Tag Archives: economics

Libertarian Floating Islands

The philosopher Immanuel Kant once said that if the world were an infinite plane, then all the problems of political philosophy would be solved. If one citizen disagreed with the way his society were run, he could pack up and start a new one over there. In reality, we’re stuck with this spherical earth, and if you keep re-locating over there, eventually you’ll end up back here, to face whatever it is you were trying to get away from in the first place. So it looks like we’re stuck with each other, and the challenge of modern society is to find a compromise.

One thing Kant probably didn’t imagine is that in the 21st century, we would spot an opportunity for a new over there. Last week was the third annual conference on Seasteading. The Seasteading movement aims to create small floating cities in international waters. They envision experimental societies, intentionally-formed communities free from the regulation of national governments and the influence of social mores.

In reality, the most serious interest in seasteading has come from rich venture capitalists. Peter Thiel, the billionaire founder of paypal and noted libertarian, donated $500,000 to the Seasteading Institute in 2005. As a Silicon Valley venture capitalist, Thiel knows first-hand the downsides of government regulation. Thiel has seed-funded a Seastead off the shore of California, which will provide day trips to the mainland and promises to get around the restrictive work visa system, allowing the unrestricted flow of international capital and labour.

But for some, seasteading is more than just a legal hack. It’s an opportunity to apply the scientific method to society; each seastead an experiment to test an economic or political idea. Do financial transactions taxes really chill innovation? What are the consequences of zero welfare provision? How about if we legalise all drugs? Policies which would be impossible in a large democracy with a divided citizenry become possible in smaller communities of like-minded individuals.

So it is no surprise that seasteading is popular amongst libertarians like Thiel. And libertarian seasteads may indeed prove highly successful. But to see them as experiments in the ‘science’ of Politics is a rather dangerous mistake. Such ‘experiments’ have flawed validity; the citizenry of libertarian seasteads would end up a selective group blessed with talents and riches, who spend at least as much of their resources keeping the wrong people out, as letting the right people in.

Thiel criticises the US government immigration policy, as it prevents skilled foreign programmers from working in Silicon Valley. But the libertarian view of immigration has an ironic nuance. On the one hand, they often advocate open borders, arguing – admirably, if unrealistically – that no government should interfere with an individual’s freedom to roam the world as he wishes. On the other hand, in a libertarian society, where private property is absolute and everything is privatised, undesirable immigrants would have the same rights as trespassers, i.e. none. Some Seasteaders, fearful of climate change, have even begun building self-sustainable floating islands, impenetrable to climate refugees. Those foreign programmers on Silicon Island may be welcomed, but only at their host’s discretion. The poor, the destitute, the dispossessed, and the sick need not apply. The taxpayers on the mainland who funded the Seasteaders’ education can also forget about getting anything back.

Libertarian seasteads will be the preserve of the rich, and cut free from the draining demands of the rest of society they may well thrive. But this would hardly be a lesson for the rest of us. Those of us who know that the earth is not an infinite plane, also know that the challenge of building a good society means caring for all. The success of selective libertarian islands would constitute the failure of humanity to work together for an equitable future in a prosperous world.

Digital abundance, physical scarcity

This is my attempt to articulate what seems like a contradiction in our modern attitudes to the production and consumption of physical versus digital goods. It’s not new, but I often find it lurking the background of much of what I think and read about.

On the one hand, it is increasingly clear that we have begun to push the planet to its limits. We use more and more of the earth’s finite resources, plundering them faster than they can be replaced. Throughout the ages, we have been able to do this without facing negative consequences. Why replant the forest when you can go and chop down another tree? Why create new energy sources when we can continue drilling for oil? This way of thinking is deeply ingrained in our economic model. Growth relies on consumption, and the resulting environmental degradation is not easily factored in to calculation. But even as it becomes clear that the natural world can no longer be treated as abundant,, we continue to act as if it is.

On the other hand, intellectual goods – by which I mean knowledge, culture, art, music, literature – are now more abundant than ever. They have, for most of history, been bounded by the scarce physical matter which allowed their transmission from one mind to another. The production and dissemination of knowledge and literature was for a long while dependent on paper, printing presses and costly distribution chains. Music was limited first by proximity to musicians, and later, by the material format on which sound was stored. Now, with the advent of the web, the cost of a copy of a book, song or image approaches zero. Modern technology enables us to have more intellectual goods than we could ever consume in a lifetime.

And yet the prevailing economic model for the production of intellectual goods requires us to behave as if they are scarce. The ‘content’ industries – those whose products exist as particular strings of 1’s and 0’s – have to limit the supply of their product to maintain its value. If just anyone can access to the particular string of 1’s and 0’s which makes up an mp3 audio file, then the intellectual good loses its value in the marketplace. According to some, this ultimately leads to no new intellectual goods being produced in the first place, but that’s another story. In any case, this imposed scarcity is artificial in the sense that there is no technological reason why everybody cannot access those bits or run that piece of code.

In both cases, our beliefs about the value and availability of a given resource are grounded in the reality of the past. For centuries, the earth’s resources really were abundant, and the dominant attitude towards them was appropriate; it allowed human civilization to progress. Likewise, intellectual goods actually were scarce, so our consumption of them really did have to be limited. But now that the situation is reversed, our assumptions have failed to catch up. We treat our natural resources as if they are abundant, and intellectual goods as if they are scarce, when the environmental and technological realities suggest the exact opposite.