Establishing a city, and some thoughts about that. Q/A.

Q:

Say you own a company that can create habitable floating platforms in international waters for a price point per square meter roughly half of the average of house prices in the US. So there is a demand for people to move there. How would you structure the funding structure for the company/government there?

Would you prefer it if the government charged taxes on income and goods and services and provide social services?
Or
Would you like a government that charged taxes on income and goods and services and provided universal basic income?
Or 
Would you like a government that charged no tax but allowed no private ownership of land instead it leases out every piece of land on an annual basis. The cost of the lease is purely determined by free market forces.

I think I would prefer the last one because it is transparent and avoids complex tax laws. It would also incentivize the government to increase the total land evaluation of the floating platform encouraging it to increase its size and desirability. It would also reduce the cost of goods and services (no tax), encourage companies to operate there (no tax) and enable the government to easily do things like put in a new transportation network that results in the demolition of people’s houses. The government can provide universal basic income too.

Or would you have a different way of setting things up? Ultimately I view floating platforms as an experiment in governance where we can try out lots of ideas and see which ones work.

A:

Good question. Right question.
 
First I should generally agree on “Ultimately I view floating platforms as an experiment in governance where we can try out lots of ideas and see which ones work.” – yes.
But at the same time, even a small one is a significant capital investment, so it better answers have to be answered to the time it actually built or you start to build it, and general understanding what, how and for what – should be present, and management structure in some of its form to be already established – and even a laughable asgardia may be example of how it can be started, for investments of people, who signed up.

But that general understanding also means things can be implemented differently, and it also the argument it should be established prior – so people are aware and understand what they sign for.
 
As things can be done differently, different goals can be present for making such city happen, and I believe goal definition is an important moment in understanding how thing should be done.
 
One of the potential goals to make it a precursor for our space existence, so sort of space gate.
Taxes
I generally against taxes and if they can be avoided, they should be avoided. If they do not – tax code should fit in 5 sentences no more. And it can be established by voting – average weight – everyone says how much it should be – we average that and make it so. Voting happens at some sort of site with a slider – you log in, set the value you like, change your mind 10 times a day or at any rate you like to, Or maybe some blockchain solutions so to be it more robust against hacking etc.
 
A flat tax on income – no sales tax, no brackets etc.
But there 2 expenses which we can guarantee to happen – maintenance to keep the structure afloat, protection against “somalia: pirates, and criminal investigations. Not certain about the last one, private detectives could serve that function or at least some of the justice system can be not a centralized system, but first, two probably is default interest of the citizens, but again voting with a slider.

Law
I would also like to keep the law system short, and in that regard, I like usa amendment system, but I do not like common law system as it grows grows and grows over time, but Jury system is interesting but it should be improved to be more flexible, and robust. So generally that type of law – I think it contains very healthy seed in it, but it should be modified according to some creeds(like not everything can and should be regulated by the law) and our modern understanding what information is, and which problem the system has.
 
I would prefer basic law – which is obligatory on the territory, short and simple like 10 commandments style, without religion stuff. And some corpus of law you sign to obey – individual law. Sort of like different versions of Open software licenses – GPL, MIT etc, but rules you pledged to follow. First serves to be root for criminal codes, second more like civilian codex. That could be fun.
 
Continuation of financial income tax topic
 
What we do the city for, can be an important defining factor, which can shape decisions towards the city.
With space habs, one of the potential goals is self-sufficiency, as ideologically space hab(or colony on mars if one like so) can be considered as the second basket(I do not like that definition, but if) and if so, one of the goals to reach is to have full set of technologies and production capabilities the group needs for its life. And in that regard city can be considered as a testing ground and a tool to achieve a full cycle of production capacities. Well documented, tested and working and ready to be used or adapted to space conditions, maybe including parts of the biosphere.
 
 
So it can be more than a place to live, but a place to live, work and make the profit to move and finance the goal.
 
In that regard Japan model could be useful – they do not have a lot of their own resources, but they manage to have good production base.
 
And the production base can be the core around which the city is set, and usually, it is that way in real world. The good part about it is that bones of that production structure can be created upfront, at least partially, in different countries. At least some core of it which helps to build/replicate the same and more in the city itself.
 
