I knew Adam from a semi-private online site called Dodge City, a subsidiary of Laissez-Faire City. LFC was an organization that had some publicity in the mid-nineties for gathering money in a trust to found a free city. Unfortunately, it couldn't find a willing government with reasonable land, and the project lost steam. It was reinvented as a project to create an independent, sovereign state in cyberspace, with physical territory as a longer-term goal. Dodge City was the most visible arm of the project to outsiders, being a sort of web-based BBS with message groups, internal email, and access to various LFC projects being tested, such as an internal stock exchange.

I can sympathize with LFC's general course of action quite a bit, since physical territory is my long-term goal, and I see cryptoanarchy as a useful short-term path to decrease the power of governments. However, good as they are on philosophy, it seemed from my experiences that LFC and DC had some serious issues with implementation. Being an argumentative sort, quick to criticize what I see as hypocrisy, I quickly got into some heated arguments online under my nickname of Rational Anarchist (Rash for short).

Despite mouthing libertarian philosophy, I found the individual in charge of DC (we'll call him "Ben") to be autocratic, angered by being questioned, flawed in his understanding, and in the habit of censoring messages he didn't like. Some examples will serve to illustrate the point. LFC is funded by grants from individuals who agree to be "Founders" for around $5K each. The ostensible purpose is to create a suite of services for individuals. However, at the time I was on DC, a program was being developed by LFC which involved spending a substantial amount of money to sponsor teams of kids across the world on internet projects. Given that the main services which LFC had been created to provide were still not working, and the rate of improvement seemed to be very slow, one DC user asked the obvious question "Why are you spending all this money on a long-term program when none of the services you promised for founders work yet, instead of hiring more programmers?".

Rather than receiving reasonable explanations (or even silence), he was attacked, not for his arguments, but for questioning those in charge. I stepped in and argued vociferously on his behalf, and received several private emails from people who were glad to see someone standing up for a change. There were other similar occurences during my brief tenure of immediate hostility towards any doubts or negatively phrased question. I found the management's reactions to be extremely unprofessional, and they greatly increased my doubts in the whole venture ("Methinks thou dost protest too much").

As an example of Ben's inconsistent vision, consider the Bot, which is an account in the DC system. The Bot is surrounded by a great deal of rhetoric about how it is completely anonymous and independent, divorced from the real world, unrelated to conventional physical structures, etc. This is a pretty standard description of an online persona. But DC then goes on to insist that a cardinal rule of the system is that each human individual only have one Bot! This association with physical reality directly contradicts the previous claims, besides being impossible to monitor or enforce without destroying the very anonymity that is the foundation of the Bot's definition. Unenforceable rules reduce users faith in a system - an important lesson that the governments of the world have failed to learn. I had hoped for more sense here, but was disappointed.

My biggest arguments in DC were in regards to something called the Digital Monetary Trust, an anonymous online banking scheme being developed by LFC. While I think this is wonderful in theory, I had some disagreements with the architecture of the system, as described in some publically available documents. It seemed to me that the DMT displayed the same faults I saw in DC: it sounded good on the surface, but a close examination revealed a design that betrayed deep biases towards centralization and control, and failed to make full use of the possibilities of computers and cryptography. Both enterprises seemed to be designed by people who, while proclaiming their allegience to the new world, had one foot firmly planted in the old.

I wrote a critique of the DMT, which included some of these psychological evaluations. I was attacked for the latter, with little regard for my cryptographic comments (and what there was was from people who clearly didn't understand them). There was even the suggestion (which I found very amusing) that I was from some mysterious governmental agency, trying to sabotage their project. The eventual result was that my account was suspended due to my arguments and criticisms, which I found extremely hypocritical given the supposed libertarian ideals of the place. Also the fact that they silence dissenters is a bad indication as to the viability, honor, and realism of the project. My attention being taken up by other things, I ignored DC, and although I toyed with the idea of creating an anti-DC site, other projects took priority.

The one correspondence I kept up from DC was with Adam Selene. He was computer-savvy and understood cryptography and security, which many of those on DC did not (this boggled my mind, these being fundamental technologies for accomplishing their goals). He was intelligent, rational, and philosophically an anarchist, which stood in stark contrast to the sort of laissez-faire in theory, fascism in practice endorsed by Ben. I expected to find DC and LFC swarming with Adam-like people, but since there was just him, I kept in touch.

