Patri Friedman runs Pronomos Capital, the world’s first charter-city venture fund. He is the grandson of Nobel laureate and free-market economist Milton Friedman, the 20th century’s leading opponent of Keynesian economics. A Google veteran and programmer, Friedman has been a major voice in the competitive governance space for nearly three decades. In 2008, he founded the Peter Thiel-backed Seasteading Institute, with a focus on establishing mobile, autonomous jurisdictions in international waters, beyond the laws of any sovereign state. Confronting various challenges relating to logistics, funding, and comfort, the institute significantly advanced the conversation surrounding special jurisdictions but ultimately failed to produce an operational seastead. Friedman co-founded Future Cities Development in 2011, seeking to build special jurisdictions within the existing framework of sovereign states. Future Cities Development established the first sketch for a modern charter city — a self-governing municipality within a developing, sovereign state — by signing a Memorandum of Understanding with the Honduran government. In 2013, Honduras passed a law establishing the autonomous Zone for Economic Development and Employment (ZEDE), leading to the development of several semi-autonomous administrative divisions including Prospera.

Special jurisdictions have proliferated since the 1980s, from a few hundred globally to over 5,000 by the late 2010s. These areas, often acting as taxation and regulatory havens, have ballooned at a time when sovereign states have persistently failed to deliver economic growth, regulatory relief, and demographic stability. Special jurisdictions — like Hong Kong, the Dubai International Financial Center, or Shenzhen — often serve as engines for economic activity, drawing in corporations and high-net-worth individuals alike.

I sat down with Patri to discuss the pressures and challenges of declining state capacity, the rapid advancement of information technology, the legal and territorial dynamics of the ocean, and logistical questions relating to the concept of societal exit. What follows is a transcript of our conversation.

Carson Becker: Where are we in terms of governance and technology?

Patri Friedman: We’re at a place where a lot of people have a lot of ideas about how to make systems that will work better, and it’s really hard for them to put those ideas into practice. And we’re just starting to have the first few examples, like Prospera, of people successfully getting legal autonomy to create new types of societies. There’s Prospera; I’m working on a bunch more of these around the world. More and more governments and founders and investors and other stakeholders are interested. But there hasn’t been a success story yet. There’s a lot of interest. That’s what I dedicate myself to. But it’s still very early. The prototype is built and operating as a technology, but it hasn’t scaled.

CB: Tell me a bit more about this prototype.

PF: My personal North Star is physical territory with legal autonomy. That’s what I’m all about. And Prospera is the place where that’s closest to being realized. Under the Honduran ZEDE program, which is in the Honduran constitution, they have control over most of their local commercial law, beneath the country’s constitution and criminal law and treaties. It’s an operating independent jurisdiction. It’s a proof of concept.

CB: How do you address the state’s monopoly on violence in the context of charter cities? Providing security through military power is a core function of the state. How does one secure the territories that you’re describing?

PF: Law is the answer. Laws and courts and treaties and arbitration and bonds. A lot of people don’t know how disputes in the nation-state system are handled, or disputes between businesses and countries, but there is this global system with multilateral investor treaties that enable people to enforce agreements on sovereigns. We’re not trying to create or invent anything new. What’s most important to highlight is that sovereigns want to be able to bind themselves. Say you’re a country, you’ve got some resource, you want some company to come and extract the resource. Say you’re the strong man dictator — you want them to give you some of the money, and then they’re going to keep some of the money. Otherwise, they wouldn’t be there. So, how do you make that agreement? It is of massive value to the world, for businesses and countries to be able to make binding agreements. That’s what powers all investment in the Global South.

And we have a way of doing this through things like ICSID, investor-state dispute resolution networks and treaties. The way it works is: a company and a country make a deal, the country breaks the deal, the company sues them under these investor-state dispute resolution networks in arbitration. If they win — if they show they said they would do this and then they did that — the arbitrator rules in their favor. And they can take that award to almost any country in the world. It’s not like a top-tier treaty, but it’s in the next tier, just below the New York Convention. And every other country in the world will enforce that ruling by seizing whatever assets the losing country has domiciled elsewhere. You can’t seize military assets, you can’t seize embassies, and you can’t seize art. But everything else: bank accounts, property, anything that’s not military, embassy or cultural, can be seized. Countries enforce it all on each other.

