
Bitcoin paradise - peter123
http://www.economist.com/blogs/schumpeter/2013/12/libertarian-enclaves
======
nawitus
>"In the future, wars will be fought over water," he says. Two rivers border
the land, and the community sits atop 56 known water wells.

This is a meme invented by people who've read about oil wars. The problem is
that water is very cheap to produce with electricity. Desalination plants are
efficient and the price of water they produce is competitive. In addition, the
price of water per kg is extremely low. This means that transporting water
over large distances like oil is transported is probably non-profitable. It
simply means that it's cheaper (and cheap) to produce drinking water from salt
water. There are not many landlocked countries.

~~~
ozziegooen
Just curious; I've read that energy takes quite a bit of non-salt water to
produce. Energy can be used to create clean water by desalinization, but I
believe I read that this still creates less clean water than the clean water
needed to produce that energy (though this can be done in a very different
area. Would anyone here happen to be familiar with the basic numbers here?

~~~
nawitus
>Desalination plants on average use about 15,000 kilowatt- hours of power for
every million gallons of fresh water that’s produced

[http://www.bloomberg.com/news/2013-05-01/energy-makes-up-
hal...](http://www.bloomberg.com/news/2013-05-01/energy-makes-up-half-of-
desalination-plant-costs-study.html)

------
nohuck13
"As for Ayn Rand, just how much have her ideas influencedthe community's
design? Mr Johnson admits he never finished “Atlas Shrugged”. "I'm not
actually much of a reader," he says. "Watched the movie and skimmed the
Cliff's Notes, though. Good stuff."

Awesome ;)

~~~
haakon
I was reminded of this quote from a recent episode of The Simpsons:
"Conservatives only get more conservative, because every year they get a
little further through Atlas Shrugged."

~~~
badman_ting
Maybe after that they'll read about Rand's actual life.

~~~
CamperBob2
Yes, someone whose family barely escaped with their lives from a communist
state may indeed have strong opinions on the subject.

~~~
maaku
I believe he was referring to this, generally:

[http://lesswrong.com/lw/m1/guardians_of_ayn_rand/](http://lesswrong.com/lw/m1/guardians_of_ayn_rand/)

------
johnarras
Why do people think that they will have access to the Internet and there will
be massive amounts of excess computing power to waste if the world economy
collapses? Computers and the Internet are luxuries that exist because basic
physical needs are met. As soon as the Internet fails for any length of time
for a given person, that person will refuse to rely on the Internet for
anything until the world economy is back together, if it gets back together.
In the event of collapse, it will be necessary to rely on local, physical
things rather than the complex, interconnected global system we have now.

~~~
orthecreedence
And without computers, bitcoins will have less worth than sticks and rocks.
The community they're talking about can exist, but it's stupid to think it
would operate on bitcoin. Isn't that exactly what _cash_ is for? Untraceable,
has representation of value but little value itself (besides tinder), easily
broken into smaller pieces, etc. Doesn't bitcoin connect them to the very same
system they're trying to escape? Cryptocurrency has purpose/value in that it
can be easily exchanged with people all over the world fro goods and services.
If you're separating from the world, its as valuable as the magnetic strip
it's printed on.

------
betterunix
"Our farm workers and suppliers still want to get paid in pesos,”

...and where will you get those Pesos if everyone is paying with Bitcoin?
Exchanges, the real basis of the Bitcoin economy. What will happen when the
world economic system collapses? Bitcoin will collapse with it.

~~~
silverbax88
I think this is the flaw in most Libertarian logic that is completely missed,
because most Libertarians live in first-world countries.

They have this idea that they want to pay no taxes and only pay for what THEY
use, and rely on their own hard work and brilliance to succeed. But of course,
that ignores the facts that first-world countries have an entire subsystem
that supports this (roads, police, laws, enforcement), which makes their
success possible.

In reality, Galt's Gulch is running on the backs of local workers, who have
access to everything in the community. What do you think will happen if the
world was to collapse? That somehow the residents of the Gulch would
blissfully go on about their lives in tranquil happiness, smug in their
brilliance? Or would the local population, who outnumber them by the millions,
are physically and mentally stronger than they are, and who run their precious
ecosystem would simply take it from them?

