Jason Hartman hosts Patri Friedman, Executive Director of The Seasteading Institute, to discuss seasteading as a way of creating new countries. Patri explains why this is done out at sea away from land. He discusses why seasteading would be a great way for governments to attract citizens by treating them better. He goes into security issues in the middle of the ocean and then gives ideas of currency.
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Jason Hartman 0:59
It’s my pleasure to welcome Petrie Friedman to the show. He is executive director and chairman of the board of the seasteading Institute. He’s the grandson of the world renowned Milton Friedman and Son of David Friedman. Petrie, welcome. How are you? I’m doing great. Good to have you on the show. I read about seasteading many years ago. And then I had the pleasure of actually meeting you in person at our mutual friend’s home in bel air, maybe, I don’t know, 10 years, maybe 12 years ago, where you talked about seasteading. And this is a pretty interesting concept. I almost want to say it’s the concept of startup countries. So yeah, what is seasteading and and what is a startup country?
Patri Friedman 1:44
So seasteading is the idea of building homes on the ocean, and not just homes, but communities and eventually countries. And the reason is that, well, I view government as an industry, just like any other. And if you start thinking about as an industry, we just use our financial analyst or economics hat, you realize that it’s a really messed up industry, because new firms can’t enter. You can’t just make your own country, there’s no startup sector. And so of course, there’s not much innovation. And the idea is that we could fix this if we open a new frontier. And people could go and start new countries, trying out new systems of government, just like America did a couple hundred years ago. And maybe we can find a new operating system for the 21st century.
Jason Hartman 2:28
Okay, well, you know, you start a new company with an idea and some capital and a certain jurisdiction in which you do it, and you’re subject to the laws of that jurisdiction, obviously. But I don’t know if what you said is exactly accurate. Just to be fair, you can start a new country. The problem is you need a military with which to do it right. A nuke new countries are always started by force, aren’t they?
Patri Friedman 2:53
That’s right, yeah, you can start a new country if you’re willing to win a revolution. And some people say an election, but that’s not really true. We can see, even when candidates who want to engage in great reforms, win an election, you know, they’re dealing with the entire mass of laws, the bureaucracies and the organizations that are in place, and they can’t just change the direction of entire country. And that’s, that’s probably good, they shouldn’t be able to, what we’re saying is that we also need places that have more experimental rules chosen by smaller teams of people, maybe even for profit companies. In some cases, we view these as sort of the next evolution of imagine like masterplan communities meet special economic zones, where the real estate developer is not only putting together the project, but also even looking around the world at the best legal codes and choosing what legal codes to use and operating the the courts and the police and not just the development.
Jason Hartman 3:47
Interestingly, that’s exactly what at least smart entrepreneurs do. When they set up a business, if it’s within the United States, they shop between 50 states, and maybe Puerto Rico and Washington DC as well. And they decide where is it best to form my corporation or LLC? what place has the most favorable laws? And you know, maybe they don’t physically need to be there. Maybe they do. And they shop, you know, it’s a marketplace. And it’s a wonderful thing, people vote with their feet as it should be. But you know, it’s interesting, I love real estate. I’ve been in that business all my life. I especially love income property. And I remember years ago, hearing the preamble to the national National Association of Realtors induction, and it starts with under all his land. All right, and, and even in our high tech world, where we have cyberspace and cryptocurrencies and virtual reality and augmented reality. If you want to start a country, you got to have a piece of land, right?
Patri Friedman 4:54
Well, Mark Twain said by you know, stop making it and we’re saying production resuming, I mean, absolutely. And part of the idea here. And now, I want to admit that there’s downsides, the ocean is expensive. It’s a tough environment. And that’s why we’re initially focused and building close to shore, we have designed that will work eventually for large deep ocean sea stead, but it’s going to be a while. But the potential to be able to make new jurisdictions and make cities You know, one of the neat things about the ocean is that you can move things as largest skyscrapers, I mean, a cruise ship is as big as a skyscraper and it moves constantly. So cities on the ocean could actually be modular and rearrange about where you can not only vote with your feet, but vote with your house, or vote with your commercial real real estate property. And we have partners in the Netherlands who design floating homes there, and they’re able to do really neat things like when a floating office building gets upgraded, instead of having to demo it, tear it down, they instead sold the smaller building and towed it off to a new location and installed the bigger building. So there’s some really amazing things possible, where cities are competing for people competing for capital, and even competing for the very floating real estate that the cities are made up.
