Disrupting Government – Why Countries Will Soon Have to Compete for their Citizens

Disrupting Government – Why Countries Will Soon Have to Compete for their Citizens

In 2002, Roger Ver was honing his entrepreneurial skills by selling products on eBay. It was in the aftermath of the Twin Towers disaster when one of his products called “Pest Control Report 2000” hit the radar of Homeland Security and he was charged and convicted of selling 14 pounds of explosives without a license.

He dismisses the product as little more than a “firecracker to scare birds from cornfields,” but ended up serving 10 months in federal prison.

While his computer-parts business made him a millionaire by age 25, Ver became truly wealthy after investing tens of thousands in Bitcoin in 2011, a crypto-currency that he bought for $1 each and trades in the neighborhood of $600 today.

Now, at age 35, Roger Ver has adopted the moniker “Bitcoin Jesus” and is one of the currency’s most ardent supporters as well as a major investor in Bitcoin startups.

At the same time, he has another agenda. He is now traveling the world, explaining to wealthy people everywhere how they can invest as little as $400,000 in the Caribbean island nation of St. Kitt and become a citizen there.

After finishing his probation in 2006, Ver moved to Tokyo to stay off of the radar of U.S. officials. Earlier this year, on Feb 13, 2014, he got his St. Kitt’s passport, and renounced his U.S. citizenship that same month.

“I didn’t hurt anybody. I had nothing but happy customers, and the U.S. government locked me in a cage,” he said. “So I want nothing to do with those people. I don’t want to support them. I want them out of my life.”

St. Kitt has become a magnet for wealthy people around the world because they only require an investment, not residency, to gain citizenship.

With transportation systems growing more efficient, and intrusive technologies leaving many feeling hyper-exposed and alienated by their government, conditions are now ripe for a massive wave of governmental disruption where wealthy individuals choose to “vote with their feet,” and abandon their home country.

Here’s why a massive shift is about to occur, that will force countries to compete for their own citizens.

The Story of Iraq

In 2003, President George Bush let the world know that the U.S. military was planning to attack Iraq and capture Saddam Hussein.

During that ramping up period, it didn’t take a genius to understand what was about to happen, and many wealthy and professional people proceeded to abandon their homeland of Iraq. The country suffered a massive brain drain as lawyers, dentists, engineers, architects, professors, and business owners all gathered up their families and moved to other countries.

This exodus of talent has had a long-term residual effect since most of these families have not returned over a decade after the official war ended making the rebuilding of the country far more difficult.

Growing Migrant Populations

Migrant populations around the world continue to grow. In 2013, 232 million people, or 3.2% of the world’s population, were international migrants, compared with 175 million in 2000 and 154 million in 1990.

Europe and Asia combined are the home for nearly two-thirds of all international migrants worldwide. Europe is the most popular destination hosting roughly 72 million international migrants in 2013, followed closely by 71 million in Asia.

In 2013, half of all international migrants lived in 10 countries, with the US hosting the largest number (45.8 million), followed by the Russian Federation (11 million); Germany (9.8 million); Saudi Arabia (9.1 million); United Arab Emirates (7.8 million); United Kingdom (7.8 million); France (7.4 million); Canada (7.3 million); Australia (6.5 million); and Spain (6.5 million).

Abandoning Citizenship 

The United States is one of only two countries that taxes citizens or permanent residents wherever they reside, including an estimated six million Americans living outside the country. (The other country, incidentally, is Eritrea, a single-party dictatorship.)

Citizens or permanent residents of every other country end their obligation to pay income tax after a sustained period of non-residence from that country, generally one year or longer.

Taxes are just one of many reasons people choose to abandon their citizenships, and the numbers tend to drop during Presidential election years. Here are the official numbers for people renouncing U.S. citizenship over the past seven years:

  • 2007 – 467
  • 2008 – 231 (Presidential election year)
  • 2009 – 742
  • 2010 – 1,534
  • 2011 – 1,781
  • 2012 – 932 (Presidential election year)
  • 2013 – 2,999

Even though the numbers are climbing, in a country of 320 million people, they are still too small for leaders to dedicate much attention to.

However, in addition to renouncing citizenship, people can simply relinquish it. Relinquishing citizenship is a process that no one seems to be tracking, and some are estimating the numbers to be as much as four times higher.

If the actual number in 2013 were 4 times higher - 12,000, it would still be considered a tiny number. But if a high percentage of them were high-profile, super wealthy millionaires and billionaires, the whole world would begin to take notice.

Change is Coming – Shift #1

Within a decade, if you participate in a demonstration or protest, the probability of being personally identified will soon reach 100%.

Recent protests in Turkey have many wearing gasmasks or the ever-anonymous Guy Fawkes masks to conceal their identity. At this point in history, masks are probably sufficient.

However, in a few short years, people will become infinitely more traceable and simply using face paint, masks, or other theatrical disguises will offer little to shield them from the scrutiny of those with infrared scanners and other mask-penetrating technologies that take time to investigate.

Young people involved in the Turkish protests find it easy to get caught up in the moment, and are often involved in the destruction and burning of property in the streets.

