Published Dec 17, 2006

I’m an inveterate entrepreneur; I like coming up with new, crazy ideas and turning them into cool companies. Or, well, I will like someday when I’ve done it successfully. Anyway, I was a poli sci major as an undergrad, so sometimes I wonder: why is it that we don’t have any truly new and innovative approaches to how a company should work? I mean, there are plenty of countries out there that are, for all practical purposes, completely fucked. So why shouldn’t they try something crazy? Here it is then, two crazy ideas of models failed countries can try.

These ideas come from three inputs:

  • I just read an article about how Wesley Snipes might flee to Angola to avoid doing time on tax evasion charges. Angola?!
  • Inmates are getting killed in LA jails because there aren’t enough corrections officers to watch the whole place.
  • Apparently Afghanistan is a narco-state and that money finances terrorism. (This is, sadly, not news.)
  • Then I saw a History Channel show on the French prison of Devil’s Island in Guiana.

So this makes me ask: there are tons of kleptocracies, in which corrupt rulers steal from their impoverished subjects; there are criminal organizations which launder money, often through terrorist organizations; but there’s no state that uses crime for positive purposes. It’s not like we can get rid of crime, is there a way we can use it? Make it more positive? And thus, two ideas for a crime-funded state.

Making Money Directly Off The Criminals

International money-laundering laws force criminals to run their money through complex laundering transactions that minimize their payoff from their criminal enterprises, in return for anonymizing that money. Of course, once that money leaves the complex laundering transactions, it can be seized by governments. Criminals can also be seized, through extradition, and brought back home to where they committed their crimes.

So why not create a country where this can’t be done? Run with me here: I’m going to explain how it works, and then how it might advantage the rest of the world.

Let’s take a reasonably screwed-up country with, maybe, pretty beaches or tall mountains or something. There’s a few of those. Then, we have the following policies:

  • Extradition treaties only for past murder and sex crimes (these people we don’t want to get rich off of, just punish), and for any crimes committed after immigration to our country (let’s not shelter ongoing crime).
  • Exile as the main punishment for crimes committed in the country (imigrants are wanted and will be arrested and imprisoned as soon as they leave the country, so let’s not spend money on imprisoning them ourselves).
  • No laws permitting seizure of money by outside governments
  • No limits on transfer of illegal, un-laundered money in, just a 15-20% flat tax on all money that comes in.
  • Said flat tax finances generous public servant salaries so that bribery isn’t a big problem.
  • Said flat tax finances public works building a resort-like infrastructure
  • Said resort-like infrastructure hoovers more dirty money
  • Dirty money finances public infrastructure, healthcare, education

So we have an ecosystem in which dirty money finances building nice resort areas, which criminals move into, which criminals pay money into, which builds the previously fucked-up country. Meanwhile external powers don’t interfere because anyone there is only there on condition that they don’t continue to commit crimes. So we’re talking older, rich criminals, who want a safe, beautiful place to retire, where they won’t be harassed for past misdeeds and yet can be big men living a life of privelege. The violent or otherwise negative ones, as well as the just disrepectful of public order, will quickly commit a small crime and be sentenced to exile, ridding our little country of the potential criminal mastermind (of course we’ll seize his accounts then).

This little country will be filled with the Wesley Snipeses of the world.

Making Money Indirectly Off The Criminals

Australia, Guiana, it used to be fashionable to export your prisoners to an imperial posession. No more imperial posessions, but there are plenty of countries with no perceptible economies. At the same time, corrections doesn’t attract the cream of the crop here in the US — salaries are low and the work is dangerous and dull. But suppose we could hire 2-3 prison guards, and train them, for the same salary? In some countries, $7-$10,000/year would be a great salary, one that could attract highly-motivated, educated people. Construction costs would also be lower, and a side effect of constructing a modern prison with water and electricity would be to improve the country’s infrastructure, to say nothing of the income that would come from providing the prison with food, laundry, etc.

So we have a cheaper-to-build prison with more numerous guards. We also minimize the chance of escape, because if you’re in prison in Angola or Bhutan or something, where are you going to go when you escape? Prisoners will be back at the door, begging for clean water and familiar food in no time.

There’s also the question of smuggling contraband into the prisons. Many prisoners have access to drugs, but suppose we put the prison in a country with a limited selection of drugs? If it’s hard to get Sudafed in Benin, will the meth problem go away? Maybe so. Imagine the added cost of bringing in porn when you have to send said porn across the Pacific.

Sure, there would be some hardship on prisoners’ families based on them being across the seas somewhere, but I’m not sure that’s so serious. Webcam visits could provide as much intimacy as meeting across a piece of reinforced glass, and, at any rate, it’s not trivial to visit prisoners even when they are nearby.

Meanwhile, for the country running prisons, they’d get tons of jobs and income. While they might not want to let truly dangerous felons stay, for many prisoners who had been shipped over because they were disconnected members of society who were therefore making bad choices, they might welcome a fresh start in a new country. If this is a developing country importing prisoners from the developed world, it’s likely that many prisoners will have skills that are in short supply in that country, so keeping that prisoner could be a net benefit, even with the risk of recidivism. And, for many prisoners who just can’t adjust to the strict rules and regulations of a developed country, a developing country, with fewer everyday rules, might be a place that they can settle down and stay out of trouble.

This country will start to find itself filled with the construction workers who do a good job but can’t stop getting DUIs, the accountants who embezzled that one time, and the computer programmers who couldn’t resist leaving a backdoor in their application. Plus water and power generation. Since this country had few skilled tradesmen, and virtually no accountants and programmers, or clean water, good deal.

There we go: two entirely new and different ways for a country to make its way in the world. I highly encourage all you repressive dictators out there to try one. After all, you can’t get rich squeezing your poor subjects, you don’t have oil wealth, and you aren’t exactly living the priveleged life of an Italian premier, even with all of your ill-gotten gains and powerful cronies. You might as well try to find some useful new sources of income. Heck, if you are crazy enough to try one of these, I guarantee you’ll make the front pages of newspapers around the world. Just a little offer of wealth, success, and fame, in this holiday season, from your friends at