Geopolitical Arbitrage


… things will get very ugly in London when the Square Mile and investment banking sector ups and decamps for Frankfurt, leaving the service sector and multiethnic urban poor behind.

The specifics of this prediction are nutty, if only because mainland Europe is going down the tubes much faster than the UK, but the abstract anxiety is spot on. The globalization of the right is entirely about geopolitical arbitrage (while that of the left is about homogenizing global governance). All the critical trends point towards the exacerbation of the ‘problem’. The 21st century is the epoch of fragmentation — unlike anything seen since the early modern period — shifting power to the footloose, and away from megapolitical systems of territorial dominion. Being left behind is the rising threat, and we can confidently expect to see it consolidating as the subtext of all leftist grievance. You can’t just leave. Watch.

The obstacles to geopolitical arbitrage — i.e. spatial Exit pressure — are security constraints. It requires defensible off-shore bases (and Frankfurt most certainly isn’t going to provide one). Eyes need to be fixed firmly on secessionary dynamics (fragmentation), techno-commercial decentralization of hard security, crypto-anonymization, artificial intelligence, and the emergence of capital outposts in the Western Pacific region. More exotic factors include opportunities for radical exodus (undersea, Antarctic, and off-planet), facilitated by territorial production (artificial islands). The machinery of capture needs to keep all of these escape routes firmly suppressed in order to perpetuate itself. That simply isn’t going to happen.

Capital is learning faster than its adversaries, and has done so since it initially became self-propelling, roughly half a millennium ago. It’s allergic to socialism (obviously), and tends to flee places where socialist influence is substantially greater than zero. Unless caged definitively, eventually it breaks out. Over the next few decades — despite ever deeper encryption — it should become unmistakable which way that’s going.

January 18, 2016admin 39 Comments »
FILED UNDER :Political economy

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39 Responses to this entry

  • Geopolitical Arbitrage | Neoreactive Says:

    […] By admin […]

    Posted on January 18th, 2016 at 2:50 pm Reply | Quote
  • Brett Stevens Says:

    I agree on “being left behind.” It has always been the Leftist fear since we got bottom-heavy as a society and started drowning in ourselves. What to do with all these serfs? The answer was always exile to the third world.


    Posted on January 18th, 2016 at 3:56 pm Reply | Quote
  • Xoth Says:

    Or this one

    It turns out that when you take the old paranoid-style driven give-us-all-your-money mailing list scams (and their old-media spin-offs like Fox News and Clear Channel’s talk radio shock jocks) and add telepathy, what you get is the whole festering stew of the Neo-reactionary movement, a scream of rage directed against the modern world. (Let’s not forget that the ideological roots of the neo-reactionaries, notably Nick Land’s writings on accelerationism, emerged during the late 1990s, not at all coincidentally at the same time that internet access among the western bourgeoisie was becoming A Thing.) When you add telepathy to the toxic stew of rejection of the Enlightenment legacy you get an ad-hoc movement of angry ideologues who have jabbed their fungal hyphae into the cerebral cortex of Reddit and n-chan to parasitically control the rageface collective.

    Though I might quibble it’s more bowing one’s head to Gnon than screaming in rage (always with the rage, oy vey) at progressivism.


    Posted on January 18th, 2016 at 4:24 pm Reply | Quote
  • pyrrhus Says:

    The “left behind” problem in a world that is entering a period of chaos is going to be obsessive. I like the isolation of Chile, possibly with backstops in Singapore and Hong Kong. Or maybe vice versa…..


    Kgaard Reply:

    Okay … having had the same thoughts … I don’t quite see how HK or Singapore really advance the ball. If the problem is being invaded by “them” how does moving over to live surounded by “them” help matters? I’ve been to both places as well as Chile and before long I am ready to split. Really two or three days is my max in all three places.

    For Americans the other issue is that the tax man chases you all over the world. So, not only do you have to move overseas, but for it make any sense you have to establish a US residence in a zero-tax state like Florida before leaving or else the last state you lived in will have its tentacles in you forever. So you are paying 40%+ in taxes before you even leave, then you have all the bullshit associated with moving and getting papers in the new place. It is all incredibly exhausting — made more so by the fact you knida have to choose where you’re going before you get really settled there, or else you can’t get legal in the new place.

    I think the elites set it all up to make everything as much of a pain in the ass as possible. My pattern has been to leave for a month or two, get exhausted and come back.