To be sure, the dividing point between a protest participant and those officially labeled a “terrorist” becomes an easily swayable judgment call.

As we move further down the path of automating justice, the use of drones for surveillance, identification, and capture will be greatly expanded. And once a person is labeled a terrorist, it will be a designation that haunts them the rest of their life, regardless of where they live, anywhere on the planet.

So rather than standing up and protesting a bad decision by the government, it will become infinitely safer and easier to simply move to another country.

Change is Coming – Shift #2

As we look closely at the advances made in transportation systems over the past couple decades, it’s easy to see that we are on the precipices of a dramatic breakthrough in ultra high-speed transportation. Businesses are demanding it. People are demanding it. And the only things standing in our way are a few people capable of mustering the political will to make it happen.

The first wave will come with driverless cars and their ability to drive far faster and safer than with human operators.

The second wave will come in the form of Personal Rapid Transit Systems (PRTs) that can be constructed over existing highways dramatically automating our commute times.

Within 10-20 years, your dreaded 7:00 am commute that takes 2 hours and half a tank of gas could be shortened to as little as 20 minutes using virtually no gas.

As transportation networks expand, the definition of a metro area will expand as people begin to routinely commute 500 – 1,000 miles each way for their jobs. A city like Milwaukee may be considered a suburb of Chicago as travel time is reduced. The entire Boston to Washington corridor could be massively linked into one large metro area.

The result of this will be a far more fluid global populations with people routinely having breakfast in Tokyo, lunch in Paris, and dinner in Seattle.

This also means that people who become frustrated with their government will have a far greater tendency to vote with their feet and move to another country.

Final Thoughts

In the past, countries were defined by a distinct geographical area and the people who lived there.

The Internet is dramatically increasing our awareness of the events and actions of those in charge, as well what’s happening in other countries around the world.

When a wealthy person like Roger Ver renounces his citizenship in favor of St. Kitt and becomes a citizen of the world, millions of people around the world take notice.

Every country on the planet is about to undergo heightened levels of scrutiny, both internally and externally as our awareness grows. This will, in turn, force governments to rethink virtually every system, process, and strategy as it relate to their citizens.

As awareness grows, counties will soon find it necessary to compete for their citizens, something they’ve always taken for granted in the past.

Late adopters to this strategy will quickly find themselves losing the talent pools needed to compete in the global marketplace.

As a result, governments will be much different in the future.

Please take a moment to weigh in on this critically important topic. Your children’s children, who haven’t even been born yet, are depending on you.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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9 Responses

  1. Scott Perlman

    After the invasion of Iraq a friend of mine renounced his citizenship and moved his family to New Zealand. He wanted to live in a country that is less oriented towards war. This was something I would have personally never considered…until his move. He loves living in another country and seems to have few regrets about abandoning his native land. You’re correct, the world of possibilities has opened up, and the world itself has seemingly opened up with more of my friends traveling to unusual destinations, and in some cases moving their families there, including Costa Rica, Dominique and N.Z. Some of these friends want to get away from our perceived dysfunctional society (financial crisis, wealth disparity, government gridlock, government spying, etc.). Some just want to try a different experience. Whether I eventually move or not, there is now at least a personal paradigm shift in how I view myself as an American…..

  2. FuturistSpeaker

    Scott,

    Thanks for your comments.

    When Brazilian-born Eduardo Savrin (One of the founding team of Facebook) renounced his citizenship in 2012 to live in Singapore, it raised lots of legal issues about whether it was fair for someone to use this tactic to avoid what would have amounted to over $1 billion in taxes. Quite frankly, most of us would have made a similar choice when there’s that much money on the line.

    Whether it’s convicted felons, drug lords, tax cheats, or those doing it for moral reasons, the whole dynamic between citizens and their government is about to change. For most leaders, this will be unchartered territory.

    Futurist Thomas Frey

  3. Nico van Klaveren

    Your post reminded me of Garry Davis who for very different reasons renounced his US citizenship after WWII and roamed the world as a World Citizen.
    I happened to meet him several years ago at an annual World Future Society meeting and am wondering what Garry would think of Mr. Ver and St. Kitt :)

  4. ray comeau

    Bang on. The notion of people immigrating as a refugee seeking asylum and freedom; is as dated as a Norman Rockwell sketch. Today the vast majority of migrants are economic migrants, who want a wealthier lifestyle.

    The retiree in NA is longer the snow birds of Florida and Arizona. One million Americans now own houses in Mexico. The expat community around the globe is growing fast as the baby boomers cash-in. Not the top 2%, but we do have disposable income and are spending it overseas.

    We enjoy a better lifestyle then in their native land. It is beyond lack of trust in gov’t, its a proactive detachment from one society to another one that is more appealing in some way.

    I a Canadian, like 600,000 other expats live in China. Many live in HK but I live in Mainland China. Been here full time for over 5 years. Friends and family at home could not understand this for a long time. Stereotypes are hard to dismiss, but after a few trips back and bi-weekly emails and pictures of what is happening, now it is like I live in another part of Canada. Eventually one of my sisters and nieces came for a visit. Now they want to come again.

