Huge old governments are less able to innovate and try new things. Small, newer nations can try new things, see if they work, and the rest of the world will follow. It happens all the time.
Are you in despair over the drug war? Portugal took the lead in decriminalizing the use of hard drugs, and five years later Scientific American featured the range of positive results.
Are you maddened by complicated taxes? In 1994, the small nation of Estonia became one of the first countries in the world to adopt a flat tax, the same percentage for everyone, and it made tax compliance so simple that they saved enough to reduce taxes further.
What about getting “the man” off your back? In 2006, the State of the World Liberty Project compiled the results for four factors of freedom and determined that the top countries with regard to personal freedom were a four-way tie between the Bahamas, Luxembourg, Malta, and Barbados, three of which are island nations, all four prosperous peaceful and small.
How about slashing state spending? Abolishing the military would look like a risky venture to residents of large nations, but it has considerably cut down on expenses for Costa Rica and 20 other nations.
These innovations quietly revolutionized governments all over the world.
The startling and speedy success of the Portugal experiment led Spain and Italy to decriminalize the personal use of drugs. Overdose numbers plummeted and addicts started to receive valuable care rather than jail cells.
The example set by Costa Rica helped inspire Panama to abolish its standing army in the 1990s, and it’s been the fastest growing country in the region ever since.
When the State of the World Liberty Project was updated in 2019, it found that the success of small nations inspired significant increases in freedom in larger nations like Argentina and Ecuador.
Estonia’s flat tax innovation spurred such sudden economic growth that other nations noticed. In quick succession, Latvia, Lithuania, Slovakia, Romania, Ukraine, and even the large economy of Russia adopted a flat tax, and each saw their economies grow by approximately 8% in a single year, over double what was seen in the world’s older nations. This caused politicians around the world to initiate debates about abolishing their convoluted tax systems and replacing them with the formerly unthinkable flat tax. Today, 25 nations have enacted some form of a flat tax since the tiny nation of Estonia enacted it in 1994. That averages out to one nation per year imitating the governance innovation of Estonia, not counting ten states in the USA.
If you look at the true history of progress in governance, you find that wars steal the headlines, but small experiments among startup societies inspire quiet revolutions that last.
In the twentieth century, Singapore, Hong Kong and Taiwan set examples for economic freedom that changed policies in China. Today, Ireland and New Zealand are doing the same for the West. All of these island nations have revolutionized the governments of their former colonizers.
Clearly, little new nations innovate and discover solutions that old big nations imitate.
“I think our time is better spent on technological innovation than political agitation. Imagine if all the money going into lobbyism and political campaigns in the last ten years had been spent instead on creating new countries at sea. We might have discovered Democracy 2.0— or something even better.”
Lasse Birk Olesen said during his seasteading TEDx talk in Denmark
Current democratic governments control six big industries: Banking, farming, public environment, war, education, and health care. These also happen to be the six great political psychodramas in the United States.
It’s no coincidence that the six entrepreneurs you meet in the seasteading book are the founder of a money-transfer service (Peter Thiel), a farmer (Ricardo Radulovich), an environmentalist (Neil Sims), a patriot (Lissa Morganthaler-Jones), an educator (Michael Strong), and several physicians.
Each of these industries is filled with innovators bursting with new ideas and gritting their teeth with frustration at their politically imposed powerlessness. Can you blame them?
Peter’s payment service was redefined as a bank by governments and fined as such.
Ricardo’s environmentally restorative sea crops are rendered illegal by environmental laws on California’s coasts in need of environmental restoration.
Neil’s unanchored deep-sea fish pen was named one of Time magazine’s “25 Best Inventions of 2012” but the company left US waters to seek expansion opportunities elsewhere because of nettlesome regulations.
The greatest inventors of the twenty-first century are fed up. Technology is advancing, but governments are not advancing with it, and it prevents innovations from reaching the larger population.
“I think we can be doing a lot better. I think we can be looking at a whole range of technologies. Futuristic computer technologies, artificial intelligence, quantum computing, space technologies, biotech, next generation life sciences. We should be finding a cure for cancer, for Alzheimer’s.”
Peter Thiel
“We are stifled by the most nonsensical laws out there. That’s why we can’t run businesses. Its like swimming through molasses… Don’t you think maybe for a second that we should focus on making it easy for a small business person to start and run their business? Don’t you think that it makes sense?”
Magatte Wade
“We have tremendous innovation in energy and it is stalled out by government intervention. I do know it is 100% a political problem. It’s not a technology problem.”
Marc Andreessen
Small, new nations can try new governance policies out, and if they work, the rest of the world will follow. Seasteads are a perfect model for this, and they will provide platforms to try the most innovative governments we can imagine. Models that work will grow, while models that don’t will dissolve with minimal impact on the outside world.
If you want to learn how we revolutionize government one nano-nation at a time, go to seasteading dot org, and read Seasteading: How Floating Nations Will Restore the Environment, Enrich the Poor, Cure the Sick, and Liberate Humanity from Politicians.
NOTES AND CITATIONS:
The small country of Portugal took the lead: Vastag, B. (2009, April 7). 5 Years After: Portugal’s Drug Decriminalization Policy Shows Positive Results. Scientific American.
four-way tie between Bahamas, Luxembourg, Malta, and Barbados: State of World Liberty Project 2006. See also, Huemer, M. (2013). The problem of political authority: An examination of the right to coerce and the duty to obey. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan. 329-330.
Resulted in increased freedom in Argentina, Ecuador, and East Timor: 2019 state of world liberty index
Estonia was an “internal colony”
flat tax, and each saw their economies grow by approximately 8% in a single year: Gethard, Gregory. Should The U.S. Switch To A Flat Tax? (December 18, 2009) Investopedia.
See also, Flat-Tax Comeback. Bruce Bartlett, National Review, 10 November 2003.
The Demilitarization of Costa Rica
“Panama is an example of another country that has followed Costa Rica’s example.”
“With both Costa Rica and Panama benefitting from demilitarization, Central America has gone from a site of violent conflict, to a potential model to the rest of Latin America and even the world. Costa Rica provided the initial precedent for doing away with the army, while Panama proved that even with an army much larger, it is possible to demilitarize. Surely, there are other countries that could benefit from abolishing or, at least, reducing their army both from a social and economic perspective.”
“Seventy-years ago a country without an army seemed to be a recipe for disaster, an example only another foolish country would follow. Today, that bold country is ranked as the happiest country in the world (Happy Planet Index). And, now, there is proof that their ground-breaking idea has, in fact, worked for two countries. Likely, this will not be enough for all countries, or even just the eight candidates discussed above, to replace their soldiers with teachers as Costa Rica sought to do. However, gradually, over time, the benefits of countries around the world reducing their military spending in favor of efforts more fulfilling to their citizens could result in a world filled with countries similar to Costa Rica—happier countries with stronger economies, higher literacy rates, less people going hungry, and less violence.”
The Demilitarization of Costa Rica
Nations and US states with a flat tax.
Lasse Birk Olesen at TEDxCopenhagen: How technology moves society – not politics.
In Tech We Trust? A Debate with Peter Thiel and Marc Andreessen.
“Do we want innovation or not? And if we do, we need the political regime to make that possible.”
Marc Andreessen
Magatte Wade TED talk: Why it’s too hard to start a business in Africa — and how to change it.
Thank you for edits Carly Jackson, Francisco Litvay, Michael Strong, Magatte Wade, Tom W. Bell, Tomasz Kaye, Chris Rasch, Cyprien Noel, and Edouard Lewis Du Mesnil du Buisson.
Created by Joe Quirk and Jackson Sullivan
