A network state comes to N1

Inside Próspera’s efforts to recruit more Prósperans in London

This week’s newsletter is a collaboration between UK 2.0 and Utopia in Beta. Make sure you’re subscribed to both! Alys was on the ground at the Próspera talk, while Isabelle added more details from her extensive reporting on network states.

Made using Substack’s AI image generator

You know you’re in for an interesting talk when the first slide consists of the words ‘THE FAILURES OF GOVERNMENT’ in all caps.

The audience for this particular pitch did not exactly have the appearance of anarchy. More quarter-zip fleece than bandana. These were mostly desk job professionals, including lawyers and tech workers. Not unusually for this kind of event, the crowd was about 90% male. Everyone milled about in the meeting room above a restaurant in Islington, eating mini wraps and fruit skewers from paper plates. They had mostly come out of curiosity, not (yet) conviction.

They were there to hear from Lonis Hamaili, VP of Growth at Próspera, a modern charter city located on the Honduran island of Roatán.

Established in 2017, the project has financial backing from funds associated with big names like Sam Altman, Marc Andreessen, Peter Thiel and Balaji Srinivisan. It is often associated with the latter’s thesis about so-called network states: startup societies that anyone can set up, beginning with an online community that then becomes a reality in the physical world.

Made possible by the Honduran government’s ZEDE framework, Próspera acts as a special economic zone. It’s positioned to house the latest innovations in biotech and finance, made possible by a flexible pick-and-mix of regulations that founders can choose upon incorporation.

The premise of the project is, on its surface, simple. Using high growth special economic zones like Dubai and Shenzhen as a reference, proponents seek to make governance as efficient as possible, sparking innovation along the way. Leaders say it will drive GDP growth for the area and provide an abundance of well-paid jobs for locals.

Ivory castles and regenerative retreats

The stop in London was part of a mini-tour Hamaili is taking this month to explain more about Próspera and encourage others to get involved. He began in Berlin, hopped across to London, and will also speak in San Francisco next week. These locations were the result of an online callout in which Hamaili asked for suggestions for where to visit. London was the number one request.

The first half of the talk covered surprisingly familiar ground. Hamaili’s core argument was that the “quality of governance essentially determines the wealth of nations”, but that the governance on offer in many developed countries was no longer driving positive growth.

Many of the examples he cited to back this up could have been found in any standard Abundance progressive argument: the inability to build new housing, failure to embrace nuclear energy, slow approvals for medical breakthroughs, and a general lack of dynamism and problem-solving.

Abundance-maxxing

After half an hour, including interjections from the audience and tangents about drug decriminalisation in Portugal, we got onto the main event: Próspera itself.

Where the Próspera thesis starts to be a little more unique is in the idea that governments should be more like businesses, and citizens like customers. Don’t like how a country is run? Switch to another with the ease that you would change broadband provider. “We’re inventing this new industry we call governance as a service.”

The primacy of choice is an important tenet of the Próspera vision. Businesses setting up there can choose their own regulation, from a menu of Cayman law, Próspera’s own rules, Sweden’s or Germany’s. Or, Hamaili said, you can simply draft your own – as long as you can get an insurance company to then back it up.

The final portion of the talk covered the lifestyle offering of the city. There was the cutting-edge aspect, from paying with bitcoin to the biotech lab patronised by Khloe Kardashian. Then there were the videos and photographs showing tropical vistas, healthy food and exercise, swimming and scuba-diving. It looked beautiful.

Future plans for the Roatán site point to a vast solarpunk masterplan, with streets lined with vegetation and buildings designed by the late Zaha Hadid’s architectural firm. As of yet though, it is made up of one luxury hotel, which existed before Próspera’s developers bought the land, one tower of apartments and a smattering of low rise tiny homes and office buildings.

People-wise, it is still sparse. Hamaili said the population is now close to 200 people. “We’re not yet quite at critical mass.”

It’s an issue that faces a number of network state projects – how, in the early days of development, can they compete with established digital nomad hubs like Lisbon? There is the attractive regulatory system for startups, of course, but many of these can be run remotely. Visitors have complained that while Próspera’s location is lovely (save for the sandflies) there is still little to do. Restaurants and cultural activities are limited. One visitor lamented the limited dating pool and, due to the low population, there can be little diversity of thought.

Events, such as the upcoming Infinite Games, provide a central point of activity within the year, attracting high profile speakers and networking opportunities. However, convincing these people to stay and build a life in Próspera has proven tricky.

For many similar projects that are still in the process of selecting their “host nation” the answer is to increase the “seed” population – spend more time gathering communities of future citizens online. Conversations within the wider network state community centre on how to build for multiple generations, and what creative culture within these new cities might look like. Yet sustaining momentum for the years it takes to develop the physical environments that house these ideas remains a challenge. Those that have already broken ground are having to experiment with these ideas in real time.

Próspera, Hamaili said, is still in the process of going from 0 to 1. Once that’s happened, “we can then scale it globally and go from 1 to N. We are talking with governments all around the world in Eastern Africa and different parts of Latin America to be able to create these interconnected zones with a shared jurisdictional layer”.

Now is a good time for a recruitment drive. Until recently, Próspera faced a slew of existential crises. Since the Honduran government passed the ZEDE law in 2013, it’s been hotly contested by the political opposition. Próspera has been made the poster child of this conflict, with the press likening the project to settlements from the country’s colonialist past. Early disagreements with the citizens of the villages that border the development further fomented criticism.

However, recent elections have changed the outlook. After a number of delays and ballot recounts, Trump-endorsed Nasry Asfura won the Honduran presidency, bringing with him continued support for ZEDEs. For the foreseeable future, Próspera has the backing to continue development in Roatán.

So why look to residents of the UK for this next stage of growth? The mood on the night was interested, if a bit sceptical. It wasn’t that they disagreed with the founding principles, but that they wanted to know how the logistics would work. How much is a flat? How many flights are there? How is this different from the ways humans have organised themselves into communities throughout history?

Nevertheless, it should perhaps not be surprising that London would be a target location. Not just because of the weather, though the contrast was a particularly stark one on the frigid night of the talk, as rain came spitting down outside while the attendees gazed at images of people working outside in shorts and sunhats.

Hamaili drew a link between British intellectual history and the good governance that he argued is responsible for human flourishing.

“It started with the enlightenment thinkers, and it actually started right here in this country, right?” he said. “The UK was the governance model that everyone else is kind of relying on today.”

John Locke aside, there’s something else going on here. A feeling among the London tech class who showed up to this talk with open minds. And it often takes the form of moving to the Bay Area. Or Lisbon. Or Dubai.

Towards the end of the talk, Hamaili invited Peter Young, director of the Free Cities Foundation, to say a few words. The foundation is holding its annual conference in Próspera later this year, but Young himself is mostly based in London.

“I’m wondering whether there’s a sort of arbitrage to be done, because I would say that the UK in general is probably moving in a direction that’s a bit more interventionist in terms of the government,” he said in response to an audience question (from your own UK 2.0 correspondent) about why London was the place to have this event. “The taxes are getting a bit higher. And I’m wondering whether there’s something like that is of interest to people here.” There were some nods of agreement.

These are the people who are seriously considering a move to another country where they feel the opportunities might be greater, that life might be better.

Próspera is a very unusual proposition, but it’s appealing to the same impulse driving some emigration: to go where one’s personal ambition is valued and celebrated. Entrepreneurs, in particular, are a dissatisfied bloc in Britain these days. They’re also a well-resourced and highly mobile group. If they don’t feel well-represented by the current government or any of the alternatives, they may well vote with their feet instead.

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Teatime scroll Each week I share links to writings, events, tweets and other conversation-starters. If you have something you think should be in here, feel free to email or DM me.

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