Jason Hartman 6:09
Okay. So, you know, you admit that the ocean is a tough environment? And I would agree with you certainly, I mean, some of these cruise ships could almost be a country, you know, they’re pretty large, they’re, they’re getting pretty big. Why not just buy a piece of land from a country? You know, maybe there is some country that would sell you a piece of land and allow you to make it a sovereign country. Right. Is that is that occurred to you? Or is it really you got to be on the ocean?
Patri Friedman 6:37
Well, I think that building on land in partnership with a country is viable. But the approach that I and my other nonprofit startup societies foundation are, are advocating for that involves working with the country, to govern a part of their territory that they designate. And with their oversight, the company or the developer, would get the set part of the laws. And the reason for this, you know, first off, we’re not ready as as a movement or as a species, for small groups to buy sovereignty. But the other thing that actually, in international law, part of how sovereignty works is it’s being recognized by all of the other countries. And so if a developer makes an agreement with one country, to do what’s called a charter city, inside that country, and get to bring in best practice laws around the world, they’re essentially operating in international law under that country’s sovereignty, and so every country that recognizes that host country would recognize them. But if you got a country to sell, you land with sovereignty, then you go from being recognized by 150 countries, to being recognized by one country. Because if even if they say, we This land is not ours, we recognize your sovereignty, no other countries recognizing you, and that means you only have one country recognizing you. Okay, so
Jason Hartman 7:55
yeah, fair enough. That’s good point. So how do you get the other countries to recognize you? Do you go and petition the United Nations or something?
Patri Friedman 8:04
It’s a complex question, because there’s no established procedure to become a new nation. There’s a lot of customs and guidelines. And I think, you know, what I’m saying is why we’re working with countries today, and probably for the next 1020 years, in order to make these smaller developments on land and on the ocean, is that it’s gonna take a while to solve those problems and the side of development that you need, in order to credibly get recognized by countries. You know, it’s just a lot bigger than anyone can manage right now. Right? billion dollar development is not enough to go and get recognized by 150. countries. Yeah. Got it. So there are new countries being formed. I mean, the map does change occasionally, right? Yeah. They’re being formed regularly in a number of countries has been growing quite a bit in recent decades, as my patron Peter teal was wondering,
Jason Hartman 8:55
what do we have now? About 206 countries or 193? I don’t know. It depends who’s counting? Maybe?
Patri Friedman 9:00
Exactly. It does depend who’s counting. But what’s happening there. So what’s different is that those countries that their countries that are splitting, based on say, ethnic or religious grounds, and what we’re proposing is something that’s intentional, that’s not historical, that’s looking forward instead of looking backward, that says, hey, here’s a group of people with an idea about how to make a better city with better laws. You know, how about they try it out? We’ll see who moved there. It’s doing it as a business. Yeah. Plant Association.
Jason Hartman 9:32
That is super cool. I love the concept for sure. I’ve been saying for years, you know, like the, I mean, there’s a couple states within the US that would be likely succession candidates, right, Texas is obviously one of them. I think
Patri Friedman 9:46
that’s in Hawaii, and maybe
Jason Hartman 9:48
maybe Rhode Island, one of those is or Maine. I don’t know which one but, you know, up there, there’s kind of one that sort of really libertarian, I think is Rhode Island, right? Or so Hampshire, or New Hampshire, New Hampshire. Thank you. Thank you. Sorry. Sorry for me. hurts. But I just couldn’t remember, you know, like I would say if Texas was to secede from the Union, the first question is, would they let it happen? Right? What would the government roll tanks in there? Would there be fighter jets flying over Obama? Yeah. You know, who not? Who knows, it’s never been tried, right. But if it did, I always said it would become the Hong Kong of the United States. Because it would be this this Mecca, where all the capital would flee to the most friendly, you know, money goes where it’s treated best. And that’s what would happen. So there could be a secession concept, right?
Patri Friedman 10:36
There could be but I think it’s tough to do, because in the US secession is, is associated with darker aspects of our past. And I definitely think that the union is, is starting to strain a bit, but it’s still the United States, I think, is still a lot stronger than, say, the European Union. And I think it’ll be a while, you know, what, what you’re saying about about capital, so part of what I see is that capital is already flowing really effectively between jurisdictions based on where it gets the best treatment, you know, and that’s great. But what we want is for people to be able to flow more between jurisdictions, and we want governments to be competing for citizens by being great places to live and work the way that they compete for businesses today. So that’s part of the idea. Let’s talk a
Jason Hartman 11:22
little bit more practically for a moment how, what is a C stand? I mean, what is it made out of? What makes it float? And how big would one need to be to kind of be a viable country? You know, when where would it be floating, you said that, right now, you were looking at models that were like these close to shore models, but it has to be what, like four miles offshore to be in international waters or something, tell us about all that kind of like really physical type of stuff.
