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Structural Libertarianism & Seasteading

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This seasteading talk was given by former executive director of The Seasteading Institute Patri Friedman in Norway and Finland in may 2011.

The Seasteading Institute believes that innovative political systems could serve humanity far better than our governments do today.

That's why we work to enable “seasteads”—floating cities—which will give people the opportunity to peacefully test new ideas about how to live together. The most successful will become thriving new societies—inspiring change around the world.

We’re creating this future because our governments profoundly affect every aspect of our lives, and improving them would unlock enormous human potential.

Learn more at www.seasteading.org

This seasteading talk was given by former executive director of The Seasteading Institute Patri Friedman in Norway and Finland in may 2011.

The Seasteading Institute believes that innovative political systems could serve humanity far better than our governments do today.

That's why we work to enable “seasteads”—floating cities—which will give people the opportunity to peacefully test new ideas about how to live together. The most successful will become thriving new societies—inspiring change around the world.

We’re creating this future because our governments profoundly affect every aspect of our lives, and improving them would unlock enormous human potential.

Learn more at www.seasteading.org

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Structural Libertarianism & Seasteading

  1. 1. Structural Libertarianism & Seasteading Competing instead of Complaining by Patri Friedman
  2. 2. Structural Libertarianism
  3. 3. Old Folk Activism “Win The War Of Ideas”
  4. 4. New Structural Activism “Incentives, not Elections Competing, not Complaining”
  5. 5. 5
  6. 6. You killed my partner, you son of a bitch! I’m going to get you!
  7. 7. Carver: You know, this is why I think we can't win this.
  8. 8. Carver: You know, this is why I think we can't win this. Hauk: How come?
  9. 9. Carver: You know, this is why I think we can't win this. Hauk: How come? Carver: They screw up, they get beaten. We screw up, we get a pension.
  10. 10. •Build Fear •Analyze •Answer: Seasteading
  11. 11. Disclaimers • Radical Increase In Freedom • We’re All On The Same Side • I’m Passionate b/c I Care • If I Dis’ It, I Done It
  12. 12. Build Fear
  13. 13. 2008: Best Effort
  14. 14. Not Enough
  15. 15. 6%-16%
  16. 16. The Game Is Rigged
  17. 17. “Every election is a sort of advance auction sale of stolen goods” H.L. Mencken
  18. 18. Being Right Is Not Enough
  19. 19. Analyze: Why Do We Have Bad Government?
  20. 20. Policies Political Systems Government Industry
  21. 21. Policies
  22. 22. Policies
  23. 23. Political Systems
  24. 24. Hotelling Model
  25. 25. Mancur Olson  The Logic of Collective Action  The Rise and Decline of Nations  Power and Prosperity
  26. 26. Empirical Observation on Democracy.
  27. 27. Libertarians: 60 years of ignoring Nobel Prize-winning economics.
  28. 28. Government Industry
  29. 29. Structural Solution: Seasteading
  30. 30. Not Just New Country - New Incentives
  31. 31. Examples, Not Arguments
  32. 32. Incentives: They work, even if you don’t believe in them.
  33. 33. Big Tent. Big Enough For Communists (That’s Big!)
  34. 34. How To Fix A Monopoly
  35. 35. *Facepalm* 41
  36. 36. Policies Political Systems Government Industry
  37. 37. Libertarian Social Clubs, Not Political Parties
  38. 38. Positive Psychology
  39. 39. 501c3 non-profit Founded: April 15, 2008 2010 Budget: $750,000 Staff: 7 full, 3 contract
  40. 40. • Strategy • Projects By Area • Timeline • How You Can Help
  41. 41. ?
  42. 42. Too Big For Them... ...Way Too Big For Us!
  43. 43. What’s missing? • Political Autonomy • Engineering • Business Models • Movement
  44. 44. Legal & political research
  45. 45. Engineering
  46. 46. ClubStead: $300/ft^2
  47. 47. Business is key.
  48. 48. Good regulation drives business.
  49. 49. Business networking
  50. 50. Business
  51. 51. Movement-building
  52. 52. Press coverage
  53. 53. Movement-building
  54. 54. 2030
  55. 55. How You Can Help • Memberships / Donations • Ambassadors (formal/informal) • Entrepreneurs (or just get rich) • Skilled Volunteers • Keep In Touch
  56. 56. seasteading.org

