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Secession As Startup: Providing Examples & Competition

June 28, 2010

When we think of secession, we often think of it as mainly being about regional autonomy for a cultural minority who are being oppressed within a larger state.  The immediate and primary result of such secession is freedom and self-government for that minority.  The United States, for example, was a frontier nation of independent pioneers that had a major culture clash with the distant and aristocratic British, and so they revolted.  The most visible result of that American Revolution was the formation of the United States of America – freedom and self-government for Americans.

Yet there is another way to look at secession, based on the economics of the invisible, where events are like icebergs, their effects mainly lurking beneath the surface.  This way is to look at the long-term consequences that secession has on the entire world.

America did not merely secede and copy the governing documents or style of the United Kingdom.  Rather, it innovated, creating a system based on the English Common Law, yet different, one with explicit checks and balances to restrain government, and with no place for a monarch.  It was an experiment with a more radical form of democracy than existed anywhere in the 18th-century world.

And it was an incredibly successful experiment, as the combination of that innovative rule-set and the empty frontier resulted in America growing rapidly in population, wealth, and influence.  During the open immigration periods of the 19th century, some years saw over a million new immigrants arrive “yearning to breathe free”.  As a result, the new American state had influence far beyond its shores.

This influence occured in two major ways.  First, America served as a test of the brand-new American Constitution, and the Founding Fathers’ philosophy about the role of government.  By showing that it worked well in practice, political philosophers, politicians, voters, and revolutionaries around the world were (slowly) convinced that this was the best government technology to be had.  Second, America dramatically outcompeted existing states, based on the simple metric of net migration.  Those million+ people a year who went to America can be thought of as customers of government services voting with their feet, which means that other countries were losing market share.

You may not be used to thinking of government in this sort of economic and business framework, but it is a core part of our philosophy here at Let A Thousand Nations Bloom, and we find it provides a unique and refreshing angle on government.  In this case, it shows us the invisible, long-term effects of the American Revolution.

Because, just like any sensible business that loses market share to an upstart competitor, the nations of the world responded.  In many cases by imitating parts of the US that seemed to work – by moving away from monarchy and to more egalitarian, democratic societies.  So it may well be that the greatest effect of the formation of America was on non-Americans!

New ventures (here in Silicon Valley we call them “Startups”) have the same effect in any industry.  Startups are tests of new ideas (part of the trial-and-error learning process of the market), and when their examples are successful, larger companies take up the ideas.  These larger companies are motivated to do this through the fear of competition – because if they innovate, the startups will grow and take their market share and become the new market leaders.  Thus the startups’ greatest influence, in the long run, is on the customers of the market leaders – not their direct usefulness to their own customers.

Trial and error and the growth of what works and ending of what doesn’t is how a healthy industry works, and for awhile, the government industry worked that way.  Unfortunately, for a variety of reasons (running out of new land, countries joining into large federations, citizens less willing to engage in revolution), there isn’t much room for startup governments any more.  So we lack new experiments which could find us new government technologies that might be as much better as today’s democracies as the US Constitution was compared to the awkward monarchy/democracy hybrids of the time.

And that is why we care about secession and related topics – because the world needs startup governments to make progress.  If you aree, I encourage you to subscribe to this blog and keep up to date on the topic, or check out my own venture to re-create the frontier: seasteading.

(this post is part of Secession Week 2010, specifically Monday: Independence Is Better Than Revolution.)


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10 Comments leave one →
  1. June 28, 2010 11:42 pm

    You left out an important part of the early American Experiment. The Articles of Confederation, the first from of government the Founding Fathers tried, were practically a backlash from monarchy. They left no room for centralized power. When Shays’ Rebellion highlighted the need for some central authority, the states went back to the drawing board and eventually came out with the Constitution.

    The important part was that enough people saw a need to change the governmental structure and made the change peacefully. I know that’s not the main focus of change being discussed here, but that period is worth mentioning.

  2. Bill Jones permalink
    June 29, 2010 8:56 pm

    “It was an experiment with a more radical form of democracy than existed anywhere in the 18th-century world.”

    Are you sure about this?

    What was going on in Iceland at this time?

  3. June 30, 2010 12:46 am

    Paul Romer had an interesting talk I hadn’t seen before at the Long Now foundation where he bemoans the lack of new startups in governance with analogy to market competition:

  4. The Messenger permalink
    June 30, 2010 2:59 pm
    Patri Friedman says early USA had “empty frontier.” After we killed those other bastards, he means?


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