Brian Armstrong

How to Start Your Own Country

This is sort of a funny topic I’ve been reading about recently, and I wanted to share some findings.  It’s mostly just meant for fun (mental masturbation in the wider sense of “breaking free”) but has some interesting long term implications.

Read on future King and Queens!

First Of All, Why Would You Want To Start Your Own Country?

This is usually people’s first reaction to the idea of starting a country, and rightfully so.

The simple answer is: you think you can make a better one.  Maybe where you currently live the government is annoying you in some way (like wars, taxes, environmental policies, oppression, extortion, etc - whatever you care about).  So after doing some strong letter writing campaigns that don’t accomplish anything, you start to look at what other countries are out there.  If you still haven’t found one you like, people eventually get the idea in their head that they could do better if they started one of their own!

But there is a more complex and serious answer to this as well.  Which is that there is a market for governments just like for anything else.  Allow me to explain.

When you go out for dinner you have to pick a place to eat.  You give the restaurant some money, and they give you some food and service in return.  If the food sucks you won’t go back, and if it’s great you tell all your friends about it and the restaurant thrives.  In short, there is a market for restaurants.  No surprise there.  This idea of “voting with your dollars” obviously works and encourages good restaurants.

But just like restaurants, there is a market for countries. You choose to pay money (taxes) to a government in exchange for some sort of services (military, roads, health care, etc).  And if you aren’t happy with the service, you can always leave and choose to patronize another country with your business.

But people rarely, if ever, choose to switch countries despite constantly complaining about the service.  Why is this?  Why doesn’t anyone seem very happy with their government, but you can find a pretty decent Italian restaurant in every city?  The answer turns out to be that the market for governments is inefficient.

We can see this by looking at two questions, and comparing the restaurant market to the government market:

  • **How easy is it to start your own? RESTAURANT: It’s relatively easy (get investors, incorporate, lease a space, hire some chefs).  Whether you will be successful or not is another story, but it’s at least not that difficult to try if you think you can make a better restaurant.   As proof of this you can see the thousands of new restaurants opening each year.

COUNTRY: You need to discover new land (not possible anymore, every square inch of dirt on Earth is claimed by someone at this point), conquer another country by force to take their land, or pull off a military coup.  You could argue winning an election for president should be on this list, but that’s not really the same as having your own country - any country democratic enough to allow elections probably doesn’t give the president 100% power to do whatever they want in the same way an owner of a restaurant could.

**

  • **How easy is it to switch (as a customer) if you don’t like your current one? RESTAURANT: Easy.  Go down a few blocks.

**COUNTRY: Hard.  You’d probably have to quit your job, sell everything you own (house, car, etc), move away from everyone you know (unless you could convince them to come with you), and go through lots of paperwork to establish citizenship elsewhere.

What is the major consequence of this?   Well, it means that, on average, the service provided by governments is worse than the service provided by restaurants.  They can get away with it, because they know it’s such a pain for you to actually leave, and there are few other options even if you wanted to. Simply put, it’s an inefficient market.

To say “on average, it’s worse” may actually be too kind.  Indeed, governments on occasion actually murder thousands of their own citizens, so in some countries it’s not even close.  But even in the U.S. people have still occasionally gotten fed up enough to leave (when the draft was instated during the Vietnam war for example).  Compared to restaurants, the threshold is much lower.  I might not go back to a restaurant if the waiter was rude, or I just like the salsa at the other place.

So how can we make countries more like restaurants and get better service from them? Those two questions above hold the key.  Somehow, you’d have to make it easy for anyone to start a country, and easy for citizens to switch if they saw one they liked better.  Economists would call this lowering “barriers to entry” and reducing “switching costs”.  This is, at the risk of oversimplifying, what makes markets more efficient.  And more efficient markets make for better service because they have to compete against each other to win your business.

Now, you could easily say “but countries will never be as efficient as restaurants, they are far apart, natural barriers, etc, etc…”.  And I agree with you.  But efficiency exists along a spectrum, and the closer we get to the ideal, the more improvement we’ll see in government service.

