Finding Freedom in an Un-Free World: A Reality Check

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Category: IM Interviews

Published on Monday, 18 July 2011 19:40

Written by David Galland

Here at International Man, we regularly get questions about the La Estancia de Cafayate [LEC] project, of which Doug Casey is a partner and the primary visionary.

Today, we’re very happy to bring you an interview David Galland recently did with Doug Casey on LEC. You’ll learn why he chose to establish the community there, what it actually offers, and why Argentina in general is likely to be one of the best places to establish a presence over the coming years.

It’s an in-depth look at a place that could very well become the real world version of “Galt’s Gulch”.

Finding Freedom in an Un-Free World: A Reality Check

- An Interview with Doug Casey on Government’s Closing Global Grasp

For several years now, a group of partners have been successfully building a community of freedom seekers and otherwise like-minded individuals in a secluded wine-producing valley in Northwestern Argentina.

Among the partners is Doug Casey, who has provided much of the vision for La Estancia de Cafayate, which when finished will be an amenities-rich version of “Galt’s Gulch”.

This brings us to the topic of my interview today: Is it actually possible to create something approximating paradise on earth for people looking for freedom in a world where freedom is becoming increasingly scarce?

The answer, as you’ll read, is yes, and no. As I am in the process of building my own home at La Estancia, the topic of this interview is personally very relevant to me. Can a community of individuals with a heightened appreciation for freedom, actually find that freedom in a remote corner of Argentina… or, for that matter, anywhere? Following is my interview with Doug.

David Galland: The primary topic I want to focus on is here is whether or not it is actually possible to find freedom in an un-free world, to paraphrase the title of Harry Browne’s book.

You’ve spent most of your adult life looking for freedom, and one of the things that has come out of that quest is your involvement with the La Estancia de Cafayate project in Argentina. That started in earnest about four years ago, so let’s start by talking a bit about that. From your perspective, how's it going?

Doug Casey: It's going better than even I anticipated, and I had high expectations. The main reason is that birds of a feather like to flock together. If I just wanted to live in a pleasant place, I could’ve stayed in Aspen, which is a small town about the size of Cafayate that already has all the facilities, all the amenities you could possibly want. But Aspen has two problems from my point of view. Number one: it's in the United States and I'm afraid that the U.S. has become the epicenter of much of what is to be feared in the world, and number two: the people that wind up living in Aspen are no longer the kind of people that I want to associate with - as often as not rich statists. As a result, even when I'm invited to cocktail parties and such, I find that I'm the skeleton at the feast because I don’t have any values in common with them.

So where do you go if you're a libertarian? In actual fact, there is no place in the world where it’s known that libertarians can hang out together, especially successful libertarians. If I could have found a place like that, I simply would have bought a lot there and made my life a lot easier. But there wasn't, and so after searching for the right place to create it – and I've been to 175 or more countries - we wound up where we are.

DG: What's your vision for La Estancia? Is the idea of La Estancia de Cafayate strictly as a community of like-minded people hanging out and enjoying the good life in good company, or is there more to it than that?

DC: Well, the people that have bought lots there are from 25 different countries, so obviously everybody is not moving in exact philosophical lock step, if only for that reason. I'd say that around half of the buyers are Americans, another 20% Canadians, the next largest contingent is Argentines, and then people from two dozen other countries. So that's where the people come from geographically. But philosophically and psychologically, I'd say there is a definite get-along/go-along libertarian attitude common to the owners. So the chances are excellent that when you meet your neighbor, you are going to like them. And you'll find that the people that you meet from the La Estancia community are the kind of people you'd like to have over for a drink or a barbecue. I can't say that about my neighbors in Aspen, most of whom are antagonistic to each other.

DG: Of course, I've spent a lot of time down there myself. And while the place couldn't be much more physically beautiful and the weather and the caliber of the food and so forth are all generally excellent - those things tend to be mentioned as secondary considerations by the people who have bought property. By a wide margin, the number one reason is the strong sense of connection to community coalescing around La Estancia.

DC: Yes. It’s a little like analyzing mining stocks. People are by far the most important thing. Next is the property- and I think that’s spectacular in all regards. I was very particular about the physical beauty and the weather, both of which are important, but I was adamant about having the kind of amenities there that would make it enjoyable to live in. By the time the place is fully buffed out, and we are well advanced at this point, I'm of the opinion that, from a physical amenity point of view, it will be one the best places in the world to live, at any price.

