Democracy IS an advance auction of stolen goods. No matter how you dress it up, thats how the incentives are structured at a fundamental level.

But the argument that lower transactions costs must necessarily result in a more efficient market is false. To be very specific, the argument confuses potential with actual pareto efficiency. There are many situations in which private parties will not be able to reallocate resources through voluntary agreements in order to reach a pareto-efficient equilibrium. First, there is the behavioral economics reason that people sometimes don’t act rationally. Ward Farnsworth had a paper years ago about how people won’t bargain their way around injunctions because usually they hate each other too much at that point. Second, and more perniciously, no pareto-efficient equlibirum may exist at the points in time when parties are ready to transact.

In other words, the answer that lowering transactions costs to competition in government will necessarily lead to better government, much less bloodless transitions in government, is fundamentally flawed. Like I said before, any prospective new government — even on a seastead — should be expected to justify itself by comparison against already existing governments, and their track records of failure as well as success.

I will have to spend some more time with tcdurant’s work, which I have not seen before. If it were my passion, however, I would begin with a study of the history of communes that have operated in the interstices of more powerful sovereigns, and see which have survived over time, and for what reason. There are several obvious examples of such communes that I can think of off the top of my head, but I cannot imagine myself ever wanting to live in such a commune cutoff from the rest of the world in the middle of an ocean! The survival of these communes seems uniformly to have been a consequence of their symbiotic (if not parasitic) relationship with a geographically coextensive authority.

This is part of why, incidentally, I said in the first place that I was interested in polycentric authority, but not in secession. The former is a great idea, and deserves a lot more exploration and development. The latter is a disaster that has been tried and failed with nasty consequences too many times to be taken seriously.

So if we’re seasteading, why not seastead as a joint venture with BP, and under U.S. jurisdiction? Seems obvious that they could use some environmentalists and engineers out there to keep their roughnecks company. Cambrian explosion indeed.

I too think you are asking “absolutely the right questions.” I am very sympathetic to your assessment of the problems with governance in the status quo, the importance of opening up cheap exit options, as well as the meta-institutional point about discovering better rules through freedom and entrepreneurship, etc.

Even with all the standard public choice arguments about impediments to reform, I am just quixotic enough to think that there are reforms — one reform in particular — that could replace the forces for constitutional decay with forces for constitutional growth/refinement.

The post above links to a short overview of what I am proposing, called “a way to debug democracy.” I would read that first… I am blogging related stuff at http://spiritofmoderation.com

I am willing to concede (1) that giving people cheap exit options is the most immediate and most assured way to progress, and (2) that my proposal is conjectural, but I have not given up on “old school” constitutional democracy…

Any thoughts you have would be helpful to me…

b) seasteads allow bloodless revolutions

More subtly, a successful seastead constitution doesn’t have to last as long as the US Constitution. If it becomes sclerotic and dysfunctional, its component households can float off to healthier communities – or even re-form intointentional daughter communities founded on a cloned constitution, but with reset institutions.

The cost of attempting that in the USA might be just a little bit dear for most people’s purses.

Go back to a limited government that follows the Constitution.

How could I forget that one!?

A thousand apologies.

NEWSFLASH! We were not supposed to be a Majoritarian Democracy… aka Mob Rule… in the first place.

The story does not go “Mr. Franklin what have you given us?” “A Majoritarian Democracy, if you can keep it.”

No, we were given a Republic… and no, we did not keep it.

Two words explain the problem.

Bread and circuses.

Our Founding Fathers told us, that when the people realize that they have access to the public till, a democracy is done.

Politicians now give citizens an unlimited amounts of publicly-funded goodies (financed with borrowered money that our kids owe) in exchange for their votes.

Politicians took over our school system in order to make sure that the citizens are financially and civically illiterate.

Politicians accept donations from Political Action Committees (still cannot believe that is legal) and vote for laws that favor special interest groups who donate to their campaigns, instead of voting for laws that favor the overall health of our country.

Politicians crafted a tax code that allows 2 citizens to join together and rob 1 fellow citizen of half of his income. It punishes success, rewards sloth, divides people into a million different deductions, loopholes and brackets. It gives special breaks to anyone who will vote for a politician in exchange for a tax advantage (taxes for thee, taxes for the guy behind the tree, but don’t tax me!)

We must become a nation of laws again, not of men.

And by laws, I do not mean monstrosities such as ObamaCare, the Credit CARD Act, Cap and Trade or the impending mother-of-all-unintended-consequences bill, Financial Reform. Those are not laws, those are takeovers of entire sectors of the private economy. Big difference.

We elect crooks and liars to go to Washington and then we are dumb enough to re-elect those same crooks and liars over and over again.

We deserve the government we’ve got.

Until each of us is willing to give up our special “bennies” from our favorite sugar daddy in DC, we will end up right back in the same spot.

If we are hopelessly addicted to selling our votes in exchange for more and more bread and circuses, then we need laws that restrain our “leaders” (ahem) from over-taxing AND over-spending (Why not? A family that buys a home has to stay within a certain debt-to-income ratio, why not limit DC’s debt-to-income ratio?) and a tax code that treats ALL citizens equally. Throw in vouchers for public school choice and you would be well on your way to getting us out of the deathspiral we are in.

If we do not, there will come a time when we are so morally and financially bankrupt that nothing will save us from the fate that we will, quite frankly, deserve.

I have been reading this blog from the beginning, and I very much appreciate the bracing criticism of our existing institutions. What is conspicuously missing, however, is positive agenda. The success of our Constitution in the face of powerful interest group politics was and is highly contingent. What makes seasteaders think that they can do so much better than Franklin, Hamilton, the Morrises, and even Madison? I would like to see their plan set out in detail so that it can be compared against the butt of all these critiques.