Patri's Politics

Note: This is incomplete and unpolished. If you'd like to comment, do so on this post on my personal blog. I am no longer actively editing it, as my political writing (as of late 2009 / early 2010) is going into the politics section of the seasteading book I'm writing.

Currently, the most polished version of my beliefs can be found in the April 2009 issue of Cato Unbound, where I have the lead essay propounding my unusual political views. It has a narrower focus than this page. Also, I have started a blog: Let A Thousand Nations Bloom about the idea of competitive government. If you prefer video form, here is a 50-min libertarian-focused talk on seasteading & competitive government:

"Seasteading" - Patri Friedman from Mises Brasil on Vimeo.

There is also a 15min transhumanism/futurist-focused version of the talk from the Humanity+ Summit in 2009:

If you'd like reading material on this subject, the Recommendations Page at Let A Thousand Nations Bloom is a great place to start.


I think (and care) a lot about politics. My motivation is that I am deeply dissatisfied with current forms of social organization (western democracy). My perspective is very much rooted in economics: the idea that incentives matter, and how you set up a system affects its incentives.

While a number of labels apply to my views, the package is odd and complex enough that I think it's worth putting it all in one place so that I (and others) can refer to it. I wish there was a simple label I could put on it, or a single book or article I could point you at, but sadly it's just more complicated than that. Also this is a pretty obscure area, so there have just not been enough angles on it to hit one that I can just point to and say - "Yeah, that's me!" Anarcho-Capitalism is the closest to an embodiment of my views, but it is not near close enough for me to be satisfied simply labeling myself as an ancapist.


Let me see if I can summarize them. Essentially, I believe:

I would put buzzwords (some of these are made up) in roughly this order of importance:

Disclaimer: I reference lots of blog posts because that's the form in which most of my political writing has been done, and so it's quicker this way. But each only contains a piece of a big puzzle, which is why I'm creating this central page.


I think (like most people) that my set of views is interesting and underappreciated, so perhaps this will serve to spread it. I am optimistic because I think there are many people who get many parts of this, but just haven't put them together in quite this way, or encountered them in this form.

I wish to live in a libertarian society, but I think libertarianism is greatly lacking when it comes to practical paths to connnect the real, present world with our desired future. I think I can supply that path, and I wish to sway libertarians towards my views. My path is not just a path to libertarianism, but to a wider variety of governments and societies. I wish to convince non-libertarians that this is an attractive vision, and that it is something they would like to see happen. I also want to help people of many different political persuasions to get along by seeing ways in which each group can have what they want, instead of arguing endlessly over what they should all have.

Views & Principles

I think most political discussion is like The Money Hole Debate: nonsensical reasoning about a useless tradition which has accumulated concentrated interests who benefit from it and have entrenched themselves:

In The Know: Should The Government Stop Dumping Money Into A Giant Hole?

The Implementation Problem

While many people talk as if they can deduce a good political/legal system from first principles (and I used to be one of them), I now think this is totally unrealistic.

I was most influenced in this by my dad's book Law's Order, a basic introduction to the economic analysis of law. I had never before thought about law as an extraordinarily complex problem in mechanism design. Somehow I had vaguely assumed that the hard part was coming up with the right set of morals - and that you'd then just write laws to implement them.

Law's Order demonstrates the naivete of that viewpoint by showing just how difficult the implementation part is. As countless politicians have shown us, you can't just pass a simple law to achieve a simple goal. Society is a complex dynamic system, and there are always unforeseen consequences. But it's worse than that - even in very simplified models of society, efficient law depends on details of the cost structures of the products involved, and efficient punishment depends on enforcement costs and the probability of detection. You can't just say "Private property rights" and be done.

To think of it in mathematical terms, laws are functions, goals are behaviors of those functions. I believe it to be the case for legal systems that there is no general algorithm for achieving an arbitrary set of goals. Actually, there isn't even a general algorithm for implementing fairly simple goals! It's just not a straightforward, easily reversible mapping.

Machinery of Freedom also has some good sections which address this issue, read the webbed chapters Problems, Where I Stand, and Answers, ie:

The longer I have thought about these issues, the more convinced I have become that arguments about fundamental moral principles do not provide answers to enough important questions. In particular, they provide no answer, and no way of getting an answer, to a whole range of questions about where to draw lines. It seems obvious that we want property rules that prohibit trespass by thousand megawatt laser beams and machine-gun bullets but not by flashlights and individual carbon dioxide molecules. But how, in principle, do you decide where along that continuum the rights of the property owner stop? We want rules that prohibit me from demonstrating my marksmanship by shooting a rifle at flies hovering around your head but do not prohibit all airplane flights. We want rules that prohibit trespass by elephants but not by satellites orbiting three thousand miles over my roof.