This is the reason we're putting in a world-class gymnasium of 3500 square feet, with a separate Pilate's room and a separate yoga and aerobics room, all outfitted with top of the line equipment. That's why the spa, which is now being built, not only has an outdoor lap pool but an indoor resistance swimming pool. Plus there will be a kid's clubhouse with the kind of things that kids like. We’ve tried not to miss a trick: a basketball court, three tennis courts, a squash court, a volley ball court, a bocce ball court, and a regulation croquet course. Those last two are great fun with a few drinks after dinner. We will also have a full parcourse, which is a lot more fun and beneficial than just going on a jog, and we're putting in about 20 miles of riding, biking, and jogging trails.

DG: And you haven’t mentioned the polo field and Bob Cupp Golf Course, or the clubhouse which are fully up and running.

DC: Yes. I may be getting a little too long in the tooth to play polo properly, but I don’t feel like I'm quite old enough to play golf yet. I know golfers love their golf courses, though, and we have one of the best golf courses in the hemisphere, I'm told. Anyway, riding either one of my polo thoroughbreds or a Paso Peruana, on the trails through the woods and the vineyards, is likely to be a daily thing for me.

In the evening I expect to spend time at the social clubhouse, which is starting construction shortly. It’s going to be very “gemütlich” - a home away from home.

DG: Okay, so that’s the vision and what’s been going on at La Estancia which, I guess you could describe as something of a libertarian enclave, with people from all different walks of life and a lot of different countries and cultures who are coming together in what might be termed an amenities-rich Galt’s Gulch.

That brings us back to the focus of this interview, because of course Galt’s Gulch was hidden away and only members of that fictional community knew where it was. But in the real world, the world that we live in, there’s no keeping the location secret. You’ve got to put it somewhere, and you picked Argentina. Why?

DC: Once I had decided that the U.S. was not the place to be, it began a process of elimination. Canada was out, partially because it’s US-lite, partially because the weather is not acceptable there six months of the year. So where else are you going to go? Europe has been on the frontline of serious wars for the last 2000 years and there is no reason to think that that's going to end at this point. In addition Europe is fiscally bankrupt, highly socialist, and quite expensive. It is in demographic decline and has serious problems developing from the Muslim world. In Asia, the only place that made sense to me is Thailand, but you'd never become a part of Thai society. And they have begun to enforce regulations that make it harder for a foreigner to buy property and live there.

Australia and New Zealand are entirely too collectivist. I thought of some South Pacific Islands, but they’re way too far off the beaten path. In the end it boiled down to the Southern Cone-- Argentina, Uruguay, and Chile. I like Argentina's wide-open spaces, I like the fact that it's demographically more like Europe than Europe itself is at this point, and that the costs are quite low. I like the sophisticated culture. This is not to say that it's the perfect place because, if it was, it would have almost no government.

DG: Let’s talk about that for a second. You're not saying that Argentina is perfect in all respects. You're saying it's the best out of a lot of options, but that every country has a government. So even though you concluded that Argentina is the best place for the sort of community you have built, the country itself wouldn’t be considered a libertarian paradise, a laissez-faire society where anything goes. Is that a fair statement?

DC: Yes, that is a fair statement. Though one of the many nice things about Argentina is that, because of decades of poor government, people have developed what appears to me to be a fairly widespread disregard for the institution - so much so that while on paper it looks like just another socialist state, it’s possible to live there with very little aggravation. I’d say, as a practical matter, much less than in the U.S.

For instance, if we tried to build La Estancia in the United States, say, in Colorado where I'm somewhat familiar with the political situation, after five years we would still be arguing with the county commissioners about how much welfare housing we were going to have to put in, and a dozen other things we’d have to resolve before getting the permits needed to even break ground. But in roughly that same time period, we're almost completely finished with the build-out of the infrastructure at La Estancia and dozens of houses are in the process of being built there. It's been amazingly easy and, based on the net result of what’s been accomplished, efficient.

DG: Similarly, unlike the US and an increasing number of countries these days, coming and going from Argentina is remarkably easy. They never ask you annoying questions about your business there or how long you plan on staying. Instead, they just welcome you and off you go.

DC: When you enter the United States or even Canada, even if you're a citizen of those countries, you're likely to be interrogated by the immigrations officer and maybe taken in the back room if he doesn’t particularly like your answers or your attitude. That's never been the case in Argentina and I can’t see it will be in the future. This is a big plus. The Argentines are like the Italians, not like the Germans. They’re not interested in controls, especially once you’re outside of Buenos Aires.

DG: So setting up La Estancia really couldn't have been done in the US or most of the more developed countries, for a couple of reasons: One is that you'd be so tied up with permitting and all this other nonsense that it would have taken far too long to get it done. But even more important in terms of it being an international community, the hassles associated with spending any appreciable amount of time in those countries would be very challenging for non-citizens.

