Scott Adams on Startup Countries

The always-interesting Scott Adams, of Dilbert fame, wants to let a thousand nations bloom. Elsewhere, he has said that understanding economics is like having a mild superpower. He shows off that superpower by channelling Mancur Olson’s argument in The Rise and Decline of Nations:

One of the biggest problems with the world is that we’re bound by so many legacy systems. For example, it’s hard to deal with global warming because there are so many entrenched interests. It’s problematic to get power from where it can best be generated to where people live. The tax system is a mess. Banking is a hodgepodge of regulations and products glued together. I could go on. The point is that anything that has been around for awhile is a complicated and inconvenient mess compared to what its ideal form could be.

His solution should be familiar to readers of this blog:

My idea for today is that established nations could launch startup countries within their own borders, free of all the legacy restrictions in the parent country. The startup country, let’s say the size of modern day Israel, would be designed from the ground up for efficiency.

As Katherine Mangu-Ward at Hit & Run points out, startup Adams’s startup countries are essentially Paul Romer’s charter cities. Adams wants to centrally plan the country quite a bit more than Romer and other competitive government advocates, failing to recognize that competition is a discovery process which could continually improve government through opt-in experimentation.

I have no idea whether Adams is familiar with Mancur Olson’s work, charter cities, free zones, or seasteading. It’s clear that he gets the power of bloodless instability, though, and even uses one of our favourite examples:

Arguably, China accidentally performed a variant of this experiment with Hong Kong. Oversimplifying the history, Hong Kong was part of China and leased to the United Kingdom for 99 years, like a startup country within a country. When the lease expired, China presumably made a fortune by getting it back in a far more robust form than it could have generated within the Chinese system.

Hat tip: Crampton.