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FREE STATE OR FREE NATION?

by Jim Peron

This speech, delivered by Jim Peron at the Freedom Summit conference in Phoenix, Arizona (October 2004) is similar to the one he delivered at the ISIL Rotorua, New Zealand Conference three months earlier in July.

     Ever since Ayn Rand wrote Atlas Shrugged libertarians and real liberals have dreamed of their own Galt's Gulch, some Atlantis where freedom is the ruling paradigm. And over the years several attempts have been made, some serious, some not, to achieve this goal. And these have generally been unsuccessful for several reasons.

     In California some suggested that everyone move to some tiny county like Alpine county.

     A hundred freedom lovers in a population of just a few hundred will make a big difference. The problem is that virtually no one wanted to live in such a rural area. We, like everyone else, live in a real world. That means they need jobs to earn a living. They want access to universities, libraries, bookstores, theaters (live and film). They want to be able to purchase the latest computer software and they want lots of choices. They don't want to live in a town where there is one restaurant, one grocery store and no doctor.

     This is the major problem with concepts like a floating libertopia or some large ship sailing the seas. A basic fact of economics is that the more people there are the more economic transactions that are possible and the more prosperous the results. A libertopia of only a few hundred or thousand people probably wouldn't be very financially successful. This option is really only available to people already financial independent since those who have to continue working to survive wouldn't make it in this scenario.

     There was another attempt to persuade libs to move to Fort Collins in Colorado. The organizers felt that the city had a libertarian temperament and that a few hundred libs could make a big difference. And for all practical purposes the theory is correct. The problem with this type of Libertopia is that a city is only a subset of other, larger political domains. Even if Fort Collins went strongly libertarian what difference would this make?

     Most transgressions on individual rights are not done by local communities. In the United States the main culprits are the state and federal governments.

     Fort Collins would still be a part of Colorado and still be a part of the United States. A liberty loving city council or state legislature couldnšt repeal the income tax, stop foreign intervention, end gun control or deregulate the economy. In fact local governments tend to be far more limited in their scope because they are local. If a local jurisdiction voted to repeal the income tax the IRS would ignore the vote and still send in their agents to confiscate property. Federal judges would simply overturn the local decision and things would continue on as before.

     These incidents reveal two conflicting problems. First, for a Libertopia to be successful it must be small enough that a tiny number of libertarians could easily effect change. It is not likely that we are going to get several million libertarians to move to Colorado so that we could change the state by overwhelmingly out-voting the rest of the population. Of course libertarians are disproportionately influential so one outspoken libertarian can sway quite a few people. But still we need to have enough of us to change policy. But the location for Libertopia must also be sovereign. A larger branch of government must not be able to come in and over-ride the local policies or be able to ignore them.

     A libertarian city is ignored by a non-libertarian state and even if we changed the state of Colorado we would still have to contend with the federal government. That puts us back to square one again.

     Libertopia requires a geographical area that is small enough to influence, large enough to be economically viable   but also one that has political sovereignty. And when we go back to the reasons that people didn't flock into Alpine county we see other problems. The area must have jobs that already exist and it must have the amenities of life that most urban libertarians want. In other words it must have a developed and thriving economy.

     I seriously considered Costa Rica, and still would, but I don't speak Spanish and I'm not one to learn languages easily, which would make it difficult to find a job. The country is nice but it doesn't have the first world benefits that I would want. It's small enough to influence but that influence is muted if one doesn't speak Spanish. It's western enough that it would be open to liberal traditions and ideas but it's unlikely that very many of us would want to go there. Of course if one is wealthy enough than these problems don't exist. But most of us aren't wealthy enough and have to grapple with these problems.

     So what traits would describe a possible Libertopia?

  1. Small enough that a tiny number could influence policy.

  2. Political sovereignty for the entire area‹not subject to higher political authorities.

  3. A developed economy that would offer jobs and basic amenities.

  4. A western tradition, preferably English-speaking.

     This last requirement is necessary because most libertarians are English-speaking. And the western tradition makes our task much easier. I've lived in South Africa for 10 years and in that time I've seen that I am able to influence the political trends. The country is small enough that I could make a difference. I did national television shows, radio shows, testified before parliament, etc. My book on Zimbabwe had an introduction written by the leader of the Official Opposition in the SA parliament. And South Africa has political sovereignty. If they legalized prostitution no one was going to step in stop them. So South Africa meets the first two requirements. It also has a relatively developed economy with basic amenities. The choices may not be as great as in the United States but they are sufficient to make most libertarians happy.

