Is the Liberland Experiment Viable?

By Jeffrey Tucker
May. 18, 2015

It's easy enough to dismiss the idea of Liberland as a far-flung libertarian scheme. We've been here before, as the history of the Phoenix Foundation shows.

Anyone can come up with dozens of reasons why it cannot and will not succeed. But all of this misses the point. The importance of Liberland might be entirely symbolic, but symbols are hugely important to our future of liberty. For the world to imagine the possibility of a truly free country is the beginning step of making it a reality.

Liberland came about in April 2015, when Czech political activist VÃt JedliÄka proclaimed its existence in a disputed territory between Croatia and Serbia. A three-mile area of land on the Danube river, uninhabited, was not under the control of any nation when JedliÄka put up a flag, announced a constitution, and laid out the terms for a truly free society. He and his colleagues have sought international recognition, and the international press has been curious and generous.

Within 30 days following this announcement, governments adjacent to the property blocked access, JedliÄka has been detained, and the prospects of a new nation coming into being suddenly look grim. Perhaps this was inevitable, and it is not impossible to see this as a temporary setback. Implausible things can happen in a time when many people in the world are rethinking the traditional model of the nation state.

Absent outside political intervention, is it possible that Liberland can actually be a viable nation with a thriving economy? Absolutely. There is no doubt about it. With true free trade with the world, such a place could operate as a kind of tax and regulatory haven, attracting massive capital from around the world, not to mention residents who are escaping despotic states from all over the world.

Three miles is an excellent size. It is larger than the Vatican and comparable to the typical city state in the late medieval Germany. It is larger than many set-aside communities in large cities around the world. Sao Paulo, Brazil, has private territories within it that includes apartment complexes, shopping centers, and sport facilities. In Florida, the community of Ave Maria is about the same size and aspires to be full-service community. In my own town of Atlanta, a territory of two square miles has been established with a private security system plus public access to become one of the most beautiful and thriving districts in the entire town.

Liberland could actually become a model for the whole of Europe on how to generate a civilized prosperity. There is nothing there but trees today. But under the right institutional conditions, a place like this could become a miniature Hong Kong in a matter of a few years. Without the strictures of regulation, taxation, and unsound money, a place like this could show the entire world how freedom and private property can be the basis of a sustainable and prosperous peace.

In the past, micronations like this were hobbled by the question of which currency to use. If it adopts the currency of some other nation state, it will forever be subjected to the whims of foreign banking and political elites. Such a restraint on a micronation will always be a compromise in its political independence. Its currency will be the lever that imperial nations will use to assert control.

But today, we are in the age of cryptocurrency. Bitcoin, for example, is a truly private currency, under the control of no nation and no central bank. Its creation rate and management policy is governed by an open source protocol rather than the arbitrary dictate of a board. This allows cryptocurrency to become an ideal money for a newly formed micronation, permitting trade with the world without the imposition of outside political control. In fact, the invention of cryptocurrency (the working model of which was only released in 2009!) makes such experiments more viable than ever before.

What's more, trading with a nation that uses Bitcoin would be more efficient and viable because Bitcoin is already an international currency. There is no U.S. Bitcoin, Japanese Bitcoin, or Brazilian Bitcoin. There is only one and it belongs to the whole world equally. In this sense it operates like the gold standard did in the 19th century century.

What about security problems? Wouldn't neighboring states or other imperial powers forever threaten such a micronation, so long as it did not have a military? Perhaps but this is not inevitable. Think of Costa Rica today. It has no military at all, and stands at every moment in a state of perfect vulnerability to attack. And yet such attacks do not come. Why? Because Costa Rica prefers a policy of peace with the world. Any nation that interfered with its sovereignty would be promptly denounced and decried by the entire international community.

It could be the same with Liberland — a country that truly minded its own business. It's true that such a country would always be vulnerable to invasion, but it is also true that such a country could inspire a new ethos of non-intervention. The more expansionist the foreign policy, the more it breeds enemies (U.S., Russia, Israel, for example), and, similarly, the more peaceful a country is and the more valuable it is for world trade, the fewer people in the world have the desire to invade it.

So what are we to make of the existing panic on the part of Serbia and Croatia toward Liberland? Perhaps these two states, as much as they have struggled with each other for many centuries, do not want to permit this experiment in human freedom to exist as a model for the world. How long with this kind of belligerence prevail in the world? It can work for a time, but not for the long run.

We live in a digital age that is gradually but systematically breaking down the central relevance of borders, old-style nation states, and arbitrary lines drawn on a map that politicians call countries. Technology permits new forms of geographically non-contiguous engagement in commerce, communication, and law. A territory of only a few square miles can indeed become a viable nation, a refuge for those who seek true freedom, and a model for the rest of the world to follow.

Liberland might indeed fail in the short term. But as an idea and a dream, it has long-term viability. Old-style political systems and political maps will not forever be stuck in the past. Change is possible. It takes visionary steps such as Liberland to help push us forward to a future of liberty.