Introduction

We are coming out of the second pandemic holiday season, subject to whichever measures our home country forces upon us. 

It may be that some of us will be spending the next holiday season in Liberland. What kinds of measures will Liberland enact to protect its citizens from Covid or other pandemics? What restrictions should you expect if you are considering moving in?

We will be describing a “mature” Liberland, existing for at least a couple of years, having built a city-state in its territory in Gornja Siga. 

The “developing” Liberland which the first settlers will likely experience will be the same, but less sophisticated and less like actual states. We want to see the contrast of Liberland vs current (European) states, so we use the mature version for a good comparison.

Let us begin! 

We postulate a thriving Liberland city where people mind their own business and are “living and letting live”. 

Suddenly, the news reaches the city of a global pandemic, which has the parameters of the current Covid crisis.

Government

The news reaches the government, which we in Liberland call the “Public Administration”, to signify that they don’t “govern”, but they serve and set up rules to help people protect their property rights. 

What will the Minister of Health do? 

Nothing, there will be no Ministry of Health in Liberland. 

Okay, touché, but we have the Minister of Internal Affairs; that is similar enough…

What will this Minister do? 

Nothing. He can’t impose any restrictions. Why?

In Liberland, the government can only do what the Constitution and the Law explicitly allow. 

Pandemic measures or the protection of public health do not fall in the scope of competence, not just for this Minister but for the entire Public Administration. 

The main principle of the Constitution is property rights – any mandatory measures will surely infringe on your property rights, especially when one of the first stipulations of the Constitution assures you that your body and your actions are both your property.

The Constitution also lists negative rights that preclude most current or proposed measures from being enacted. Think about the freedom of movement, of association. Those are real and matter in Liberland. Legislative practice in other States notwithstanding, our Constitution explicitly forbids restricting those rights, even for so-called “public good”. 

The Courts will abolish any measures the Judge may find unconstitutional.

The lifespan of the measures would thus be about as short as the lifespan of a snowball on the surface of Venus and their end just as quick and brutal.

So what will our Minister do?

The only thing he can do: 

He would inform the populace that there is a pandemic.

He would ask them to behave responsibly.

He would outline what seemed to be the best practices that we had learned from previous pandemics.

He would kindly suggest that people act accordingly.

That would be all the government response that could come.

Are you, the citizen, therefore completely without protection? Is Liberland destined to become a “plague ship”, and her citizens are all doomed to die of this terrible variant of cold?

No, but unlike in Your Country, in Liberland, the burden of the pandemic falls fully on its privately-owned healthcare system. To properly appreciate this, let us first examine Liberland’s healthcare system and see how it is designed to provide high-quality products comparable to what you experience in Your Country.

Healthcare System

Your Country

Especially if you live in Europe, Australia, or China, you may be paying your State a health tax, though it is sometimes called insurance. Government-controlled health systems turn your health into a public good.

Therefore, it is logical that if a health crisis fills up hospitals, it is a matter of public policy. The full hospitals become a problem for me and you and my neighbour too, because 

1. The Government must guarantee healthcare as a positive human right;
2. Due to the pandemic, it can’t fulfil this obligation; so
3. The Government feels obliged to limit your free movement, social life, drinking habits and anything else it deems a danger of public order and public health.

However, most often, the people are not very happy with any restrictions, right until a big disaster strikes. 

The Constitution of Your Country also, at least on paper, upholds human freedom and individual choice, making any such legislative rules difficult to enact. 

It typically doesn’t go far beyond tax on smoking and alcohol and perhaps sugar.

Given this tangle of freedom coupled with a lack of individual responsibility, the people feel any restrictions to be very unusual and therefore wrong when the pandemic hits suddenly. 

This may (and does, as we amply experience) lead many of them to ignore the restrictions and try to circumvent them. It usually doesn’t go far enough to actual demands for the abolishing of these restrictions, so Your Country was likely to land up in a strange hybrid world where the rules were strict, the people accepted them by their silence but many did something very different in their private lives. 

This, in turn, leaves Your Country defenceless, as there is no other layer of protection it could count on besides the government restrictions. 

Liberland

The Constitution precludes the Public Administration from doing virtually anything Your Country does to influence the health sector – as a consequence, the Liberland healthcare system is/will be purely market-based.

Purely market-based means that you pay the doctor either out of your pocket or through your insurance plan. 

The State does NOT guarantee you any access to a healthcare provider whatsoever. It does not promise it will care for you when you are sick. 

