Seasteads governed as joint-stock corporations?

The strange, weird, red-pill world of political theorist Mencius Moldbug is not the world as I see it. It has far more extremes, more evil, more black-and-white judgments, and more overarching historical themes. But I find it fascinating because it overlaps with my world in places where few others seem to. For example, he recently discussed the benefits of governing a nation as a profit-maximizing corporation:

The joint-stock republic is a very different entity from your ordinary, democratic republic. Its shares are negotiable and freely traded. Owning a share is not a “right,” except in the sense that if you own a share of Intel you have a right to receive Intel dividends. And, most importantly, the republic is operated for the exclusive benefit of its shareholders. All corporate governance mechanisms are otherwise the same, although without a superior sovereign to enforce them they must enforce themselves. Briefly: combine this technology with this one. (Those Google engineers will be busy.)

If the republic is operated for the exclusive benefit of its shareholders, who of course are likely to resemble the corporate shareholders of the present day (pension funds, fat cats, Saudi sheikhs, etc), how on earth does it provide high-quality government? Shouldn’t it be operated for the benefit of its customers?

This is the miracle of capitalism, so familiar and yet still so strange. The capitalist restaurant is operated for the benefit of its owners. The Communist restaurant is operated for the benefit of its customers. But which has better food?

We must agree that a restaurant operated effectively for the benefit of the customers will be a better restaurant than any operated for the benefit of the owners. But it is not possible to design a management structure that will reliably achieve this result. The problem is fundamental: we cannot state a precise and unambiguous definition of “good food” that we know all customers will agree on. We cannot characterize the results objectively or quantitatively.

We can, however, operate a restaurant effectively for the benefit of the owners, because we can describe what the owners want objectively and quantitatively: money. The more, the better. Thus the restaurant can be accountable to its owners, as it never can to its customers. And it is this accountability, this quality of tautness, which causes it to serve its customers well. A string can be loose in many ways, but tight in only one.

In a joint-stock republic, the mapping from profitable ownership to high-quality government is straightforward. The return on each share is a function of the value of the capital. The capital is the country, ie, its real estate. The value of real estate is its price. How does a government maximize the price of its real estate? By making the country as pleasant a place to live as possible, ie, by providing high-quality government.

CEOs of private corporations today may be effective or ineffective. There is no escaping the bell curve. On the right end, you have Steve Jobs; on the left, Gil Amelio. However, one quality shared by almost all corporate CEOs is sanity. One generally does not hear of them going crazy and murdering the entire board of directors with a fire-exit axe, or the like. I realize that this is a low standard – but consider the record of heads of state in the democratic era.

While I like this model, I think it is also worth noting that democracy should work better on seasteads, because smaller communities means less voters which tends to lead to better performance from democratic government. My guess is that corporate governance will be more common in the “high-road” seasteads, funded by investors and run by entrepreneurs for profit, while democratic governance will be more common in “low-road” seasteads, which will be funded, built, and run by their occupants. The former will have more office towers, and the latter will throw much better parties.

The great thing about seasteading is that we don’t have to pick and choose. We want to see lots of forms of government tried, because not only do we not know what will work best, probably different forms will work for different groups. No need to endlessly debate about how each will work and for who when we can just go try them out.


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