To prove this to yourself you can take a quick look at cable companies.  They exist somewhere in between restaurants and governments on that spectrum (both in efficiency and service).  It’s harder to start a cable company than a restaurant (more capital required) and consequently fewer of them.  It’s also more difficult for customers to switch if they don’t like their cable company, because there are contracts and only one or two options in most neighborhoods.  It’s no accident that service provided by cable companies is far inferior to restaurants (“your food will arrive somewhere between the hours of 8am and 6pm tomorrow…”) but not nearly as bad as governments (cable companies haven’t murdered anyone yet, that I’m aware of).  My point here is that there is a range of efficiency in markets and it seems to correspond with a range in quality of service.  Any gains in making government markets more efficient would have some benefit, even if they don’t get all the way to restaurant levels.

So now that we’ve seen why someone might want to start their own country, you might be wondering…

Ok, So How Would You Actually Start One?

Let’s look at the three main ways people have tried over the years, with varying degrees of success, and a real life example for each.

1. Build Up A Man-Made Island

Ok this one is pretty hilarious.  In the 1970’s, a group of people (led by Las Vegas real estate millionarie Michael Oliver) took over this “island” that was just below sea-level (and thus unclaimed by any nation).

They brought in some barges of sand to bring it above sea level, and declared themselves the proud new owners of a country, which they dubbed “The Republic Of Minerva” because it was located on the Minerva Reefs in the Pacific.

They even made their own currency!

Unfortunately, the nearby nation of Tonga was not too happy about this new nation popping up in their back yard, and the Tongan King issued the following (very uncool) proclamation:

PROCLAMATION
His Majesty King Taufaʻahau Tupou IV in Council DOES HEREBY PROCLAIM:-

WHEREAS the Reefs known as North Minerva Reef and South Minerva Reef have long served as fishing grounds for the Tongan people and have long been regarded as belonging to the Kingdom of Tonga has now created on these Reefs islands known as Teleki Tokelau and Teleki Tonga; AND WHEREAS it is expedient that we should now confirm the rights of the Kingdom of Tonga to these islands; THEREFORE we do hereby AFFIRM and PROCLAIM that the islands, rocks, reefs, foreshores and waters lying within a radius of twelve miles [19.31 km] thereof are part of our Kingdom of Tonga.

Tongan troops (I can only imagine their military prowess) eventually came and took over the island, taking down the Republic of Minerva flag.  The founders were unwilling to defend the island (or to hire mercenaries like the next group described below), so they left and the island was eventually reclaimed by the sea :(

Whatever your thoughts on these guys, you at least gotta give them props for execution.  For all the people crazy enough to have this idea, how many of them actually went out and dumped sand into the ocean?  Well they did, way to walk the walk guys.

You can read more about the Republic of Minerva on wikipedia.  But in general, the idea of using a man-made island has a major flaw:  most “just below sea level” atolls are quite close to other countries and even if they are technically in international water, that country is quite likely to get jealous of your micro-nation and come kick your butt.  Be warned, if you decide to go this route, you should probably bring guns.

2. Take Over An Abandoned Sea Platform

This micro-nation, affectionately known as The Principality of Sealand, is stationed on a abandoned sea platform off the coast of Britain.  It is arguably, the most successful attempt to date to create a new country.

Back in the 1960’s, a guy named Roy Bates got fed up with the British government and decided to occupy it (it was abandoned after World War II when the British built it for naval defense from the Germans, and it resides in international waters also - a recurring theme here).  Roy was doing a bit of “pirate radio”, which is where you broadcast songs on your own radio station (without paying royalties).  The British government decided to crack down on his radio station, so he took the rather drastic step of moving it off shore and starting his own country while he was at it.

Here is a great little video on Sealand, if you want some background.  They even have a Facebook group you can join.

What makes Sealand perhaps the most successful micro-nation to date, is that it’s been around so long, and a hilarious story of a takeover attempt which led to the German government giving them a defacto recognition as a real country!