In exchange, it does not take away your money for healthcare, enabling you to find the best ways to cater to your own healthcare needs.

To summarise the environment, you will be entering as an emigree to (a mature) Liberland:

There will be several

1. Private healthcare providers 
   1. from amongst whom you can choose;
   2. whom you can freely leave for another provider; and
2. Insurance companies providing funding
   1. on a free market, contract basis; and
   2. you can leave them as well, and lastly
3. Charities will help those of insufficient means to afford either insurance or direct payments.

Because the actors are market-based and there is no government subsidy, regulation, and therefore no safety net if something goes wrong with them, those actors are motivated to be efficient in providing healthcare. They better be – or they go bankrupt!

This is, in my opinion, a good “comparative advantage” of Liberland’s “product” (i.e. governance style) over the “product” of Your Country. 

Your Country motivates for excellency in artificially selected particulars (response times, prices, competence, friendliness…) of what it means to be a good healthcare provider; Liberland sets up a system where the whole system, the “gestalt” of “being a good provider” is that which is being incentivized – and it’s up to the actors on the market to decide what elements does this “integral whole” constitute. 

Given that you as a customer likewise experience this whole “gestalt” rather than just the particulars, that doesn’t sound like a bad system, does it?

Though we do not have a mature Liberland yet, this all is no speculation. There exists right now a vibrant world of totally private insurance companies mainly catering to people who reside in more than one State regularly (think of digital nomads or frequent business travellers), with insurance providers such as Cigna, IMG or Aetna. 

In many countries, including some European ones such as the Netherlands, many healthcare providers are already fully market based and private; and the Aetna-insured patient is welcome there.

If you look at Aetna’s web pages, you will see that the prices are not horribly high for the typical middle class westerner; the reason why you or I don’t make use of their services is that we (presumably) live in Our Country, which forces us to participate in a “second layer” mandatory healthcare system; and we wouldn’t want to pay double.

It is reasonable to expect that without the “second layer” of State-based insurance, the world of Cigna and Aetna will become the default insurance system for Liberland, and private medical practitioners will establish themselves there like they do already in much of Europe and America.

Comparison

We have established that just like Your Country has a functional healthcare system, Liberland’s system can likewise motivate healthcare excellence; Your Country takes the route of particular criteria. Liberland’s approach looks at the “results”, holistically; the happy, healthy customer.

Now is the time to see how all of this does not lead to “you being left alone to face the global pandemic”, nor does it mean that Liberland is “defenceless” against viral threats. 

On the contrary, Liberland has a robust way of dealing with contagious diseases, which we will describe in the next section.

Liberland’s Pandemic Response

Private Incentives

In the previous chapter, we said: Healthcare system in Liberland is motivated to efficiency by the forces on the market. 

From this follows that the doctors and the insurers (and NOT the daddy State) may offer incentives. These can be in an everyday situation: 

• Different pricing schemes for people whose lifestyles are healthy compared to those who are say, overeating or smoking;
• Higher prices for people who do extreme sports;
• Special programs for alcoholics and people from less advantageous neighbourhoods which will help them to tackle their addictions and other problems;
• Higher prices or even lack of coverage for certain combinations of preexisting conditions and disease, e.g. lung cancer and smoking;
• Charitable programs for those born with serious preexisting conditions; etc. etc.

The insurers and providers may also offer plans which you can follow to keep yourself at a lower risk and, therefore, less likely a patient and a burden. Such schemes have existed for many years in countries outside of Europe, just like in Japan.

How do those providers establish such systems? In their terms and conditions as you enter the contractual relationship with them. If you don’t like the terms and conditions, you walk away.

This system will, let us restate, be established long before any pandemic strikes and will be tested and upgraded a thousandfold while “at peace”. Logically, it will serve as a bulwark for the “war” situation when the virus rears its ugly spike glycoproteins.

Market Response to a Pandemic

Let us continue the original story of the new pandemic.

A new virus appears somewhere in the world. The Public Administration gives out friendly recommendations and shuts up, as this is all it can do. It probably mandates home office for its employees and takes it easy with work.

The insurers and healthcare providers are meanwhile busy burning the midnight oil. 

The data collection and web search professionals search the insurance company’s sources to know everything about how this virus functions. The medical experts are on the line with doctors worldwide during the day, and during the night, they prepare reports.

The insurance mathematicians work together with fact-finders to crunch the numbers and draw conclusions.

