◼ TECHNOLOGY Bloomberg Businessweek December 23, 2019
27THE BOTTOM LINE Friedman has a long way to go to convince
critics and skeptics that carving out territory inside other nations
can and should work, but he’s got Thiel and others on board again.are advising similar efforts around the world,
Pronomos is the only one with seed money from
boldface names including Thiel, venture capitalist
Marc Andreessen, and Bitcoin evangelists Roger Ver
and Balaji Srinivasan. In describing his new firm,
Friedman isn’t shy to use seasteading as a reference
point. “I’ve been putting these ideas out there for
20 years, and they’ve grown and compounded,” he
says, sipping well water at his mountaintop com-
pound south of San Jose. “What we get excited
about is the ability to do this repeatedly.”
Why the colonial-sounding framework, right
down to the old British laws? Dressed in a well-
loved Slytherin sweatshirt, Friedman says it’s the
best fuel for a fledgling economy and property val-
ues, and to assure global investors that their money
will be safe in Pronomos projects. The justice sys-
tem is more important than the tax breaks, he says,
citing research that suggests faith in a functional
code of laws is a leading indicator of a region’s eco-
nomic success.
That’s been less than reassuring to politicians and
residents leery of ceding land to unaccountable for-
eigners, in exchange for theoretical network effects.
Fierce local opposition has halted a plan to create
an independent area on a stretch of coastal land in
Honduras, for example. The proposed tax incentives
and other benefits for foreign investors were about
as popular as you’d expect. “That land belongs to
someone,” says Silvio Carrillo, the nephew of assas-
sinated Honduran rights advocate Berta Cáceres.
Pronomos “will only go where we are wanted,”
according to Friedman. He also says, with a straight
face, that if Pronomos can get local officials to agree
to its plans, “we have a credible shot at eliminat-
ing poverty.”
Friedman’s grandfather spent his life attacking
government oversight in the field of economics, but
his father, a law professor at Santa Clara University,
has advocated for a kind of anarcho-capitalism on
a legal basis. At age 43, Patri Friedman has pushed
his family’s do-what-you-feel ethos to some other
extremes, advocating for communal living, poly-
amory, and human-machine hybridization. He’s
spent most of his career at Google, including his
Seasteading Institute years. He left Google this sum-
mer to work full time on Pronomos.
The venture firm has raised about $9 million
so far (more than half from Thiel), well short of
Friedman’s initial goal. He says that’s only enough
to cover basic fact-finding expenses for his local
partners, and he’ll raise more to buy and develop
land once governments approve the plans.
Similar ideas have gained some support beyond
fringe libertarian circles. Honduras amended its
constitution in 2013 to allow the creation of special
economic zones outside the country’s legal frame-
work. Erick Brimen, a startup founder who has coor-
dinated development projects in Central America,
is informally working with Friedman and others on
Prospera Honduras, a local business advocacy group
there. Brimen says it’s too early to discuss publicly.
Other groups aiming for these kinds of extralegal ter-
ritories have announced priorities including tax hol-
idays and privatized health care and police forces.
“Our vision aligns” with Friedman’s, says Taavi
Kotka, who runs an Estonian organization advocat-
ing for looser employment and tax laws to attract
immigrants. “He’s a pioneer in setting up these spe-
cial zones,” blockchain enthusiast Barak Ben Ezer
says of Friedman. He and Friedman are working to
turn the Marshall Islands into a tax haven similar to
the Caymans. Friedman says he hopes to back more
than a dozen projects in the next four years.
Yet even if Friedman and the other landsteaders
can assuage concerns about colonial-style exploita-
tion and the flouting of local laws, there are few
guarantees in the world of quasi-sovereign states. In
April a couple proclaimed their small fiberglass pod,
14 miles off Thailand’s coast, was its own nation, and
the Thai government sent its military to destroy their
new home, calling the proclamation an act of war.
The couple has been in hiding since then. That’s
why, says Friedman, he’s making sure any Pronomos
projects have local officials on board. Further out,
“Do I want to create the first venture-backed city-
state? Hell yeah,” he says. “That’s what I’m in it for.
That’s the long-term goal.” �Lizette Chapman“Do I want to
create the
first venture-
backed
city-state?
Hell yeah”