The Arawa Island Project

...a plan for creating the first libertarian nation state.

Aug 09, 2024

Who is this essay for?

This essay is for liberty-minded folk who want to live in a pro-liberty, pro-innovation, high-competence country within their lifetime.

Inspired by the Free State Project, the Arawa Island Project (AIP) intends to establish an international homeland for liberty lovers by concentrating enough libertarians in the US Virgin Islands ( USVI ) such that they sufficient political power to

Win almost all of the important seats in government.
Declare independence.
Pass sweeping pro-liberty legislation.
Evolve into the Switzerland of the Caribbean.

The AIP may be of interest to you if you are:

...a wealthy individual who wants to protect your wealth from confiscatory taxation.
...a pronatalist who wants to use reproductive technology such as polygenic risk screening, germline genetic engineering, in vitro gametogenesis, and surrogacy.
...a nuclear power advocate who wants to build new plants under a rational regulatory regime.
...an entrepreneur who wants to hire the best talent from all over the world.
...an artificial intelligence researcher who wants to create AI's as powerful as current technology allows.
...a sex worker who wants to be able to work without fear of imprisonment or deportation.
...a psychedelic drug user who wants to be able to partake without fear of imprisonment.
...a housing developer who wants to build abundant housing free of onerous zoning regulations.
...a scientist who wants to deploy new medicines without stifling FDA regulations.
...a patient who wants low cost drugs/medical services in the absence of medical licensure and prescription drug laws.
...a home schooler who wants to teach your own children w/o state meddling.
...a cryptocurrency advocate who wants to be free of KYC/AML laws, capital controls, and banking regulations.
...an inventor who wants to be free of patent laws.
...a writer who wants to be free of copyright laws.

In other words, the ultimate goal of the AIP is to establish USVI as the first full-fledged libertarian nation state. (The AIP is named after the original inhabitants of the US Virgin Islands, the Arawak Indians.)

What problems does the Arawa Independence Project (AIP) solve?

There is currently no state on the planet where libertarians can live under a full-fledged pro-liberty government.

While some states are definitely better than others, all extant states are governed by authoritarian governments that impose a wide variety of wasteful, destructive policies on their citizenry.

Although libertarians frequently run for office, we almost never win. When libertarians do win office, we rarely succeed in passing pro-liberty bills.

There are several reasons for this, but the biggest reasons are:

there aren't that many libertarians
the libertarians that do exist are diffused across the world
despite 50 years of effort, libertarians have not found effective ways to significantly increase our numbers

For example, in the US, there are probably ~15 million “hardcore” libertarians spread out among the ~335 million total population of the US.

Elections are fundamentally popularity contests, so if your faction only makes up 5-15 percent of the population, you will consistently lose.

No libertarian in the US has won an election (on the Libertarian Party ticket) for:

President (Gary Johnson won the most votes ever by an LP candidate when he got 3% in 2016)
Congress (House or Senate)
Governor (of any state)
Mayor of a city with a population greater than 75,0000

If there is an effective persuasion technique, libertarians have not found it.

Twin studies suggest that political inclinations are heavily influenced by our genes. If these studies are correct, no persuasion attempts are likely to be effective.

But what if you could concentrate many of those libertarians in a single state? If libertarians became the most populous faction in a single state, then they should be able to win most elections in that state, even if they are minorities nationally.

Concentrating enough libertarians in USVI to have sufficient political power to make USVI a libertarian nation is the problem the AIP seeks to solve.

Why not participate in the Free State Project instead?

The AIP is inspired by the Free State Project (FSP), a similar project to concentrate libertarians in the state of New Hampshire. The FSP was founded in July 2001 by Jason Sorens, then a Yale graduate student. Sorens studied secessionist movements, and his empirical research suggested that if at least 2% of the population were political activists in favor of secession, then the secessionist movement had a good chance at success.

But how do you get libertarians--a notoriously fractious collection of people--to move to a single state? Sorens proposed an assurance contract: ask people to commit to move if and only if at least 20000 other liberty minded folk commit to move as well. That way, anyone who committed to move would have greater assurance that paying the costs of uprooting and moving therefore would not be in vain.

