Political change can end oppression with long overdue emancipatory reforms, but it can also create oppression. The transition of the Weimar Republic to Nazi Germany, the Rise of Mao Zedong following the boxer rebellion and the Chinese civil war, the collapse of Yugoslavia and the genocide that followed, or the American PATRIOT act are all examples of changes for the worse.
Even neutral reforms can be disruptive, and leave many elderly people with a sense that the rug was pulled out from under them, while the cost of regulatory change often exceeds the cost of the regulations themselves. Between a third and a quarter of all financial service firms spend one whole day per week tracking and analysing regulatory change. The best regulatory environments for business are politically stable ones with constant rules that make long term future planning, and investment, possible.
In my book, The Philosophy Method, I suggest that, since immigrating into a country requires positive effort, immigrants effectively consent to a host nation’s law more completely than those who stay for family, friends or career. For this reason, a nation with unchanging laws and an initial population of zero would more closely resemble a perfect social contract – a legal system with the full consent of all inhabitants (until they had children) – than any other real world political arrangement. Voluntary migrants into such a country would accept its law in totality at the time of their arrival. Since the laws don’t change, they remain acceptable to old migrants, while the new migrants will also accept them (or else not move there). So a country with unchanging laws and zero initial population will amass, over time, an entire population who all find the law acceptable, perhaps even optimal (if such a thing is possible in the real world).
I called this form of governance “Constitutional Anarchy.” “Anarchy” merely refers to the fact that no one has the authority to make or change the law. There would still be a legal constitution as well as a judiciary and police force to interpret and enforce it. Human beings must, of course, initially write the law, and they could write and modify the law for the territory until the first inhabitant moved in to be ruled by it. However, once the first person moved in, the law would be frozen for ever after.
A major limitation of constitutional anarchy is that the only response to an objectionable law is to leave the country. You may ask incredulously: “But what if a law was a huge problem for 99% of the population? What if the solution was obvious? Would everyone still really have to up sticks and leave?” While people may initially all agree with the laws, changing technology and criminal tactics could suddenly make a given law very problematic. There is something ridiculous about an entire citizenry abandoning buildings, roads, parks, zoos, etc., etc., just because new technology rendered a few (easily fixable) laws ineffective and no amendment procedure existed. The principal absurdity of moving an entire population just to change a law is the billions of pounds worth of fixed infrastructure that would effectively be wasted.
Unamendable laws foster political stability, which has many advantages. The main disadvantage (of the only recourse to dissatisfaction with the law being relocation) is the cost of abandoning fixed infrastructure.
But what if all the country’s infrastructure floated on water? What if the country was only a few miles across and the nation with identical laws in all other respects (except for the problematic law) was located 5 miles away from the first? Given that container ships the size of skyscrapers routinely travel across whole oceans, does it really seem impractical to move a floating city across 5 miles of water to amend a law? There would be a third option: the Seasteading Institute advocates modular floating cities composed of platforms that can be docked to, and undocked from, each other. So, if only some people wanted to change a given law, they could undock their platforms and move 5 miles over to the new jurisdiction while those who were happy with the status quo could stay. This might happen if the existing regulations inadequately met the needs of some new industry in the floating city but continued to serve other industries.
Jurisdiction-Independent Courts
The largest barriers to towing a city made of floating infrastructure into a brand new jurisdiction would be negotiating the territory for the jurisdiction with the UN (current international politics takes decades, if not longer, to create new countries), and starting a new court from scratch (since precedence plays a strong role in judgements and court procedures). The best way to address these challenges would be to establish an umbrella nation on the high seas with a single court. This court could:
- Rapidly create new jurisdictional territories with new constitutions in regions of water within the aquatory of the umbrella nation with arbitrary laws proposed by jurisdictional entrepreneurs
- Judge cases for multiple jurisdictions in accordance with whatever local laws govern that jurisdiction
While the umbrella nation’s court could establish new jurisdictions on ungoverned territory, it should not be allowed to “rezone” previously zoned jurisdictions until their last inhabitant moves out. This way political stability can be ensured for those who choose to stay put in their jurisdiction of choice.
