Crack-Up Capitalism Chapter 9: The Legal Bubble-Domes of Dubai
Think of a city where walking from one neighborhood to the next is basically like crossing a national border. Different laws. Different courts. Different rules about what you can own and what you can do. That is Dubai.
In Chapter 9 of “Crack-Up Capitalism” (ISBN: 9781250753908), Quinn Slobodian shows how this emirate on the Persian Gulf became the ultimate experiment in what he calls “legal bubble-domes.” Not just one big free trade zone. A whole patchwork of zones, each with its own legal system, stacked inside a single city.
From Gold Smuggling to the World’s Tallest Hotel
A few decades ago, Dubai was a small outpost known mostly for pearl diving and gold smuggling. Houses were built from coral and sand. British banks sold tiny gold bars to buyers in Dubai who would then strap them to their bodies and smuggle them on speedboats over a thousand miles to Mumbai. The local customs officials had a great line for this: “Trade out of Dubai is not smuggling but free enterprise.”
Then oil showed up. Dubai confirmed commercially viable oil in 1967 and sent its first tankerful to Britain two years later. By the end of 1975, oil revenue was $600 million a year. The money changed everything.
In the first decade of the 2000s, Dubai’s economy grew 13 percent a year on average. That’s faster than China. Skyscrapers went up at a floor every three days. The population doubled and the city’s footprint quadrupled in just six years. Plans were announced for an amusement park three times the size of Manhattan. They built artificial islands shaped like a palm tree and an archipelago shaped like a map of the world. Then they announced a sequel: the Universe.
A British construction worker said it best. A major property development in the UK would be 150 acres. The main free zone in Dubai was a hundred times larger. “In two years they have built and opened a metro system,” he said. “In the UK it would take that long to refurbish one station.”
Capitalism Without Democracy
So how did they do it? Here’s the thing. Dubai was, and is, a case study in capitalism without democracy. No popular elections. No free press protections. No rights for non-citizens. The CIA noted as early as 1985 that in Dubai “ideology is dismissed as irrelevant to business.”
Power and ownership were concentrated in the figure of the sheikh, who was often called the CEO of Dubai, Inc. The executive council was made up of heads of state-owned companies, not elected officials. No public debates. No “not in my backyard” protests. One architectural critic wrote the city was an advertisement: “Look at what enlightened, corporate, efficient and non-democratic government can do.”
Mike Davis called it “Milton Friedman’s beach club.” A society with no income taxes, no trade unions, and no opposition parties. But here’s what’s interesting. Friedman himself never mentioned Dubai. It did not come up in discussions about economic freedom indexes where Hong Kong and Singapore were the stars. Dubai’s real fans were further to the right. Anarcho-capitalists. Neo-reactionaries. People who believed monarchy was actually better than democracy because monarchs take care of their territory long-term, while elected politicians just grab what they can during their time in office.
Curtis Yarvin, the tech worker and blogger who wrote under the name Mencius Moldbug, was one of the loudest voices. Dubai proved to him that “politics is not necessary to a free, stable and productive modern society.” Instead of citizens, it had customers. No bonds of civic belonging. No abstract ideas of obligation. Just contracts.
By the early 2000s, about 95 percent of Dubai’s population were foreigners.
The Patchwork of Zones
But the shiny skyscrapers and artificial islands are not what truly made Dubai special to libertarian thinkers. What they loved was harder to see: radical legal pluralism. Zone after zone, each under its own “regulatory and legal bubble-dome,” each with a distinct set of rules.
It started with Jebel Ali. Queen Elizabeth herself came to open the port in 1979, which would become the world’s largest man-made port at sixty-six berths. Dubai carved out the Jebel Ali Free Zone as a formally extraterritorial space. Five thousand acres of land with 100 percent foreign ownership allowed, no corporate taxes for fifteen years, no personal income taxes, full profit repatriation. And no labor unrest, because the workforce was imported from South Asia and constantly threatened with deportation.
Jebel Ali became the template. New zones kept popping up. Silicon Oasis for tech manufacturing. Dubai Healthcare City for medical companies. Knowledge Village for university branches. Media City and Internet City, where web access was unfiltered. Aviation City, Cargo Village, Aid City, Humanitarian Free Zone, Exhibition City, Festival City, Flower City. In 2006, $100 billion in projects were underway.
The most striking was the Dubai International Financial Centre, opened in 2004. Its regulator, an Australian named Errol Hoopmann, said the goal was to take 110 acres of land, empty it of all existing laws, and “write our own laws to fill up that vacuum.” He compared it to the Vatican. “A state within a state.”
Workers Behind Barbed Wire
But there is a dark side that the Brand Dubai media office would rather you not think about. The whole system ran on cheap labor from South Asia. Workers came for wages higher than at home, but they had no right of residence. Hire, fire, deport. That was the cycle.
While wealthy expats from richer countries enjoyed all-you-can-drink brunches and air-conditioned suburbs, manual workers lived in barbed-wire encampments in the desert. Thin legal protections meant many of them were not even paid at all. The suburbs offered Spanish villas, Santa Fe style, Bauhaus cubes. The labor camps offered bars on bus windows.
Dubai Goes Global
Around the turn of the millennium, Dubai started exporting its zone model. A state-owned company called DP World combined transportation, real estate, logistics, and light industry. It took over ports in Saudi Arabia, Malaysia, and five African countries. It bought a US container terminal company. It partnered with the Indian Tata Group for logistics parks. It signed deals in Russia, Libya, and Senegal. Romania came looking.
In 2006, DP World bought P&O, the historic British shipping line that once serviced the British Empire. The old coaling stations and naval bases that held the empire together were now run by the empire’s former possessions: Singapore, Hong Kong, and Dubai. Dubai bought 20 percent of the London Stock Exchange, a stake in the London Eye, and put the Emirates name on Arsenal’s stadium.
A former semi-colony was now managing the gateway to London’s most important waterway through London Gateway port.
But here’s the problem. Dubai’s rise was hard to separate from US military power. The UAE hosted American military equipment since 1991. Jebel Ali became the US Navy’s busiest port of call. The economic boom rode the oil price surge that followed the invasions of Iraq and Afghanistan. Halliburton, the oil and construction giant, relocated from Texas to the Jebel Ali Free Zone in 2007.
The Crash and the Dream That Remained
It all hit the wall in 2008. The global financial crisis forced DP World to suspend loan repayments. Dubai needed a bailout from Abu Dhabi. The planned Trump Tower on Palm Jumeirah was never built. Jafza pulled out of a $600 million deal in South Carolina.
But the model survived. And the dream of people like Curtis Yarvin went even further. He proposed breaking Iraq into its old Ottoman provinces and putting each one under a for-profit “sovereign security corporation.” These companies would be publicly traded on the Dubai financial exchange. People born in the former Iraq would get a share but no vote. Voting shares would be sold at auction. No political freedoms. No civil liberties. “The business of Iraq will be business, just as in Dubai.”
In one of his provocative asides, Yarvin wondered whether Dubai’s Sheikh Al Makhtoum should be allowed to run Baltimore. Others in his circle asked a different version: what if Silicon Valley ran Honduras?
That question would become the subject of the next chapter. The sovcorp was about to get closer to reality.
This post is part of a series retelling “Crack-Up Capitalism” by Quinn Slobodian (ISBN: 9781250753908), chapter by chapter.
Previous: Chapter 8: A Business Clan in Somalia