The State: Back with a Vengeance

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By Daniel Lucas, Q Wealth Report Editor

When I was living in Vietnam in the 2010s, it always amazed me how the nation of 95 million people, spanning 1400 miles from north to south, was able to operate as such a highly unified, uniform ‘whole’.

An order from the capital Hanoi could quickly make it into the loudspeakers that are perched on the corner of every ward in every village, town and city across the country.

Friends who ran businesses there were generally left to their own devices, and people enjoy a pretty high level of personal freedom in the country (as long as they don’t cross the line of the government).

But when the government there wanted something to happen, they made it happen very quickly.

I remember when the national hero General Vo Nguyen Giap – regarded by many to be one of the greatest military strategists to ever live, up there with Napoleon, Grant and Rommel – passed away in 2013 at the age of 102.

The order came from above: there would be a period of national mourning, and absolutely no displays of any kind of ‘fun’ would be tolerated. This included shuttering all bars, clubs and some restaurants, which if you’ve ever been to Vietnam you’ll know – are ubiquitous.

The orders were followed to a tee. For friends of mine who owned bars, there was never even a question of disobeying the order; the consequences would be enormous, and they would definitely be handed down.

It is precisely this kind of centralized, direct state power that has allowed Vietnam to emerge as one of the fight against Covid-19’s ‘success stories’. Despite bordering China, there have been fewer than 300 infections, and no deaths from the virus.

While it is far from a rich country, the government quarantined over 40,000 people, traced every infection with dogged determination, and now the country is largely opening up its economy again.

For a government with previous experience in dealing with epidemics, and with a direct, unopposed authority to manage the country as they deem necessary, handling the crisis head-on was considered something of a life or death struggle. If they failed, how could the single party government claim the one main point that legitimizes its rule: that it’s the best protector of its citizens interests?

So what does this mean for us out here in the rest of the world? Do we want to have strong, unopposed states that can act decisively and without worrying too much about the rights of their subjects? Does having absolute authority and great power truly bring great responsibility, and better performance in times of crisis?

A Crisis of Democracy

Ever since Covid-19 burst out of its temporary confines in East Asia and began its spread around the world, two important trends have emerged:

1. Countries with centralized, one-party systems (such as China and Vietnam) have been relatively effective in containing the spread of the virus.

2. Many Western ‘democracies’ have been quick to override their traditionally proud defense of individual liberties and have tried – to varying degrees of success and similarity – to emulate countries such as China’s heavy-handed, essentially authoritarian ‘containment’ measures.

For people who are wary of unchecked exercises of state power over individuals – and that should be everyone – this situation presents something of a Catch-22:

If we believe that Covid-19 does indeed pose a serious threat to human health, but decry the state’s power and authority to enforce lockdowns on citizens, we have to accept the possibility that the free movement of people may lead to spiraling infections, and ultimately deaths.

Defend the state’s power to do so, and we essentially hand the state our consent to take away individuals’ rights whenever they decide that the situation warrants it.

While this problem might seem to be just moral in nature, the consequences of how we react to and perceive it have very real implications.

Measures enacted in ‘emergencies’ – ostensibly for a temporary period – have the tendency to stick around and become embedded in laws and policies. They also tend to go on and set new norms for how a state is permitted to act.

This ‘policy creep’ can then go on to set new international norms that go on to affect policy areas that are seemingly unrelated.

Consider the Patriot Act, introduced in the aftermath of the 9/11 terrorist attacks in the US. The Patriot Act saw the authorization of sweeping powers for state agencies to surveil and monitor US citizens, and was originally meant to expire on December 31st 2005.

However, fast forward to today, and most of the powers granted by the act have been extended or morphed into other pieces of renewed legislation.

Added to that, the Patriot Act also gave rise to a series of new powers for authorities to monitor and sanction financial transactions globally, and for US presidents to be allowed to carry out things like assassinations on foreign citizens, anywhere in the world.

What happened to Globalization? 

The dramatic extension of state power we are currently witnessing across the world has to also be considered within the context of a broader global dynamic, which has been unfolding since around the time of the Brexit referendum and election of President Trump in 2016.

That process is something we can call ‘de-globalization’: a rolling back of the wide-reaching drive towards borderless free-trade across the planet that has defined much of the world since the fall of the Soviet Union.

Globalization was often touted as the process that would eventually end the pre-eminence of the nation state as the primary node of power in the world.

In many ways, that has indeed happened: countries are pretty restricted in how autonomously they can act, if they do not want to break agreements they have made with other countries and international organizations, such as the UN and IMF.

But they have started doing it. With Trump leading the way, countries from Viktor Orban’s Hungary to Duterte’s Philippines, Erdogan’s Turkey and Putin’s Russia are pursuing decidedly less ‘globalist’ agendas, focusing instead on placing what they claim to be their own national interests above those of the ‘international greater good’.

It’s very much a ‘pandora’s box’ kind of issue: once one powerful country starts doing it, others react by doing the same, in order to protect their interests from a newly-resurgent free-for-all competitiveness.

Whether you agree with this new trend or not is largely irrelevant: what matters is that it is happening, and its effects are going to have major consequences for freedom and democracy around the world, as states begin to reclaim power previously delegated to international organizations, and begin to act more according to what they deem to be their own self interest.

The Covid-19 crisis has only accelerated this trend, as global travel is curbed and governments look for ways to consolidate their supply chains so that they are not at the mercy of foreign powers over whom they can have little control.

It seems inevitable that this crisis will lead to a long term deepening of state power and authority around the world, and that will happen to the detriment of individual freedom and democracy.

The question that remains for anyone who values freedom and democracy is how we will be able to navigate the complex political and economic environment that is going to define the near and medium future.

The answer to that question is complex, and will be the underlying subject of everything we will be writing about here at Q Wealth for the foreseeable future.

This will include covering how to establish residency and obtain citizenship in countries with more transparent governments and higher qualities of life, to the types of assets that will allow you to operate more autonomously from the purview of states, and how to best protect yourself from the coming economic shocks.

These issues will soon be addressed in our upcoming Covid-19 Report, which will be made available to our paid members. 

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