CB: Do you think we live in a unipolar world system, or do you think we live in a more fractured system that will tolerate the level of competition among states that you’re envisioning?

PF: It’s hard to speak simply about the state of the world, but it’s definitely multipolar. We’ve got great powers in different regions, different continents, and they have a ton of influence. And there’s a question of how these new jurisdictions play with the great powers. Are they in their interests or out of their interests?

CB: Well, are they?

PF: It depends. And they can be. I don’t know whether I can give any specific examples for confidentiality reasons.

CB: Would you consider Britain’s network of offshore financial jurisdictions to be something that’s in the interest of the great powers? It’s convenient for many different parties.

PF: Yes.

CB: How would you describe that particular arrangement? You’ve got the City of London, and then, for example, Bermuda. You’ve got places like Guernsey. You have these little nodes with a quasi-sovereign function.

PF: It’s super relevant to the charter model because this Empire model is based on English common law. We have data showing it’s our best legal operating system, our best source code, or programming language, in the law-as-software metaphor. The UK mostly handles the international treaties and the National Defense and the military. And then they have these sub jurisdictions that have a ton of local autonomy that they can use to serve global customers under that umbrella.

I think it’s actually great for diversification of jurisdiction. It’s almost like an incubator. They’re doing the layer that’s really hard for all the startups to do. They’re doing this really hard, really deep, really technical, really expensive layer of military and international weight and treaties, but then choosing to delegate to these jurisdictions really meaningful autonomy, such that they’re different from the UK. I think that structure is very supportive.

CB: Hong Kong is also an interesting example. China absorbed Hong Kong, and they maintain their separate status because it’s convenient. China didn’t fully absorb it, as some anticipated.

PF: It’s a fascinating case study. There’s a lot of emotion around it. The land was China’s — and the lease expired. It’s their jurisdiction. They have that legal right. And of course, they’re kind of anti-democracy, it’s China. They restricted political freedom in a more China-like way. But on the economic freedom side, they didn’t want to kill the goose that laid the golden egg. They saw the special jurisdiction and the institutions and rules that applied there, and preserved it.

I think it’s a fascinating counterpoint to the majority perspective because people are often like, “but what if the government just comes in and seizes it” and there is this international arbitration thing that I mentioned earlier. You do have recourse. But a city is not a resource. A city is an economy. It’s an organism and it’s functioning and producing value because of the rules and institutions that are there. My mission is to rezone more of the world with better rules and institutions. But it means the government can’t take it over and change it and keep it. If you change it, you’ll ruin it. They can either take it over and not change it and try to capture some of the value, or they can ruin it — and then they’re gonna lose it. It self-destructs if you fuck with it.

CB: One of the things that you mentioned in your famous Cato article from 2009 — you said there are a few ways to bring about a change in governance. You can have a war, a revolution, or an election. But you don’t often change a form of governance without violence. How do you perpetuate these arrangements — which are fundamentally a change in governance, and sometimes a challenge to different forms of governance — without the corresponding violence and destruction?

PF: This international arbitration system that I mentioned, there is violence in a sense. A country can seize assets that are domiciled there, and they have the power of state-backed violence to do that with, and it’s in everybody’s interest to keep the system running. It’s what enables people and companies and countries to invest in places that they don’t trust, which is great for everyone. It’s all about at this stage, even though I want to change the existing system, at this early stage it’s about fitting in and finding allies. We’re not going to out compete their violence — we’re too small and too few, that would be ludicrous.

CB: Comparing islands versus ships — mobile jurisdictions — what are the respective advantages of both?

