An interview with Joe Quirk, President of the Seasteading Institute
Please introduce us to Seasteading, what is the vision?
Seasteading is homesteading the high sea. In 2008, Robert Ballard, the famous oceanographer who discovered The Titanic, gave a famous TED talk where he concluded:
“Why are we not looking at moving out onto the sea? Why do we have programs to build habitation on Mars … but we do *not* have a program looking at how we colonize our own planet? And the technology is at hand!”
That same year, Patri Friedman and Peter Thiel co-founded The Seasteading Institute. Nearly half the Earth’s surface is unclaimed by any state. That means each seastead would essentially be its own nano-nation. We’d like to create thousands.
What are common misconceptions about Seasteading?
Seasteading is not a plan for society. Seasteading is a technology for anybody to try their own society. The Seasteading Institute takes no position on what kind of societies should be formed. We foster the research and technology for individuals to try their own societies. As long as people can leave seasteads voluntarily, and join them voluntarily, we think exciting governance solutions will emerge.
Why do you think we need autonomous countries? Why existing governments are not sufficient?
I often use Steve Wozniak as an example. He loved working for Hewlett-Packard and was loyal. He proposed his design for the personal computer to his company bosses five times and was rejected each time. His superiors at Hewlett-Packard couldn’t imagine how personal computers could solve problems that Hewlett-Packard’s giant computers couldn’t. In order to show the world what was possible with personal computers, Steve Wozniak had to leave Hewlett-Packard and start his own company with Steve Jobs, who named the new company Apple.
I think of seasteads as platforms where the Wozniaks of governance can demonstrate startling innovations we can’t imagine because we all work for the Hewlett-Packards of governance.
Can you share an episode of how you first became interested in the idea of creating seasteads?
I learned from Milton Friedman that monopolies are bad for the consumer and good for the provider who holds a monopoly. I met Patri Friedman, Milton Friedman’s grandson, at Burning Man, a festival of social experimentation in an American desert that produces remarkably positive results in multiple domains simultaneously.
Patri explained that governance is the most important service in the world, and countries essentially hold a monopoly on this service. If we could create a technology for floating societies in international waters, we would essentially have a startup sector for governance, a Silicon Valley of the Sea.
I had just been on a cruise ship six weeks before, when I realized floating cities were possible. I had already attended Burning Man ten times and witnessed first-hand how rules can evolve in unpredictably positive ways when societies can start from scratch and permit decentralized organization. Burning Man essentially starts over every year, throwing away bad rules and incorporating new rules that work.
Patri explained that this would work even better on the ocean, because floating neighborhoods could disassemble and move about like a jigsaw puzzle, increasing the power of governance consumers to choose new societies, and creating the incentives for governance providers to innovate to please residents. This would rapidly accelerate the rate of peaceful innovation in governance, the most important service in the world.
Humanity urgently needs to solve the problem of sea level rise, and we urgently need to innovate peacefully to discover better technologies for governance. Seasteading is an affordable technology to begin to solve both problems, and the company Blue Frontiers plans to start immediately.
What are main challenges that need to be overcome to realize autonomous floating cities? Are they mainly technical or political?
The technical challenges for this project have been largely solved by Dutch engineers at Blue21, who designed and built the Floating Pavilion in Rotterdam and have partnered with Blue Frontiers to build seasteads. The governance challenges have been largely explored by over 4000 Special Economic Zones around the world, which have been studied by Blue Frontiers’ legal counsel, Tom W. Bell, author of Your Next Government? From Nation-States to Stateless Nations. Tom W. Bell has studied the best practices of these Special Economic Zones and designed the SeaZone specifically for first seastead.
The remaining challenge to inform the public that the way to participate in Blue Frontiers, the first seasteading company, is by buying Varyon, a token that will be used for the exchange of goods and services in the Blue Frontiers ecosystem. You can use Varyon to stake residence on a seastead, and thus participate in governance. Owners and renters can veto based on vesting in the floating society. You can read more about it by reading the Varyon white paper.
How are you thinking about governance and what do you envision the Seazone looking like?
We hope to establish a private “SeaZone Authority,” through which Blue Frontiers will manage the project. As Tom W. Bell specifics, Instead of asking for *no* regulations, we’re going to ask for the *best* regulations. The world’s greatest hits. We and future host countries will define a Peer Group of countries from among the most peaceful, prosperous, and well-run nations on earth. Those Peer countries will provide the regulations for the SeaZone.