Currency
The problem of UBI, currency etc – will be that the city has to “sign” an agreement with “global” financial system or else any currency you have in circulation will be banana republic stuff, or if you use publicly traded currencies you constantly on the mercy of those who emit it, it can turn in bunch of paper as result of decision you do not control.
Another underestimated and not often discussed property of currency is that it is one of the cores, like flag and such, around which a common interest of a group is build up. So it is not only a mean to redistribute goods and services, but also a binding element which defines where you put your interests. One of the problems of attempts to artificially establish countries, among the many, was the absence of that campfire of common interests around which people gather, and they were not ready to protect that campfire, or the ability of few to exploit it for the costs of interests of many.
And there a lot of questions to currently used financial tools, starting from simple to more controversial objections.
 
All that and other factors, including topics which gain their support in recent times and looks reasonable in perspective of full automation, such like UBI, it would be nice to have benefits of a gold standard system, the flexibility of fiat currencies and built-in guarantees of stuff like UBI or social programs and such and free market.
 
I believe that energy based currency can be such system.
It can have plenty of direct or indirect consequences.
 
With the core around production and self-sufficiency, it means you use your energy directly to be used to produce goods you need if technologies are available, or you support developing stuff(technologies and means of production of certain goods and services) you are interested in, establishing production of them etc.
 
An individual can choose to be its own money pressing press, by investing energy in means of producing energy, that blockchain ability a many were excited about but which wasn’t supported by material good and more proped by interests and utility of such system.
 
There are other necessities of our time like Open Technologies
If technologies are open and production cycles are open and if tools are developed for that to maintain and improve those technologies and their description in the system, and development of technologies and creating selfsufficent cylce, and I remind it is one of the targets, which derived from the main goal to create space habs, then one can choose to improve processes to be more energy efficient, and have certain percent from the energy saved if those processes would not be implemented, and get that percent so long as someone does not replace it with something else, more efficient or by a different process.
It replaces IP rights, you have right on your effort in a working system, as long as it works but a not overblown projection of its potential value.

And there should be a database of technologies and a tracking system which where are used.
As a sort of example, in the system, a guy who invented the wheel probably would have some percentage from each wheel produced. It could be not that much significant percentage as other people did their work in improving how wheel are manufactured, designed etc.
Determining the percentage is a tricky part, but potentially it can be determined by the system of relatively simple rules implemented in an automatic system which determines the percentage of all involved. Those who invent have their share, those who implement have their share, those who improve have their share. The last case the simplest, others should be determined by agreement, which again should be simple if possible. Simplicity over precision.

The energy which is in possession of individuals can be invested in groups which improve technologies – supporting of researchers, and people who are working in that, which in their own can support fundamental researchers they need or may think they need or just for lurking for a chance. Or in fundamental can choose that too.

UBI part of the economy and Energy
UBI part of this is not in the giving paper for something, but having the energy source, the mean to produce energy.
In that regard, the mean of energy production can be the UBI, and renewable energy sources are good to guarantee that for life and be inherited by offsprings.
Different energy sources require maintenance and refurbishing and cost of replacement – so for each energy source there is a tax and technologies for that and it is your income tax.
 
Energy
Solar and wind not necessarily only one source which can be accepted to be permanent and long lasting enough to serve as to invest in it. Nuclear and potentially fusion in the future can be those sources too – which can be considered stable and permanent enough to serve as saving investment – so there is certain risk involved in the in which source of energy you invest, what you trust to be your energy source, so maybe it can be a combination of different sources, with different maintenance taxes etc. So as the grid which transfers the energy takes some price, so as some energy storage solutions.
 
So big energy sources like nuclear reactors, which those days can be actually small enough, like 50MW per block or 1GW blocks they can be collectively owned – shareholding situation which establishes management group and pays them the percentage they (shareholders) establish.
 
Free market
Elements of the free market in the case is getting more for less, and it is driven by their consumers and their interests and incentivizes production and development in quite a natural way.
But generally not much different from usual markets. There is slight difference that you have two types of money one is part of the printing press(energy production), and another is actually printed paper(energy)
Storing value
One of the questions of using energy as currency as money if the ability to store value.
In the case storing energy is more a question of using it to do something which has some value for other people or for yourself.
 
