The Myth of Libertarian Exit

The Myth of Libertarian Exit

Raymond Craib’s new book, Adventure Capitalism, traces the history of individualist, property-oriented “escape” projects pursued by the likes of Michael Oliver, Peter Thiel, and Bitcoin bros.


Imagine if Ayn Rand had written a novel that imported the basic attitudes and ambitions from her famous protagonist John Galt into a steel-willed detective who gallivanted around the Caribbean in an attempt to turn a coup d’état into the stateless society of tomorrow. Her protagonist would probably resemble a collage of the real-life adventurers, financiers, ex–CIA agents, abject European nobles, and gunsmiths who mounted several profit-driven attempts at “exit projects,” or plans to create stateless and market-oriented micronations in the decolonizing world of the late 20th century. In his new book, Adventure Capitalism: A History of Libertarian Exit, from the Era of Decolonization to the Digital Age, author and professor of history Raymond B. Craib demonstrates how Rand’s vision of “Galt’s Gulch,” the libertarian safe haven in Atlas Shrugged, actually served as a source of inspiration for so-called exit projects. But unlike Rand’s bestselling novel, every exit project has flopped.

The repeated failure of these projects, from immigrant Michael Oliver’s attempt to create a micronation on the Minerva Reefs, to Peter Thiel’s Seasteading Institute, will likely prompt readers of Adventure Capitalism to nod in agreement as they learn that Murray Rothbard, don of radical libertarian theory and an inspiration for Oliver, derided exit projects as “cockamamie stunts.” Rothbard instead advised the founders of would-be micronations to “come back to the real world and fight for liberty at home.”

Few heeded Rothbard’s call to check the aspirations of political imagination with a dose of political reality. Peter Thiel, for example, took the position that the libertarian project requires “an escape from politics in all its forms.” In contrast to Rothbard, as well as thinkers like Friedrich Hayek, who advised that the work of liberation reform should be made through society’s existing channels of governance, and saw freedom as less of an ideal state than a shifting equilibrium between the market’s emergent order and a minimal government, Thiel now proposes a wholesale abandonment of the democratic project. Forget improvements forged at the intersection of coalitional interests, like the growing YIMBY movement. The real solution, according to the Startup Societies Foundation—“the Center for Decentralized Governance”—is withdrawal: “Don’t argue. Build.”

What should we make of exit projects, past and present? I spoke with Craib about this question, the paradoxes these projects contain, colonialism, and the way the sea represents freedom. The following conversation has been condensed and edited for clarity.

Jacob Bruggeman

Jacob Bruggeman: Gunsmiths, CIA agents, the Koch brothers, Southern segregationists, the kings of Pacific islands nations. This is a small sample of the characters included in Adventure Capitalism. It’s a motley crew connected by what you explain as attempted libertarian “exit projects.” What were these ventures and who pursued them?

Raymond Craib: “Libertarian exit” is the phrase I use to designate a set of projects, pursued by various individuals in the wake of World War II, to escape or exit the nation-state by creating new countries organized almost entirely through contractual, market relations. The 1960s and the 1970s were decades in which such projects proliferated. Inspired by Ayn Rand, Ludwig von Mises, and Friedrich Hayek, the individuals who pursued such projects can fairly be described as libertarian in the midcentury American sense: they were hyper-capitalist, opposed to the regulatory and welfare state, radically individualist, and equated freedom with private property rights. They were not, in other words, libertarian in the classical sense (i.e., anarchists).

These individuals experimented with an array of projects, most of which took place either in the ocean or on islands or archipelagoes that were struggling to be free from colonial rule. The figure I focus on most closely is Michael Oliver. Oliver was born Moses Olitzky in Lithuania and was the only member of his immediate family to survive the Holocaust. He arrived in the US as a young man in 1947 and established himself in Nevada, where he soon achieved success as a land developer and coin dealer. In the 1960s, he feared the US was turning toward totalitarianism, and he wrote a book called A New Constitution for a New Country, in which he laid out the rationale and plans for exiting the country. Between 1970 and 1980 he tried repeatedly—with the aid and support of various libertarians, including University of Southern California philosophy professor John Hospers, Ayn Rand’s acolyte and lover Nathaniel Branden, investment guru Harry Schultz, and investor John Templeton—to bring his dream to fruition. He first tried to build an island on the Minerva Reefs in the southwest Pacific, between Tonga and New Zealand, then linked up with former OSS and CIA agents in an effort to colonize the Abaco islands if the Bahamas, which were slated for independence, and then helped foment a secessionist rebellion on the island of Santo in the New Hebrides. In each case, these efforts came to naught, but they wrought havoc in the regions where they were undertaken and upon local populations, all of which were in the process of decolonizing.

JB: Part of what I find fascinating about your book is the way you describe Oliver and his international milieu within a midcentury cultural imagination. When you introduce us to the plot to execute a coup on the Caribbean island of Abaco, for example, we encounter Oliver and seven others. You describe them in a scene that evokes the hard-edged masculine tension of a spy novel or Tarantino flick. Your concept of “libertarian noir” is rather suggestive on this score. Perhaps more than profit, and certainly more than their professed aims of promoting freedom, these guys were simply playacting as James Bond. What other work does this concept do for you in the book?