How much freedom will we have? If an activity is illegal everywhere in the Peer Group, it won’t be legal in the SeaZone. If one member of the Peer Group dissents, and has demonstrated that a certain freedom works out fine in their country, it will be legal in the SeaZone. That way the SeaZone will be maximally inclined toward business and personal freedom.
Thus the SeaZone will be the freest place in the world, but it won’t be too radical. It will be the first incremental step toward freedom on the high seas, and seasteaders will absorb the cost of failure. It The SeaZone succeeds in bringing prosperity to the local community, Blue Frontiers can return to the host country and say, “Are you happy with what we created together? How about a little more autonomy, a little further out to sea?”
Instead of arguing for freedom, we demonstrate it works step by step, and we don’t ask anyone else to pay the price, but we share in the prosperity. We call this strategic incrementalism.
Peter Thiel last donated to the Institute in 2014. What is relationship with him? Is he still involved in the project?
Peter Thiel co-founded The Seasteading Institute with Patri Friedman in 2008 and has been the most generous donor to the nonprofit. Peter Thiel is not involved with the startup company Blue Frontiers, but we hope our first seastead makes him proud.Read More
Lotta Moberg completed a PhD in economics at George Mason University. She wrote a wonderful book, The Political Economy of Special Economic Zones. Our discussion ranges from the benefits of special economic zones, to the failures of special economic zones, to what the future of special economic zones can bring.Read More
A conversation with Michael Castle Miller, the Founder and CEO of Politas Consulting
Tell us about Poltias Consulting. What do you do? Who are your clients? What is your value proposition?
Politas exists to help cities and special jurisdictions shape the future of governance. We provide legal and public policy solutions for special economic zones, charter cities, refugee cities, and other special-status areas. We help these areas overcome political roadblocks to innovate and implement new institutions that promote inclusive economic development. We are currently working on projects in Latin America, Central Asia, North Africa, and the United States. We are a boutique firm with the world’s leading experts on special jurisdictions, specializing in law, public policy, institutional design, urban planning, economic development, and political economy.
You focus on special economic zones and new cities. Do you see such projects as playing a role in economic development and poverty alleviation?
Cities and special zones hold the key to building inclusive, prosperous societies that address the major challenges of the 21st century. Special economic zones can be vehicles for introducing new policies that otherwise might be impossible for states/provinces or national governments to carry out. They do this by introducing new rules in a limited area, which avoids political conflict with people who prefer to preserve the status quo. New cities can play a similar role, except the potential is even greater. Cities are magnets for diverse people, ideas, industries, and creative expressions. So, when given enough power, they can combine all of these resources with good policies to unleash explosive growth.
Cities and special zones play a key role in international development and poverty reduction because they help reform institutions. Institutions – including laws, governance structures, and administrative practices – are the largest factor in the success of countries. Institutions determine whether businesses benefit more from delivering high-quality, affordable products or from chasing after political favors. They determine whether politicians benefit more from seeking the best interest of society or from taking bribes and helping elites. They determine whether poor people and migrants can find a safe, legal, and affordable home and job, or whether they stay in the shadows. Politas helps its clients restructure institutions in cities and zones to create more open, prosperous, and inclusive societies.
What are some projects that you have worked on that are most promising or you are most proud of?
First, we’re helping develop the institutions for a special jurisdiction in Latin America. We have the opportunity to greatly improve governance in the area for the benefit of all – from poor farmers to international investors.
Secondly, we’re developing new policy ideas that combat housing prices and homelessness in U.S. cities. Much of the problem with high housing costs in cities like Los Angeles, San Francisco, New York, and Washington, DC, stem from overly restrictive zoning that limits the supply of new housing. Many zoning restrictions are good and understandable, but they also prevent cities from being inclusive and affordable, especially for low- and middle-income residents. Easing these restrictions in a sensible way requires us to make sure existing residents don’t bear all the burdens and none of the benefits of new development in the neighborhood. We’re about to unveil some exciting work on this front soon.
Finally, we’re working on refugee cities projects for countries hosting large displaced populations. Refugee cities are special designated areas where the normal immigration, land use, and business rules are tweaked. Instead of forcing displaced people to stay on the margins of society, the special areas allow them to work, start businesses, and hold property.
What are some trends which you see in the development of new city projects and special economic zones?