     The problem is that South Africa is no longer a safe country.

     Crime is out of control and the government is pursuing policies that will inevitably lead to disaster. My western instincts are deeply offended when a rampaging mob burns an old woman because they think she is a witch   we had around 300 such cases a year. One provincial minister of education refused to go to her office because she said it was cursed! Taxi companies compete for routes, not by dropping prices or improving services, but by murdering each other. Our political views and our life-styles come out of the Enlightenment and all the values it espoused. So my point about a Western tradition is one which I think is necessary for a Libertopia to exist.

     There is one more point necessary for a successful Libertopia: it must be accessible to lots of liberty lovers. It doesn't do any good to locate a sovereign area which is inaccessible. If it has hard immigration laws then we can forget it.

     As I was ruminating over these problems it suddenly dawned on me that I had already found the right location. In my quest to leave South Africa I was looking at New Zealand as a possibility.

     What I hadn't thought about was how well New Zealand fit the criterion necessary for a successful Libertopia‹my only concern was finding a decent country where I could emigrate.

     New Zealand (NZ) is a relatively small country in terms of population   and blissfully isolated. It has just over 4 million residents. There are lots more sheep but since they donšt vote I wouldn't worry about them. If I could have some influence in South Africa, with 42 million people, then I should be able to have even more influence in NZ. So it fits the size criteria. NZ is a sovereign nation and this is a fact respected by the rest of the world. Even the Aussies are unlikely to send in troops to put down an ideological revolution.

     Libertarians could survive here on the practical level as well. The economy is well developed and first world in nature. Unemployment is low and opportunities abound. It has all the first world amenities that most of us want. We would have the choice of restaurants, theaters, etc that we want. It has higher educational opportunities and decent medical care.

     Auckland is a major city with well over 1 million residents. This means that urban dwellers could feel right at home there but those of us who prefer seclusion have the entire rest of the country from which to pick. Because NZ is about the size of England, with a fraction of the population, there are lots of private, rural areas to live in as well. NZ is also a western country with basic Enlightenment values. The chances of a squatter camp in the park next to your house are minuscule. Those of us with western values will fit right in. That just leaves one more requirement: how easy is it to get in to NZ?

     That is what has surprised me most. NZ is relatively welcoming to immigrants. Unlike the US, with the INS Gestapo, New Zealand is more encouraging to immigrants. There are many ways to qualify and I recommend you speak to Kim Saull, who is here, about that as he's a specialist in immigration to New Zealand.

     How does current political policy fit in for libertarians? The Index of Economic Freedom by the Heritage Foundation says that NZ has a "well-founded free market system". Specifically they say the following about various policies:

Low level of protectionism. "New Zealand has an average tariff rate of 3.2 percent. In 1994, New Zealand announced plans to eliminate all tariffs by 2004." That measure was frozen for a couple of years but is back on track again.
     New Zealand not only is working to abolish tariffs but has already abolished all subsidies for farming.

     The rates of income tax the index list are called "moderate" There is no capital gains tax except for property development. The general sales tax is 12.5% which is higher than many areas in the States but not that far off from the major areas like New York City or Los Angeles. For many libertarians in other countries even 12.5% is an improvement. It has been pointed out to me that NZ does not have a separate "social security" tax as does the US and this would dramatically lower taxes. In addition the US has state governments which can heavily tax income or sales and that level of government is entirely missing in New Zealand   along with those taxes. In addition we do not have a capital gains tax, except in special circumstances, nor do we have an inheritance tax.

     Since I mentioned states let me make sure something is clear. New Zealand is so small that we have a national government and local city governments but we don't have provincial or state governments in the middle. Now some might find that disturbing as the purpose of state governments in a federal system, was to counteract the power of the national government.

     Since the Constitution in the US was changed in 1913 that function has been basically abolished in the US. States no longer act as a check on federal power. They merely are another layer of bureaucracy with the power to tax. So they don't fulfill their original function of limiting government. Now they just add additional costs on everything. New Zealand does not have this secondary level of control and regulation. And I tend to that a good thing.

