My next point would be that there is no reason to expect a government to make a profit.

The idea is that it is possible to make the cake bigger by having efficient government. This is why he invokes Laffer curves as relevant concepts.

I find myself sympathetic to this. If you say give some amount of stocks to foundations that provide free healthcare to those who can't afford it or preserve natural habitat ect. that matches current GDP spending, but come up with a government that is more efficient at providing funds for all these endeavours you get more spent in an absolute sense on healthcare or environmentalism than otherwise.

If you want to do efficient charity, you don't work in a soup kitchen, you work hard where you have a comparative advantage to earn as much money as possible and then donate it to an efficient charity. Moldbug may not approve but I actually think his design with the right ownership structure, might be together with some properly designed foundations be a much better "goodness generating machine" than a democratic US or EU might ever be.

I also like the idea of being able to live in a society with laws that you can agree with, if you don't like it you just leave and go somewhere where you do agree with them.

The profit motive is transparent and it is something that is easy to track down than "doing good", which is as the general goal of government far less transparent. As a shareholder or employee in a prosperous society you could easily start lobbying among other share holders to spend their own money to set up new charity foundations or have existing ones re-evaluate their goals.

It also has the neat property of seemingly guaranteeing human survival in a Malthusian em future (check out Robin Hansons writing on this). As long as humans own stocks it wouldn't matter if they where made obsolete by technology they could still basically collect a simply vast amount of rent which would continue growing at a rapid rate for millennia or even millions of years. The real problem is how these humans don't get hacked into being consumption machines by various transhuman service providers but optimize for Eudaimonia.

I don't disagree that it is a Schelling point. But is it stable? History strongly suggests that legitimacy is a real thing that is an important variable for predicting whether governments can stay in power and institutions can remain influential in a society. In other words, there's a reason why mature absolute monarchies (like Louis XIV) invented "divine right of kings." I assert that you can't throw that away (as Moldbug does) and assume that nothing changes about the setup.

He says robot armies and cryptographically locked weaponry eliminate the need to care about what your population thinks. The technology simply wasn't there in the time of Louis XIV. The governing structure has no need to mess with people's minds in various ways to convince them it is a just system.

And the thing is, while such technology as ubiquitous surveillance or automated soldiers in the hands of government sounds scary, there seems to be no relevant reason at all to think other government types won't have this technology anyway. Worse the technology to modify your mind in various ways will also be rapidly available (as if current brainwashing and propaganda technology wasn't scary enough).

In other words people living in such Patchwork instead of the futuristic US or the PRC would trade political freedoms for freedom of thought and association. The last two are not really guaranteed in any sense, but he gives several strong reasons why a sovereign corporation might have an interest in preserving them. Reasons that most other states as self-stabilizing systems don't seem to have.

But Moldbug's commitment to accepting the verdict of history means that he wouldn't find this very persuasive. if one believes that might makes right, then government probably does need to make a profit. In other words, when you acquire power by winning, there's every reason to expect that failing to continue winning will lead in short order to your replacement.

He basically says that whether we like it or not might does make right. The USA defeated Nazi Germany not because it was nobler but because it was stronger. This is why Germany is a democracy today. The US defeated the Soviet Union not because it was nobler but because its economy could support more military spending and the Soviet Communist party couldn't or wouldn't use military means as efficiently as say the Chinese to stomp out dissenting citizens. This is why Russia is a democracy today. Democracies won because they where better at convincing people that they where legitimate, their economies where better and as a result of these two they where better at waging war than other forms of government.

He also seems very confident that if his proposed form of government was enacted somewhere it would drastically out-compete all existing ones.