Startup Country | Hacker News Reader

Startup Country

dilbert.com

94 pointsjeff1855 comments

Deciding everything in advance like that (e.g. banning cash, which could turn out to break everything) is actually the big co way of doing things, not the startup way.

A real startup country would start out with few rules and a bunch of early adopter inhabitants, and they'd figure out what they should do incrementally in response to the inhabitants' needs. A lot like the early US in other words.

Well, they certainly achieved the "make something people want" part.

Probably a lot of these "legacy systems" are an inherent result of trying to govern a large number of people with competing interests, perhaps analogous to the cultural difference between a 10k person company and a 3 person startup.

Even if you could start from a clean slate, you'd need to do that again periodically to avoid creating more "legacy systems".

I agree, but unlike the early US, a startup country would stop once a while to see what has organically grown and proliferated, then unify the hodge-podge that results by refactoring. This would lay a proper foundation for further incremental growth.

Sounds more like Germany or Japan. Though the stops haven't been voluntarily.

a lot like what they did in "Atlas Shrugged"

Unfortunately, that only worked because Galt personally selected a small and virtuous population (recall that Dagny actively tried not to become the beneficiary of govt subsidies early in the book). In the real world, I don't think it would be possible to keep rent seekers out.

In the real world, virtuous vs rent-seeking is most often a matter of timing: circumstances change, people change with them.

Any society based on constant philosophical adherence across the range of human circumstances can only work in fiction.

One difficulty here, if the idea is to identify policies that should be adopted country-wide, is confounding factors. Say you ban cash, and also introduce a 1984-style police state, and lastly pay for education and health care for all citizens. Crime drops versus the rest of the country. Is it because you're living in a police state, or is it because people are well educated and healthy? This difficulty seems especially problematic when some top level entity is a priori choosing what the new policies will be, versus choosing them as reality indicates.

A better system might be to have a number of startup countries, let the people in them choose what laws they will or will not have, and also allow people to move easily between countries, so if the policies enacted in one turn out to suck, people can vote with their feet. And with a large number of countries to choose from, the ones with the best policies will tend to win out over the long term. Say to start, let's have fifty of them.

I see what you did there.

And with a large number of countries to choose from, the ones with the best policies will tend to win out over the long term. Say to start, let's have fifty of them.

I don't get the feeling people really move from state to state for the politics though. I would guess things like natural resources, weather, and historical accident play a bigger role.

I'm in California, apparently because Fredrick Terman encouraged a couple of his students to start a company here [1], and because the place has nice weather.

[1]: http://www.slideshare.net/sblank/computer-history-museum-112...

People absolutely do move between states for politics.

People who move directly for political reasons (taxes, regulations, etc.) are relatively small, but for instance I left California due to California firearms laws and taxes.

A lot of people move for second-order effects of politics -- there is more new business activity in Texas than in Louisiana, New Hampshire vs. Vermont, and in South Dakota than Minnesota, etc. due to government actions, and people move for those jobs.

One problem with open immigration is that it makes all these supposedly separate experiments actually interdependent, which tends to lead towards either: 1) them all converging; or 2) immigration restrictions.

For example, Social Democratia has a free-rider problem with respect to its neighboring Low-Tax Libertonia: healthy and prosperous people will go live next door so long as they're healthy and prosperous, but anyone who gets sick or ends up destitute will conveniently move across the border to Democratia for the social safety net. Social Democratia will have to either drop its social programs (converging with Low-Tax Libertonia) or institute some sort of immigration restriction.

Or, say Crime Preventistan sets up a really good set of programs, education, etc., such that there would be virtually no crime in their country, and they can have very minimal police and virtually no government surveillance of their citizens. But they live next door to the Wild West Republic, which spends money on neither prevention nor police, and its rampant criminal population enjoys carrying out cross-border burglaries, or maybe even moving next door to set up their outlaw shop in Preventistan. The Crime Preventistan experiment can't really happen unless they're able to close their border with the Wild West Republic and restrict who's allowed to immigrate.