RC: I appreciate this question. One of the book’s working titles was “Libertarian Noir,” which gives you a sense of how central I see the concept for making sense of the figures I examine. (Another working title was “Any Distant Archipelago,” which I use in another chapter and captures another through line in the book regarding islands and oceans.) My use of noir probably was less about identifying their James Bond cosplay inclinations—although there certainly is a bit of that, particularly with Mitchell Livingston WerBell—than about trying to draw attention to the paradoxes of the projects themselves. I think of noir fiction, in particular, as characterized by moral ambiguity, cynicism, paranoia, and a kind of bleakness…all of which are apparent in the chapter on Abaco in particular. I wanted to highlight this because there is a paradox in all of this: Michael Oliver—perhaps the “private eye” in this if you pursue the metaphor—adamantly argued that creating a new country was part of a “moral experiment” to create spaces of individual freedom against what he saw as an encroaching tide of totalitarianism. And yet in that pursuit he found himself allied with an array of people who were morally ambiguous at best, cynical and driven by profit-seeking, paranoid about the threat of communism, and who trafficked in violence and illegality. There is a bleakness to the history—corruption, capitalism, racism, colonialism—and at the same time, no real resolution to it. So certainly the James Bond aspects of it are real enough, but with noir, I really wanted to stress this violent undercurrent that seemed to run through a project described as a “moral experiment.”

JB: And part of what makes this history bleak is how easily Oliver and his allies pass off reconstituted colonial relationships as innovative projects in liberal statecraft, and that Oliver and co were either high enough on Ayn Rand to be blind to the bald-faced extractive quality of their schemes, or that they simply didn’t care.

But let’s put motive aside for a moment, because I think this is directly related to your reference to “Any Distant Archipelago.” Oliver’s “moral experiments” dovetailed with a view of earth’s bodies of water as worlds unburdened with state structures. But the ocean does appear in our history and culture as a symbol of freedom. Scholars like Markus Redicker and the late Julius Scott trace its historical significance in this regard. How do the exit projects you study fit within—or stand outside—the histories that give the ocean this association with freedom?

RC: The phrase “any distant archipelago” comes from the Marxist dissident Victor Serge, who wrote in the early 1940s of how the ocean had long been a place of refuge for the hunted and persecuted. He goes on to say that such was no longer the case in the 20th century and that the “urban labyrinth” was a safer place for refuge than “any distant archipelago.”

I like the quote because it gets at both the possibilities and limits of thinking about ocean and island spaces as refuges from the state. The ocean has always offered a paradoxical freedom: One could find the hydrarchy discussed by [Peter] Linebaugh and [Markus] Rediker, but also the slave ship so powerfully explored in another of Rediker’s books; the freedom of laissez-faire in the age of sail was also the freedom to traffic in others’ bodies and unfreedom, as Greg Grandin eloquently shows in Empire of Liberty. And of course, to return to the quote from Serge, what was once a space of liberation can just as quickly become a space of exploitation.

Freedom is a social condition that produces space, rather than a space per se. This is why in the book I draw a sharp distinction between libertarian exit and the forms of escape associated with, say, maroon communities of formerly enslaved peoples or the Zapatistas of Southern Mexico. Form should not be privileged over content, and there is a problem with seeing these as somehow comparable political projects.

JB: Let’s get back to current exit projects. You conclude the book with Thiel’s Seasteading Institute and a garden variety of exit projects in cyberspace, outer space, and charter cities carved out of small countries with novel legal forms like Employment and Economic Development Zones. You highlight how the philosophical contradictions and moral tensions that bedeviled Oliver’s projects are not bugs, but central features of exit projects and libertarian thought more broadly. Might you put a finer point on those contradictions and tensions in these exit projects? I see WerBell, for example, as personifying the tension between the language of free choice and the reality of paramilitary force in how these projects were carried out.

RC: It is fairly easy to identify contradictions (or, less generously, hypocrisies) in these projects. Many of their promoters are beneficiaries of state programs and publicly-funded institutions and initiatives; they have no qualms about doing business with illegal states. They seem tone-deaf to the moral, ethical, and legal implications of how they operate, despite championing “moral experiments.” As you suggest, these are more than bugs or glitches. They point to something more profound, and that is that these new country exit projects are new forms of capitalist state-making, often with strong colonial undertones.

Critics of Paul Romer’s “charter cities” idea—which served as the foundation for the Employment and Economic Development Zones in Honduras—repeatedly noted the structural similarities between his idea and previous forms of colonial practice and ideology. The most astute critics of his project were the majority of Hondurans themselves who opposed such projects and saw immediately the family resemblance to colonialism, having lived with the long history of US neocolonialism.