DC: Yes. In addition, an important part of the vision for La Estancia from the very beginning is as a hedge against having all your assets in the U.S., Canada or similar degrading countries in the more developed world. If history has taught no other lesson it is that having all your eggs in one political basket can be a very big mistake.

Staying on the topic of Argentina as a good choice to hedge your lifestyle, there are some other serious advantages over the other places you hear talked about. For example, Singapore is very meticulous about everything, including the application of their immigration laws. Plus it is very expensive, and it’s a city. Switzerland is way too uptight. All of Europe is a sinking ship; very expensive, extraordinarily bureaucratic, and not really an alternative to the U.S. at all. Central America crossed my mind, but it’s backward, lacks class, and is completely over run with Gringos looking for cheap beer. Mexico has a lot of problems, especially when it comes to land tenure.

Which brings us back, realistically, to Chile, Argentina, and Uruguay where typically there are no squatter problems, good property rights, no racial tensions, and European traditions. In those three countries, and I’ve travelled extensively in all three, I was drawn to Cafayate as the place that I liked best in terms of just about everything.

DG: Having lived through several earthquakes in Chile, and spending time in Uruguay, I agree wholeheartedly with the choice of Cafayate. But what about the downsides of Argentina?

DC: Well, okay, the upsides are what attracted me, but there is no place in the world without downsides. All over the world, governments are out of control and approaching bankruptcy. So, taxes and reporting requirements are on the increase all over the world. There are no exceptions.

Consider some of the recent changes in Uruguay, for instance. The U.S. Government pushed the Uruguayan Government to put in an income tax, which they didn’t previously have. Today it’s only a tax on domestic income, but there is a serious push on to have it apply to worldwide income. Meanwhile, they’ve effectively put an end to Uruguayan bank secrecy.

So there's no ideal place where you can be insulated from these things. That includes Argentina – where taxes that were previously disregarded or not enforced – are now being taken more seriously. They still don’t have real estate taxes to speak of, but since 1998 they have had a 1.25% annual tax on assets registered in the country, which is now being enforced. Those assets include property and houses, so the tax is roughly equivalent to the average real estate tax in the U.S. This is the sort of thing that is becoming the case all over the world. It’s most unfortunate.

DG: Argentina certainly isn't a tax haven, but at this point there are very, very few countries that would be considered tax havens, right?

DC: Absolutely. And quite frankly, the few that remain aren’t very nice to live in. You'd be stuck on an island with an extremely high cost of living.

DG: So, if you are still going to be subject to government scrutiny and, under certain circumstances, taxes, why would a person from the United States or Canada want to have a place in Argentina and specifically in La Estancia de Cafayate? Besides the community aspects that we’ve already talked about, what’s the advantage?

DC: First and foremost, the most important diversification you can make, by far, is a political diversification. That’s because the biggest risk to your wealth today isn’t fluctuations in the market, although that's a big risk. Your biggest risk is a political risk from your own government. So no matter where you live, but especially if you are an American, it's very important to have significant assets outside the bailiwick of your government. Sure, you may be able to open a foreign bank account, which you have to report, and you may be able to find a foreign broker who will still let you open an account. But the U.S. Government could still force you to close those and repatriate the assets.

About the only thing that's really politically safe is property, and ideally property that you can enjoy, if for any reason things become too unpleasant in your home country. If history has taught anything over the last century, it has taught the importance of that diversification. Just look at the Russians in the 19-teens, the Germans in the 1930s, the Cubans in the 1950’s, the Vietnamese in the 1970s, the Iranians and Rhodesians in the 1980s, the Yugoslavs in the 1990’s. That’s just off the top of my head.

I expect upsets like that are going to increase, not decrease, in the years to come because we’re going into another period of global war, and the US is going to be in the middle of it. That’s something else that drew me to Argentina—it not only stayed out of the last two world wars, but profited from them. I don’t expect a change in their approach to foreign adventures.

But you must be diversified, because anything can happen anywhere today, even though most people ignore that simple fact.

DG: On a more mundane level, a big attraction to me personally for diversifying into Argentina is that when it's winter in the northern hemisphere, it's summer in the south. So it's a nest egg – a bolthole if you will – but also has a very practical value in terms of allowing you to avoid the worst of winter.