Patri Friedman 11:49
So the ocean is divided into a number of zones. The first 12 nautical miles from shore is called territorial waters. And that’s exactly the same as being on land.
Jason Hartman 11:58
Once you’re 12 miles, not four, okay, you got to write,
Patri Friedman 12:01
there’s a common misconception that things are just a free for all outside of that, and they’re really not. So if you’re a ship, then once you’re outside 12 nautical miles, as long as you’re on a journey between two different countries, then you’re regulated by the state whose flag you fly. It’s like a corporate registration. So you register your ship, and they have sovereignty over you, once you’re outside territorial waters. And that’s actually an incredible system from the competitive governance angle, because this is a virtual Association where you’re franchising their sovereignty. So I think there’s a lot that could be done with, you know, what I call ship Said’s. I think that medical treatments, for example, on a cruise ship, like medical tourism, but instead of having to fly someplace, you know, you get on a ship in LA, that just goes to Mexico and back, I
Jason Hartman 12:47
think one of the concerns there is if you got to have surgery, keeping the knife study,
Patri Friedman 12:51
you know, that’s what I thought too, but it actually turns out from Navy experience, but it’s because ships make these long, slow rolling motions, rather than any, like sudden jerks that it’s not so much of a problem. So practically, that’s one design that we’ve covered is the ship. Now then the easiest design is if you’re in sheltered waters, then you can do it like a floating home, where you have platforms that are say, hollow concrete boxes, or foam filled concrete boxes, and that you just put normal buildings on top of. And that’s one way you can go. And then there’s the oil rig, which we did a we commissioned to design. So we have a patented oil rig, residential system design, and those have these long pillars. So then the flotation is below the water. And then you have a pillar so that there’s not very much surface area at the waterline. And then the pillars hold of a platform. And you build on top of that. And each of these kind of has has different trade offs, depending on where you are and how big you are, you know, and you asked how big these needs to be. So here, it really depends on on the economies of scale, if you’re close to land, and you can build on these developments for just hundreds of people, for example, but if you want to be your own country, I think that you need to have 10s or hundreds of thousands of people. And you know, we really need to scale up with smaller developments first.
Jason Hartman 14:09
Okay, so who would fund a building? These are? These are giant projects. Right? And, you know, it begs the question, I mean, every sovereign country is susceptible to invasion, you know, if they have wealth, somebody is going to want it and some burglar with a military, like Napoleon or saddam or whomever, they’re gonna come and get it sometime. Right?
Patri Friedman 14:33
Well, I mean, that’s a concern. But that’s a way in which the world is really changing is that we’re currently in a phase where countries aren’t doing hard imperialism, we’re forcing sort of soft imperialism from places like China, and maybe I would, I would say that Russia would be the only great power is doing something closer to actually taking territory. So I think that that if you’re following international law, and you know, initially you’re you’re plugged in through one or more agreements, with existing countries until you’re large enough to sort of be bigger than many of the smaller countries and then claim independence, and of course, have a military. You know, I’ve always said that the the big worry is is not pirates. It’s nation states. But, you know, nation states these days, they are not in the business of conquering places, fortunately. So especially in matters if you don’t threaten their economic interests. So one of our core principles is the idea that if these little policies are going to want to have their sovereignty respected, then they better respect the sovereignty of all the much bigger, much older countries. And that means, for example, that seasteading can’t help citizens evade the laws of their country. So, you know, things like you certainly wouldn’t want to let any cease dead, export drugs that are illegal in other countries, or help residents hide money and dodge taxes, like, because those things are disrespecting the sovereignty of other countries over their citizens. And that’s the last thing we want to do.
Jason Hartman 15:55
Okay, what else do we have to know? I mean, there’s so many issues. What about a passport? What about funding? You didn’t answer the question about funding these giant projects? I mean, it is a startup. So you got to raise capital Now Peter teal, is he one of your backers? Yeah, he
Patri Friedman 16:12
was our first donor to the seasteading Institute, and he supported us for many years helped us get started, I see these projects as being very much for profit, right. So it’s, it’s like a real estate development, except you’re getting to bring the legal system and the courts and you ought to be able to make the land worth a lot more, if you bring a good, honest legal system and honest judges to a place that doesn’t have them. So that the money will be coming from investors seeking profit by funding your construction in return for the rents just like any real estate, other basics. Right now. We’re really it’s all about partnerships with countries and starting to do small developments. We’ve done a decade of research and we had one partnership with French Polynesia, we had a non binding agreement, where we did an environmental impact study economic impact study and looked into legislation that they could pass to enable a C zone, sort of a special economic zone for platforms floating alongside but the the team that did that, they tried to raise money with an Ico right after the Ico bubble burst. And they kind of ran out of steam. And so the partnership is not being advanced right now. But the country is still open to it.
