self-described Democrats and Obama supporters, like startup founder and venture capitalist Balaji Srinivasan, seem to be concluding that in order to get space to experiment and innovate in today’s political climate, an “exit” might be in order.Frustrated with their political prospects, many libertarians are coming to the conclusion that instead of trying to change government, a better strategy might be to simply sidestep it entirely. Even
Exit over voice was the message of a great talk by Srinivasan in October, which prompted Silicon Valley’s naysayers and muckrakers to froth at the mouth, predictably charging that Srinivasan was advocating for an Elysium. Since then, he expanded on his vision in a couple of essays in which he proposed what he calls “inverse Amish” spaces. Like the Amish, such communities could exist within an existing political jurisdiction but set their own rules, yet quite opposite to the Amish the point would be to push the envelope of what’s allowed.
Srinivasan is not the only one to see the need to emigrate to a more tolerant place where you can try things without first asking for permission. “There are many, many exciting and important things we can do but we can’t do because they’re illegal or not allowed by regulations,” Google CEO Larry Page said at last year’s Google I/O developer conference. “As technologists, we should have safe places where we can try out new things and figure out the effect on society and people without having to deploy into the normal world. People who like those kind of things can go there and experiment.”
Peter Thiel, the eminence grise of Silicon Valley libertarians, best articulated what motivates this search for exit over voice in a 2009 Cato Institute essay in which he wrote, “I no longer believe that freedom and democracy are compatible.” He went on to explain that although in his youth he “naturally was drawn to the give-and-take of debate and the desire to bring about freedom through political means,” he has concluded by looking at the progress libertarians have made that “the broader education of the body politic has become a fool’s errand” and that “[i]n our time, the great task for libertarians is to find an escape from politics in all its forms.”
Since every square inch of land on earth is under some government’s control, Thiel saw three possible places to which to escape: cyberspace, outer space, and the oceans. Exit to online communities held little promise for him because, as he put it, “these new worlds are virtual and  any escape may be more imaginary than real.” Instead, Thiel favored seasteading or colonizing space, much like another Silicon Valley billionaire, Elon Musk, who wants to build an 80,000 person Mars colony.
Yet it is precisely space colonies and seasteads that are imaginary worlds, while the Internet is very real and increasingly woven into the fabric of our lives, and as Srinivasan points out, increasingly manifesting itself in physical space. More to the point, while space colonies or seasteads may be technically feasible, all paths to living in space or the oceans go straight through the very politics that Thiel is trying to avoid. You cannot go into space without governmental permission, and ditto for colonizing the oceans, whatever their official legal status may be. “Exit” may be a good strategy in the long term, but in the short run libertarians will have to engage politically to achieve the necessary conditions for exit.
If politics cannot be avoided, then leveraging cyberspace for an “exit” may be the much more practical path. Consider Bitcoin, which makes difficult the regulation of gambling, prediction markets, crowdfunding, and, yes, the trade of unpopular goods and services. Other nascent initiatives like Tor, Hyperboria, and Ethereum, similarly aim to reduce points of control, and thus power over their users. The challenge is to scale these new systems before they are politically compromised.
Yes, networks like Bitcoin are open source, distributed, and decentralized, so they can’t be easily shut down, but they are still networks, and networks thrive on strong network effects. The more people use Bitcoin, for example, the more stable the price becomes, the more merchants accept bitcoins, the more processing power dedicated to the network (thus better securing it), and perhaps most importantly, the more mindshare Bitcoin will capture and the more difficult it becomes to restrain. Yet it would be naive to think that these network effects are beyond the reach of politics.
Think of the Bitcoin network’s strength in a world in which as many merchants accept it as do PayPal today, and then think of its strength in a world in which it’s banned. In each world Bitcoin exists, because it can’t be shut down, but only in the world in which it has political permission can it grow to the scale where it no longer needs that permission.
So, libertarians may still want to engage in politics. Not to convince the polity about the advantages of liberty and capitalism, but simply to buy as much time as possible for our networks to scale, and to secure permission for exit paths that are not allowed today, such as seasteads, space colonies, or, more realistically, the China-inspired special economic zones that Srinivasan suggests. These projects are not easy sales, but they are surely boons for “jobs and the economy.” With this change in perspective libertarians may come to realize not only that pursuing “exit” requires engaging in politics, but that it may not always be so frustrating.