President-elect Donald Trump made a lot of big promises during his 2024 campaign. He made an especially ambitious one back in March 2023. Since then, he hasn’t spoken much about it. The national media hasn’t given it much coverage either.
According to Trump, his big idea was to hold a national contest to build 10 new cities from the ground up, on federal land.
Trump called them “Freedom Cities.”
As so often happens with Trump, his proposal raised more questions than it answered. For example, why does the country need 10 new cities? About 80 percent of the United States population already lives in urban areas, according to the U.S. Census Bureau. Over the past several years, according to the Census, people generally have been looking to get out of cities, not in, with nearly half of all American cities showing population declines as of 2023—though some cities have begun to rebound, albeit slightly, from population losses.
In Silicon Valley’s largest cities, San Jose dropped by more than four percent of its population between 2020 and 2022. San Francisco lost 7.1 percent since 2019, though in 2023 it leveled off and even showed a tiny gain, adding 1,200 new residents.
Suddenly adding 10 brand-new urban areas would seem superfluous at best, but if the “Freedom Cities” plan actually happened, who would move to these new places and why?
How would these new cities be governed? By calling them “Freedom Cities,” is he saying that existing cities, which have democratically elected governments, do not have “freedom?” Is Trump expecting the new cities to have some other form of governance?
And because Trump proposes building these new cities on federal land, would turning that land, even a small amount of it, over to private developers who win a contest actually be a wise use of public resources?
Perhaps the most important question, with such a large percentage of the population living in cities already, will directing resources into building 10 new ones take away from efforts to improve the American cities that already exist?
Secession Plan
Trump’s proposal bears a striking resemblance to an idea that has become popular with Silicon Valley’s elite investors and power players over the past two decades—startup cities, sometimes even more ambitiously termed “startup societies.” To call this concept an “idea” isn’t actually doing it justice. Big tech-funded startup cities have been attempted in countries around the world.
Why? For the past decade, Silicon Valley has seen a growing “secessionist” movement, led by billionaires. In 2013, Google Co-Founder and then-CEO Larry Page proposed that “we can set aside a part of the world” where technology entrepreneurs and researchers could create their own laws and regulations or, more to the point, not create them.
Around the same time, venture capitalist and founder of the bio-tech company Counsyl Balaji Srinivasan gave a speech calling for “Silicon Valley’s ultimate exit,” to a separate entity where high-tech business could exist free from the smothering effects of existing, democratic governments.
“We need to run the experiment, to show what a society run by Silicon Valley looks like without affecting anyone who wants to live under the Paper Belt,” he said in the talk. “We need to build opt-in society, outside the US, run by technology.”
The term “Paper Belt” was coined by Michael Gibson, a former doctoral candidate in philosophy who dropped out to work for tech billionaire Peter Thiel as vice president for grants at the Thiel Foundation. That’s Thiel’s charitable group that awards $100,000 grants to encourage students to drop out of college, or as Thiel puts it, “stop out.”
Inspired by the term “Rust Belt,” which refers to the supposedly dying industrial regions of the U.S. Midwest, the “Paper Belt” describes, “the paper-based industries from Washington, DC, to Boston. In DC they print money, visas and laws on paper. In Delaware, companies incorporate on paper. In New York City, they print media on paper. And in Boston, Harvard and MIT print diplomas on paper,” Gibson wrote in his 2022 book Paper Belt on Fire: How Renegade Investors Sparked a Revolt Against the University. “I am dedicated to lighting the Paper Belt on fire.”
Srinivasan has remained a leader of techno-secessionist thought, authoring the 2022 book The Network State, in which he details his ideas for this “opt-in society” constructed outside the legal and territorial boundaries set by existing states.
“Silicon Valley is shaped by exits,” he said in 2013, and cited the Thiel-backed attempt at “Seasteading”—building offshore colonies on artificial islands in international waters—and Elon Musk’s dreamed-of Mars colony as first steps in a complete Silicon Valley secession. He referred to these new “opt in” societies as “the frontier”—language echoed by Trump a decade later in his “Freedom Cities” pitch when he said the new cities would “reopen the frontier.”
Open the “frontier” for whom?
Billionaire venture capitalists Thiel, a founder of PayPal, and Netscape browser pioneer Marc Andreessen are already investors in Promonos Capital, a venture capital firm dedicated specifically to funding startup cities.
According to the company, it had already backed at least eight such new cities on five continents. Promonos was founded by Patri Friedman, 48, a Silicon Valley investor and grandson of Nobel Prize-winning conservative economist Milton Friedman, a close advisor to President Ronald Reagan whose theories formed the basis for Reagan’s “trickle down” economic policy.
While most of the Promonos cities exist largely in the theoretical stage, one such city is already a reality. And that one has been mired in controversy and is now threatening to bankrupt its host country.
Hiding in Honduras
In June, the U.S. Department of Justice announced that Juan Orlando Hernández had been sentenced to 45 years in prison, essentially a life sentence for the 55-year-old, after being convicted of having “conspired with some of the largest drug traffickers in the world to transport tons of cocaine through Honduras to the United States.”
It was quite an ignominious fall for the man who until his extradition to the U.S. in 2022 served two terms as the president of Honduras. During his term, while he was also playing his part in a massive drug trafficking operation, he avidly promoted the Honduran version of Special Economic Zones (SEZs), known as a Zone for Employment and Economic Development, or ZEDE (an acronym for the Spanish name).
In April of 2022, just three months after Hernández left office, the Honduran Congress repealed the ZEDE law, and a year after that the country’s Supreme Court ruled ZEDEs unconstitutional.
In the interim, however, Pronomos backed the creation of a new city on the island of Roatán off the Honduran coast. The city, named Próspera, had just 2,000 residents as of September 2024, according to a New York Times report. Some of those were “e-residents,” who did not actually live there—the city has just one apartment building—but had paid a fee to start businesses there.
The Honduran court decision left Próspera’s investors deeply unhappy. They filed suit against the Honduran government for $10.775 billion, an amount that could “break” the state, Honduras’ vice-minister of foreign affairs, Gerardo Torres, told Wired magazine. The county of fewer than 11 million people already carries a public debt of $16.5 billion, and two-thirds of the population lives below the poverty line.
Honduras Próspera, the Delaware-registered company that owns the startup city, says that the government agreed to let it operate for 50 years, regardless of whether the ZEDE law was repealed, and that if Honduras simply honors that agreement, the lawsuit will be dropped.
So far, the city is best known for adopting Bitcoin as legal currency, and for its laissez-faire approach to biological research free from the safety rules and other regulations imposed by the U.S. Food and Drug Administration. They include Minicircle, a company that claims its drugs can cure Alzheimer’s disease, as well as Symbiont Labs which makes electronic body implants to allow humans to become “self-sovereign cyborgs,” whatever that means. In all, 222 businesses have been incorporated in the Próspera ZEDE.
Próspera was conceived as the type of undemocratic “libertarian” utopia for which Thiel and Friedman have expressed such enthusiasm. But the key to setting up their startup city as the first ZEDE in Honduras, according to the New York Times report, was keeping the political aspects of the project on the down-low.
“Instead of saying we are trying to create a libertopia,” Próspera founder Erick Brimen, a Venezuela-born, Arizona-based entrepreneur, said in 2021, “we shifted the conversation away from advancing a political ideology toward, yes, liberty, but as a tool to development.”
Business Makes Own Laws
SEZs are areas set aside within countries that are exempt, in whole or in part, from the host country’s regulations, tax laws and tariffs. As of 2022, there were more than 7,000 SEZs in the world, according to a United Nations report. The first was Ireland’s Shannon Free Zone, founded in 1959. The use of SEZs has since become a favored tool of developing economies, with 75 percent of all SEZs located in such countries.
SEZs, which exist in countries all over the world, are similar to the Honduran ZEDEs—but there are some significant differences. Most important, the Honduran version allows a greater degree of independence from the host government. Inside the boundaries of a ZEDE, a local government can implement its own tax laws and legal system.
According to a report by the Center for Strategic and International Studies, the legal system provision is especially important because it allows the administrators of a ZEDE to pluck from various legal systems around the world to find a legal “framework more conducive to establishing a business than Honduran law.”
Despite their high level of independence, ZEDEs, according to the report, are nonetheless required to obey Honduran law “in all topics related to sovereignty, application of justice, national defense, foreign relations, electoral matters and issuance of identification documents and passports.” They must also, at least under the law, provide equal or better human rights protections than those in the Honduran constitution.
