The Startup Nation
Chad Elwartowski and Supranee Thepdet had a dream of being free. They wanted to be among the first people to live outside of the jurisdiction of any nation, and saw “seasteading” as their chance. Just like the homesteading pioneers of early America who moved out West to stake a claim, seasteaders look to international waters as the new frontier for freedom and opportunity.
These two seasteading pioneers had a floating home built about 15 nautical miles outside of Phuket, Thailand. During the day they were surrounded by ocean in all directions as far as the eye could see. And at night the only lights they could see came from the stars blanketing the sky. Unfortunately, their adventure had only just begun when it was brought to an abrupt end.
The couple’s radical experiment in self-governance landed them in the crosshairs of the Royal Thai Navy. The Thai government saw their project as a threat to the sovereignty of Thailand.
But you might be wondering: Why even bother trying to start your own nation in the first place? And why would a government feel threatened by people choosing to do this?
In his essay “How to Start a New Country”, Balaji Srinivasan makes the case that starting a new country is the ultimate blank slate. He outlines different ways to start a new country, including his vision of the cloud country. But he does not dive deeply into why this revolution in governance is so important, or why it will not go unopposed.
Why We Need A Startup Nation Revolution
We are all born within the borders of a country and under the rule of its laws, but none of us ever got any say in that matter. If we are lucky, the country of our birth is relatively free, democratic, and prosperous. Unfortunately, that is not that case for most of us. To add further insult to injury, it is not easy (or cheap) to emigrate to another country. In some cases (e.g. North Korea), leaving the country of your birth is simply not allowed.
Borders might just be lines drawn on maps, and laws words written on paper, but the countries that maintain these artificial constructs can (and do) use violence to enforce them.
Have you ever thought about how profoundly weird all of this is?
This system only seems natural to us because it’s hard to imagine any alternatives to the way things are. And if you were lucky enough to be born in a politically/economically stable country, you probably never think much about any of this.
Yet, if you’re a family fleeing violence and poverty in Nicaragua and trying to cross over into the “land of the free” only to be rounded up by armed men and detained, then our borders and laws are a harsh reality.
The world is far better for far more people than any other time in history, but the quality of your life is still largely determined by the luck of where you were born.
Worse yet, the entirety of humanity suffers every time a one in a million mind is born into poverty and dies in obscurity.
How much have we collectively missed out on because opportunity is not more evenly distributed? How many minds that may have been as great as Archimedes, DaVinci, and Tesla never had the chance to impact the world?
And even if you’re lucky enough to win the lottery of countries at birth, how long is that good fortune going to last?
History has shown that even the greatest of empires have fallen. Some have observed that much like mutation leading to the development of cancer in the human body, that errors, inefficiencies, and corruption inevitably accumulate over time in governments until they start leading to systemic failures.
I think we can agree that all the countries around the world aren’t going to suddenly decide to open their borders and allow everyone to freely relocate to wherever they’d like.
But what if we could expand our options? What if we could create our own country with its own government (or lack thereof), just like an entrepreneur starts a company?
A startup nation.
The startup nation is about more than just creating new opportunity, the promise of a better life, or escaping the failing systems of old in the hopes of a fresh start. It is also much-needed competition.
It has become clear that governments face diseconomies of scale. Look no further than the US government’s lack of a coherent federal response to COVID, or the increasing ineffectiveness and hypocrisy of the UN.
Over time, governments tend to grow in power, but the political class remain largely insulated from their mistakes. The unintended consequences of bad policy are seldom traced back to their root cause, and so the solutions tend to be more bad policy. This leads to a trend of increasing power, and decreasing accountability. Large governments are also slow to adapt, and that creates stagnancy and liability in a rapidly changing world.
Recently there’s been an exodus of tech companies and workers out of California to other states like Texas and Florida. When individuals and corporations have the option to go somewhere new, it puts pressure on existing governments to do better. Brain drain and loss of tax revenue are very real but nonviolent threats to an incompetent government.
Imagine if instead of being held captive by the country of your birth, that startup nations could give you other options? How might the world improve if countries have to start competing with one another for your citizenship?
We could be on the verge of a great age of experimentation, where new systems of governance and societies with different structures can compete and the world can learn from what works. It would be like a Cambrian explosion of rapid evolution in governance.
With the growing rate of innovation, new models of self-governance by startup nations could be the breeding grounds for rapid technological development and implementation — and this will be a powerful competitive advantage for them.
We might not see it in our lifetimes, but I believe that a radical transformation of governance is inevitable. And while the historical trend has been toward central governments consolidating power, I believe we are approaching a tipping point where governance will become increasingly decentralized.
But… The Empires Will Strike Back
They won’t take this lying down, though — like the Royal Thai Navy stepping in to shut down the seasteaders, there will be pushback.
Governments around the world aren’t likely to quietly and humbly accept competition from startup nations.
But how will they fight back?
Most countries wouldn’t engage in violence against individuals who are peacefully opting out, but some might. Will the UN recognize the sovereignty of a startup nation and offer it protection?
Most likely, I expect that some governments will impose exit taxes on their citizens. Like a proposed policy in California that would continue to tax you for up to 10 years even after you left the state. This could be a powerful weapon to essentially hold citizens and businesses hostage and disincentivize relocation.
Governments may decide to impose sanctions on their startup nation competitors. Or even just refuse to recognize their sovereignty.
What leverage would a startup nation have?
Wealth doesn’t seem to be enough. If your startup nation’s wealth is in the currency of another nation, they can retaliate by excluding you from their financial systems. Even if your startup nation’s wealth is in crypto, other countries will still have some means to impose sanctions on you.
To me it seems like the key will be having sufficient intellectual capital. If your startup nation is comprised of enough talent, then other nations can’t risk losing access to those intellectual resources. It’s for that reason I expect that some of the first startup nations will likely evolve out of tech companies or potentially even be akin to a guild of skilled workers.
And what would a startup nation even look like?
Some form of independent corporate territory? Cloud-based virtual communities that eventually crowdfund their way into geographic existence? Can we expect a Heinleinesque lunar colony staging a revolution for independence?
What’s clear to me is that you are not truly free unless you’re free to opt out of the system that you were born into and opt into an alternative that you choose. If you can’t wipe the slate clean and get a fresh start then you’re being held captive by your government.
Chad Elwartowski and Supranee Thepdet’s experience shows that it won’t be easy — being a pioneer never is.
The rise of the startup nation may be the most significant revolution for self-governance since the American Revolution. Except, instead of sparking the beginning of the end of colonialism, this revolution may ultimately bring about the beginning of the end of the captivity of citizenship and impermeability of borders as we know it.
