This article was published in the Winter 1998-1999 issue of Formulations
by the Free Nation Foundation
A Single-Owner Proprietary Nation:
Advantages, Problems, and Solutions
by Roy Halliday

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In a single-owner, rental-income, proprietary nation, all the land and other natural resources are owned by one person, partnership, or firm, and all residents voluntarily agree, by contract, to abide by the rules of the proprietorship and to pay rent for the use of specific portions of the property.


From a libertarian perspective, a single-owner proprietary nation has several advantages over other free-nation proposals:

1. All the inhabitants of the nation voluntarily accept the rules of the proprietorship. This conforms to the libertarian principles of private property, freedom of contract, and nonaggression. Taken as a whole, the leases agreed to by the residents of a single-owner proprietary nation would actually fulfill the requirements of a legitimate social contract. The leases in a proprietary nation would do what Supreme Court Justices imagine the U.S. Constitution does—they would establish a contract between the administrators and the residents of the country.

2. The proprietor could establish rules that would make the nation less likely to be invaded by other nations. For example, the proprietor could forbid the use and possession of drugs that are outlawed by the USA, and, thereby, make it less likely that the USA would invade.

3. The proprietor could establish rules for settling disputes, punishing criminals, and compensating victims of crimes or torts. By including these rules in the leases that all residents agree to, the proprietor could establish a uniform system of law for the nation. This would solve the vexatious problems caused by the fact that there is no objective way to determine what punishment is exactly appropriate for any particular crime and the fact that there is no objective way to prove that one form of compensation is more fair than all others for any particular tort or crime.

4. The proprietor could achieve the benefits of zoning and the esthetic symmetry of a planned community without violating anyone's rights.

5. So-called market failures due to what economists refer to as externalities could be solved by adding appropriate clauses to the leases. For example, the proprietor could solve the problems of water and air pollution by stipulating appropriate rules for the use of water and air or by specifying a method, such as mediation or binding arbitration, to solve disputes involving pollution and other nuisances.

6. Because the administrators of a single-owner proprietary nation could have the ability to address all social problems, residents would have less incentive to demand the creation of a coercive, centralized State. Since a proprietary nation could conceivably have as many rules and regulations as a State, it is easier for people who believe in central planning to believe that a proprietary nation could work.

7. Double-entry bookkeeping would enable the proprietorship to track its income and expenses and its profits or losses, which would give it an objective way to measure the success of the administrators at satisfying the needs of the tenants.

8. As long as the proprietorship is a profitable enterprise it can be self-perpetuating.

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A single-owner proprietary nation would not appeal to libertarians unless it solved the following problems:

1. A single-owner proprietary nation might not allow any more freedom that the USA or other statist nations. So, even though a single-owner proprietary nation is, by hypothesis, morally legitimate, it might not be attractive to people who are interested in obtaining more personal freedom.

2. Unless safeguards are included in its design, a single-owner proprietary nation runs the danger of stifling competition in various industries. This would prevent a market from being developed in those industries and, as a consequence, it would prevent experimentation with alternative solutions to social problems and prevent information from being derived about which rules and methods work best.

3. The moral legitimacy of a single-owner proprietary nation rests on the legitimacy of its property title to all the land in the nation. It seems unlikely that one person, partnership, or firm could legitimately obtain title to enough land to create a nation. Typical free-nation plans involve negotiating with an existing State to purchase or lease land from them. Since States have no legitimate title to the land in the first place, the would-be proprietors of a free nation cannot obtain legitimate title to land in this way.

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The disadvantages of a single-owner proprietary nation could be reduced if the proprietorship is in the hands of enlightened libertarians.1

1. A libertarian proprietor would limit freedom as little as necessary to preserve the existence of the nation. For example, the proprietor, through lease contracts, might outlaw drugs banned by the USA but might allow other vices that the proprietor believes will not incite the USA to attack.

2. The proprietor could handle the problem of competition within the nation by refusing to grant monopolies in any industry. The proprietor could divide the nation into multiple, semi-autonomous communities, each of which could have its own rules established by its own subleases. This would allow competition between communities, which would yield information about which social rules work better. The overall proprietorship might limit its own role to establishing the minimum conditions necessary to preserve the safety of the nation.

3. The problem of obtaining legitimate title to all the land in the free nation seems to me to be the most difficult of the problems facing a single-owner proprietary nation. The proprietorship could establish legitimate ownership of some land by homesteading or through market transactions with legitimate owners. In this way, perhaps a very small nation could be established and recognized by the rest of the world. The proprietorship could gradually expand its territory by purchasing contiguous, or non-contiguous, land through legitimate market transactions or by accepting donations of land from sympathetic property owners seeking to join the free nation.

If the single-owner proprietary nation becomes an economic success, the competitive advantages of doing business under the terms of the proprietary nation could make it worthwhile for individuals and corporations to transfer title to their land holdings to the proprietorship or, better yet, to imitate it by establishing competing proprietary nations based on similar principles. D


 1 "A Model Lease for Orbis" by Spencer MacCallum in Formulations Vol. III, No. 3 is a master lease for a libertarian, single-owner proprietary community. MacCallum has done a great deal of thinking about this subject, and he had incorporated his wisdom in the details of this lease as well as in the explanatory notes that accompany it.

Roy Halliday, ironically, was involved in the Atlantis project, which spawned "A Model Lease for Orbis." In 1968, Roy became the second full-time resident of the Atlantis community, which was located in Saugerties, New York. Since Roy was working for IBM as a technical writer at the time, Werner Stiefel (the proprietor of Atlantis) asked him to write a business prospectus for the proposed free nation of Atlantis. Roy declined the offer because he did not think he had sufficient business and legal training. Fortunately, Stiefel found Spencer MacCallum and commissioned him to write a model lease for the proprietary nation. Spencer did a masterful job and has continued to refine the model ever since.


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