WHY FOREIGN HAVENS?
It seems the illusion of good government is in free fall and no one knows precisely what will happen when it shatters upon the rocks. An enormous lie upon which the masses have staked livelihoods and personal identities is about to be shattered. How should we brace for the likely interruption to the global division of labor?
Guns, gardens and gold (and Bitcoins!) seems as good a recommendation as any. Many American libertarians, including entrepreneurs Jeff Berwick, Doug Casey and Erik Voorhees have sought and found greater economic freedom outside the United States. They’ve been vocal about opportunities in lower-trust societies.
“Get [your] money out of the country . . . and if you don’t want to get washed away in the flood . . . get yourself out of the country too,” Dough Casey said during his brilliantly irreverent speech at Libertopia, 2012.
Though the advice may be sound, we should not mistake these havens for Galt’s Gulches, at least not yet. The economic freedom of such havens is not based upon recognition of self-ownership or a respect for the libertarian conception of property, but upon bribes and the self-interest of a different group of tax farmers. At best, it reflects attempts by foreign tax farmers to attract new cattle by minimally imitating libertarian principles.
The occasional praise one hears for the governments of lower-trust societies is misplaced. It reflects not praise for the new system, but resentment of the old one. Ayn Rand, having escaped the Soviet Union, was similarly motivated when she made ridiculous statements like “the United States of America is the greatest, the noblest and, in its original founding principles, the only moral country in the history of the world.”
Why should the relatively free, relatively lawful, relatively high-trust United States also be among the most feared? As articulated by professor Hans Hermann Hoppe, “states that tax and regulate their economies comparatively little — liberal states — tend to defeat and expand their territories or their range of hegemonic control at the expense of less liberal ones. This explains, for instance, why Western Europe came to dominate the rest of the world rather than the other way around, More specifically, it explains why it was first the Dutch, then the British and finally, in the 20th century, the United States, that became the dominant imperial power, and why the United States, internally one of the most liberal states, has conducted the most aggressive foreign policy.” 
With substantial power comes substantial abuse, but it’s not directed at large for fear of dispelling the illusion of good government upon which they rely. It is aimed carefully at threats to the monopoly privileges of the political class, hence it is precisely the entrepreneurs whose innovations and ambitions threaten these privileges that benefit most from emigration. Though tax farms outside the first world may be worse in general, rich immigrants are able to purchase the protection necessary to engage in the type of commerce stifled in their previous home.
Aside from their appeal as new tax-cattle, there is a second reason why entrepreneurs, especially financial ones, have found success outside the first world. Lesser tax farmers have already been robbed of much of their monetary privilege by their powerful, first-world rivals. They feel comparatively little incentive to stifle financial entrepreneurship. They’ve had to settle for more modest monopolies. They’ve erected barriers and organized violence for exclusive access to local commerce and natural resources. These they guard jealously, but a financial entrepreneur’s threat to a rival’s privilege is met with indifference or tacit approval.
Despite the promise of such havens, an important difference should not be taken for granted.
First-world governments gain legitimacy from the illusion that they actually do good. As has been observed many times, no government can survive without at least passive consent from the governed. The political class is aware of this, intuitively if not explicitly. When they want to exercise their considerable capacity for violence against a threat, say, against the threat Bitcoin poses to their money monopoly, they weigh it against the risk of revealing their true malevolent selves to the public. They must tell a good story or else rely solely on covert violence which bears its own risks.
By contrast, second and third-world governments gain legitimacy from their imitation of first-world institutions. Their publics admire first-world wealth and give passive or explicit consent in exchange for their government’s albeit imperfect imitation its first-world counterparts. Secular democracy is the correct system as evidenced by the wealth of the first world, and the main question among the politically conscientious is how to best achieve it, or more precisely, how to elect politicians who will bring it about.