Suppose I have stolen a hundred dollars from you. If all you are allowed to do is take your money back, then theft is an attractive profession. Sometimes I am caught and give the money back, sometimes I am not caught and keep it. Heads I win, tails I break even.

In order to prevent theft, you must be able to take back more than was stolen. But how much more? When I raised that question once in a talk to a libertarian audience, I was told that it had already been answered by a prominent libertarian--you are entitled to take back exactly twice what is stolen. That was many years ago, but nobody yet has given me a reason why it should be twice. Two is a nice number, but so is three, and there may be much to be said for four, or ten, or a hundred. The problem is not to invent answers but to find some way of deriving them.

I could continue with a wide range of other problems for which the natural rights approach to libertarianism offers, so far as I can tell, no solution.

I call this "The Implementation Problem", but I'd love a better term :).


Given this "implementation problem", it seems to me that, just like in the real world (science, business, etc.), the right solution has to involve experimenting. Trying systems of rules and seeing what happens. Which means these rules need to be embedded within some system which allows for the easy generation, testing, and comparison of rules.

We don't need answers, we need a way of generating answers. (Great section in MoF on this).

Government has stagnated. Very little experimentation. (What do you expect when it's basically impossible to start a new country or change an existing one? How do you expect to get technological advances without experimentation?)

Experimenting has some important benefits:

See my writing on experimentalism.

Many Competing Systems

The fewer, larger political systems we have, the less experimentation there will be. Also, the less different types of society we will have. I believe that a world with a diverse set of governments, peacefully competing for citizens, would be a much better one. We might see the technologies of social organization advancing as fast as other areas of science and technology.

Note that this is different from the naive libertarian view - I don't insist on (or even desire) a world with one (or many) purely libertarian states. I respect that other people have different values for safety and equality, vs. my values of growth and freedom. Furthermore, since achieving a set of political goals is very difficult, even among societies with similar goals to mine, I'd like to see many attempts at different mechanisms, so that we can find those that work best.


It is no accident that the last great leap in government, the USA and its representative democracy with checks & balances, happened as part of opening a new frontier. Given that part of the problem is the way entrenched power structures grow and cement their power, moving to a frontier serves as a reset to clear the accretion.

Sadly, there are serious problems with frontierism in the modern age. There are few frontiers left, and more and more of our wealth is in forms that are not easily movable. The cost of moving to a new frontier is much higher when you cannot carry most of your posessions in a wagon.

Seasteading aims to change this. By building cities on the ocean in a modular fashion, the ocean becomes a permanent frontier, because any dissatisfied group can go to a new, empty patch of ocean, and take their houses and offices with them!. This lets them reset at far lower cost.


Forget analyzing laws, let's analyze the systems that generate the laws, and think about what types of systems will tend to generate better laws. This is really important, and goes hand in hand with experimentalism. It means we have to solve a more abstract, unintuitive problem, but the gains are huge.

By stepping up a level, we neatly avoid getting trapped in endless policy debates, debates which are almost pure intellectual masturbation because the problem is not figuring out a good policy, the problem is that the system (say, democracy) doesn't optimize for "good". We can argue for hours about the best tax system - but politicians don't want "the best", they want one where they can profit by selling loopholes.

Such discussions have some benefits:

This is one of the areas where I find myself disagreeing with many of the thinkers about political systems. I think people (including, sadly, me) waste an enormous amount of time and effort exploring specific solutions, laws, and policies which will never be implemented. They do this because:

But this very rarely helps to advance such a society. Such discussions are a mirage, a distraction, they are hacking at the branches of evil rather than striking at the root. They distract us from the more fundamental reforms that would actually change the world.

The Machinery of Freedom sequence mentioned earlier (Problems, Where I Stand, and Answers) addresses this point as well, ie:

In order to prevent theft, you must be able to take back more than was stolen. But how much more? When I raised that question once in a talk to a libertarian audience, I was told that it had already been answered by a prominent libertarian--you are entitled to take back exactly twice what is stolen. That was many years ago, but nobody yet has given me a reason why it should be twice. Two is a nice number, but so is three, and there may be much to be said for four, or ten, or a hundred. The problem is not to invent answers but to find some way of deriving them.