It should be understood that storing energy have much more faces than just storing it in LiPo battery or other accumulator solution. Production needs not only energy but also matter – and mining requires energy to produce tools and to actuate those tools – so mining and refining ore all those processes which require energy and all they can be used to store energy value.
 
Specifically for sea location, it should be noticed that there are unique ways to store energy available there. A simple bag made out of rubber or plastic(probably not the best way but) pumped with air from the surface and attached to some weight on the bottom at depths of 1km or 2km – can be good rechargeable energy storage which quite easy to implement both technologically and practically.
Instead of bags, stones can be used, maybe bound with cement with some cap inside(like bell shape)
side notesuch energy storage also can be used for deep fish farming, which they can’t or won’t escape for reason of the presence of food and presence of oxygen in the underwater region.
 
The specific energy density of such storage is on par with fuel elements like zinc-air batteries – with the simplicity of the technology like of 2000yo roman concrete + a pinch of modern electric generators and turbines.
 
A cubic km of such storage can store energy for 2 months to cover needs of few million people(a big sity consumption of about 5mil people and energy demands of about 10GW 24/7 for next 54 days)
A layer 10x10km and thickness of about 140m can extend that storing period for 20 month.
 
The price of such storage, its main underwater component, it the price of a making binding mix and collecting sand or gravel or purchase component for about $360/kWh (wish small quantities, probably can be cheaper) – which is about 3600 hours of 1kW production to store one kWh. So there a plenty of processes to store energy in and create services and invest – directly or indirectly.
 
A relative simplicity of technologies and most important simplicity of elements of construction and abundance of components and technologies involved allow relative easy to solve one of the major disadvantages of solar energy production – no sun no energy. Does not exclude other means or technologies, but as energy can be a core of the existence of such city, it is important to make sure there is a way to be independent in terms of production, using, storing etc.

Citizenship and other stuff
There are few interesting consequences of energy based relations and currency.
First of all citizenship.
A citizen can grant a citizenship to any human he chooses if few requirements meet.
 
A citizenship may mean owning energy production capabilities in the city. There may be some minimum of how much energy you need to have to cover your existence in the city – maybe something like 20kW per person can be a reasonable value.
And that allows threat citizenship as sort of commodity, and if a citizen has more than 20kW energy production, minimum 40kW in the example he can grant a citizenship by giving a person that minimum of 20kW of energy production.
20kW here is not a minimum necessary for life, but a good minimum sufficient for good productive life – it more like average energy use in the world + 10kW for full artificial food growth solutions; but the real number to be established and to agreed upon with all citizens(idk not just majority, but 90-95-98% – it is quite important fundamental number and it should have high degree of consensus or it can be set by slider in voting tool – and we take average – those who vote for higer than current pledge to devote their energy in to increasing energy prodcution for those who do not have the value atm – so that number, not necessarly a fixed value) But in our example it is 20kW atm.
 
So if a citizen has 40kW available, he can gift or sell that ownership to non-citizen with the condition that he will visit the city and pledge to sign basic law and select his personal law(and maybe some blood sacrifice for fun and creating a mysteriously important moment, or learning language)
If that does not happen, then energy goes back, maybe with some penalty(like a tax in the fund of accepting new specialists and people who may be important for currently running programs etc)

Visas
This also allows citizens to issue working visas and other long-term visas – by giving the management of  20kW without the right to sell etc.
This can be another way to get citizenship as the human can spare energy and invest it in energy production which he has right to own. once he reaches +20kW target of his own energy he can apply for citizenship or sell it if he likes.
Short them visas also can be issued that way, by creating certain funds, which is collectively funded by those who are interested in tourism and exchange local currecny to other currecies. Also those funds are to care about tuourism side of those tourists etc.
 
