The Benefits of an Inefficient Government

The photo below shows a scrap of paper with the word “Liat” on it. LIAT is an airline that services the Eastern Caribbean, seventeen islands in all. It does this rather badly. LIAT has a very poor reputation amongst both locals and visitors in the Caribbean Islands.

LIAT flights are scheduled, just as those of other airlines, but the orderliness and businesslike management of the airline essentially ends there. Flights arrive and depart at erratic, unscheduled times, as a matter of course. Often entire flights are cancelled without even the airport staff being informed.

Flight staff have been known to strike, take sick days or simply not appear as scheduled. Frequently, baggage is misplaced or sent to an incorrect destination.

Passengers are commonly stranded in whatever airport they happen to be when a plane does not appear, and when frustrated passengers ask when the flight will take place, they are told, quite honestly, “I haven’t any idea.”

If a mealtime arrives when stranded passengers are sitting in the departure lounge waiting for the plane to arrive, a LIAT representative goes from passenger to passenger, apologising for the continued delays and handing out vouchers for a free meal anywhere in the departure lounge. The “voucher” is like the one pictured above: a scrap of paper torn from a page, on which the representative writes, by hand, “Liat.”

Of course, to the weary traveler, this is absurd. If the airline is so disorganised that it resorts to writing a voucher by hand, the traveler could just as easily write his own voucher, and of course, many people do just that. However, LIAT does make good on the vouchers, paying the restaurants for all meals that have been served to passengers who hand them in as payment.

Should passengers still be waiting for the plane to arrive after midnight, the LIAT representative rounds up several taxis and arranges for the passengers to be taken to local hotels. As can be expected, this is also done in a very disorganised manner and the passenger may count himself lucky if he rests his head by 2:00 AM in a hotel that he might not have chosen for himself, had he had the choice.

So, how on earth is it possible for such an airline to exist in the modern world? Surely, it should be bankrupt by now. The key is that LIAT is not a normal business. It’s owned almost entirely (85%) by seven governments (all of them islands in the Eastern Caribbean), with the controlling shares (73%) being held by three island nations. These three, of course, call the shots as to the management of the airline, resulting in the chaos seen at LIAT.

This is a reminder that governments, being monopolies, don’t need to place a priority on efficiency and customer service. They can operate ineffectively and at a financial loss because the taxpayer will be picking up the tab, no matter how great and no matter how senseless the loss may be.

A Nuisance That’s an Opportunity

Now, to those who live in a large, highly organised country, who visit such a destination on holiday, this is quite a nuisance. It wouldn’t be surprising if they were to comment, “I could never live there; their government is so inefficient, they can’t even run their own airline.”

Quite understandable, and yet, for those internationalising, this situation should be looked upon from a different perspective. Today, those who are internationalising their lives are generally doing so because they are seeking to remove themselves from the overreach of their own home governments.

In many countries (particularly in Europe and North America), governments have become so adept at efficiency and control that their citizens are becoming enslaved by their own governments, unable to live in a state of relative freedom, due to the ever-expanding controls.

To be sure, we all like to be surrounded with efficiency in our day-to-day lives, but when a government becomes so efficient that it can chip away at our freedoms, we take a different view. It’s axiomatic that, as Thomas Jefferson said,

“A government big enough to give you everything you want is strong enough to take everything you have.”

And today, as stated above, the world’s largest governments have reached that point. As a result, we’re seeing a dramatic increase in the number of people who are opting out and seeking to internationalise themselves. And here we reach the principle point of this article.

When beginning the internationalisation process, most people seek to replicate all of the conveniences that they presently have, but to have them in a jurisdiction where the government is less controlling and parasitic. These jurisdictions do exist, but they’re rare.

Size Matters

It’s quite true that there are some jurisdictions (mostly small ones) that have highly efficient governments and are excellent places to live. But in most cases, the internationalist must expect to pay a premium to live in one of them. If he can afford to make this choice, he will do well.

However, the great majority of those presently seeking to internationalise are saying, “I can’t afford to live in an ideal location (Hong Kong, Zurich, the Cayman Islands, etc.) Does that mean that I’m simply to become a casualty in my home country?”

The answer is an emphatic “no”; however, what it may mean is a trade-off. There are many countries in the world where the government is not as invasive as in the above-mentioned jurisdictions. But realistically, this, generally, is not for lack of trying.

It can generally be assumed that, the larger the country, the more likely the government is a controlling one, sometimes obsessively so. However, the less prosperous the country is, the less tax the government is able to extract from its people and therefore, the less efficient it is likely to be. (In those countries that internationalists are presently exiting, it is their very prosperity that has allowed the governments to successfully become overreaching.)

Therefore, those internationalising may well choose to live in Argentina, Ecuador, Thailand, etc., in part, because of an increase in freedom. It should be borne in mind that in each of these countries, those in power may be no better than those in power in their home countries; however, they lack the tax dollars and the accompanying infrastructure to enforce restrictive laws. Often, their residents habitually ignore laws.

This is not a freedom that should be taken lightly. Often, whilst a less efficient, less sophisticated jurisdiction may seem like a step down and that the standard of living may in some cases be diminished, the quality of life may be enhanced.

Countless individuals who at first were skittish about making the leap have reported a year or two later that their lives had been literally transformed. Their initial fear of living in a place where they couldn’t find a Starbucks, or, for that matter, one where the airlines were inefficient, was washed away with the realisation that those priorities had become secondary to the acquisition of a new life that was, quite simply, happier.

Those who are travelling in search of a new home, rather than travelling on holiday, must take with them a new perspective. To be sure, this is a trade-off, but often, the very things that create concern for someone on holiday are symptomatic of an opportunity with regard to internationalisation.

For many, increased freedom tends, ultimately, to override the desire for convenience and efficiency and replace it with greater contentment.

Editor’s Note: There are many attractive jurisdictions that are cause for optimism. Some are ideal places to reside. Others are great places to park some savings or to invest in. Others are optimal for conducting business. Yet others are perfect for obtaining a second passport. You can find out our favorite jurisdictions by clicking here to watch this free video.

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