No taxes or bureaucracy in planned libertarian paradise

Adventurers seek to establish a capitalist Utopia in the jungle

STARRY-EYED free-market dreamers are encouraging British investors to back a capitalist utopia that they hope will rise somewhere in the steamy jungles of the Third World.

Citizens of Laissez Faire City, a proposed libertarian paradise, will be able to live and do business without the onerous obligations of paying taxes, filling out forms in triplicate or complying with fusty old rules.

They will live in secluded suburban ranches and commute by executive helicopter to their offices in modern air-conditioned towers that look a little bit like giant air fresheners.

Proponents say the futuristic city, drawn straight from the pages of a 1950s novel, will combine the dynamism of Hong Kong with the beauty of - Las Vegas.

At least that is the ideal. The reality, if it materialises at all, may be more like existing, problem-plagued cities than the visionaries care to admit.

Other attempts to establish utopias, many of them based on new brands of religion, have been tried to varying degrees of success. Elizabeth Nietzsche, sister of the German philosopher Friedrich, set up a community of racially pure Aryans in Paraguay at the end of the last century, which still exists although it has failed to prove her expectations of racial superiority.

The Laissez Faire founders, however, want to create not just a community of like-minded people, but a sovereign city state, with its own citizenship and passports, free of outside government controls. Its only historical precedents are the lawless pirate bases set up in 17th and 18th centuries in the Caribbean and along the coasts of Africa.

Laissez Faire City was the brainchild of the late Ayn Rand, a Russian emigre to America who founded a movement called objectivism - a cult of enlightened self-interest. Among her most ardent followers is Alan Greenspan, chairman of the US Federal Reserve, although he is not involved in the project to bring her dream to life.

In the 1940s and 1950s, she wrote two novels, The Fountainhead and Atlas Shrugged, the latter describing a society so weighed down by socialism that the wealth creators - entrepreneurs - fled to a distant valley where they built a free-market city imaginatively called Atlantis.

The books sold better in the US than in Britain, sparking passionate devotion in right-wing readers and vitriolic charges of neo-fascism from the left. But no one seriously considered turning her words into bricks until a group of investors from around the world met on

a junket to Argentina, Chile and Peru last winter.

Many of the travellers discovered they had a common interest in Ayn Rand's writings. None of them owns up to being the first to suggest it, but most credit Dr Michael Lynch, a physician from Florida, as the catalyst that made the project happen.

The investors registered a trust in Moscow and Costa Rica in January, appointed a trustee - former Soviet diplomat Mikhail Largin - and began planning in earnest. They hope to convince a Third World country to lease them sovereignty over a 100 square miles of land for 50 years.

Dr Lynch is confident the project will be on the ground within two years, with the first buildings, a hotel and visitors welcome centre finished six months later. He envisions an economy based largely on financial and service industries, with some light manufacturing. In this it will be similar to existing tax havens. But while they are eager to accept investors' cash, they are just as restrictive about immigration as other jurisdictions. Laissez Faire City would welcome both.

The group already has 60 founding members, each of whom put up $5,000 (pounds 3,125) and a recent advertisement in the Economist yielded a flood of letters and faxes. "Some of them have been sending us unsolicited money, which is more than we asked for," said Sonny Vleisides, editor of the Laissez Faire City Times, the newsletter sent to every prospective founder.

Not all of the contacts are as convinced as the true believers. "It's a wonderful dream," said Tony Caplin, former chief executive of HunterPrint, the magazine publisher. "But I don't think it will happen."

There are the problems of the existing residents and political and legal structures to resolve. "There would have to be some kind of regulation," admitted Dr Lynch.

"We wouldn't want fly-by-night operators coming in and besmirching the name of the city."