So, the Free State Project was born. New Hampshire was chosen as the destination state at the 5000 signup mark in 2003, after extensive research and debate. The move was triggered in February, 2016. To date roughly 8000 Free Staters have moved, and another 20000 have agreed to move.

And, almost unique among libertarian political strategies, the Free State Project is enjoying successs. After the 2020 November elections, 94 libertarians were elected to the New Hampshire House and Senate (out of 400 House seats and 24 Senate seats). The liberty faction held four of the six positions on the House leadership team, including the House majority leader, and the House whip. They've successfully trimmed $210 million from the state budget, passed a school voucher program, and eliminated gun licensure requirements among other achievements. (11, 12)

However, the Free State Project has several limitations:

Many libertarians born outside the US would like to move to New Hampshire. Unfortunately, US immigration suppression laws make immigrating almost impossible. The US Federal Government (USG) only allows a small number of immigrants into the US each year. Nationalist sentiment is unlikely to allow immigration suppression laws to be repealed any time soon.
Many of the worst predations of government happen at the Federal level: the War on Drugs, the FDA, the Wars in Afghanistan and Iraq, among many others.
While New Hampshire state government can try to nullify Federal law (such as by forbidding local law enforcement from enforcing bad Federal laws), the federal government still has vast resources to attack New Hampshire citizens. Short of seceding entirely from the US, it's going to be difficult for New Hampshire residents to escape Federal rule.
The idea of peaceful secession arouses irrational aggression among many. When polled, only about 15% of New Hampshire citizens support secession. At current growth rates, it will take decades to build a constituency for secession.
New Hampshire is a cold weather state. The cold and snowy weather is probably the most common reason libertarians give for refusing to move to New Hampshire.
There is a strong xenophobic sentiment among the existing New Hampshire population, even among the liberty minded. Opening up New Hampshire to significant immigration from outside the US is likely to be very difficult.

But what if there was a place where:

Neither US citizens nor locals have strong attachments to each other.
Locals can set many of their own Federal policies, such as low state and federal taxes.
US citizens can freely live, work, and vote (without even a passport!)
The population is low enough that small number of activists (< 20,000) could win almost all important government positions.
The locals could set their own immigration / visa policies.
The weather is warm and sunny year round.

Such a place exists: US Virgin Islands (USVI).

Why might USVI make a good libertarian nation?

Located in the Caribbean near Puerto Rico, USVI consists of three main islands (Saint Croix, Saint John, and Saint Thomas) and fifty smaller islets and cays.

The US purchased the islands in 1917, and USVI became an unincorporated U.S. territory in 1927.

As a US territory, USVI enjoys a number of advantages:

USVI citizens are treated as American citizens, and can move freely to and from the US mainland.
As one of the original 13 colonies, New Hampshire has centuries of ties to the US government and culture. If New Hampshire were to secede, it could significantly shift the balance of power in the US Congress.
By contrast, most US citizens have no knowledge of USVI, and could not even place it on a map. USVI residents have few strong ties to the US. If USVI were to secede, it would affect the balance of power on the US mainland very little.
USVI is small enough that relatively few political activists could win control. There are fewer than 90 K residents, and only ~22 K vote in a typical election. If Jason Sorens is correct, it would only take 2 - 5 K libertarian activists to move to USVI to make significant changes to the political system.
USVIers are US citizens and can freely move back and forth between the US mainland and USVI--you don't even need a passport. In order to establish residency, you need only live there 90 days prior to the election.
The USVI independence movement has historically been quite popular, although it's not especially active right now. (4)
USVI is likely to be more open to immigration. Immigrants already dominate the population--more than 50 percent of Virgin Islands residents were born outside of USVI. There is no native population with especially long-standing cultural ties to the land.
There is existing precedent for US territories to have their own citizenship program. Saipan has a work visa unique to Saipan, the CW-1. (15) Guam has a sub-national citizenship program that allows people to be citizens of Guam, without being a citizen of the US.
USVI could offer a similar USVI-only citizenship program, which would allow USVI companies to hire from the global labor market. Libertarians from other countries, not just the US, could potentially move to USVI.
It's relatively easy for US mainlanders to live and work in USVI remotely. English is the official language, spoken by 85% of the population. USVI is located in the Atlantic time zone (an hour ahead of New York City, four hours ahead of San Francisco). The Virgin Islands sits on top of a major trans-Atlantic internet backbone. Over the last decade and a half, Virgin Islands Next Generation Network (viNGN) has built out a robust fiber network across St. Thomas and St. Croix.
Although buildable land is scarce—USVI has an area of only 134 square miles, 70% of which is devoted to national parks—there are many cays, bays, and sandbars nearby where seasteads could anchor out.
Seasteads could offer a way to increase the land area without limit, and without impinging too much on the existing citizens. There are also several large islands for sale.
A seasteading community could work out the bugs of seastead prototypes in USVI, while still having relatively ready access to services from the mainland.
USVI has two international airports and a container port. The USPS delivers there, and shipments to USVI are not considered exports. Heavy industry is possible; for example, there's a decommissioned refinery that could be repurposed to seastead construction:
The Jones Act doesn't apply to USVI, so foreign flagged vessels can make a port of call at USVI on their way to the US, dramatically reducing shipping costs. (3)

USVI offers several tax incentives for companies and individuals willing to locate there, such as:

Economic Development Commission (EDC) tax program
USVI Hotel Development, and Finance Program
Enterprise Zone Tax Incentives (EZC) Program

Of these, the Economic Development Commission (EDC) tax program is the most significant. Under the EDC, USVI resident companies can expect the following key tax incentives:

90% reduction in corporate income tax
90% reduction in personal income tax
100% exemption on excise tax
100% exemption on property taxes
100% exemption on gross receipts tax
1% duty on imported goods

The top federal US income tax rate for 2023 is 37%, successful EDC applicants can enjoy a tax rate as low as 3.37%.

What are the challenges of the US Virgin Islands?

No place is perfect however. Living in the USVI has some significant downsides.

The existing culture of liberty is weak. The government is wholly dominated by the Democratic party. Democrats outnumber Republicans 16:1.
Like many island nations, USVI suffers from nepotism, corruption, and cronyism. As a result, the USVI government is bloated, and deep in debt.
In fiscal year 2019, USVI’s primary government revenue was a little less than $2.1 billion, and expenses were almost $2.3 billion. USVI reported a net pension liability of $3.2 billion for the primary government and $903 million for the component units.
In addition, USVI provides other post-employment benefits. Liability for these benefits was $774.5 million for the primary government and $117.7 million for the component units.
Together, these liabilities represented 124 percent of GDP in fiscal year 2019.
USVI is at risk of severe Category 5 hurricanes. The islands are still recovering from 2017 hurricanes Irma and Maria.
As of 2019, USVI had the third highest murder rate in the world (only Honduras and El Salvador have higher rates) That said, most of the deaths appear to be related to drug/gang violence. If you don't involve yourself in the drug trade, you are at much less risk.
USVI high school SAT scores are the lowest in the US..
97% of USVI food is imported.
Shipping from the mainland US is expensive and slow.
By US mainland standards, many USVI residents are poor--as of 2019, median annual household income is ~40 K.
Tourism is the biggest industry in USVI, accounting for 30% of USVI's GDP. The USVI tourism industry was hit hard by Hurricanes Irma and Maria, and the Covid 19 pandemic.
The US Federal government heavily subsidizes the USVI economy in a variety of ways. (4)
USVIers cannot vote in Federal elections, and they have no representation in Congress.

What advantages does the AIP offer over the Free State Project?

Both the AIP and the FSP depend on concentrating libertarians in a single location in order to be effective. Won't the AIP compete with the FSP, weakening liberty activism in New Hampshire?

