If I was a billionaire I would probably buy Nauru[1], it's a 21km2 independent island state with <10k people and GDP ~30M$, which comes at 3000$ per capita. I would offer 50.000k$ to every citizen (more than they will earn in 15 years), which comes down to 500M$, to abdicate authority trough democratic process and move off the island (or possibly stay and work for me). Then build your own benevolent dictatorship that's already recognized internationally as a state.
You'd have to be creative with the economy. Nauru is literally made of shit. The phosphate-rich soil has been basically completely mined, so it has very little natural resources. It's very expensive to have humans living on an island with little natural resources. You'd have to be very creative in your business model to make this work. But I imagine that's your point entirely: the business model would be founded on the "benevolent" dictatorship which would have the latitude to create a completely unique economic system that could attract particular types of business ventures.
IMO you could afford to build high tech self sustaining enviroment for <50k people easily, a few micro nuclear reactors [1] would provide enough electricity, hydroponics, seafood farming, or advanced things like protein from bacteria/algae protein for food production, import the luxuries. They seem to have drinkable fresh water source, and with enough power and cash desalination is viable.
The fantasy business model would be to be rich enough to be able to personally cover these costs and establish a high tech R&D environment :) I'm not suggesting that this is actually possible, it's one of those things - what would I do if I had Bill Gates kind of money.
This sounds like an extremely high-cost environment. How would you compete with high tech R&D centers around the world that may have 1/10th or 1/100th the costs? I'm not saying you can't compete, but I think you'd have to offer something (1) that you couldn't get anywhere else but Nauru and (2) is in very high demand.
(And by the way, not trying to rain on your parade; on the contrary, I find this discussion fascinating, so thanks for starting it.)
You'd be fine. Just let the inspectors in and be super-transparent. Plenty of people have research reactors, and if you aren't a belligerent theocracy, you shouldn't have much of a problem. Just play nice.
Micro nuclear reactors don't have weapons grade uranium/plutonium in large quantities, AFAIK at best they could be used to build a dirty bomb. And what would be the point of that ? I'm not proposing building a religious sect, just a society of hand picked individuals from different fields, like engineering, natural sciences, architecture, arts etc.
My undergraduate institution (Reed College) has a student operated nuclear reactor on campus. No weapons grade nuclear material, and it wouldn't make a very good dirty bomb either. However, it's useful for bombarding things with neutrons and it does give off a pretty blue light because of Cherenkov radiation: http://en.wikipedia.org/wiki/Reed_Research_Reactor.
Given Nauru's isolation and exposure to the elements, I'd
rather install a couple 7.5MW Enercom wind turbines, a few
MW worth of solar panels and maybe a tidal generator instead
of a nuclear reactor.
Ok, fine. So you're a billionaire with an island nation state and (presumably) a private army to protect it. As a business owner, I then have the choice of doing my business in a major Western democracy with an elected government that is publically answerable to millions of people, or subjecting my business to the whims of an eccentric billionaire with his own private army who is answerable to no one.
If you want to do that with your own billions, have at it. But I wouldn't want to locate a business there, do business with you, or even go to work for you, an employer from whom I could have no possible legal recourse in the event of a dispute.
> an employer from whom I could have no possible legal recourse in the event of a dispute.
That part is easily solved: the dictator can put up a bond in some trusted country. The bond is forfeited if the dictator betrays you. The contract laws of the trusted country apply.
It could be that some enterprising dictator could gain a better reputation for respect of property than the US government[1]. A reputation for respecting property rights, combined with a country, is an extremely lucrative asset, and it would be costly to lose it.
> As a business owner, I then have the choice of doing my business in a major Western democracy with an elected government
If moonchrome can offer a better regulatory environment, you might prefer to do business with him. Maybe your business is melanoma detection. HN user danifong approached YCombinator with that idea, and Graham told her[2]: “The trouble with the melanoma detection idea is that you’d spend most of your time dealing with legal and regulatory crap. That sort of work doesn’t really take advantage of your skills.”
For all the issues that can crop up with property rights around the margins in the US, the EU, and any other established democracies, doing business in a country where decades or centuries of history has established a strong general belief in property rights and the rule of law gives you a very strong set of baseline protections. Abandoning that for a brand new country where what one guy says goes introduces a whole new kind of risk that most of us here at HN are not used to dealing with and factoring in.
For example, requiring a dictator to post bond is all well and good until he decides at some point while you're within his borders that he's going to (a) kill you, in which case collecting on the bond won't you much good, though it will soften the blow for your investors, or (b) start cutting off toes and fingers until you release the bond. (Obviously you could structure the bond in such a way that option (b) is unworkable, which means that it either becomes a straight up hostage ransom situation, or reduces to option (a).)
Even given all of that, you're right that it still might make sense to do business there for a particular kind of business given a particular risk tolerance. It might well be an experiment worth trying. By the same token, if you develop a new kind of versatile routing software that does an especially good job of finding the optimal approach to trying to route materials past someone who is actively trying to stop you, selling it to Mexican drug lords might be an experiment worth trying. Just make sure you have a really good idea what you're getting into and that the risks to your person as well as your business are worth it to you.
