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Hong Kong

UK: The Potential for Productivity

HSBC has decided to keep its headquarters in London after Brexit. Given HSBC's historical ties to Hong Kong, that is no surprise.

Hong Kong shows that even a tiny island with slightly less government than its surroundings can become an economic powerhouse. Having less government than China turned this island into one of the dominant business, financial, cultural, and trade centers in the world.

Hong Kong's per capita income is around $35k a year. China's is recently UP to a laughable $7k a year.

Hong Kong is full of wealthy and productive entrepreneurs and businesses. The few wealthy in China are largely crony capitalists, skilled primarily at using political connections to get special favors.

HSBC knows this: It won't matter how easy the EU makes internal trade among European countries. It won't matter if the EU develops a single legal code, or a single "simplified" European language. Being absorbed into a single, monolithic, big government, overregulated, cronyist disaster will not help England. Being free to lower regulation, make independent trade agreements, and allow innovation and cultural development will.

China may succeed in reabsorbing Hong Kong, forcing Hong Kong to adopt China's inflationary currency and dumbed down language, in the hope that doing so will bring Hong Kong's skill and wealth into China. But the main advantage that Hong Kong has that China doesn't: less government. If you add Chinese cronyism, state propaganda as "education", and inexplicable central planning (e.g. ghost cities) to Hong Kong, you'll just lower Hong Kong to China's level. Or you might just empty it of talent, as all the productive people leave to seek opportunities where hard work and innovation pay off.

During the last decades, the EU has partially succeeded in doing just that with the UK. It turned one of human history's most vibrant centers of innovation into a backwater of welfare socialism and crony capitalism.

The UK has the incredible opportunity to become Europe's Hong Kong. It must first reject any bad trade deals with the EU. The EU's "free trade" is nonsense. It is, in fact, highly closed trade. It's free trade and movement of labor within Europe, in exchange for massive restrictions on trade and movement of labor from outside of Europe.

The UK should seek trade relationships with productive, capitalist(ish) economies like the U.S., not with Europe's hubs of laziness and socialism. Second, it must reduce its own regulation and taxes. It can become a place that attracts and keeps entrepreneurs and innovative businesses, instead of repelling them as it does now.

If the UK remains courageous, rejects restrictive trade deals with nonproductive countries, refuses to bail out foreign nations, and lowers its own taxes and regulations, it can become to Europe what Hong Kong became to China.

In Liberty,

Arvin Vohra
Vice Chair
Libertarian National Committee

Sell Sovereignty Rights

Imagine if you knew someone with a house made of solid gold. Imagine if he had run out of food, and had no income. Would you buy him food for the next ten years? Or would you suggest he sell a small piece of his house, and pay for his own food?

Right now, many countries are in a similar position. Venezuela and Greece are the most well known, but dozens of other countries are struggling and demanding foreign aid.

But the fact is: they don't need foreign aid. They all have large quantities of the most valuable resource on earth: sovereign territory.

Normally, when you buy land, you don't also buy sovereignty rights. You cannot treat your house like a private country, setting your own laws, regulations, and taxes.

But any country can theoretically sell you those sovereignty rights. Sovereign rights over land have been sold many times in history. Obviously sovereignty rights are much, much more expensive, but that just makes them a great way for desperate countries to quickly raise capital.

Most countries have huge amounts of unused, state-owned land. Selling sovereign rights to that land to private companies would quickly raise billions of dollars in capital. For some countries, the sale of a small piece of sovereign land could eliminate their entire debt.

Other countries might consider selling sovereignty rights to current property owners. Those who already own large amounts of land or developments could also be interested in purchasing sovereignty rights.

Of course, the creation of new, private countries would benefit everyone else. How much would a hundred new Hong Kongs help the global economy? As private nations competed with public nations to offer better services, lower taxes, and lower regulations, it would force all countries to improve.

Citizens would also have more choice. You could choose to live in a private nation in which all drugs and all alcohol were banned. You could live in a nation where everything was legal. Because private countries would be smaller than public ones, you could easily leave or avoid countries whose rules you found objectionable.

Some private countries would look like Hong Kong. Others like Monaco. Others like Silicon Valley. And there would be plenty like nothing we've ever imagined before.

The U.S.government should first stop all foreign aid, and stop any direct or indirect funding of the World Bank or IMF. Then, encourage countries to sell sovereign territory, allowing the creation of many more private nations. Finally, we must politically pressure our own governments to extend preemptive and immediate diplomatic recognition to all new sovereign nations.

The benefits: more money for desperate nations...without IMF strings attached. More choice for citizens who want to move to an innovative, new nation...or a very traditional, conservative new nation. Many different experiments in governance, as we find new and better ways to run countries.

Small, private, entrepreneurial nations will revolutionize and improve governance just as much as small private entrepreneurial companies have repeatedly revolutionized and improved business.

In Liberty,

Arvin Vohra
Vice Chair
Libertarian National Committee