Technology Can Be Disruptive, So Why Can't Cities?

Disruptive technology is a game changer. It’s something that seems to come out of nowhere, upsets incumbent firms that don’t adopt it (or at least adapt to it), and generally heralds a big jump forward in some sector or industry.

Companies that are the first to bring these new technologies to market tend to start out small and aren’t given any attention by the major players. By the time the reigning champs start to react, the newcomers have already gained too much ground and built up too much momentum to be stopped.

This is how technology moves forward: by entrepreneurs starting small, running with ideas that work, and changing the world when they get something right.

But what if this understanding of  technological progress could be applied to pursue advances in governance as well? What if the way to produce better functioning systems of governance isn't any different from the way we produce better versions of any other technology? 

If we want to think of governance as technology, we have to realize that the market is not a competitive one. Existing states don’t generally take kindly to their citizens opting in and out on a whim, and although federal systems allow for a degree of experimentation, it’s not as if the startup mentality extends to governance.

That might be about to change, though. Startup Cities, sometimes referred to as Model Cities, are special zones that pursue political, legal, and economic reform. The basic concept is to "rezone" a small portion of an existing country under a completely new system of governance.

The new city — with new governmental technology — is built from scratch. The current model calls for private groups to purchase land and then develop the infrastructure and legal systems. After these new systems prove their benefits for citizens, other municipalities can opt into the reforms through a popular referendum.

The ability to enter and exit the zones at any time is a critical restraint on the state's authority. Potential residents in the host country can opt in or out by voting with their feet, meaning that the founders of a Startup City have to create a universally acceptable set of rules. If they don’t, there’s nothing forcing the residents to stick around.

The first Startup Cities project is slated to take place in Honduras, where the government recently passed legislation allowing the creation of special, politically separate development zones. The hope is that these cities will provide a haven for Hondurans suffering under the violence and corruption that plagues the rest of their political system. 

But Startup Cities isn’t the only proposal for launching small-scale experiments in governance. Built around the same basic ideas, Seasteading proposes to build at sea what Startup Cities creates on land.

Yes, you read that right. We’re talking floating, politically autonomous human habitats, each test-driving new (or at least modified) forms of governance. While this might sound far-fetched, opportunities like sea farming or regulatory arbitrage make perfect sense. Blueseed, the first Seasteading-inspired venture, is a prime example of building opportunities by simply going outside the system — in this case, the U.S. immigration system.

Keeping the jurisdictions small helps open up space for innovation by allowing more people to try more things. Moreover, small-scale projects are easier to walk away from if a new polity becomes dysfunctional or corrupt. Planning for the possibility of failure is an important element of these programs, too. On a long enough timeline, everything breaks down. We can’t build things that never break, but we can build things that don’t threaten all of society if (when) they come apart at the seams.

If all this seems a little esoteric, just think of “Too Big to Fail." The way our financial system is structured, we’re a society sailing on a fleet of 12 Titanics. What’s worse, each Titanic is chained to every other one, and instead of decoupling and breaking them down into smaller vessels, we’ve instituted rules that attempt to guarantee not a single one will ever run into another iceberg.

Spreading our bets not only makes us more effective at learning from our mistakes, it makes us more effective at surviving them. By starting small and spreading out, Seasteading and Startup Cities embrace that idea completely.

The advances we’ve seen in tech over the last few decades haven’t happened because of some gifted elite that just always manages to get everything right. They’ve happened because a handful of individuals were willing to risk time and capital to try out ideas that the experts didn’t think were possible.

When considering a technology as important as governance, we might do well to open up the space to do the same.

[i] Bay Area readers of any discernment or class, please forgive my use of the term disruptive; the rest of the world hasn’t yet overused it to the point of making it another universally annoying cliché buzzword.