Crack-Up Capitalism Introduction: Shatter the Map - What Are Zones?
How many countries are there in the world? You probably know it’s about two hundred. But what if someone told you the real number of separate legal territories is way higher than that?
That’s where Quinn Slobodian starts “Crack-Up Capitalism” (ISBN: 9781250753908). And that someone asking the question was Peter Thiel, the PayPal co-founder and early Facebook investor.
Peter Thiel’s Thought Experiment
In 2009, Thiel posed a simple question. Imagine the year 2150. How many countries will there be? A thousand? Twenty? One? And what kind of world does each answer create?
Here’s the thing. Thiel wasn’t just playing a thought game. He had a clear goal. After losing big in the 2008 financial crisis, he was thinking about one thing: how to escape from democratic governments that collect taxes.
He wrote, flat out: “I no longer believe that freedom and democracy are compatible.”
His logic was straightforward. More countries means more places to move your money. And when countries compete for your money, none of them can risk raising taxes. So if you want more freedom (his version of freedom), you want more countries.
But what Thiel did not mention was that this fragmented world already existed.
The World Is Full of Holes
We all grew up looking at maps with neat colored patches. Each country has its flag, its anthem, its spot at the Olympics. That’s the version of the world we know.
But Slobodian says this picture is incomplete. The real world is full of holes. Inside those neat national borders, there are thousands of special legal spaces. City-states. Tax havens. Free ports. Duty-free districts. High-tech parks. Innovation hubs.
He calls these zones. And they are everywhere.
So What Exactly Is a Zone?
At its simplest, a zone is a piece of land carved out of a country where normal rules don’t fully apply. Taxes might be lower or gone entirely. Regulations are lighter. Investors get to set their own terms.
Zones come in at least 82 different types. Special economic zones. Export-processing zones. Foreign-trade zones. Some are small, no bigger than a single warehouse. Others are entire planned cities like New Songdo City in South Korea or Neom in Saudi Arabia.
And there are over 5,400 zones in the world right now. One thousand new ones appeared in just the last decade. That’s far more separate territories than Thiel’s dream of a thousand countries.
From Factories to Tax Havens
Zones work at both ends of the wealth scale.
At the bottom, you have factory zones. Often surrounded by barbed wire, these are places for cheap labor and cross-border manufacturing.
At the top, you have tax havens. These are the places where big corporations hide their profits. The economist Gabriel Zucman calls this “the hidden wealth of nations.” Offshore tax shelters hold an estimated $8.7 trillion of the world’s wealth. The US alone loses about $70 billion a year in tax revenue because of corporate money flowing to these low-tax zones.
Here’s a fun fact. Some Caribbean islands have more registered companies than actual people living there. Barack Obama once pointed out Ugland House in the Cayman Islands, a single building with twelve thousand corporations registered inside it. “That’s either the biggest building or the biggest tax scam on record,” he said. But here’s the problem. It was all perfectly legal.
Perforation, Beetles, and Lace
Slobodian uses a great word for what’s happening: perforation. Capitalism works by punching holes in the nation-state. Each zone is another hole, another place with different laws and usually no democratic oversight.
He mentions philosopher Gregoire Chamayou, who compares it to a longhorn beetle gnawing away at a structure from inside. You don’t see the damage until it’s too late.
Then there’s the lace metaphor. Lace gets its pattern from the gaps. The fancy term is “voided patterning.” To understand how the world economy really works, you need to learn to see those voids.
Where Are All These Zones?
Most zones are in Asia, Latin America, and Africa. China alone has nearly half of them. Europe and North America together account for less than 10 percent.
But the strongest supporters of zones are often in the West. They see zones as experiments in what Slobodian calls “micro-ordering.” Small-scale alternative political setups that prove free markets can work without big government. The Heritage Foundation’s Stuart Butler wrote back in 1982: “Localized freedom can rot the foundations of the unfree state around it.”
The strategy is simple. Start small. Create a zone where capital flows freely. Then watch as other places are forced to copy you just to keep up.
Soft Secession and the Zone at Home
Here’s something Slobodian points out that I found really interesting. The zone is not just “out there” in some far-off country. It starts at home.
You don’t have to formally secede from your country. You can do it quietly. He calls it soft secession. Pulling your kids out of public schools. Converting your savings to gold or crypto. Moving to a state with lower taxes. Getting a second passport. Moving to a tax haven.
And gated communities? Those are zones too. By the early 2000s, about half of all new developments in the American South and West were gated and master-planned. It’s a global thing. From Lagos to Buenos Aires to India, people are building private mini-governments behind walls.
A venture capitalist who worked for Thiel came up with a clever name for this: underthrow. Not overthrow. Underthrow. You don’t seize power. You just quietly opt out. You treat politics like shopping. Don’t like the product? Go somewhere else. No obligations to anyone.
Globalization’s Two Faces
Slobodian reminds us that the 1990s weren’t just about the world coming together. Yes, the Berlin Wall fell. The WTO, the EU, and NAFTA were created. But at the same time, the Soviet Union broke apart. Yugoslavia dissolved. Somalia lost its central government for over a decade. Walls went up everywhere. More than ten thousand miles of borders worldwide have been hardened with barriers.
Globalization has two forces working at once. It connects us. And it tears us apart.
Capitalism Without Democracy
And here’s the big idea of the book. Many of the people pushing for more zones don’t just want lower taxes. They believe capitalism works better without democracy.
Stephen Moore, one of Trump’s chief economic advisors and a Heritage Foundation fellow, said it plainly: “Capitalism is a lot more important than democracy. I’m not even a big believer in democracy.”
That’s not a slip of the tongue. Slobodian argues this is a well-thought-out position that has been growing for fifty years. Hong Kong under British colonial rule, apartheid-era South African homelands, and the authoritarian states of the Arabian Peninsula all served as “proof” to these thinkers that political freedom might actually hurt economic freedom.
What This Book Will Show Us
Slobodian tracks these “crack-up capitalists” around the globe for half a century. From Hong Kong to the London Docklands. From Singapore to late apartheid South Africa. From the American South to Somalia to Dubai. And finally into the virtual world of the metaverse.
Their vision? An agile, mobile fortress for capital. Protected from regular people who might want a more fair distribution of wealth.
As Slobodian puts it: a hundred years ago, the robber barons built libraries. Today, they build spaceships.
That one line stuck with me.
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