Editor's Notes

  • As mentioned, I founded and run The Seasteading Institute, which seeks to bring about free societies by building them on the ocean. (Sometimes I think I have the best job in the world.) But seasteading is just one example of a more general viewpoint about why we don’t have free societies and how we can get them.\n
  • And this general framework is much more important than any one venture like seasteading, so I’m going to spend the first half talking about a new way to look at activism and politics. One which might actually work, unlike most political reform.\n
  • The old kind of activism I call Folk Activism, which involves following our intuitions about politics from pre-industrial days, when we changed things by changing minds and building coalitions in small tribes. Examples nowadays includes trying to “win the war of ideas”, whether in academia, in mainstream politics, or on the internet, trying to elect candidates to public office, Nowadays, it finds expression in trying to win the war of ideas in academia, Washington DC, or the public media, trying to elect candidates to public office, complaining about bad laws, writing papers suggesting better ones, and similar very natural, very worthless activities.\n
  • Structural activism views laws as emerging from the incentives of political systems, which themselves emerge from the global government industry. Just like in any industry with a monopoly or a cartel which has bad customer service and little innovation, the best way to get a better product is not by writing letters to the monopolist but by increasing competition.\n
  • I don’t know how popular American TV is here, but one example of this viewpoint is to contrast a traditional police show with “The Wire”. In a traditional show, the hero wins through courage, persistence and honor. He is good & selfless, and he fights enemies who are bad & selfish.\n\nBut in “The Wire”, everyone is a bit bad, a bit good, and a bit selfish. Bad results happen because of bad incentives.\n
  • This is the sort of thing people say in a traditional cop drama. It’s the old way, good against bad, winning through persistence and courage.\n
  • Here’s a classic quote from The Wire. (CC) The problem here -difficulty enforcing drug laws - is caused by incentives. It can only be fixed by working smart, by understanding and changing the incentives. It’s more complicated, harder to make into a TV Show, but it’s the way the world actually works, and if we want to actually change things we have to base our strategy on how the world works not what makes a good story.\n
  • Here’s a classic quote from The Wire. (CC) The problem here -difficulty enforcing drug laws - is caused by incentives. It can only be fixed by working smart, by understanding and changing the incentives. It’s more complicated, harder to make into a TV Show, but it’s the way the world actually works, and if we want to actually change things we have to base our strategy on how the world works not what makes a good story.\n
  • This table is what I believe. It’s somewhat depressing, that the most straightforward route is a big waste of time, and the alternative may not even work. But that’s the reality, and accepting reality is a necessary prelude to changing the world. Changing structure is hard, but the other options are to give up on freedom (or to bury our heads in the policy sand)\n
  • (or to bury our heads in the policy sand), put out policy papers, talk to others in the libertarian echo chamber and blogosphere about how much things suck, get whooped in elections, and fantasize about the day when the world will magically see the light.\n\nI don’t know about you, but I want freedom, not fantasy. Structural activism may be uncertain, but at least it’s a shot.\n
  • That was a preview, and here’s the structure of the rest of the talk. First I’m going to scaremonger about how bad the prospects are for freedom by conventional methods. This should make you feel afraid and confused - hopefully this has started already. Then, I’ll explain how to use economics to guide effective activism. This explanation will be somewhat soothing, but leave you restless and wondering what the practical paths are. Finally, I’ll provide you the answer, restoring your hope in the future with cheerful optimism.\n
  • I probably should have given these first, but I wanted to start with actual content...Just in case my points prove controversial, I want to stress a few things...\n\n(points)\n
  • The United States has one of the highest densities of libertarians in the world.\n
  • Ron Paul was an incredible candidate who set fundraising records.\n
  • Yet he received only 5.5% of the vote in the Republican primary - insignificant as far as impact on the race or on the political party.\n\nWhen a huge success relative to the past still has no impact, success is unlikely. Especially when there is good reason to think we can’t do much better.\n