PF: This one’s pretty clear under the laws of the sea, which is one of the largest multilateral treaties in the world, and it’s basically the downside to being a mobile vessel. The ocean is a difficult, expensive operating environment. Everything is way more expensive. A boat is a hole in the water you pour money into, that’s the nature of it. This is seasteading’s motivation, and what you get in return for that is a remarkable legal environment.

The world came up with a jurisdiction system for a world of mobile little towns — the flag system, where a vessel has to register with a country and fly their flag, and then that vessel is under the law of that country, and they’re out past 12 miles. There are exceptions for taking resources, like fishing or oil, or any of those things are still owned by the coastal state out 200 miles. The ships passing over don’t get the right to take the fixed resources. But as far as like, what is the legal environment on the ship? It’s the flag.

It’s a bit like a floating embassy, but run by a third party. You’re franchising the sovereignty of the country whose flag you fly, and that’s a business that a bunch of countries engage in. And as a result, you can renew your flag registration annually, and there doesn’t need to be any association between the ship and the flag state, except that they’ve registered and so you have this virtual, consensual association between these mobile assets, ships, and the nation state, such that that forms a really competitive market. Unlike land, where “this country owns this, we’re claiming these fixed resources”— it’s not a competitive market. You can’t enter it. The cost of switching in terms of land is really high. But because any country can serve any ship, and ships can easily switch between different flagging providers, it’s actually this incredible competitive market for franchise and sovereignty, which, if we had that for land, I’d be done. I would do something with AI or whatever.

Being mobile on the ocean gets you something almost anarcho-capitalistic — not quite, but in the sense that you choose your service provider, you choose whose sovereignty you’re using and whose laws you’re under. You have to pick someone, and they have to be a country, and they have to say yes, but there’s a competitive market. The downside is the cost and the upside is this incredible legal environment. I work on charter cities because that cost downside is just too big, and we can get our protection in other ways, and that seems like a much better bet to me, but that’s the trade-off of going mobile.

CB: There’s another side of it which doesn’t really involve human beings at all — just parking assets in this mobile jurisdiction. A company, for instance. What would be the arguments against that?

PF: It’s just more expensive to do stuff on the ocean, so there has to be a reason.

CB: When you talk about the sea tax, at what point does it become cost prohibitive?

PF: The example I generally use is: there’s one condo cruise ship called The World, which lost a lot of money for its investors. And the cheapest apartments on it were maybe at one point around $50k a year. So the OPEX was roughly 1/6 of the capex, which is insane, compared to a house. And that illustrates the operational costs of having a moving home. If you do the math, depending on the discount rate — say 5% — that high of an OPEX ends up actually being more expensive. The net present value is more expensive than the capex.

CB: In recent years there’s been a proliferation of special economic zones in special jurisdictions.

PF: There are not very many deep ones, though.

CB: What makes them either deep or shallow?

PF: I think of this from a software perspective. What percentage of the codebase do I own? What percentage of all laws and regulations do I get to write that apply to this area? Is the operator different from the rest of the country? In most SEZs, the difference is really small. They’re just patching a few parts of the code base to change taxes, tariffs, labor laws, capital repatriation. They tweak some things that are in the way of getting business done, so we’re gonna make an exception. For whatever reason, we can’t change the whole country, but we can make an exception for this area.

Anything that changes key constants, something like Honduras, Prospera, or another example I would use would be Dubai International Financial Center, or you could say Guernsey. In any of these jurisdictions, the percentage of things that are different is radically higher than an SEZ. In the case of Prospera, they’re under the Honduran constitution, treaties, and criminal law, and they basically get to write all the rest of the law — what’s called commercial law, which is about everything from medical, finances, zoning, labor, and everything else that’s not a crime. I call it 80% autonomy. It’s a made up number, but that’s my feel for it. The Dubai International Financial Centre is a corporate jurisdiction with completely different corporate and commercial law. Businesses incorporated there virtually get to be under this different legal system for all their corporate law and everything that flows from that. So that was a much deeper reform, that or Hong Kong. It had different rules and regulations than the UK. The percentage of things that were different was very high.