He had mentioned moving to Costa Rica, so when the trip came up I dropped him a line. It turned out that he had moved there a month or two ago, so we agreed to meet. While he does not work directly for LFC due to differences in philosophy, he is currently working for a company which is socially associated and located in the same buildings, and lives nearby. Thus he was able to serve as an introduction to the LFC community...

The City Club could, if properly designed, have functioned as a social hub not only for LFC but for other technomads and libertarian expatriates. It seems as though this was not its intention, however I think it is important not to underestimate the power of communities to help social and political movements. Their Consulado across the street, a large complex with offices and housing, was more of a communal center, but being walled and guarded it was private and internally oriented. The impression I got from the City Club was somewhat confirmed by other descriptions of the LFC (and especially DC) scene: political bickering, secretive personalities, and an internalist perspective that seemed paradoxical for what is ultimately a political movement.

As an example of the internalism, one of the issues that I had raised with the DMT was trust. The DMT's cryptographic structure means that the user must trust the DMT completely, despite alternate schemes (sketched in my critique) allowing for minimal trust. It seemed to me that the DMT was focused on a paradoxical market too paranoid to trust traditional physical banks, yet not so paranoid as to be concerned about the trustworthiness of the DMT itself. One of the LFC programmers addressed this concern with the DMT in a conversation during my visit by saying "Well, I lived with [one of the principal authors of the DMT] for several months, and I know I trust him". I made the obvious response: "Sure, but isn't people who have lived with one of the principals for several months a pretty small market?". He agreed, but I found the fact that he bothered to present personal evidence to be reflective of the conflict between LFC as a tool for the in-group and LFC as a tool to change the world.

A similar piece of evidence was a brief discussion with another LFC programmer about the acrimony surrounding my presence in DC. He said that the DC folks don't expect to be questioned because they mostly all know each other. Its their baby, and they resent outsiders telling them how to run it. The fact that they are attempting to get users to pony up money for their services and planning an eventual major rollout clashes with this attitude, and I was one result of that clash. Real users expect real products, and real clients expect professionalism - and a response to comments on features and security different than "How dare you question us?"

I found it both surprising and amusing that Rash's brief crusade against hypocrisy had been a big deal at the time, with a lot of DC folks getting pretty pissed off. Rash was even mentioned once during a conversation by someone who had no idea that I was he, causing Adam to cast an amused glance my way. Fortunately I was not the only one fed up by DC's censorship, and some major changes were occuring while I was there, including DC being weaned from the LFC tit.

The evolution of the LFC/DC structure embodies (to my mind) their flawed vision, so I think its worth going into. Muni, or the LFC Municipal Corporation, is funded by money from the LFC International Trust, which gets its money in turn from those who agreed to be Founders (I believe). Muni then funds all the LFC projects, including their stock exchange, PGP webmail system, and DC. To the economically minded folks out there scratching their heads, I agree with you. This government-like agglomeration of heirarchal subsidies creates a poor incentive structure, failing to harness the spirit of laissez-faire competition which these folks claim is their guiding force.

While the whole thing is funded by voluntary payments (unlike a government), the bulk of those payments currently is from founderships, not the provision of services. So the main incentive for DC, for example (inasmuch as they have any incentive, given their lack of competition and Muni subsidy) is to get people to sign up as LFC Founders - not to make those Founders happy later. Adam had been a staunch opponent of this system, and while they eventually came around to his side, the fact that any argument on the subject was necessary raises some major questions in my mind about the LFC team's real understanding of their stated principles.

While I was there, the whole structure was being shaken up. Muni was divesting itself of its subsidiaries, including DC, letting them sink or swim without its funding. Muni itself was planning to specialize in one service, and its subsidies from LFCIT are scheduled to end at the end of the year. Laissez-Faire City's internal system will, finally, be a little more appropriate for their name, and I predict and hope that it will increase their rate of progress.

I learned that others had also been bothered by DC presenting a negative impression of LFC to outsiders. My read on why DC became so prominent is that DC provided a concrete, interactive community, with news updates and discussion boards and access to LFC services. This filled a sorely-needed market niche, and caused DC to appear as more of the public face of LFC than some considered desirable.

