Russ Roberts

Patri Friedman on Seasteading

EconTalk Episode with Patri Friedman
Hosted by Russ Roberts
PRINT
Bernstein on Inequality... Shirky on Coase, Collaboration...

Patri Friedman, Executive Director of the Seasteading Institute, talks with EconTalk host Russ Roberts about seasteading, the creation of autonomous ocean communities as an alternative to existing political and cultural forms. Topics discussed include the political and economic viability of seasteading, risks of piracy, the aesthetics of living on the ocean, and the potential impact of seasteading on conventional governments.

Size: 22.1 MB
Right-click or Option-click, and select "Save Link/Target As MP3.

Readings and Links related to this podcast

Podcast Readings
HIDE READINGS
About this week's guest: About ideas and people mentioned in this podcast:

Highlights

Time
Podcast Highlights
HIDE HIGHLIGHTS
0:36Intro. Seasteading, play on word homesteading. Build new city-states on the ocean. Freer society, bring libertarian ideas into use. Logistics: built sort of like oil platforms, on tall pillars to avoid waves. Just outside U.S. territorial waters, eventually outside 200 nautical miles outside Exclusive Economic Zones (EEZ). How many people? Looking for about 50,000 square feet; some would live, others commute; first deep ocean ones: 200 people, 250,000 square feet, resort that would go to be a real city. Governments that serve people much better. Key qualities: high barriers to entry. To try out a new government, you have to win an election or a war or revolution. On the ocean, since it's essentially unclaimed, you can try out government on a small scale. High switching cost--have to leave your family and friends to leave a country. These would be modular: you could move your entire building, boatlike but for skyscrapers. Georgia could be 1000 miles from Russia in a week. In the short term, mission is autonomy, not sovereignty. No formal way to get recognition as a country. Have to fly the flag of some existing country and are under their protection, their rule. Flags of convenience: half of the world's tonnage is registered under flags of convenience. Flagging is a competitive market.
7:11Idea intriguing but reality: is it feasible or a pipe-dream? Cruise ships: millions of people do that; possibly the cost of living on a cruise ship is less than a nursing home. Would seastead be self-sustaining? Definitely not. Self-sustaining is another way of saying really poor. No comparative advantage in growing things. Comparative advantage in low regulation: would offer services that are not available elsewhere. Other than being just a pleasant place to hang out: ocean tax vs. the government tax. Harsh corrosive environment tax: if that could be made less than government tax, people would move to the ocean and use the land for farms and other things that are efficient on land. What would people feel hanging out there for an extended period of time? Resort model; over time a few people would be attracted to live there. Would help to have businesses there--cruise ships employ many people from the Third World. What would it be like to have none of the features of the natural landscape other than the ocean? Exhilarating but boring. Talk to people who live on oil platforms for extended periods of time--not very happy. Fountains. Economics of creating platforms: have engineers, so far sounds like $500/square foot, comparable to expensive houses in the Bay area. After the first one, build a factory. Customize. Safety; aesthetics. Stability of oil platforms: a lot of money spent on them but sometimes they go down in storms. Evacuations by helicopter. Looking at seasonal migration to avoid hurricanes. Could locate in the Doldrums, not a lot of big waves.
15:44Alternatives: other ideas people have proposed to create more liberty. Would love to get more liberty without leaving California or having to rebuild civilization. Has to be stable and feasible. Free State idea: Yale thesis, libertarians may be a minority everywhere but if enough get together could influence government. Picked New Hampshire, state motto is Live Free or Die. Aiming for 20,000, less than half that so far. Post-Civil War U.S. already has strong government values; most problems are at Federal level, not state level. Problem with Free State project is that it's trying to affect the area of government that is least bad. Effect that can have on liberty is limited. Could minimize state component. Even if 20,000 hard-core libertarians went to live in New Hampshire, senators would not likely be anarcho-capitalists. Bulk of people would eventually come to want collective action to be coercive. Organic feature. Seasteading depends on changing the incentives of the system. Some people may move there and want collective action; those seasteads would have more state intervention. Fluid nature of the ocean; would be hard to force that on those who didn't want it, because people could just take their town and leave. Ralph Nader theory of regulation: government regulation doesn't work but that's just because we have the wrong leaders. George Stigler's view. Seasteading: opportunity for socialist communal powerful state arrangements for those who feel that government is not currently statist. How many states like that would develop? Generate more empirical data. Can learn which things work and which don't.
