What does the future of government look like? Is constitutional democracy of the American persuasion really the best type of governance there is? People who seriously study politics and governance would most probably yell an emphatic no. In many ways, the contemporary model of government is very outdated. It stays stagnant in a world that’s rapidly and profoundly changing. But how do we know what system works better? It’s not like government is something we could experiment on. Or is it? Keep that question in mind as you follow this conversation with Patri Friedman, cofounder of The Seasteading Institute. Get to know Patri’s views on experimentation with political systems and how they’re applying their models to practice. If we are to build better governments in the future, we’re sure to get some brilliant ideas from these brave pioneers who are testing what works and what doesn’t. Follow this rabbit hole to see what practices are bound to trickle down to the government of tomorrow!

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The Future Of Government, Countries, And Statehood With Patri Friedman

In this episode, we have Patri Friedman, who is the Founder of The Seasteading Institute and General Partner at Pronomos Capital, and a technologist. I’m excited to talk to you about him because he went from the technology space and is now doing interesting things with society, government, and how we live as a species. Patri, welcome to the program. Can you tell us a little bit about you and how you got started with all of this?

Thank you. I appreciate it. It started after college when I have these strong values of freedom. There are a lot of things about the US that I didn’t like, whether it’s the wars overseas or the putting people in jail for what plants they eat. I didn’t feel like I belonged. It didn’t seem like my views are popular enough that we could affect change in a democratic system. I was like, “Maybe I’m in the wrong country.”

I went and looked at some other countries and I was like, “They have different packages of goodness, okayness, and terribleness,” but none of the packages is very good. They weren’t value-aligned and also, most countries were not very well run. You get better service from T-Mobile than the DMV, not even the best cellphone company. That seemed wrong. I’ve got some background in Economics and Political Science. I got into researching it and trying to figure it out.

I came up with this idea in Silicon Valley and doing a Master’s at Stanford and CS at the time, that maybe the problem is there are no startups. We don’t have ways to test out new political systems to make new countries for a smaller group of people. That’s wrong. People should be able to band together around their own set of values and their own way of designing a government and go live with it so we can see what works in practice instead of talking about it in bars all the time in some conceptual way. That’s what got me started.

We don’t have ways to test out new political systems. People have to band together around their own way of designing a government and live it.

The Seasteading Institute was something that I remember specifically The Colbert Report and The Daily Show talking about. I saw that and I thought, “That’s a guy that is building the future. He’s pushing boundaries.” I’m excited to talk with you because of that because I do agree with you. Government is something that does not have a lot of new innovation. I feel like there are different forms of government, but I can’t think of a new form of government off the top of my head that has been formed in the last however many years. Knowing that, what are you looking at right now to make the next step for us as a government?

What I focused on for a long time because it was hard is, “How do we have something like startup countries?” First with the Seasteading work, because in the early 2000s, no countries were willing to work with groups to do governance experiments but that changed in 2010 or 2011 when Honduras created their first Charter City program and Paul Romer’s famous TED Talk in 2009.

The beautiful thing about a charter city is it’s this nice halfway point. In a charter city, the default is it’s got its own commercial law and it follows the country’s criminal laws, constitution, and all of its treaties, which you have to do. It’s like a big enough space that matters. Commercial law is like a lot of it. It’s still under government. You’ve got them as a backstop. It was this awesome halfway point. It took fifteen years or something, but, eventually, we got to where I can work on your question, instead of, “How do we even make experiments possible? What do they do?”

What I’m in this for is wanting to see brand new government systems that are different and maybe find one that’s as much better than constitutional representative democracy, which is the industry standard as much better than that as that was a monarchy. That’s my hope. Nowadays, the product market fit is bringing the best practices to more countries because it’s hard for a country to change its entire commercial law and then people wouldn’t want it.

It’s wrong to change the law in a huge way on top of people. That’s why in the Charter City concept, you start with empty land and people opt into it. What’s happening with Honduras Próspera for example, which is our 0 to 1, is that they looked around the world at all different areas of commercial law and who has the best legal system and put them all together into one consolidated, simplified like, “This is best practices.” That’s product market fit.