In short, I think it'd be difficult to maintain any differences between countries in the face of complete lack of border controls (open immigration, free trade, etc.), because any differences between them would be arbitraged away as soon as someone found a way to exploit them.

I think free movement between governing systems would do a lot to weed out some bad ones and make them all more competitive. Your big problem is of course geography - you couldn't, for example, allow tens of millions of badly governed people to migrate into a small country, as they would destroy what made it desirable. But if you could vote to put your physical area under the control of a more desirable government, that would be a great leveller. Imagine you lived in Darfur and you could vote for the Swedish government instead of your own. It'd be a bit of a pain for the succesful government to adjust to ruling a culturely, geographically, and economically different area, but in the longer run, well managed governments would probably benifit from the increased territory, population and diversity.

An article in the Atlantic that was posted here "The Politically Incorrect Guide to Ending Poverty" actually talks about this idea from the lens of international development. It dwells on the analogy with Hong Kong, and some city states in Mediaval Europe quite extensively. It's a thought provoking read, you should check it out here:

http://www.theatlantic.com/magazine/print/2010/07/the-politi...

HN discussion here:

http://news.ycombinator.com/item?id=1426429

This seems to be similar to the article from last month's Atlantic Monthly about Paul Romer's plan to have developed countries run microstates similar to Hong Kong or Singapore in developing nations.

It was discussed at http://news.ycombinator.com/item?id=1426429

Here is an article about it: http://www.theatlantic.com/magazine/print/2010/07/the-politi...

Also see http://www.chartercities.org/ and http://www.ted.com/talks/paul_romer.html

The "perfect and flawless"-model for running states has been widely discredited. These models invariably makes sweeping assumptions about peoples priorities, which is very hard to do, given how surprisingly different people are. The resulting flood of compromises either leads to inefficient systems like the ones we have today, or totalitarian regimes (force people to share the assumed priorities).

The model of deciding on a few general core values and defending them rigourously (free speech, equality to the law, right of self determination etc.) leads to inefficient, yet stable and reasonably prosperous societies.

See Patri Friedman's seasteading concept: a multitude of startup countries where political systems compete and innovate.

http://seasteading.org/learn-more/intro

"Campaign contributions would be eliminated because all campaigns would happen on the Internet so that running for office would cost next to nothing."

I doubt it. Competition between better and worse campaigns would ensure that everyone running for office would still want the best campaign managers, and they would still pay through the nose for that. Just because media purchasing is thrown out the window doesn't mean there isn't room left for further (expensive) optimization.

In fact, any system with rules is going to have inefficiencies to be exploited. In this case, it seems like the biggest one is privacy. The most well off startup citizens are going to realize they want some privacy back, and will pay dearly for it (just as the wealthiest currently value their privacy so highly). This will create a market for elite "privacy engineers" (think ghost in the shell style), who will be the citizens most in demand.

Heh, that line stood out. Imagine: "Venture capital will be eliminated because more companies will be started on the Internet, where costs are next to nothing."

Ah yes, the second system syndrome. This time we'll get it right.

Going by history the third version doesn't work out too well either.

Want to know the only difference between complicated and simple? Between a startup and Big Co? EDGE CASES -- Your startup (country) will be fine and perfect as long as you support the basic cases. It's when you start addressing the nuances, you'll get right back on the path of the parent country.

You don't really need legislative government when you can vote laws directly (through the internet).

Interesting article.

However, there is a risk of bugs as in any code rewrite, don't you think?

Exactly. Honestly though, laws are the bandaids trying to patch up a poorly designed society. Nevertheless, the point was that technology can (and will) eliminate the need for bureaucracy.

This kind of world is hard for most to imagine without borrowing from hollywood fantasies of either chaos or some dystopia which are more sensational and indulge in the viewer's sense of fear of the unknown (the future).

I don't think removing the last shred of accountability from lawmakers while introducing even more populism is the right way to go.

