Silicon Valley's Next Disruption: Floating, Autonomous City-States

It’s a sunny Tuesday afternoon in Palo Alto, and seasteading entrepreneur Max Marty is trying to persuade me that putting 1,500 immigrant entrepreneurs together on a floating startup city in international waters 12 miles off the coast of San Francisco is a good idea.

“The exchange of ideas and collaboration is really, really helpful in the creation of new technologies and innovations,” Marty tells me. “It’s really a win-win-win for everybody—obviously it’s a win for the entrepreneurs, but also for the local governments, for the economy, for the environment.”

“It’s an ideological bent of ours,” Marty adds. “We like win-win situations.”

For anyone who has ever met a “seasteader,” this enthusiasm is unsurprising, if not entirely comprehensible. The founder and CEO of Blueseed, Marty is at the forefront of a small but zealous cadre of Silicon Valley libertarians who view the ocean as a new frontier where people can live and work without the burden of national boundaries and government regulations. His unusual startup is the latest—and most promising—attempt at achieving this techno-libertarian dream.

Part-tech incubator and part-college dorm room, Blueseed is billed as the “Googleplex of the Sea,” promising a “perpetual hackathon atmosphere.” The company plans to lease a decommissioned 1,500-passenger cruise ship, and outfit it with coworking spaces, high-speed wifi, 24-hour concierge services, and a gym, with a tentative launch date of spring 2014.

As bizarre as it may sound, the idea has gotten a surprising amount of interest from entrepreneurs and partners, if not from investors. According to Marty, about 800 startups have already applied to join Blueseed, about 400 of which are being considered to join the ship. Interestingly, about 20 percent of the applicants are from the US, indicating that Blueseed’s appeal goes beyond immigrant entrepreneurs.

For now, however, Blueseed is still conceptual. After receiving an initial $350,000 seed round last year, the startup has been looking for funding sources to provide the $27 million needed to actually launch the ship. (Naturally, the company accepts bitcoin.)

If Blueseed gets the funding, it’s not clear how the US government would react to a ship full of foreign nationals floating off the coast of San Francisco with the explicit goal of circumventing US immigration law. Technically, the ship will be out of the jurisdiction of US law and customs enforcement, in international waters governed by UNCLOS, a loosely followed maritime treaty. (The US is not actually a signatory, but has typically deferred to the treaty’s rules.)

Marty is confident that the US won’t want to “establish precedent” by taking action against a cruise ship in international waters. But he concedes that there are a number of other ways the US government could make life difficult for Blueseed and its passengers, including holding up its wireless Internet permits and making it difficult for passengers to travel to and from shore on business and travel visas. So far, though, there has been no public opposition to the project from any government agencies or politicians.

But the project is also a logistical nightmare. Arrangements have to be made for supplies, ferry transportation, legal support, wireless Internet, medical care and insurance, and a million other contingencies that could come into play when 1,500 people live together on a boat for 6-12 months.

But regardless of whether Blueseed ever gets in the water, the project could represent the next evolution of the techno-libertarian ocean pioneering popularized by Silicon Valley’s Seasteading Institute.

Founded in 2008 by Patri Friedman, a former Google engineer and grandson of free-market champion Milton Friedman, and aided by a $1.25 million donation from Paypal billionaire Peter Thiel, the Seasteading Institute envisions a maritime utopia where floating city-states act as incubators for new forms of government and “compete” for citizens.

On paper, the Seasteading Institute is the ultimate confluence of the most ostentatious elements of Silicon Valley libertarianism, combining Randian worship, technological determinism, and billionaire youth into a Libertarian 2.0 Waterworld.

In person, however, it’s hard not to be endeared to the hippie capitalists who run the think tank. The Seasteading Institute’s offices are in the Oakland Embarcadero, in a building called The Leviathan, which is actually designed to look like a sea monster eating a barge. On a sunny Wednesday afternoon last week, the dog to human ratio in the office was about 1:1, and staff members were happy to brief me on maritime laws and various emerging “aquapreneur” markets.

