Galt’s Gulch in Real Life

Last week I told you about EcoVillages being developed in Central America, combining libertarian ideas with a golf-estate lifestyle. They’re just getting started… and they’re aimed at people with enough wealth to move abroad, and ideas about doing so in a particular way.

This week I promised to explore examples of similar communities so you can think about whether this would make sense for you.

The thing is: There’s a lot of marketing hype out there devoted to new kinds of communities like Liberland in Europe and Próspera in the Caribbean; communities set up by private individuals, promising “new ways of living” without government control and with greater freedoms.

If you’re fed up with high taxes and government overreach at home… and tempted by a new adventure on a new frontier… life in these communities might seem appealing…

But if you’re tempted by the marketing hype—there are a few cautionary tales you should know about…

In the early 2010s, a group of investors decided to create a self-sustaining community in Chile based on libertarian principles. They called it “Galt’s Gulch Chile” in honor of Ayn Rand, a luminary in the libertarian philosophical universe. One investor, Ken Johnson, drove the process of recruiting participants.

Problems started almost immediately. Taking advantage of his knowledge of Chilean law and the trusting nature of prospective participants, Johnson structured the deal so the latter didn’t get individual title or water rights as they were initially promised. Instead, these rights were centralised with the project organizers.

This led to accusations of fraud and misrepresentation. But since the participants had agreed to a dispute mechanism based on libertarian principles, they had no legal recourse. Instead of building a sustainable community, participants divided into factions and went to battle. Eventually, the project descended into suits and countersuits, and millions of dollars later, there was little to show for the development.

Lest you think I’m setting up a straw man here, similar problems have occurred in nearly every attempt to build communities of free association. Maximum liberty and minimum regulation generates common problems… issues you’d be wise to consider before signing up for a similar community abroad:

• Joint commitment to ideals of personal liberty and individual independence aren’t enough. Truly voluntary communities rely on everyone behaving according to core principles of honesty and fair dealing. Individual restraint is the substitute for government. If these commitments break down, there’s no mechanism to deal with it.
• Shared ideals are what lead potential participants to drop their guard and assume they can trust projects organizers. Often, people join such communities assuming nothing can go wrong because everyone shares core principles. But expressing such principles is easy. Practicing them requires individual restraint and ethical commitment. If the project founders go off the rails, project participants can be defenseless.
• Instead of rules, these communities focus on creating processes to resolve conflicts. But they are time-intensive and require commitment and participation. Oscar Wilde once said: “The trouble with socialism is that it takes up too many evenings.” The same could be said here. But without all the meetings and time commitments, there’s no mechanism to resolve disputes, so conflicts can easily spiral.
• These projects exist within sovereign nations based on very different principles. Locals may resent the presence of foreigners taking advantage of special investment and taxation regimes. For example, neighbors and many ordinary Hondurans bitterly oppose the libertarian enclave of Prospéra in Honduras. And when disputes can’t be resolved internally, participants resort to the country’s laws and courts… negating the point of the exercise.

Faced with problems like these, some proponents of libertarian communities now advocate benevolent dictatorship rather than internal democracy. Others put their faith in blockchain-based decision mechanisms. So far, there aren’t any practical examples of long-term success.

So, does that mean you’re out of luck if you’re looking for a freer lifestyle than the one you have now? Not at all. There are lots of places around the world that offer not only better living for less, but that offer tax savings, greater personal freedoms—whatever you’re looking for.

The point is: You don’t have to put your faith in frontier-style communities that are attempting to reinvent the wheel when it comes to government and human relations. (You just need what I call a “freedom key.”)

Many expats have found towns and villages where they can live the life of their choice with little external constraint… And in my Global Citizen Prosperity Blueprint, I offer plenty of advice on the best places to go around the world, whether your primary interest is saving on taxes, an easy-access “Plan B,” or a second passport.

It’s an old trope, but still true: human nature is what it is, and there’s a reason why throughout tens of thousands of years of human history, complex societies have always relied on some form of government to keep them stable.

So if joining sustainable communities of voluntary association overseas appeals to you… ignore the marketing ploys and focus on the inner workings of the community before you sign up!