CB: There were supposed to be some emancipatory qualities to the information age — that was something widely forecast. It was widely anticipated that there would be a liberating quality to the Information Age. I’m not really seeing it, though. The business model is basically surveillance in order to sell advertising, but it could easily be converted, if political circumstances were to shift, into something oppressive. What do you make of this? Is it an authoritarian or a libertarian age?

PF: I had a conversation with a founder friend last week about AI and robotics and this question. I think that people who are into decentralization or personal freedom tend to look at technologies and see the ways in which the technology would help that — and completely ignore the ways in which the technology would contribute to the opposite. Take 3D printers: people said oh, it’s gonna decentralize manufacturing, but there’s economies of scale. Like, mass production is always cheaper than custom production. That hasn’t changed. Just customer production has gotten cheaper.

With the internet, there are ways it makes it much easier for people to communicate and transact privately and form cabals and all of these things and coordinate and form insurgent networks. And there’s all these ways in which it gives the state the power to surveil and control. The core error is that people don’t think through both sides and understand: Why is there centralization? And does this actually change? Does this actually shift the balance?

With the internet, you can’t generalize, right? The world is complicated. There’s ways in which the ability of people to form secure, unbreakable communication networks — to coordinate without being monitored, with sovereign-grade security — has never been higher. That capacity is very, very strong right now. It’s not perfect. Humans aren’t great at OpSec, but that’s real. We have crypto and there’s ways that people can transact and save money that’s difficult for nation states to stop. The internet has enabled an increased ability for individuals to anonymously contract without government oversight. And it’s enabled mass monitoring at scale, right? Giant databases — that’s real too.

What’s the net effect? I tend to think that the net effect is towards more freedom, because more and more stuff is moving into cyberspace, and the rules of cyberspace are different. It is a much more voluntary competitive environment: low barriers to entry, low cost of switching. There’s way more competition, way more giving people what they want. And more and more important things are happening there, and it does give the surveillance state tools. But I definitely think that on net, the movement of power and of things happening that matter into cyberspace is draining power from the nation state.

CB: There’s this famous Peter Thiel essay — I think it appeared in the same issue as your essay, for Cato. Thiel talks about, on the one hand, the fundamentalist and totalitarian state threat, and at the other end of the spectrum, the unthinking demos of mass democracy. There’s this concept of exiting. Is it possible even to really exit? Is it ethical to think in these terms?

PF: Can you fully exit? No. But can you exit in a meaningful way? Definitely, yeah. You know somebody who’s got three passports and lives in Dubai — not a great example this year — is still interconnected. You’re still gonna get fucked sometimes with geopolitics. But you can meaningfully exit -— not completely — but individuals have to evaluate for themselves whether their partial exits that are available are worth it, and understand that utopia is not an option. There’s no Gulch. You’re gonna be part of the nation state system, but it doesn’t mean that there’s no way to work that system and improve it.

On the ethics, 99 out of 100 times I see a legal or regulatory change, I feel like it’s shit that’s for special interests and doesn’t fit my ethics. But the US exit tax change that happened in the Patriot Act — I don’t know how the fuck this happened, but it’s proper. Before the Patriot Act, the IRS could tax you for 10 years. You leave, they keep taxing you for 10 years, and then you’re free. The Patriot Act said, look, it’s very simple. If you want to exit, all of your unrealized gains get taxed that you’re leaving with because you owed those taxes to us. They just haven’t hit the books yet, they haven’t been realized, and then you’re free. And that’s the perfect rule, right? You grew this wealth inside the system. And this is the clear and explicit deal. You’re here, we do these things. We collect the taxes. You made the money. We’re just going to collect our uncollected taxes, and then you’re good to go. I think that’s so perfect and so moral and ethical.

