Joyce Brand
Tuesday, January 21, 2025
For years, many believed that only governments or non-profits could provide public goods like infrastructure, security, and dispute resolution. But for-profit companies, from hotels to shopping malls, already deliver these services effectively through voluntary contracts. Consider the MGM Grand in Las Vegas—it offers governance, infrastructure, and security much like a small city, all while remaining profitable.
This aligns with Spencer Heath’s vision that landowners are uniquely equipped to provide public goods. Spencer MacCallum expanded this idea, comparing multi-tenant properties to homeowner associations (HOAs). His research showed that entrepreneurial communities, or entrecomms, are far more effective.
The Problem with Subdivisions and HOAs
In traditional subdivisions, developers sell parcels of land and hand over governance to HOAs. While HOAs aim to protect property values, they often become politicized and rigid. Covenants can prevent needed changes, and disputes over shared costs—like installing a playground—leave some residents dissatisfied. With fragmented incentives and no clear leadership, HOAs struggle to adapt.
Why Entrecomms Work Better
Entrecomms operate under a single owner who manages the community through contracts. This model has several advantages:
1. Flexibility: Owners can adapt to market demands, such as building office space or new amenities, ensuring the community evolves organically.
2. Dispute Resolution: Clear incentives drive owners to resolve conflicts efficiently, keeping tenants satisfied.
3. Aligned Interests: Profits depend on tenant satisfaction, creating a feedback loop where community well-being drives success.
4. Tenant Selection: Owners can curate communities based on shared values, fostering harmony and inclusivity.
A Real-World Example: Morazan
The semi-autonomous zone of Morazan exemplifies the entrecomm model. Here, landowners provide essential services, infrastructure, and safety while adapting to tenant needs. Their ability to respond quickly to market demands ensures a thriving, flexible community without the bureaucratic delays typical of governments.
Rethinking Governance
Entrecomms prove that for-profit governance works—and excels. By aligning incentives, fostering adaptability, and prioritizing tenant satisfaction, they create thriving communities. As more examples like Morazan emerge, entrepreneurial communities could reshape how we think about governance and urban development.
👉 Read the full article on Substack
CEO Of Morazan Model Association
I am a woman who is passionate about freedom. I understand that freedom is an overused and misunderstood word. By freedom, I mean responsibility — specifically the responsibility of living without allowing any self-proclaimed rulers to make my moral judgments for me. A coercive government can impose negative consequences on me for disobeying its edicts, but I am free to the extent that I recognize my own responsibility for the risks I choose to take in following my own moral judgments. That is what it means to live free in an unfree world.
The label that I use to describe myself is voluntaryist because it is the clearest word I can think of to describe my most important belief — that all interactions between human beings should be voluntary. There is never any moral justification for the initiation of violence or coercion. The Morazan Model Association explores the implications of that core belief.
© 2023 – The Morazan Model Association. All rights reserved.