DC: Yes—other than going skiing now and again, I hate the winter. And it’s worth stressing that for people looking to enjoy an international lifestyle that you don’t want to be stuck in the middle of nowhere. Sure, you can buy a nice farm someplace, but you’ll find yourself pretty isolated, with nobody that you can socialize with, with nothing much you can do. Your options for entertainment or even a good meal are extremely limited. By contrast La Estancia has been envisioned from the start to be the kind of place where a Renaissance man could be happy and blossom.

For instance, in our social clubhouse, which should begin construction soon, we'll have a world-class library, replete with all the classics that you’ve always wanted to read, several thousand books. And the same thing with our media room – we'll have hundreds of well-selected movies and other DVD’s. It's meant to be the kind of place where you can have a great meal and then play a game of billiards over a snifter of brandy, or perhaps bocce ball or croquet on the front lawn. Or have a game of poker with your friends. Or simply sit in the library, smoke a cigar if you feel like it, and play a game of chess. That kind of place.

DG: So while freedom in an unfree world may be difficult to find, you can create your own environment to be as agreeable as it can possibly be. But ultimately there are going to be aspects of living in Argentina, or anywhere, related to residency and taxes and so forth that you’ll have to deal with. And that applies to every country. So, is it a true statement that there really is no place on this planet where a person can live completely free of the interference of government?

DC: That’s correct. There is no Utopia and there is no Shangri-La. As a matter of fact, we're at a stage of history where nation states everywhere are becoming more predatory. I'm very sorry that’s the way things are, but that's the nature of life on planet earth at this moment.

There’s one other advantage to Argentina that’s worth mentioning. And that is that since Peron, which is to say for the last 60, almost 70 years, the Argentine economy has stumbled from one crisis to the next. While that's not a good thing, looking at the bright side, Argentines are used to managing in economic crises. You don’t have to be adversely affected by the problems within Argentina because even though you'll be diversified there, you'll still have significant assets outside the country that will allow you to actually profit and capitalize from these things. And it's a very pleasant place to hang out.

DG: Also, at least up to this point, the government isn’t as technically capable as some of the more developed countries, especially the U.S. So, as a result, you're not being cross-referenced in computer banks no matter where you go or what you do. That said, the lack of the widespread use of the latest technologies and processes, along with some generally odd ball legislation, can have the downside of making it frustrating to deal with things that should be simple, like managing local bank accounts and buying and selling cars, that sort of thing.

DC: As I mentioned earlier, I've lived in a number of different countries and everything is different everywhere, so you always have to relearn some things. And it's true that from a consumer's point of view, the U.S. is more efficient, but balancing that is the fact that in Argentina the beef we eat hasn’t grown up on a feedlot stuffed full of antibiotics and steroids and fed on unnatural ingredients for the last part of its life. Instead, most of the food is locally grown and of noticeably higher quality. And we'll be continuing that tradition at La Estancia by doing things like buying a couple of Jersey cows for residents to use; they have a far superior type of milk.

In addition, we've got fruit trees, including olives, planted all over Estancia; it's a healthful, wholesome place to live. The kind of place where your kids can walk off for the whole day and you’ll know they’ll be perfectly safe. It's the kind of place that if you feel like it, and if you have a mind to, you can get on your horse and ride five days in any direction and hardly see another human being.

So, while you may have to deal with some unexpected frustrations in dealing with things that should otherwise be simple, the advantages of the place far, far outweigh the negatives. Because Cafayate, and La Estancia, offer absolutely all the things required to live the good life –sporting facilities, amenities, interesting and intelligent companions, good restaurants, a modern local hospital and so forth.

As far as the frustrations are concerned, as the community at La Estancia continues to grow, with time and experience, the Cafayate Concierge service, which was set up to help smooth the bumps out of life for residents, will only improve.

DG: In the list of advantages of the place, there is also the fact that Cafayate is a very successful up-and-coming wine-producing area.

DC: Yes. There is something about living among the vineyards which is just extremely civilized and desirable. And any climate that grapes like is the kind of climate that people like – warm and sunny during the day, but cool at night.

There is no ideal place in the world, but Cafayate is about as good as it gets, based on my many travels.

DG: So in your view the hassles of dealing with some of the petty stuff are more than offset by the very agreeable lifestyle. It’s also worth mentioning the people of Salta province who, in my direct experience, are extremely friendly. Even so, people need to understand that it’s not Kansas, but another country with a different history, a different culture, and so adjustment is necessary. You cannot arrive there expecting to go down to your local Wal-Mart and pick up everything you need for pocket change.

DC: No, but it’s easy and not very expensive to hire a local who will do these things for you. Speaking of which, to have a full-time maid in the U.S. is extraordinarily expensive. To have a full-time maid at La Estancia is very affordable, and that inures to a much higher standard of living because you can have somebody that does all the nuisance things you don’t want to do.