That's basically what happened in Sealand (discussed in the article). HavenCo moved there to be supposedly free of government intervention, but instead what they found was that they were subject to the whims of a very small, very eccentric government. In 2003, following a dispute between HavenCo and Prince Regent Michael (the acting Sealand head of state and head of government, standing in for his father), HavenCo was "effectively nationalized"; Sealand's government took operational control of its servers, and everyone else associated with the company had their visas revoked.
Exactly. The premise that you can allow businesses to operate outside the interference of government by setting up a new government is a category error.
>If you want to do that with your own billions, have at it. But I wouldn't want to locate a business there, do business with you, or even go to work for you, an employer from whom I could have no possible legal recourse in the event of a dispute.
It sounds like you are risk averse and probably don't share the goals, wouldn't be swayed by the value proposition - so you wouldn't move there. It's true that there would have to be trust in the person doing this, but I'm assuming the billions didn't drop from the sky and I have done something to earn them, the process of getting them should provide plenty of material to evaluate my trustworthiness. Trusted third party insurance is also an option.
> I would offer 50.000k$ to every citizen to abdicate authority trough democratic process and move off the island (or possibly stay and work for me).
History teaches us that there will always be hold-outs and that the most effective way to achieve this goal is through brute force. This is how the U.S. base in Diego Garcia came to be. The islanders who lived there were forcibly deported from their homes in the 1970s by the British who owned the islands.
>History teaches us that there will always be hold-outs and that the most effective way to achieve this goal is through brute force.
That's assuming you want them all of the island and that you need everyone's consent to take over, you just need the majority to be take power trough democratic process and the few that wish to remain could be employed/incorporated in to the state.
True. And yes, please keep thinking of alternatives to brute force. :)
I recently read a fascinating book called "Miles from Nowhere" which described life in the least populated counties in the U.S. One recurring theme is that counties with almost no one living in them are subject to being taken over by groups with their own agenda. For example, a county with only 150 people in it might be the target of a group of libertarians. 800 libertarians may agree to move there to set up a libertarian government. The point the book made was that virtually uninhabited is very different than uninhabited, and that there are still people there who have wishes, dreams and rights of their own.
So what you are describing is actually an act of force. Overtaking Nauru for your own purposes is a unilateral destruction of someone's home. Imagine for some odd reason the entire population of China decided to buy out and relocate to your city and turn it into a Chinese culture and economy. You may have nothing against the Chinese or Chinese culture, but you may wish to simply keep your home city as is.
Democracy is often thought of as peaceful, but it can often be a vehicle for the majority to disregard the legitimate needs of the minority.
Looks like a really interesting book - they do cover the remote bits of Oregon, right? There is some incredible country out there - it can feel a bit creepy to be so far from anything.
Yes, the "empty quarter" or "outback" of Oregon is mentioned, especially the amazing challenges of census workers in the region.
If you like geography, this book is a good read. It's a bit dated, having been written in the early 1990s, but this, in my opinion, turns out to be a good thing. It gives us some great glimpses of how isolated these communities were and I'm sure the Internet has since changed this considerably.
>Democracy is often thought of as peaceful, but it can often be a vehicle for the majority to disregard the legitimate needs of the minority.
But that's the system they already live in, I wouldn't change that, I would just use that system to achieve my goal. I agree that it's not completely moral but that's inherent in democracies, even with constitutions protecting the minorities, they will always be subjected to mob rule.
> You may have nothing against the Chinese or Chinese culture, but you may wish to simply keep your home city as is.
But I don't have any right to do that. I only own my own home/property; 'my' home city as a whole doesn't belong to me. Attempting to control what my neighbors may do with their homes and what kind of social arrangements they'll be allowed to participate in, to the point of trying to exclude entire ethnic groups from settling within some arbitrary boundaries - simply because I feel some personal sense of propriety over what doesn't actually belong to me - is the more direct and clear act of brute force here.
> Overtaking Nauru for your own purposes is a unilateral destruction of someone's home.
No, it isn't. Unilaterally destroying someone's home is a unilateral destruction of someone's home. Purchasing people's homes with their consent, and leaving alone those who don't want to sell, isn't destruction of anything.
I would imagine that the UN woudl say that any contract "to abdicate authority through democratic process " would be invalid and unenforcable. - they will point to the enableing act on 36 in germany and the UNDHR.
For example you can sign a contract to waive your rights to anual leave but its invalid and unenforcable.
In my fantasy billionaire scenario hiring PMC would be a viable option. Also, with lot's of cash to throw around - how hard would it be to build an alliance with neighboring states, bribing politicians, "friendly relations", etc. You would probably trade with them anyway, build a few facilities there to please the people/sell the story.
If the data contained on your servers is bothersome enough to the US, then their military will simply bomb your tiny state out of existence, which is made even simpler if there is no one around to stand up for you. I've had this idea, both in the form of a small country, like yours, and in the form of a large ship, forever sailing the world's oceans, never docking anywhere, but both are easy targets. Far up in space or deep down in the ocean are likely the only good scenarios, and neither of those is cheap or easy.
[1] http://en.wikipedia.org/wiki/Nauru