  • The government consumes 13.4 percent of GDP versus 18 percent in the United States.

  • Very low level of inflation.

  • Low barriers to foreign investment. "New Zealand actively encourages direct foreign investment and approval is routine."

  • Very low restrictions on banking. The Index says banking is "deregulated" and there is no "deposit insurance".

  • "Wages and prices in New Zealand are determined largely by the market. New Zealand enforces a relatively low minimum wage for most adult workers."

  • Property Rights here are relatively similar to most Western countries even if some of our local libertarian friends are convinced it's much worse. But over the years I've noticed that most libertarians think that where they live is about as bad as it gets.

  • "Establishing a business in New Zealand is easy. Regulations are applied evenly and consistently."

     The competing "Economic Freedom of the World" published by a dozen or so free market think tanks, says New Zealand had the largest increase in economic freedom in the world during this period. They said: "New Zealand now ranks as the third most free economy, behind only Hong Kong and Singapore". The most recent index still has New Zealand as third but in a pool of nations with generally declining scores.

     Compared to the United States (according to the Index) New Zealand does quite well. It generally has lower levels of taxation and the banking sector is less regulated. The Index rates New Zealand as being more economically free than the United States. Also, unlike the US, it is relatively easy for immigration purposes which is something the Index does not take into account. It also scores better than Australia, Canada, most of Asia, South America, Africa and Europe. In the 1996 Index (which is the one I own) New Zealand was only beaten by Hong Kong (which is now under control of mainland China) and Singapore. One flaw of the Index is that it only rates economic freedom. Singapore has a relatively authoritarian political structure which does not have much respect for civil liberties. If we take civil and economic freedom both into account New Zealand is already one of the best locations to live in the world. On the civil liberties side I will note that the Prostitution Reform bill recently legalised brothels, that Right to Die legislation missed passaged by one vote and the first reading of the Civil Unions bill was approved. Recent polls show that Civil Unions have the support of the majority of New Zealanders.

     I should also point out the some advancements in recent years in Kiwi politics. The National Party, the major party in opposition to the left Labour Party, was under the leadership of a bland man with few apparent principles. He played the middle of the road game and took that party to the point of oblivion.

     A newly elected National MP, a former Reserve Bank chairman named Don Brash, challenged him for the leadership and won. He's a relatively libertarian thinking man though wrong on the war on drugs. National doubled it's support in the polls and is now leading Labour and may well be the next government.

     National is like the old Republican Party before religious fanatics took it over and turned it into an American Taliban. The leader is a rational man who understands libertarian ideas on most issues. A few months ago I wrote an editorial describing him as a libertarian and arguing that the media didn't understand the differences between a libertarian and a conservative. I received the following email from Brash after the article was published in the Christchurch Press.

     Most polls say that Brash is within a few percentage points of having enough support to become our Prime Minister in the next election.

     In recent months a lot has happened with National because Don is party leader. A Classical Liberal Action Group was formed within National. They sponsored a breakfast at the National Party annual convention and asked me to be the speaker. I gave a strong presentation on the basic principles of libertarianism. Six National Party members of parliament were in the audience including Dr. Brash.

     At a dinner for the New Zealand Business Roundtable one of Brash's assistants came over to introduce himself and said that Dr. Brash had spoken of my presentation often. At that July conference my bookshop, Aristotle's Books, which is the only store front libertarian bookstore in any major city in the world, had three tables packed with books by Mises, Hayek, Rothbard, Rand and others. One long time political activist came over to me and shaking his head said: "I never thought Išd live to see the day that these kind of books would be sold in a National Party conference."

     One result of that presentation was that only last weekend I was invited to speak to the Young Nationals annual conference about the basic principles of liberty. They also invited me to set up a book table of literature from Aristotle's Books. The significance of this was that this conference was held inside the Parliament buildings themselves. A comparable situation in the United States would be having Laissez Faire Books asked to set up a display table of books within the Capitol Building.

     At that conference Dr. Brash was the keynote speaker. He said that what is called the "centre right" is made up of four groups. One is nationalists, one is urban professionals, one is moral conservatives and one is "classical liberals like Jim Peron". I was a bit surprised. My first thought was that I hope that I'm not the entire fourth group by myself. I think it was just a nice plug from the man many think will be our next prime minister.

