity even when surrounded by less free systems. Many of these regions began at a geographic disadvantage — Singapore had no natural resources and no hinterland, Dubai was a desert, Hong Kong was a rocky peninsula — and many were surrounded by significantly less free neighbors whose populations had little access to the abundance that free markets produce. The freedom of their economic environments attracted the capital and talent that overcame those disadvantages. The contrast with their less free neighbors was, in every case, impossible to ignore.
More recently, Prospera in Honduras has attempted to push this concept further toward genuine private governance, operating under a special legal framework that grants it significant autonomy from Honduran law. Under Prospera's model, a 5% tax is collected and paid directly to the Honduran government — a recognition of the host state's sovereignty claim over the territory and its cut of the arrangement.
The mechanism proposed here improves on Prospera's model by replacing that tax with something more elegant and more strategically powerful: equity held by individual state agents rather than the state itself.
The core proposal is straightforward.
A private entity — let us call it the Covenant — negotiates with a host government to obtain operational sovereignty over a defined territory. In exchange for that sovereignty, individual state agents — the politicians and officials with the power to approve and maintain the arrangement — receive equity stakes of roughly 5 to 10 percent of shares from companies that choose to establish themselves within the zone. These shares are granted to the individuals as private persons, not to the state as a collective entity. Collectives cannot own property, as collectives are not rational actors. The shares belong to the men and women who hold office, not to the office itself.
No ongoing taxes. No recurring payments to the state treasury. Just shares, held personally by the individuals whose cooperation makes the arrangement possible.
The Covenant itself does not govern. It does not collect revenue. It does not provide services. It is simply the contractual wrapper that defines the initial exchange and establishes the conditions under which that exchange remains valid. Think of it less as a government and more as a deed of covenant — a record of a voluntary agreement between parties who retain their individual sovereignty.
Companies entering the zone negotiate their own arrangements directly. The host government officials' relationship is with the zone as a whole, not with individual companies. New entrants automatically fall under the existing framework without requiring fresh negotiation. Critically, the share arrangement applies only to new entrants — existing businesses in the territory are grandfathered in without restructuring requirements, avoiding the legal challenges and adoption barriers that mandatory restructuring would create.
This is not a government. It is a covenant — a network of voluntary agreements enforced by economic incentives rather than coercion, which is the anarcho-capitalist ideal expressed in institutional form rather than pure theory.
The critical innovation that makes this arrangement credible is the forfeiture clause.
Any action taken by the host government that violates the sovereignty of the zone — signing resource extraction deals with external powers over the zone's territory, attempting to impose regulations, granting jurisdiction to foreign entities — renders the relevant officials' shares immediately invalid. The determination of whether a violation has occurred is adjudicated by a mutually agreed-upon private arbitration body, specified in the original contract. This arbitration body derives its authority not from state sanction but from its track record and reputation — the same way bond rating agencies or accounting firms derive authority from their history of honest adjudication rather than from government mandate.
Once a violation is confirmed, enforcement is elegantly simple: the companies decline to honor the invalidated shares. The company controls its own share registry and exercises its own property rights by refusing a transaction it is under no obligation to complete. No court order required. No international force needed. Just a company declining to repurchase shares from a party that has forfeited its claim to them.
This mechanism converts potential predators into stakeholders. Politicians and bureaucrats who hold personal equity stakes in a flourishing free zone have a direct financial incentive to leave it alone and let it succeed. Their greed, which would otherwise manifest as extraction, is redirected toward protection. It is worth noting that this dynamic is already observable in the existing system — politicians who accept lobbying and accumulate personal stock portfolios consistently vote in ways that benefit their holdings. We are simply making that mechanism explicit, transparent, and pointed toward a productive end.
However, the forfeiture clause alone is insufficient. As the experience of Hong Kong under Chinese pressure demonstrates, a zone that becomes dependent on its host state is vulnerable to gradual encroachment regardless of contractual protections. The goal must be to make the host state dependent on the zone, not the other way around. This means structuring the arrangement so that capital is highly mobile — firms must be able to exit quickly if expropriation begins, so that the host state faces immediate and severe economic consequences for any violation. It also means diversifying the ownership of shares across multiple foreign jurisdictions, so that any attempt to seize or invalidate them involves the host state in disputes with multiple foreign legal systems simultaneously, raising the cost of violation prohibitively.