24:18Hayekian emergent aspect to this. In early days, owner? covenant? constitution? Initially set up as a private business, Spencer McCullen's [sp?] propriety idea. If you have control and lease out the businesses then you have an incentive to make the property as valuable as possible; incentive is to serve them well. Over the long term, people will want to have a say in how things work: constitutions, elect people. Hayekian order, Stigler: frustrating how this idea is built on these libertarian insights, say Ron Paul--example of just "get a different guy in there." How instead can we change the system in a way that is feasible and sustainable? Pirate radio: originally didn't play great music; operated on ships. Governments made it illegal to sell supplies to them; had to go to the Netherlands. Eventually made better radio. Competition. Bring more liberty to the world. Is it really conceivable that thousands or millions of people could live this way, as opposed to hundreds? For smaller ones, avoid waves by using pillars; but if it's big enough, can have a breakwater. Get a 1/r (radius) economy of scale. With a breakwater, actually pretty cheap. Ocean tax could be really low. Could paint them, could surf them. Inclined plane simulating the shoreline. Wave compresses and breaks. Very cool. Small number of people excited about that but not trivial.
30:38Are people taking this seriously? Some are, some aren't. BBC interview, CNN, now EconTalk. Benefit of idea is that it doesn't need to be taken seriously by a lot of people--just a few people with money. Don't have convert millions of people. Finances: people on staff? hobby? Originally just Patri and Wayne Gramlich. Small group, step by step. Book, blog. Last year, through Clarion Capital, hooked up with Peter Thiel, funding. Business plan, pitch idea of 20 miles off the coast of California. Have you ever run anything? No, but could bring in people. Want to make sure the political vision happens. What might stop if from happening? Basic nature of the ocean: ocean tax could be too expensive. Government could notice and try to do something about it. How violent will they be to keep their monopoly? What about piracy? Not too worried. Small scale: 2/3 do not involve guns. Organized crime groups take ships and take all their cargo, nicely boxed and ready to be sold. Ratio of people to moveable property different, works in seastead's favor. Assets in the form of concrete and generators. Seastead that can move around could be appealing to hijack. Defense: problematic. Walking the line between having enough to make it expensive to attack but not seem like an offense. How much weapons technology? Other problem: collective nature of defense. Hierarchy of government: platform level; could join together in groups at higher level. Fluid nature of these groups. Will be useful to have large collective higher levels. Skepticism vs. love--sign-ups. Get people who think it's a great idea, build it and I'll come, sign me up; others with other political goals.
38:53Logistics: water, electricity. Book, online: water, evaporation, desalination. Power at beginning, mainly diesel, a little solar and wind, maybe long term wave power maybe based on o-tech, heat differential between deep and shallow water. Food mostly imported, but grow some fruits and vegetables in greenhouses. Fish cheap. Aquaculture. Huge efficiency when you go from hunting to farming. Demand for fish is going up, healthy, great source of protein. Aquaculture now 20% of fish production. Fresh water vs. salt water; deep ocean aquaculture. Farming tuna. Aesthetic return: seastead as a giant aquarium. Sushi. Fountains. Logistics of the first one: dream big, when might first one be open for business? Optimistic time: 3-5 years. First deep water one 5-10 years. Evolution in oil platforms? Aesthetics, design. Source of information but different requirements: don't need to be fixed in one place, don't need to take heavy loads. Generate power and water locally. Financially viable. Cruise ships, too. Oil platforms very expensive; seasteading needs to be much cheaper. Could pump oil as a strategy to be financially viable. They are probably pretty good at it already. Everyday people: what excites people the most? World needs a frontier, experience of America, last big revolution in making a government was democracy. People with pioneering spirit. Ocean is the penultimate frontier: not space, but closest next thing. Has to happen.