DG: It's a huge advantage. Being able to go there, even if just for a vacation, and have a maid who cooks and cleans is, from a lifestyle standpoint, a big benefit.

DC: Oh, exactly. You have much more time to do the things that are important to you, whether that's reading or exercising or just thinking and sniffing the flowers and associating with friends.

DG: There is one other thing worth mentioning – in Argentina you are free from media created hysteria and constant barrage of blaring cable TV news programs, which are almost impossible to avoid in the US. While in Cafayate, I typically have no idea what's going on in the rest of world, and don’t care in the slightest. In fact, when you come back to the US you realize that none of the media hype really matters.

DC: That's right. Of course we have all the satellite channels, high speed Internet, and the rest of it. But you’re not inundated with them as you are in the US. I also minimize my use of them, by choice.

DG: Let’s talk a minute about Cafayate’s remoteness. The nearest large town is Salta City, which is a 3-hour drive. Is that a plus or a minus?

DC: I'd say it's a huge plus. I do expect very rough times over the next 10 years in the U.S. and Europe and I've long said that I far prefer watching these things on my widescreen from a place that's safe and pleasant and isolated than watching it out my front window back in the U.S.

Besides, the town of Cafayate itself has everything you would reasonably want for day-to-day living, including lots of nice restaurants, with sidewalk cafes around the square. And although it's isolated, it has a jet airport people fly their private jets into now, and a limited commercial service from Salta City. Relatively soon, we would expect to see an expansion of commercial flights with direct flights from Buenos Aires.

So it's isolated but only in the way that Aspen has historically been isolated. You're isolated from the bad things but quite connected with the good things, from my point of view.

DG: One sign of what's coming is the fact that the Grace Hotel Group, a very upscale operator, is building a boutique hotel on the La Estancia property. They have indicated they’ll also be running regular flights from Buenos Aires to bring in guests and service items for the hotel.

DC: Yes, that's right, and speaking of Grace, just as we are building what I think will be an absolutely first-rate athletic spa, they’re planning on building a first-rate aesthetic/cosmetic spa at their hotel. Plus, they plan on operating a first-rate restaurant at the hotel, along with a number of other facilities and amenities. And that's right on our property, which confirms me in my opinion that La Estancia is going to be the best place in the world to be.

DG: Yet, you didn’t exactly rush into the idea of helping to build La Estancia de Cafayate. It wasn't your dream to get involved in a project of this scale, but you’ve done it. How did that come about?

DC: Well this thing evolved organically, actually. There was no intention from the get-go to build it, but it just seemed like there was no alternative. If I wanted to live in a community such as La Estancia, it became clear that I’d have to be involved in building it. As it turns out, the place is unique.

It’s why in the years to come there will be loads of people who want to live there, but won’t be able to. There are only so many lots. It’s intentionally small and exclusive.

DG: One of the more remarkable aspects of La Estancia is that despite it really getting rolling in 2007-2008, right at the peak of the crash so far, almost two-thirds of the properties are already sold.

DC: Yes, altogether about 220 lots so far. And the momentum is gaining traction, now that most of the major infrastructure is built, or soon will be, and houses are going up here, there and everywhere. I take that as a clear sign of the pent up demand for a community of this sort, with the kind of people you want as neighbors, plus the amenities, and the natural attractiveness of the location.

DG: So to sum up, it may not be possible to find unfettered freedom in today’s unfree world, but you can structure things in such a way that by diversifying internationally you can enjoy a fantastic lifestyle free of the risk of a single government sweeping in and grabbing your assets, or worse.

DC: I personally feel much safer and much freer when I'm at La Estancia than I do when I'm in the U.S. And if there was a better place to be, believe me, I would be there because I diligently looked everywhere, compared the pros, the cons, the advantages, the disadvantages. There is no perfect place. Like I said, Shangri-La does not exist, but this is as close as I think you can reasonably come.

DG: That seems like a good place to end, and so we shall.

~~~

For those of you unfamiliar with the fast-growing community at La Estancia de Cafayate, visit LEC's website, as that is the best way to understand just how far the vision has moved toward reality. As you’ll see, whereas just a few years ago La Estancia de Cafayate was little more than an idea, today virtually all of the infrastructure is either finished, or well on the way to becoming so.  And private residences are rising up amidst the hectares of producing vineyards and astride the Bob Cupp designed golf course that winds throughout the sprawling estancia.

If you are interested in learning more or have any questions, you can get in touch with the LEC Concierge using this special “priority service” e-mail set up just for our readers: IM (at) laest.com

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