Fergus Hodgson on the Fintech Revolution & Competitive Governance
2019-12-08 · Guest: — · 52:06
Bob Zadek interviews Fergus Hodgson about the transition from traditional nation-states to competitive governance models driven by the Fintech revolution. They discuss how digitization, peer-to-peer economies, and small-state models like Liechtenstein and Estonia are empowering individuals to “vote with their feet” and seek freedom from bureaucratic overreach.
Topics: Fintech, Competitive Governance, Libertarianism, Digital Governance, Bitcoin, Sharing Economy, Liechtenstein, Estonia, Voting with Feet, Economic Freedom.
Speakers:
- Bob Zadek - Host
- Fergus Hodgson - Guest; Author and researcher on economic freedom
- Caller (Michael) - Listener
Introduction and the New Zealand Upbringing [00:18]
Bob Zadek: Hello everyone, welcome to the Bob Zadek Show, the longest-running live libertarian talk radio show in all of radio. The show today, the show always, the show of ideas, never ever the show of attitude.
The story is told about Diogenes. Diogenes famously and allegedly wandered the globe with a lantern in his hand, searching around for an honest man. Well, of course, there are plenty of honest men; he shouldn’t have had to look that hard, but that’s Diogenes. Well, this morning’s guest is another form of Diogenes, a more modern form perhaps, but he is real. This morning’s guest has the theoretical lantern in his hand and he has literally and actually wandered the globe looking for freedom.
Hmm. Well, that’s a challenge perhaps. Has he found it? If he hasn’t found it yet, what’s missing? And what clues does he have as to where he or anybody else searching for a more perfect life of liberty—what tips does our modern Diogenes offer to us as he wanders the globe? You probably have already guessed, the guest this morning is Fergus Hodgson. Fergus has been on our show before; he shared his wisdom on Venezuela. The show is available in my podcast, it’s a wonderful listen even today, so please enjoy that show. But this morning Fergus will share with us his experiences in traveling the globe somewhat of a stateless man, but Fergus you can expand upon that, as he searches around for freedom and therefore has become somewhat of an expert. He’s like our global comparison shopper. Now I know Fergus, you don’t offer your services that way, you don’t go into Nordstrom and help people buy slacks, but you help us find the perfect country if our goal is freedom. So Fergus, welcome to the show this morning.
Fergus Hodgson: What a privilege, and thanks so much for that introduction. It’s a bit emotional for me to speak on this topic because it’s been my life for at least a decade, and I’m very pleased to share this with the audience.
Bob Zadek: Now the audience has probably already guessed that you probably didn’t grow up in Queens, New York. I did, you didn’t. So give us just a tiny insight into that part of your personal history that let you start on this search, this comparison shopping among countries for liberty.
Fergus Hodgson: Yes Bob, and at the time growing up I had no idea that the nature of my upbringing would really have this impact on me, but I grew up in a very rural or isolated part of New Zealand on an organic sheep and cattle farm. My parents had six children and maybe it is or was close to the state of nature really, because we just had open countryside. We used to go hunting, fishing, build huts, do whatever we wanted. It was an incredible way to grow up. My father milked a cow by hand, so we had this fresh raw milk.
And I remember one time a cousin from Canada came to visit and she was wondering how there was a speed limit of about 65 miles an hour on this tiny gravel road and how could this be? And we just thought, well you use your own brain to decide how fast you go, we don’t need speed limits here anyway. And it was just that, I guess that was the contrast that we had just grown up without any real dealing with control from government and it was just our nature to get on with the job and live with our own initiative.
The Burden of Bureaucracy and KiwiSaver [04:38]
Bob Zadek: Well so, why are you not still living in New Zealand milking a cow and tending sheep? If I can add, and sitting on a hillside with a curved staff and watching sheep, which are very predominant in New Zealand. Why are you wherever you are—you will tell us where you are perhaps—but you are not in New Zealand. So how come you left the state of nature? Were you just drowning in freedom and couldn’t stand it?
Fergus Hodgson: Well, great question Bob, and I should say I give a lot of respect to my younger brother who is now leading the farm with his wife and my father is retired but still lives there. And in many ways because I was a child I didn’t realize the different challenges going on, right? I didn’t understand taxes, I didn’t understand compliance. And now in New Zealand of course we’ve got a carbon trading scheme, we have all sorts of complications, there is tracking—every single cow has to have a chip.
So the nature—there are two things going on. One, as a child I didn’t realize all that was going on behind the scenes in terms of compliance or the burdens. And two, even since when I was a child growing up in the late 80s, a lot has changed. The world has changed, right? And particularly the bureaucracy of a place like New Zealand which is a British colony and was really almost like a Wild West for a long time, you know, this open country that was being colonized by British settlers. And it’s just become more of a bureaucratized country. And even though New Zealand scores high on indexes of economic freedom, and it’s not a bad place to be, I don’t want to speak negatively of my home country, it is difficult to make a start there as a young person. It’s very expensive, it is isolated. And you would earn roughly half in terms of salary what you might make in a place like the United States.
The “Wild West” and Aspirational Liberty [07:08]
Bob Zadek: I would just like to offer one quick as-an-aside observation. You mentioned fondly that New Zealand was like the quote “Wild West.” And the reason I’m focusing on that phrase is because you said so almost wistfully. And Elizabeth Warren, I believe, but it doesn’t matter, in the recent presidential battles has in observing a part of our economy that was unregulated, she said with disparagement and with a lot of verbal exclamation points, “Why, that segment of the economy is like the Wild West!” And to me, she meant it as it is doomed, but to me that’s aspirational. I want the world to be like the quote “Wild West,” which means people are free to do what they want. So I was struck by the fact that the Wild West equals a lot of freedom has become something to fear and something that requires fixing with regulation rather than something to aspire to. Just an aside, I don’t want to belabor the concept of Wild West.
The Stateless Man and the Debt of Education [08:43]
Bob Zadek: Now you have experienced living and you have self-identified, I believe, as for a while a stateless man. Tell us about that experience and why you chose that label and more importantly why you chose that lifestyle.
Fergus Hodgson: Oh man, there’s so much to say about that. One thing, yes, so just a little bit about the nostalgia I might have for the Wild West and it is true that isolated parts of the world still have that sense of freedom that you can’t really get in the city. So and just like you, I see it as a positive thing because there’s such peacefulness or such peace.
But in terms of why did I leave, why did I feel this way? I guess as I was making the transition from being a student and athlete to being a worker and entrepreneur, that’s when I—and particularly because I was working as a writer, researcher, editor—that was when I started to realize the gravity of the problems. And people who have followed my work might know the first article I wrote for public consumption, the first non-academic article, was on basically a superannuation or retirement scheme that New Zealand had imposed in 2007.
And basically in the late 1990s there was a referendum in New Zealand: did people want a compulsory superannuation scheme or retirement scheme like Social Security? And over 90% of people voted against it. They didn’t want it. It was such a resounding statement, I was even surprised that people would be so clear about it. But obviously the social engineers just would not let it go. And they introduced what they called a quote “voluntary system” in 2007 called KiwiSaver, which was basically an appropriation of our proud bird national emblem for some government program. And they just basically said that you have to opt out of this actively every time you get a job. So basically whenever you would take a job, you’d be automatically opted into this and you’d have to write a letter requesting to opt out. And if you didn’t write a letter quickly enough, you’d be stuck in there forever. And also people who went into this government retirement scheme would get $1,000 bonus to start up with and they’d pay lower taxes. So there would be all sorts of tax incentives which imposed burdens on employers. And I just wrote about it and I said this is a deceit, this is just a lie. It’s not voluntary and it’s harming people like me who want to be independent.
And that was really the start of my writing career. And I just—I guess I just—that was just the start of me identifying the problems that I didn’t want to have to deal with and I felt like I had no real choice because of course I’m just one man, I can’t change an election and even if I could get elected I would just be one man in a parliament. So I thought the fastest way for me to change the laws that applied to me was to leave and find alternatives.
And also I also did not appreciate the treatment I’d received growing up. It might seem strange to many people, but even receiving government handouts to me was probably worse than paying the taxes because I saw that as a tool to make me weak and dependent. And I did not want that. I wanted to be a proud independent man who could speak with conviction and not let his principles be eroded away. Well, of course you were correct as I have observed many, many times on my show, almost irrespective of the topic, that one of the primary tools that all governments use, and indeed all institutions—I could probably include organized religion—but the tools that organizations use in order to build what is a substitute for loyalty is dependency. If governments or organized religions or other, or perhaps even business, can make you afraid of something in a way that it seems impossible for you to counter the fear by yourself, and these people who create the fear then say, “But sign here and we will protect you.” Once they make you afraid, then they have you where they want you. So your reference to dependency is right on because it is the primary tool.
Fergus Hodgson: Yes, and there was one example which just opened my eyes too because a family friend of ours had run as a candidate for what would be the equivalent of the Democratic Party in New Zealand. And a big plank, and which is now in place, was this basically universal childcare that the government would pay a few hundred dollars I think, I can’t remember whether it was weekly or monthly, for free childcare. Or basically you would get subsidized and free up to a point childcare. And that politician and her husband knew—they just told me that this is a way to build a long-term voting constituency, that this group of mothers will become voters for us permanently. And I just thought, man, this is exactly the problem with democracy, that politicians will literally take money from me or other people and just build a permanent loyal voting block. It’s just painful.
Liechtenstein: Government as a Service Provider [18:30]
Bob Zadek: A lot of your writing as you study the governments of the world, good and bad—as you have spent a lot of time in Central and South America and you have seen the worst of government—and you have written about smaller governments. And we’re going to talk for just a bit about Liechtenstein. Not that this is going to be a travelogue or a “sign here” or a link to a website where you can become instant citizen of Liechtenstein, but I’m mentioning that only because there are lessons to be learned. So when we discuss Liechtenstein, which you have written quite a bit about, we are discussing it not to urge people to move there—that wouldn’t be a bad idea—but rather to show how different a citizen’s relationship to government could be and the government remains viable. So tell us about Liechtenstein, about the Crown Prince and his writings, and what we as Americans or as New Zealanders and whatever state you self-identify with, Fergus—I don’t mean to speak for you—but what we can learn about how our government might have a different approach to its relationship to its citizens.
Fergus Hodgson: Well yes, I do love the Liechtenstein example. But Liechtenstein is similar to other microstates who basically show the conventional enormous or bureaucratic nation-state to be obsolete. And so Liechtenstein is a country of roughly 40,000 people. It’s between Austria and Switzerland and they have a royal family. And they are one of the most classically liberal nations on the planet. And my understanding is that Hans-Hermann Hoppe worked with the Crown Prince on both the constitution and that book. So if you have an anarcho-capitalist philosopher working with you, you’re going to be about as solid as you can get.
Anyway, so they have decided to devote themselves to providing basically—to being a service provider. So that’s flipping the government and subject relationship such that people are no longer serving the government, but rather governments are serving the constituents. Much like a retailer—I use Walmart as an example in my article, but obviously we know Amazon or many other outlets that do absolutely everything they can to match what people want and be as responsive as possible. And Liechtenstein has focused on providing stable rule of law, of providing adjudication, to be a financial center. And they have—because it’s such a small country often they don’t make the lists—but they have GDP per capita in excess of $100,000 per person. And this is just in a very mountainous area of the world, there’s nothing particularly special in terms of natural resources. That’s purely intellectual capital.
And the royal family, they have a very forward-thinking culture there. And in terms of going and moving there, you can’t really move there because becoming a citizen is not easy and also they speak a unique dialect of German, so it’s not the easiest place to go and live. There are many other options if you want to get out of the United States or to go elsewhere. But they have a forward-thinking culture or way about them and they just realize that the modern redistributionist or welfare state as we know it in the first world is simply unsustainable.
The Success of Small Nations and Intellectual Capital [21:28]
Fergus Hodgson: And there are two main reasons which I wanted to get to today. One is the increased capacity for us to move both ourselves and our businesses wherever we see fit. And the other is our increased capacity to basically opt out and conduct our economic affairs in a gray market fashion. Not necessarily illegal, but simply not participating in the conventional financial or government sectors. And these are making the modern welfare state unsustainable and the alternative is for more competitive nations or states such as Liechtenstein which have a totally different way of thinking. And I just love it. I’m so optimistic about places like that. And they call the bluff. All these notions that we need, let’s say, Social Security or we need these enormous welfare schemes are contradicted by these microstates which say we do so much better.
And one thing to note about the size of countries: if you look at any list of the top 10 wealthiest nations per capita in the world, almost all of them are very small nations. The United States, which sometimes comes in about 10th, is a very rare exception. The only other country with more than say 20 million people is Australia that sometimes gets in the top 10. Almost all of them are below 10 million people.
Bob Zadek: We’re going to go to break in a second. Before we go to break, which we will in a moment, when you mentioned a state as a service provider rather than an instrument of governance, that’s not revolutionary. Actually it was revolutionary in 1776. If you just read the second paragraph of the Declaration of Independence, governments are created by individuals for the purpose of protecting life, liberty, and property, or pursuit of happiness. So that concept of government as service provider is in our American DNA. It is a new idea that’s been around forever. This is Bob Zadek, I’m speaking with Fergus Hodgson, we are talking about what is the future for liberty. Is liberty and freedom from governmental intrusion inevitable? I say it is, Fergus says it is, and we will learn that technology accelerates that path to freedom from government when we come back in 30 unbelievably short seconds. Please stay tuned.
[Commercial Break]
Estonia and the E-Residency Model [29:10]
Bob Zadek: Welcome back to the Bob Zadek Show, the longest-running live libertarian talk radio show in all of radio. The show of ideas, never ever the show of attitude. We are having a conversation this morning with Fergus Hodgson. We are talking about the future of freedom. Is the growth of freedom inevitable despite the best efforts of government to snuff it out? And what are the technological circumstances that make this conclusion inevitable?
And Fergus, before we go on to technology, one observation. You had pointed out that the nations that you were speaking about specifically, Liechtenstein, is tiny of course—42,000 people, couple of square miles in the mountains between Austria and Germany, I believe. I want to sort of disabuse the audience that it only can happen—this only can happen in a really small country. I will remind our listeners that probably the first city-state that perfected the use of free markets to become a world power is of course Venice. Venice, a city-state in the 16th century, was almost—was just about the dominant political force in its region, if not the world. And the city of Venice was nothing other than a bunch of tiny islands sitting in the Adriatic, or in the Venetian Sea in the Adriatic, with no natural resources, nothing going for it. There was wet soil, that’s all there was. So how did they become so dominant in world affairs, in cultural, military, and economic affairs? By opening up the country to free markets. Anybody is welcome there so long as you obey the law and pay taxes.
And for more modern example, look at Singapore and Hong Kong. No natural resources whatsoever. What made them so powerful? Free markets. Come here, pay the taxes, don’t harm anybody, and you’ll love it here. And also Estonia, which Fergus you can talk about for a second because I know you studied Estonia. Estonia is yet another example, quite a bit larger country, used to be part of the USSR when there was a USSR. So tell us a bit, just because it’s a wonderful story if we can take a little side journey, tell us about Estonia, which I love discussing.
Fergus Hodgson: Oh man, Bob, I loved your introduction there as well because Hong Kong and Singapore are wonderful examples of nations that their capital is their human capital, right? It is their legal system and that’s why Hong Kong being consumed by China is such a problematic development. But Estonia, well, as you said, it was a part of the Soviet Union and the nations, the former Soviet bloc states, have a great disparity in their outcomes since the fall of the Berlin Wall. And Estonia is one of the best, right? It’s maybe it is the best example of after the fall of the Berlin Wall, they just went to enormous privatization, digitization, a modern economy, a flat tax. They did everything they could to basically become Western. And it is flourishing. It’s a country of 1 million people, so I guess about similar to New Hampshire. And they are pushing the boundaries of this competitive governance, of basically jurisdictional arbitrage. So they’re saying, look, why don’t you bring your business to Estonia and we’ll make you a great deal? There will be some tax, but very low and a much better option than what you can get let’s say in Canada or the United States or New Zealand. And so they have what’s called e-residency where they will give you a digital ID card and access to all the legal services of the country so you can run a business, you can conduct contracts there, whatever it may be, at a very low cost. And not only does that bring in some tax revenue for them, but it makes more people want to actually go and conduct their business there. And I took a trip to Estonia this past summer and it is a very humble, hard-working society. I liked it a lot. Very forward-thinking as well and I’m confident they will rise to become another Singapore or Hong Kong.
Bob Zadek: And Estonia is also a country of a million people, so we’re not talking about a micro-nation, but again, a country with no real natural resources. They have no precious metals, no oil and gas. So they are prospering and they have an index of freedom that is in the very top of the entire world and they are prospering because their export is freedom and free markets. And that shows us that humans inherently, they are hardwired to search out freedom and that becomes the most important variable that will draw individuals to a country is the desire for freedom. And Estonia has discovered that and they are a standout among the former nations which comprised the USSR.
Caller Michael: Psychological Freedom and Fear [32:50]
Bob Zadek: Now Fergus, we have a caller on hold. I try to take callers when I can, so this might be a good time. Michael, good morning, welcome to the show. What’s on your mind?
Caller (Michael): Oh hi Bob. First I wanted to thank you for having this show. It’s a breath of fresh air because as you probably know, every other political talk show on AM radio are Republicans or Democrats, which muddies the waters rather than gives us a breath of fresh air. So thank you so much for doing that and being so consistent over the years. I appreciate it.
Bob Zadek: Thank you Michael.
Caller (Michael): You’re welcome. My question was something you said earlier about companies, agencies making you dependent on them and creating fear. And the other side of political freedom is inner freedom or psychological freedom. And the way emotions work is our emotions come from our thinking. So companies can’t cause our emotions like fear or dependency. It’s how we view companies and how we view relationships to companies that creates our fear and dependency. And that’s a very powerful idea because then you can change your view and change your thinking and not feel afraid to leave a company or religion or a business and that gives you a lot of freedom.
Bob Zadek: You’re quite right and of course the genius of governments, companies, religions is that they know that. They are all—they seem to be all staffed by trained shrinks who have taught them that and that is a—as you observe—very powerful tool. And if you can tap into that power in a negative way, you own the recipient of your message. So thank you very much for sharing that Michael. We appreciate you being a loyal listener and an occasional caller. So thank you so much.
Caller (Michael): You’re welcome Bob.
Fintech, Uber, and Peer-to-Peer Liberation [34:50]
Bob Zadek: Now Fergus, tell us about how the advent of Fintech, the sharing economy—first define for the audience what you and I mean by that—and how the accelerated growth of the digital world has made or will make states become somewhat less relevant and maybe even jiggle the whole concept of what a country does and is and how little geography is going to matter.
Fergus Hodgson: Thank you, and thanks to that caller. I just would like to respond by saying I mean I agree with him of course that you need to have self-esteem, confidence to want to go your own way or stand on your own two feet and my sense is that people often lack that and that’s why they look to someone to save them.
When we refer to Fintech of course that just means financial technology. I use the term regarding the digitization and decentralization of the financial sector. So we are moving to digital transactions and also we are leaving the traditional financial sector to become more of a peer-to-peer financial system, you might say.
Bob Zadek: Tell the audience what you mean by digital. Digital as a standalone word doesn’t help people who are not as familiar as you are. So tell us what you mean by that phrase.
Fergus Hodgson: Sure. So digital is in contrast to analog, which would refer to paper checks, paper cash, it would refer to physical brick-and-mortar banks. And so we’re basically moving away from the physical to the non-physical or intangible and that can have different consequences, but that’s the transition I’m referring to.
And what does that mean for governments or for the broader economy? Many things. One thing is that controlling the non-physical is more difficult of course, right? One example which I’ve referred to in terms of—well this is one example of the way that the digital economy has helped us get out of the grasp of government or broken cartels. One example that everyone understands is Uber. Uber has gone into cities all across the world and has broken taxi cartels. And right now for example in Argentina, Uber is illegal, but of course you go to Buenos Aires, you can pick up an Uber anytime. And they just continue to engage in activity because what are you going to do? You’re not going to send out the police to stop every car. So they’ve shown the state to be weak and they can do that because they can exist outside the traditional financial sector. They use foreign banks and anyone with a foreign credit card can use it. So they have found basically a way to withdraw from the conventional Argentine financial system and that’s to the benefit of Argentine people because of course they know too their own financial sector is corrupt, that the peso has severe problems for the last 20 years. And so that’s just one example of the way our digital peer-to-peer transactions are allowing us to serve each other without being impeded.
Bob Zadek: And tell us—expand a bit about how digitization—I hope that’s a word—represents a threat, a real existential threat to the whole concept of government. You mentioned it a bit with reference to the fact when something is intangible it is harder to control when your tools are guns. Well, guns don’t do you very much good if everything is in the ether and if people don’t have to be located where you can touch them in order to carry on what you would like to say is an illegal activity. Think of for one example is of course online gambling where governments’ hair is on fire as they make online gambling illegal because it threatens the lobbyist’s client which is the casino industry who for a while had a lock. You couldn’t build a casino because it was against the law unless you got a license, the most hateful word in the English language: license. And now when an online gambling institution is out there in space, it’s located on Pluto where you can’t touch them, now governments don’t have any tools in their toolbox other than controlling the payment system. And governments have been trying to do that by controlling the payment system, as a result being new payment systems are evolving.
So what we see, Fergus, and what I learn from your writings is there is an inevitability of this all is that humans are so determined to be free that despite what seems overwhelming power imbalance, humans will find a way to free themselves from government. It’s incremental, it’s not one massive movement, but there are so many examples when government tries to deprive humans of what they naturally want and need—or forget need, even just plain want. Government’s attempt to regulate social behavior: prostitution, use of alcohol for a while, drugs, gambling, and now more recently you pointed out the cartels. Well, it was illegal to drive a taxi cab without having a medallion, a license from the government. But where government is prohibiting something that most people inherently want, the people will prevail and digitization is an invaluable tool towards that end. So help us if you can share more examples. We can mention briefly—we haven’t got time to get into cryptocurrencies in great deal, that’s a whole other show—but tell us how digitization is a very, very valuable tool in correcting the power imbalance between government prohibiting and citizens wanting.
Fergus Hodgson: Yeah, so the two reasons are that one, it allows because our businesses are non-physical that makes us extremely mobile. I mean that’s why Estonia can have an e-residency, a virtual residency when you don’t actually live there. So we can have businesses quote “being done there” because the businesses are not actually existing in any one particular space. So first it makes our businesses or our economic activities more mobile. Second, it means that wherever we may be, we can more easily conduct activities peer-to-peer without centralized intermediaries, right? And so the intermediaries are where governments can control us more easily. If we work peer-to-peer, it’s easier for us to just engage in that trade without anyone interfering or controlling that.
And in terms of why is this rising, this has been a very long-term change. Ever since the Industrial Revolution and the move away from an agrarian society, modern economies have become more and more service-oriented. And more and more of those services now are being conducted online in a non-physical manner. And that is what is making this change because as the proportion of the economy conducted in that fashion expands and expands, government has less and less that it really has control over. And that’s why as you said the writing is on the wall. And that’s why I’m just so optimistic these days. When I was a younger man I was sometimes a bit jaded, I thought man things are not looking up, but my optimism is growing and I just think we live in a wonderful era. It’s a great time to be alive. And for people who want—who do care about their individual sovereignty or freedom—there are so many options at your fingertips to help you achieve that. It’s so accessible and you don’t have to be wealthy or anything like that. You can basically take proactive steps to reduce your tax burden, to find alternative ways of engaging in business that are more in line with what you really believe or want to live.
Voting with Your Feet and the Future of Governance [44:37]
Bob Zadek: Ilya Somin, a scholar and an attorney at Cato, has written extensively about democracy but from a different point of view: how powerful—and it’s his phrase I believe, he probably didn’t invent it—how powerful “voting with one’s feet” actually is. We get to vote and exercise democracy in many ways. Every time you buy something you are voting. You are voting for a product. You are saying I vote for this product and I do not vote for the other product, the one I didn’t buy. That’s a form of democracy and that sends a message. That tells the manufacturer or the provider of the service you didn’t buy—that sends a valuable message: “We don’t like your stuff, you better change.” Well, voting with your feet is another form of voting. You say, “Gavin Newsom, I don’t like your state. I’m out of here. I’m moving to Texas. I like that product better.” Or I’m moving to Utah, which has the highest economic statistics in the country. I am moving to Utah. Voting with one’s feet.
