What I'm Looking For
Three Things #71: June 4, 2023
Every community has a set of topics that come up again and again in friendly conversation. In the community I’m most familiar with, the blockchain and cryptocurrency community, one of these topics is where one should live. I suspect every group of people discusses this topic to some extent, but most probably don’t cast as wide a geographical net as crypto folks do, and it must be a more common topic in this community than in most. It’s a topic that crypto enthusiasts seem to have quite strong opinions about for, I think, two reasons. The first is that crypto folks are on average pretty well off, somewhat iconoclastic, and tend to be less married to a particular geography or jurisdiction, so they’re readier to up and move than most people. Our professional lives are quite global already and we already tend to spend a lot of time on the road so the thought of moving a continent or an ocean away from friends and family isn’t that daunting. The second reason is that crypto folks tend to be extraordinarily sensitive to certain political and economic factors, much more than the average person. While certainly not universal, the strong libertarian ethos in the space tends on average to make crypto folks especially allergic to things like high taxes and big government.
I can’t tell you how often a friend or colleague in the space tells me that they’re moving or planning to move abroad. These conversations tend to take the form of, “Well, politics in X have gotten even more fucked than ever, I’m seriously leaving this time,” or, “Can you believe how much tax I pay in X? We’re leaving.” I share many of their frustrations and I’m also seriously contemplating making a big move, but I suspect the things I’m looking for aren’t the same as what they’re looking for so I thought it would be interesting to write down what I’m looking for and where I think I might find it.
Thing #1: Good People are Everywhere
“Show me a young Conservative and I’ll show you someone with no heart. Show me an old Liberal and I’ll show you someone with no brains.” - Winston Churchill
I was born and raised in and around New York City and attended university in the San Francisco Bay Area. These are both Good Places (TM). Spending time in these places early in life exposed me to an extraordinary number of talented, ambitious people from a young age and gave me a global, as opposed to a provincial, outlook on life, the world, and opportunity. It also gave me a great deal of optimism because I didn’t have to look far to find positive role models and literally anything felt possible.
Of course the influence wasn’t universally good as I’ve come to understand later in life. While these are global, wealthy, elite places, as I like to say so often everything is a trade off and you lose something in exchange for this. These places are relatively amoral (unless you count making money and accumulating status and stuff as moral) and as I wrote two weeks ago they tend to deemphasize family values in favor of things like ambition and fun. They lack small town values such as self-reliance and personal responsibility, and knowing and caring about your neighbors, and as we saw so obviously during the pandemic they are too easily captured by silly, irrational brain viruses. But for an ambitious young kid who spent most of his time on a small, sheltered farm in NJ, they were good places.
After college I only seriously considered living in New York, California, maybe Boston, or Tokyo (I had studied abroad in Japan and wanted to go back)—that was about it. I might’ve been convinced to move to London for, say, the right job or the right girlfriend. I distinctly remember declining an interview with Microsoft because I knew I didn’t want to live in Seattle. Two years later I ended up in Hong Kong which wasn’t on my short list and was unplanned but it turned out to be a great opportunity. It sounds snobbish now but I really did only want to be in those places because I expected I’d meet the “best” people there—the most talented and ambitious strivers—and because I’d have exposure to the most ideas and opportunities. I wasn’t wrong, but a lot has changed since then, as have my preferences and priorities.
One thing that’s changed is that I’m no longer in a phase of my life and career where I need to maximize exposure to people, ideas, and opportunities. Those things are nice and they’re still important from time to time but I don’t need or want them every day or even every week or month. In fact, I find myself closing more doors than I’m opening these days for lack of time and because I’m already focused on meaningful work. I find opportunity when I need to by attending events and conferences and through my existing network of friends, classmates, and colleagues. I used to chase novelty and exoticism just for the sake of it, but I’ve experienced enough of that in my life and I value stability more highly now (with a little adventure thrown in from time to time!).
Another thing that’s changed is that the world really is more connected and more global than it was 20-odd years ago when I started my career. Hong Kong and New York felt much farther apart than they do now. Today, I’m regularly on calls with friends, colleagues, and collaborators on three or four continents and in five or six countries over the span of an ordinary day. The Internet really has become the great equalizer and the great connector, and location and distance don’t matter as much as they used to. I’m part of the final generation that remembers what things were like prior to this change: expensive long distance phone calls, metered, slow Internet connections, getting news from a physical copy of the local newspaper, not talking to distant friends or family for months or even years, etc. I certainly don’t believe that location doesn’t matter or that you can do real work or build real relationships exclusively at a distance, but I also get to see my friends and colleagues, even the ones who live very far away, at least a few times a year at gatherings and conferences.
The biggest thing that’s changed, however, is that I’ve realized that the most important thing about a place are its people—and that there are good people literally everywhere, not only in big, expensive, crowded cities. Yes, big city people have something going for them in terms of worldliness and sophistication, but they also tend to be haughty and overconfident, and have superiority complexes. In some ways I think I relate better to small town, small country types. There are kind, interesting, intelligent people with integrity everywhere, and those are the qualities that really matter, not where someone happened to have been born or happens to live.
Today, I’d live just about anywhere for the right opportunity. I’ll talk more below about what I’m looking for but generally if a place has fast Internet, access to a good airport with plenty of flights, and if the weather isn’t too hot, I’d seriously consider living there for the right opportunity (or maybe just for a change of scene!).
I’m fortunate that I have no trouble making friends, and people in distant, unfamiliar places often have a lot more to teach me than people who spend time in the places I do doing the things I do. I’m the type of person who would have a beer with just about anyone, anywhere, listen to their life story, and be genuinely fascinated by it (I think this is my superpower: genuine curiosity). For this reason I’m seriously considering living places I would never have considered before, like India and Africa, because I have a lot to learn from them.
Thing #2: Utopia Doesn’t Exist
“I don’t want to belong to any club that would accept me as one of its members.” - Groucho Marx
I can’t tell you how many times I’ve had some version of this conversation:
Me: What are you looking for?
Them: Oh, you know, nothing too out of the ordinary. I’m just paying too much in taxes now. I want to live somewhere cheap and safe with nice weather. Oh, and I guess I don’t want to be that far away from civilization, or in a strange timezone. I want to live somewhere where people speak English, and where there’s good medical care. You know, basic stuff.
Finding a place to live is like buying a home or finding a job or dating. It’s simply impossible to get everything you want. In my experience trying to optimize for everything means you’ll end up with nothing. The right thing to do is to pick the one or two things that matter most to you and optimize for those things, and be willing to trade off everything else.
There’s no such thing as a place that’s cheap, safe, and desirable, and also has low taxes. The laws of economics and the no arbitrage rule dictate that this cannot happen. If a place is all of those things and is also welcoming to outsiders like you, then lots of outsiders will already have arrived and it will already be more expensive, at the very least. Housing won’t be cheap. It’s likely that taxes will also rise. By the same economic laws, other things equal places that are extremely popular and that create lots of economic opportunity for their residents (think New York and California) can get away with charging exorbitant taxes and people mostly won’t leave, and plenty of new people will still want to come.
With hardly any exceptions the places that have zero or very low taxes are mostly not places you can or want to actually live. There are places like Puerto Rico, Antigua, Vanuatu, Cayman Islands, BVI, Bermuda, the Bahamas that I’m sure are all charming in their own right, but they’re distant and isolated, not exactly cosmopolitan centers. There are places like Somalia, Western Sahara, Ethiopia, and Myanmar that are unsafe political basketcases. There are places like the UAE, Bahrain, and Saudi Arabia where you can go work for a few years, but they’re authoritarian and it’s difficult to impossible to actually become a citizen and stay long term. And there are places that have low taxes but are very expensive for other reasons: Switzerland, Monaco, Hong Kong, and Singapore come to mind.
Why is there always a catch? It’s not a coincidence. It has to do with relative advantage. A place that doesn’t have much else to offer can instead offer lower taxes, a form of regulatory arbitrage. And a place that collects lots of revenue in another form, such as through land ownership and management as in Hong Kong (making its property the most expensive in the world), doesn’t need to collect as much income tax.
If such a utopia existed it would immediately be flooded with new arrivals and quickly wouldn’t be so desirable anymore. In business and markets, new opportunities appear often enough that if you’re persistent and get lucky you can be early, beat most other arrivals and establish a foothold in a new market before it takes off. But this doesn’t happen very often in geopolitics. New jurisdictions don’t appear very often, they don’t tend to radically change their policies, and even when they do those changes are usually announced way ahead of time so it’s nearly impossible to be early.
The trick, therefore, is to be asymmetric: to find the thing or the unique combination of things that you care about that other people don’t value as highly. This is your point of maximum leverage. If you really, really just want to minimize your taxes and don’t mind living somewhere remote, tropical, and possibly authoritarian, and you don’t mind giving up lots of first world conveniences and being far away from family and friends, you have plenty of options starting with the first list above. If on the other hand you value, say, political stability above all else, you have very few options today and can narrow your search to a handful of smallish countries—but you’ll have to make sacrifices like paying higher taxes and living somewhere with fewer local opportunities.
The main point is that everything is a trade-off so learn to think in terms of trade-offs. You can have anything you want, but you cannot have everything you want. Literally every place has severe downsides and utopia doesn’t exist (after all, that’s what the word “utopia” means: the “no place”).
The other main point is that, in truth, you can be happy anywhere for the reasons outlined in Thing #1. Low taxes and warm weather are nice but so is being able to meet tons of people and access economic opportunities close to home. Taxes aren’t the worst thing in the world and you can’t put a price tag on the value of being near friends and family. Not everyone who trades away these things for lower taxes is happy with the decision down the road, and these decisions tend to be difficult or even impossible to reverse, so be careful.
Consider: you can also probably be happy where you already are if you really want to be.
Thing #3: What I’m Looking For
“Hard times create strong men, strong men create good times, good times create weak men, and weak men create hard times.” - G. Michael Hopf
Having said all that, what is it that I’m looking for? I like making lists, which tend to grow pretty long sometimes. I’ve made this list a few times and I could easily share 10-20 items from it, but in the interest of taking my own advice I’ll try to share just the factors that matter most to me.
The biggest, most important factor is somewhat intangible and it’s hard to describe succinctly, but it has to do with the mood of the people around me. I want to be surrounded by people who are optimistic and ambitious, who are working hard to build things and make the world around them a better place. It’s one of those things that you know when you see it, even if you can’t describe it perfectly. It could be called dynamism, vibrancy, or energy.
It helps a lot if a place has lots of ambitious young people that are hopeful about the future and also unafraid of hard work. It also has to do with a general open mindedness, including a welcoming attitude to outsiders and foreigners, and a celebration of failure. It has to do with being overwhelmingly forward looking, with a bold, confident, optimistic poise, as opposed to being stuck in the past or focusing on addressing previous wrongs. All of these factors somehow combine to create an overall sense of energy and optimism, and of the feeling that anything is possible. It’s the sort of culture that promotes builders and building things and investing in solving hard problems the right way, not kicking the can down the road or looking for the easy way out.
The USA used to have this energy in spades, which is to say that it used to be an extraordinarily vibrant, energetic, optimistic place. Unfortunately a lot of this changed over the past few decades. The country hasn’t been so pessimistic in many generations. We seem to have lost a shared narrative and sense of purpose, and on average young people today are more interested in fighting bogeymen, spreading FUD and doomerism about climate change and killer AI, and trying to right perceived past injustices than they are in building towards the future.
Today I most strongly get this feeling of energy, optimism, and vibrancy not in a specific geography but in the blockchain community and in the global tech community more broadly. The geographies where I’ve felt this were China (pre-Covid) and places like Detroit and Portugal that have weathered crisis and turned a corner and where things are looking up. I don’t spend a lot of time there, but I suspect the vibe in Austin is pretty optimistic and energetic these days. (I’m surprised how hard it is to come up with more examples of places that feel optimistic and ambitious these days. This is deeply worrying.)
Another important factor is sustainable economics. I’m not an economist and I don’t have a very strong grasp of macroeconomics, and I also try to look past the hyperbole that diehard Bitcoiners spout about the awfulness of modern monetary policy and fiat money, but even I can see that things are bad and getting worse. Countries including the USA have printed enormous sums of money over the past few years, have wildly unbalanced budgets and huge deficits, and are taking on more and more debt just as we’re facing rising interest rates, inflation, and exploding entitlement spending that’s out of control. No one seems to have any plan for how to handle the situation, other than to try to grow our way out of it—which might work, but then again, it also might not, and then what?
Payments to service the national debt currently represent around 7% of all government spending or around 1.7% of GDP. That might not sound terribly high but it represents a significant tax on all of the wealth being generated in the country. Debt is rising at unprecedented rates, and so are interest rates on that debt, which will have a compounding effect so that this number will explode over the next generation. And politicians are powerless to do anything about it because a. They don’t actually understand economics very well, b. Their constituents don’t understand economics, c. They’re cowards and liars, and d. The incentives are all wrong. In modern, democratic welfare states people want to be told that more government largesse is coming (or, equally, that taxes are going down), not that it’s time to tighten our belts and adopt austerity measures to shrink the deficit and the national debt. But this only works for so long, and we’re really pushing the limits.
I don’t want to live in a country with enormous and rising debt, one that’s kicking the can down the road and expecting future generations to pay for today’s profligacy. I want to live somewhere with strong, confident, honest leaders that understand economics, with responsible fiscal policy and with debt that’s under control. In other words, I want to live somewhere where people aren’t trying to live and spend beyond their means. India, Taiwan, Estonia, Thailand and New Zealand all seem to be doing well economically.
Similarly, I want to live somewhere where the government stays out of my way and stays out of the way of business in general. I’m not an anarchist and I don’t consider myself libertarian either, and I believe that the government should exist and does have a role to play. But the smaller that role, the better. There’s a very, very small number of things we need national government for; everything else should be handled privately or at the local level. I don’t trust government, especially not big, distant government. I think the incentives are all wrong and the government screws up almost everything it touches. A place with a small, local, responsive, accountable government appeals—the sort of place I could see myself actually getting involved in government someday. Singapore, Switzerland, Taiwan and Estonia all come to mind.
Finally, I want to live somewhere safe and stable. I’m not so concerned for myself but becoming a parent definitely changes your priorities and your politics accordingly. I know how to do math and I understand probabilities but even so the recent spate of gun violence in the USA is appalling and terrifying. I don’t want to raise my children in a place where I fear, even irrationally, that they might not make it home when they go out, or even worse, that something might happen to them at school. Fortunately, literally every other country on earth has less gun violence and there are many safer places including most of Europe and pretty much all of Asia. More stable, less fractious politics would help a lot, and again smaller countries tend to have these. In this respect, too, places like Singapore, Taiwan, and New Zealand strongly appeal, for reasons of both safety and stability.
The Sovereign Individual thesis, which quite captivated me a few years ago, posits that we’re heading to a world where talented “sovereign individuals” can shop for political jurisdictions the way we shop for commodities today. The pandemic definitely set things back a few years but I do think this thesis is directionally accurate and that we’re heading this way, as evidenced by the conversations I mentioned above. People are shopping around and the long-term effect will be positive because human capital and financial capital, which are more mobile than ever before, will migrate towards the best jurisdictions with the lowest taxes and the best policies and outcomes, i.e., the best products at the best prices.
This was historically challenging for a host of reasons—it wasn’t exactly a liquid, efficient market—but the Internet, credit cards, cheap and ubiquitous airfare, the near-universality of English as the lingua franca of commerce and tourism, and modern immigration programs and visas that target talented expats like those on offer in Portugal, Taiwan, Japan, UAE, Canada, Australia and other places have made migration much easier than ever before.
We cannot keep printing money and spending unsustainably the way we are today. The transition is not going to be easy but with strong leadership and good policy it need not be catastrophic, either, and it’s going to happen whether we like it or not so we might as well start thinking about it and planning for it now. One of the best ways we can do that as individuals and as entrepreneurs and builders is to vote with our feet and our tax dollars and move to the best, most welcoming places, both to support good policy and as motivation for the laggards to adopt more responsible economic policy.