Globally, cities and special jurisdictions are gaining influence. As more and more of the world’s population moves to cities, national and provincial governments are recognizing the outsized role cities play and letting them take more responsibility for their own governance. Power is becoming more decentralized by necessity and by common sense.
We’ve been working on a project in Libya, where decentralization is happening by necessity. The failure to form a state over the entire country has meant that mayors and local councils have had to fill a governance gap – providing public goods that were previously only provided by the state. We’re helping empower those local leaders through municipal capacity building and special development zones. Ultimately, we believe these cities and towns hold the best prospects for building a peaceful and prosperous Libya.
Decentralization is happening by common sense with many new city and special economic zone programs. The Republic of Georgia has decided to accelerate its impressive recent economic reforms, by building a new city and special economic zone in Anaklia. Anaklia has incredible potential because it will include a major, badly needed deep sea port on the Black Sea and is a perfect vacation spot. But even more importantly, the Parliament will give Anaklia special status under the Constitution, enabling it to pilot innovative new policies and governance structures. (It’s perfect weather means its a great vacation spot too!)
What this means is a shift is occurring. Zones are not just tax havens, they are becoming diverse, urban areas with new public policies, services, and administrative frameworks. Cities are similarly leaders in solving pressing global issues like immigration, the environment, and building an inclusive economy. It is an exciting time!Read More
Mwiya Musokotwane is building a new city in Zambia, and raising capital to expand the model throughout Africa. He is the co-founder and CEO of Thebe Investment Management, which is building Nkwashi, a new city project. Our discussion ranges from new city projects, to African development, to state capacity.Read More
One of the most important considerations in building a charter city is location. Building a charter city in the wrong location will inevitably lead to failure, while getting the location right can obscure substandard performance on other important questions facing a charter city. There are three key attributes of location, 1) legal autonomy, 2) potential population, 3) trade patterns.
Charter cities, by definition, have substantial degrees of legal autonomy. As such, the first and most important consideration for the location of a charter city is legal autonomy. This can be understood broadly as the relationship of the charter city to the host country. The host country must pass legislation which grants legal autonomy to the charter city, as well as being able to credibly commit, at least on certain margins, to respect the autonomy indefinitely into the future.
It’s possible to learn about the profile of potential host countries by examining projects similar to charter cities. Shenzhen, born out of a special economic zone, is arguably the city which most closely resembles a charter city. The special economic zone in Shenzhen had significantly more autonomy than most special economic zones and was sufficiently large to incorporate the future growth of the city. Another important project which is comparable to charter cities is the Dubai International Financial Center (DIFC) and its successors, Abu Dhabi Global Market and Qatar Financial Center. The DIFC imported common law to create a successful financial center, demonstrating the possibility of creating legal systems from scratch for charter cities.
China, Dubai, Abu Dhabi, and Qatar are all autocratic states suggesting likely host countries to be autocratic. On the other hand, Honduras, a flawed democracy, has passed legislation which allows the creation of a charter city. That being said, six years have since passed and no projects have been approved in Honduras, at least publicly.
In general, high income countries are less likely to support charter cities. The most potential in charter cities is in low income countries, as they have the most catch up potential. Low income countries also, in general, have higher variance in making policy than high income countries. As charter cities are not within the usual policy prescriptions, higher variance translates to increased likelihood of passing charter cities legislation.
The second important consideration in where to build a charter city is potential population. Where is the potential population going to be drawn from? New cities are constructed in rapidly urbanizing populations. In an urbanized country, a charter city would have to compete with existing cities for residents. In rapidly urbanizing countries, there’s an existing population of residents already moving to cities, making it easier for the charter city to rapidly grow.
High income countries tend to be rapidly urbanized. Latin America, surprisingly, is more urbanized than Europe. Much of Asia is urbanizing very rapidly, while Africa is urbanizing most rapidly.
The third important consideration in where to build a city is trade routes. Historically cities are built on trade routes, or in the case of most mountain cities, to extract resources. Charter cities are no different. The challenge is that many of the good locations have likely already been ‘taken’. However, it is easy to imagine someone making a similar critique about China in 1980 and we know how that turned out. More specifically, when forecasting there are two important changes in trade patterns which will allow the rise of new cities.
The first is global warming. Global warming will defrost a portion of the permafrost in Siberia, opening it up to farming and trade. Additionally, permafrost will make certain existing cities increasingly inhospitable, encouraging their residents to move. Further research needs to be done, or perhaps simply found, but cities with 50-year time horizons should begin thinking about the impact of global warming on trading patterns.