Another moment parent grants citizenship to children.
A bit more complex process and details are less clear, but it is an important moment to point out. They temporarily chip part of their energy budget to a kid. And the energy is invested in growing energy production, in the way that 10-15 years later it creates the conditions for accepting citizenship.
And adulthood is reaching the milestone 20kW and accepting citizenship.
The number, how much parents chip away for the time of growth of their kids, has to be reasonable so we have at least replacement population growth rate – it definitely should be that it is enough for two kids at least. It just a sketch, the problem is quite complex, but it just an illustration.
This approach allows establishing more or less clear rules on how to regulate population. Instead of such things like 1 child policy, or work people to death so they would like to have more fun to relax after work and children are just expense.
 
A growing kid should have the ability to operate a certain percentage of his energy budget – for investments for goods. as an example, 20% education needs and other social expenses, 30% parents operate, 30% for growth of the fund to reach it 20kW mark in 15 years, 20% kid responsibility, maybe gaining it gradually since 5yo as an example 4% per year. So there could be interesting situations when some kids may be considered as an adult earlier than others.

It can incentivize them to learn and be useful for parents and for society.

 
Smart parents will grow their means of energy production let’s say from 20 to 25 yo, maybe in the period of getting a high education, so that for them is no problem to chip the energy budget for the 2 or more kids without significant reduction of their energy budget and it stays well aboive 20kW.
 
In such system, based on energy, consequences can be significantly complex even when the premise relatively simple and transparent.

Interaction with outside world also can be interesting.

 
If the system of technologies is open and accessible to the outside world, and people have access to it, like a game, you charge $1 per month or more symbolic value in certain regions or more significant value for other regions.
When technologies are accessible it means everyone in outside world can improve it. And trough that gains energy in their account. Energy to invest it or to sell for goods and services which can be produced by the city, or it can be sold to outside world. And this way internal currency can be publicly traded, not necessarily on stock exchanges.
side note – purely virtual items in games have some value in outside world, so it should be much better if it also has some representation in outside world.
 
Creating new technologies and products and gathering citizens to invest it to it leads to getting a percentage of energy spend on the production or income from selling those goods which are also the way to gain energy in the system and a path to citizenship or making a profit by selling that energy(right to use it in the system to cast some goods or service which system is capable of)
 
other remote work – programming, design, learning courses etc.
 
Certain restriction may apply for non-citizens, like not owning more than 20kW of plain energy production, more restrictive access for energy storage systems, but they still own their fair share in production processes they have their share in. Share in a production process is obtained by creating it or investing energy in its creation, or improvement etc.
 
So energy is spend sold or invested in obtaining citizenship.
 
Citizens also interact with the world – providing goods and services to others. Interaction with other countries goes through diplomatic missions which serve as organizations which ensure exported goods do not violate law of the country, inform people what’s legal what’s not and offer consulting services and help service for import and export goods. Try to establish better conditions for exchange. Their price for services is import and export tax. There are problems to think about, but generally, it allows to have different forms of interaction with other countries and their systems.
 
And those dip missions form some sort of council to establish some correlation and consensus for problems which may be in conflict of citizens and global politics – find solutions, inform people about problems etc. This part of politics should be transparent, and people in council should be responsible for not providing full or providing incorrect information. A downside of such organization, no secret agreements with other countries, but maybe it is for the better.
 
 
Generally, technologies may be not that sophisticated for the start, I mean technological capabilities of a city, but there still are underdeveloped countries which can provide resources for the development of their technologies, and education, and at the same time it enriched technologies available for the city. And over time it may reach the potential to get a share of a global market in other countries and have a good quality of products for themselves.

NB
There is important moment may be more directly related to the company premise you started with and “How would you structure the funding structure for the company/government there?”
 
It also relevant for other long-lasting projects, which expenses are not determined yet by the nature of processes involved. You do not create a company which pumps money in something hoping for the profit in the future.
But you create investment fund – which accepts investments, purchases shares of companies which pay dividends and profit out of that is directed to the development and initial establishing of stuff, not the fund itself. It allows more or less guarantee that whatever money it takes they will be delivered over time. It is not a 100% guarantee but, still it less risky.
Then when things are tested, R&D complete, Some seed created, some structures established, you inform shareholders and begin to liquidate funds and pump and solidify it in your project, or rather shareholders begin to do so through the company.

 

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