    Still have not gotten the answer to this problem …


    SVErshov Reply:

    for last few years Ecuador has been best country for expats.


    vxxc2014 Reply:


    Possible answer,

    Fight instead of being sucked dry by parasites?


    Kgaard Reply:

    VXXC — Yeah … maybe. I don’t know. It’s so relaxing to stop fighting. To be in a place with like-minded people. And the people on the other side tend to yell. And talk a lot. And be irrational. It gives me a headache. I would rather BUILD than fight.

    SVErshov: I’ve spent some time in Guayaquil. It’s a lot nicer than one would expect. Beautiful waterside development they have. There’s a whole city park with iguanas in the trees. Fun little dudes. They have medical freedom written into the constitution. They are commies on many fronts though and I suspect culture is about zero. In Lima, for instance, they basically do not even HAVE an art museum. That’s pretty stone backward.

    I have this constant problem of waking up in some strange city and spending 15 minutes thinking, “What the fuck am I doing here?” It gets at the root of my being. People don’t talk much about culture shock anymore, I guess on the assumption that everyone is so cosmopolitan that it doesn’t happen. But you know what? It’s a real thing. I get it pretty hard after a couple weeks.

    High on my list of places to live would be Prague, Budapest, other cities in central and northern Europe. I just read a fascinating study that people are actually happiest when the temperature is in the 40s (fahrenheit) and there is almost no fall-off down to the TWENTIES. In contrast, when the temp gets over 70 happiness starts to implode. Isn’t that interesting? It has changed my way of thinking about the ideal location.

    Erebus Reply:

    Yeah, it’s bad… but with proper planning, I think that it’s manageable.

    I know a guy who moved to Hong Kong from the USA. This guy put all of his wealth in HK shell corporations that engage in “trading.” These corporations, which actually do engage in meaningful commercial activity, hold assets and cash, and are taxed at the local rate of 16%. The guy in question puts everything on expense accounts and corporate credit cards, and the corporations pay him a “salary” of something like $40k or $50k/year — somewhere far below the expat tax threshold. His wife, who is also “employed” by those corporations but who is not American, makes a “salary” that outstrips his by a few orders of magnitude. So he has very little taxable income on the books. The corporations he directs own everything, pay all of his expenses, keep his wife and household flush with cash, keep increasing in value… And, to the best of my knowledge, he’s not in violation of any laws. He’s actually making use of a known FATCA loophole.

    My advice to those seeking exit would be: Talk to a good tax lawyer and a good accountant first. With planning, there are ways to mitigate the tax burden.


    Posted on January 18th, 2016 at 4:25 pm Reply | Quote
  • Mariani Says:

    “The rageface collective”? Is this 2009?


    Xoth Reply:

    Oh, I suppose he’s getting on in years.


    Posted on January 18th, 2016 at 4:57 pm Reply | Quote
  • Salty Pickles Says:

    Antarctica? Gonna need a heated dome.


    AugustusPugin Reply:

    Always looking for an excuse to repost this:


    foam Reply:

    …or a mining station.

    To quote Satoshi Nakamoto:

    “Bitcoin generation should end up where it’s cheapest. Maybe that will be in cold climates where there’s electric heat, where it would be essentially free.”

    Re: Bitcoin minting is thermodynamically perverse


    Posted on January 18th, 2016 at 5:23 pm Reply | Quote
  • What the hell happened to neoreaction? | reactionaryfuture Says:

    […] mould. Examples are easy to find which are on the side of Patri Friedman contra Moldbug , see here, here, here and here for examples, so many examples in fact that when anyone unfamiliar with Moldbug […]

    Posted on January 18th, 2016 at 5:31 pm Reply | Quote
  • Sidney Carton Says:

    Stross: “free movement of capital but not of labor.” That line was said a lot by the progs (with “people” typically swapped in for “labor”) when the refugee issue surfaced last year. Implication is that the right is hypocritical (though they probably conflate very different factions of the right). Why is one form of borderlessness ok but not the other?


    Different T Reply:

    Capital is fungible and investment drives economic growth (though there can obviously still be pitfalls to an influx of foreign capital).

    Immigrants are not fungible and their impact is much less certain on growth. Additionally, political stability can be threatened (including in monarchies like the ME) by immigrants, whereas capital usually must conform to the law, few questions asked.


    D. Reply:

    Externalities occur with movement of people (not restricted to labor) that are absent with the movement of goods and of capital.


    Grotesque Body Reply:

    @Different T and D.,

    Or, to put the absurdly obvious retort more bluntly, “Capital and immigrants are *not* the same fucking thing.”


