Voluntary, Entrepreneurial Solutions as Idealistic Goal

Now that Woke Has Failed

I have always wanted to make the world a better place. Call me an inveterate do-gooder, if you will.

When I was in the dorm rooms at Harvard in 1979-1980, I spent countless hours listening to the Marxist socialists, who advocated violent revolution, argue against the democratic socialists, who preferred a peaceful transition to socialism (Jamie Raskin was a classmate, I heard him argue for hours for democratic socialism). No one to the “right” of either was taken seriously by mainstream campus culture.

I left Harvard to go to St. John’s College in the fall of 1980, mostly because I vastly preferred the Socratic pedagogy. But I was also deeply interested in understanding the deep roots of political philosophy, moral philosophy, epistemology, and the history and philosophy of science. Reading, thinking, and discussing the classics of Western civilization, including classic texts in math and science, struck me as a way to understand the philosophical premises of contemporary political debates.

In my last year at St. John’s, I wrote my senior thesis on Adam Smith and Karl Marx. Titled, “A Shallow Reading of Marx, and Other Likely Stories,” I basically acknowledged that Smith’s economic points were more solid than those of Marx, but that that was a “shallow reading” of Marx which neglected the underlying power dynamics of capitalism. My identity was still “on the left” and focused on the clear truth that socialism (democratic socialism, I never had a taste for the bloodthirsty revolutionary version) was morally superior to capitalism.

I went to the University of Chicago as a graduate student to discover how the Chicago economists could pretend to be scientists while being for free markets, which I knew were evil. Early on while studying there I encountered Jack Hirchleifer’s “Fundamental Theorem of Exchange” that “Trade is mutually beneficial.” Indoctrinated in anti-capitalist ideology, I was initially full of counter-examples, mostly of deceitful corporations selling people things that they didn’t need, want, or that weren’t good for them. I was raised in a Lutheran Scandinavian household, and the moralism of Thorstein Veblen (“The Theory of the Leisure Class” and “conspicuous consumption”) came naturally for me.

But over the course of a few years, the mountains and mountains of evidence provided by Chicago economists convinced me that most of the time, voluntary exchange was mutually beneficial. Not only was this true on an individual basis, but more importantly the evidence was already clear (in the late 1980s) that capitalist nations such as Hong Kong and Singapore were rapidly becoming prosperous nations whereas the socialist nations in the developing world were failing. More damningly, it had been clear in the 19th century that laissez-faire capitalism raised the standard of living of the working class rather than making “the rich richer and the poor poorer” as every leftist intellectual had been preaching.

But the real nail in the coffin for me, which led to two years of depression regarding political possibility, was public choice theory. Public choice theory makes the case that individuals respond to incentives in the political system just as they respond to incentives in the market system. Politicans seek to win elections, bureaucrats tend to expand their budgets and control, concentrated political interests (e.g. unions and corporations) tend to have more influence than do diffuse interests (e.g. innovators or the poor), etc. While one can quibble with many details, in broad outlines it is hard to dispute the fact that human beings in governments respond to incentives just as do human beings making consumer, employment, or investment decisions.

Thus by 1988 or so, I realized that deliberative democracy, the notion that citizens can discus “best policy” and then have it implemented by elected officials, was a pipe dream. Perhaps it was possible in small governments such as the Athenian democracy or Vermont town halls in 19th century America. But as governments became larger and took on more responsibilities, special interests would inevitably prevail most of the time.

Thus at the age of 28, I accepted that for the rest of my life the most likely outcome of every election was that regardless of which political party won, regardless of what policy debates people were raging about in the media, regardless of the clever policy debates academics were having, the most likely outcome was that in the background special interests were getting their way. They were focused on the issues that mattered to them 24/7/365 and nothing that I was going to do would change that fact. If the mohair producers could beat the public interest, there was nothing whatsoever we voters or public intellectuals could do about banking and finance.

This acceptance of public choice theory saved me a great deal of disappointment - I was so thoroughly convinced that concentrated interests would win over diffuse interests I saved myself from the rage and disappointment that most people seem to experience regarding political outcomes and the continuous stream of broken promises from elected officials.