I’m looking at the crypto world or the new governance models. There are also people who have had a lot of ideas for a lot of decades that they didn’t get to put into practice. My dad designed one neat political system. He’s the co-inventor of Polycentric law. It’s best practices and crypto is where all the governance experimentation is happening. One angle in my work is I’m trying to bring the fluidity of the digital realm, the ease of entry to making new things into switching to the world of governments, cities, and countries.

I like what you said earlier about the fact that you get better service from T-Mobile than the DMV. I feel like civil service even is something that’s ripe for innovation and increases in efficiency. If you do that on the city level and then you say, “Our city runs better than all these other cities,” at least you can start getting early adoption there and that’s when you can start convincing people, “Maybe the legal system needs to be in reinvented.” Where are you at with that? Are you searching for funding? Do you have any model cities available? Where are you at with your experimentation?

In one sense, we’re early. For people coming into this, we’ve gone 0 to 1 with Honduras Próspera. There’s one of these like model jurisdictions. My investment fund is funded by about eight other companies. Most of whom are trying to do the same thing. Some of whom are pretty far into negotiations with governments, but yet there is only one.

People are like, “How does this work? How did that work?” I’m like, “We have one, but I can tell you my guesses.” For me, I’ve been working on this stuff for many years and it was considered crazy. Even many ago, we were being made fun of. For me, the fact that there is one and there are a bunch of countries’ interests is such huge progress. Our biggest barrier right now as founders are great entrepreneurs or teams of entrepreneurs, ideally with some experience who are passionate about some vision for a new and better way to live.

The most important thing beyond general startup badassness is community building because you’re going to start with a build for 100 or 1,000 people who you’re trying to get to move to some new place and try some new way of life. That needs to be an aligned, cohesive, and bonded community. That’s important. I get people offering to intro me to countries on a regular basis that I don’t follow up on because we don’t have any founders. There are a lot of countries interested because the world has changed and countries get that the 21st century is different, at least small countries do.

In these market conditions, capital is a big constraint for sure, especially since some of the projects get bigger and are raising larger build rounds. In these market times, we are not on a flight to safety. These projects will be profitable. It’s like my career to invest in them. It’s not easy to convince someone who’s scared about how the world is going, even though our sector is doing great, countries continue to be interested, and projects are moving forward. It’s a tough time to raise. Founder is 1 and capital is 2, but way behind 1.

How’s the city of Honduras doing? What are you doing differently there than in another city or even something that you’ve done in the past?

In Honduras, they’ve been operating for several years. They’re growing rapidly. They have some neat businesses. They’re doing gene therapy, drone delivery, customized houses, apartments that you design, and a web app in conjunction with Zaha Hadid, but they’re now running into some significant political trouble where the government that ran Honduras from 2009 to 2021 was in favor of this program. It was something important to them.

In late 2021, there was an election that swept in a far-left candidate and they don’t like the program. It’s like a campaign promise to try to stop it. It was always expected in these projects that you need to have legal protections so that if you make a deal with the government, invest a lot of money, and try to create jobs, they’re not able to break that agreement or appropriate what you’ve built.

Próspera has various legal protections. There are investor treaties with the US and there’s the Central American Free Trade Agreement or CAFTA, which Honduras is part of, and there can be serious sanctions or damages against them because when they made the program, the constitutional amendment specifically said that existing projects were grandfathered in. Otherwise, nobody would do one of these or build it.

They’re trying to say that that’s invalid. Próspera initiated arbitration against Honduras to say, “You need to stick to your agreement.” It’s in limbo, but the great thing is they’ve been able to keep operating normally through all of this and keep growing. It’s troublesome, but they’re in pretty good shape. There are various US lawmakers weighing in on both sides of this.