The law creating ZEDEs in Honduras passed in 2013, the year before Hernández became president. In 2021, the United Nations issued a warning that ZEDE law “jeopardizes the full enjoyment of human rights by all inhabitants. This is the result, among other determining aspects, of the autonomy that these entities would have with respect to the administration of public services, the justice system and the penal system.”
Dispensing with Democracy
In the Silicon Valley “exit” plan, startup cities would be governed not democratically but in authoritarian fashion by a kind of technocratic monarchy.
Srinivasan defines the “Network State” as “a social network with a moral innovation, a sense of national consciousness, a recognized founder, a capacity for collective action, an in-person level of civility, an integrated cryptocurrency, a consensual government limited by a social smart contract, an archipelago of crowdfunded physical territories, a virtual capital and an on-chain census that proves a large enough population, income and real estate footprint to attain a measure of diplomatic recognition.”
What does that all mean? The important part is that Srinivasan says that an expansive Network State is an aspirational goal. To get there, the process must begin with “startup societies.” In other words, something much like Freedom Cities.
Trump did not, and still has not, spelled out the details of how the new “Freedom Cities” would operate. But tech billionaires, including Thiel and Andreessen, are already pouring money into startup cities in the United States and in other countries. And they have a plan.
Andreessen has also invested in California Forever, a proposed startup city in Solano County. In a podcast interview in 2023, Srinivasan described the California Forever start-up city as a Network State project. An artist’s rendering of the proposed Solano County city was used at a 2023 Network State Conference.
The CEO of California Forever, it should be noted, has disavowed any connection between his hoped-for mega-development and the “Network State” concept. (In July, California Forever announced that it was withdrawing its planned November ballot measure seeking local voter approval, and would instead start a new two-year development process.
Andreessen is an enthusiastic fan of the “Network State” concept and said that its chief evangelist, Srinivasan—a former general partner in Andreessen’s VC firm—“has the highest rate of output per minute of good new ideas of anybody I’ve ever met.”
According to a New York Times report that first revealed the tech billionaires behind California Forever the group’s founder, Sequoia Capital venture capitalist Michael Moritz, in his initial letter to other tech investors “painted a kind of urban blank slate where everything from design to construction methods and new forms of governance could be rethought,” ideas that sound very similar to the basis for the “Network State.”
What kinds of “new forms of governance” do they have in mind?
Using the F-Word
The ideological basis for the tech-secessionist movement, the “tech-xit” as it were, has been shaped by a 51-year-old Silicon Valley entrepreneur who made his name as a blogger in 2008—when he was signing his name as “Mencius Moldbug.” He has since reverted to his given name of Curtis Yarvin, but he continues to advocate for his self-described “neo-reactionary” ideas, which would do away with democratic government in favor of rule by corporate “monarchs.”
For several years, from 2014 to 2020, Yarvin—who coined the term “red-pilled” to describe liberals’ conversion to right-wing politics—found himself on the fringes of Silicon Valley culture, his ideas largely rejected. In 2016, he actually wrote, “I am not an ‘outspoken advocate for slavery,’ a racist, a sexist or a fascist.”
“As anyone who’s been on the internet lately can tell you,” wrote Tablet magazine reporter Jacob Siegel in a profile of Yarvin, “a person who must publicly deny that they are a fascist has already lost.”
In 2020, Yarvin came in from the cold, appearing on a live edition of the Other Life podcast. Thiel showed up in the audience at that live podcast where Yarvin made his comeback in 2020. In the early 2000s, Thiel invested in Yarvin’s company Tlon. The company’s raison d’etre was to develop Urbit, a project described as Yarvin’s “audacious project to rebuild the entire internet computing stack from scratch.” (Yarvin quit Urbit in 2017, then came back in 2024.)
Yarvin also hung out with Thiel at the billionaire’s 2016 election-night watch party where guests popped champagne corks as it became clear that Trump would win an Electoral College victory over Democrat Hillary Clinton and take the White House. A 2021 biography of Thiel by Bloomberg tech reporter Max Chafkin called Yarvin the “house political philosopher” for Thiel’s “budding movement.”
Yarvin has not been shy about expressing his views on democracy, bluntly titling one 2008 blog post “How I Stopped Believing in Democracy,” and in another calling democracy an “adaptive fiction” that he considers responsible for “war, tyranny, destruction and poverty.”
“However precisely you classify his ideology, Curtis Yarvin is bad news,” wrote Ben Burgis, a journalist who debated Yarvin in a 2022 podcast. “He’s a racialist crackpot openly contemptuous of democracy, and it’s disturbing to see a billionaire, two politicians and a prominent cable news host nodding along to Yarvin’s nonsense.”