  • First, libertarians are a minority. David Nolan who founded the US Libertarian Party reports that surveys in the US show at most 16% of people have libertarian beliefs. Other studies using more restrictive definitions find numbers as low as 6%.\n
  • Second, modern psychological research by people like Jonathan Haidt here at TED suggest that moral beliefs are innate. Some few people can be convinced by logic, and god bless them!  But it is rare. Most people use logic to justify their moral intuition, not to derive it.\n\nSo distributing more copies of Atlas Shrugged or Free To Choose or repeating their arguments will never create a libertarian majority. Therefore, the rational course is to accept that we are a minority, and find ways to focus so that we can win anyway.\n
  • Actually, I’ve understated the problem. Even if there were more libertarians, we would still lose elections, because democracy is rigged against freedom. Here’s why.\n
  • In the old view of the world, political candidates compete mainly by creating sets of policies that appeal to voters. So the voters get what they want. This world is depicted here as an enchanted forest with unicorns and fairies because that’s how realistic it is.\n
  • But in the Structure view, candidates get the resources to compete in elections by promising political favors to special interests. So the more favors a politician is willing to sell, the more he can spend on winning the election.\n\nThen in comes the honest libertarian whose goal is to not sell political favors.\n
  • We’re the hobbits who only want the ring of political power in order to destroy it. And then we wonder why others have more allies.\n\nSo not only are libertarians a permanent minority, but we underperform our numbers in democracy.\n
  • Part of Folk Activism is an intuition that being right is all it takes to win in economics and politics. This is true in some areas of science, where theories are easy to test and there is not too much to be gained by pushing a wrong theory. But there is no universal law which says that the truth will win.\n\nJust look at the rising epidemic of obesity and the related diseases of diet around the world. Even with people’s lives at stake a little bad science and some special interests have overcome the truth for decades. Compare that with the power and money at stake when it comes to competing economic and policy theories which are often difficult to test or explain. Being right is not enough.\n
  • Hopefully you are feeling a bit down, but don’t worry. We have failed to get freedom because we had the right theories of economics but the wrong theories of activism. Fortunately, we can use economics to understand activism.\n
  • We can classify political analysis into three levels (explain w/ activism context & history of when they came about).\n
  • A classic economic mistake is to think that you can manually set prices without consequence - price-fixing. We understand how foolish that is. Prices are the result of human action, not human design, they emerge from the intersection of supply and demand.\n\nBut when it comes to policies, libertarians make the same mistake. We constantly suggest better policies as if democracy was a system for generating good policies that just doesn’t have enough economists on staff. But when most policies turns out to benefit special interests, at some point you should wonder: maybe democracy doesn’t optimize for public benefit. Maybe there is some underlying logic, some incentives, that cause this.\n
  • Before I explain the pattern, we might ask we we suggest good policies when it makes no difference? It’s because, 10,000 years ago when we were sitting around the fire trying to figure out how to divide up the buffalo, our individual suggestions mattered. In a tribe of 100, if you could come up with a good suggestion, explain it well, and build a group around it, you could make it happen. That’s the environment where we evolved.\n\nSo our mind’s wiring assumes that we have a political voice equivalent to someone in a hunter-gatherer tribe. And we comment on nationwide events with that level of passion - even when so few people listen that our comments don’t change anything. Thus...blogs!\n
  • Before I explain the pattern, we might ask we we suggest good policies when it makes no difference? It’s because, 10,000 years ago when we were sitting around the fire trying to figure out how to divide up the buffalo, our individual suggestions mattered. In a tribe of 100, if you could come up with a good suggestion, explain it well, and build a group around it, you could make it happen. That’s the environment where we evolved.\n\nSo our mind’s wiring assumes that we have a political voice equivalent to someone in a hunter-gatherer tribe. And we comment on nationwide events with that level of passion - even when so few people listen that our comments don’t change anything. Thus...blogs!\n
