Democracy and Markets in Government

My post on libertarian democraphobia has elicited a sharp response from Patri Friedman. It's good stuff, but I think we're talking a bit past each other. In part, that's because I was brain-dumping and wasn't as clear as I might have been, and in part because we have some substantive disagreements. I think maybe I can be clearer on a few points and that we can start to try to get to the bottom of our disagreements.
First, I'm completely sincere in wishing Patri and others well in their exciting visionary project. I'm eagerly watching its progress and I hope it succeeds. But I think one thing we need to hash out is why we think the probabilities of success are what we think they are. At this point, I consider the probability very low that seasteads (or something like them) will create a competitive market for systems of social organization within my lifetime. I also think the probability is low that persuasion and political organization will, by itself, be very effective in moving any already relatively liberal state within the status quo global system of states very far toward more thoroughly liberal ideals. I just happen to think that the prospect of making some progress on this front is better.
I share the view that demonstration is more powerful than argument. And I think that if there is significant further liberalization within the system of states, it will most likely be due to the salience of successful innovations in governance, and that other jurisdictions, competing for talent and investment, will act to copy those innovations. I just don't presently think the jurisdiction most likely to set off this kind of race to the top will be a seastead. And, furthermore, I think setting off this kind of cascade requires a good deal of intellectual and rhetorical groundwork. Argument and persuasion often makes demonstration possible.
Anyway, let me reply directly to some of Patri's remarks:

Will seems trapped in the hopeless quest to philosophically define a single just society.  I find the idea that one can determine, philosophically or practically, the best way to organize a society a priori to be laughable.  And that’s even if we agree on a single set of goals for our society – which we don’t. Competition and consumer choice are the answers – why is this so hard for a libertarian to understand?

Not hard at all. And I share Patri's skepticism about the worth of a priori ideal theory.

We face a very hard problem – the problem of creating a good system of social organization, one with the power to enforce laws,  yet which does not abuse this power.  As liberals, we know how to solve hard problems – use markets.  Which is why I advocate for a competitive market for government.  Will, strangely, seems to like the current oligopoly with its high barrier to entry and high switching costs, and is skeptical that a more competitive market will provide a better solution.

I don't believe I said anything that implied I like the status quo system of states. As readers of this blog know, I am deeply invested in the conviction that the fundamental human right to move — the right to exit and enter jurisdictions — must be more fully recognized and honored. Competitive markets for government can't work if people are not allowed to “unsubscribe” from their current provider of governance or “subscribe” to another. Because governance is territorial, the very possibility of anything like consumer choice in governance is based on mobility rights. I'm not skeptical that more competition between jurisdictions will provide a better solution. I'm pretty certain it will. I think Patri has confused my defense of the possibility of progress within existing liberal democracies for complacency about the “current oligopoly” system, which I actively deplore.

Note that this argument has nothing to do with democracy, and doesn’t depend in the slightest on the morality or practicality of the system.  Democracy is simply the current industry standard product that firms offer customers.  If it truly is the ultimate form of social organization, then in a world of competitive government, democratic seasteads will outcompete all other seasteads, attract all the customers, and people will eventually give up trying other forms of government.  Personally, I find the idea that this ancient Greek technology is the best we’ll ever do to be absurd, but even if I’m wrong, even if our Thousand Nations are all different variants of democracy, the system will still improve politics by allowing for competition between those variants. so we can find those that work the best.

First, I think it's more than confusing, on Patri's own terms, to talk of states as if they are “firms” and as if the people who live within their territories are “customers.” I thought the point was that there isn't a market and that people within the jurisdictions of states don't have effective consumer choice over governments. I suppose talking as if the culmination of your work has preceded you may help to create a needed conceptual shift, but it also obscures the fact that the freedom of citizens and subjects all over the world to become globetrotting jurisdictional shoppers remains a largely political question within existing states.
Second, does Patri think democracy has become “the current industry standard” for no reason? As it happens, liberal democracies are in fact the best places in the world to live. They are where people are happiest, healthiest, live the longest, and, yes, are most free, And, as it happens, people who live in advanced liberal democracies generally have significant freedom to emigrate. (In non-democracies, not so much.) When they do move, they tend to move to other liberal democracies.
I understand it's tough for new entrants to break into the government “market,” and that if attractive non-democratic alternatives were to be offered, people with the freedom to choose them might choose them. But insofar as there has been a limited market test, democracy is the decisive champ. So, if Patri really finds a priori identification of the best way to organize society “laughable,” then I don't understand why he's entitled to be so confident that “the idea that this ancient Greek technology is the best we’ll ever do [is] absurd.”  It's this sort of thing that makes me (and others, I'm sure) suspect Patri's less than wholehearted about the “Let a Thousand Nations Bloom” rhetoric and is in fact a closet ideal theorist who wants a bit of turf on which to demonstrate the superiority of his ideal. Not that there's anything wrong with that!

Thus even a democraphilic should want competitive government.  It’s not democraphilia or democraphobia which is the key here, but agoraphilia or agoraphobia (meaning markets, not open spaces, of course).  So my challenge to Will, and any other agoraphilic skeptic of competitive government is to resolve this contradiction.  If you generally believes in the power of competition to offer better products to consumers, why is the market for government fundamentally different?

I do want more competitive government! But I'll persist in complaining that Patri underestimates the extent to which the possibility of competitive government remains, for the forseeable future, largely a political problem and not an engineering one. The question of “why the market for government is fundamentally different” takes us back to anarchist vs. statist ground zero, doesn't it? But, that aside, my response to the challenge is simply to deny that I am agoraphobic, or that there is a contradiction I need to resolve.
Here's a question for Patri: Why do you think building some new territory relatively few people will be politically free and economically able to move to will be sufficient to create a “competitive market in government” significantly different than the current “market”? And here's another: If seasteads converge on forms of democracy not very different from current ones, will you consider this a vindication of familiar forms of democracy or an indictment of imagination?
There's more in Patri's post I'd like to respond to, but for now I'll leave it at that.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center