Daily Bell: Thanks for speaking with us again. How are you?
Wendy McElroy: Doing well, thank you. Life has been a wild ride of late but I am looking forward to a long, hard winter because it will give me the excuse I need to spend every day in front of my computer, writing. Other than time spent with my husband, I'm never happier than when I'm workin' the words. And I am jazzed about a new book I'm doing about non-political strategies through which to pursue freedom, especially on a personal level in daily life.
Daily Bell: Your editorial, “The Fate of Galt’s Gulch Chile,” http://www.thedailybell.com/editorials/35591/Wendy-McElroy-The-Fate-of-Galts-Gulch-Chile/, which we published at The Daily Bell in August, received an enormous amount of attention. Can you provide a brief history of your involvement in GGC and summary of the points made in your editorial for those not aware of the background?
Wendy McElroy: First, a bit background on the article itself. Galt's Gulch Chile is a proposed freedom-oriented community that would be about a hour west of Santiago, near the town of Curacavi. GGC sold options on lots that ranged from 25 to 1.25 acres. My husband I purchased an option on a small lot. GGC also engaged in various businesses, primarily agricultural, in which people were encouraged to invest in order to receive regular dividends. But GGC was not quite as it represented itself to be.
The Daily Bell was the first media outlet to break the story, and it took courage to do so. The GGC debacle needed to be exposed. Potential investors and purchasers needed to be warned so that they did not walk into the same angst as my husband and me. When we discovered that GGC land and investments were still being marketed, despite assurances to the contrary, Brad and I knew we had to go public even if it reduced or removed the value of our own investment. The Daily Bell did not hesitate in becoming part of the solution. I am proud to associate with you.
The more personal background: In the wake of 9/11, my husband and I watched freedom die in North America. I've been active in various freedom movements since I was 15 years old and it made me literally ill to see how people rushed to embrace the lie of trading freedom for security. If they want to trade their own freedom for a faux security, then great. But they traded mine. The United States is now a police state domestically and a perpetual war-machine internationally.
And, then, there is the economy. I don't know if we are dancing on the edge of a fiscal cliff or if we are in free fall because the process is slow and so much depends on who you are, on how you've positioned yourself. I keep wondering how long the American economy can withstand such savage looting. A long time, I think. There is a great deal of ruination in a nation that has so much personal and private capital as America.
Back to GGC. I first heard of GGC at the Freedom Fest conference in 2012 from the Dollar Vigilante Jeff Berwick, who was one of two GGC co-founders> He quickly become a friend of mine. The other founder was Kenneth Dale Johnson, whom I had not met. (At some point, and I am unclear as to when, Jeff was pushed out of the operation, leaving only Ken.) I learned that several other purchasers/investors were successful businessmen whose opinion I respected on financial matters.
Brad and I wanted to break free from North America's political context and start over in country filled with sunshine, in a community filled with neighbors we wanted to know rather than ones with whom we rarely discuss anything but weather. We did research. Chile is not free and never will be in the libertarian or anarchist sense. But it offered distinct advantages, including a stable government, a wonderful climate, and a remarkably business-friendly environment. We purchased an option on 1.25 acres.
The first GGC general celebration event occurred in November 2013 but we were unable to attend. The event was advertised as an occasion when option purchasers could choose the specific lot on which to build their lives. Lots were chosen but no progress toward an ownership transfer was possible because zoning and other 'niceties' had not occurred. The second GGC celebration was in April 2014 and we attended. Lots were chosen but no progress toward an ownership transfer was possible because zoning and other 'niceties' had not occurred. In short, the promises made in 2012 and repeated afterward had come to naught. A zoning application had not even been filed. Those who invested in business ventures did not receive the scheduled dividends as promised.
Daily Bell: What have been some of the outcomes of that editorial?
Wendy McElroy: It set off a firestorm, and I address that in another answer. One salutary outcome: The publicity seems to have cut off the funding of GGC from new buyers or investors. Four people have told me they had been on the verge of writing a check before seeing my article. They thanked me – one thanked me profusely – for hoisting a red flag. It is important to remember that the buyers are often average people who invest their life's savings in a dream of retirement. When that dream bursts, the consequences can be catastrophic. One couple has broken up and no longer speak to each other. One man now lives in his car with his partner and a young child. Saddest of all is a wonderful woman who died last week; I believe the stress of GGC hastened her demise. I should interject right now that Brad and I are fine on all fronts. But this has been a financial blow; it has been an emotional blow as well.
The best result of the Daily Bell editorial? Until the words were spoken aloud, there could be no healing, no progress toward a solution.
Daily Bell: You stated that fraudulent transactions had occurred pertaining to the project. Anything you want to clarify or change? From what you’ve learned now would you adjust, clarify them or strengthen them?
Wendy McElroy: Actually, the question is inaccurate. I came within a whisker of calling GGC transactions “fraudulent,” and anyone with two brain cells to rub together will come to their own conclusion about whether fraud occurred. I never used the word, however. Instead, I allowed the facts to speak for themselves. I have most definite personal opinions on the fraud question but I've been a writer for many years and I know the parameters of libel law.
I am not sure I would adjust anything in the article. Everything I've learned in the intervening month has confirmed my assessment of GGC and Ken Johnson. True, some of the details revealed have been shocking. For example, bitcoin was accepted and encouraged as a purchasing currency. Meanwhile, Ken Johnson must have known that Chilean courts do not recognize bitcoin contracts and would not have allowed a land transfer based on bitcoin. Either he knew it or he is woefully ignorant. Personally, I think he does not care.
Daily Bell: The article has received 900-plus feedbacks at this point and you and your husband, Brad, have replied to a significant number of those. Can you comment on that process?
Wendy McElroy: Brad has more endurance than I do so I stopped answering on a regular basis after the second day or so.
Participation on the thread has been difficult because, quite apart from the harshness of many comments, I approached the discussion with unpleasant emotions ricocheting within me. Embarrassment at being taken for a fool...and having been a fool. Brad was the one who first raised the possibility of moving to GGC but I felt as though I'd let my husband down. I am still angry with myself – which is more difficult than being angry with others. I am disappointed in myself, I'm dealing with the loss of a dream, I am sometimes filled with discouragement... None of these emotions are useful when dealing with an unsympathetic thread because you are somewhat inclined to agree with the cruel comments. But I have a commitment to answer every quasi-civil poster at the Daily Bell and I sometimes answer the uncivil ones once in order to ascertain whether the poster is a one-time rudenik or an habitual jerk.
The most interesting aspect of the thread was that Ken Johnson and some of his employees showed up to post. It was a rare public display for an operation that is cloaked in a secrecy bordering on paranoia. Ken has thrown mud at just about everyone on the “rescue team” and threatened to sue about half of them for one thing or another. But he's never slandered or threatened me. Perhaps I am the the only one to call his bluff and go public instead of bowing to his constant threat, “if anyone crosses me, I'll make this thing blow up! I'll go public with what I have on people.” Just call me nitro-McElroy.
Daily Bell: You must have received many messages of private support, even though publishing the article was surely an agonizing decision. Can you give us some indication of what people have been saying to you?
Wendy McElroy: The potential purchasers who are now pausing-in-place are the most rewarding messages I've received. I've also received messages and downloads from former employees who seem to need to speak out and purge the information sealed up inside of them. They are like domestic abuse victims, I suppose. A key part of healing is talking.
The private messages have also been a source of invaluable information. For example, the rescue team learned that GGC was marketing its water rights – the percentage is unknown – only because a real estate agent forwarded to me a solicitation email he'd received. He knew to contact me because of the Daily Bell article. He had a vested interest in doing so. He said GGC was poisoning the market for ex-pat property sales in Chile. As a consequence, the rescue team issued a press release to Chilean newspapers and other relevant parties to announce that the legal ownership of GGC was in question and any transfer of rights would be challenged. Without the Daily Bell article, we would not have known water rights were on the auction block.
Daily Bell: Were you surprised by the furor it caused? You spoke of feeling sick to your stomach following publication.
Wendy McElroy: I was not surprised by the furor among investors and purchasers. I was privy to the behind-the- scene anger and frustration they had bottled up for months. I knew there would be a huge venting whenever the lid popped.
And, yes, I did feel sick to my stomach at the publication of the original article. I do not recommend whistle blowing as a digestive aid. I know why people stay silent. Some of them are in denial, some believe speaking out will harm the value of their investments or the investments of others. Others bow to pressure from fellow investors who don't want to rock the boat. The first one to speak out draws all the fire of vicious people, angry people who kill the messenger, people who are opportunistically cruel. And, then, there is the embarrassment of publicly admitting you are a fool and providing a stage for schadenfreude (a shameful joy in the misfortune of others) to anyone with a grudge, personal or ideological.
But, at some point, you have to say “what's true is true.” It is what it is.
Daily Bell: How about Brad? Similar effects on him, or has he had a different response to it?
Wendy McElroy: Brad has different strengths and weaknesses than I do. Perhaps the worst fall-out is that he is soured on the very idea of becoming ex-pats. We have agreed not to discuss the matter for a full year, at which point there should be enough distance between the GGC debacle and us for more clarity of thought and emotion to prevail. I am still a believer. And a year poses no problem because I think the rescue of GGC may take a full year before anything practical is possible.
BTW, if the rescue team prevails – and I believe that is likely – various possibilities may be available to land purchasers. I've been told that the 25 and 10 acre lots have received zoning permission. Frankly, I'll believe it when I see the notarized paperwork; perhaps not even then because sharp legal questions attend the notarization process used by GGC. The 1.25 acre lots have not been zoned and (IMO) zoning is unlikely because of the strict environmental constraints that attend the property. One source told me that GGC was environmentally protected at the national level which means chopping it up into small parcels would take the Chilean equivalent of an act of Parliament. Is that true? Who knows? Many alternatives are being discussed.
Daily Bell: Some of the response was harsh, indeed. What about the reactions of those who seemed to take pleasure in the difficulties because it is a problem being experienced in the libertarian community? Were you surprised at the anti-libertarian backlash in the feedback and the press?
Wendy McElroy: Yes, I was, and I should not have been. One of the indications to myself that I'd run out of perspective on GGC was that I was surprised at the viciousness of leftist posters toward me. After all, I'm a human being who has done them no harm. But I had no business being taken aback. I've dealt with gender feminists for years; they literally despise and sometimes go to great lengths to harm women who disagree with them. Heretics are hated more than infidels. In my youth, I spent quite a bit of time around Marxists whom I believe would not have hesitated to line people like me up against a wall and shoot them. And, then, there are the global warming zealots whose idea of communication is a death threat. I don't know whether defending a house-of-cards ideology turns people vicious or merely attracts the already vicious.
Daily Bell: Can you summarize the cites the article received away from The Daily Bell? It attracted considerable attention. Why do you think the article received such wide play?
Wendy McElroy: The most balanced coverage to date was in the popular independent 'zine Vice, which cleaved closely to the facts without editorializing. By the way, the National Post is supposed to have a story on GGC this weekend or shortly thereafter. And the main figures in the GGC saga have been interviewed for an upcoming article in Newsweek.
There are various reasons for the stir.
One is because the name Galt's Gulch raises the specter of Ayn Rand whom many liberals are eager to bash. They point to GGC as a sign that her capitalist ideology is drek and her followers are fools. This is evident from the headlines used by liberal sources. For example, Salon declared, “Ayn Rand’s capitalist paradise lost: The inside story of a libertarian scam.” The Gawker stated, “Ayn Rand's Capitalist Paradise Is Now a Greedy Land-Grabbing Shitstorm.” Addicting Info announced, “Libertarian 'Utopia' Styled After Ayn Rand Book Spectacularly Falls Apart Almost Immediately.” The Daily Kos was more restrained with the headline, “Galt's Gulch Chile: The Libertarian Oasis.” But the opening sentence belied the restraint, “The Real Manly Men (and even more Manly Women) of Libertarian Genius decided a couple years ago to flee the socialist Hellhole of the United States and create Galt's Gulch...” I could go on and on citing liberal coverage, especially if blogs are included.
Another reason is that many libertarians are shocked; it is hot movement gossip even for those who like the concept of GGC, perhaps especially for them. The Daily Paul announced, “Shocking Developments With Galt's Gulch Chile.” A scandal involving millions of dollars and high profile libertarians is bound to reverberate. Other libertarians (like me) are determined to spread the news in order to warn others who might be tempted to invest. Still other individuals and communities want to publicly distance themselves. At the April celebration, there was a presentation by three bitcoin gurus who were invited because GGC accepted bit coins as payment for land. Now voices in the bitcoin community want distance. The bitcoin blog Ounce ran an article entitled “Libertarian Paradise Or Just Another Bitcoin Scam?”
The coverage is also starting to appear in the Chilean and South American media. This should increase remarkably in the wake of the press release sent to Chilean media and other interested parties, such as real estate agents. The first such publication was the Panam Post on September 4: “Galt’s Gulch Chile: Libertarian Paradise Turned Nightmare.” The story of GGC is attractive because of its local interest but also because it deals with a phenomenon that South America is experiencing across the continent: North American ex-pats who buy land. (Indeed, the issue of ex-pats is drawing considerable attention in the U.S. and Canada as well.) Unfortunately, GGC fortifies the worst impression of ex-pats because GGC has been wretchedly bungled and it owes so much money to honest Chileans who delivered services and goods.
It can be difficult to read some of the coverage but the only chance the rescue team has is transparency and truth. The rescue team does not stand a chance of redeeming the project otherwise.
Daily Bell: Do you have a sense of the accuracy of these articles? Did they approach libertarianism accurately or not?
Very few of them were even vaguely accurate. This is especially true of the liberal and left coverage. Oddly, some had quite a bit of trouble getting my name straight. It is the one time I've been happy to have my name misspelled.
Daily Bell: What were some of the main misunderstandings about libertarianism that you encountered?
One misunderstanding is that the GGCers are/were greedy fat cats – a common caricature of libertarians – and we wanted to thumb our noses at the rest of the world. The purchasers ran a financial gamut from successful businessmen to impoverished people who worked at GGC as a way to “pay” for land. One of my potential neighbors wanted to raise chickens, as he did in the States, in order to provide income for his family. No thumbing occurred. Instead, there was a desire to build a self-sustaining and peaceful community that worked in harmony with the nearby town of Curacavi.
A strange subtheme of misunderstanding arose. Some people assumed GGC would be a law unto itself perhaps because libertarians are viewed as scoff-laws. For example, I was asked how the court system would work in GGC. Well, in the same way it worked in the parts of Chile outside of GGC. No one intended to flout Chilean law and “get away” with anything. We wanted to be good neighbors with the Chilean people as well as each other.
And, then, there were those libertarians who accused GGCers of abandoning freedom and not “staying to fight.” Hard to take them seriously. For one thing, their assumption is that freedom and the fight for it exists only in North America...or in the United States. Ridiculous. The desire for liberty is a global phenomenon, a human characteristic that is reborn every time a new infant draws breath. Moreover, I intended to write about libertarianism every bit as much as I do now. Perhaps more. The day may come when it is no longer safe to express radical ideas, such as the principles of freedom, in North America.
Daily Bell: Why do you think there’s so much anger, much of it ignorant, regarding libertarianism? The hostility was striking. Why do so many people seem to have trouble with libertarian approaches generally?
I believe the rise in the level of hostility is due to the increased popularity of libertarianism. We are now perceived as a real political threat. One of my favorite quotes from Mahatma Gandhi is, "First they ignore you, then they laugh at you, then they fight you, then you win." Right now libertarianism is in fighting stage, the one that comes before winning.
Daily Bell: There was a great deal made of the issue that some of those involved in the project don’t intend to sue as well as criticism of those parties who do wish to utilize the state system to pursue justice. Why is this?
Wendy McElroy: There was and is considerable difference of opinion within GGCers on the issue of using the state court system, which illustrates the diversity of purchasers and investors. But no matter which stand was taken, there seemed to be a crowd of hecklers waiting in the wings.
Some wanted to taunt libertarianism or anarchism because they believed (falsely) that an anarchist like me would abandon a lifetime of commitment as soon as there was a “real” (read money) advantage to doing so. They were wrong. But they continued jeering for the simple joy of viciousness.
Others were angry at my refusal to use the court system, perhaps because they thought I was being “holier than thou.” I'm not. I'm just living my life according to my own principles. One person even accused me of aiding and abetting Ken Johnson by refusing to use the legal system. This, despite the fact that I was the one who blew the whistle and took it square in the teeth for doing so. Pacifists during wartime receive similar opprobrium as cowards who aid the enemy for not being willing to kill strangers because the state sanctions and orders it. I sometimes wonder whether the attackers have a deep-down sense that they are wrong and so they need vilify anyone who reproaches them by refusing to do the same.
Still others were validly confused because my article stated in a passive voice, “Lawsuits are in progress.” Not my lawsuits, to be sure, but the passive voice created confusion about whose lawsuits. I should have worded the statement better.
Daily Bell: Do libertarians never seek redress – or is there reluctance to use the tools of state justice?
Wendy McElroy: Libertarians aggressively seek redress for injustice but the means they use varies depending upon the type of libertarianism they embrace. Limited government libertarians and Objectivists (who would 'object' to being called libertarian) both believe in a night watchman government. That is, they believe state police and court systems are justified by the need to protect the person and property of individuals. For them, using the court system to redress injustice is a no-brainer and it does not violate their principles; it actualizes them. Many of the purchasers/investors are using the law in a variety of ways, both collectively and individually.
For better or worse, I do not willingly use state 'services'. If a gun is pressed to my head -- in the form of a tax demand, for example – I will comply as long as my actions do not harm others. I will also use the state when I cannot otherwise achieve an important goal...again, as long as my actions do not harm others. For example, I intended to register my property title. (By contrast, an example of an action that harms others is answering a police officer's question, “does your neighbor use illegal drugs?” I'd either lie or refuse to comment.) I am angry enough with Ken Johnson that I wish I could go the legal route; it would be emotionally satisfying. But I can't, so that's that.
Daily Bell: What alternatives are available to those who wish to avoid using the state system in addressing such issues? And what would be the libertarian ideal, in this case?
Wendy McElroy: My main recourse for redress is the media. If the Daily Bell had not published the expose, I do not believe anything else would have happened with GGC. The truth is more powerful than any legal system could be. The rescue team has been negotiating with Ken Johnson for a transfer of control for months, and shedding a strong beam of light onto GGC provides incentive for such a transfer to occur. Truth makes bad actors uncomfortable.
There are many other non-state options as well. Earlier in the GGC saga, when a conflict erupted between Ken and an employee, a free market arbitration occurred with the arbitrator being approved by both sides. Letting Chileans who are owed money know that the new management team would pay off debts as a top priority is essential. It gives the local population reason to boycott GGC through refusing services and goods, by refusing to serve GGC staffers in restaurants and through calling out unpleasantries whenever staffers walk the street of Curacavi. Another successful use of truth was circulating the press release in order to notify potential buyers of the water rights or land that any transfer would be vigorously contested.
Of course, the ideal situation is a private court system which so many libertarian anarchists have envisioned.
Daily Bell: Is it still viable and worth pursuing?
Wendy McElroy: I point to the concept of “demonstrated preference.” If you want to ascertain what people value, then look to their actions which reveal their preferences more surely than their words do. A dedicated group of dynamic people are spending an immense amount of money and time – I'm in the time-spending category – to reclaim GGC. The leader of the team is a mega-successful and competent man who has earned my respect and trust. Frankly, that is not an easy accomplishment these days.
Daily Bell: What’s next – can you give us some sense of what is going to happen now? Is there a comprehensive plan moving forward?
Wendy McElroy: Yes, there is a comprehensive plan. Were I able to speak of it openly, then the Daily Bell would be the first place I'd publish. You have earned a great deal of loyalty from me. But the rescue team is closed-mouthed at this point, and it must remain so.