     In July our Institute for Liberal Values (we mean classical liberal) sponsored ISIL's World Freedom Summit. We had 125 in attendance. Remember we are a nation of just 4 million. About 90 of the people there were locals. A comparable attendance in the United States would be almost 7,000 people!

     We had four members of parliament as speakers from three different parties. And we had another two MPs as paying registrants as well. That's 5% of our entire legislative body in attendance at a libertarian conference. To have the same thing happen here it would require 5 US Senators to be seated in the audience backed up by an additional 22 members of the House.

     The MC for our freedom summit was Rodney Hide. Rodney is the newly elected leader of the ACT Party and one of the most prominent members of parliament. Hešs a good libertarian. One thing that is important is that in our system of parliament it's very difficult for one party to rule without cooperation from allies in parliament. And National's most likely ally is ACT. So both the ruling parties in our next government could be lead by libertarians.

     Our Institute for Liberal Values has published dozens of editorials in the major newspapers of the nation. I've had quite a few of these published on the editorial page of the New Zealand Herald. This is the equivalent of having libertarians editorials published on the op ed pages of the New York Times. We also produced a book The Liberal Tide, which is a collection of essays by such luminaries as Frederic Bastiat, Ludwig von Mises, James Buchanan, Leonard Read and others. We sent copies of this book to every single high school library in New Zealand.

     In addition to the Institue we have several exciting liberty oriented groups including the Business Roundtable, the Trade Liberalisation Network, Education Forum, Liberal Forum and more. In July 25 university and high school students met at our freedom summit to form the Free Students Network which is bringing speakers on campus to challenge such things as welfare and the global warming theory.

     Things can only improve with an influx of those seeking a Libertopia. There are some drawbacks. The health care system is still pretty much a welfare state. But compared to places like England, Canada or South Africa it is a relatively decent one. Private options are, of course, available as well. But the drawbacks are minor compared to some of the problems that Americans have with an over-eager federal government. Before moving here from South Africa friends liked to joke about how many sheep there are in New Zealand. True, I told them, but sheep don't shoot.

     In closing I'd like to say something. The world is a vastly different place from what it was when first put my thoughts on this down on paper. Worse yet is that America has changed even more.

     What is happening in the US scares the hell out of me. The reports from US friends scare me as well. As I see it the libertarian values on which the US was founded are very much in retreat. I hope I'm wrong. More now than ever I think US libertarians should pack up and join us in NZ. The vision is dying in America. And we can save it by reviving those ideas here. All the reasons for being here have magnified significantly as a result of Bush's war on liberty.

     I may be wrong and the US may eventually return to normal sometime soon. But normal wasn't so great. And if it does get worse it will get significantly worse. And if one tries to make such a move then it may well be too late. Most of us who left South Africa realize that those who left before us were the smart ones. Leaving is a hard decision to make. When I left America it was long before any of this. I'm glad I did it because doing it now would be harder in some ways.

     Before I left South Africa many friends sought me out to speak about moving. I know it's difficult. It's very hard to leave your own country behind. But I told them that they had to think of their kids. Maybe they could survive in South Africa right then and there. But what about down the road. What about the nation their children will inheret.

     That is something for each of you to consider. What is going to happen in America now. For how long will our young be dying in Iraq? Is Iraq the end of this empire building exercise or just an early chapter? How many more flag drapped coffins will be sent back to America? And whose children will be in those coffins down the road? And in this modern world you can't even be assured that your daughters will be safe. I do think conscription is coming.

     I do think that the situation will deteriorate and the Bush administration has no idea how to get out of this quicksand. I do think that many thousands of Americans will die because of his blind foolishness.

     I do think that massive deficits will come home to roost. And when they do it will be disastrous. For the foreseeable future America is in trouble.

     I hope that many of you will join us in New Zealand. I hope youšll help us build a free and open and tolerant society there. No, New Zealand is not utopia and I don't think utopia is an option. We have shown that a nation can be basically free economically and socially and still have a non interventionist foreign policy. Come visit our beautiful islands and see it for yourself. And if you have questions, ask those here who have already been there or live there. Marc and Amy have visited, Stu and Lisa Krone have been there and are planning a move. George Smith recently visited us for the World Freedom Summit and Doug Casey has a home in New Zealand as do several major libertarian financial experts.

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