Seasteading Institute Senior Director Randy Hencken is trying to dispel the idea that seasteading is strictly the purview of super-rich libertarian tech gurus.

“Everyone always writes that we are building libertarian utopias for Peter Theil,” Hencken said. "As an Institute, we are politically agnostic. We see seasteading as a technology rather than a political ideology."

Theoretically, at least, the seasteads would work like a marketplace of governance. Each seastead would be an autonomous city-state that could decide its own system of governance and rule of law. Citizens who wished to move to a seastead would then be able to choose the governance system that suits them, and leave if they were not satisfied.

The idea, Hencken said, is not to have no laws, but to develop better laws.

Ideally, there would be multiple seasteads trying out different types of governance, he explained. Those could include libertarian seasteads, but also dictatorships, participatory democracy, and even new forms of governance like a cryptographic legal code. Christians could live on a Christian seastead governed by Biblical laws, atheists could bar religion on their seastead, and so forth.

“People are looking for known rules in government,” Hencken explained. "The problem that we have now is the rules are always changing."

But while Hencken insists that seasteads are not meant to be “utopias,” his vision of the movement’s potential is grandiose bordering on delusional.

"It's not only about government—it's about making the planet better. We are creating more wealth, making the planet cleaner and healthier, curing diseases that we couldn't cure on land,” he said. Other benefits of seasteading include "reducing global warming," "feeding the hungry,” “and creating new fuel and fuel sources.”

"It's about ensuring humanity has a future."

But without an overarching system governing seasteads, each community would be free to make its choices, like what kind of businesses to allow, how to dispose of waste, and how to police its citizens. So if one seastead started polluting the ocean, for example, the other seasteads would have no recourse to stop it, besides cutting off economic relations.

It’s easy to imagine seasteads as floating dystopias, and even some of the potential seastead industries suggested by the Institute (e.g. medical tourism, unregulated drug trials) sound terrifying.

I asked Hencken about some of the more sinister possibilities. What if lax laws turned a seastead into a haven for child pornographers, or if white supremacists decided to start their own seastead?

Hencken largely dismissed these hypotheticals. In the first case, he argued that the threat of citizens leaving the community would likely force the seastead to change its laws. In the second scenario, other seasteads would likely end relations, leaving a lonely floating island of white supremacists. (Hencken drew the line at my idea of a Most Dangerous Game Seastead though, calling it “far-fetched.”)

This ideological zeal has lead some Bay Area libertarians to dismiss seasteaders as the Billy Carters of the movement.

“Sure, it’s an interesting idea, but it’s such a waste of money,” said one Facebook engineer I met at an event hosted by Sen. Rand Paul (R-Ky.) last week. “These guys are pouring millions into these experiments instead of putting it towards something useful, when they could actually get something done.”

With Blueseed, Marty, the former director of business strategy for the Seasteading Institute, has aimed to address these criticisms.

“Often what happens, especially to people who have these kinds of big ideas, is that they don't ground those ideas in practical realities, which are necessary to make them work,” Marty said. “There are certainly people who have had utopian visions, but the definition of a utopia is a place that doesn't exist. A lot of times grandiose ideas go well beyond the scope of what is actually possible.”

“I hope that Blueseed is the start of a new string of movements that use technology to address what have normally been thought of as political problems,” he added. “Instead of complaining or trying to leave the situation, using the market, technology to create some sort of venture that addresses what the problem is.”

While Blueseed may be a step forward in ocean colonization, the Seastead Institute is still holding out hope that someone will establish a permanent residential settlement on the high seas.

“"They definitely fit with the idea of of seasteading in that they are looking for an opportunity that doesn't exist on land, but I don’t think that Blueseed will ever be a permanent settlement,” Hencken said. He predicts that the world will see the first seastead city “within the decade.”

"At first it is going to be small,” he adds. “Just like the Pilgrims coming to America."