    Kwisatz Haderach Reply:

    Coming from one who purports to speak for the workers of the world, “Free movement of capital but not of labor!” is an inadvertently hilarious accusation. Free movement of labor is and always will be an advantage to Capital, not to Labor. I mean, how careless do you have to be to rhetorically position big capital as against free movement of labor?


    michael Reply:

    until it is sorted whether we will have nations or not and if it is sorted that we will i think some restrictions on capital are warranted to protected nations capital can be a weapon,there may be ways to mitigate the weapon aspect of capital and allow the nation to enjoy the benefit of foreign capital without fear and the capitalist an expanded market.

    One problem with labor moving is not all labor is the same value but the cost of supporting the immigrant is kinda fixed this means capital can triangulate third world desperation against first world labor who are not represented by their governments.the libertarian argument you mention pretends all labor is as equally valued as the capital its compared to, if capitalist had to bid for labor on a market like forex to find its value it would be different what really happens is thy bid for a portion of the cost while first world governments use their citizens money to subsidize the capitalist imagine if the 30k a year the state contributes on average were billed to the capitlist and then imagine if a cost benifit analysis were done that calculated the other costs like inflation to realestate, wages being sent oversees, the weakening of the culture, bilingual administrations and a hundred other cost and billed that to the capitalist.

    If capital is going to be non national then it can not be treated as if its part of the community, The value of first world markets the roads, courts, media penetration, quality of labor. housing quality for employees up to ceos, military protection is worth a lot and should be accounted for in any negotiation with capital this is not socialism this is informed partners dealing as equals with capital the way another corporation would rather than some banna republic dictator would sell his people out..I actually think the solution might better be the opposite force capital to choose a nation and be good citizens there could be advantages to both sides for loyalty.

    as of now there is no technology that frees markets capital of the nation states except the old fashioned bribes subterfuge etc states like usg ought to be able to negotiate equally with capitalists and get value for its citizens they could actually force most companies to be american companies if they put their shoulders to it.If tech emerges that changes that things should be rethought. capitalism is good because its efficient evolutionary mimic benifits the citizens of the countries that invented it and others to the extent they adopt it. its not good simply because goldman makes billions who gives a shit whats so great about that and why should i protect and defend it instead of simply kicking the jews ass and taking his shit. so while its important to remain cognizant of not gumming up the gears of the capitalist machine its also important to understand why we tolerate it. Yeah property rights and all that enlightenment stuff hmm thought we didnt believe in that anymore. we like the efficiency because we like new inventions around here and nations generally like the benefits too.If western civilizations didnt exist capitalists would have to invent them if we allow capitalist to destroy western civilization they will have to build and defend western civ like outposts to manage their empires. the reality is the same minds that invented WC invented capitalism and both must be defended from each other and from outside forces.but ultimately civilization must come first capitalism serves civilization not the other way around, the value of capitalism is its value to civilization, and sure theoretically if allowed to run rampant it might still produce some benefit to some civilization for some period but not optimally and eventually like some runaway AI.think of a machine that does an amazing job at some formerly arduous task of course you dont start messing with its gears but neither do you let it run your country you put it in a room and let it do its thing while you and the men decide how to preserve civilization with the added resources the machine allows.


    Posted on January 18th, 2016 at 5:33 pm Reply | Quote
  • Different T Says:

    It’s allergic to socialism (obviously), and tends to flee places where socialist influence is substantially greater than zero.

    Not really. It wholly depends on what is being socialized. Socialization of losses and expenses attract capital, even skeptical capital that thinks it can escape before it gets eaten.


    Posted on January 18th, 2016 at 5:49 pm Reply | Quote
  • Thales Says:

    They’ve turned a corner: from mocking and sneering at the very idea of capital flight to fearing it openly.


    Yvjrolu Reply:

    The economically focused leftists have always seemed to fear it.


    Posted on January 18th, 2016 at 6:51 pm Reply | Quote
  • Mark Citadel Says:

    Don’t get too far ahead of yourself, but I definitely think this year will begin to see the fragmentation. If EU survives 2016 I will be blown away!


    Grotesque Body Reply:

    Europe V EU


    Hurlock Reply:

    It will survive.
    Too many vested interests in it.


    Posted on January 18th, 2016 at 7:02 pm Reply | Quote
  • Viriya Says:

    #2 “Courageous media capitalists (those with the odd ethical bone in their body) will stand up to them and get themselves assassinated or imprisoned.”