Later, in the 00s, I learned about political ignorance - not only does everyone in the system have incentives that are not aligned with the public good, but that voters have no incentive to be well-informed regarding political issues, the number of issues is overwhelmingly complex, and massive increases in education since the 1950s haven’t increased political knowledge at all. Most people simply don’t care that much about voting and political issues, and even if they did they can’t possibly be adequately informed to understand the issues (what should we do about aquifer depletion and impervious land cover? Are wage subsidies better than earned income credits? Etc.)

In 1990 I went to a summer workshop hosted by the Institute for Humane Studies and learned about Austrian economics, with is emphasis on entrepreneurship and uncertainty, which struck me as more realistic than the neo-classical economics I had learned at Chicago. I also was first exposed to anarcho-capitalism, the idea that even governance services could be provided by an entrepreneurial marketplace based on voluntary exchange. This struck me as both shockingly outrageous and as a highly intriguing thought experiment. If voluntary exchange was mutually beneficial, if competitive markets were a prerequisite for sustained innovation, and if monopolistic governments at larger scales always resulted in special interests winning, why not consider providing everything, even governance itself, in a voluntary market?

For the time being I left it as an intriguing direction to consider. In the meantime, as a believer in voluntary entrepreneurial initiative, I soon began my career launching innovative schools. It seemed to me so obvious that the government schooling system was obsolete that I expected it to collapse at any moment (this was back in the 1990s).

Eventually, after creating Moreno Valley High School in 2001 to become one of the top ranked public schools in the U.S., I was forced out in 2003 because I did not have a public school administrator’s license. Of course the State Department of Education in NM didn’t care that I had created the top ranked school in NM and the 36th ranked nationally. I had known for decades that government policy had NOTHING to do with the public good - it was almost all institutional incentives all the way down.

I had met John Mackey, founder and CEO of Whole Foods. He and I had both come from the left but had become passionate about entrepreneurship, disillusioned with government, and had learned from thinkers such as Friedman and Hayek why these patterns were systemic. We created Freedom Lights Our World (FLOW) in fall of 2003, a non-profit to promote entrepreneurial solutions to world problems.

In spring of 2004, I met Mark Frazier, who had been working in the free zone movement for decades. He the case that zones were a strategy for creating free market jurisdictions around the world. At the time I had been studying New Institutional Economics and was acutely aware of the fact that poor countries were poor because of the lack of property rights, rule of law, and economic freedom. Mark convinced me that a new generation of zones with their own law and governance were a path around this problem. Moreover, he was a big advocate of using a portion of the resulting land value gains in the zones to finance education and health care, resulting in a win-win-win (for an example of land value gains due to zones, see Shenzhen, a tiny fishing village in 1980, now the world’s leading manufacturing hub, with land values increasing 20,000% or more).

Although I was at this point thoroughly disillusioned by government, I was still a leftist - in the sense that my primary goal in life was to improve the lives of those who were least fortunate. Of course, capitalism itself was the fastest way to do this - as was becoming obvious in China at that time. But how much better to help the poor BOTH by means of free market capitalism AND by providing free or subsidized education and health care (See “Creating Libertopia” with its “Georgist libertarian endgame” published in 2011 for more).

By 2009 I was working almost entirely on creating these new zones. If I was focused on “entrepreneurial solutions to world problems” then there was no greater entrepeneurial project than launching these next generation zones. I was working with Kevin Lyons on establishing a version of these zones in Mexico and Estonia. In 2011, I was introduced to the Honduran team who had created the RED legislation (Regions Especial de Desarrollo) that allowed for a robust version of these zones to be created. After I signed the first agreement with the Honduran government to develop such a zone, the legislation on which these zones were based was declared unconstitutional in 2012. I returned to the U.S. where I began creating schools again (best description of the entire episode is at Reason here).

In 2013 new legislation was passed, ZEDE (Zonas de Empleo y Desarrollo Económico), which eliminated Paul Romer’s clause that allowed foreign governments to control the zones and re-structured the zones as an extension of municipal autonomy. By 2021, Prospera, was functioning as a private governance entity on the island of Roatan. Gabriel Delgado Ayau, one of my business partners from the my work there, was a co-founder of Prospera. My wife, Magatte Wade, launched Prospera Africa this year, to bring the Prospera governance platform to Africa.