Democracy Is A Bad Meta-System

See the whole school of Public Choice economics. Democracy is not a system which produces efficient laws. There are many reasons, but these include:

It is also not a good political system to produce libertarian results. Libertarian reform within democracy is hopeless, because libertarians can never win a power contest. They are always at a disadvantage to any party willing to use the power and influence it can get by winning, because they have less resources available to contest the election, as Jonathan Wilde explains.

See my writing on the problems with democracy.

Absolute Morality vs. Preferences

I have a strong intuitive sense of natural rights, but I believe that it comes from evolution, and does not represent absolute truth. Rather, I see moral viewpoints as falling along a spectrum, from things that are always wrong (killing someone for fun) to things that are more like personal preferences (I want to live in a society that values freedom and absolute wealth over equality and relative wealth). I believe that commonality of a moral view is a signal as to its degree of absolute truth (murder=wrong is much more common than redistributive taxes=wrong), but an imperfect one (devaluing classes of people, such as women, was once very common, but still more like murder than like taxes).

Relatedly, I believe that much of the apparent difference in preferences between me and others is actually a difference in our beliefs about how certain systems would work in practice. It is a difference of opinion about the means, as opposed to a different conception of an ideal society. This relates to Experimentalism - if we actually try things out, we will have actual societies to compare to each other, rather than each having a different prediction of how a system will turn out in practice.

See my writing on consequentalism and morality.

Contrast with Libertarianism

I am a libertarian, but like my dad says:

"There may be two libertarians out there who agree about everything, but I am not one of them" - David Friedman.

Hence "libertarian" really doesn't do much to sum up my views (or at least, the important ones). It's a great summary of what kind of society I want to live in, yet it completely leaves out my viewpoints on what I believe to be the hard part of the problem, which is how to actually create such a society.

So I don't believe in the standard form of libertarianism (let's all live in a libertarian democracy with a strong constitution!). In fact, I call this "naive libertaranism" because my views have led me to believe that while libertarianism is in many ways correct about what makes for a widely attractive society, it has some serious errors:

See my writing on naive libertarianism.

Aligning Incentives

A deep part of my view of social organization is the idea of encouraging positive-sum interactions, and discouraging negative-sum ones (such as resources wasted on zero-sum transfers). I believe that libertarian systems are far better at this than socialist or other non-free systems. Government actions, while they purport to generate net social good, are in the vast majority of cases net negatives. The consensual interactions of private individuals are much more likely to be positive-sum. (However, I think libertarians are naive about not realizing that some consensual interactions are negative sum. Market speculation is a classic example, it is purely consensual, but may be negative sum due to effects on third parties).

This is all related to rent-seeking - situations where parties fight over a fixed resource, that exists regardless of their work. There is a tendency to waste such resources by spending almost their value in fighting over controlling the stream of rents. This is a major class of negative-sum interactions. Classic examples including college endowments and natural resources.

Relatedly, I also believe a main goal of social organization is to align individual and societal incentives, so that people acting in their own self-interest produce a better world for everyone.


Spillover effects of too many laws

I believe that illegality has additional harmful effects on people's minds through guilt, shame, and secrecy. When an activity persists despite being illegal, this does not mean that the regulation has failed to do harm, because there is still harm done by driving it underground. For example, post on gay marriage, or the classic argument that the war on drugs causes drugs to be of lower/uncertain quality and more harmful (ie people poisoned by bad booze during Prohibition, but Anheiser-Busch doesn't make poisonous booze).

Also, when things that everyone (or almost everyone) does are illegal, the decision about who to prosecute gets made for political reasons - based on who the government doesn't like, or disempowered people (minorities, the poor).

Another effect is that when people frequently break the law, it lowers respect for the legal and social system as a whole. The existence of bad rules and their inconsistent enforcement mean it is less likely that good rules will be followed - as any book on parenting will tell you.

Specific Approaches

Non-Territorial Government / Polycentric Law / Anarcho-Capitalism

Here is an overview of ideas and introductory works in this area

I believe that there is no special moral magic to groups. Anything which it is wrong for an individual to do, it is also wrong for a group to do. This simple principle leads one quickly to anarchism, a belief that the state is morally illegitimate, and that humans would be happier if they restructured their political arrangements into something more egalitarian.

I also believe in the libertarian concepts of property rights and freedom of contract. The implication of this set of beliefs turns out to be an odd system called anarcho-capitalism, or polycentric law, or market anarchism. It is difficult to sum up briefly, I can only refer you to the books listed below.

My differences with Ancap lie in the areas of feasibilty (can we get there from here?), and stability (would it last?). A historical system which had entirely private enforcement of law, although not production of law (Iceland) lasted several hundred years before returning to a more traditional government. England also underwent a gradual transition over hundreds of years from private enforcement to public enforcement. On the other hand, while I question its stability, I think it is much more likely to be stable than naive libertarianism (a libertarian democracy).

There are certainly plenty of nits to pick with Ancap, and very few historical examples exist. However, it is the most elegant solution I have ever heard to the problem of defining and enforcing law in a world where people have different preferences and beliefs about morality. If that is something that interests you, please check it out. If you believe in a single set of universal rights (Objectivism or natural rights libertarianism), you might consider ancap as one of the top proposals for a practical way of implementing libertarian rights without degenerating into statism, as the US did.


Dynamic Geography

This is my contribution. The basic idea is that if we open the new frontier of the oceans, we get a very low barrier to entry to creating a new government, and avoid the powers-that-be. And if we build these cities out of modular platforms, so that people can vote with their house (instead of just their feet), we get a world of unprecendented mobility (ie free association). Together, these have the potential to transform the governing industry from an oligopoly into a competitive market.

See My original paper, or some of the other writing listed below.

The Free State Project

I have mixed feelings on this project to take over New Hampshire. As I wrote in my Cato Unbound essay:

The FSP aims to bring 20,000 liberty activists to the state of New Hampshire. So far, 9,000 have signed up and 700 have moved. Even these few have been able to elect 4 of 400 state representatives, which makes it plausible that the full 20,000 could have a substantial impact on state politics.

I have doubts about the amount of freedom the FSP will be able to secure, because most restrictions and taxation are at the federal level, and the issue of rights was pretty solidly settled in 1865. Instead of opening a new frontier, it is on land claimed and controlled by the most powerful military force in the world. It also operates within traditional democracy and its flaws.

Still, the FSP was consciously designed as a reaction to the failure of libertarian reform to date, and is a vast improvement over folk activism. It concentrates our strength rather than depending on a mass libertarian movement which will never come. It is based on immediate action: practicing our principles today to demonstrate that freedom works, rather than just endlessly preaching.

Being inside the United States may limit the freedom achievable, but it also limits the difficulties, so this is a good low-risk, low-reward option.states

Also see: FSP Issue.


Also from my Cato Unbound essay:

Proposed in Tim May's Crypto Anarchist Manifesto way back in 1988, the idea is that anonymous digital cash could greatly limit government power. While computer and networking technology has developed enormously since it was written, digital cash has not taken off, and the main impact of digital transactions seems to have been on record industry sales, not the ability to tax and control economic as May predicted.

Despite the mathematical elegance of digital crypto, our analog world is the site for most spending and income, which can thus be taxed and regulated. Also, physical reality provides a nexus control for no matter how sophisticated the avatar, a knife between its s shoulderblades will seriously cramp its style.

While the Internet has been a big step towards a more virtual lifestyle, we t all going to be jacked in full-time anytime soon. Over time more of s predictions will come true, but only slowly and for a limited subset of human affairs. Still, cyberspace is an inherently more competitive, more anonymous, harder to tax and regulate environment, and so advancing it is a way to accelerate freedom through technology.Mayarenmaster interactionson May

Bad Approaches / Misguided Viewpoints

Because of these views, I think all of the following are misguided:

My Writing:

(Most of these are blog entries. Topic links are to blog tags. Sadly, my blog is imperfectly tagged)

TODO: Star the key posts.

Influences - Books

Here are the books that have had the most influence on my political views:

Influences - People

These are some of the few writers whose views seem to match most decently with my own, and who have influenced me:

(There are many non-writers/bloggers that I share a common philosophy with as well, but they are harder to link to.)

Here are some individual pieces that accurately capture bits of my philosophy, even if the author doesn't match well enough to be listed above:

Background Story

(This was written awhile ago, and is incomplete)

Libertarianism by Patri or why tolerant libertarian is not an oxymoron.

I feel like I have a somewhat odd sort of libertarianism, in some ways more extreme than usual and in others much less. It is one that I feel quite passionately about, so I'd like to share it in the hopes that people with other beliefs will find something appealing in it and incorporate it into their political visions.

I started out as a very intuitive, natural rights libertarian. I had a strong and very libertarian moral intuition - I was arguing libertarian politics in middle school before I even knew there was a libertarian party or that my family had any association with them. So I spent a good decade as a standard argumentative libertarian, sure that his morals are the right morals, and thinking that rhetoric would change people's minds about right and wrong.

Three main things changed that. First was arguing with smart, caring, passionate people I respected who were not libertarians - even (gasp) after arguing with me. Second was learning about human irrationality, and the ways in which our instincts, including our moral instincts, represent old, hardwired intelligence that may not always serve our interests, and should be subject to critical examination.

Both of them convinced me to be deeply skeptical of my moral intuitions as a representation of absolute truth. I came to think of them as preferences for what type of society I would like to live in, and to respect other people's preferences (say, for greater equality) as other reasonable goals for society. While I resent having their viewpoints forced on me, that is different from believing them to be wrong. There would be nothing wrong, for example, in them getting together and forming a voluntary society with rules that I hate. Not only would it be coercive to stop them, but I also believe that it's wrong to question their choice, for who are we to tell other people how to live their lives?

(Aside: This shift towards tolerance of theoretical non-libertarian societies did not change in the slightest my belief in the pervasive crappiness of actual governments, their consistently inefficient implementations, often producing results directly counter to their intended beliefs. I can respect a desire to provide for the elderly - but I cannot respect Social Security, which claims to be a welfare system, yet taxes the poor more (since it is only on wages, and has a cap), yet pays the rich more (since they live longer). I can respect a desire to ensure the security of one's nations from terrorists - but I cannot respect pointless "security" which serves only to waste people's time and would not stop a determined attacker. And I do not believe any of these are accidents, I believe that they are so common that one must consider them as endemic to democracy.

So while I respect the idea of people with different social goals and different beliefs about what laws should be in a society, I think it is naive and contrary to the data for them to expect existing democratic government to implement their just society. Most of the time, I think it is better to have the government do nothing, even if you'd like it to do something, because it will just screw it up. So I think that even people with very different goals than mine are wrong to not favor libertarianism for purely pragmatic reasons. However, my tolerance is not as hollow as it sounds, because I only think this for modern democracies, and I have hope that the future will bring us better versions of many people's very different ideal societies. More on that later.).

The third thing, the nail in the coffin, was reading my dad's book Law's Order, a basic introduction to the economic analysis of law. (moved to section on The Implementation Problem).

Having been cut adrift by one of my dad's books, I was rescued by another, Machinery of Freedom. Sure, we may not agree on morals. And we may not be able to easily write laws to implement even those morals we do agree on. But that just means we need to go meta. Forget analyzing laws, let's analyze the systems that generate the laws, and think about what types of systems will tend to generate better laws.


Mencius Moldbug Quotes

From a couple months (June - July 2008) of his archives, here are a bunch of awesome quotes:

So, as thoughtful and concerned people, we have three reasons to think about solutions. One is that we are thoughtful and concerned people. Two is that thinking about government in a post-democratic context is an excellent way to clear our minds of the antinomian cant with which our educators so thoroughly larded us. And three is that once the cant is cleared, it's actually kind of fun and refreshing to think about government. The problem is not new, but it has been lying fallow for a while.

Today's administrative states are irresponsible because their actions tend to be the consequence of vast chains of procedure which separate individual decisions from results. The result is hopelessly dysfunctional and ineffective, often becomes seriously detached from reality, and demands an immense quantity of pointless busywork. However, it has the Burkean (Ed, not Tim) virtues of stability, consistency, and predictability. It works, sort of. When you take all this process, policy and precedent, rip it up, and revert to responsible personal authority, you gain enormously in effectiveness and efficiency. But the design places a tremendous engineering load on the assumption of responsibility and the absence of politics. This simply can't be screwed up. If it is, the consequences can be disastrous. Hello, Hitler. Also, did I mention Hitler? Finally, there is the possibility of creating a new Hitler.

Imagine that there had been no scientific or technical progress at all during the 20th century. That the government of 2008 had to function with the technical base of 1908. Surely, if the quality of government has increased or even just remained constant, its performance with the same tools should be just as good. And with better technology, it should do even better.