IMO, it makes sense to try the FSP concentration strategy in another location only if:

The new location offers significant advantages that New Hampshire doesn't offer.
It doesn't significantly compete with the Free State Project for people.

I believe that the AIP meets both criteria.

Due to the much smaller population of USVI, it will likely take many fewer activists to take control over the USVI government than it will in New Hampshire.
In New Hampshire, 20 K activists would make up only 1.5% of the population. New Hampshire libertarians will have to form coalitions with authoritarian Republicans long into the foreseeable future.
In USVI, by contrast, 20 K activists in USVI would make up 18% of the population. With 25 K activists on USVI, libertarians could win elections even if none of the existing voting population voted for libertarian candidates.
USVI already offers the potential for significant reductions in Federal tax burden via their tax incentive programs. It will be a long slog before New Hampshire voters can win significant tax breaks from the Federal government.
The AIP may be able to offer work visas and citizenship to libertarians born outside the US long before New Hampshire. If we assume that libertarians make up 2% of the global population, that's a potential pool of 162 million libertarians.
USVI is a tropical paradise. Many libertarians won't relocate to New Hampshire due to the cold climate. Those libertarians are lost to the FSP regardless of the AIP. However, perhaps some of those libertarians would move to a tropical island. Conversely, many people hate the heat as much as some people hate the cold. Therefore, while there would be some competition for people,the AIP would probably draw from a different crowd than the FSP.
The USVI offers a place for libertarians in the US to retreat. As the FSP grows in power, it will likely come into increasing conflict with the US Federal government. While I hope that such conflicts will be resolved peacefully, it's possible that the USG will crack down brutally on FSP activists and their families. FSP activists may need a refuge for themselves and their families.
If both projects are successful, they could also collaborate with each other. For example, if libertarians controlled both New Hampshire and USVI, then they could establish reciprocal agreements. New Hampshire residents could snowbird in USVI without giving up their New Hampshire citizenship and vice versa.

How to make it happen?

So how do we make it happen? How do we work with the existing residents and political class?

As USVIers are mostly black Democrats, they're likely to be suspicious and fearful of a bunch of white libertarians proposing to make significant political changes to USVI.

To the extent that the island political system is afflicted by corruption, cronyism, and nepotism, the existing beneficiaries of the current system are likely to take a dim view of reforms that would destroy their cozy sinecures. There are likely to be criminal backroom dealings going on that are not currently being publicized.

In order to assuage suspicion, and reduce the possibility of a violent crackdown by the existing political class while the project is in its infancy, I recommend a "friends first" strategy.

Instead of immediately trying for large, scary political changes, I recommend that libertarian activists move to the island, and demonstrate value to the existing citizens outside of the political realm.

For example, libertarian newcomers could:

Start businesses:
- farms
- security firms
- nursing homes
- biotech firms
- solar panel installers
- handyman service
- private schools
- medical clinics
Build community centers.
Volunteer for existing politicians campaigns.
Volunteer for charities such as Habitat for Humanity, Doctors without Borders, Neighborhood Watch
Buy and restore blighted property
Clean up beaches, roads.
Repair potholes.
Host events such as dinner parties, musical events, movie nights.
Volunteer at the local library.
Teach entrepreneurship, home economics, and emergency preparedness classes.
Identify the good people on the island and make friends with them.
Identify the informal power structures.
Identify the coalitions who are likely to be threatened by change.

In other words, libertarians should work to create the voluntary civil society that we hope to replace the existing authoritarian structures. That way, ideally, we'll be able to make changes without much resistance as people will already be benefiting from the non-coercive alternatives.

For example, if you start a chain of private micro-schools, you might draw enough students that it will only make sense to close the government schools.

If you'd like to help realize the Arawa Island Project

Sign up for a paid subscription. The more subscribers I have, the more time I can devote to this project.
Share this essay with other liberty minded folks, especially students, entrepreneurs, political activists, and others who are likely to be excited by the project.
Put me in touch with pro-liberty folks already living in USVI.

I look forward to working with you to create the first libertarian nation! Questions, suggestions, and corrections welcome!

Acceleration Nation

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