Monday, April 2, 2012

If You Plan on Leaving the United States...

Think small.

Back in June 2011, I wrote in the EPJ Daily Alert:
People often ask me what countries are the best to move to if it becomes time to leave the United States. I generally shy away from naming a specific countries, because it is in many ways a very personal choice depending on the person's occupation and likes and dislikes.

That said, I have developed a few guidelines. I think the smaller the country the better. I'm talking very small.Very small countries are the least likely to be bureaucratic for many reasons, including the fact that small countries likely don't have the funds to be very bureaucratic and it almost seems absurd that they would require huge bureaucratic red tape for say getting a barber's license, or pretty much anything else, when there are so few people that will need to be licensed... the bigger a country the more bureaucratic a country is going to be.
Because of the above, I took notice when Simon Black wrote these comments today:
I enjoy strong, vibrant economies where optimism and opportunity dominate the scene-- not chaos and negativity.

There are a lot of places around the world that fit this mold-- their economies are healthy and people are legitimately confident about the future. From Estonia to Hong Kong to Andorra to Singapore, there are common elements in these countries that have greatly contributed to their success:

1) They're small.
2) They have governments that generally stay out of the way.

An obscure 20th century economist named Leopold Kohr wrote extensively about these factors; my colleague Tim Price introduced me Kohr's writing last year, and his 1957 book The Breakdown of Nations has proven quite prophetic.

In the book, Kohr extols the virtues of 'smallness' and indicates that most of the political challenges in the world-- military over-extension, debt, poverty, bureaucratic stodginess, etc.-- are caused by the unsustainable expansion of nations.

For Kohr, it is simply a matter of scale. Once a country becomes too large, any system of government will become oppressive.

Small countries, conversely, don't have the resources to wage wars or build huge bureaucracies. They're forced by circumstance to allow the market to work and the private sector to flourish.

Singapore and Hong Kong are great examples. They're not waging wars, dropping bombs, or establishing far flung military bases. Both countries are devoid of any natural resources, and their only means of survival and success have been to step out of the way and let the market take over.

In a matter of decades, they have become two of the most prosperous nations on the planet, and remain among the healthiest today.

Conversely, the 'big' countries of today have assembled massive states which have spawned massive governments that require massive resources to administer... and quite oppressively I might add.

Democracy may look great on paper, but in modern practice of today's 'big countries', it is a terrible perversion of the principles of liberty. Like Rome and the Ottoman Empire before, the individual now exists to support the state, not the other way around.

This is exactly what Kohr warned would become the 'crisis of bigness'. Faced with economic challenges and a debilitating cost structure, big governments and bloated bureaucracies will only beget more bigness, more bloat... until the only possible outcome is collapse.

It reads like a playbook of exactly what's happening today in the west. Already suffocating from too much debt, governments are going deeper and deeper into debt, and hiring more and more workers to administer 'stimulus programs' and an ever-expanding tax code.

To politicians, the solution is to expand the state and expand their authority. This is the exact opposite of what they should be doing... and as has happened numerous times throughout history, it may very well lead to an entire system reset.

There are exceptions, of course. Cuba is a small nation and very totalitarian, but in general a small country is not going to be as bureaucratic. Black mentions Hong Kong and Singapore, but as far as I am concerned, these  countries are too wealthy. Governments in wealthy countries can tax the wealth to acquire the latest toys of the expanding state---and likely will eventually do so. Small, up and coming countries, where the wealth is not yet clear, so that the wealth is not an obvious target for taxation to feed  the growth of the state, is best in my view.


  1. Mr. Wenzel, would you agree with Doug Casey that there are certain countries in Africa with good opportunity to make a good life?

  2. I love the Bahamas, but too close to the US.

    However, if you live on a boat, you can change your address in a heartbeat. (Well, at 6 knots, maybe).

    However, there IS that sticky little issue of a passport.

    Simon Black says: "No problem, just BUY one from Dominica!".

    Anybody got a spare $50,000 ????

    1. Yeah, that's a sticking point for me. I'm sure most of us don't have 50k lying around just for a passport. I prefer more fiscally realistic options.

  3. Mike, the last I'd heard, the price was more like $100,000.

  4. I've said it for years and years that the best place to live is one that's too poor to screw with you but not so backwater as to be a danger to ones safety. Any place that has "funds" is one with too much time and money on it's hands. Therefor it seeks out new and devious ways to diddle with the citizenry. Those without the funds, the mechanisms, or desire, are the best places to be left alone and live the most "free" sort of existence. Major nations are a major "threat" in ways we can only imagine.

  5. Hey guys, I was wondering if someone could help me. I've recently been looking into moving to the Netherlands some time in the distant future and I was wondering if someone could tell me if this would be a financially sound decision. By this time I will my PhD in Psychology and making a moderate amount of money. As mentioned above Netherlands is fairly small, however it is an extremely wealthy country (size considered). Would someone with my type of job training be able to flourish in this type of economy or should I look for greener pastures? If I can make a reasonable living I would like to move there, but only if I could live comfortably.