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The creation of zones has not always meant gleaming towers and crowded ports. In South Africa, market radicals seized on apartheid policies to put the zone offense into action. Ciskei was one of several territories that the apartheid government designated a homeland for the Black population. Under this policy, Black South Africans were stripped of their citizenship and told they were citizens of these new pseudo-states instead; over 3.5 million people were forcibly relocated as a result. Seeing these developments, libertarians hoped that the homeland could work as a kind of zone, Slobodian explains; with the help of economists who believe in the power of markets, prices and incentives, it could become, depending which paper you consulted, the African Hong Kong or Africas Switzerland.

They got their chance to weigh in directly in 1984 when Ciskeis leader, Chief Lennox Sebe, put together a commission on economic policy. The head of the commission was Leon Louw, a South African inspired by Hong Kong, Friedman, and Friedrich Hayek. The model he proposed was the Export Processing Zone, which essentially created an internal offshore space with few regulations or rules to turn off investors. The strategy was to undercut countries like Taiwan by paying even lower wages. This is like Taiwan 30 or 40 years ago: no competition, cheap labor, one investor enthused. Rapid industrialization followed, as did violent state coercion: the would-be libertarian utopia operated hand in glove with the South African security forces, cracking down on dissent and any attempt at labor organizing.

In a similar instance of opportunism, market radicals also took an interest in war-torn Somalia in the 1990s. In that story, Michael van Notten, a prominent Dutch libertarian thinker and attorney whose claim to fame was the idea of the tax-free T-zone, would take the lead. Van Nottens signature scheme called for ending taxes in certain strategic locales to arouse what one economist called a stimulating jealousy in the surrounding area. In this way, lower taxation might spread by osmosis as communities raced to the bottom in order to remain competitive. In the Horn of Africa, he called for the creation of a society with no central government, ruled instead by judges rooted in the legitimacy of traditional Somali law. Individual Somali clans, as van Nottens Somali wife explained, would be able to profit from their statelessness by opening areas within their tribal lands for development, inviting businessmen and professionals the world over to come to take advantage of the absence of a central government or other coercive authority.

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The Plan to Split Democracies Into Tiny Pieces - The New Republic