I think there’s a codependent instinct that says, ‘No, I’m gonna stay and try to change and fix things.’ That can be beautiful and noble. It’s a great instinct to have. And the question is: Are there actual routes to change that, which you have the power to enact, or that the system permits that will work? And there’s nothing wrong with that strategy, but there’s also nothing wrong with saying it’s okay to leave. It’s okay to break up with someone, it’s even okay to divorce someone. It’s okay to say, I’m going to live differently, I’m going to change my provider. I don’t think there’s anything immoral about leaving society. You didn’t promise that you were going to stay until you were dead and help America when you were born here. You were just born here. And we have a system of taxes and Social Security that’s trying to keep track to some degree. You might feel grateful, you might want to give back, but you’re not morally inclined to stay in a failing system. That would be fucking retarded.

CB: Do you think the Patriot Act represents a shift in American governance as profound as, say, the New Deal?

PF: It seems smaller, but it’s important. Obviously, it was also a shift to a surveillance state, which I don’t like, but it seems smaller. It’s big on the scale of the laws of the past 50 years.

CB: Since you began your seasteading journey, what have you discovered, in terms of material and in legal obstacles to this endeavor?

PF: In the seasteading days, the main obstacle was the cost and difficulty — the economics. You’re in this expensive environment, and you’re far away from infrastructure and trade routes and people. One thing that the broader movement has realized is what we call the cold start problem. A new city, or a new society, is sort of a contradiction because cities depend on network effects and economies of scale, and new things don’t have that. The question of, how do you get the first people to move? How do you get your first users onto a network-effect business? That’s front and center. The ocean makes it a lot harder. It’s hard enough to get people to move to Roatan and live in Prospera, on a beautiful Caribbean island that has water and electricity and internet. Getting them out of the ocean is even harder. The cold start problem is a big challenge, even in doing this stuff on land.

I don’t think there are really legal obstacles. A sovereign is allowed to delegate their rulemaking authority. We have the New York convention for enforcing deals on sovereigns. The legal stuff is there. The economic model is big. One bottleneck is that startups are hard — trying to start a new society as a startup is another level of hard. It’s already a very limited population that can successfully found a company that changes the world, and now we’re doing a super hard-mode company. It’s a very limited set of people who can handle that, and there’s very few of them. Those people are often billionaires or centimillionaires who are incredibly successful and can do anything they want. We need those incredible people — we need the Elons of the world — but the space is too new and small to attract them. I think as we prove it out, that’ll change, because starting a new country is ultra-ambitious. That has appeal.

The other bottleneck is the economic engine. A lot of these projects are dead in the water because we have all these fancy ideas about how better legal systems and better laws lead to faster GDP compounded growth rate over time. That’s all true, but it kicks in over decades. And when you’re starting one of these, you need an actual small-scale economic engine to make it economically viable in the near term. What will the jobs be? What are your competitive advantages versus the rest of the world? What are your resources, who are your anchor tenants? Making those economic engines is really challenging. We haven’t really seen a success in the space yet. It’s fundamentally necessary. I believe it’s possible.

CB: What are some incentives that could make this work from the economic standpoint?

PF: There’s not a general formula. It takes a great entrepreneur to look at a country — their resources and industries and legal system — and figure out what they can bring to the table. One of the pitches for Prospera is FDI: if you make a stable, familiar regulatory environment, then people will be more willing to invest there than they would in the host country. But it’s really product design, it’s business development. You’re creating this real estate-plus-government business. The features are a better regulatory system, whatever infrastructure I can fund and build, and the companies you can bring in. Then you ask: who wants this product?

A lot of my focus these days is on Africa with our company, Alpha City. It’s different per country. There are some things like agriculture, a huge part of the economy everywhere in Africa. And bringing in better tech and more modern methods and better management can improve quality of life and economic returns across the continent. Then there are country-specific opportunities. Countries have specific resources. Parts of East Africa have insane amounts of untapped geothermal energy, massive amounts of cheap geothermal energy there that’s perfect for data centers, AI training. This is how we monetize. It used to be that crypto mining was how you monetize cheap electricity. Now it means AI training.