The second change in trading patterns will come from innovations in transportation technology. The hyperloop, supersonic planes, and even drones could lead to significant changes in trading patterns. Again, forecasting these changes is outside the scope of this post, but it should be considered when considering where to locate a charter city.Read More
Paul Collier is a professor of economics and public policy in the Blavatnik School of Government at the University of Oxford. He is also a director of the International Growth Centre, the director of the Centre for the Study of African Economies, and a fellow of St Antony’s College, Oxford.
He is a prolific author, his most recent book being on the refugee crisis. He has also written extensively on the world’s poorest, immigration, and the environment. He recently wrote a report with Tim Besley, under David Cameron about how low income countries could escape the fragility trap, drawing on the state capacity literature.
Our discussion ranges from development to state-building, to the benefits, and sometimes perils of democracy.Read More
The sixth guest for the Innovative Governance Podcast is Patrik Schumacher. Patrik is the Principal at Zaha Hadid Architects. Originally a socialist, the financial crisis made him rethink his views, turning him into a libertarian. He has stirred up controversy in architectural circles for his pro-market views, and recently began advocating for free private cities.Read More
Wade Shepard, a journalist who writes on new cities has an article in Forbes which describes some of the challenges in categorizing new city projects.
When emerging markets step onto the global stage they are often clad in new cities. From China to India to the Middle East to North and Subsaharan Africa, markets are rebranding themselves as modern, international and investment-worthy by building shiny new metropolises in droves. Indonesia has 28 new cities in the works, Morocco is building nine, while even little Kuwait is at work constructing 12 new cities of their own. As I write this, Oman is building Duqm—a new urban colossus two and half times the size of Singapore—out in the middle of the desert, Palestine is throwing up the towers of Rawabi, and developers in South Korea’s Songdo are proverbially looking down from the windows of their skyscrapers upon the new city of 120,000 people they built successfully from scratch on reclaimed land.
The challenge in categorizing new cities is that there doesn’t exist a standard for defining cities. For example, sometimes a single city can have multiple administrative areas, like the Washington DC metropolitan area, or an administrative area can encompass multiple cities, like Chongqing.
Wade Shepard identifies five important qualities for new cities; 1) master planning, 2) multi-use, including residential, 3) economic drivers, 4) physically distinct from other urban areas, and 5) distinct identities. I would, however, caution, that new cities do not, and in fact most aren’t master planned.Read More
Our fifth guest for the Innovative Governance Podcast is Glen Weyl. He has a new book written with Eric Posner, Radical Markets: Uprooting Capitalism and Democracy for a Just Society where he argues that we should rethink our current property rights regime in favor of property rights that are based on auctions and would lead to greater allocative efficiency.
- Radical Markets
- William Vickrey
- Mechanism design
- Armen Alchian
- Henry George
- Progress and Poverty
- Coase Theorem
- Matt Kahn on Weyl and charter cities
- Armen Alchian
- Vitalik’s blog post
Last week I attended the World Free Zone Organization’s annual conference in Dubai. One of my goals with the Center for Innovative Governance Research is, first to map, then bring together the groups which are a natural constituency for charter cities and other types of free zones. As such, what follows is a mapping of what I believe the important aspects of the World Free Zone Organization are.
- The World Free Zone Organization (WFZO) is four years old. It is not the only international special economic zone organization, another is WEPZA, but the WFZO appears to be the most active.
- Their funding is nearly entirely from Dubai related entities, see the sponsorship list here.
- They function as an industry group.
- African, Latin American, and European free zones were well represented. Asian zones were underrepresented.
- Conversations were different for different continents. High tech manufacturing in Europe, labor intensive exports in Africa.
- Most free zones present focus on exports.
- Very limited discussion on the regulatory arbitrage of free zones. What discussion there was focused on taxes.
- The speakers focused on international trade. The economists invited did not specialize in free zones.
- There were relatively few consultants there looking for clients.
- No discussion of free zones as a tool for economic development.
- No discussion of charter cities, or free zones with urban areas.
- There remains no good mapping of free zones worldwide.
The key takeaways from the conference are that discussions of free zones are still relatively underdeveloped. Free zones themselves don’t have an international internally consistent narrative, though they are developing one. There is the opportunity for influencing the WFZO, and free zones more generally, toward mixed use, more urban, deeper reforms, e.g. charter cities lite, which can set the stage for economic development.Read More