Will New City-States Replace Nations?

We interview Patrick Friedman, a leading thinker on competitive governance, about his vision for decentralized societies. He explains the charter city model as a way to "upgrade" existing nations by allowing innovation in legal systems. These startup societies enable jurisdictional experimentation absent in most countries today.

Patrick argues exit rights are paramount so groups can self-determine governance. He envisions charter cities as platforms where many opt-in communities with niche values/cultures can emerge. We discuss economics, recruiting celebrity founders, penal colonies, and more unorthodox concepts. Overall Patrick sees charter cities as unlocking competition to find better forms of social organization.

[00:00:00] Hello. We said, we're going to get a very special episode today, which can almost be thought of as a lost interview, because it was one of the early interviews we did. Uh, but it was in a very different format than our other episodes. And so we didn't want to release it until we had a bit more of a following. It was, was Patrick Friedman who runs Pronos capital, the first venture capital fund that focuses on charter cities and network states. So when people are trying to start new countries, uh, this is the main funder of that. And Patrick Friedman, who we've known for a very long time since Silicon valley. Is the guy who would have been at the center of the seasteading movement when that was really growing. He coded at Google for 10 years, rent a small angel fund since 2, 7, 11 has degrees in CS and business and has been a leader in the competitive governance scene for over 20 years. Yeah. Leaders understatement there.

He was basically he's the, what was the early charter city guy, when [00:01:00] most of the charter city movement with seasteading, which was this idea that people would go live on. Uh, sort of floating boats that would be made up of, uh, autonomous components that could like break apart and recombine. So like even your house, you could easily leave one government system and go to another government system very easily. So, uh, Some other stuff here I have 2001 began thinking about a new approach to upgrading governments. The side hustle 2008, started the sea setting Institute with funding for Peter teal, 2009. Co-created a famous phrase, a self-organizing festival on water, still running annual annually. So for if ever raises another thing, cause this is actually a really important event within. Silicon valley culture, which was seen as sort of like the rationalist slash less wrong version of burning man. Um, but it was done on boats, which honestly seems much more appealing to me. Uh, 2011 co-founded future cities development, which have had the first M. Oh you for a modern charter city in 2012 in to southern 18 started promos capital patrick [00:02:00] has board memberships and advisory positions across this charter city network state space He does talks interviews and events regularly around the world Very excited to, to bring this loss a bit of context for you and we have a few other interviews we might be able to put out this way Um so very excited about that.

Simone: Hello Simone.

Malcolm: It's wonderful to be here with you today. And Patrick Friedman. Patrick Friedman, he is and has been for a long time, known as one of the most preeminent thinkers of what. Future cities may look like what future society may look like. And given that we've been talking so much about the future of the world economy and the future of what human civilization may look like in ways that are very orthogonal to the way people think about civilization today, we are so excited to have him on.

Malcolm: I would love you to give a bit more of your background if you think as any is necessary. And the first question I will prompt you is, is has [00:03:00] any of your thinking around what future human cities may look like? Changed with the rapid development of AI and the movement of AI into the public sphere? Or had you, were you such a forward thinking, you already

Patri: accounted for all of this?

Patri: Well, nobody can know the timing of something like ai, but I think of it as being like somewhat orthogonal. Like, I have serious concerns about AI risk, but like, that's not my path, right? I have my part of the world order that I try to make better. And yeah, I think it's like really hard to predict what AI will do, but definitely now is the time when it's starting to do something.

Patri: So we'll find out. Okay. So when you think

Malcolm: about how cities are gonna change, what is your sort of go-to talking points right now?

Patri: Well, so I'm, I'm interested in New city states it's kind of my life's mission to make it so that we can start new countries, like we start companies today. And at this kind of halfway point, after 20 some years of working on [00:04:00] it what it looks like is what are called charter cities.

Patri: Charter cities have regulatory authority over some parts of the law while being under a country's sovereignty. And so I'm very interested in the way that that cities using new governance systems. Can be a way to kind of upgrade a country, right? Because the alternative, a lot of countries have old laws, maybe like relics of some mishmash of like pre colonialism, colonialism, post-colonialism.

Patri: Often the courts aren't great, but it's really hard to reform a whole country at once, right? I mean, you can't make huge changes the legal system of the whole country at once. And you shouldn't, right? You shouldn't change it on top of a bunch of people. But what this has meant so far is like very little innovation in government.

Patri: No, like sandboxes as we say in software engineering. No ways to test out new things. And that's what's really missing. And the genius of the Charter City idea is it says, Hey, wait. If we start with empty [00:05:00] land and then put a significantly different legal system there and people are opting into it, now we can make much bigger changes and test things out.

Patri: And also it's a way of kind of, Creating a bubble with like a different culture and having people like opt in and acculturate it in time. So that's really different about it and I think that definitely the city state. I mean, look, the best run country in the world right now is Singapore, which is a city state.

Patri: It seems like cities are like kind of like big enough to matter and potentially be independent while like small enough to be responsive to their citizens or customers. As I like to say, one of my main generative metaphors is looking at governments like businesses and thinking about the governing industry.

Patri: That's all the countries in the world and citizens or customers who pay taxes and other fees and get some package of governance services and are kind of like shopping for the place that gives them the best deal. [00:06:00] Yeah.

Malcolm: One of the things I love about what you're saying, and it's something that we often bring up, is really government hasn't been experimented with that much in a long time.

Malcolm: Like there haven't been major innovations. And the last big one was when America was formed. And the reason you had that innovation is because right before that period you basically had a flourishing of steady states, which were the American colonies, combining European governments with Native American governments, which had evolved down completely different trajectories.

Malcolm: And since then we haven't had isolated scenarios where people could, in lower risk envir