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cschneid
I like that he thinks these two things hold true at the same time:

1) Nations are having wars over water. 2) Water rights matter

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dualogy
> A quirk of Chilean law makes land, mining and water rights independent of
> each other. Mr Johnson made sure to acquire all three, particularly the
> water rights. "In the future, wars will be fought over water," he says.

Sounds like he'll have to purchase some nukes next, then ;D

~~~
baddox
For obvious reasons, nuclear weapons aren't the best weapons for securing
water rights.

~~~
XorNot
Actually they are - you ensure no one could successfully _start_ the war for
water. Of course, if you need it, then it may be worth rolling the dice
regardless.

------
exit
_> You have reached your article limit. Register to continue reading or
subscribe for unlimited access._

wish i could bitcoin my way through this paywall.

------
aantthony
It wasn't mentioned in the article, but Galt's Gulch Chile was founded by Jeff
Berwick the tech entrepreneur who co-founded the Bitcoin ATM project, and also
stockhouse.com in the 90's.

------
Nursie
Good luck to them. It's not often people get to go somewhere new(ish) and try
out a new model of society.

I think a society based on Rand and/or libertarianism is a terrible idea,
likely to be brutal and darwinistic and to degenerate into feudalism. I also
think that this isn't really a model for a society based on these ideals -
lets face it, the people who are going to be going there are a wealthy subset,
not representative of much.

But good for them for trying.

~~~
collyw
Actually it would be nice if we could get all Ayn Rand followers to relocate
to their own society. Maybe the rest of the world would be a nicer place then.

------
damian2000
Here's the text of the article for those behind a paywall...

A GROUP of self-described anarchists, libertarians and Ron Paul supporters
fleeing the crumbling world economic system have founded Galt's Gulch, a
community in Chile inspired by Ayn Rand's “Atlas Shrugged”—and with an economy
based entirely on Bitcoin. Or that's the goal, anyway.

"Our farm workers and suppliers still want to get paid in pesos,” Ken Johnson,
the project’s founder and managing partner, explains. "But Bitcoin as the John
Galt coin? Why shouldn't it be?”

If the world economic system "goes sideways," as Mr Johnson puts it, residents
will retreat to their self-sufficient gated community, where they will enjoy a
shooting range, equestrian facilities, and spa and fitness center. The
6,874-hectare site (pictured) also includes a 100-hectare farm, although it is
not clear who will pick the lettuce when the world ends.

Galt's Gulch Chile—a name impossible for local Spanish-speakers to
pronounce—will also boast an innovation centre, where expatriate libertarian
dentists and chiropractors may ply their trade. In exchange for Bitcoin, of
course.

In the event the world economic system fails to collapse on schedule, however,
Mr Johnson has a plan B—his new trademark, Galt's Gulch Organics. "The farm
came with 65 hectares of lemons," he says. "The US and Japanese markets pay a
premium for organic, non-GMO produce." Plans are in the works to plant herbs,
spices, fruit, nuts, and vineyards, and organic certification is not far off.

A quirk of Chilean law makes land, mining and water rights independent of each
other. Mr Johnson made sure to acquire all three, particularly the water
rights. "In the future, wars will be fought over water," he says. Two rivers
border the land, and the community sits atop 56 known water wells. Galt's
Gulch bottled mineral water may soon be in the offing. Mr Johnson is also
building guest haciendas to house not only prospective buyers, but also, he
hopes, tourists.

Set in a secluded valley 17 kilometres from Curacavi, Chile, on the road
between Santiago and the luxurious beach resort of Viña del Mar, Galt's Gulch
is a mere forty-five minutes by car from the Santiago airport, but, as Mr
Johnson says, "it feels like you're at the end of the Earth." Yet his goal is
not isolationist, he adds. "We're not trying to hide from the world. In fact
we want people to find us.”

Indeed, of the 430 lots for sale, only 12% have sold so far, and Mr Johnson is
marketing vigorously to the libertarian and Bitcoin communities. Lots are
priced in both dollars and Bitcoin, with big discounts for buyers who pay in
that crypto-currency. Many early adopters of Bitcoin find themselves sitting
on small fortunes, and Mr Johnson hopes to tempt them to diversify into real
estate. So far nine clients have paid in Bitcoin, totaling around $1.5m in
revenue.

Mr Johnson, a former California real estate agent and evangelist of water
ionizers (devices supposed to slow aging and prevent disease, but derided as
snake oil by many scientists) has become something of a celebrity in
libertarian circles. Authors such as Ben Swann, Josh Tolley, Luke Rudkowski,
Bob Murphy, Angela Keaton, Tatiana Moroz and Wendy McElroy have visited the
site of his future utopia, and a television production company is pitching a
documentary series on the community.

Most buyers so far, he says, are expats or second-home buyers. For Mr Johnson,
the appeal is easy to explain. "It's like California, only forty or fifty
years ago. Feels like you've stepped back in time.” Mr Johnson plans to break
ground in 2014, and estimates five years to fulfill his vision of a place
where he can "live and let live, thrive and let thrive.”

Why does he think his project will succeed where similar schemes have failed?
"We're a freedom-minded community, but we're not trying to create a sovereign
state," he explains. "We pay our taxes, we obey the law. Our goal is to lessen
the effect of the rest of the world without telling the world to go take a
flying leap."

As for Ayn Rand, just how much have her ideas influenced the community's
design? Mr Johnson admits he never finished “Atlas Shrugged”. "I'm not
actually much of a reader," he says. "Watched the movie and skimmed the
Cliff's Notes, though. Good stuff."

~~~
jahaja
Anarchist community inspired by Ayn Rand? Fck me, revisionist history is
seemingly having a renaissance with regards to former socialist concepts that
is now apparently right-wing - libertarian and anarchist.

~~~
yetanotherphd
I don't see what bickering over words is going to accomplish. Your post is
typical of the far left: do everything you can to appear smarter than your
interlocutor, short of actually engaging the issue.

~~~
jahaja
I actually think it's important to call things what they are, just as North
Korea aint a democracy even though they call themselves that, this is nothing
reassembling anarchist thought. By hi-jacking concepts we introduce confusion
and ultimately destroy the original meaning and ideas.

I'm fairly tired of this being the case from the right, not just in america
but in my country as well where the most right-wing party recently branded
themselves "The new workers party".

~~~
vbuterin
Or, alternatively, why not actually foster dialogue between left-wing and
right-wing anarchists and help the two groups realize that they're often not
as far apart as they think? Seems to be working quite well over at
[http://c4ss.org/](http://c4ss.org/) .

~~~
collyw
I think they are incredibly far apart.

"Right wing anarchists" seem to want to take the trappings of capitalism, from
which they have benefited immensely, and keep as much as they can to
themselves. For the good of themselves.

True anarchists reject capital and properly rights, and want precisely the
opposite. For the good of everyone.

The anarchy subreddit is actually pretty good and not filled with as much junk
as a lot of the subreddits are.

~~~
vbuterin
It depends on who you talk to; I feel like there's a sort of winding spectrum.
It's something like:

    
    
         F            A
         |            |
         |            |
         |            |
         E            B
          \          /
           \        /
            D------C
    

A = Wealthy people who just want to maximize their own revenue without
particular regard for ethics. Some do not support libertarianism at all, some
support some aspects of it but turn around as soon as they can benefit from
pollution, eminent domain or copyrights/patent privileges.

B = Wealthy people who are actually libertarian to a high extent, caring about
some notion of property rights, but have basically no concern for equality,
corporate power, etc.

C = Libertarians who also care about reducing corporate power and promoting
decentralization. These people love markets and voluntary exchange, but also
dislike monopolies. They tend to heavily promote 3D printing, Bitcoin,
seasteading, etc.

D = Left-libertarians who are fine with property rights, but seek a less
market-oriented basis for society. They might like 3D printing, organic
farming, urban agriculture, and perhaps also Bitcoin, though to a smaller
extent since it is still money even if it does bypass the banks.

E = Anti-propertarian anarchists. Buy into leftist morality (eg.
"exploitation" where you benefit much more than the counterparties from an
economic agreement is immoral), and are happy to expropriate capitalists.
However, they are also anti-state.

F = State socialists and social democrats.

This experiment seems to be something like B with maybe a touch of C. A proper
C-libertarian experiment would also try to provide ways for people to live
with very little money (eg. by living in a small closet that would normally be
illegal under occupancy limit regulations), and D-libertarian would be a
commune.

~~~
jahaja
<3 the ascii art. I rather like this one:
[http://upload.wikimedia.org/wikipedia/commons/0/0c/Political...](http://upload.wikimedia.org/wikipedia/commons/0/0c/Politicalquad_en.svg)
(and similar)

------
javert
It's embarassing when libertarians (mis) use terminology taken from Ayn Rand
that they don't understand.

~~~
vbuterin
I don't see the problem here. Atlas Shrugged is a very complex book and has
many parts that I find profound (eg. her thoughts on romance, the concept of
sanction of the victim and her surprisingly sane views on the relationship
between money and human values) and many parts that I find mind-bogglingly
stupid (eg. her extreme rejection of anything associated with progressive
ideology even when no government is involved, and especially the deduction
from A is A to objectivism being true). Taking the parts of a set of ideas the
you like, discarding the parts that you do not like, and using the good parts
as a core from which you advance your own philosophy with legitimate ideas is
not a bad thing; it's how all philosophical progress works.

~~~
javert
I think we could have a good discussion around a lot of the issues you raise
here, but I want to just focus on what I think is the most worth talking
about.

> and especially the deduction from A is A to objectivism being true

This is a very understandable, but major, misconception. Very understandable
because Atlas Shrugged is a novel, not a formal philosophy treatise, so how
would you know any better? (Without spending a crap ton of time studying other
Objectivist literature, that is, like I did.) Major because Objectivism is
induced from reality, not deduced.

For instance, take ethics. The Objectivist ethics looks at the nature of man
and then figures out what man needs to have a happy life. Well, how do we know
about the nature of man? We don't deduce it from A is A; that would be
impossible. Rather, we look at lots and lots of examples of men and determine
what is always common vs. what differs from one to the next.

Almost everything in Rand's philosophy is very bottom-up, based on looking at
tons and tons of examples out there in reality and then forming a
generalization that holds in a specific, delimited context. But that isn't
evident from her writing, at least not at first. And our whole intellectual
culture today is very top-down. So it's easy to think the Rand is a top-down
thinker and not a bottom-up thinker.

By "bottom-up" I mean starting with concretes in reality. "Top-down" is
starting from intellectual abstractions, like A is A, or God, or "a society is
only as morally good as its worst-off member," or the libertarian non-
aggression principle, or "from each according to his ability," and so on.

~~~
vbuterin
Thanks for the well-reasoned response; always happy to talk about this stuff.

My main concern with that style of thinking in general is that, while it is
good at finding principles, it is less good at finding cases where those
principles do not apply. For example, one important idea from Objectivism is
the principle that "there can be no conflict of interest between honest men".
This is clearly usually true, and classical economics does a great job at
explaining why, but there are also cases where it's false. For example, if I
am a monopolist selling pharmaceuticals for $1000 when their marginal cost of
production is $1, it will benefit me to raise the price to $2000 even if it
reduces my potential customer base by 30%, but it hurts those people who can't
afford the product anymore, and it also arguably hurts society as a whole. You
can't make this argument in non-monopoly circumstances, for reasons discussed
by Bastiat, Mises, etc, that I'm sure you're well aware of, but you can here.

As another example, there are circumstances in which it is personally, and
arguably universally, beneficial to initiate aggression. For example, if you
are starving in the woods and see a hut with its owner absent, you would
probably want to break into the hut and steal food from it. If you are honest,
you will come back in a month and pay for everything ideally 2-5x over, but
even then you technically violated the property rights of the owner of the
hut. Of course, the owner would probably be delighted that you stole the food
and paid 500% of what it's worth and would have consented to such an
arrangement had he known, but the practical communication difficulties of the
real world make such consent impossible in that particular circumstance.
Indeed, this problem is fundamental; the Chicago School of Economics proves
that essentially all so-called market failures are the result of high
communication costs.

Some objectivists will make exceptions for at least one of those cases, saying
that standard ethics are not intended for emergency situations. If you admit
that as an excuse, however, do you support the laws in the United States
requiring hospitals to admit non-paying patients for emergency care? If you do
not, then you will need to have some reasons why not. And at that point, your
philosophy is basically consequentialist - so why not just cut out the
middleman of an overarching philosophy and directly support those policies
that have desirable consequences?

I do think there are good answers to that question, but I am interested in
what you would have to say.

~~~
javert
You are raising good points and I have (I think) good answers.

I guess fundamentally, my over-arching answer is that abstractions like "there
can be no conflict of interest between honest men" and "do not initiate force"
are not useful to anyone who has not personally induced them from reality.
Only when you have done that can you see precisely why it's a valid
abstraction and understand what the delimited context is.

Of course, by that point, the abstraction isn't really "useful," except as a
mental shortcut or as a summary to tell someone else (which is likely to
confuse them, unless they know to merely treat it as a goalpost that they can
personally try to induce).

Most of the Objectivist literature is exactly that: a summary without the full
induction provided. Fortunately, not _all_ of the Objectivist literature is
that way. After all, I am describing issues in Objectivist epistemology right
now, I didn't come up with this stuff.

Regarding the first example: The principle doesn't apply in a mixed economy
(i.e. one where you can get regulatory monopolies), except to say that it is
in everyone's interest to have a freer, more rights-respecting system. That
doesn't mean the principle is invalid, it reflects the fact that every
principle is delimited to a certain context.

Regarding the second example: That is correct, non-initiation of force does
not apply in an emergency situation. And that is not the only thing delimiting
the context. For example, it does not apply in a state of anarchy, which is
why you can morally yet forcefully establish a minarchy out of an anarchy.
Rand-influenced anarcho-capitalists do not understand this point.

I don't think we should require hospitals to admit non-paying patients for
emergencies, I think we should immediately create a totally free market for
medical care. I think that the cost of medical care for humans would
eventually approach that for animals (i.e. veterinary medicine, which is
insanely cheap), at which point poor patients could all be admitted via
charity, along with a large number of other benefits to everyone.

If we are not going to take that step, I guess we should keep forcing
hospitals to treat these people, but I think you could argue either way. iF
you are going to slowly phase in a free market in medicine, maybe you slowly
phase out the free medical treatment. I say "maybe" because Ayn Rand does not
deal with this mixed case, and I don't think there is a "philosophically
right" answer. She would just observe that it's in everyone's self-interest to
live in a society where the government does not put up barriers to pursuing
personal values; a free market in medicine is an implication of that. So she
(and I) would argue for instituting a free market as quickly as possible.

> And at that point, your philosophy is basically consequentialist - so why
> not just cut out the middleman of an overarching philosophy and directly
> support those policies that have desirable consequences?

It is basically consequentialist already. It's just that you need to talk
about things like the nature of reality, valid epistemology, the nature of
man, etc. to properly understand cause and effect at a broad level and,
therefore, to make sound consequentialist arguments and to be able to refute
all the people who say, "the best consequence is when we all serve God" or
"the best consequence is when we all serve Society," or "the best consequence
is to have an economy that mixes regulation with freedom because without
regulation, selfishness [1] takes over and the system gets corrupted" and on
and on.

[1] As you probably know, AR claimed that "selfishness" as used in the culture
is falsely combining two unlike things, (1) rational self-interest and (2)
victimizing others for short-term benefit, which she argued is not a rational
strategy in the long run.

------
conformal
ken and his staff are really cool easygoing people.

it is great to see an article about them in the economist.

------
fat0wl
Oscar Bluth, anyone?

