The Case for Slightly Dysfunctional States

How to leverage dysfunctional chaos to your advantage.

Welcome Avatar! Usually after speaking to locals here in Argentina for the first time, when they find out I am originally from a top-tier GDP/capita country in Europe, the first reaction is: what the f are you doing down here? Besides a love for the country, language & culture, another reason is the arbitrage you can lever to your advantage in a dysfunctional or chaotic economy / state. Let’s dive in.

Chaos = Cash

Let me get started by stressing that the kind of environment countries like Argentina and Venezuela find themselves in, is absolutely brutal for 90%+ of the population. So it is not something to be proud of or cheer about, nor should you want to wish this upon even your worst enemy.

That said, we cannot change what is not in our direct power to change. Decades of very bad economic decisions by politicians who have never worked an honest job in their life have brought it to this point. Hopefully it will change some time in the future, but for now the only thing left is leverage it to your advantage.

The simps have created hard times here, and it seems the generational joke of the meme above has been lost during the last 80 years, where simps just keep creating hard times.

But: hard times create chads, and there are many ways to become a chad in an economically hostile environment. There just aren’t too many of them, so there’s no good times yet, but they do know how to thrive and create opportunities.

BowTiedBull - Read Pinned Tweet or NGMI @BowTiedBull

2020 was the *most* chaotic the world has ever been. What happened? Massive opportunties. 2023-2024 will be the same. Don't be fooled into thinking "slowly up" is the best environment. Total insanity = best environment since it means wild mis-pricing.

Argentina in this sense is no different. Like I discussed in The Sovereign Individual Stack, it is crucial to keep your access to existing banking, and all other services that might give you an edge in terms of earning foreign currency.

In the local economy there are many ways to arbitrage the capital control restrictions implemented by the Argentine government. Basically any intervention in any field creates a secondary black market instantly.

Opportunities arise in the field of: money transfers, official/blue exchange rate arbitrage, official fiscal property value / market value, imported products through unofficial channels, etc, etc.

This is why I mentioned this the other day, after reading that one of the leading parties in government is planning to restrict temporary rentals due to a shortage of properties in the long term rental market:

BowTiedMara @BowTiedMara

The disconnect of these commies with reality is a sight to behold. Surely after that every Airbnb will have a hotel sign at the door and the owner will accept the official dollar rate. I hope they go forward with this, will launch cuevabnb right away👌

Restriction = immediate opportunity to invent a solution around it. In this sense Argentina really made me a lot more creative in terms of thinking in solutions, not problems.

Less control over your individual sovereignty

Another benefit besides becoming a lot more creative in terms of solutions and making the most of arbitrage opportunities, is the fact that in a chaotic environment like Argentina with a 120%+ YoY inflation, there is less functional oversight over citizens compared to the US or Europe.

Having lived in a highly monitored society for most of my life, I really felt a sense of relief after a few years of living here.

Probably most people can relate to the “if you don’t do this or that, you might end up in jail” feeling that haunts most “First World” residents.

And I’m not talking about doing anything illegal. Just making a few mistakes on your tax returns could get you there in some cases.

That feeling is completely absent here. The country is too big, too chaotic, and there are too many things to solve before that kind of state control will become a thing. The lawlessness is a thorn in the side of many who complain about politicians getting away with corruption etc, and in general many white collar crimes go unpunished.

The flip side of this is that you can literally feel the lack of enforcement in the air, which is very liberating.

The only time it can be frustrating is with bureaucracy, but let’s face it: bureaucracy is frustrating wherever you go (and honestly it isn’t much better in more developed parts of the world).

Most of these benefits you can only experience as a temporary resident, and after 3 years of temp residency, you will be able to obtain permanent residence and citizenship, if you want to.

Argentine citizenship can be very useful if you plan on putting up a base in South America, since it is a Mercosur passport, allowing you to live directly in any Mercosur country (Brazil, Colombia, Uruguay, Paraguay, Bolivia) without any further requirements. Only need that dark blue booklet.

The colored booklets that allow you to travel

From an early age, I never felt much for nationalism and have always considered the idea of a nation state to be a flawed concept. It hasn’t been around for that long either (just 300+ years).

People who try to defend the idea of identifying with a country just because they were arbitrarily born there and some previous historic figures determined some lines in the sand they then called official borders, makes no sense from any perspective.

BowTiedMara @BowTiedMara

Important point that many seem to forget. Nationalism is all identity politics that leads to nothing. You can’t choose within which imaginary borders you’re born. Game the nation state system as much as you can and use it to your advantage.

Nomad Capitalist @nomadcapitalist

Your citizenship does not define who you are.

The concept of "nationality" and belonging to a country is actively promoted by the State since it makes citizens less independent, less critical, more collectivist, easier to manipulate, better tributaries, and more willing to fight wars under that particular flag.

Unfortunately, until we see the resurgence of city states and the fragmentation of current blocks like the European Union (which is bound to happen in my opinion, just a matter of time), we have to play within the rules of the imaginary community of the Nation State model.

The concept of the colored booklets that allow us to travel (passports) as we know them today, were gradually introduced in most countries. Passports were more rigorously introduced after the 1918 Spanish Flu Pandemic (see how those moments always mark a before and after in terms of government control over citizens).

Now they’re standardized booklets that fully identify people and indicate governments where they should be sent if they are declared inadmissible - their primary purpose in international law.

You can be grateful for opportunities you had access to for being born in A or B, which gave you passport A or B.

This really is just pure luck, and you shouldn’t autosimp for one colored flag or another just because of that. It’s just about the only element in your life you don’t have ANY control over.

What you do have control over is how many additional passports you can obtain to make your life easier in this Nation State environment.

Stop simping for nation states, defend property rights

The only thing you should defend is your private property rights. These can be defended in any territory, and if they’re physical assets like a home, apartment etc, it will be located under one flag or another.

BowTiedMara @BowTiedMara

It all boils down to flags that change over time as arbitrary lines in the sand shift. The idea of the nation state is ridiculous & invented to brainwash people into having a national identity. Be your own sovereign individual, anon. Collect flags in little books for travel. https://t.co/0Ubi3GtM6z

BowTiedMara @BowTiedMara

Mexico 🇲🇽 lost approximately half of its current territory to the United States 🇺🇸 about 10 years after Argentina 🇦🇷 lost the Falklands to Great Britain 🇬🇧. Still, I never see Mexicans whine about this loss like Argentines do about that island group. https://t.co/aob9XgNCNh

Now, people often have a wrong impression of Argentina in terms of private property rights. State intervention into the market is one thing that happens all the time, but private property rights of citizens are always respected.

There are a few cases of private companies that were later “nationalized”, which is definitely a violation of private property rights. Some recent examples are the partial nationalization of YPF, the full nationalization of Aerolíneas Argentina, and there are a few more.

What do these have in common? They were highly strategic companies in industries that were already regulated to death.

Moral of the story: you do not want to do business with the government, or be active in any service that can be easily regulated in Argentina or in countries with similar interventionist tendencies. If you steer clear of that kind of business, you’re fine.

Of course if the tendency to violate private property rights does worsen, you have to always make sure to have possibilities to go elsewhere, with residences and passports.

Play the game of collecting those colored booklets that allow you a visa free access to country A or B, and official residency permits that allow you to stay in several countries to have more optionality.

Be pragmatic, there is no need to get emotionally attached to any of them. Hate the game, not the players.

See you in the Jungle, anon!