Dateline: Wroclaw, Poland

When I was five years old, my grandfather gave me a chipping stand-up globe. I would spend hours studying the geography of faraway places around the world, staring in awe at the expanses I knew nothing of.

That globe, from the 1950s, contained countries like the USSR and British Honduras. Few of the tiny countries that dot the European continent existed.

Of course, the socio-economic picture was much different when that globe was made, as well. Burma was one of the wealthiest countries in Asia, as the military junta that trampled its economy had yet to take over. Hong Kong was still long to be a part of Britain while neighboring Macau belonged to Portugal.

Just sixty years ago, there were far fewer countries than there are today. In fact, even the redrawn borders after World War II created a world with fewer than half the number of sovereign states that exist today.

As South Sudan declared its independence from Sudan in 2011, the number of sovereign nations hit 195. In the 1950s, that number was only 95. As the century rolled on, that number gradually increased.

Today, there are countries around the world that want to secede from their government and form their own nation; one that suits the needs of a local group of people, not some unaccountable government in a faraway capital.

From here in southern Poland, you could throw a stone and hit countries that exist today as the result of secession movements. Fed up with unaccountable big government, their local leaders wanted to secede.

Crimea: a reminder that borders change

Of course, Crimea is the most recent story that suggests what the future of countries will look like. The autonomous region of Ukraine recently voted in favor of breaking away and joining Russia.

It is easy to forget that the lines on the map are redrawn fairly often. Boundaries are relocated and countries become larger and smaller. Sometimes, countries are renamed or disappear entirely. The trend as of late — one I happen to like — is for smaller countries and away from large empires that swallow up smaller countries whole.

And I believe this trend is bound to continue.

In the United States, secession is treated as a taboo topic for conspiracy theorists. No one “serious” (read: those who buy mainstream media propaganda) actually believes any state ever could or should secede from the Union.

We frequently discuss the concept that The Land of the Free’s insularity is such a big part of what is hurting it. If Americans looked to the countless secession movements going on around the world — and the successful ones in recent years — they might be inspired to take action.

After all, in a world where Singapore, with all of its 273 square miles of land, can become the richest country on earth, why couldn’t Texas be a real economy?

Why I like secession and new sovereign states

I’m a firm believer that if we must suffer under corrupt governments that steal our money and deprive us of freedoms, those governments should be as small as possible. Through a concept that I call “government arbitrage”, we can pit smaller governments against one another to get the best deal for ourselves.

Smaller, more fragmented governments create a truer “free market” in the sense that those governments are forced to compete for foreign capital and talent. One hundred years ago, Singapore was a malarial swamp. It is where it is today because it understands my “five magic words”: capital goes where it’s treated best.

For example, my lawyer friend who handles citizenship by descent cases for those with Irish and Italian heritage is already excited about the possibility that a sovereign Scotland would offer a similar program to offer citizenship to those with Scottish heritage. Getting a British passport is nearly impossible unless your parents are from the UK, but an independent Scotland may just offer one more internationalization option.

While some breakaway republics want the ability to run up more debt and spread socialism further than their current government allows them to do, I believe the creation of many new countries would increase the number of jurisdictions worthwhile for offshore banking and offshore financial centers.

When governments compete, you win.

Countries that want to secede from their government

Scotland (from the United Kingdom)

Scotland was an independent nation until a 1707 National Referendum made it a part of the United Kingdom. After years of prosperity, Scotland was a kingdom in crisis by the early eighteenth century. An imperialist land expansion plan, coupled with the “Lean Years” of poor crop harvests, put its future in jeopardy. Finally, Scotland was forced to join with King William after losing a quarter of its liquid capital in a botched investment.

Today, Scotland is one of four “home countries” in the UK. However, on September 18th, it will vote in a secession referendum and decide whether it wants to remain part of Her Majesty’s union or become an independent nation.

Of course, the United Kingdom has been rather passive about declarations of independence from its colonies since the mid-20th century. While some colonies, such as the British Virgin Islands, have become British Overseas Territories, plenty of nations in Africa and Asia have become fully independent.

Scotland has a very valid reason to favor independence: huge oil and gas reserves in the North Sea. Scottish separatists favor using a model similar to that of Norway, which has the world’s largest sovereign wealth fund (and owns 1% of the world’s stocks) as a result of saving proceeds from its huge oil reserves.

Scots argue that not only has the UK poorly managed the oil resources in its seas but also that the Scots are getting less in return than they pay into the British system. After oil, Scottish oil reserves comprise an estimated 94% of all of Britain’s petroleum wealth.

It is believed an independent Scotland would be a more active member of the European Union and likely adopt the Euro currency.

Venice (from Italy)

For 1,100 years, Venice was its own self-governing republic. In fact, it was one of the first republics of the modern world. Works such as The Merchant of Venice describe the thriving economic conditions of the day, as Venice defeated rivals such as Genoa to become the most prosperous Mediterranean republic. At the height of its power, Venice stretched as far south as Greece.