    My nationality is in my heart. My economy is in my address. I am a baby boomer, the world there for us. Just open the door and begin walking.

  5. michael cushman

    Tom, you are absolutely right, counties no longer can assume their citizens won’t just leave. City, states, regional governments have been experiencing these dynamics for years. When crime is high, jobs scarce, or polution kills, people move and never return. Now enabled by globalization and technology, no boundaries remain. When former Soviet Union countries join the EU, often the most tallented youth leave to find better opportunities.

    Changing citizenship to avoid taxation is a growing trend, that is unsustainable. It is a great boon to those amassing personal wealth, but on a large scale, a future of crushing goverment debt for those left behind to pay for military, highways, social sevices, public safety, etc.

    The inequality of wealth distribution is another problem on the rise globally, and it too is unsustainable. Currently, over 60% of the world’s wealth is inherented, and it is moving rapidly upward.

    Tax havens and wealth concentration will eventually force nations to cooperate on taxation. It is a long way off, of course. You will be able to live where you wish, and you will be taxed relatively the same regardless. Otherwise civilization will colapse.

    Between now and then, governments and individuals will be making self-interest choices that will be intersting to watch.

  6. The notion that everyone should raise their eyebrows and take notice when someone wealthy who doesn’t want to pay taxes makes a dramatic life change is hyperbolic at best. Oh no! What will we do if the top .01% leave?! What were they contributing? One man only buys one pizza. Do you think anything came from that person that helped to sustain our economy? Don’t make super-rich people angry, or they’ll flee! Good riddance. This is a conversation about .01%-ers being had by top 2%-ers who long to be them. Everyone else is exempt from all this moving around the world rubbish and is stuck doing whatever they always do wherever they’ve always been. If you feel empowered and mobile enough to live abroad, be happy with it. But this notion of further catering to the wealthy (15% capital gains taxation isn’t consolation enough?) in hopes that they don’t abandon their nation is nonsense – particularly in the USA. You want to live in a nation with no army and no world status just to keep from paying some tax? Hope you never need an embassy…

  7. Unconcerned Citizen

    Concerned Citizen has a point. Oh no, 12,000 people *might* have relinquished their citizenship last year! And maybe 200 of them might be super-wealthy. Whatever will we do? 12,000 would be the exact amount of people it would take to fill the baseball stadium in Des Moine, Iowa. I’m sure the Iowa Cubs would be thrilled to have them all show up for a game. Dodger stadium in Los Angeles can hold nearly 5 times as many. So they’re super wealthy? What does that mean? They barely pay any taxes now, what makes anyone think it makes a difference? Show me their tax returns and total how much they actually paid in taxes and then maybe I’ll look up and take notice. Maybe. They’ll want to invest their money somewhere, it’s fairly doubtful it will have any impact on the US economy… they’ll continue to invest and write-off their taxes. Big yawn, somebody rich moved. Maybe the gossip columnists will be interested. Hordes of average citizens walking out? Sure, that’s noteworthy. Wake me when it happens and I’ll get on the bus too.

  8. Before I get going here, know that I’m very much pro-business – which is tough to be unless you’re also anti-monopoly…

    It’s estimated that there’s about $4,000,000,000,000 parked in offshore accounts by individual rich folk from around the globe, 80% of which is there for reasons of tax avoidance, AKA ‘theft’. So I expect this particular pendulum to swing the other way first. They’ve found loopholes. It’s now the *public* government’s job to close them.

    As to the *private* governments that are the monopolies out there, I’m expecting a new Teddy Roosevelt on this landscape, soon.

    Here’s some light reading while we’re waiting: http://www.salon.com/2014/06/29/free_markets_killed_capitalism_ayn_rand_ronald_reagan_wal_mart_amazon_and_the_1_percents_sick_triumph_over_us_all/

    Best,
    Kevin

  9. Ed in Jersey

    In the good ole USA the wealthiest of “citizens” is chomping at the bit to get out. Think corporations which are considered individuals in this country. Then wrap your mind around the new buzz term “inversion” which simply means a US company buys a foreign based company and now assumes the foreign based companies address for tax purposes. Pfizer one of the largest corporations in the world is trying to do just that by launching aggressive bids for Astra Zeneca. Pfizer is not just a billionaire, it comprises around 200,000 employees? on its own. Many one per centers, and a boat load of high paid middle class white collar jobs that are all on the books and pay huge taxes.
    Those of you that aren’t worried about a few rich people leaving? Rethink that. Alarms should be sounding off everywhere to address this. Large governments are always asleep at the switch and reactive vs proactive. Not only will the rich leave, but the only remaining productive jobs are now leaving which is even worse. The USA manufacturing base which used to dominate the world is now nearly non existent and this has devastated our middle and lower class employees for companies to save a couple of dollars per hour labor. Now corporations are looking to save billions in reduced taxes. Cannot be stopped, never count on a corp to “do the right thing” that is contrary to there charter and mission to maximize profit. They always put a nice spin like “we contribute to our communities”, and this is true, the USA just won’t be their community anymore.

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