I was far from the only person to be bothered by the censorship on DC, and with the Muni splitup other news forums were being planned. I was told that Ben had said something like "No one will read or use unmoderated [ie uncensored] news forums - they'll be full of spam and flames and arguments!". While Usenet is indeed full of spam, flames, and arguments, it is rather far from the truth that no one reads or uses it. I look forward to participating in LFC forums where deletion is not an available form of response to criticism of the establishment.

The LFC activists embody these ideals, as they have chosen to live in a country with more freedom, to free their finances from funding the terrorist american government, and to dedicate their professional efforts towards increasing global freedom. They have demonstrated true committment to their causes. I may see flaws in their understanding, but I have the utmost respect for their courage and their choice of vocation. "Real programmers ship", and it used to be said that "cypherpunks write code", but as that no longer seems to be true, someone sure needs to.

I had an interesting discussion of intellectual property in the Libertarian/Anarcho-Capitalist setting with Josh. Josh was concerned with the ability of an author to profit from his reputation, and to receive voluntary donations from readers, both of which require authentication of authorship. After some arguments stemming from a gut anti-IP reaction on my part, Josh helped me realize my mistake. Much of my anti-IP belief stems from the lack of excludability. Unlike a hammer, if I have a digital copy of a book, and I give you a digital copy, we both still have it (as does everyone else with a copy), so having a third-party (such as the government) prohibit that copy is prohibiting a voluntary transaction which causes no coercive harm to others. However, known authorship, and a revenue stream associated with known authorship, which Josh was interested in protecting, do have the property of exclusivity. If I was the sole author of book A, you cannot also be the sole author. One of our claims must be false.

These desirable institutions can be accomplished solely through voluntary contracts and the libertarian anti-fraud provision. Consider a contractual statement associated with a book which says "The author is XXX and the bank account created for him to receive proceeds from the book, which may now be owned by someone else, is YYY, click here to send ten cents". If XXX or YYY are false, this constitutes fraud. The author can help prove his authorship through the use of an anarcho-capitalist institution which authenticates such connections. For example, he could send in drafts periodically, signed by his private key, or use some other system.

These enable the author to use capitalist funding methods such as selling stock or bonds based on his current or future revenue streams, letting his reputation provide leverage for future projects. Hernando De Soto's _The Mystery of Capital_, which was clearly an influence on Josh (and I skimmed briefly while there) suggests that many of the economic difficulties of the third world lie in an inability to use such leverage, due to insecure property rights and inefficient government institutions related to such rights.

I had dinner with the City Clerk, his girlfriend, and Adam, and we discussed a number of things, including how CR is as a residence for libs (my data on that topic in a seperate email). The topic of 9/11 came up, and (as with discussion on expatriation), I found points of view that I had argued vociferously in the states taken for granted here. We expressed mutual horror at the bloodthirsty jingoism coming from the Objectivist camp, and it was suggested that crises such as this reveal who the true libertarians are and who are closet statists. While the current tightening of state power is unfortunate, perhaps it will have the positive result of impelling people to leave (me, for example), and cause eventual failure/revolution/drastic change sooner.

Adam mentioned that Grenada's cash-for-citizenship program was just suspended due to worries about terrorism, and suggested that I take advantage of Dominica's (the other well-known, above-board, low cost program) as soon as possible. I recall that Dominica's program involves citizenship for one's spouse at no extra cost, so perhaps this is an auspicious time for Katy and I to get married. Purely for convenience, of course, as both of us have serious objections to that state/religious institution, with its oft-hypocritical undying vows and high failure rate.

Several of the LFC folks, including Adam, seem to speak very little spanish (less than I've been able to scrape up in memories from middle school), which was a bit strange to me. Communication seems like such a basic skill. I did without it in Budapest, but that was due to the utter peculiarity of the language and not lack of trying. I can't imagine living in a romance-language country and not at least working on the basics.

Besides the City Club and Consulado near San Jose, many LFC folks have land on the Nicoya peninsula, and some live there. LFC has a project to develop housing there, but its on hold while they work on other things. I was quite interested in it as a community sort of thing, and hope to check it out next time I'm in town.

After talking late into the night, I look for the suggested guest bed. The first door I opened was to a room with a bed with a woman in it. After briefly thinking to myself "Wow, what hospitality!", I realized that this must be the wrong room, and recognized my hostess, who pointed next door. Apologizing, I entered the right room and crashed.

Note: LFC has since been dissolved, with the particular individual and style of business which concerned me being the major reason. For an excellent account of this, see Scamdog's page.

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