In the mid-19th century, a series of wars crippled Venice, and it eventually became “reunited” with Italy in 1866. Talk of a Venice secession movement has been heating up lately, but Venice’s desire to be free from the Italian government goes back many years. In fact, Venetian nationalism is substantial.

Venetians want to secede from Italy for one main reason: economics. Venetians send €71 billion to Rome every year, only to get €50 billion worth of services from the Italian government. Like any other host tired of supporting a parasite, Venice has grown tired of “supporting the poor and crime-ridden south”. So much so that 89% of Venetians recently voted to create their own sovereign state, which would be named “the Republic of Veneto”. Imagine the tourist and finance dollars flowing into that new country.

Such an overwhelming vote should be hard for Italy to ignore. We’ll have to see…

Venice’s secession desires have already encouraged others in Italy to consider seceding. Sardinia now has plans to have a referendum of its own, and the three other regions of Italy, including Lombardy, are also considering secession referendums in the future.

Catalonia (from Spain)

Catalonia has been seeking to break away from Spain for years. It’s been a bitter, bloody battle as Spain seeks to control the region that includes the city of Barcelona. And the Spanish Parliament just recently blocked Catalonia’s opportunity to vote on secession. It wasn’t even close. Spanish lawmakers claim that all of Spain, not just Catalans, have the right to determine whether a region can break away from Spain.

Catalonia was once a kingdom in Europe but eventually fell under the rule of Spain in 1714. The province has its own customs, traditions, and Catalan language, separate from Spanish. Catalans have been seeking independence for almost a century now and experienced brutal treatment under the Franco regime, which shut down “home rule” and the right of provinces to practice self-determination.

However, a recent report suggested that the European Union would be very flexible in allowing newly sovereign states like Catalonia to retain EU membership.

Spain, which is reeling from economic sluggishness and high unemployment as a result of its dreadful economic policies, can’t afford to let Catalonia go. Beyond that, Spain actually wants to retake territories that long ago left its possession.

The principality of Andorra, one of my favorite offshore banking jurisdictions, is a microstate between Spain and France; Spain believes Andorra should be reunited with Spain. The Spanish government would also love to see Gibraltar back in its clutches, even though Gibraltar is perfectly happy as a British territory.

Quebec (from Canada)

Like Catalonia, Quebec has a separate language from the rest of its country. While Quebec secession has calmed in recent years, there is still a sizable minority there that favors breaking away from Canada. A separatist party in Quebec got trounced in recent elections, but that doesn’t mean that locals are in love with the Canadian government.

In fact, a 1995 referendum on sovereignty for Quebec failed by one percentage point. Those in favor of secession argue that preserving Quebec’s distinct cultural heritage is important and that Quebec was only acquired as a result of a land swap between the British and the French when Canada was under colonial rule.

Transnistria (from Moldova)

Moldova, which was originally part of Romania, is a breakaway republic in and of itself. It’s also the poorest country in Europe, and one of the most miserable countries on earth according to the excellent book, The Geography of Bliss. However, this secession nation has a breakaway republic of its own: Transnistria, also called Transdniestria.

Transnistria claimed its independence from Moldova in 1990 and fought a war several years later to force the point. While Transnistria is not recognized as a sovereign state by any international group, it largely operates as one. Transnistria’s desire for independence stems from fears of its ethnic culture being washed away; since Moldovans are essentially Romanian, the Russians of Transnistria claim fear of persecution.

Of course, I could go on and on: from Scotland to Serbia, countries around the world want to be independent. Not to mention the more than 100 countries that would result if every American secession movement was successful.

Why secessionist movements make sense

The “leviathan” model that countries like the United States and the European Union have employed have proven not to work. Large, unaccountable bureaucracies set policy for the peons out in the hinterlands. Resentment against government is at all-time highs, while tyrannical governments are dreaming up more and more ways to keep those peons down.

The capitals of these large countries contribute little, if anything, to the greater economy. In The Land of the Free, Washington is awash in money it stole from the people that are actually productive: the resource producers, the small business owners, the innovators.

That’s why governments don’t like secession movements. Secession means a loss of power for Big Government. Small nations have small governments and fewer resources to drone three-year-olds in Yemen, or to send IRS agents chasing after a guy who lives overseas and doesn’t report his local checking account.

After all, enforcing draconian Big Government laws requires… well, Big Government.

Smaller nations can’t push their neighbors around so easily, nor can small nations demand that other nations impose laws like FATCA on their banks.

That’s why secession movements have a habit of being brutally suppressed. When people just want to be free and live under their own local government, Big Government gets angry and sends the military in. It’s happened in Iraq, Indonesia, Russia, and Tibet.

The cold, hard truth is that smaller governments have better track records of managing their finances, as well. Critics will say that tiny countries in Central America or Africa have had issues with high interest rates and sovereign debt. However, Singapore is running budget surpluses. The countries mired in red ink are the big, imperialist powers.

Singapore, Switzerland, and others of their ilk have better things to do.

That’s why secession is a key stepping stone in the future of self-determination and sovereignty.