Exactly - the great think about populism in the form of internet petitions is that the laws proposed don't actually have to work as intended and the proponents don't have the responsibility of dealing with the consequences

Personally, I think this is the most horrific idea Scott has proposed in a long time. Police-state surveillance in my bedroom and bathroom?[1] No cash, meaning no possibility of discreet purchases? Only one option for banking?

This world of his would be lovely right up until humans started occupying it. But even the slightest bit of corruption would render it a nightmare.

[1] Actually, full surveillance everywhere EXCEPT in the home would be fine with me...as long as the data feeds are completely public.

>The entire banking system would be automated. There would be no cash in the start-up country. You wouldn't need to "apply" for a loan because the virtual bank would always have a current notion of your credit-worthiness.

Am I the only one who is even slightly troubled by the fact that individuals could essentially be tracked in real time as a result of this technology? I mean the Stasi would have loved to have this level of information about their citizens' activities.

I know very little about cryptography, but it seems like it would be possible to construct a system where you authorize the bank to learn only those details of your credit history which are relevant to its decision.

i figured out a while back that the 2 main enablers of political corruption are (1) the allowing of privacy for politicians, and (2) allowing untracked economic transactions (cash handed over, etc.). If you could eliminate those two things it would be much harder for politicians to be corrupt. But it's easier contemplated than implemented, in part because we have inertia and power in the hands of people who would not allow it. Also, there is effectively no "unclaimed" land/sea in the world anymore upon which to start a new country. And in the US, at least, it is considered a high crime for anyone to band together and split off forming a new country (consider Lincoln and the US Civil War). You could still try to start a new country somewhere, but you'd probably need a lot of military power to defend it from existing countries, their puppet forces, and pirates.

To this day I still think it's amusing that we supposedly live in The Land of the Free (TM) but we can't "fork" a piece of the US off, even a tiny piece of it that we personally inhabit, and make a new country.

I think the main enabler of political corruption is politicians aren't paid enough. In the U.S, they oversee trillion dollar budgets yet are paid less than $100,000. It's a recipe for corruption. Politicians in Singapore pay themselves a few million dollars annually and Transparency international rates Singapore as the 3rd least corrupt country in the world.

While the U.S. salaries aren't millions of dollars, they're definitely over $100,000 these days, at least for federal office. Senators and Congressmen get $174,000/yr, Supreme Court Justices get $200,000, the Vice President gets $227,000, and the President gets $400,000. They all get very generous benefits, pension packages, and expense reimbursements as well.

Corruption can take many, many other forms than the handing over of cash.

Politician A fixes something for company X in legislation, company X opens a new plant in A's constituency just in time for re-election. A runs on excellent job-creation credentials, and regular meetings with X aren't controversial, after all X is the biggest employer in the district.

Also, Politician B fixes something for labour union Y. When it's time to announce his bid for re-election, 400 exited Y-workers show up yielding "Re-elect B" rally signs. Excellent photos for the front page of the paper, and man-of-the-people B-roll for the TV-news for the entire campaign.

Are these even corruption, by the way? Or are A and B genuinely looking out for the best interests of their constituents?

I can't blame any nation for not allowing it's citizens to declare their own lawn a sovereign nation and do whatever they please on it. That is beyond libertopia and into plain anarchy.

To me this illustrates one of the biggest weaknesses America has to BRIC. All of those countries have some form of an extraordinarily underregulated place within their borders as well as places with the money and efficiency of the US, and while these places allow for human rights violations, they also allow for extraordinary growth and innovation. They are able to get the best of both worlds.

The prime example is Rio, with it's slums right next door to giant skyscrapers. The slums act like incubators, and when innovation happens the cities eat it up. While the vast majority of the people trying to create businesses within the slums fail, the effects of the failures are absorbed back into the slums, while the cities scale the successes. This may keep the slums poor, but this juxtaposition (among many other factors) seems to be doing wonders for Brazil's economy.

>The slums act like incubators

Yeah. Sure. Keep telling yourself that. 1 in 3 people in Rio live in those slums. Even Rio's socialists want god "to step in and clean up this mess", because they view the slum inhabitants as less than human and deserving of their fate. The poverty there is so bad people break into houses of vacationing families and steal everything: copper pipe, kitchen sink, floorboard -- the freaking floorboards -- because they're useful in improving life in the slums.