Going back to what I said about regulatory differences playing out over decades — my original idea was to identify things in a country’s legal system that prevent certain businesses, that they won’t change at the national level, but they are willing to grant an exemption to us. Find the ones with the highest potential and build around them. But I think the more important work is the entrepreneurial legwork: the business development and entrepreneurial market research and customer analysis and finding partners and putting together deals, bringing together the capital, the jobs, the workers, that work that an entrepreneur needs to do is far more what it’s about. It’s your specific business development for your product.

CB: What happens as you get further and further away from the coastline of a sovereign state?

PF: At about 20 miles, if you’re not on a flagged vessel, you’re considered a pirate. Any nation’s warships can seize you and board you. That’s the category where you’re at the mercy of anyone under international law.

If you’re a proper flagged vessel, the first 12 nautical miles are territorial waters — . exactly like being in the country. Then from 12 to 24 nautical miles is the contiguous zone, where there are limited rights; if you’re chasing someone out of your territorial waters, you’re allowed to keep chasing them, but mostly the contiguous zone doesn’t really mean very much. Then there’s the exclusive economic zone, which is out to between 200 and 350 nautical miles depending on the depth of the continental shelf. A ship there is in international waters but the coastal state owns all the resources. They own the oil, the seabed resources, the fish, even solar panels to collect the sun, that’s theirs. All the fixed resources are owned by the coastal state out to that limit.

Beyond that are the true high seas. But the only reason that states haven’t claimed those resources is that nobody knows how to exploit them — it’s too expensive and too difficult. There are no resources there, and so nobody’s bothered to make a claim. When you’re out there, nobody owns the resources, but you mostly can’t access them anyway. If you want to fish in international waters, you’re allowed to do that, but nobody’s gonna make money fishing 200 miles offshore. Your ship is still flying this flag, and you’re under various international laws and treaties about safety and pollution — and subject to the flag state’s law, however much of it they choose to apply.

CB: What are the most permissive flagging states?

PF: Liberia, Panama. Flags of convenience are what they’re called. If you don’t make a big stink, they don’t care.

CB: Are you able to switch your flag?

PF: I am pretty sure it’s illegal to have multiple flags and switch between them, but you can change your registration annually. It’s illegal to fly a false flag.

CB: What legacy systems of governance do you think are set to expire in the near future?

PF: Look at the whole welfare state and the demographic pyramid. All the welfare state countries are going broke. Their systems were not well-funded enough. They were not flexible enough. And the people on the dole are never going to vote to decrease it — they’re single-issue voters. How the fuck you beat a large block of coordinated single issue voters? That time bomb that some people projected, it’s going off. I think that’s a huge one.

Control of currency is obviously being degraded by crypto. And back to the cyberspace thing — nation states can and do regulate cyberspace with some degree of effectiveness, but it’s just harder. Mathematically, technologically, it’s a freer place where the rules of physics are different, and more and more of our world is moving there. Personally, I focus on meetspace — network states and all that, sure, sounds good, do whatever you want in the cloud. But things already work pretty well there. My focus is, we’ve got to change the world by affecting the real world.

But it remains the case that the more stuff that moves online where nation states have less power, the less power they have. The largest companies are now bigger than small nation states. There are a lot of ways in which the legacy systems are failing as the world changes and they don’t.

CB: What becomes of “the unthinking demos” in this new world?

PF: I see a full spectrum of possibilities — from crazy abundance and UBI for people, because the robots are making so much stuff, to AI killing us all. It’s going to empower those with agency. But the unthinking demos depend on the systems around them to work and function, and those systems are failing. This is why the graphs of trust in our institutions, or the number of people here in Texas who are saying, “Fuck all of this, I want to grow my own food and be self-sufficient, the system is broken,” is growing. The number of people in the unthinking demos who are realizing they can’t just go along unthinkingly, because stuff is falling apart around them — that number of people who are forced to take the red pill by their circumstances is growing and growing. I think the unthinking demos is fucked, and they’re waking up to it.