All the territory (aquatory) of the umbrella nation that was not specifically allocated as a jurisdiction would be subject, by default, to the law of the sea.
Such an umbrella nation would in all likelihood take decades to establish, but, once established, it could serve as a sand box in which to rapidly test a wide variety of different legal and regulatory systems.
We can thus see that, perhaps ironically, the inherent flexibility of a floating medium could make more rigid and more stable governance systems feasible. However, their compactness and variety would ensure that everyone could find a jurisdiction that was right for them.
John
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How do you envisage the process of setting up a new jurisdiction? Say someone wanted to set up a Pastafarian theocracy. How would he or she go about doing so? Would individuals and companies be able to just create their own jurisdications with whatever laws they wanted? If so, how would you prevent hundreds of tiny tax havens from springing up?
In the particular mode of governance I’m advocating in this article, no jurisdiction could be set up with a dictator that sets the rules. You can only set arbitrary rules and regulations, so all the governments in the umbrella nation would essentially be constitutional anarchies, the court of the umbrella nation would also adjudicate cases. But they would adjudicate each case in accordance to the local laws in the jurisdiction in which they were infringed (local laws which can be arbitrarily set).
Regarding theocracies, in the system proposed here, you could not set up a jurisdiction with a “holy leader” but you could set up a jurisdiction that punished people who violate particular religious teachings in a manner prescribed by a holy book.
To set up a jurisdiction a group of inhabitants of the umbrella nation simply go to the court with a bunch of rules (ideally drafted by lawyers to ensure they could be consistently enforced) say to the judge “give us a jurisdiction with these rules” and then the judge would allocate them an empty jurisdictional territory that is roughly proportional in size to the number of people who are planning to live. The jurisdiction cannot overlap other existing jurisdictions and the location would also be allocated to take into account the sensibilities of other jurisdictions. If they were particularly noisy, they would be zoned a place far from quiet jurisdictions, if they were a Las Vegas-style casino jurisdiction with lots of neon lights, they would be zoned far away from a jurisdiction of astronomers with strict light pollution rules.
The simplest way to stop tax havens from developing is Chinese-style capital controls. If countries limit the amount of capital that can be transferred out of their borders (by both people an corporations) then it becomes impossible to funnel money into tax havens. Admittedly countries with capital controls also need customs officers to stop things like gold from being smuggled out. AI will make such enforcement a lot more straightforward in the future.
The alternative to capital controls is land value tax. If a government is satisfied with the revenue it can raise through land value tax, then it need have no fear of tax havens as you cannot transfer land across borders. If every inch of land has an tax liability equal to its rental value associated with it, independent of its owner, then the government is practically guaranteed to collect the full rental yield of the land as public revenue. Beyond land value tax, government issued money (without faffing around with central banks) is another source of funding that cannot be taken away by tax havens. Though the extent to which governments can fund their operations with new money must be limited to about 3-5% of GDP to avoid runaway inflation.
So you’re saying the problem with tax havens isn’t the tax havens themselves but economic policy in the rest of the world?
Governments have it within their power to unilaterally adopt tax and fiscal policies that are resistant to tax havens either:
1) By restricting the free movement of capital like China already does (either across a national border or across the border of a group of nations whose tax policies are compatible with each other – a kind of EU-like capital customs union)
or
2) By abandoning corporation tax altogether and shifting taxation to sources of revenue that are naturally resistant to being siphoned into tax havens such as Land Value Tax (or indeed taxing any fixed asset that cannot easily be moved across borders) and government issued money.
Frankly I think the main reason why politicians claim that the problem of tax havens is “unsolvable” is because half of them have stashed their own ill-gotten-gains into such places.
Tax Havens are also a good pretext for justifying global government.