  • Time to start citing dead economists. We’ll start w/ Harold Hotelling. (Hotelling model schtick)\n\nThis model isn’t completely accurate, but it has some truth to it. It explains why candidates move to the center after the primary. It’s important, not because it’s the main explanation of what’s wrong w/ democracy, we’ll get to that next, but because it’s the beginning of an explanation, it’s easy to grasp and profoundly structural. In this model, the beliefs of the vast majority of voters are irrelevant - all that matters is where the center is. Not because the system was designed that way or because people want it, but because that is the behavior dictated by the rules. It’s an example worth meditating on.\n
  • When it comes to more frequently relevant flaws in democracy, my favorite economist is Mancur Olson.\n\nHe points out that smaller groups are more effective than large groups because they can organize more easily and more quickly. Standard numerical example. (add coord cost numbers).\n
  • In his later years, my grandfather Milton talked about the puzzling disconnect between economic and political freedom. He wondered why some of the freest economies of the world were in places like Hong Kong & Singapore with no political freedom. The evidence of the 20th century is that democracy leads to moderate levels of economic freedom...but in recent history, across many different countries, times, and cultures, never high levels. If you take reality seriously then you should take this as serious evidence against a democratic minimal state.\n
  • Olson gives us theoretical and empirical evidence about why this is. Remember those special interests? Well, over time, they accumulate in democracies like the barnacles on a boat, causing drag on the whole country. This is why old industries like education, banking, and finance tend to perform worse than new industries like technology. In the US, we bailed out banks and auto companies in 2008, but we didn’t bail out internet companies in 2000, because they were too young to have captured politicians.\n
  • The approach of education, proselytizing, trying to spread the libertarian movement and win victories within democracy ignores basic economics. You are trying to produce a public good instead of a private one (explain). We must find ways to privatize the creation freedom! I have some ideas here :).\n
  • What I find shocking is that these economic theories of democratic failure are not new. We’re talking about 60 years of Nobel Prize winning work which libertarians occasionally cite when criticizing government and have completely ignored when it comes to fixing government. We actually have a theory of why government doesn’t work, an economic theory based on incentives and almost no activism is focused on changing those incentives. It’s insane.\n\nBut it’s also an incredible reason for hope. If we’ve been doing the wrong thing all these years, maybe creating freedom is not so hard. Maybe we can do it.\n
  • We can do it by looking at this third and deepest level. Let’s figure out why we don’t get innovative forms of government to address the issues raised by public choice theory.\n\nGovernment is an industry, the countries are firms, the citizens as customers. The laws and institutions are the product, the technology. The first thing you notice about the government industry is how little innovation and customer focus it has. I’ve never heard of Starbucks murdering its customers. This is not an accident. The industry has certain properties that make it anti-innovation.\n
  • The biggest is the high barrier to entry. To start a new web business, you need a laptop. A student can do it as part of an undergraduate business class. Unfortunately, every piece of land on earth is claimed, so to try a new government system, you need to win a war, an election, or a revolution. Try doing that in a semester.\n\nOne way to think of it is that the high barrier to entry means there are no startups. And startups are the source of innovation. This is true for most products - it’s easier to design something radically new from scratch. And it’s even more true for systems of rules and institutions, which are incredibly hard to change “in-place” - almost impossible.\n\n
  • Enormous customer lock-in. Expensive to move. Car insurance, even cell provider. But government?\n\nWe see some shopping for states, and shopping for countries like here in the EU, but it isn’t a strong incentive b/c it is so expensive.\n
  • Any industry with these characteristics is dysfunctional. See: Operating Systems. Hard to write & get apps, hard to switch, so we get a new entrant about every 10 years. Microsoft, Apple, Linux.\n\nWe don’t have few OSs because OS’s are less important than websites, or there are less different ways to write an OS than a photo-sharing service. It’s because of the industry’s structural characteristics. It’s tempting to blame Microsoft for how Windows sucks, but the XBox is a pretty good product, because the console industry has better incentives than the OS industry.\n
  • With this framework, we can see the right kind of activism. We need to reduce this barrier to entry, enable entry into the government industry, and create a startup sector. For example, by building new nation-states on the ocean - also known as seasteading.\n\nSeasteading privatizes freedom - the people who form these communities, the businesses who move there, the entrepreneurs who create them, each captures most of the benefits. And it dramatically lowers the barrier to entry. We can build the first one for tens of millions of dollars. Much easier than winning a war, an election, or a revolution.\n\nBut that’s not all. It turns out the ocean is more than just the next unclaimed space. It has characteristics that make it a better medium for building a free society.\n
  • Cruise Ship vs. Empire State Building. Literally true that objects as large as skyscrapers move around the oceans on a daily basis. We can build these ocean cities out of modular, rearrangeable units, which means that you can change countries...without leaving your house. Seasteading lets people and buildings shop for countries the way that multinational corporations do now. It’s a dramatic lowering of the cost of switching, to reduce customer lock-in.\n\nTo paraphrase my father, If a seastead city starts an unpopular war, the leaders may wake up the next morning and see that the only buildings left are the military barracks and the newspaper offices. \n
  • This has been a fast tour through a big idea & a new way of thinking. Let’s talk about a variety of implications.\n\nThis analysis is apolitical and sidesteps moral arguments. If the problem is an uncompetitive market, the solution is to make it more competitive. I think this will work much better than looking at it as a moral issue and trying to convince people their morality is wrong.\n\nThis shows the futility of trying to win the war of ideas.  Government is bad because it is a cartel of many local monopolies. It doesn’t need new ideas, it needs the discipline of competition.\n
  • Seasteading isn’t about running away someplace new, starting one country, and hoping it avoids the old problems. We are going to enable the trial-and-error process of startups forming, growing, failing, and combining that is the source of all innovation. And we’re going to do it on the water, which is a different medium than land, so society built on it will be fundamentally more dynamic and innovative because it’s easier to move.\n
  • In advocating for the power of freedom, how many millions of words of papers and books does it take to add up to the two words “Hong Kong”. If you believe that freedom works, instead of trying to convince other people, why not just go out and prove it?\n\nThe best way to convince someone, is not with words, it is with experience. For citizens of the USSR, a single visit to the West could outweigh years of Soviet propaganda.\n\nIf we create actual free societies, then prospective customers of the new system can actually experience it physically and emotionally, rather than as a mental abstraction. End the endless series of objections.\n
  • The power of structural change. I mean, yeah, you have to solve difficult problems in ocean engineering and international diplomacy to do it. But what you don’t have to do is challenge the identity and value system of millions of people.\n\nThere is a very real sense in which advocating for libertarianism for an entire country is a centralized planning solution. You’re trying to impose your values & beliefs on other people - no wonder they resist! This alternative idea of competitive, entrepreneurial government on the empty frontier sidesteps this entire mess.\n
  • Surely we can all agree that people should be free to join together, voluntarily, into new societies. Anyone who is dissatisfied with the current government product offerings can agree that we should build cities on the ocean :).\n
  • Let’s think of two ways to improve a bad product from a monopolist. First, we could complain to the monopoly, filling out its customer surveys each November, try to convince others that the monopoly has bad service. Or, we could figure out how to allow other firms to enter the market and compete. Why is it that we who so love the virtues of competition somehow miss this second option? It blows my mind. This is how it makes me feel:\n
  • \n
  • I have some family history with libertarianism, and the relationship of that history with these ideas is sort of interesting. MF -> folk activism. F2C = pinnacle! Changed many minds, probably slowed the growth of government, but overall trajectory has remained the same. Then my father comes along and says - the problem is with the incentives of the system to produce good policies. And so he became an Anarcho-Capitalist. But he had no plausible route to bringing ancap into being. So I come along and say: Ok, why is it that the government industry doesn’t have innovative startups trying exciting ideas like ancap, and how can we change it to add a startup sector.\n
  • Since this is a gathering of libertarians, I am not claiming that we should not organize libertarians. I would not be here if not for this local group. But the primary benefit of these groups is social, not political. Sharing company w/ like-minded people is very important. The less people, the more important! Cite David Nolan.\n\nSo I think libertarian social clubs are wonderful. Unfortunately, many libertarian resources go into large think tanks and advocacy organizations which seem very unlikely to achieve change, compared to building real free societies, even if we have to do it on the ocean.\n\nFinally, cite Brad APEE papers.\n
  • Psychology of competitive governance. One reaction: Crap, we've been doing the wrong thing, we have all this cognitive dissonance to root out...\n\nI say, it’s amazingly empowering. The old view is: a titanic struggle of good vs. evil where we few brave souls struggle helplessly against an immensely powerful & merciless enemy. It's incredibly moving, passionate, would make a great movie script, but it's also incredibly depressing & anti-economic. It’s not about incentives.\n\nInstead, this is simply a practical problem in how to crack a cartel. Thinking as consumers of government services is profoundly empowering compared to citizens in a world of right & wrong.\n
  • That’s the big vision. But I want to make it clear that we’re actively working on making this a reality. It will be a lifelong project, and we’re in the early stages, but this is not just a website & some slides - we’re making it happen. I’m going to talk about our strategy, our accomplishments and projects \n
  • \n
  • Most of our funding comes from Peter Thiel, formerly best known as the founder of PayPal, but now perhaps better known for being the first investor in Facebook, as you may have seen in The Social Network.\n
  • With such a huge challenge and such limited resources, an obvious question to ask is whether we’re totally insane or just insane enough to be onto something?\n
  • The potential scope of building startup countries includes almost every field of science from engineering to sociology. If we were the Gates Foundation, we couldn’t work on all this. Fortunately, most problems have already been solved.\n
  • A cruise ship really is a floating city. It provides all the basics of life - power, water, food, security, even internet. (So our work is focused on the few core challenges that make a seastead different from a cruise ship: Law, Engineering, Business, and Community.)\n
  • (So our work is focused on the few core challenges that make a seastead different from a cruise ship: (list))\n\nI will talk about what we have done, and are doing in each of these areas.\n
  • Why?\n\nWhat.\n
  • We expect to begin seasteading with cruise ships, but they aren’t right for the long haul. We need less-expensive mass-produced, modular designs that can start as a building, expand to a village and eventually a city.\n
  • We’ve begun with this design, that we call ClubStead, a 200-guest hotel/resort designed for the waves off SoCal. Also Eelco’s & Miguel’s Papers.\n\nNext steps: George’s Study, Location Study\n
  • What kind of business? \nQuestion to ask: Competitive advantage\nResource-based -- deep-sea aquaculture, alternative energy\nLegal-based, based on the less restrictive legal environment of the ocean.\n\n\n
  • HK and Singapore have shown us: Create the environment, and they will come...\nWe don’t need to get the capital to build the city\nWe just need to build the system, businesses bring the capital\n
  • Magellan Network\nBusiness summit\n\n\n\n
  • We’ve done: Sink or Swim. In-Progress: Series of papers about seasteading biz considerations, case studies, possible biz, etc.\n\nOur favorite so far is medical tourism, where people travel to other countries for medical care that’s lower cost or higher quality. I will be going part-time at TSI later this year so I can work on creating this business.\n
  • The final core challenge is community. We don't need everyone to accept us -- just enough people .\n\nThis is a picture from our 2009 Ephemerisle event, a sort of Burning Man on the water, where we gathered with houseboats, self-built platforms, and art on the Sacramento river. 2010, 2011.\n
  • We build this movement by expanding general public awareness...\n\nNote BBC recently\n
  • This is why I am here. Besides these lectures, we do Virtual Town Halls. Writing a Book.\n\nWe’re looking for Entrepreneurs like Henrik. Potential future residents. Donors. Advocates.\n
  • Here’s the timeline...few years of research, now growing - from 1 non-profit to 2 nps & 2+ fps, really exciting.\n\nPlatform: Beginning of seastead real-estate market\nVillage: Multiple platforms\n
  • And in two decades, an entire floating city. After that, of course, (comes complete world domination.)\n
  • (After that, of course, comes world domination.)\n
  • Skilled volunteers: legal, ocean eng, PHP/Drupal.\n
  • So, that’s the plan. If you’re interested in re-inventing government, please check out our website, get connected to the movement, and I’ll see you on the high seas.\n
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