COMMENTS (20 to date)
Sam Wilson writes:

I found myself fascinated by this week's podcast. Like many other listeners (I suspect), I was skeptical about the idea from a number of angles: start-up costs, cost/benefit analysis, marginal utility, etc. The mention of economies of scale prompted me to think of this proposal in terms of game theory, and it occurred to me that if this were to be a possibility, there would have to be some sort of Schelling point not only for up-front investors, but for potential residents. I've been mulling that point over for a bit now and the first thing that occurred to me would be some sort of powerful shock to the land-based economy. If there were a way to offer, say, reliable seaborne monetary policy in times of hyperinflation on shore, we might see folks springing for a peacoat and a watchcap. However, in the absence of simply dreadful conditions on land, I think I share your skepticism about willingness to sign on, Dr. Roberts.

On another note, I'm not at all convinced that the cruise ship model is particularly attractive from both a practical standpoint and on ethical grounds. One of the reasons cruise ships appear to work so efficiently (from the passenger's perspective) is that the working crew (entertainers and activity coordinators excluded) are kept strictly segregated from the guests. Speaking as a former sailor, I can speak with some authority that those marginal workers who would go to sea for whatever reason (be it wage differentials or possibly something shadier) are not often socially compatible (a horrible term, but I'm struggling to think of something more appropriate) with the magnates and gentry that might be attracted by the liberal trade and manufacture policies suggested by the plan. Life at sea is not at all the same as life on land. Even in a small town, it is relatively easy to avoid those people you'd rather not spend time with. I can't assure you enough that this sort of task is next to impossible at sea. The "ocean tax" (a term I quite like) must include the social disutility inherent in this kind of arrangement, else the operators of the floating communities be willing to segregate manual laborers, an idea utterly anathema to liberty. After all, we would consider these seasteads to be akin to autonomous nations and I think anyone with a libertarian sentiment is put off by coercive conditions of citizenship.

Then again, perhaps there is a middle solution to the living arrangements. Perhaps my own shipboard experience has rendered me myopic. I'd like to think (and I suspect I'm right) that I am often unable to develop every possible solution to a problem. Still, I think this particular issue is one that must be considered, as I know from my own experience that the most difficult part of being at sea is dealing with the rest of the crew.

I'd also be interested in how collective barganing might work. It's clear that any sort of treaty would be next to impossible with a nation that could just up and split up overnight. Any sort of permanent diplomacy would be a nightmare. Also, like it or not (and I really don't, on libertarian grounds), free trade is largely accomplished these days through international agreements. If I ran my own floating country, I would constant fret over the threat of embargo (or just ordinary trade protection), made worse by the fact that my internal alliances are no more permanent than the shifting sands of a windswept beach. I'm not sure far-thinking investors would be attracted to a situation where goods and services could flow in unhindered by tarriffs or quotas, but could not flow out as easily.

Still and all, I think it's a very romantic idea, and appealing to those of us who spend our time identifying flaws in the way our elected officials choose to serve our interests (i.e. usually not at all). I spent close to four years at sea, and there is a lot to recommend it.

Cautious Fan writes:

Big time listener, first time poster here.

I think the seasteading idea is a little "fishy." First, I felt like Friedman left a little to be desired on credibility. He sounds like a young guy with lots of passion but not a lot of reality. I appreciate his efforts though. Venture capitalists like the following question; "If the idea is so great, why hasn't someone done it before?" The point is, if there isn't some new enabling technology, it's probably a bad idea. The only enabling technology I see here, if you want to call it that, is we live in a services based economy now which allows for remote production of goods.