Jason Hartman 17:27
Okay. I’m sure I haven’t asked you many questions that I should be asking, what else do you want people to know, just kind of tell us more?
Patri Friedman 17:36
Well, I mean, I think it’s interesting to think about how how this fits into a lot of the changes that we’re seeing in the 21st century. I mean, you know, with cryptocurrency, for example, there’s a lot of overlap in interest because, you know, what is cryptocurrency? It’s the idea of taking something money that has historically been done by the state in a centralized fashion. And, you know, they’ve sucked value out of it that way, and using technology to make a decentralized, more stable version. And, you know, really that’s what seasteading is it’s taking something traditionally done by the state, namely, you know, being a state and making laws and saying, hey, maybe we can do it in a decentralized bottom up way that uses new technology in the fiscal 21st century. So I think a lot of these, a lot of these trends are kind of on our side.
Jason Hartman 18:22
Okay. Yeah. Interesting. So, I mean, I guess the sea stead could use any currency, they could peg themselves to say the dollar, they could be a cryptocurrency country. So there’s that. Did you want to mention something about that?
Patri Friedman 18:37
One thing that people often mistake is thinking that seasteading is about one particular society that we want to make. And so they asked us, like, what will the money be in your sea stead? And the answer is that our goal is much bigger than that. We don’t want to create one society. We want to do the research and advocacy so that any group of entrepreneurs out there who has a vision for how to make a new society or a development with new legal systems can go out there and do it. And so our motto is let 1000 nations bloom. We don’t want to take sides and what the laws are, we want to just want to change the industry to create a startup sector.
Jason Hartman 19:15
Yeah, and I love the way you say the industry, which is an interesting way to look at a country. And also it’s it just be this marketplace of ideas. And those ideas become, you know, laws and every set of laws is different. But you know, you said that a sea stead should respect the laws of other countries so that other countries, for example, wouldn’t want to invade them more and steal their wealth and things like that. So they wouldn’t allow people to dodge taxes or do drugs or whatever, right. But ultimately, the startup country, the sea stead would probably outcompete the other countries to attract capital. It would have better corporate law. It would have a more business friendly environment. And so there would be a capital flight and maybe a brain drain following the capital, of course, other countries would be upset by that. I mean, look at in business. Nobody loves their competitors, right?
Patri Friedman 20:16
Yeah, yeah. I mean, I think if it works out, there would be a brain drain and capital flight. But of course, I think that the greatest impact that the startup sector could have, would be spurring the big players in the industry, which is the large existing nation states to start innovating in order to be able to better compete. And so I think that with through syrup societies, we’re working on an open source legal system, for example, called you, Lex. And so these laws and code, they’re going to be out there for other countries to use. So if they don’t want to lose in the competition for citizens and capital, hey, all they have to do is change their laws.
Jason Hartman 20:52
Very interesting. Very interesting. Give her your website.
Patri Friedman 20:55
Sure. It’s seasteading. That org. And I also write on Twitter as Patrice Mo,
Jason Hartman 20:59
Petrie. Where are you located?
Patri Friedman 21:01
I’m in the Los Gatos mountains at the very edge of the Bay Area.
Jason Hartman 21:05
Okay. And, you know, we’ve got to ask someone like you that because you might be out at sea. And, you know, we never know, you know, you’ll be out on the sea stead. someday.
Patri Friedman 21:14
When do you see this happening? When I saw your presentation about it at our friend Judds house, you know, you talked about decades out, even, you know, 100 years away with like a timeline that you might see some of this start to take shape, we’re starting to see the first csudh projects that are actually being built or have actual partnerships with countries happening right now. So if you asked me a few years ago, I’d have to say, I don’t know, 510 years, but these things are actually starting to starting to happen. So in the next few years, you’ll see things like this, although, of course, they may or may not be described as being like this, I mean, every every new product to the done branding, and we could see product like this either trying to position themselves as very innovative and cutting edge in order to attract people or, you know, just as kind of Nothing to see here. Move along. You know, they’re more worried about getting negative publicity. So keep your eye out.
Jason Hartman 22:09
Yeah, good stuff. Thanks for joining us. And good luck. This is fascinating. And I really wish you the best it would be. It’d be great to see some competition in the country industry. Good stuff. Good stuff. Thanks again.
Patri Friedman 22:24
All right. Thanks for having me.
Jason Hartman 22:27
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