CB: And do you foresee the completion of the Sovereign Individual thesis? You think there will be a caste of individuals that master these new technologies and become sovereign unto themselves?

PF: Nothing’s black or white. We’re already seeing people become much more sovereign. With technology, some minority of people will become more so, and that’s only going to increase as the leverage of tech increases, but it doesn’t mean the nation states are going to go away.

CB: Who’s becoming more sovereign and in what ways?

PF: The ability for people to make passive businesses, or optimize their health with AI, and peptides rather than depending on the medical system, educating themselves with online learning instead of depending on an educational system. There are more and more tools where people can self-serve parallel institutions. The people who take advantage of those, given that the mainstream institutions are failing, whether that’s media, health, education, business, dating — are getting much better results. But it doesn’t make them fully sovereign, right? It’s clawing back degrees of it. What does it even mean? We depend on each other. We depend on each other for production, and unless you’re the Chairman of the Joint Chiefs of Staff, there are always people with more guns than you. That’s the world that you live in. Sovereignty is a direction. It’s not a destination.

CB: On the microstate concept: for example, the Order of Malta is not a country, it’s not a state, but it’s a Sovereign Order within the Catholic Church.

PF: I consider it the only sovereign entity without a clear geographic center, without territory. They’re the only decentralized sovereign. It’s super cool. But they don’t seem interested in doing my type of cool stuff with it.

CB: How would you replicate that? How would you convince a country to accept a passport for a nonexistent state like they do?

PF: I’m a really big fan of this. What we’re doing with charter cities is not trying to replace the state, but find partners and plug into the nation state system. You’re licensing their sovereignty, right? So I think it’s all about finding a country willing to issue passports that maybe don’t confer citizenship and voting rights, but come with full background checks. If a country just chose to divorce the travel document more from citizenship, and partnered with a company that said, we’re going to sell as many $25,000 passports as we can and make sure holders have been cleared to the same or better standards as other countries — I think that’s already an accepted model. Use what’s already there. And over time, people will come to understand that a travel document authority is really different from a nation state — you want a much narrower set of things from it. It doesn’t need to be the same. We’ll transition at some point.

CB: The sovereign response to the Covid-19 pandemic was a remarkable thing. For you, what are the lessons from what happened?

PF: It was such a huge tailwind for my movement. It showed people how bankrupt the legacy systems were — how fucked up they were — in a way which became vivid and real to a lot of people. It led them to be like, “wait, there are a bunch of other things that aren’t working. Let me look into this. Oh my god, everything’s actually falling apart.” So it’s a huge tailwind to the parallel institution movement. You can’t just expect the future to be like the past. Sometimes their systems are failing, but you haven’t realized it yet, because it hasn’t been made clear to you, or they haven’t been subject to the right stressors, and you should be more careful about what you trust. Today’s governments are not effective decision making machines. Let’s do something different.

For the authoritarians, there’s a public good problem here where if you misuse authority, everybody uses that as ammunition against authority. But you are getting the benefits of exercising your authority, and states are not unitary or rational actors at all. That’s the problem. If they were going to learn a lesson, they should learn lessons about what rights people care about and what impact it has on the trust of your citizens to violate those, and how badly some of our institutions have been allowed to decay. We needed them, and they weren’t ready. Keep the departments running smoothly. Be prepared for uncertainty, because there’s just going to be more of it.

The world is changing faster and faster. We are in the AI soft takeoff now. It’s 2026. The singularity as an abstract future idea that people argued about — that ended in the last year, I would say. It is happening. I’ve been using agentic AI with OpenClawfor six weeks and it’s changing my life. I’m seeing more and more people pick up these AI tools and accelerate their growth and improve their health. It’s not a hard take off where we’re suddenly fighting Skynet, but this is what the soft takeoff looks like. We’re in it. That means more uncertainty, more need for resilience, and more need for systems that are responsive and functional and adaptive, because the future is coming faster and faster, and it’s starting to come really fast now. That’s not going to let up for a while.

This interview has been lightly edited for clarity and length