Politics has a lot of problems. Lacking a price system to make rational decisions, government is very inefficient. Lacking the incentives of competition, government pursue’s it’s own interests and is unaccountable to the populace. Lacking effective external constraints, government overreaches its bounds.

How to go about getting better government is an age old problem. But economics has some profound insights to offer. In free markets, competition serves to create market prices, which enable economic efficiency and cooperation on a global scale; competition creates strong incentives for firms to be accountable to their customers; competition from other firms limits the power of any one firm.

Competition between governments can bring these benefits to politics. But governments are large territorial monopolies, and citizens are basically captive given the costs of switching countries. Enter Patri Friedman (grandson of the famous economist Milton Friedman), a visionary who wants to build floating self-governing cities on the ocean. Patri analyzes governance as an industry, and points out that there has been practically no innovation at all since the advent of representative democracy. There are no start-ups experimenting with new ideas in governance. This is because the costs of entering the industry are enormous: since all land has been claimed by governments, you would need to win a war or a revolution.

Patri’s solution is to build on the ocean and open up a new frontier for startup governments to innovate and compete for customers. He founded the Seasteading Institute to make it happen. A similar land-based vision is promoted by the fellow-traveler Free Cities Institute. A related project is the Charter Cities initiative, which is essentially to replicate the Hong Kong model by creating special economic zones governed by market friendly rules.

Provided that international legal challenges can be overcome, these projects to create start-up governments and increase competition between governments could very likely radically transform the world. The benefits are too many to count, but I’ll list a few important ones. There would be much more choice of what type of society you could live in. More importantly, people in countries with bad governance (i.e., the third world) would have new opportunities to escape, especially since start-up countries would be seeking new residents. Competition would foster innovation and discovery of better rules and institutions that every other government could adopt. And emigration from bad countries to good countries would put competitive pressure on bad countries to shape up or lose its residents.

This decentralized, bottom up approach to revolutionizing politics is a great example of the power of spontaneous order. In fact, this was the central motivation for the whole Sporder project. Our long term goal is to create a virtual frontier—in a massively multi-player video game—to allow for the emergence of social order from within the game. Let a thousand nations bloom!

Here’s a short video of Patri Friedman explaining why seasteading is such an amazing idea: