Such proclamations verged on the scandalous as breakaway movements threatened national crack-ups from Quebec to Belgium to Belgrade. The UN had a formal policy against secession and discouraged minorities inside existing nation-states from seeking independence.47 But the mood was changing as Hans-Adam spoke. The Soviet Union’s stepwise dissolution seemed to be showing that peaceful disintegration was possible. In his address, the prince welcomed the Baltic states Latvia and Estonia, which entered the UN at the same time as the microstate. He also welcomed both North and South Korea as new members. The Cold War’s end was allowing for the recognition of multiple claims on a single people along with a surge of new nations.

  The prince proposed that the way to help rather than hinder human evolution was to create a means for continuous churning of the world map. This would happen through referendums. Such a rearrangement could move by stages, devolving first responsibilities for local affairs and taxation; but if that did not satisfy a population, it could go all the way to the splitting of a state into two or more new entities. The idea originated in a parlor game that Hans-Adam’s family used to play: speculating about how their erstwhile patron and protector, the Hapsburg Empire, might have survived. Hans-Adam believed that it could have happened if the empire had allowed for the proliferation of smaller self-determining units—a decentralization within a loose union to save the interdependent whole.48 He thought the model was just as valid a century later. The high-pressure system of globalization could only preserve the all-important economic unity if polities were given the option of splitting into fragments.

  Hans-Adam cross-fertilized the Holy Roman Empire’s model of aristocratic state ownership, which had given rise to Liechtenstein itself, with the fluid idea of sovereignty represented by the global clients of Liechtenstein’s banks. Those corporations’ tangle of overseas subsidiaries and shell companies suggested that sovereignty could be unbundled, relocated, and recombined. Hans-Adam’s own family had ruled Liechtenstein from afar for centuries. Why shouldn’t the modern state also be a “service provider,” where all capacities except for national defense were contracted out to private actors?49 This was an opt-in, opt-out vision of citizenship, explicitly designed as an analogue to the marketplace. The people, he wrote, should be “the shareholders of the state.”50

  The conclusion of the First World War had enshrined the idea of Wilsonian self-determination, usually understood as based on a common language, common territory, and common history. This was the justification by which Czechoslovakia had expropriated his family’s properties. Hans-Adam countered that a nation should not be premised on a transcendent idea of the state as a bearer of an ineffable essence, or even of a community of shared fate. He preached instead a premodern idea of statehood. It was nebulous, open to adaptation, even—as his own state showed—open to purchase and sale. Liechtenstein set itself up as the international champion of the contractual communities that people like Murray Rothbard dreamed of. Given a pulpit at the UN, Hans-Adam espoused a libertarian blueprint for what he called “the state in the third millennium,” or what Rothbard called “nations by consent.”51 It was anarcho-capitalism by way of the Alps.

  The prince practiced what he preached, bringing his version of self-determination into his own country. In the year 2000, a red booklet arrived in the mailboxes of every citizen in Liechtenstein with Hans-Adam’s proposed revision to the constitution.52 The proposal greatly increased the prince’s power, giving him the right to put forward and veto bills, dissolve parliament, and enact emergency laws. It also included something remarkable: a nuclear option that permitted the population to hold a referendum to abolish the monarchy itself.53 And true to Hans-Adam’s UN speech, the proposal permitted any of Liechtenstein’s eleven communes to secede after a majority vote (while reserving the right for the prince to order a second vote). The clause was watered down from the prince’s original version, which included the possibility of individuals to secede without the need for approval from the parliament or the prince.54 When members of the parliament balked at what was called a “princely power grab,” Hans-Adam showed he was serious about his transactional relationship to the territory. He suggested he would be happy to sell the country to Bill Gates and rename it Microsoft if the constitutional reform did not go his way.55 “My ancestors bailed out Liechtenstein when it was bankrupt and thus acquired sovereign rights,” he told the New York Times. “If ever the people decided time is up for this ruling family, they would have to find someone else rich enough to take our place.”56

  The prince had no intention of letting go of his investment cheap—but finding someone as rich as he would have been a tall order. The House of Liechtenstein was wealthier than the House of Windsor.57 The proposed constitutional revision passed in 2003, making Hans-Adam Europe’s “only absolute monarch” but also the only one building in a constitutional exit from the monarchy and the country itself.58 The combination was odd, out of step with the times. There was talk of Liechtenstein being ejected from the Council of Europe.59 But the confrontation with parliament meant that Hans-Adam’s model had passed its stress test. The next year, the “tycoon-monarch” passed the governing duties on to his son.60

  3.

  Hans-Adam’s Liechtenstein was a combination of hereditary male autocracy and direct democracy chained to a dependency on capital hypermobility and secrecy. The Economist called it “democratic feudalism.”61 The prince’s hybrid version of medieval and modern politics sparked the imagination of libertarians in the 1990s and the first years of the twenty-first century, becoming an important touchstone for their criticism of European integration. Liechtenstein was the avatar of a different Europe and an alternative way of relating to the world economy. “Europe’s enclaves could be more than amusing anomalies,” wrote John Blundell (seen earlier as a champion of the homeland of Ciskei). “They could contain the seeds to subvert the European Union.”62 Specifically, critics argued that the European Union should follow Liechtenstein’s example by including a clause allowing for popular referendums to leave the union.63

  Underpinning the libertarian critique of the EU was a romanticizing of the continent’s earlier fragmentation. Historian Paul Johnson argued that “the so-called feudal system, often used as a synonym for backwardness, was in fact a series of ingenious devices to fill the power vacuum left by the fall of Rome.”64 “When the Roman Empire in the West disintegrated,” he wrote, “the ensuing Dark Ages saw state functions assumed by powerful private individuals or defensible cities.”65 A German economist proposed that “the European culture is the most successful in world history not despite but because it is fragmented into so many small countries that compete with one another.”66 Far from being impractical, the messy jumble of polities on the European peninsula dead-ending in the Atlantic was a source of strength. The ideal Europe was a “free market of states” with a common repository of rule of law and entrepreneurial spirit, a fractured assembly of sovereignties in a pool of shared culture.67

  This counternarrative turned the official history of European integration on its head. The sign of progress was not fusing sovereignties and decision-making and overlaying the continent with ever more shared laws and regulations. The arc of progress did not bend toward “ever closer union.” Rather, Europe had been on the path to greater liberty when it was politically fissured. Advocates of Brexit praised the success of Liechtenstein, Monaco, Luxembourg, Singapore, Hong Kong, and other small territories in the “age of the statelet.”68 Among the celebrants of medieval Europe was the founder of the Far Right party that would help win the Brexit vote.69 The fact that Liechtenstein was in the European Free Trade Area (EFTA) and European Economic Area (EEA) without joining the EU meant that it had free trade without free movement of people—another model of partial integration attractive to advocates of Brexit.70

  Hans-Adam II stood alongside other Euroskeptics. In 2013, he appeared at a gathering of neoliberals and nationalists with the economist Bernd Lucke, who had just founded the Alternative for Germany (Alternative für Deutschland, or AfD), soon to become the first Far Right party to enter the Bundestag.71 The prince also became a member of the Hayek Society, which included key members of the AfD in its ranks.72 Another member of the House of Liechtenstein, Prince Michael, a wealth manager by profession, was the founder of the European Center of Austrian Economics Foundation, which translated Alvin Rabushka’s book on the flat tax into four languages.73

  Hans-Adam presented his argument about the state as service provider at the conference of the Ludwig von Mises Institute alongside people advocating the breakup of Switzerland and the European Union. The prince’s proposals bore a striking resemblance to those of the institute’s namesake, another child of central Europe and an icon for the libertarian Right. In a famous book from 1927, Mises had argued for secession by plebiscite and speculated on the possibility of the secession of the individual.74 In his regal style, Hans-Adam included references to no other thinkers in his writing, but the shared spirit of Mises connected his proposals to the ideas of Rothbard and the other paleo-libertarians across the Atlantic.

  Part of the reason for libertarians to defend the Liechtenstein model was that the Liechtenstein model was under attack. Tax avoidance and money laundering, long allowed to proliferate unchecked, became politicized after the Cold War amid renewed concerns over drug trafficking, corruption, and, after 2001, terrorism. A first sign was a report on “harmful tax competition” published by the intergovernmental organization of the richer nations, the Organisation for Economic Co-operation and Development (OECD), in 1998.75 A task force set up by another club of the world’s most powerful nations, the G8, put Liechtenstein on a blacklist of fifteen “non-cooperative states” related to money laundering in 2000; it was the only one from Europe.76 The blacklisting dealt a blow to Liechtenstein’s reputation. A major leak in 2008—the first of a string that would include the Panama, Paradise, and Pandora Papers—showed that among those holding accounts in Liechtenstein through a trustee was a German dog named Günter.77 Financial institutions were forced to change regulations to cut back on the possibility of anonymous account holders.78 Liechtenstein’s primary bank lost nearly 10 percent of its assets as customers pulled out when they could no longer remain unknown.79

  The targeting of Liechtenstein did not dim its glamour for market radicals. On the contrary, it became possible to narrate the tax haven as a capitalist David fighting against a globalist regulatory Goliath. Paradoxically, a place that was among the wealthiest per capita in the world, tailor-made to protect the finances of the even wealthier, was cast as the underdog—a victim of “financial imperialism.” Hans-Adam led the defense, arguing that the OECD was threatening to develop into a global tax cartel and even a world government.80 Borrowing a line invented by Swiss bankers in the 1960s, he defended the origins of Liechtenstein’s bank secrecy as part of an effort to save persecuted Jews—an interpretation made doubtful by the fact that some of Hitler’s closest corporate allies, IG Farben and Thyssen, housed their corporations there years after the Nazi seizure of power.81 In an even more eyebrow-raising claim, the prince cast his country as the end station of an Underground Railroad for the superrich. “So long as you have tax pirates,” he said, “I don’t feel any moral guilt about being a tax haven just as people once took up slaves to help them escape their poor fate.”82 When the German government sought more insight into the internal workings of Liechtenstein’s banks, which were found to hold tens of millions of German accounts, he described it as the “Fourth Reich.”83

  4.

  To libertarians, Liechtenstein looked like a wormhole back to an earlier form of global political economy, free of the treaties and international regulations that seemed to be tightening the noose around secrecy jurisdictions by the first decade of the twenty-first century, and the integration that libertarians feared would lead to redistribution and infringements on private property. Like Hong Kong and Singapore, it was a living example of the way things could be, premised on a globally interconnected world with no barriers to the movement of goods and money—a strip of rural land inserted almost invisibly into the circuitry of international finance, one of the “fragile islands of freedom” threatened by the expansion of the regulatory state.84 Recall that the end of the Cold War saw two apparently contradictory trends. On the one hand, there was greater economic interdependence, with globalization the buzzword on everyone’s lips. On the other hand, the political landscape was more fragmented than ever, as the UN tacitly opened up the possibility for something it had never accepted before: secession and nationalist movements by minority populations were now considered legitimate politics. The originality of Liechtenstein was its particular spin on this new form of politics. If new groups could make claims, then what if they began to make them as clients of services rather than as members of a national community?

  There was something genuinely ideological about this vision of a world of tax havens that the mythology around Liechtenstein helps us to understand. It was not merely escape or exit in the negative sense but a fully formed philosophy of radical decentralization with secession as an ever-present option. The billionaire prince promoted his vision through the Liechtenstein Institute on Self-Determination, founded in Princeton with a $12 million gift, as well as the Liechtenstein Foundation for Self-Governance, which seeks to disseminate the country’s model abroad. The libertarian world pays attention. In 2018, the Ludwig von Mises Institute’s Jeff Deist praised “breakaway movements of the kind that Prince Hans of Liechtenstein is writing about, that government be rethought of as more of a service provider and subjects being thought of, or citizens being thought of, as customers.”85 A libertarian think tanker who helped blunt the OECD campaign against tax havens never fails to mention that the right to secede is enshrined in the Liechtenstein constitution. “Shouldn’t people in other nations have the same freedom?” he asks.86