There are those who say, “If we let countries break their investor agreements with us, that’s terrible for US investors. It’s not okay. Why are we giving aid to countries that break their agreements?” There are others who say, “These investor relation treaties are terrible and they harm poor countries.” It’s playing out. Próspera put together this best-practice legal system. They’re in incorporation jurisdiction. They’re working on becoming a cryptocurrency jurisdiction. They’re doing a lot of things in new ways and people there are happy to be there.

How’d it go with the sea-based locations? One of the things that I was always attracted to is the fact that nobody’s tried what you have tried, which is creating your own islands and jurisdictions purely on the sea. It always harkens back to me the idea of Jules Verne’s Twenty Thousand Leagues Under The Seas. This is a completely self-sustaining ecosystem that was created by man to live in the sea, which we have not tried. I feel like it was a double experiment, which is the government system, but then also this idea of living in a location that we haven’t tried before. How did those go?

It turns out to be hard and there are a few things that are working. Ocean is expensive and difficult enough that you have to be selective with what you do, where, and with what business model there are only a few things that can work. What Seasteading was good at was lighting up people’s imaginations, whether it’s like, “We need new countries. This is ridiculous.”

We got the word out to millions of people like, “Why can’t we start our own countries?” That was amazing. It’s been used in video games, board games, and a number of fiction novels. It was incredible for that. In terms of what’s been built, what’s exciting are these two people, Chad and Nadia. Chad is a Bitcoin guy and Nadia is Thai. They are a couple and with a German engineer’s help, they built their first Seastead design in Thailand.

It’s a single spar SEASTEAD there’s a pillar in the middle, a platform on top, and then flotation underwater. It’s like a dumbbell but with a long part in the middle. It’s a design that I suggested many years ago. It’s obvious. It’s the smallest thing you can make. The maritime authority was totally cool with it when they asked, but after being out there for a month and we at The Seasteading Institute were filming all this, making a documentary, the Thai Navy heard about it.

Chad and Nadia had talked about, “Someday, we want to live free on the ocean. We want sovereignty.” That’s not what they were doing. It was a test of the first prototype of an engineering design. Thailand felt that this threatened their national interests and they charged Chad and Nadia with treason. Chad and Nadia managed to get word and go into hiding. Thailand lodged Operation Destroy Seastead. They sent 3 Navy boats and 100 people to drag it in and destroy it.

Chad and Nadia were in hiding for a while in Thailand and eventually made this daring nighttime escape by sailboat where they first went to Malaysia. Malaysia was like, “You can’t stop here. You can’t even resupply. We stand with Thailand.” They had to go a week without enough water or fuel. It’s a crazy thing. You can see some of this on the YouTube series, The First Seasteaders. After that, they got out. It’s awful, but it was okay. They went to Panama, a friendly jurisdiction.

There’s a whole community of people working on blue economy projects. They’ve taken that prototype and made a production version of what they’re now selling called the Eco Pod, which is this beautiful fiberglass thing. It’s got solar energy and is health-sustaining. The nature of the design is it’s much slower to move from point A to point B than a boat, but it’s much more stable in the waves. It doesn’t move very much. If you want to take it out someplace and anchor it, that’s what it’s made for. They’re selling these and that’s pretty exciting. If we have a community of these, there are various places on the ocean where if it’s in international waters, but shallow enough to anchor that a group could go and start a community.

Liberland, which is this micronation, in Europe on land that two countries say is not theirs. Liberland and some of their people have done a barge in international waters near Iran. It’s a place where 12 miles out are the same as being in the country and then 200 miles out is the economic zone where they regulate any using resources, fishing, scientific research, and a bunch of stuff. They chose a place where the countries don’t claim an economic zone. You only need to be 12 miles out. They anchored a barge. They live there. Their tug boat got the barge and did great in some big storms.

Unfortunately, their supply boat got destroyed and they had to turn to fishing, which was fine. They did a lot of fishing and were able to eat enough. They’re now looking to expand that project and bring more people out to live there. There are some cool experiments happening. I focus on the successes, but all of this is showing that the frontier is exciting. It’s a wild ride. Sometimes the government comes to destroy what you build. Sometimes you run out of food and have to eat fish. It’s pioneer life.

Oftentimes when I watch a Wild West show, I’m like, “Why would anybody do that? Why would you risk setting up in front of all of these hostile environments?” I see that and I’m like, “There’s a person out there like that and we need people out there like that.” I’m just not one of those people. It’s exciting to see that from a bird’s eye view.

I do hope that these experiments do trickle down and have downstream benefits for us as a society because we’re in a very stale version of society in the midst of all of this rapid technological change. I don’t know if those governments or any of these other places are as adaptive enough to handle these things I hope that we can at least get some experiments going that show us, “Maybe we should adopt this model of the DMV or an economic system.”

Everybody thinks of finance as the one way to do things. It’s something like the dollar bill that’s in your hand or this international credit system we have. Everything is looked at through this lens of like, “Can we make it better? Can we do a better thing of that?” That’s an exciting future because hopefully, some of those downstream effects will affect us. Have you gotten any benefit from your own life from some of these experiments? Obviously, the thrill of this experiment aside, what are some things that you’ve seen that like, “This is going to benefit not only me but humanity down the road?”

First, give yourself credit. You may not be the guy who wants to go live out there, but you’re exploring the frontier of ideas and of what the human future is. That’s also rare and important.

I like talking to interesting people like yourself and hearing about what is in store for us. That’s something that any type of science fiction has hypothesized and that’s something that I enjoy, but tell me a little bit more like what have you seen in your own life and some benefits down the pipeline for the rest of society?

In my own life, there are simple things like giving me a purpose or something amazing to do to serve humanity. I’d say that there have been some unexpected psychological benefits. I started out as a more like, “These are my morals and they’re absolutely right. Everyone should believe them,” kind of person, which is not healthy. It’s not flexible. It’s not mentally diverse. There are some moral principles that are pretty absolute and others that are more personal preferences. For me, thinking about starting new societies and the idea that a group of people with a given set of values should be able to come together to try to make a society around those values and then be tolerant of all of these.

Other people can think differently. Part of it is in a democracy. I’m like, “If everybody has different values than me, I’m not going to get to live my values,” and that’s terrible. Groups of people can go live their values then I don’t need to convince them. It’s okay. That creates tolerance because we don’t all have to agree there’s a sense in which democracy is very intolerant.

Sometimes the majority chooses to protect the minority, but it’s still ultimately like up to the majority to decide. The other thing is that the possibility of creating new societies means that I might have a values-aligned society and the lens of looking at countries like products like, “These are products, places to live with values and legal systems. I’m a citizen customer. I’m disappointed with what the products are. They’re bad. They don’t fit me. They’re not well designed.”

I’m like, “How can we build better products?” The psychological difference between that, is I’m frustrated. The low quality and lack of choice versus like, “No country wants people like me. They’re all evil.” It gets this huge difference from this zero-sum frustrated to this positive-sum optimistic. That makes a big difference psychologically.

I’ve seen a lot of people who have this moral absolutism or hate the society that they’re in. It makes them unhappy. I think that this view is important. For society, the government is the largest sector of the global economy. The percentage of global GDP that’s spent on government is bigger than energy, transportation, healthcare, or any of those things. It’s the base of our operating system. It’s what everything else runs on. There’s no innovation. I love the American Constitution. It’s incredible but it’s from 1787. We can do better now.

I appreciate that because if we don’t have people that are experimenting with the different kinds of government, then we’re going to be relegated to what we have now. I feel like that’s fine, but in science fiction, they have this fact or theory. I heard Michio Kaku talking about it in another show. He was talking about the different stages of civilization. The zero stage is we have all of these individual tribes and eventually, when we get to stage one of a society or a civilization, it’s like a monoculture, government, or something like that. We are seeing that nowadays.

Whether we agree with it or not, English is becoming the global language and there are certain art styles or culture styles that are rising to the top at a faster clip than others. There is a potential there to become a monoculture like what science fiction has talked about. For example, in Star Trek, you have one government. I would hope that there’s somebody out there that’s like you that at least trying to test the system a little bit to make things better.

I feel like we are on this trend of one government and financial system, which is the American dollar. You do have small sectors that are pushing back against that. The trend is that we are going in a monoculture or a mono-government type of system. How do you feel about that? Do you feel like that’s something that maybe I’m naïve in saying because there are people doing things like you? There is the rise of other government systems. China is getting big on the world stage. The idea of democracy isn’t necessarily the end-all, be-all when it comes to this stuff. Do you feel like that’s an accurate assessment or do you feel like I’m looking at it inaccurately?

I do think that the universalizing thing is a powerful force and from my perspective, it’s awful, absolutely terrible for humanity because it’s the opposite of what I was describing. Tolerance comes from getting to do things your own way and then, if other people want to do things a different way, it’s okay. It’s not an experiment unless it’s being done differently.

Diversity of governance and the ability to create new things that are autonomous is super important. There are things where we need global coordination like existential threats and nuclear weapons. I’m not saying don’t have global coordination, but I’m into the idea of robust and diverse governments. I see the universalizing tendency like, “Everybody has to think our way, have the same set of values, and run on the same representative constitutional democracy.” I see that as super harmful.

Tolerance comes from getting to do things your own way. Diversity of governance and the ability to create new things that are really autonomous are super important.

You’ll appreciate this since you’re into science. I think of it a bit like the Second Law of Thermodynamics and the fact that entropy is always increasing and that eventually we’re going to end up in like a completely gray universe where everything is the same and nothing flows and there’s no life. To me, that’s what the universalizing force is. It’s like trying to move towards everything being the same, nothing flowing and no life.

To me, it’s harmful, but I don’t think it’s guaranteed or absolute. I love China existing, not that I want to live there or that I think it’s like a form of government that fits my values, but it’s truly different and it works. That’s super valuable. Not only is it different, but I would say that Russia is different and it works, but it’s not new. We know that authoritarianism and oligarchy are old things, but China is different, new, and it works. I love that. If you look at something like Brexit, there are big downsides to universalizing and people realize over time sometimes that it’s not the best thing. There are very strong national and regional identities. The United States is always going to do things differently than China and then Europe.

Even in the United States, we do things differently. There’s a huge difference between certain regions and huge political division in this country. I feel like there is a give and take when it comes to diversity of thought and things being a little bit more homogenous. For example, the way that you described it was the second law of thermodynamics. I look at it as that bacteria in your gut. I have a medical background. Diversity of gut flora leads to a healthier lifestyle but in a starvation setting. There are certain things that benefit from a monofloral that might be able to extract more nutrients from a certain type of food source or something like that.

Regardless, it’s interesting to watch it play out. There’s this interesting change in humanity. I feel like everybody can sense it. There’s much change happening fast. To me, it’s interesting to talk to people like you and to see, “What’s going on with this change? Where are we headed as a species?” Where do you see what you’re doing in ten years? What is something that you’re going to hope for from The Seasteading Institute or even your city in Honduras? What are some things that you hope that is going to happen?

We are in a time when there’s this rapid technological change and that means that our old systems and institutions are breaking. They’re not adapted. We need to rebuild large parts of civilization. I think of my project. My focus is governance, but being situated in this wider space of people who are seeing, “This system is broken. Let me rebuild it better and try it out myself.”

That’s what Bitcoin is. We don’t like fiat money and inflation, build our own currency and use it. People are broader cryptos trying to do that with finance. There are other people doing it with education, healthcare, and other things. It’s of like a builder’s paradise right now because so much is broken. There is much to rebuild, but also it sucks to live under a broken system.

In ten years, I want more charter cities, countries, and continents that are growing and different from each other. I want diversity. Ten years is about my goal for looking at starting the first startup sovereign city-state. Going from these charter cities within a country to having enough experience, respect, influence, and capital to start something, maybe it’s on the ocean or done with a country with permission that aims for sovereignty.

In my space, there are people who think you can hack sovereign, something like the Prince Valley of Sealand where like they had some letter from England saying, “You’re not in our jurisdiction.” They’re like, “Now, we’re sovereign.” I think of it much more practically like an engineer. When you have a population, an economy, and a military that’s bigger than 20% of countries, now you’re like, “We’re bigger than these countries, recognize us.” It comes from building up but doing something with starting to do projects with sovereignty as the goal. That’s what I want to get to.

That’s interesting to think about. I don’t know too much about this space. What would be the most successful representative example other than your organization? I think of the Wild West. You move to an area and then you try to build up your town. Eventually, it gets to become some ghost town that doesn’t succeed or it could become the next Salt Lake City. What are some other representative examples that you could say, “This might not be Salt Lake City, but these people are doing big things?”

If you go to the past, America is this shining example, which is why it’s frustrating when Americans are like, “What do you mean, start a new country?” because it was this frontier.

I mean modern society, post-World War II. Anything out there that you can think of?

Israel is one. It shows how hard sovereignty is because it took a huge amount of support from larger countries and they still had to fight. That’s the main example of a startup country in history. The number of countries keeps growing. We have this trend of territories, for example, becoming independent. Israel is not based on a new way to live but based around a specific way to live and a specific set of values. That was values-based, but there aren’t very many of them.

This is a new idea because it’s 21st century in nature. It’s more fluid. It’s more like the internet where you can start a new app easily and you can switch between things. It’s saying, “In the real world of the jurisdictions, let’s be able to start new cities, societies, and countries.” We look to certain models. Dubai pioneered this Charter City zone, although theirs was done by the government, not by a public-private partnership.

They created their financial center, which had all of its own commercial law. They wanted to make a financial center. Their Sharia-based legal system was not good for that. They said, “Our product is a financial center. It’s important that that product have good tech and laws.” They looked around and said, “London has good financial regulations.” They copied the laws of London in English.

In a country where all the other laws were in Arabic, they hired retired British judges and they created this zone, Dubai International Financial Center, which had this totally different commercial law. If you incorporated it, you would get that law as a corporation wherever you were. They pioneered what Honduras later did by saying, “This zone has different commercial laws.”

Remember I talked about values alignment and quality of government? Singapore is a shining example in the world of quality of government. It’s incredibly well-run. It’s somewhat tough to emulate. I’ve come to think that reading Lee Kuan Yew’s biography that Singapore had this strong founder effect like Steve Jobs and Apple, where part of why it’s good is it had an incredible founder for a long time, but it shows that government can work much better than it does in most countries.

Singapore is the shining example of quality government in the world.

I look at him as that shining example of a benign dictator. That model has this scary annotation to it, but honestly, you need somebody like that to get the stuff done that needs to be done. It’s not easy to set up a city-state, especially when you’re dealing with large amounts of people. There’s that number of humanity that if you go past 150 people, that’s when social structures tend to break down because that’s what we’re used to. We’re used to this number of 150 people in our tribe.

I never thought about those countries. For whatever reason I thought, “They’ve existed for a long time, but they have been in the grand scheme of things.” It’s something that’s interesting to think about. Let’s talk about the other side, which is like the failed experiments. You mentioned Sealand, off the Coast of England, which I know about. For those of you guys who aren’t familiar, it’s this group of people that struck off from the course of England. It was an oil refinery.

It was an anti-abandoned and anti-aircraft radar platform.

How big did that place get? How big are you guys in Honduras? if you can get past that 150 number, then I’m like, “Something’s working here.”

Sealand is interesting. I talked to the people involved and basically, it was for pirate radio. There was this period in England in the early 60s and maybe late 50s where there was BBC 1, 2, 3 and 4 in the radio stations. They didn’t play any rock and roll. When the Beatles was happening, you couldn’t hear it on the radio. This created this demand and all these pirate radio stations. Most of them are on boats, but Sealand was one that was on a platform. They got all of the audience because they are the only ones playing the music that people wanted to listen to.

The UK started to crack down on them. First, they made it illegal to advertise. For anyone in the UK to advertise, that was their main source of revenue. They made it illegal to resupply. They would have to go to the Netherlands to resupply, but what eventually killed it was they opened up the airwaves and started playing rock and roll, which is a neat example because some people would think of that happening with a charter city as a failure, but that’s narrow.

The goal isn’t to build charter cities. The goal is to serve humanity by making government work better. What those pirate radio stations did is they forced the government to do the right thing and play what people wanted to listen to, and that was a success. We look at Hong Kong as an example. Hong Kong for China, Shenzhen, and everything that happened there lifted more people out of poverty than has ever been done before in history, which is 500 million people. It is incredible from having this model and all these people who went to Hong Kong and learned about entrepreneurship and free trade and brought it back. That’s an incredible thing that we want to do.

The goal isn’t to build charter cities. The goal is to serve humanity by making government work better.

As far as Próspera, there are about 100 people living there. It’s been constrained by raising money and building real estate. They have a bunch of real estate that is rolling out soon. They have these four 12 to 14-story multifamily towers that are opening soon. That’s going to expand it by hundreds of people and mostly Hondurans who either work in the zone or want to live there. They’re also building higher-end residences that would more likely be for ex-pats for a smaller number of them. They have a bunch of real estate rolling out. It’s going to be up to hundreds of people later in 2023 and I could see them hitting 1,000 by the end or middle of 2024.

What does the government look like right now over there? What are you doing differently than the Honduran society outside of the city?

It’s got completely different commercial law. For those who don’t know, commercial law is huge. It’s most laws. It includes things like zoning, financial market regulation, medical regulation, contracts, corporate law, family law, and labor law. It’s like almost everything that’s not a crime. It’s most of the areas of law and they’ve got their own commercial law system that was approved by the Honduran regulators when they rolled it out, then they’ve got independent courts.

They’re using international arbitration because it’s a lot easier than building your own court system. There’s a whole network of people out there whose job is to be judges. It’s got a separate court system in Honduras. It’s a way of trying something different. The culture is also different in the sense that they’re very entrepreneurial and appealing to whether it’s Honduras who entrepreneurial want to work hard, move up the ladder and better themselves or global nomads who are entrepreneurial and want to go live in it with a government that is responsive to them appeals to those forward-thinking people.

Prospera appeals to forward thinking and entrepreneurial people who want to live with a government that is responsive to them.

When you say responsive to them, let’s say the civil services, how is Próspera different? What is better in the Próspera experience than other societies?

It’s neat because they’re able to modify their commercial law too. I was at a longevity-focused event. There are a bunch of people there who are interested in places to create and deliver novel medical treatments, anti-aging treatments, stuff that would take ten years and $1 billion in the US. In Honduras, they have the ability to write their own medical regulations. There is one neat gene therapy startup there, a mini circle that’s operating. I’m thinking of getting it. I’m looking at a few of their treatments considering for myself. It’s incredibly unusual.

You can do this in some smaller countries, but if you have a company or a group of companies in a space that would benefit from different regulations, they can go to Próspera and say, “Here’s what we’re trying to do. Here’s why we can’t do it in the US because it’s onerous. Now let’s work out a set of regulations that will keep people safe while also allowing innovation that has a better balance of that.” Próspera can do that. Small countries are starting to be willing to do this as well, but a very unusual thing in the world is that you can talk to regulators and make new regulations if you’re not some giant Fortune 500 company or whatever.

Certainly, if you have the resources of a Fortune 500 company, a lot of these things are not an issue, but if you’re a small group of people, it’s nice to know that there are other people that are trying to create these environments so that you can also have the same opportunities.

I’m getting to talk to heads of state about changing the regulations. I have companies that are getting to talk to heads of state and I have friends who for their own companies, these are all like relatively small groups and small companies that are getting to talk directly to countries, say, “Here’s the benefit we could bring to your country if you modernize your laws for cryptocurrency, medical regulation, or whatever it is.” It’s an exciting time.

It’s going to be interesting to see how that plays out. I’d love to have you back and see how Próspera has done in a year, but we are getting to the end of our time. I did want to talk with you a little bit about some things that have been brewing in my mind during this stimulating conversation. Certainly, the three questions that I ask every guest at the end are things that I’ve been thinking about. I don’t have the opportunity to expand upon them when we’re having conversations.