Daily Bell: Chile just suffered from two bomb explosions in major municipal centers causing the government to raise the alarm about terrorism. It looks as if Chile may go at least partially down the US road regarding a continued state of emergency from a governmental standpoint that could include suspension of liberties. Would this be a problem as relates to the project?
Wendy McElroy: I do not expect Chilean policies to become a problem for ex-pats. Or, rather, I think the policies are better than elsewhere in South America and they are likely to remain so. That said, Chile is a nation that loves its police and military. It always has. In this regard, it reminds me of the United States. But GGC would exist in relative isolation and I do not envision a problem.
It is my understanding that Doug Casey's enclave in Argentina is able to function well even though the Argentinian government has become decidedly totalitarian.
Ex-pat communities are viewed in an odd manner by local authorities, almost as though they are inside a bubble. The ex-pats are sources of income without taking anything out of the economy. They usually bring highly evolved and valued skill sets, like computer programming or other expressions of technology. The communities tend to be quiet, peaceful and a non-factor in local or national politics. For example, although I would continue writing anarchist material, I'd still focus on North America. The last I checked, there are not many nations that punish you for attacking the U.S. I'm more likely to win an award.
Daily Bell: How about conversations with the government – any being initiated? Any reason to do so?
Wendy McElroy: If conversations with the Chilean government have occurred, I don't know about them. It is quite possible that others on the GGC rescue team have approached or will approach the government but I would almost certainly be left out of that loop because of my anarchist objections with which they are familiar.
Daily Bell: What’s next for you? Will you have more involvement in the project or less?
Wendy McElroy: I am very active in the rescue team. Among other roles, I'm the archivist and, when the Chilean dust has settled, I will be writing up a narrative that draws heavily upon original documents and first-hand accounts. A book-length treatment will occur whether or not the GGC rescue is successful. Many of the hitherto undiscussed details will be shocking.
Daily Bell: Do you still hope for a successful conclusion or are you more or less resigned to the idea that it may never work out?
Wendy McElroy: Both resignation and hope exist within me at the same moment. I am resigned to losing our investment and never seeing Chile again. But, I swear to God, I will go down swinging. And I have not lost hope because I've seen justice emerge from far worse situations. I was involved in opposing a land and water grab in my own backyard in Canada. A woman mortgaged her home to sustain a battle that took years and which was conducted with many strategies. The neighborhood won against overwhelming odds. We won because we did not give up.
Daily Bell: In September you wrote an editorial about this experience entitled “Reflections of a Whistleblower,” (http://www.thedailybell.com/editorials/35640/Wendy-McElroy-Reflections-of-a-Whistleblower/) in which you talked about advice you’d received long ago from Nathaniel Branden: “Never respond to an attack on your character.” Your editorial about GGC certainly fostered attacks on your character, as well as that of many others involved, but also on the “character” of libertarianism more generally. Is it possible to defend, or at least clarify the stance of, individuals or ideals while heeding Branden’s advice? How so? Why do you think online discussion so often devolves into name-calling and ad hominem attacks?
Wendy McElroy: Actually, I have a somewhat contradictory stand on answering attacks on my character. I usually take the Branden approach because I agree with his point that debating a statement like “You are a fraud” is a losing proposition from the get-go. No one who honestly wishes to discuss ideas leads with a character assassination. On the other hand, on the Daily Bell, I've been known to provide one response to people in whom I see some possibility of civil discourse. I respond politely and, if the counter-response is not civil, then I move on. I make the initial post because there have been remarkable occasions when a valuable discussion – in one case, even a friend – resulted.
I think online discussions devolve into viciousness so quickly and often because they are usually anonymous. I make a point of using my own name and owning my statements, which includes admitting a mistake if it occurs. But anonymity frees people to be unfair, cruel, deceitful and to evince savagery without paying a price. I am not for removing anonymity from the internet...not in the slightest. But it has unfortunate consequences.
Daily Bell: Thanks for your courageous stance, as always.