The zone must have real teeth. The contract must be structured so that honoring it is always more profitable than violating it, and violating it is always more costly than the gains from doing so.
As the zone generates wealth, the state agents' personal equity stakes appreciate. As their equity appreciates, they become increasingly motivated to expand the zone — more territory under the covenant means more companies, more shares, more personal wealth. The rational response to a successful SEZ is to make it bigger.
This dynamic, if it takes hold, is self-reinforcing. Each expansion generates more wealth, which motivates further expansion, which generates more wealth. The host government is not being convinced to dissolve itself through moral argument. It is dissolving itself incrementally through rational self-interest, one territory exchange at a time.
As the zone grows and the state forfeits more and more territory, the balance of power shifts. The state becomes increasingly dependent on the SEZ for its officials' personal wealth, which gives the Covenant growing leverage to impose progressively more restrictive conditions on what the state is permitted to do — not just within the zone, but to its own population outside it. Early in the arrangement, the terms are purely about zone sovereignty. As the state's dependency deepens and its alternatives diminish, each new expansion becomes a fresh negotiation with tighter conditions: prohibitions on mass expropriation, restrictions on gross human rights violations, requirements for basic legal protections for the civilian population. The state is gradually defanged not through conquest or revolution but through the accumulated weight of its own financial dependency. You want the state increasingly unable to walk away from the table, while you become increasingly able to set the terms at that table.
There is a further incentive beyond the zone's borders: the contrast between the flourishing SEZ and the stagnating state-run territory surrounding it becomes impossible to ignore. Neighboring states observe the wealth being generated and the personal fortunes accumulating in the hands of the host government's officials. The demonstration effect applies not just to populations but to other governments — statesmen in neighboring countries will want what their counterparts are accumulating. The SEZ model becomes self-propagating.
One foreseeable consequence of this dynamic deserves explicit mention. As the zone's economic weight grows and state agents become personally enriched by its expansion, some host states may be incentivized to conquer neighboring state-run territory in order to turn it over to the zone and acquire additional shares. This cobra breeding program may prove successful. Two states fighting over their own illegitimate territorial claims is, frankly, their problem — they are two bad actors squabbling over illegitimate claims, and we shed no tears over it. What we cannot permit is the collateral damage: civilians targeted, private infrastructure destroyed, or existing SEZs outside our own covenant brought under duress. The contract must therefore explicitly prohibit the host state from targeting civilians or private infrastructure in any military action, and from making any claim over or taking any action against existing sovereign economic zones outside the covenant's own territory. Expansion must come through voluntary agreement or not at all.
The ideal endpoint is a world in which no state-run territory remains — in which every former statesman has traded their coercive authority for a portfolio of equity stakes in flourishing private enterprises. At that point, they are no longer statesmen. They are wealthy private citizens in a stateless society, with no more claim on anyone than their shares entitle them to.
In a genuinely free market, every transaction is voluntary. No one is obligated to do business with former statesmen or their descendants. The coercive mechanism that generated the original wealth is gone. What remains must be maintained through voluntary exchange, like everyone else's. Let the last lobby the state ever receive be the one that buys it out of existence.
This mechanism is not without historical analogues, though none map onto it perfectly.
Compensated emancipation offers the clearest parallel. Britain's Slavery Abolition Act of 1833 compensated slaveholders for their "property" in human beings — a philosophically impure concession that treated an illegitimate claim as legitimate enough to buy out. Those who rejected compensation on principled grounds were correct in principle. Those who accepted the compromise actually freed the slaves. The lesson is clear: working within a corrupt system's own logic to produce better outcomes is sometimes more effective than refusing to engage with it at all.
The Standard Oil breakup offers a different kind of precedent. John D. Rockefeller became wealthier after the forced dissolution of Standard Oil than he had been when it was intact, because he held equity stakes in all the successor companies and the market correctly valued the parts as more than the whole. This mechanism inverts that dynamic deliberately — instead of the state forcing dissolution on a private entity, private entities incentivize the state agents to dissolve their own power, with those politicians emerging personally wealthier for having done so. The demonstration that releasing control can be more profitable than maintaining it is a powerful argument that requires no ideological conversion to appreciate.