For those of us who’ve lived in what are sometimes called “emerging economies,” the spectacle is pathetic indeed: bad ideas imitated poorly. Economic actors don’t know whether to celebrate the alternate avenues to commerce offered by the corruption rampant in such societies, or mourn the stagnant, fetid, cesspools of bureaucracy and predatory legal systems from which there is absolutely no “clean” escape.
The greatest risk for prospective emigrants is that when second and third-world governments exercise violence against threats to their monopolies, they are less restrained. They feel little pressure to feign benevolence. They need only convince a majority of the public (be it the most ignorant, emotional, vindictive majority) that they remain on a trajectory toward the correct institutions of government, the ones exemplified by the first world. Covert violence is also easier in more crime-ridden societies.
I quote H.L. Mencken to console Ukrainian friends who express personal shame for the behavior of their politicians, and long for more “Western” government institutions: “Every decent man is ashamed of the government he lives under.”
Most radical libertarians would dismiss their desire outright. Government is evil. Government cannot be reformed. Maybe so, but their desire has merit if one interprets it as longing for a high-trust society.
Consider this: In much of the world, the revelations which pave a libertarian’s intellectual journey (government does more harm than good, every act of government is necessarily an act of violence, a state is, by definition, a monopoly on security and justice, natural rights, non-aggression, self-ownership) are not revelations. They are not even news.
Of course the government (in its current manifestation) is no force for good, of course they are violent, of course the powerful prey on the weak, and all this talk about self-ownership and rights is as relevant as a children’s fable with a discernable but idealistic lesson about the real world.
Libertarian proselytizers from the first world may be thrilled that the illusion they’ve long struggled to dispel — the illusion of good government — is nearly non-existent, but horrified by the myopic, ignorant pursuit of that illusion. Nobody believes government does good, but almost everybody believes it can and should. Philosophical principles upon which to begin are callow distractions, constantly giving way to more pressing concerns like the next election cycle.
Though the latter may describe the masses of the first-world as well, there remains an important difference in the nature of the dialogue.
Most libertarians do not appreciate this. They remain unconscious and ungrateful inheritors of a rich philosophical foundation: the high-trust society built by western civilization, an oft-forgotten and oft-ignored anomaly of history. Pockets of this society now exist all over the world, and to a limited extent, technology transcends geography and builds global societies. Also, it has degenerated in its place of genesis. Nevertheless, its emergence seems unique to Europe, to the Europe west and north of the Hajnal Line.
The cathedral of libertarianism stands atop the individualism, rationality, and justice of the Enlightenment. It cannot long survive upon ignorance, brutality or mysticism (or for that matter, upon the threat of its own making: the secular, nihilistic religion of post-modernism).
The ideas we cherish can rightly be considered first world problems. Let’s appreciate how fortunate we are. The question of whether self-ownership is an extension of our biology or bestowed by “nature or nature’s God,” is moot without either 1) the ability to defend this conception against aggressors, or 2) membership is a society that cherishes this paradigm.
Culture matters. The Rothbardian tearing down of coercive institutions is good but insufficient.
There are many important questions to consider: What will emerge from the ashes of the great fiction? What implication will its shattering have for states which have long gained their legitimacy through pursuit of the illusions? Are those who’ve sought refuge in the second and third world safe?
For the sake of posterity let us also consider, how do high-trust societies emerge? Why do they vanish?
 From a speech delivered to cadets of the United States Military Academy, transcribed in Philosophy: Who Needs It, 1982.
Though its freedoms are diminishing, the United States is #10 on the 2013 Heritage Index of Economic Freedom.
Hans Hermann Hoppe, The Great Fiction, Location 3991, 2012.
John Locke, Second Treatise of Civil Government, chapter 8 section 95, 1690; Etienne de La Boétie, Discourse of Voluntary Servitude; David Hume, Of the Original Contract; and others.
We libertarians would do well to qualify our beloved self-ownership principle. How can we simultaneously claim self-ownership while observing the many ways that exercising self-ownership will be met with violence? So long as the rebuttal to self-owner consists of shackles, Tasers and bullets, then the best we can claim is *rightful* ownership of our bodies. No more.