[Thanks go to Spencer MacCallum for some needed corrections and edits on 14 February 2004.]

To: ba-liberty
From: Jeff Chan
Date: Fri, 13 Feb 2004 03:07:35 -0800
Subject: Re: [ba-liberty] 2/12: Spencer MacCallum on Freedom Islands

Hi All,
Let me preface this by saying that I didn't comprehend it earlier, but now I'm staggered by what I heard tonight. Seldom does one get to hear living libertarian history directly from people who participated in it (OK, OK, I don't hang around at ISIL conferences or LP conventions enough...). This was an intriguing and stimulating talk, even if I don't necessarily agree with all the details of the approach. It probably helps that this particular area of libertarian thought, of establishing a free nation somewhere, has been rattling around in my own head for the past decade or so.

I don't believe a recording was made of the talk, and I was unable to grab a recorder before I went over, so I'll try to give an overview of what Spencer MacCallum discussed. Not sure if transcripts will be made available, as was the case for some of the prior talks. (Note that the following are my own imperfect recollections and words and not an exact transcription or direct quotes from the speaker, except where noted.)

Spencer MacCallum is a social anthropologist now living in Tonopah, Nevada who has consulted with different new country or free nation projects over the years. He estimates there have been a dozen or so new libertarian nation projects over the past two decades. None have yet succeeded, although some are still active.

He began by introducing the idea to the mainly economics undergraduate students and some Civil Society Institute members at Santa Clara University the idea of entrepreneurship in a truly free economy, one without government. MacCallum proposed the idea that private enterprise could provide all the features commonly associated with community without government involvement. (Even with an introduction from Economics Professor Daniel Klein that this was a fairly different way of looking at traditionally public goods and economy, I got some impression that the ideas may have been a little beyond or too alien to some of the audience, but that's probably to be expected. On the other hand it's good to stretch some minds, hoping some were engaged.)

MacCallum cited Hong Kong as an example of a relatively free economy that has raised itself up from third world conditions at its founding to a standard of living comparable to first world nations. He attributes this remarkable transformation mainly due to policies of a very free economy. This environment has allowed millions of people to lift themselves up to prosperity. Hong Kong's British Financial Secretary from 1961 to 1971, John James Cowperthwaite, was largely responsible for creating and maintaining relatively very free market conditions favorable to growth and individual prosperity.

MacCallum consulted on several free nation ventures, especially Werner Stiefel's Operation Atlantis and Michael van Notten's Awdal in Somalia. He gave a brief overview of these two projects and his contributions to them.

Operation Atlantis was the brainchild of Werner K. Stiefel leader of a family-owned dermatological soap business, Stiefel Laboratories, Inc. The company was founded in Germany, but Stiefel fled Nazi Germany as a refugee with just the clothes on his back. Having seen the horrors of the Nazis and the relative safety and freedom of the United States, Stiefel became concerned as he observed that the U.S. was slowly but surely moving towards some of the problems that befell Germany. (MacCallum didn't cite specific grievances, but one can assume Stiefel noticed rising taxes, greater government control of the economy, a growing police state and permanent military establishment, etc.) Recognizing that if the U.S. came to similar ends that there would not be another place to flee in pursuit of greater freedom, he endeavored to find a way to create such a place.

Stiefel's observations were influenced by Ayn Rand's novel Atlas Shrugged, and with some of her ideas in mind he sought to make a place where a "Galt's Gulch" could exist. After much discussion and thought he settled on the idea of creating a ship to ply Caribbean waters, practicing free enterprise while artificially filling in a shoal to create a new land in international waters in the Caribbean.

Stiefel assembled a group of volunteers in the upstate New York town of Saugerties. There at the Sawyerkill Motel the volunteers held informal Freedom Forum talks on the nature of freedom and began to build a ferro-cement ship to be a first home of Operation Atlantis. The group had little ship building experience, so their challenges were plentiful.

If the group could succeed in building this ship together, they would demonstrate their ability to work together and accomplish goals. The ship was eventually built and sailed to the Caribbean. Landfill operations began near the Silver Shoals area, but the project stalled when the ship was lost in a storm.

Undeterred, Stiefel contracted with Haiti to set up a freeport operation on their island. Some progress was made until the government of Haiti perused a copy of Atlantis' newsletter. Deciding the group's goals were "politically incorrect" the government of Haiti cancelled their lease.

Next Stiefel got an offshore oil platform and towed it into position as a base for Atlantis. It eventually was lost in a hurricane.

To MacCallum, the most interesting question that came in initial discussions with Stiefel was about the form of government for such an operation. Rather than form a government, MacCallum proposed a model of multi-tenant income properties, where properties would be leased out, and leaseholders would be responsible for developing the properties. Unlike a subdivision, leased properties mean the lessor retains a continuous and ongoing economic interest in the property and thus has an incentive for it to succeed.