The demonstration effect offers perhaps the most human illustration of the mechanism's underlying logic. In 1989, Boris Yeltsin made an unscheduled visit to a Randall's grocery store in Houston, Texas. He was reportedly so overwhelmed by the ordinary abundance on its shelves — the variety, the quantity, the sheer unremarkable plenty of an average American supermarket — that he wept. He later said the visit was a turning point in his thinking about the Soviet system. This is the demonstration effect in its purest form: not an argument, not a debate, not a philosophical treatise — just the undeniable reality of what free markets produce, experienced firsthand by someone who had spent his life in a system that could not produce it. The SEZ creates that moment deliberately and repeatedly, for every state agent whose personal portfolio is tied to its success, and for every citizen of the surrounding territory who can see across the border what voluntary exchange produces compared to the extractive apparatus of the state.
The Law Merchant offers a precedent for private legal order. Medieval European merchants developed their own system of commercial law — the lex mercatoria — that operated independently of state legal systems and was enforced through reputation and exclusion from trading networks rather than state coercion. The Covenant proposed here operates on similar principles: compliance is maintained not through force but through the credible threat of exclusion from an economic network that is more valuable than whatever can be gained through defection.
Voltaire's London Stock Exchange offers perhaps the most elegant demonstration that voluntary trade transcends every division that states exploit to maintain their power. In his Letters on England (1733), Voltaire observed: "Go into the London Stock Exchange — a more respectable place than many a court — and you will see representatives from all nations gathered together for the utility of men. Here Jew, Mohammedan and Christian deal with each other as though they were all of the same faith, and only apply the word infidel to people who go bankrupt." Merchants who would have been enemies under the banner of their respective states became partners under the banner of mutual profit. The SEZ is this principle institutionalized and scaled.
The Pacific Northwest fur trade offers a documented example of what happens when voluntary exchange reaches a population previously cut off from global markets. Beginning in the late 18th century, maritime merchants trading with the Tlingit, Haida, Chinook, and Nuu-chah-nulth peoples of the Pacific Northwest brought what historians have documented as a rapid and significant increase in material prosperity, wealth, and technological advancement among those populations. The exchange was genuinely voluntary and mutually beneficial — Europeans needed the pelts that only native hunters could supply, and the native populations wanted the steel tools, goods, and technologies that European traders offered. So organically did this trade flourish that it spontaneously generated its own private linguistic solution: the Chinook Jargon, a pidgin trade language that emerged naturally from the need to communicate across multiple incompatible language groups, without any state mandate or central planning. It is worth noting the coda to this story: the prosperity generated by voluntary trade was eventually destroyed not by the trade itself, but by state-backed colonization that followed in its wake. The market produced flourishing. The state produced ruin. The lesson requires no elaboration.
It is also worth noting that the state, as an institution, consistently costs more than it generates. It is extractive by nature — it produces nothing, it only redistributes and consumes. Private enterprise is generative — it creates value where none existed before. This is why politicians who accept lobbying and accumulate personal investment portfolios tend to be far wealthier than those who don't: they have discovered, however cynically, that participation in productive enterprise is more lucrative than governing alone. We are simply proposing to make that discovery the foundation of a deliberate dissolution strategy.
Geography matters. The ideal host territory would be coastal, positioned on major shipping lanes, and governed by political leadership that is more transactionally than ideologically motivated. Many potential host regions suffer genuine geographic disadvantages — poor internal connectivity, lack of natural harbors, distance from major markets — that have historically constrained their development and left their populations with little access to the abundance that free markets produce. A sufficiently free economic environment can overcome these disadvantages through private investment in infrastructure, as Dubai and Singapore both demonstrate. Indeed, the geographic disadvantage itself becomes an argument for the SEZ — host governments with less to offer have more reason to accept the deal.
