The recent move by Buckhead county to seperate from Atlanta city and create what I have outlined elsewhere as a private “sovereign community” has demonstrated, I believe, how a principality could come about in real terms. This development had me thinking about how one could use similar measures to transform the very areas these communities are seeking to escape by rebranding them as sovereign corporations.
To turn a community- be it a large city or a small residential neighborhood- into a corporation, all that would be required would be a few basic restructuring steps. First, demarcate the boundaries of your community. This is a fairly simply process; we see many examples in affluent gated communities, which have gated walls and on-site security manning the entrances to control who comes and goes. Next, file for divorce from the surrounding area. Then you perform a market valuation and issue shares, allowing individuals to invest in your community.
Initially, the only communities likely to follow these steps (as Buckhead County have signalled they are willing to do by an 80% majority- with the vote taking place next year) and be capable of providing for their own security will be those with considerable pools of wealth. Buckhead is a very affluent area, and no doubt it’s secession will deprive Altlanta city of a large cut of its tax income. In refusing to address the rising crime rates, these cities are signing their own death warrants by forcing their most productive areas to remove themselves from the situation- and with it, their wealth income.
So I decided to perform a thought experiment whereby I would take an area renowned for crime and poverty and attempt to transform it into an affluent sovereign community within the span of a decade or so.
Firstly, let’s create a fictional corporation, called Company A. This company decides it’s going to revitalize the infamous Gipton Estate, an impoverished council estate in the city of Leeds inWest Yorkshire, noted for it’s high crime rate (the 3rd highest in the city), and a place where I spent my early years before settling in Horsforth.
Sidestepping the issue of this estate being Leeds City Council property, Company A has decided to craft a scheme whereby Gipton can be gradually improved and transformed into an affluent and attractive place to live- a far cry from its current situation.
The steps for creating such a corporation are relatively straightforward. Firstly, you need a name and address for the company. Then you register your company with Companies House. The company must have at least one director and one shareholder. Next, draft up its articles of association (agreed rules about running the company); then you need to register it for Corporation Tax.
The main problem with Gipton, as highlighted above and a point on which everyone from with the area will agree, is it’s crime rate. There have been numerous previous attempts to address this issue; all have failed largely because the solutions proposed have been based upon the fallacy that there are no bad people, only bad circumstances. The reason for the crime, it is said, is that the young people of Gipton are merely bored and have nothing better to do than set cars on fire and cause havoc instead of attending school. This explanation however does little to answer for the adult criminal element. The reality of the situation however is that the area is populated by thoroughly distasteful people.
Growing up in Gipton was an illuminating experience and a stark lesson in human nature; the area had been left to fester by the police and other public services thanks to the general inhospitality and violence of the people who lived there. Drug dealers openly did business on street corners; used condoms and solvent cans littered back alleys; packs of stray dogs roamed the streets, tearing into rubbish bags that were often left out and would attack anyone who got too close; fire crews were called out most nights to put out stolen cars that were set ablaze in the middle of the street, having been broken into and driven around the estate by drugged up hooligans who then crashed them once the vehicle ran out of petrol; burglaries were common, as were muggings and violent assaults. Whole streets in the estate (such as Casterton Gardens) were abandoned and boarded up, with weeds growing over the roads. These dilapidated houses were regularly set on fire too. My mother, just one of the many single teenage parents who were settled there by the Council in the 80s/90s (and whose children would grow up fatherless, to continue the cycle of delinquency) had to clean human excrement smeared on the walls of her new home that was left there by the previous residents. The whole place was a waking nightmare. It has improved somewhat in the past decade, but the area is still avoided by most people and for good reason.
One of the reasons for the estate’s youth woes is that the children are not instilled with any form of discipline or values. The parents speak to their children like absolute shit, most people settled there are criminals and the ones who aren’t are generally just rough and violent mannered. The fact is simply this- the people who live in and around Gipton are not pleasant folk.
Of course, despite the vast majority of them being thoroughly antisocial and incapable of ever being incorporated into polite society, one thing the saner residents can agree on is that the crime needs to go. This is the angle from which we will approach the revitalization project.
So, Company A has to first convince the majority of Gipton residents to contribute toward a payment scheme, one which will employ a private security firm to provide for the services normally fulfilled by the police; and a private cleaning team to provide for the services normally fulfilled by the City Council (a drive around the estate will reveal that neither of these services is currently being provided for). This payment scheme will not be an easy task, given the general lack of forward planning skills on the part of the residents. However, suppose we somehow manage to convince most of the residents to pay in by contributing £1 a week to the scheme, with those who don’t contribute being made up for by those offering to contribute over the £1 minimum. There are around 75,000 people currently living in the Gipton Estate. That brings us £75,000 in weekly capital to provide for a private security contract and street cleaning services.
Perhaps we could split the estate into four quadrants to roll out the scheme in stages. We focus on implementing the scheme in one small, easy to manage quadrant to begin with, and when this pilot scheme starts to pay off, other residents will see the results and be more likely to pay in.
Now that we have secured a consistent stream of capital via the proposed payment scheme, we can set about employing a private security contractor whose services will include street patrols, installation of state-of-the-art surveillance technology on all major streets and most residences, as well as a dedicated task force that responds to any and all call outs in record time. Let’s assume we contract with G4S. And let’s assume we are receiving a weekly payment from roughly two-thirds of the residents so far- that comes in at around £50,000 per week. Compare this to a neighbourhood in Sutton where 104 residents scraped together a comparatively paltry £504 a month to employ a private security detail to prevent car thefts and burglaries. Company A is at liberty to save any unspent funds for administrative costs- as well as a “capital fund” which we will be utilising later (Alongside this fund we could perhaps find some government body willing to grant us a community loan/grant to help finance the whole operation).
