Market Overview

Seasteading and Free Cities: Is Demand for Liberty Rising?

"Until philosophers are kings, or the kings and princes of this world have the spirit and power of philosophy, and political greatness and wisdom meet in one, and those commoner natures who pursue either to the exclusion of the other are compelled to stand aside, cities will never have rest from their evils, --nor the human race, as I believe."
~from The Republic by Plato

In light of contemporary issues related to government regulation and the rule of law in the US, is demand for liberty rising?

A long time ago the philosopher Plato explored questions of the ideal just state and the meaning of concepts like truth and justice. Though humanity has come a long way since the days of Plato, questions regarding proper leadership, good government, and the meaning of justice remain.

The ongoing debate regarding health care in the US has raised questions regarding the role of government and the relationship between government and the people. On Thursday's episode of Marketplace, Gallup's editor-in-chief Frank Newport discussed that Americans are split regarding the health care law. Newport: "Our last poll at Gallup and other polls show it breaks even, or actually tilts negative. I haven't seen any polls that actually show, say, a majority of Americans who support the health care act." Whereas "the majority of Americans have seen no impact" of the health care law, "the majority don't anticipate a lot of positive effect in the future either."

Interestingly, according to Newport, "seven out of 10 Americans, when asked, say that the Supreme Court should strike down the individual mandate part of the bill", the individual mandate being "not at all a popular provision of the Affordable Care Act." Marketplace host Kai Ryssdal suggested that Americans can't seem to make up their minds on how they feel about the health care law. Ryssdal: "We're split on it overall, we don't like parts of it, we like parts of it."

The Associated Press recently commented that those against the health care law fear big government. From the article: "Americans, Republicans and Democrats alike, are asking some fundamental questions about the state of the union that go beyond how to grow the economy, add jobs, lower fuel prices and curb foreclosures. Among the most profound: What is -- and perhaps should be -- the role of government in our lives?" Akin to the 2011 debt ceiling debacle, the issue of Obamacare reflects substantive differences within the American collective consciousness with respect to the role of government and the legal line of civil liberties.

The LA Times' David Savage reported on March 28, 2012 that "the Supreme Court's conservative justices said Wednesday they are prepared to strike down President Obama's healthcare law entirely." Per Savage's report, regarding the question of whether some of the health care reforms could be upheld if the individual mandate were struck down, "the court's conservatives said the law was passed as a package and must fall as a package." The Supreme Court is expected to rule on the constitutionality of the health care law on Friday, but the Court's decision is expected to be announced in June.

If the Affordable Care Act is upheld as being constitutional, one issue with the Supreme Court's ruling could go back to questions regarding Justice Elena Kagan's sitting on the court. Justice Kagan served as Solicitor General under Pres. Obama. According to a PR Newswire press release published on MarketWatch, "Justice Elena Kagan, the former Solicitor General, is continuing to illegally preside over a case in which her impartiality has been seriously called into question." The PR Newswire press release suggested that Justice Kagan's participation in the ruling may call into question not only the legitimacy of the Supreme Court's decision on Obamacare, but also the legitimacy of "the Supreme Court as an institution." Per the press release, Freedom Watch's Larry Klayman commented: "It is now clear that the Supreme Court considers itself above the law, does not represent the American people and much less the rule of law. This is a formula for revolution."

In the instance that the individual mandate is upheld, the possible response from those opposed to the law may be precarious. Per one protester's sign outside the Supreme Court: "We will not comply." The current Zeitgeist in the US (owing to the ongoing culture war regarding the role of government) in some ways portends possible issues with respect to forcing states, firms, and individuals to comply with the health care law. The Supreme Court's ruling will come with the backdrop of a struggling economy, financially-squeezed consumers, and an ideologically-divided populace.

To say the least, the idea that the government could force citizens to engage in contracts sounds a bit disconcerting from a constitutional perspective. The question leads one to wonder if the Commerce Clause has any boundaries at all. Conservative commentators like Glenn Beck, Rush Limbaugh, and Mark Levin have discussed how the fact that we have gotten to this point in American law should concern people. The idea of the individual mandate transforms the relationship between citizen and state. There's a recurring theme in the contemporary conservative American discourse that the nation is on the "precipice" -- with the Constitution hanging by a thread. And as economists have seen with respect to government intervention in the markets, the government often does not work as efficiently as the private sector. Understandably, in light of ongoing issues with Social Security, the housing market, and higher education, the prospect of Obamacare may raise some concerns in the hearts of Americans.