The first of which we alluded to a lot of sea-based things and that was one of the things that I liked about The Seasteading Institute. It was this idea that we could go and colonize this place that hasn’t been colonized before. The reason why is that I was inspired by Jules Verne’s Twenty Thousand Leagues Under The Seas. What is some media, science fiction or not, that inspires you when you’re thinking about these things that you look at as, “That would be awesome if it was like this?”

Snow Crash was one. It is an incredible book. They had these things called Franchise-Owned Quasi-National Entities. It’s a world where the US government has faded into irrelevance, but there are these private organizations that have their own little gated communities all over the country that all have the same set of laws and court enforcement. In fact, the same physical layout that if you move to one in a different place, you get the same layout. That was neat.

There’s a book called The Syndic, about a completely anarchist world in the sense of peaceful cooperation without government. A country tries to invade them and without any government, but with pure cooperation, they’re able to repel them. The Moon Is a Harsh Mistress by Heinlein is an amazing one. It’s the idea of creating this totally free society. In my living room, I have a collection of Libertarian Utopianist fiction. A Lodging of Wayfaring Men is Christian-focused. It talks about creating a community. There’s a lot. They’re fun.

You’re wearing the ears. Is that part of the microphone or your style?

I’m doing a 30-day cat ear challenge. It’s more like a personal growth thing to be a little visibly different in a way that’s fun and see how that affects interactions and conversations.

One of the science fiction I like and see ourselves tending to is this graphic novel that came out called Private Eyes. People get to the point where it’s like in a video game. They wear masks and whatever because once you go outside, everything is recorded and facial recognition. I look forward to that time when fashion is a head-to-toe idea. You’re dressed in your suit of armor. You could be whatever you want. You could be an octopus.

I look forward to that reality. Kudos to you for pushing the boundaries a little bit. Last question, with everything that you’re doing, if everything goes right, what do you hope from your city-state? What is it going to look like if everything goes right? You have that idea that, “In ten years, I want to have my own city-state.” What does that look like for you?

I want there to be multiple ones that are different. One thing that I’ve learned in this process is the humility of saying, “I know my values. I have some ideas about how to design a government, but I could be wrong about either of them.” It might be that if a bunch of different groups put their values into practice. I’ll see that someone else’s values are better. Someone else’s design is better. I’m wanting a city-state for myself that’s high-freedom where the government is very efficient.

Another thing that I realized is that I used to think I cared about low taxes and small government. It turns out that’s because most governments waste money and do a poor job. In places like Singapore, if there are higher taxes on spending and it’s used effectively to create infrastructure, foster entrepreneurship, to educate people, then that’s fine. What matters to me is how effectively the government runs, how it balance scentral planning with individual autonomy, and creating a place that keeps people safe while permitting freedom.

What matters is how effective the government runs and how it balances central planning with individual autonomy so that it creates a place that keeps people safe while permitting freedom. 

I feel like what you’re saying is you want it to be a benefit to society. You want it to happen and be good for humanity. I appreciate that because you don’t care what it looks like as long as it achieves this goal that you’ve set out for yourself, which is cool.

It is vision versus engineering. Engineering is not the point. The point is a great place to live.

It was nice to talk to you. I appreciate having you on. I’d love to have you back and we can see what has changed in Próspera. Thank you much for joining us. I hope to see you all again in the future.

Important Links

• The Seasteading Institute
• Pronomos Capital
• Twenty Thousand Leagues Under The Seas
• The First Seasteaders
• Snow Crash
• The Syndic
• The Moon Is a Harsh Mistress
• A Lodging of Wayfaring Men
• Private Eyes

About Patri Friedman

Patri Friedman runs Pronomos Capital, the first venture fund for charter cities and network states. He coded at Google for 10 years, runs a small angel fund since 2011, has degrees in math, CS, and business, and has been a leader in the competitive governance space for over 20 years: