Free Cities Are Coming, With or Without Honduras

Michael Strong on the idea whose time has come

Roatan, Honduras

The Special Development Regions initiative in Honduras has been of particular importance to The Stateless Man, since it has offered what I describe as “The Frontier of Competitive Governance.” In addition to a full episode on the topic in February, I’ve examined police state activities and safety in Honduras and have published a supportive article with Liberty Blog and La Conexión.

The plan was and remains “the world’s first free city program… to create new cities on empty land with semi-independent governance systems under Honduran and international oversight.” A successful SDR or free city, I’ve noted, would have positive ramifications far beyond Honduras.

First, it would hold oppressive governments accountable. A vote with one’s feet is more powerful than a vote at the ballot box, so we [could] see people from [the United States] and other parts of the world departing for Honduras.

Second, other nations… considering similar initiatives [would be more likely to replicate and refine the Honduran experience]. In a few decades, we [could] see thriving and competing free cities dotting the globe and bringing prosperity to many.

Interest in and momentum for the success of the free cities in Honduras was building, and John Stossel even featured the idea on Fox Business. Unfortunately, in October the Supreme Court of Honduras ruled the prevailing approach unconstitutional. That was despite the initiative, as of July 2011, being in the Honduran Constitution.

A part of the Constitution not being constitutional does not make a lot of sense to me. Regardless, that ruling put a stop to the initiative, at least for a year or so—and the two leading promoters, Grupo MGK and Future Cities Development, have suspended their activities in the country.

The CEO of Grupo MGK, Michael Strong, came on The Stateless Man this month to explain why the Honduran initiative faltered and what remains for the future of the free cities movement. Listen here or below—19 minutes.


The good news is that Strong says interest continues to grow for the idea, regardless of the setback in Honduras. He receives multiple emails each week from people interested in assisting with similar projects in their home countries, and he identified Belize, Jamaica, Senegal, and Morocco as likely candidates for the near future.

Even people from Native American tribes within the United States have expressed interest, so the pressure is building for a free city to come to fruition in one of these jurisdictions. At that point, there will be a clear example to point to and similar ventures are likely to follow in quick succession.

“We certainly believe that this is an idea whose time has come somewhere,” Strong said.

He attributes the setback in Honduras to a flurry of misrepresentations by political opponents who sought to inflame fear and hatred. In particular, opponents construed the venture as a loss of sovereignty, when in fact these regions would remain within Honduras and function more like a private home owners association.

When he and his colleagues had time to sit down and talk with people there, “despite the negative opinion they had heard from the media, they turned around and loved the project.” Latin America may be “the most anti-capitalist region on earth,” Michael said, but people everywhere still want jobs.

We agree that conventional “economic development” and foreign aid are failures. As an alternative, one that would enable a swift path to prosperity, the free cities idea appears to be the best game in town. One need only consider the link between employment prospects and capital investment—and in order to attract capital investment, free market institutions such a property rights are key.

For those of us eager to follow and support the free cities idea, Strong recommends updates from Radical Social Entrepreneurs and Grupo MGK., while under construction right now, is likely to be back running again soon. For a deeper understanding of the case for free cities, here is a lecture from Michael Strong at the Future of Free Cities Conference in Roatán, Honduras, in April of 2011.

Fergus Hodgson About Fergus Hodgson

Fergus Hodgson is an economic consultant, financial editor, athlete, and traveler. He holds degrees in economics, finance, and political science from the United States and New Zealand, and he has lived in eight countries. Follow @FergHodgson.


  1. It’s unfortunate things didn’t work out in Honduras, but I’m definitely optimistic about the future of free cities and Michael Strong’s work. It seems like in addition to working with governments and businesses, there’s a need to work with the people and educate folks on the benefits and realities behind free cities.

    • Tony Escobar Agreed. I see it as just a matter of time, as more people awaken to the need for an open market that allows investment and economic activity to flourish. Even just the response to this article gives me confidence.

  2. I will be following, we have developed a concept to finance housing that should work for this idea.  
    Ron Reeser

  3. joey2times says:

    Great stuff.
    It’s time.

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