Per Pres. Ronald Reagan's sentiments, common sense tells us "that when you put a big tax on something, the people will produce less of it". The more you regulate X or Y, the less of X or Y there is. Whereas regulation can help in a limited form to ensure a reasonable standard of quality, too much government regulation and taxes can severely stunt commerce and economic growth. And as we can see from the 2008 financial crisis, when it comes to regulation of the marketplace, the private sector is often a few steps ahead of the public sector. If a bureaucrat asked an economist how many products and/or services the government should regulate, it is as if the economist could respond, "It depends on how big you want the black market to be."

The issue of Obamacare also comes at a time in the public discourse in the context of the impending student loan bubble, political questions regarding the rule of law and enforcement of the law, and the viability of the US dollar. Whereas some may perceive civil liberties being at stake with respect to government regulation (and also Internet privacy policies), it would appear that societal demand for liberty may be on the rise. As such, demand for political and economic alternatives may rise -- including the possibility of seasteading experiments and alternative currencies. I discussed in August 2011 how seasteading could become an avenue for citizens to establish floating libertarian city-states.

The seasteading project Blueseed serves as an example of this phenomenon. According to the Blueseed website, the sea-based "Googleplex of the Sea" plans to launch between the third quarter of 2013 and the first quarter of 2014. Akin to Ayn Rand's Galt's Gulch, Blueseed would serve as fertile ground for entrepreneurship, innovation, job creation, and economic growth. According to the website, Blueseed is for "the boldest, brightest, and most talented tech entrepreneurs from around the world." Blueseed believes that "the world's best entrepreneurs should be able to gather and collaborate in one place, and not be limited by antiquated work visa restrictions." The Blueseed phenomenon definitely brings to mind Rand's vision of a refuge for entrepreneurs, creators, and innovators -- "Silicon Valley's visa-free offshore startup community".

Another interesting phenomenon in American society is the Free State Project where libertarians hope to move to New Hampshire in order to effectively establish a libertarian state. The Free State Project claims that it currently has 11,741 participants with 1,017 in New Hampshire. The Free State Project's website claims that the group "will reduce burdensome taxation and regulation, reform state and local law, opt out of federal mandates, and press for the restoration of constitutional federalism." The Free State Project would thus serve as a beacon of light for libertarianism in the US.

Whereas many may look to criticize the particular structure of government in opposing government regulation and the loss of civil liberties, I think it is important to note that the question of liberty really goes beyond a government's structure. Hypothetically, a libertarian state could exist even in a monarchy. As the philosopher Aristotle noted, the problem with a monarchy is that it can easily turn into tyranny, the worst form of government. However, in light of a viable constitution with respect for individual liberties and the rule of law, a libertarian laissez-faire system could exist in a monarchical state. As I hope to discuss in a future article, libertarian constitutional monarchism could work to fulfill the the subtle need for unifying non-partisan political leadership in daily practice within a society while allowing for viable economic growth and robust ideological debate.

Despite questions regarding the role of government and individual liberty, I have to come back to what I wrote in August 2011 in that "I really think that humanity is going to find that the quality of a state is not about its form of government or its constitution written on paper. Rather, humanity will find that the quality of a state depends on the behavior of the state's citizens themselves. A state's goodness or badness is not in its form on paper, but its form as evidenced by the character of its citizens."

In this way, if there is a growing demand for liberty, the path of liberty in the future may have to be paved with culture and practice rather than be written on paper. If government regulation and taxation begin to increase while Obamacare is deemed as being constitutional against the will of the American populace, at that point we may see a rise in demand for liberty to the point where individuals and firms begin to look elsewhere for alternatives to big government and ominous dystopian prospects. This may entail an increase in the number of phenomena such as Blueseed or the Free State Project. In particular, I think it is interesting in that Blueseed is pretty much an echo to the Galt's Gulch that Ayn Rand created decades ago.

In the years to come, depending on public sentiments regarding the federal government, we could also see states or cities declaring themselves "free" as a political statement of self-government and quasi-sovereignty in the sense of effectively "opting out" of national norms, e.g., if members of a city decided to embrace a local or alternative currency. Might we be hearing about a "Free City of Columbus", a "Free City of Augusta", or a "Free City of Portland" in the years to come? As the nation finds itself divided on social, economic, and political levels, we may also begin to hear more calls for some sort of unifying force to bring the country together.

In light of the health care law, as it is clear that some states do not appear to favor Obamacare, it will be interesting to see how those states respond if the law is later deemed constitutional. Some commentators like Mark Steyn have previously suggested that such ideas get into questions of state secession and public discontent. And given current sensitivities regarding the rule of law and political leadership, no one can say for certain what will happen in the future. That being said, as I have previously written regarding economist Thomas Sowell's ideas, constraints on individual freedom run counter to economic growth and prosperity. Thus, if demand for liberty is increasing, maybe this is a good thing. At the end of the day, liberty with the protection of individual rights is good for economic growth.

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