Minority Report
In his 2009 essay, “The Education of a Libertarian,” in a journal published by the libertarian Cato Institute, Thiel synthesized Yarvin’s anti-democratic ideology and Silicon Valley secession quite succinctly.
“I no longer believe that freedom and democracy are compatible,” he wrote, in what has endured as his most famous quote. Later in that essay, Thiel discusses “how to escape politics in all its forms.”
He concluded the short piece by stating, “all of us must wish Patri Friedman the very best in his extraordinary experiment.” That “experiment” was The Seasteading Institute, an organization devoted to building floating cities in international waters where they wouldn’t be subject to the laws of any one country.
In his own 2009 Cato Institute essay, Friedman declared, “democracy is not the answer,” calling it instead “the current industry standard political system, but unfortunately it is ill-suited for a libertarian state.”
Friedman, in a way, was more honest than Thiel, admitting that “libertarians are a minority, and we underperform in elections, so winning electoral victories is a hopeless endeavor.”
In other words, if you can’t win the game, change the rules.
Quinn Slobodian, a history professor at Wellesley College, explained what he calls the tech “secessionist” agenda in his 2023 book, Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy. The book is a study of “special economic zones” around the world.
SEZs are supposed to spur rapid economic growth. But as obvious favorites of self-described libertarians like Thiel and Friedman, they form the basis of the “startup cities” movement.
“These libertarians were inspired to think about how they could pioneer a new form of social organization that would do away with democratic representation altogether,” Slobodian explained, in an interview with the University of Oxford Centre for Intellectual History. “A kind of possible world governed only by a kind of contract and modified exchange, leaving behind the kind of tattered legacy of attempts at popular sovereignty, or representative government.”
“Because there are no truly free places left in our world, I suspect that the mode for escape must involve some sort of new and hitherto untried process that leads us to some undiscovered country,” Thiel wrote.
Who Will Pay?
The federal government owns about 30 percent of the country’s total surface land, according to the U.S. Government Accountability Office. That’s approximately 650 million acres. Of those Trump wants to take enough for 10 new startup cities, each the size of Washington, D.C., according to his own announcement. That would be 437,660 acres, a tiny percentage of all federal land.
To build 10 new cities would hardly be a tiny project. Considering the utter vagueness of Trump’s proposal, it’s impossible to know exactly how much the project would cost. NYU Urban Studies professor, Tyler Haupert, believes that the idea is Trump’s version of Saudi Arabia’s startup city project, NEOM.
That single new city is projected to cost $1.5 trillion, and in the seven years since its inception has already run over budget and behind schedule, according to Haupert. Even if the “Freedom Cities” cost considerably less than NEOM, to build 10 of them would be likely to run into the trillions of dollars. The entire federal budget ran about $6.3 trillion in 2023.
This expenditure would come at a time when Trump planned to name Elon Musk as a sort of budget-cutter-in-chief, charged with, according to Musk, slashing a staggering $2 trillion from the federal budget. Obviously, then, the Freedom Cities won’t be built with principally with federal funds.
Instead, the plan looks like a giveaway of public land to private developers. Even so, private construction and infrastructure projects almost always receive substantial federal subsidies. The Bipartisan Infrastructure Bill alone, passed in 2021, dedicated $1.2 trillion to upgrade the country’s infrastructure.
The cities that already exist in the United States require hundreds of billions to maintain and modernize their own infrastructure, such as public transportation, water systems and other essential functions.
Pouring the billions or trillions of federal money into building 10 new cities from the ground up will strain the resources desperately needed by the cities that are already home to eight of every 10 Americans—especially under an administration that says it will impose massive spending cuts throughout the government.
Who will benefit from this diversion of federal resources into private hands, other than the developers who win Trump’s contest to build the cities? The answer is probably found by looking at who in this country wants to live in new cities: the same people behind Prospera, California Forever and the Network State. The Silicon Valley tech barons who want an “exit” from the United States, and from democracy anywhere.
Trump’s Freedom Cities proposal, according to tech journalist Gil Duran, is “a clear indicator of his willingness to sell out the country to his far right Silicon Valley benefactors.”
The only question remaining is the same one to ask about most of Trump’s announced plans: will he, or can he, actually make it happen?