By the end of the book, I raise the possibility that exit projects are not, in some ways, about “exit” at all, but rather are of a new phase in capitalist accumulation. Austerity and IMF structural adjustment in the late 1970s and after led to a huge transfer of public monies and resources into a small set of private hands, typically through nepotistic, unethical, and illegal channels. Now it is the state apparatus itself that is increasingly being privatized—military contractors outnumber military personnel in war zones; state university budgets get a pittance from state coffers and depend increasingly on tuition dollars and private alumni donations; Bitcoin bros are promising cash-strapped governors paradise if they can purchase and run the electrical grid. Exit projects are already around us in forms of dramatic social (if not quite yet sovereign territorial) secession. I note in the book that the visionary writer who in some sense saw this approaching reality most vividly was not Thiel, Musk, or Bezos, but JG Ballard in his books Cocaine Nights, High Rise, and especially Super-Cannes.

This is where we might loop back to WerBell. The man was a caricature of the hard drinking, chain-smoking, anti-communist soldier of fortune, and he makes for great copy, but he is also an aperture through which to explore not only the dark and violent pathways that libertarian exit could follow, but also the significant place military personnel and veterans played in embracing and furthering libertarian exit. They did so via virulent anti-communism of course but also, especially during and after the Vietnam War, via an embrace of anti-government libertarian politics. Freedom of the market always came at the expense of the freedom of self-determination for others.

JB: Characters like WerBell do make for great copy. And I’ll stress for readers that your book is brimming with surreal detail, as when the financier of an exit project sends someone to rifle through a journalist’s car and the journalist loses a finger in a tussle. This leads me to wonder if, by way of conclusion, you could share one or two moments you had to leave on the cutting room floor.

RC: I had to ponder what to leave out. The human stories generally—and the quirky ones in particular—can make for compelling reading, but they can also overwhelm the narrative and obscure the analysis and argument, so I wanted to be careful to not throw everything into the mix.

One of my central concerns with the book was to accentuate the reality of politics, life and history in the places where exiters tried to create new countries because in the little writing that has been done on the projects, the focus has always been the exiters and their ideologies, their foolhardiness, etc. Authors end up reproducing the geographical and historical ignorance that bedeviled exiters themselves. I did not want to over-privilege the exiters in each of the geographical chapters, as much as possible.

One moment that ended up on the cutting floor, as you put it, is the efforts by a Canadian couple, the Fediuks, to join Jimmy Stephens’s Vanafo community on the island of Santo in the New Hebrides, which is the subject of Chapter Four. Stephens, a chief and one of the early anti-colonial leaders in the New Hebrides, had allied with Michael Oliver and his allies in what was called the Phoenix Foundation. They wanted to set up a libertarian country on the island of Santo and worked to get Stephens’s backing. As information circulated internationally about Stephens and his Nagriamel political movement, an increasingly strange cast of characters expressed interest. Some of these were prominent US-based libertarians (Grant Lapoint and Ralph Fair Jr., for example); others were people seemingly adrift and looking for something intangible. The Fediuks struck me as that. Colonial officials, meanwhile, described them as “religious fanatics.” One of the Fediuks wrote a letter to Jimmy Stephens in May of 1976 inquiring about joining his community in Santo, railing against Marxists, Maoists, and terrorists, and asking the following: “ps: Would it be advisable to avoid Vila [capital of New Hebrides] if we wish to bring our dog and guns. Could you please send a clearance for our dog and guns, as we desire to become citizens of the Na-Griamel Federation. Our dog, as ourselves, are vitarians (special ‘vegetarians’) and do not kill anything for food.” The Fediuks arrived—with or without their dog, I do not know—in the New Hebrides in mid-July of that year; they were deported a month later.

After their deportation, Oliver evidently called them but the details of the call are limited, and, as best I can tell, he was inquiring as to the situation in Santo. I could say more, but the point here is that the project in Santo attracted interest far and wide—real estate speculators from Hawaii; US-based libertarians from California, Alaska and Texas; émigrés with guns and a dog searching for something; wealthy speculators based in New Caledonia and Australia; and gold dealers from Amsterdam, among others. There is perhaps a long article to be written exploring, in more depth, this cast of characters and “why the New Hebrides?”

Thank you for reading The Nation

We hope you enjoyed the story you just read, just one of the many incisive, deeply-reported articles we publish daily. Now more than ever, we need fearless journalism that shifts the needle on important issues, uncovers malfeasance and corruption, and uplifts voices and perspectives that often go unheard in mainstream media.

Throughout this critical election year and a time of media austerity and renewed campus activism and rising labor organizing, independent journalism that gets to the heart of the matter is more critical than ever before. Donate right now and help us hold the powerful accountable, shine a light on issues that would otherwise be swept under the rug, and build a more just and equitable future.

For nearly 160 years, The Nation has stood for truth, justice, and moral clarity. As a reader-supported publication, we are not beholden to the whims of advertisers or a corporate owner. But it does take financial resources to report on stories that may take weeks or months to properly investigate, thoroughly edit and fact-check articles, and get our stories into the hands of readers.

Donate today and stand with us for a better future. Thank you for being a supporter of independent journalism.

Ad Policy