In addition, the tax of the sea seems to me to be significantly more than the land tax. If it wasn't I suspect we'd already see communities of various nutjobs & jerryriggers making their life out on the sea tieing together old barges and living free.

Finally, most people on land currently have the option to leave and go to another country. I suspect we don't because we like our familiar surroundings. I foresee the same thing happening at sea, but hey, I'd love to be proven wrong here.

Sorry my first post is negative. The idea was stimulating and I'm a big big fan of the podcasts. Russ is making a Libertarian out of me.

Schepp writes:

Russ,

Thanks for bringing different views to the forum. I was very unimpressed with the feasibility of the idea. I do concede that all he needs to find is enough people who will shell out the money to make it happen. However, seems not to have a viable economic system to make Seasteads work. Just imagine in how many way the Seastead will be tied into many governmental entities to do it's business.

I do think that just as Coase and Munger claim that firms exist because they are efficient, and that there are always incentives applies to government as well. We may be individually very disappointed in government actions, but non-existent government does not seem to exist and where government is extremely weak anarchy does not seem very effective.

The transaction cost of picking up your peice of the stead seem to be way underestimated as well.

I do think the concept of transaction cost of the Sea vs the transaction cost of government and taxes was right on, but I just don't think the math adds up to make the Seastead feasible.

Jonathan writes:

I've only listened to this one once; I'd rather have absorbed it all a bit better before commenting, oh well. I'm a member of the Free State Project, and I'd say it's hands down the best Galt's Gulch type thing going. I'm headed up to New Hampshire in November, and VERY excited to be doing so.

Emmanuel G. writes:

Russ,

This is off topic but it relates to your position as a free-trade economist.

Russ, do you truly believe in the free market? If so, read on and let me know what is wrong with the following argument:

"Truly the strangest beast in the libertarian landscape is the free-market academic – the man who endlessly praises the ethics and quality of the free market, while himself staying as far as humanly possible away from it!

Such a creature will always tell you that he has joined academia – despite its entirely statist and unionized nature – because he wants to help the world achieve freedom by preaching free-market economics to impressionable students.

“Someone has to teach these kids about economics, and it is better for an Austrian economist to hold the position rather than some hideous statist or Keynesian. At least when I am up on the podium, these kids get exposed to some free-market ideas, which they can then further study, discuss and understand on their own for the rest of their lives. Also, some of the kids that I teach will end up going on to become economics professors themselves, which will further spread free-market ideas to other impressionable youngsters. And so, the world will become freer over time…”

This compelling fairytale is exactly the kind of self-serving propaganda that you would expect coming out of the head of any government agency.

Why is this position so ludicrous?

This argument rests on the belief that great good can be achieved from within the bowels of corrupt privilege. The position of “professor” can only be obtained by joining a state-sanctioned and state-protected union, an enforced monopoly with high and violent barriers to entry. The university system itself is highly subsidized by the state – a less free-market environment can scarcely be conceived outside of pure communism.

If a free-market economist can achieve great virtue and do wonderfully good deeds despite being embedded in a violent and corrupt environment, then surely the same can occur in any government agency, or any state-enforced or state-subsidized monopoly. Violence and corruption can lead to great good, if only the right people can be put in place – is that not the fundamental delusion of statism?

Free-market economists dislike statist monopolies because they are immune from market forces, which they claim results in poor quality, shoddy service, endless inefficiencies and the wholesale destruction of physical and intellectual capital. Also, because such a monopoly does not rely on its customers for its income, but rather upon its political connections, economists recognize that its real “customers” are not the end consumers of its products or services, but rather the political masters who control its fate.

Since free-market economists do not gain their salaries from their students, but rather from the approval of other academics, bureaucrats and politicians, we can assume that the universal principles that they apply to other statist monopolies also apply to their own. In accordance with his own free-market principles, an academic economist dooms himself to a life of pitiful quality, shoddy service, endless inefficiencies and the wholesale destruction of intellectual capital – in this case, the tender and trusting minds of his students.