MacCallum cites hotels and shopping malls as private properties that have all the aspects of communities, such as transportation (e.g. elevators as a collective but private good), security, common areas, etc. As such there is no reason community cannot be developed by purely private means. MacCallum's book "The Art of Community," which is available from him, addresses this concept.

In order to codify these concepts for Stiefel, MacCallum was engaged to create a master lease for the properties. In the end, the master lease became in effect a private constitution for a fictional community in space called Orbis. The Orbis constitution has taken on a life of its own and more than a dozen people have actively participated in developing it. Copies of the Orbis Constitution are available by email from MacCallum at sm@look.net-nospam (take off the -nospam). An introductory essay about the Orbis constitution can be found online.

A slightly differing account of the earlier parts of Atlantis can be found in Start Your Own Country, a somewhat sketchy book from Loompanics. The oil rig period of Atlantis and perpetuation of the Atlantis constitution in the form of the Orbis constitution was news to me.

Another project MacCallum consulted on was an enterprise for a stateless enclave in Somalia for Michael van Notten. The project was to be carried out by Awdal Roads Company, and it was proposed by libertarian international law attorney van Notten in consultation with the Samaron clan in Northern Somalia. MacCallum has published an article about this venture in The Foundation for Economic Education's journal The Freeman called "A Peaceful Ferment in Somalia" (revised local edition here).

Somalia has been functioning very well, prospering actually, without a central government in the decade since they dismantled their previous corrupt, internationalist government. Many African tribes are fully comfortable with and capable of providing for their needs entirely without a central government. [They've probably been providing for themselves for longer than the modern concept of government has existed. -- Jeff C.] Their own form of contract law and the general blessings of free trade are implicitly already understood in Somali culture. [As an aside from Jeff, much of the misery, suffering and death in Africa have been *caused* by oppressive, corrupt, socialist-influenced, central governments. It's unfortunately what they do best.]

MacCallum reports that exports from Northern Somalia are now five times greater than when the central government was in place, and trade with neighboring Kenya has doubled. Reports from the mass media, which sides with those who wish to impose a central government on Somalia are somewhat less than reliable. It's little surprise that Somalia's "economic miracle" since shedding the central government is not widely reported since that knowledge would threaten the status quo of other centralized governments.

So the Samaron clan asked van Notten and (indirectly?) MacCallum how they could bring their clan into the modern world *without* the domination of a central government. MacCallum advised that it was possible and could be done, but had never been done before. For structure MacCallum brought out the Orbis constitution and suggested a similar structure for this enterprise. The clan could lease out portions of their territory on a long term basis, say 999 years, as multi-tenant income properties.

It was felt that although most of the leaseholders would be Asian or European, there could be little discrimination against Africans since they would be in the dignified position of ultimate landlords. Because the Samaron are a traditionally stateless society, the leased enclaves would enjoy total economic freedom and could become prosperous like Hong Kong. They would offer many training, educational, and business opportunities for the Samaron to pick and choose among; they would become their stepping stone into the modern world.

A key would be the development of freeports. Since Somalia has a long coastline and neighbors like Ethiopia are landlocked, the first project proposed was a toll road between Ethiopia and the coast. As traffic increased the clan would recognize a benefit from the road and gain confidence in the company and its proposal to improve the port facilities on the coast and develop them as freeports. (In ISIL reports it was proposed that service stations, lodging facilities, etc. could logically be developed along the toll road.) If the road worked, larger portions of territory could be leased out, up to the size of a Luxembourg.

MacCallum mentions his observations and those of others that democracy failed as a structure imposed on top of the Somali clan system. Given a vote, Somalis tend to vote along clan lines. Whichever clan got the reigns of government would use the army and tax collectors detrimentally against other clans and to the benefit of their own clan. This destructiveness is part of the reason the Somalis deliberately dismantled their previous government.

The lack of a central government in Somalia was very "unsettling" to the United Nations and United States. Despite the fact that life was improving and the Somalis were well-capable of providing for their own needs with their pre-existing clan system, the U.S. and U.N. felt compelled to impose a central government. Between the two of them, they launched 14 attempts at a cost of billions of dollars to re-establish a central government. Today there is no central government in Somalia.

The Awdal project received a blow when van Notten unfortunately passed away in 2002. In addition, when Al Qaida ties in Somali were alleged, the United States threatened to bomb all of Somalia's ports. With threats like that, investment in the Awdal project became less attractive, though I note their web site is still active.