My friend spent 4 months there, and had to travel through the slums almost daily. He's concluded that poverty -- real poverty like what he's witnessed with his own eyes -- doesn't exist in the U.S.

Here's a tip: Brazil's economy is doing well because it is not oil-dependent, it exports oil, it has no social safety net, and its doing whatever it can to attract foreign investment. The slums have nothing to do with, except as a refuge for those who are left behind by the economy.

Brazil does have a social safety net. It has a universal health care system, unemployment benefits, benefits for families with children, and a few other things. They may not be great, but they sure do exist.

A safety net is useless if it doesn't cover those who need it the most. That's the problem with the social safety-nets in many developing countries. On paper they're great. The problem comes up if you try collecting your benefits while being a member of the underclass.

This rings very, very true. In Rio, there are free schools that any child can attend so long as they show up.

The thing is, they put those schools so far away from the slums as a disincentive for the barefoot underclass from showing up.

Sure, a child could walk 6 miles one way uphill to get an education. And some families might support that. But in general, when a family doesn't know when or where its next meal is coming from, it has higher priorities than schooling.

The needless snarkiness ("Yeah. Sure. Keep telling yourself that...Here's a tip") detracts from this comment. It would be more persuasive without it, because when you include status-lowering attacks with your factual counter-arguments, your opponent can't agree with you without lowering zir status.

Sometimes people who are utterly, utterly clueless about how the other half lives need a wakeup call.

If a wakeup call drives a clueless person further into their clueless position, it's the last thing they need. What they need is a persuasive argument with an escape route where they can concede while losing minimal status.

It's difficult to see it from the other side. When we see a status attack favoring a position we agree with, it feels like a righteous smiting of the enemy. But it doesn't have the effect we intuitively think it does.

Sometimes, offensive comments need to be called out as offensive. Had the person been talking about, say, post-Katrina New Orleans as an "incubator for innovation" they'd be downmodded to oblivion.

I suppose I am assuming that the purpose of a discussion on HN is truth-seeking. If we are also enforcing social norms, then it makes sense to attack the status of those who propose offensive things.

Enforcing social norms must come at the expense of truth-seeking though, and I think truth-seeking is more important. Anyone can easily think of examples from history where offensive opinions turned out to be correct, and there are sure to be views today which are regarded as offensive and are also correct.

Paul Graham wrote about this in What You Can't Say: http://www.paulgraham.com/say.html

Edit: We have drifted from the original topic somewhat. The snarkiness I objected to wasn't calling out his opponent as offensive. It was just snarkiness.

Startup countries are a great idea. Old governments are patched and repatched to meet each new wave of lobbyists.

Th key is not starting over but establishing mechanisms that require governments to compete and that enable customers to walk away if they aren't happy.

The US started out with 50 competitive states whose overall security was protected by a tiny federal government that did little more than manage the border and the currency. The states did everything else.

If you dislike your state, you just move to another one. WE need MORE of that. We need SMALLER states with more intense competition.

The naysayers will tell you its a crazy patchwork quilt. They want one set of rules, presumably for all human beings ultimately with no innovation or competition. The dream of all statists. They trumpet diversity in biology, but scorn it in human life.

Actually, didn't it start with 13 states?

Don't break his rosy dreams.

yes, it was 13.

Might as well designate existing metropolitan areas as Startup Countries - less dislocation. There also would be a ready supply of lawyers eager to startup a new legal system as well.

Or perhaps do this around Western Nebraska where are some of the poorest counties in the USA.

This sounds like a place that would not be fun to live or work in. Part of the vibrancy of cities and countries is that there is history and, yes, inefficiency.

Similar in spirit to http://www.ted.com/talks/paul_romer.html

Here's a nice book about, among other things, a similar country: http://www.marshallbrain.com/manna1.htm

Reply on news.ycombinator.com