  One person who took the rhetoric literally was Daniel Model, a corrugated packaging mogul and former curling champion. After moving from his native Switzerland to Liechtenstein, he went one step further, releasing a “declaration of sovereignty” that rejected membership in any human collective he had not expressly consented to and condemned democracy as a system of organized theft.87 Model declared his independent state Avalon, headquartered in a dove-gray mansion the size of a city block in a rural Swiss village. He drew its name from The Mists of Avalon, a fantasy novel written by Marion Zimmer Bradley that revisits the legends of King Arthur from the point of view of women. Avalon became Model’s own private Liechtenstein. In 2021, he hosted a conference called Liberty in Our Lifetime, devoted to finding places all around the world where one could escape the state. One of the speakers, who praised the Liechtenstein model of secession by referendum and designed his own scheme of “free private cities” with citizenship by contract, said that the attendees were driven by one question: “Are there possibilities to opt out?”88

  The search for such fantasy escapes took libertarians from Central London to East and Southeast Asia to European microstates. But sometimes they also went farther afield, seeking economic freedom in what they misidentified as the earth’s remaining empty lands.

  PART III

  FRANCHISE NATIONS

  8

  A White Man’s Business Clan in Somalia

  Somalia

  In Bruce Sterling’s 1988 novel Islands in the Net, the global government is known by the metonym “Vienna.” Public enemy number one is a white US Special Forces colonel named Jonathan Gresham, who has defected. At the end of the book, Gresham speaks from a “liberated zone” in a “heavily guarded, supersecret mountain fortress” in the Aïr Mountains of Algeria, wearing the “male chador” of the Tuareg people. On video, he sits “turbanned, veiled, and cloaked, his massive head and shoulders framed in a spreading wicker peacock chair” flanked by armed lieutenants.1 He is a caricature of radicalism past: a Caucasian libertarian Huey Newton. But the absurdity of his pose suggests the scrambling of politics at the end of the Cold War. “I’m a postindustrial tribal anarchist,” he says, giving a name to a peculiar new school of thought.2 Laura, the novel’s protagonist, is a public relations consultant. She seems to inhabit a different world than Gresham does, one of power suits and boardrooms instead of desert hideaways and automatic weapons. But she, too, revels in the fissures of the new world, ruminating on “little Pacific island states whose ‘national sovereignty’ could be had for a price.” These islands, she observes, “were on the Net, and where there were phones, there was credit. And where there was credit, there were airline tickets. And where there were jets, there was home.”3 The libertarian guerrilla and the consultant were kindred spirits—champions of the age of crack-up capitalism.

  The previous chapter showed how anarcho-capitalists were electrified by the disintegration of states and the commodification of sovereignty in the 1990s. Among their more startling inspirations was the northeast African nation of Somalia, where a bloody civil war left the international community in shock and the country with no functioning government after 1991. This apparent catastrophe was a stirring vision of hope for the most radical capitalists. Rather than a humanitarian nightmare, Somalia offered a preview of the world to come and a chance to combine “postindustrial tribal anarchy” with sovereignty for sale. The war-torn Horn of Africa offered the prospect, as the Mises Institute put it, of being “stateless … and loving it.”4

  1.

  Our guide to this alternative future is the globe-trotting Dutch libertarian Michael van Notten. Perhaps more than anyone, he embodied the furious political experimentation of the market radicals. Born in the thousand-year-old Dutch town of Zeist in 1933, Michael (also spelled Michiel) van Notten trained as a lawyer and eventually took a position with the European Economic Community in Brussels. He worked in the Directorate-General for Competition, often described as a special site of neoliberal thought in action for its ability to overrule national government rules about state spending and public ownership.5 After nearly a decade in Brussels, van Notten abandoned the citadel of European integration to form the Libertarian Center in Holland, then set up the Institutum Europaeum libertarian think tank. A major Dutch newspaper described him as being “at home in the conservative strongholds of the Hoover Institution at Stanford University, the Heritage Foundation in Washington, DC and the Institute of Economic Affairs in London.”6 He also became a member of the Mont Pelerin Society in 1977, co-translated the abridged Reader’s Digest version of Hayek’s Road to Serfdom into Dutch, and did a Dutch translation of Milton and Rose Friedman’s Free to Choose.7