They Built a Cartel Because You Found the Exit

Governments are pooling power into bigger blocs at the same time ordinary people are learning to work, save and live across borders. The two trends are very much connected.

On July 21, 2026, local authorities in Johor, Malaysia shut down Network School, a startup campus run by Balaji Srinivasan. For $1,500 a month, it hosted people who want to build new communities online first and on land later. Officials revoked its business licenses, citing breaches in how the premises were used (The Star). Srinivasan didn’t bother spending years trying to appeal. The next day, he signed a memorandum of understanding with Kazakhstan to move the school there (The Block).

It’s a small story about a niche project, but it follows an argument a French-Belgian economist made in 1849 almost exactly. It also fits a lot of what’s happened to money and borders in the last two years: one government said no, and another said yes within 24 hours.

Is the nation-state getting weaker or stronger?

Depends where you look. In January the US announced it was pulling out of 66 international organizations, and it has left the WHO. Tariffs are back. Border enforcement is up almost everywhere. If you only read those headlines, you'd say nationalism is winning.

But a second set of headlines points the other way. The power that used to sit with individual governments is moving in two directions at once. Some of it is going up, into agreements and institutions that sit above any one country. Some of it is going down, to individuals who can now earn and save without much reference to any specific flag or land.

So first, let's look at the power that is centralizing. In 2021 more than 130 countries signed on to a 15% global minimum corporate tax through the OECD, known as Pillar Two. The goal was to stop countries from undercutting each other on tax rates to attract companies.

On January 1, 2026, the OECD's Crypto-Asset Reporting Framework (CARF) went live. Forty-eight countries started requiring crypto service providers to collect each user's legal name, date of birth, tax ID, country of residence, and the value of every transaction. Those countries begin swapping that data with each other in 2027. The US has committed to join the exchange in 2028 (BlockEden).

In Europe, Parliament voted 416 to 169 this summer to move the digital euro into final negotiations. The ECB says it could be issued as early as 2029 (Sumsub). It would be a currency run from above the level of any member nation.

And in January 2025, El Salvador's legislature voted 55 to 2 to gut its own Bitcoin Law as part of securing a $1.4 billion IMF loan. Businesses no longer have to accept bitcoin, and it can't be used to pay taxes (Reason). A country made a sovereign decision about its money, and a lender above it walked that decision back.

On the decentralizing side, MBO Partners counted 18.1 million American digital nomads in 2024, about 11% of the US workforce and up 147% since 2019. Around 60 countries now offer some kind of digital nomad visa or remote-work permit. In 2019 that number was zero (Nomada).

Wealthier people are moving too. Henley & Partners projected that about 142,000 millionaires would relocate in 2025, a record, with the UK losing around 16,500 and the UAE gaining around 9,800 (Business Standard). Henley's 2026 report says US applications to its programs doubled last year, and it quotes advisor Basil Mohr-Elzeki describing what clients are after: "to ensure that no single government holds the whole of a family's life and capital" (Henley).

Why governments start acting like a cartel

A cartel is a group of sellers who agree not to compete with each other. OPEC is the famous one. Oil producers agree on output so prices stay higher than they would in an open market.

You only need a cartel when your customers have somewhere else to go. A town with one gas station doesn't need a price-fixing deal. A corner with four of them might start thinking about one.

For most of the 20th century, governments were the one gas station in town. Your income was earned where you lived, paid by an employer who reported it, and deposited in a bank that answered to the same government. Leaving was expensive and rare.

That changed once companies could book profits in Ireland and people could work from Lisbon for a client in Toronto. Countries started competing for both. Pillar Two exists because companies could move. CARF exists because money could move. These agreements are what governments built once enough people and capital had options.

Cartels also have a well-known weakness, which is that members cheat. On January 5, 2026, the OECD released a "side-by-side" arrangement that exempts US-parented multinationals from most of the Pillar Two rules (EY). The biggest member wrote itself a carve-out four years in. Meanwhile, 60 countries are designing visas to attract remote workers away from the other members, and Kazakhstan said yes to a project Malaysia had just thrown out.

The US pulling back from international bodies fits this picture too. A country that large doesn't need the cartel's rules when it can negotiate its own exemption from them.

Molinari asked the question in 1849

Gustave de Molinari was a Belgian-born economist working in Paris. In 1849 he published an essay called "The Production of Security," and it asked something nobody had asked so plainly before. If markets do a better job than monopolies at producing bread, cloth and everything else, why should security be the one product only the state is allowed to sell?

His answer was that it shouldn't be. Security, he wrote, "should... remain subject to the law of free competition," and "no government should have the right to prevent another government from going into competition with it." The customer should keep the option of "being able to buy security wherever he pleases" (Mises Institute).

