The Archipelago, Part 3: Practical Concerns

Part of a series on the Archipelago: Part 1, Part 2

For this final post in the series on the Archipelago, I want to look at some practical concerns we might find there.

One major unsolved issue is macroeconomics. Since the Archipelago will likely maintain a common currency (in addition to local currencies at the country level), there needs to be a way to do monetary policy which supports economic growth across all states. Rule based monetary policy may be important to prevent states from manipulating monetary policy in their favor.

The need for independent, monetary policy suggests there should be independent fiscal policy as well. The Archipelago government needs to remain uninfluenced by the countries it leads. This helps to prevent state manipulation of spending. However, unlike in many countries today, the overall spending of the Archipelago will likely be much smaller than that of the component states, making this a smaller issue. In addition, much of the taxation (Pigouvian taxes, land value taxes) and spending (basic individual income, basic state income, public goods finance) will be automatic.

While the Archipelago must be protected from state manipulation, the states must also be protected from the Archipelago! If the Archipelago can withhold money from states as it sees fit, it can coerce these states and reduce their ability to control their own policy. This happens in many countries today. The automated spending and tax rules cut both ways, preventing countries and the Archipelago from manipulating one another.

These points about non-manipulation tie in with the discussion of government manipulation of people’s moving choices from part 2 of this series. For completeness, the Archipelago should be prevented from manipulating peoples movement (say, by publishing biased information about certain states or preventing immigration), people should be prevented from manipulating the Archipelago, and states should be prevented from manipulating each other. This all suggests an additional role for the legal system in the Archipelago.

But even if there are no state-imposed moving barriers, moving frictions present a very serious issue. Empirically, moving frictions can be very strong. The pressures of friends, family, and work all add to the existing costs of moving. This reduces the amount of competition governments face, making them less responsive to their citizens needs. How do we remedy this? Transfer credits are a simple approach, by paying citizens to move we can overcome some of these moving costs. Additionally, having some basic requirements that each citizen “try out” one other country could help people learn what it is like to live in another state, reducing the risk of regret. The Archipelago could fund innovations such as movable housing or public transit to make moving and maintaining social connections across borders easier. It could also enforce assurance contracts for collective movement, similar to the Free State Project, making it easier to move with friends. These systems will also help reduce barriers to the formation of new states.

How would we reapportion land as countries grow or shrink? How would new land be given to groups which want to start a new government? One natural solution is to provide each citizen with an equal allotment of land which follows them around. If they join a new state, that state is allotted their parcel of land. If the same citizen wants to start their own government, they can use their parcel of land for it. There are some nuances here, since it would be difficult to have state borders fluctuating constantly. Border adjustments could occur every couple of years instead. Additionally, some states may not need of new land, so there should be a system of trading parcels of land between states. For example, states should be able to buy up or borrow land from one another. Some market-supporting infrastructure will be necessary here such as land-clearinghouses, systems to reduce land price volatility, and so on. A land value tax is essential here as well.

With the problem of gathering land for new governments solved, we now need ways to reduce entry barriers to forming a new state. In addition to some of the immigration-supporting policies I outlined, providing education to citizens about how to start a new state is important. Consulting services (subsidized by the Archipelago itself) can also help groups of citizens get started. Helping new states grow increases the diversity of the Archipelago and helps prevent collusion between states.

The final issue to resolve is whether or not states can prevent people from joining the country. I tentatively believe states should be able to do this, but it does seem like it would restrict free movement. Fortunately, the rejected people of a state can always create a copycat state to satisfy their desires. Alternatively, the Archipelago can encourage a system where people pay a variable citizenship fee, allowing them to move to a country while also compensating the state they are moving to. Some degree of assistance to people who want to move but cannot pay the citizenship fee would make sense here too.

Though there are many intricacies in Archipelago governance, there are often good answers to how we should approach each issue. This ends my introductory series on the Archipelago, but expect to see much more on this topic in the future.

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