Wednesday, December 7, 2011

The Future of Supply Chains: Managing Libertarian Sea-Cities

In week 7 we're going to spend some time talking about the future of supply chain management, so I thought it would be interesting to do a brief introduction to what of many are calling a pretty crazy idea - Seasteads, which are to be large floating cities where Libertarians can do, essentially, what they want, without paying taxes.

Here is an artistic rendering of what a Seastead could look like:

From: Seastead Insitute

If these cities do get the go-ahead, they're going to face some difficult supply chain challenges (which, more than likely, won't be as "taxing" as escaping the grip of the IRS.) After all, they'll be building large floating platforms on the open ocean, which raises questions about how to facilitate renewable energy, telecommunications needs, and, of course, food.

Now, large ocean going entities which deal with these obstacles already exist. Large cruise ships and off-shore oil rigs provide sport, luxury, and accommodation for their passengers and employees, but because they are not committed to being permanent self-governing bodies, they can afford to be more reliant on supply chains and business support from the mainland. Seasteads, on the the other hand, are going to have to come up with innovative solutions to cut themselves free of tax-demanding, landlocked bureaucrats.

Here are just a few supply chain problems that would arise from their total independence:

Telecommunications: If they try and lay any large fiber-optic cables from the coast, they're going to have to pay some kind of tax on that's out of the question. Satellite communications may not prove to be as efficient and fast as the Libertarians would like, so they may have to come up with some sort of laser or microwave link.

Location: Some countries regulate economic zones in the ocean as far out as 200 miles from their shores. If the Seasteads want to be completely independent and not integrated into mainland shipping lanes, because of legal and tax issues, they're going to have to build relatively far away from the nearest country. This is problematic since many of the Seastead designs are being developed for calmer more littoral regions. It also compounds the problem of moving food and perishables.

Costs: Since the Seasteads will want to develop their own trade links and supply chains over time, the initial costs of these networks will be considerably higher since the will not be tapping into existing trade routes and supply networks.

Of course, it is easy to laugh at the idea, but significant funding and research is being dedicated to these Seasteads. Ultimately, they may not just be an eccentric dream for a private colony, but tangible international medical centers where controversial or experimental procedures are the norm, or even theme-parks that pride themselves on being able to do more than legally allowed under the auspices of certain nations.

To get more information about Seasteads from the Seastead advocates themselves, check out their website: Seasteads

And, here is an article from the Economist, with great commentary and illustrations, that focuses more on the legal and sovereign issues: Seasteading: Cities on the Ocean

I would definitely visit a Seastead, but I wouldn't want to live there.

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