But without computers, cell phones or even motor vehicles, 19th-century America could rebuild destroyed cities instantly - at least, instantly by today's standards. Imagine what this vanished society, which if we could see it with our own eyes would strike us as no less foreign than any country in the world today, could accomplish if it got its hands on 21st-century gadgets - without any of the intervening social and political progress.

When we think of progress we tend to think of two curves summed. X, the change in our understanding and control of nature, slopes upward except in the most dire circumstances - the fall of Rome, for example. But X is a confounding variable. Y, the change in our quality of government, is the matter at hand. Extracting Y from X+Y is not a trivial exercise.

But broad thought-experiments - like imagining what would become of 1908 America, if said continent magically popped up in the mid-Atlantic in 2008, and had to modernize and compete in the global economy - tell a different story. I am very confident that Old America would be the world's leading industrial power within the decade, and I suspect it would attract a lot of immigration from New America. The seeds of decay were there, certainly, but they had hardly begun to sprout. At least by today's standards.

Surely a healthy, stable society should be able to thrive in a steady state without any technical improvements at all. But if we imagine the 20th century without technical progress, we see an almost pure century of disaster. Even when we restrict our imagination to the second half of the twentieth century, to imagine the America of 2008 reduced to the technology of 1950 is a bleak, bleak thought. If you are still taking the blue pills, to what force do you ascribe this anomalous decay?

Whereas the red pill gives us an easy explanation: a decaying system of government has been camouflaged and ameliorated by the advance of technology. Of course, X may overcome Y and lead us to the Singularity, in which misgovernment is no more troublesome than acne. Or Y may overcome X, and produce the Antisingularity - a new fall of Rome. It's a little difficult to invent self-inventing AI when you're eating cold beans behind the perimeter of a refugee camp in Redwood Shores, and Palo Alto is RPG squeals, mortar whumps and puffs of black smoke on the horizon, as the Nortenos and the Zetas finally have it out over the charred remains of your old office park. Unlikely, sure, but do you understand the X-Y interaction well enough to preclude this outcome? Because I don't

Salomon's view of public opinion is mine: that it simply has nothing to do with the difficult craft of state administration, any more than the passengers' views on aerodynamics are relevant to the pilot of a 747. In particular, most Americans today know next to nothing about the reality of Washington, and frankly I don't see why they should have to learn.

Most observers interpret bureaucratic sclerosis as a sign of a government which is too powerful. In fact it is a sign of a government which is too weak. If seventeen officials need to provide signoff for you to repaint the fence in your front yard, this is not because George W. Bush, El Maximo Jefe, was so concerned about the toxicity of red paint that he wants to make seventeen-times-sure that no wandering fruit flies are spattered with the nefarious chemical. It is because a lot of people have succeeded in making work for themselves, and that work has been spread wide and well. They are thriving off tiny pinhole leaks through which power leaks out of the State. A strong unauthority would plug the leaks, and retire the officials.

A restoration is a regime-change procedure designed to safely and effectively reverse the damage which progressivism has inflicted on civilization, acting under the principles of good government that prevailed in theory, if not always in practice, in the late classical or Victorian period, and producing a new era in which secure, responsible and effective government is as easy to take for granted as tap-water you can drink, electricity that is always on, or a search engine that returns porn only if you searched for porn. A good way to define a restoration is to model it as a sovereign bankruptcy. Since a government is just a corporation, albeit one whose rights are protected not by any higher authority but by its own military force, it is subject to the same inexorable laws of accounting. More specifically, a restoration is a sovereign bankruptcy with restructuring. There are always three options in a bankruptcy: restructuring, liquidation, and acquisition. While it can be interesting to wonder what the People's Liberation Army would do with West Oakland, in general restructuring is the only practical option at the sovereign level. In any restructuring, a restoration delivers temporary control to a bankruptcy receiver. The receiver's goal is to render the company both solvent and profitable. Solvency is achieved by converting debt to equity, diluting existing equity holders and treating equal commitments equitably. Profitability is achieved by optimizing corporate operations as the receiver sees fit. In a sovereign bankruptcy, there is one extra quirk. At least in today's real world, the corporation which we are restructuring does not think of itself as a mere corporation. It doesn't even think of itself as a sovereign corporation. It thinks of itself as a mystical pact which echoes across the centuries from generation to generation, bonding human souls across time, space, language, gender and race. So we can expect its accounting to be a little funky. But accounting, still, is accounting. And not rocket science.