In 1849 that was a thought experiment. You couldn't shop for a government from Paris. You were born into one and you mostly stayed there.

Today a software developer in Ohio can compare Portugal's digital nomad visa to Malaysia's, check which one recognizes her income, and apply online. Henley now publishes a "Wealth Mobility Competitiveness" score for countries, ranking how attractive each one is to people who can leave. Governments are being graded like products.

Molinari's framework explains both halves of what's going on. The nomad visas are governments competing for customers. Pillar Two and CARF are governments trying to agree not to.

A 1997 book called The Sovereign Individual took a similar idea and pushed it forward. James Dale Davidson and William Rees-Mogg predicted that "cybermoney controlled by private markets will supersede fiat money issued by governments," and that states would get more coercive as income got harder to tax. They described the state as a farmer whose cows were about to grow wings (Wikipedia).

AI and the payroll tollbooth

There's another reason the state's job is getting harder, and it has less to do with borders than with how work is organized.

The US started withholding income tax from paychecks in 1943, under the Current Tax Payment Act, as a wartime measure. It turned employers into the government's collection agents. Milton Friedman helped design the system at the Treasury and said later in life that he regretted it. Withholding outlived the war because it works so well: the tax comes out before the money ever reaches you.

That system assumes most income runs through employers. AI is starting to break that assumption. In September 2024, Matthew Gallagher launched a telehealth company called Medvi from his house in Los Angeles with $20,000. According to a New York Times report this April, it did $401 million in sales in its first full year, with two people on staff: Gallagher and his brother (PYMNTS).

A two-person company with software doing the work of a hundred employees doesn't have a payroll department for the state to lean on. When more of the economy looks like that, the cheapest collection point the state has ever had gets smaller. Pair that with income earned in one country by someone living in another, and you can see why the information-sharing agreements keep growing.

What states can still do

It would be easy to overstate all this, so here's the other side.

Governments still control land and bodies, and they're getting better at it. The EU's new Entry/Exit System machine-counts the 90-day Schengen limit that travelers used to fudge. Georgia, once one of the easiest places for remote workers, has added work-permit rules. Bermuda ended its nomad visa in 2025 (Nomada). Malaysia closed Network School in a day.

Próspera shows the same limit from the builders’ side. It’s a privately run city on the Honduran island of Roatán, set up under a special law that let it write many of its own rules. Then Honduras repealed that law, and the project lost its legal footing. Próspera’s investors sued Honduras before an international arbitration tribunal for about $10.8 billion. According to Honduras’s attorney general, they later cut that claim by roughly 85%, to about $1.63 billion (Revista E&N). When a new jurisdiction is built on land, the old one can pull the rug out, and getting compensated means years in court.

So wherever you go, your body is in somebody's jurisdiction, and that isn't changing soon. Your savings are a different matter.

Where the reach stops

Go back to CARF and read what it covers. It applies to "reporting crypto-asset service providers," which means exchanges, brokers and other businesses that handle crypto for customers. Self-custody wallets that never touch one of those businesses are outside its scope, and so are peer-to-peer trades with no intermediary (BlockEden). On-ramps and off-ramps are covered. What sits in your own wallet in between is not something any provider is holding for you.

That matters most when an institution decides your savings should be frozen, seized or redirected. Think back to El Salvador. An entire country held bitcoin and still had to rewrite its laws to satisfy an outside lender. A person holding their own keys can be pressured in plenty of ways, but there’s no account manager to call and no balance someone else can lock. In this way, an individual can now be harder to coerce than a nation.

Roya Mahboob saw this years ago. She paid women in Afghanistan in bitcoin because many of them couldn't hold bank accounts in their own names. When the Taliban returned in 2021, some of them left the country with their savings stored as a memorized seed phrase (Bitcoin Magazine). We wrote about the Canadian version of this problem, the 2022 account freezes, in Jump out of the pot.

What Mises thought was impossible

In Liberalism (1927), Ludwig von Mises argued that people should be able to choose which state they belong to, by village or district if they want. He took it further than most liberals would, and then admitted the limit: "If it were in any way possible to grant this right of self-determination to every individual person, it would have to be done" (Mises Institute). In his day, it wasn't possible. Money, work and records were all tied to a place.

A hundred years later, a growing share of people can work for clients anywhere, keep savings that no bank holds, and choose among dozens of countries actively trying to attract them. The governments on the other side of that trade have noticed, which is why the reporting agreements and coordinated tax rules keep coming.

None of that requires moving abroad. The practical version is smaller: earn in a way that isn't tied to one employer if you can, know what your exchange reports and where, and keep your long-term savings in a wallet you control, where no institution can lock them.

At Bitcoin Well, every bitcoin you buy goes straight to your own wallet, so you're the one holding it.