West African nations in the Gulf of Guinea present compelling candidates. Ghana in particular offers relative political stability by regional standards, an existing port infrastructure at Tema, a functioning legal tradition, and geographic positioning at the natural nexus of Atlantic shipping lanes to both Americas and Europe. Côte d'Ivoire's Abidjan is already one of West Africa's most significant financial centers. Both sit in the crook of the Gulf of Guinea that minimizes shipping distances to major global markets. Critically, West African political culture tends toward personalism — power organized around individuals and their networks rather than institutions and ideologies — which makes it more susceptible to the personal financial incentives at the heart of this mechanism than ideologically committed states would be.
The Baja California peninsula presents an alternative with different advantages — adjacency to one of the world's largest consumer markets in California, direct Pacific shipping lanes to Asia, and natural geographic delineation that makes the zone's boundaries self-evident. The primary obstacle is Mexico's current political environment and the cartel penetration of the region. The cartel problem, however, may be less intractable than it appears: cartels are extractive by nature, while private defense forces protecting productive enterprise are generative, creating a compounding economic advantage for private security over time. Critically, cartels derive significant power from corrupting and co-opting state institutions. Remove the state, and you remove the primary mechanism by which cartels maintain their power. Cherán's successful expulsion of both cartels and government demonstrates that sufficiently motivated communities can fill security vacuums effectively without state assistance.
The Chinese problem. Any zone in Africa or Latin America must contend with China's systematic acquisition of resource rights through debt trap diplomacy. Many potential host governments are already so indebted to Beijing that China effectively has informal veto power over major economic decisions. The forfeiture clause must explicitly cover agreements with external powers over the zone's territory, and the zone's economic returns must be sufficiently attractive that the host government's officials find their personal equity stakes more valuable than whatever Beijing is offering. The shares must vest quickly enough and appreciate rapidly enough to compete with Chinese checkbook diplomacy from day one.
The ideological threat. Occasionally, politicians emerge who are genuinely committed to the primacy of consciousness — statists who believe in state power not for personal gain but as a matter of principle, and who might seek to undo the arrangement on ideological grounds. This is a real risk, but the mechanism contains its own defense: state agents who already hold personal equity stakes in the SEZ have powerful financial incentives to keep such politicians out of power. The accumulated personal wealth of the officials who have benefited from the arrangement becomes a bulwark against ideological disruption. They will not allow a true believer to torch their portfolio.
A note on principled distinction. This mechanism should not be confused with the unprincipled compromises offered by those who claim libertarian sympathies while ultimately conceding the necessity of some state action. We are not arguing that the state is good, or that working with it is desirable, or that this arrangement reflects our values. We are arguing that it is the most effective crowbar currently available for dismantling something we oppose entirely. The distinction matters. We do not celebrate this concession. We make it begrudgingly, in the same spirit as the abolitionists who paid slaveholders — not because the payment was just, but because the slaves got freed.
Existing companies. The share arrangement applies only to new entrants establishing themselves within the zone. Existing businesses are grandfathered in. The influx of new companies seeking to establish themselves in the zone will create strong demand for existing infrastructure, land, and operational assets — meaning the existing local population stands to be enriched simply by the arrival of the zone, before they have participated in it at all. The ordinary person who owned a building or a plot of land before the zone arrived may suddenly find themselves the beneficiary of extraordinary demand. This is not an incidental benefit. It is a powerful argument for local political support that reduces the host government's domestic political cost of accepting the arrangement, and it is a concrete demonstration — before a single new company has opened its doors — of what the generative power of free markets produces compared to the extractive apparatus of the state.
The (Semi-)Private Production of Dissolution is not a perfect solution. It makes compromises that principled anarchists will find uncomfortable, treats illegitimate authority as legitimate enough to transact with, and relies on the greed of the very people it seeks to make irrelevant. We are under no illusions about any of this.
But it has one overwhelming advantage over every other proposed path to statelessness: it aligns the incentives of the people with the most power to resist change toward embracing it instead. It does not require statesmen to become libertarians. It does not require revolution, collapse, or conquest. It requires only that politicians act in their own financial self-interest.
Let their greed do the work.
Let the last lobby the state ever receive be the one that buys it out of existence.
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." — F.A. Hayek