This story is almost too funny to believe, but apparently it really happened:

In 1978, while Bates was away, Alexander Achenbach, who describes himself as the Prime Minister of Sealand, and several German and Dutch citizens staged a forcible takeover of Roughs Tower, holding Bates’ son Michael captive, before releasing him several days later in the Netherlands. Bates thereupon enlisted armed assistance and, in a helicopter assault, retook the fort. He then held the invaders captive, claiming them as prisoners of war. Most participants in the invasion were repatriated at the cessation of the war, but Achenbach, a German lawyer who held a Sealand passport, was charged with treason against Sealand and was held unless he paid DM 75,000 (more than US$ 35,000). The governments of the Netherlands and Germany petitioned the British government for his release, but the United Kingdom disavowed his imprisonment, citing the 1968 court decision. Germany then sent a diplomat from its London embassy to Roughs Tower to negotiate for Achenbach’s release. Roy Bates relented after several weeks of negotiations and subsequently claimed that the diplomat’s visit constituted de facto recognition of Sealand by Germany.

You can read more in the Wikipedia article.

Roy Bates didn’t make the same mistake as the group above: we was willing to defend his land, and hired mercenaries to do it!

There are lots of other funny stories about Sealand, like the time ThePirateBay.com tried to buy it to store their web servers outside of any country’s jurisdiction, or the time Red Bull sponsored a sporting event there.  But despite Sealand’s success, there aren’t many of these abandoned platforms around for people to inhabit, so let’s take a look at one final solution people are proposing.

3. Buy A Floating Sea Colony

This option is known as “seasteading” - building a permanent residence on the sea which is somewhere in between an oil platform and a cruise ship.  It’s stabilized like an oil platform and is on piers to keep it above rough ocean waves, but has ballasts like a submarine so if necessary can float up a bit and be moved around (like if the King of Tonga comes after you).

If you think this is crazy (and it is), just keep in mind that both oil platforms and cruise ships prove something like this is already possible technology wise.

While these haven’t actually been built yet, there is a VERY good chance that they will in the near future.  The Seasteading Institute has received half a million in funding from one of the founders of Paypal to build a prototype - that’s serious money, and shows they aren’t just a couple of nut jobs posting ideas on the internet.

If you want to read more about it, they have a book (currently in draft form, freely available online) which lays out their ideas in more detail.  They seem to know what they’re doing.

So what will one of these cost?  Hard to say at this point - maybe $50-$100 million in total financing.  But you could buy a piece of land on it for less.  It’s likely these sort of countries will be funded early on by specialized industries like medical tourism, gambling, free trade ports, etc.  Something where their independence (low taxes, free trade, no regulations, etc) will give them an advantage.

You might think a country with no natural resources, a small land mass, and additional cost of importing all their food would be at a major disadvantage.  But then again, that is also a good description of a region like Hong Kong, and their economic growth rate over the last 25 years has left most other countries in the dust.  Freedom, it seems, might be sufficient for stellar economic growth, even if you have no natural resources.

Conclusion

So there you have it.  A quick overview of micro-nations and a glimpse of how we might start to see new countries pop up in the future.  It would be an interesting world to live in if anyone with $50 million bucks could start their own country (legally, and without killing anyone).

If you were into environmentalism, there would be a country for that.  If you cared about privacy, there would be a country for that.  If you wanted free health care or lower taxes or whatever, there would be a country for that.  It would be like new restaurants popping up all over, each trying to capture your heart and mind (and tax dollars) with the next great innovation in government.  There would be something for everyone, and innovation would take off at an incredible pace as all sorts of ideas were tested in the real world, instead of being relegated to “what if’s” in presidential debates.

It would be nice to see ads from all these countries, trying to win your business with the best service possible.  And if they didn’t live up to their promise, you wouldn’t be stuck - you could just float your house over to the next one.

Even if I never actually live on an island or platform in the ocean, I still think they are a good idea, just because they will put pressure on current governments to start shaping up.  It will lower that threshold where people get fed up enough to leave.  And the more competitive we can make governments to keep their citizens, the better service we’ll all get.

Until next time, keep breaking free! Brian Armstrong

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