This security force, furnished as it was with a lavish budget, would patrol the streets at all times, especially the areas known for criminal activities. They would work closely with the police, preparing the bulk of administrative work, dispute resolution and crime prevention– saving the police a ton of effort and allowing them to expedite the prosecution of lawbreakers. The areas normally regarded as particularly dangerous could be targeted with advanced security systems (technology solutions such as thermal and seismic detectors, fence detection systems, and ground radar intruder alarms are all offered as standard with modern security contractors these days). We could also have permanent patrol stations installed at or near the high crime areas, as well as remote monitoring.
Next with our budget, we employ a street cleaning service which is tasked with cleaning up street litter and the removal of waste, as well as enforcing that the gardens and streets directly outside the resident’s properties are kept free of clutter (you will often see old sofas unceremoniously dumped in front gardens overgrown with weeds when driving around the Gipton estate).
Within six months, providing a solid portion of the weekly payment scheme is coming in, the crime-riddled and filthy streets are a thing of the past. The Gipton Estate has been transformed into a clean desirable place to raise a family or set up business. Property prices increase dramatically as a result.
Our next step in our long term revitalization plan is to begin the purchase of real estate from the residents. Let’s say the company now offers to buy as many homes up as possible. It does this by lending willing residents of Gipton a lump sum from the aforementioned capital fund to buy their house from the Council, perhaps in exchange for the company recieving a % of the property’s equity in 10 years (I believe a developer known as Bellway are currently doing just that by entering into a venture with the Council- doomed to fail given the other social issues aren’t being addressed, but I digress). We are of course assuming the value of the property is going to increase dramatically as we gradually revitalize the area). You could lend each resident anywhere up to 50% of the house price to go toward purchase of the house in exchange for part ownership relative to the % lent (if the company lent the resident 30% of the house price, it would thus own 30% of the property). When the property value increases due to the revitalization project, 30% of the property is now worth far more than the initial value paid (the average property price in Gipton is £125,000- and bear in mind this is a generous estimate that factors in the decent areas on its borders. Assuming we improve the area to levels equal to that of it’s richer surrounding areas- such as Roundhay, where average property prices are £355,000, that is a 64% increase in property value, a decent return on our initial investment).
A simpler alternative could be one in which the company offers to buy the homes outright from the residents (after some serious negotiations with the Council) at a fixed sum, lower than what they would get if they sold it on the market (let’s say the offer was £60,000)- on the agreement that the house legally becomes property of the company upon the resident’s death or if the resident chooses to relocate. The resident doesn’t even have to move out, they simply get a considerable sum paid out to them on the spot in exchange for the company acquiring possession of the house upon the resident’s death/move. The company now has even more of an incentive to improve the area. Providing they do so, the purchase of the properties becomes a worthy investment (a 64% return as outlined above). Most residents wouldn’t turn their nose up at £60,000 for a house they likely have little intention of leaving to their children anyway.
The agreement of purchase could also include a clause that states eviction could be enforced if the resident becomes such a nuisance that a majority of residents vote to allow Company A to trigger said clause.
So, after some time, Company A has now succeeded in its task. Security patrols keep the streets safe and free from vibrant vehicular bonfires, stray dogs have been rounded up and lovingly rehomed and machete wielding lunatics have been settled in a more suitable environment at HMP Leeds. The gardens are beautiful, the walls scrubbed free of graffiti. All is well in the fair land of Gipton.
The next task is dealing with those God awful post-war brick houses. Over the years, the company could demolish those houses no longer occupied and replace them with kitschy sandstone cottage houses. Those brick built houses are reaching their end- it costs more to refurbish them than simply demolish them as they stand. Stone is more cost effective, more energy efficient, and it looks nicer. Tear down those eyesores and build anew, I say.
Company A now files for divorce from the city council (hey, if London can do it why can’t we?), rebranding the estate as Newdale– owned by Company A in the form of Newdale Incorporated. It begins to build a perimeter wall around the estate, effectively transforming it into a gated community. It then performs a market valuation and issues shares. Residents are each awarded a share (which they are at liberty to sell if they so wish). Individuals who purchase enough shares to become majority shareholders form the Newdale Shareholder Board. This will function in an executive capacity, fulfilling the role of the former Council. The Board proceeds to elect an Executive from it’s members. This Executive is now the CEO of Newdale, and it is their job to rule their principality effectively and responsibly.
Residents of Newdale may elect an alderman, a representative whose job it is to approach the Board with the minutes of the monthly resident’s meeting, bringing to their attention any concerns or issues the residents may have. The residents do not vote to elect the Board members- Board members earn their seats in the same way any shareholder would in a corporation- by investing enough of their wealth to become majority shareholders.
The difficulties in implementing such a plan as this would be convincing a council to allow an entire suburb to secede and provide for itself as a private corporation- even if Leeds City Council would see a net benefit from no longer having to provide a disproportionately high amount of services for an area that pays low levels of tax due to its resident’s mean income (most Gipton properties fall under Council Tax band A, which stands at £1,199.83 per annum). But I believe we will see more examples like Buckhead county in the future. Precedents will be set, and with it stronger arguments for municipal secession. Failing this, we could develop a network of homeowner associations and private corporations that function in a quasi-official sovereign capacity, effectively allowing us to still achieve all the proposals outlined above.
This revitalizing project ccould all be accomplished quite easily tomorrow if the residents of Gipton decided they wanted it. But they won’t; the estate will continue to struggle along, and the quality of life for its residents will remain as it is. They do not dream of making their world better because they do not believe they deserve better. But the solutions are there, for those with the ambition- and the willingness to invest some capital.
Finally here’s a documentary showing a likely to fail rejuvenation project for the Gipton estate. See go yourself the calibre and climate of the estate: https://youtu.be/3_F55IirnOE