So says David Friedman in an article I found on his website. It covers the same theme as my very first post on this blog, albeit in a more compact and entertaining way. Particularly interesting for me was the comparison of private “governments” (condo/homeowners associations) to local governments. They don’t seem radically different (both allow free exit), but Friedman notes an important difference. If a city is formed by means of a vote, minority voters have a government thrust upon them; whereas condo associations usually exist prior to any residents moving in, so that each resident participates in the “social contract” by virtue of their choice rather than the majority’s will. Democracy is the tyranny of the majority.
If only a city could be formed in an area where no one lives. Perhaps it could be a for-profit corporation and own its land as private property. New residents who arrive would need to join a city association. There might or might not be some degree of democratic decision-making (like with condo associations), but the board would be elected by shareholders, not the residents (unless the residents decided to buy the corporation). Of course, to ensure that no one’s rights are violated and that state/federal taxes are collected, the higher levels of government would need to have a presence on the city’s land and access to every part of the city (perhaps this would be the role of the county government). There would still be government in the background, ensuring that rights are protected and laws enforced. But certainly most city functions could be handled by the profit-seeking corporation, like transportation, utilities, and city planning.