If this rule does not apply to him – if he can provide quality and do good despite his coercive monopoly – then he has no right to criticize other coercive monopolies, but rather should abandon such principled objections, and say that such systems can work beautifully, if only they can be populated by the “right” people. In other words, it is not the system itself that he is criticizing, but rather the inhabitants of that system – thus falling prey to the endless delusion that some people are immune to the economic absolute of responding to incentives, and so it is those people who can productively use the power of the state to benefit the world."


Continued on page 12 of 'How (Not) To Achieve Freedom' by Stefan Molyneux. Available for free in pdf and audio at :

http://www.freedomainradio.com/free/#HNTAF

Andrew Ferrier writes:

I found this week's podcast fascinating, as they so often are. The idea of seasteading definitely appeals, and Patri makes it sound realistic.

I'm surprised no-one has mentioned Sealand. I'm not sure whether it strictly adheres to the definition, but it could be argued to be a seastead.

John Mininger writes:

Great podcast Russ.
I looked at Seasteading a little when I saw the short piece in Reason.
I tend to agree with Jonathan though; I think the Free State Project is more viable.
How about Jason Sorens as a guest sometime? The Free State Project was his idea. I believe he's professing political science at SUNY-Buffalo.

karl writes:

Yeah I was hoping they would mention Sealand as well. I wrote about this and other micronation ideas for the Toronto Sun back in 2000.

http://www.geocities.com/lapetitelesson/cs/text/jul002.txt

Note also the story of Oceania and the Atlantis Project.

Interestingly there's a whole wiki devoted to micro nations:

http://micronations.wikia.com/wiki/Main_Page

I'm curious about maybe the economics of simply buying a plot of sovereign territory from a third world nation. There would be a few African coastal nations that might want to sell a bit of land or even an offshore island for such a project. They get a one time injection of several billion dollars and then all the other benefits of people needing to use their airports and trade.

I swear years ago I saw some report about some bug nutty people with a monarchy fetish who were trying to buy a bit of a Caribbean island to set up their own kingdom and people would be awarded noble titles and they're wear a lot of ermine in the tropical heat.

What happened when I tried to create my own sovereign utopia:

http://thelongrunblog.wordpress.com/2008/09/30/what-dungeons-and-dragons-taught-me-about-economics-and-the-free-market/

Tangentially related is my plan to sell Canada to the USA:

http://www.yrad.com/essays/canusa.htm

I wrote this back when US$1 = CAN$1.50. Not sure if the numbers or the allure works today.

And there's an often talked about plan in Canada to offer province-hood to the Turks and Caicos Islands.

http://www.cbc.ca/news/background/turksandcaicos/

Jonathan writes:

I've listened again, and I'll expound a little on what I said before.

Patri sniffed at the Free State Project because it doesn't or can't address liberty at a federal level. I disagree. FSP members "will exert the fullest practical effort toward the creation of a society in which the MAXIMUM (emphasis added) role of civil government is the protection of life, liberty, and property." Sure, plenty of these "Porcupines" are political types, working to create a libertarian state, but plenty more are An-Cap voluntaryist types, fighting the state in all its forms. Is it feasible? I have to try.

I heard Munger in a North Carolina gubernatorial candidates debate. It was awful. Here at EconTalk I hear him speak wonderfully of emergent order and liberty. In the debate he was talking about investing in education and creating jobs. I love Mike Munger, but he's wasting his time. He'll achieve nothing.

And seasteading? Mm, seems like running away to me.

jay writes:

Does anyone know of podcasts similar to Econtalk?

karl writes:

Jay:

In short, no. In long, you could check out NPR's Planet Money which is kind of This American Life meets EconTalk. As well the Economist Magazine has a podcast that's a round up of stories that week. It's not too bad and pretty informative.

karl writes:

Jonathan I guess you could also argue America was founded by people who were running away too. That didn't work out too badly.