With respect to voluntary, entrepreneurial solutions, I’ve been working on new schools since the 1990s and on new jurisdictions since 2004. In the US, Educational Scholarship Accounts (ESAs) now reach an estimated 22 million students, allowing for educational entrepreneurs to provide transformational experiences instead of the damaging K12 experience that most children are forced to undergo.

With respect to new jurisdictions, although the Marxist government in Honduras is trying to kill Prospera Roatan, it will most likely survive in some form there. Regardless of what happens there, Magatte is well on her way to launching a path to African prosperity. She is in discussions with ten governments and has advanced negotations going with two. Once one takes off, Prospera Cities will spread rapidly across the continent.

As an inveterate do-gooder who became disillusioned with government solutions in 1988, I’ve been patiently waiting for the world to catch up. I thought that after the fall of communism in 1989, the Marxist professors would write full page apology in the New York Times and support market solutions. Instead, they transmuted their anti-capitalist movement into the anti-globalization movement of the 1990s. Then as it became obvious that rather than exploiting the global poor, capitalism was making more poor people rich more quickly than ever before in history, they gradually shut up.

In the 00s it appeared as if market solutions might be taken seriously. Then in 2008, the financial crisis was blamed on capitalism (rather than on government regulations and subsidized banking risk). Occupy Wall Street attracted attention briefly, then identity politics began to spread from academia to dominate American society. The right, as a consequence, became focused on fighting woke. This has resulted in Donald Trump being elected for the second time and Republicans controlling both houses of Congress. Democrats are realizing that they need to dial back the identity politics in order to win elections.

What is an inveterate do-gooder to do in this day and age? I invite you to become a fellow traveller and support the movements for entrepreneurial initiatives in education and new jurisdictions. Renounce the negative sum game of government conflict. Rejoice in those who support voluntary solutions over coercive solutions.

Because I see the U.S. as the most preferable hegemon by far (much, much better than China or Russia), I support U.S. hegemony for the foreseeable future. Thus I’m not an “ancap” in the usual sense. That said, the more we can move away from coercive government and towards voluntary, win-win solutions the faster we’ll achieve human flourishing for all. If we can shift the K12 education sector towards voluntary learning communities in the next two decades that will be a huge win. Millions of lives will be saved. If we can create dozens of new jurisdictions across Africa and elsewhere in the developing world, that will be a huge win. Billions will escape from poverty into the middle class. Are these goals not exciting and inspiring?

In the meantime, the growing debt crisis in the U.S. is likely to increase the value of Bitcoin considerably. There were estimates several years ago that when Bitcoin hit $100K, more than half of the world’s billionaires would be crypto billionaires. I expect that it will go up considerably from here. In the next twenty years, we may well see a fiscal collapse in the U.S. along with Bitcoin holders controlling much of the world’s wealth. Given that most of them are sympathetic to voluntary, entrepreneurial solutions, the learning curve and technological acceleration associated with new forms of education and governance will be prelude to a dramatically different future globally twenty years from now. Get involved now before these movements really explode!

William Deresiewicz has a vivid description of the faculty lounge politics that lost in the 2024 election:

Over the last 10 years or so, a cultural revolution has been imposed on this country from the top down. Its ideas originated in the academy, and it’s been carried out of the academy by elite-educated activists and journalists and academics. . .

It has promulgated an ever-shifting array of rebarbative neologisms whose purpose often seems to be no more than its own enforcement: POC (now BIPOC), AAPI (now AANHPI), LGBTQ (now LGBTQIA2S+), “pregnant people,” “menstruators,” “front hole,” “chest feeding,” and, yes, “Latinx.” It is joyless, vengeful, and tyrannical. It is purist and totalistic. It demands affirmative, continuous, and enthusiastic consent.

Academia is not going to change; they have no incentive to do so. At the same time, our civilization is driven forward by optimism and a sense of progress. Moreover, technological progress alone, without a positive impact on humanity, is neutral at best. Building more stuff and living longer will not inspire humanity as a whole. Moving billions from poverty to prosperity and empowering the next generation to transcend the malaise and dysfunction of modernity will.

Join me in working towards peace, prosperity, happiness, and wellbeing for all through voluntary, entrepreneurial solutions. Become an entrepreneur of happiness and wellbeing, or work for one, invest in them, or advocate for them.