MacCallum is editing for posthumous publication a book by Michael van Notten, The Law of the Somalis: A Stable Foundation for Economic Development in the Horn of Africa. It describes the existing natural law structure of Somalia.

MacCallum finished the prepared portion of his talk with a list of strategic suggestions for a successful "island of freedom":

  1. Keep a low profile.

    Haiti kicked out Atlantis when it heard their libertarian pronouncements. I argued that a successful venture would inevitably stir attention.

  2. Project must be non-ideological. It should stand on its own economic merits. Entrepreneurship should be grounded in a sound business plan.

  3. Locate outside of existing political jurisdictions. Examples include Somalia, possibly some countries with weak governments, or on the ocean. Space, Ocean floor, Antarctica probably require technology that's still in the future.

    MacCallum mentioned the Freedom Ship project, a huge community at sea with 20,000 housing units. The ship would be near an existing country with shuttles between them every 15 minutes. Housing units would cost $180k to $2M all the way up to $44 million.

    Audience member Patri Friedman mentioned the Residensea project, with the large "The World" luxury ship currently roaming the high seas, was recently bought out by the residents. (However Residensea is not promoted nor necessarily used as a tax haven.) Patri Friedman has been working on the Seastead project, which would create a new nation on ocean platforms.

    My approach would be to use smaller ships.

  4. If locating within the jurisdiction of an existing state, negotiate a freeport status with an absolute minimum of taxation or regulation. Don't purchase, but lease with an option to buy in order to:

    1. Save capital for development

    2. Decrease vulnerability by increasing ability to pull up stakes and leave if needed

    3. Create an incentive for the lessor to continue to cooperate, especially if the lessor is a government. (If all the lease fees are paid entirely up front, there is less disincentive for a government to simply take the property back by force or other means and pocket the lease proceeds.)

  5. Develop the project as a multi-tenant income property, not a subdivision.

  6. Take steps to minimize risk of becoming a target of aggression.

    1. Keep a low profile

    2. Don't look to any governments or their agencies for services. (Don't become beholden to government interests.)

    3. Sponsor world-class medical and research facilities that heads of state might want to patronize, etc.

"Whatever the outcome of these 'islands of freedom' projects, they are all valuable as heuristic exercises toward understanding the workings of a free society. They afford us not only an ideal toward which to strive, but also the possibility of significant business and investment opportunities in the main corporation or in the leasehold properties. As experiments in freedom, any of them could become the prototype of voluntary, non-political communities of the future."

A question and answer period followed. Some of the things mentioned were:

We continued the discussion somewhat over dinner, and I enjoyed the opportunity to discuss and think about these issues with others. All in all this was a very intellectually and spiritually stimulating event. It was great to meet some like-minded folks, even if we disagree about some of the details.

Prior to the event I did a little research and found a decade of research into free nations at the Libertarian Nation Foundation Included are writings by Spencer MacCallum and many others including several of the themes mentioned above.


Jeff C.

On Friday, February 6, 2004, 2:16:26 PM, Mike Linksvayer wrote:

> http://www.scu.edu/csi/
> http://www.scu.edu/csi/LectureFlyers/MacCallum.pdf (text below)
>     The Civil Society Institute
>     Presents
>     Spencer MacCallum
>     Freedom Island
>     Thursday, February 12, 2004
>     5:30 -7:00 P.M.
>     Brass Rail, Benson Memorial Center, Basement
>     Santa Clara University
>     Hong Kong is an island of relative freedom in an ocean of government
>     interventionism. Hong Kong has made the liberal blessings of freedom
>     apparent for all to see.
>     Can more Freedom Islands come into being? There are three requirements:
>     (1) A group of people and resources committed to freedom must come
>     together. (2) They must gain control of the territory that is to
>     become a Freedom Island. (3) External powers.neighboring governments,
>     the U.S. government, the U.N., etc..must not prevent the organizers
>     from realizing Freedom Island.
>     Spencer MacCallum has pursued the vision of achieving a Freedom
>     Island by voluntarily means. He has explored possibilities in Somalia
>     and Costa Rica. He has explored the idea of creating a Freedom
>     Island at sea and in space, and these possibilities become more
>     viable as technology advances.
>     MacCallum holds a bachelor.s from Princeton and a master.s in social
>     anthropology from University of Washington. He has explored these
>     ideas in his book The Art of Community and in articles in Human
>     Organization, The Independent Review, Critical Review, and Modern
>     Age.
>     Refreshments will be provided
>     If you have a disability and require reasonable accommodation, or
>     for further information, Please contact Marianne Farag at (408)
>     554-6931.  Write The Civil Society Institute at csi@scu.edu and get
>     on the CSI mailing list.
Jeff Chan