    So let me get this straight, the ‘media capitalists’ are the ethical and couragous ones. Ethically and courageously covering up mass molestations of their own daughters, chaos and violence in their own back and front yards (welcome to Malmo, we love grenade attacks!), courageously towing the line of financial/political elites to protect their cushy careers and social status as the 21st century brahmins, padding their reporting with lies and moral signalling at every opportunity. And of course, the real problem with events like the Cologne rape are how they’re being ‘spinned’ by evil right wingers. Damn them!

    Don’t you stupid right wingers realize that European women wore partial veils 500 years ago? Gosh you’re ignorant. I mean, the very act of saying this could be construed as implying a 500 year developmental gap between Islamic and European civilization, but that would be the WRONG conclusion, you damned dirty racist!


    G. Eiríksson Reply:

    Well formed.


    Posted on January 18th, 2016 at 7:26 pm Reply | Quote
  • Geopolitical Arbitrage | Reaction Times Says:

    […] Source: Outside In […]

    Posted on January 18th, 2016 at 7:38 pm Reply | Quote
  • michael Says:

    you can exit [maybe] but you cant take it with you. capitals value is dependent on it remaining within the jurisdiction of the thugs that printed the worthless capital. and you cant earn interest on piles that big outside their system or sell widgets with no one to sell them to. You can start over or you can take over. if you start over they are likely to annex and tax you anyway unless you can beat usg in the field in which case i suggest just taking over.


    Salty Pickles Reply:

    Ain’t you heard of bitcoin, son?


    michael Reply:

    LOL fortunately i got out near the top to pay for my daughters rehab was kicking myself till about 6 months ago. But I dont think we have heard the last of crypto and thats a good thing but not to allow goldman to fleece us just the opposite. crypto and other tech will put the check back on government at least its a hope. it wont allow goldman to operate tax free corporation of that size need markets commensurate and will continue to have to negotiate entry to those markets what crypto might do is force the peoples representatives to negotiate in good faith not sell them out.
    Im not suggesting nations should socialize capital but the problem is actually the opposite in western nations the corporations get extraordinarily lucrative deals and make lots of money [though things like AA should be abolished] the socialization is the capitalists losses and the wages of its labor and tax subsidized benifits to the capitalist. Too big to fail needs to be solved its a real problem but complicated. Its really hard to talk about what im trying without triggering all our socialist vs capitalist so i always say im squarely in the extreme capitalist camp and i am which means im in favor of both parties dealing freely but the citizens of the nations negotiating with capitalist are not represented well. so you either force capitalists to become citizens of a particular country and deal with other countries from a nationalist capitalist perspective or you negotiate with them as hostile outside forces and extract as much from them as they would from you.yes capitalism is under assault but goldman and google neednt worry its the local dry cleaner and programmer who needs to worry.Imagine if google wanted to operate some new concept in epcot what do you think that deal would look like,now compare that to the one google gets in the average nation.


    Posted on January 18th, 2016 at 11:49 pm Reply | Quote
  • vxxc2014 Says:

    “You can start over or you can take over.”



    Posted on January 19th, 2016 at 2:04 am Reply | Quote
  • frank Says:

    The cost of primary property ownership over the cost of secondary property ownership (CPP/CSP) is still prohibitively high to justify escape. Being a subject of WashCorp is still too rewarding and not punishing enough. For most, it will never get low enough. The lesson of the South Africa Experience is that the dominating factor in the ratio is CPP: CSP can get astronomical and yet CPP/CSP is still not low enough for the overwhelming majority. Anything short of an exponential decay in CPP will not do. Hard security is hard, for now. A drastic fall in the cost of slave robot armies or conversely a drastic hike in the cost of owning human armies, or both is the most promising way forward. The former produces Moldbug’s patchwork, the latter, feudalism 2.0. All this, of course, is old news. As capital is radically properterian, its escape condition is prodigious proliferation of primary property possession.


    Posted on January 19th, 2016 at 4:51 pm Reply | Quote
  • Lightning Round – 2015/01/20 | Free Northerner Says:

    […] Geopolitical arbitrage. […]

    Posted on January 20th, 2016 at 6:02 am Reply | Quote
  • jay Says:

    Another example of Capitalism outpacing its foes.


    Posted on January 20th, 2016 at 11:02 am Reply | Quote
  • Arbitragem Geopolítica – Outlandish Says:

    […] Original. […]

    Posted on September 13th, 2016 at 11:04 pm Reply | Quote
  • G. Eiríksson Says:


    Posted on May 16th, 2017 at 12:17 pm Reply | Quote

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