Thanks for the heads up on Munger running for office. I found an interview with him here:

http://www.wunc.org/tsot/archive/sot1106a.mp3/view

I haven't listened to it yet but I've dl'd it and will put it in the Zune queue (I'm an anything but iPod type guy).

Jeff Henderson writes:

Jay,

Not really, but I would suggest listening to some of the Media on Mises.org. They have hundreds of mp3s and dozens of videos of lectures, interviews, and audiobooks by economists all available for free. They cover a wide variety of topics so I'm sure you can find something you're interested in. The material on that website keeps my hunger for learning satisfied in between EconTalk podcasts.

paul writes:

An alternative and cost-friendlier alternative worth considering would be to buy or lease land from governments in financial distress. At the pace governments are now bailing out bankrupt banks, buying worthless assets and/or fight expensive wars, some might soon run out of money. Remember in 1867 Russia’s Emperor Alexander II sold the whole territory of Alaska for some $7,200,000 or about 1.9¢ per acre.

Woodah writes:

Wait, basic economic incentives will work on everyone -- except apparently on Patri Friedman, who gave up one job at Google and another at a hedge fund to run a quixotic mini think-tank promoting personal liberty on the high seas. Ahoy, ye libertarrrrrians.

Incentives matter, yes, but can't we reconize that human beings are complicated creatures who respond idiosyncratically to a COMPLEX of personal incentives? It's not all about money. If so, Che Guevara would have led a comfortable life as a doctor in Argentina, and Patri would still be commuting to Google every morning on the shuttle.

Ed writes:

Interesting topic. Are there any civilizations or societies that have lived entirely on the sea? If it were economical, I think we'd have people living on the sea now to escape higher taxes and regulation.

It seems a bit unrealistic that you can live on the sea and move from one government to the next. Still, the concept of being able to fire your government and get a new is appealing. A town for example relies on your reluctance to go through the process of moving when the town board decides to push threw a tax hike.

Russ Roberts writes:

woodah,

Incentives matter. But not all incentives are monetary...

Camilo Ferreira writes:

There are already two natural "Seasteads" that are economically viable and and enjoying free markets. Hong Kong and Singapore these two city states have no natural resources,they are only spots of land in the ocean close to big continental populations willing to trade. They dont require to produce any food, and prosper from the high productivity manufacturing and services that they exchange for the goods they require from the outside The economically, the only diference is that the land is cheaper there than in a artificial seastead. If there is people willing to take a flight to costa rica for a surgery, there could be people going 12 miles for mediacal treatment.
Sorry for any error in my text I am Peruvian so english is not my first language.

Alejandro writes:

Russ, first, great podcast as always.

I find Patri Friedman's idea intriguing, like many others. I agree with some of the commentators above that, overall, the case does not sound too convincing, there is something missing and too many possible failures: social, economic, engineering, political, etc...

By the way, an interesting note on the subject:
One of the most successful video games this year is called BioShock: it's the story of an entrepreneur "Andrew Ryan" who goes off to create a libertarian utopia in an undersea city. Needless to say it does not end well, but the story of the game is fun and has a lot of Ayn Rand references...

here's a link to one review...

http://xbox360.ign.com/articles/813/813214p1.html

Google "bioshock" and you'll find a lot of material on this ( I know you're not a fan of video games, but I couldn't help to point out the coincidence), having played the game , that was the first thing on my head when I understood what Patri was proposing.

arnie writes:

I am as technically skeptical as most above. I think that I heard that Russ isn't sure of the whole concept either. If the VC has only chipped in half a million, they aren't sure either. (They give 20$ million to the most obscure idea, even now).

Interesting that even a live free or die group that most of the above posters would be a part of are not willing to let the seasteading (not in my spellchecker) idea to be freely explored by those with private capital and personal energy. At least it isn't another bridge to nowhere.

Columbus won't ever make it either, I guess.

He didn't, but look what he did find instead.

Comments for this podcast episode have been closed
Return to top