We don’t yet have—it’s not yet convenient to vote with your feet by changing countries. That’s a little too dramatic for most people to do, but you envision, Fergus, a world where states are actually competing. We have that a tiny bit with the budding Seasteading Institute—I have done shows on seasteading—and with the free cities movement around the world. So people are starting to get into the business of government in offering a better product. It is quite exciting and you are the pioneer, you are the Christopher Columbus. You know you don’t fall off the end of the world when you sail east or sail west on the ocean. So you are the Christopher Columbus of states as vendors, as customers. So we have only a few minutes left, Fergus. So tell us about what you can see—I’m going to give you—now the best part of the show, Fergus, is when you offer an opinion, you don’t have to be right. That’s the beauty of an opinion. Nobody’s going to yell at you if you’re wrong. So Fergus, share with us in light of the advent of digitization and a Fintech world, what do you see—and indeed part of it’s going to be aspirational—what do you hope and what do you see as what countries are going to be like 50 years from now or 75? Fill in the blank space. Is it going to be like the United States, people just packing up and leaving California to go to Texas, or will it be not that dramatic and what will it look like?
Fergus Hodgson: Oh wow, that’s such a tough question Bob, but I’m very, very optimistic. And I don’t think people will need to leave California. California has a lot going for it actually, it’s a wonderful state.
Bob Zadek: The weather.
Fergus Hodgson: Yeah, and weather, beautiful countryside. There’s a lot in California. But the basic change will be a shift towards, as we’ve discussed, a service provider nation-state that will more mimic voluntary organizations, associations or societies. I’m a member of the CFA Society Houston, I’m a member of the gym, all these different organizations that basically exist to serve you. And people will be able to disconnect their economic affairs from their geographic location. So you might live in California, but your company, which you can already do right now, will be registered in Wyoming. And you can deal with the tax system or the jurisdiction there rather than where you physically live. That particular separation of placing your economic affairs in a more friendly or favorable jurisdiction will make all the difference.
Bob Zadek: And I think the lesson is that I have gotten from a lot of what you have written is that where I am—there is a reason that I am a lawyer and not a professional tennis player. There is a reason, it’s not like random. It’s like I’m really bad at tennis and I like to think I’m okay at law, so that’s why I do it. Now what is my point? My point is that there are certain functions that governments do pretty gosh darn well. Of course it can be improved, but running a court system so disputes can be resolved, protecting property rights, protecting people from others who would harm them, both domestic and foreign. Governments do that very well. What governments do very badly is delivering the mail, manufacturing products, delivering water—they’re just crappy at it. They could do it, they certainly could do it, but they’re really bad at it. What does business do well? Business does well by increasing the value of capital and by providing goods and services that people are willing to pay for. If a business tries to run a welfare system, if there could be such a thing, it would be bad at it. What did churches do well? Each of these institutions do something very well and something very badly. And my takeaway from your writing is if governments, businesses, churches, trade associations stick to what they do best, the collective benefit to all of society would be enormous. It is everybody exercises their comparative advantage. Do what they do best and the world becomes infinitely better. And that’s my takeaway from your writing. Governments stick to government stuff and don’t do anything else. Fergus, we have about one minute left. Any closing thoughts?
Fergus Hodgson: Well, just I would love for more people to engage in finding their freedom and having optimism. So you’re always welcome to reach out to me. Twitter is the best place to follow me, just @FergHodgson. Also I do write for the Epoch Times and for the Frontier Centre for Public Policy in Canada and I’d love for more people to engage with my work and I hope that because there’s so much more to say about this topic that we can have a discussion through my work and through my social media and I love to have feedback and engagement.
Bob Zadek: Bob Zadek saying thank you so much to my friend Fergus Hodgson for sharing an hour of his time. I’ll be back again next Sunday. Have a nice Sunday.
Fergus Hodgson: Thank you Bob.