The experts then present those conclusions to their management. The management looks at them through the eyes of a businessperson; not just the medical logic is evaluated, but also the logic of running a multi-million LLM organisation. 

Calls are made to customers. Opinions are gathered – which rules and recommendations do the Liberlanders find reasonable? Which they find “so-and-so”? And are there prescriptions the imposition of which would make that patient search for a new provider?

The management then signs the final decision. The insurance company CEO announces to her customers a new set of anti-pandemic rules complementing the standing plans. 

• She can do so legally because she has this power stipulated in the Terms and Conditions. 
• She can do this efficiently because she knows how to do this; 
• Her organisation does this routinely for threats such as smoking, sugar and alcohol. 

Her response is quick and customer-friendly. 

It is also not final – she has departments of data experts monitoring the stats, how many people end up in the hospitals, and how many the company must pay. 

On the other hand, she also has the customer service and marketing departments on the call, finding out how the people see her rules and recommendations in practice.

By the time the measures are “out”, she is already busy with her teams creating the next iteration of the recommendations – just like any sensible entrepreneur would in any other line of business!

Now, how precisely will the final rules look like? We can’t know! If I could predict the market in this way, I would do good business out of those skills. 

We can, however, illustrate two possible approaches and see the dynamics between them.

Worked Example

Sally is the CEO of WeCare, an established insurance company known for its paternalistic approach. Bob is the CEO of Freedom is Health, their main competitor, maximising personal responsibility. 

Let us see a snapshot of the private systems they create, on three particular rules (out of many):

Sally sets up the following rules:

• Increase of costs to all besides people who work at home;
• Whoever doesn’t vaccinate will have to finance their hospitalisation with the virus out of their pocket and pays “double” (or any other, more smartly set up increase) in premium;
• Whoever travels to a “danger” land (where the virus has spread extensively) pays “double” for three months after they return.

Bob, on the other hand, sets up his rules, maximising freedom:

• Vaccines are optional, and you pay them out of your pocket if you want them;
• No restrictions on travel;
• Only certain jobs (i.e. office jobs) are motivated to the home office, and that positively, i.e. a decrease in the premiums.

Do we now expect that Sally’s company will quickly outcompete Bob’s? Will Bob become a janitor tomorrow? 

After all, she mandates a semi-lockdown and mandatory vaccination; they stop the virus from spreading between and within the people, while Bob practically opens the door to the contagion.

No. She has a company to run, not a government; people threaten to leave! This being Liberland, Sally’s customer care department finds itself soon enough bombarded by calls from angry customers complaining that they now live in a “gulag” of Sally’s making; they want her head!

Her newfound trouble gets to illustrate for us an important point of Liberland’s system:

Liberland’s pandemic response systems compete not only for their effectiveness against the virus but also for the “hearts“ and the customers’ opinions. And customers, especially in Liberland, want freedom! 

To put it more formally, provided measures S and B offer the same (or similar) efficiency, but measure S limits freedom much more than measure B, measure B is always prefered.

But Bob, who gets the most radical of Sally’s customers to sign his LiveFree policy, is also not off the hook and can’t take a vacation in the Bahamas quite so soon. He will be getting some angry calls from the accounting department:

The hospitals report a spike in Health in Freedom’s unvaccinated insurees who just returned from the lands where the pandemic rages the worst; this won’t reflect well on the balance sheet.

Sally and Bob will therefore have to find compromises in their approaches. Sally relaxes the travel restrictions and realises that employees working for a private highway laying company can’t take a home office, even in a pandemic. 

Bob mandates vaccines for all those normally in the “endangered” category (obesity, diabetes, smokers). He decides to pay for vaccinations. He sets up some mild quarantine rules or a “double” premium for returnees from dangerous lands.

From their competition, the whole country benefits.

Not just the endangered, as they get protected;

not just the freedom lovers, for they remain as free as the real pandemic and economic situation allows is;

but above all, the economy as a whole, that will not be burdened by needless restrictions.

Voluntary obedience

“This is all well and good”, you may say, “but we have now an assortment of measures. Who will enforce them in this Liberland of yours?”

The insurance companies will, and, if needed, the Courts; after all, the restrictions are contractual, and whoever is bound by a contract and doesn’t follow breaches the other party’s property rights. 

And, which is extremely important, the people themselves will enforce the measures because they had agreed to the contract that mandates them. Because they are paying by chunks of their freedom for a product which they want and need.

Do you think “obey or else” promotes more voluntary obedience, or “paying for the desired service” does? 

Countries in Europe with a high level of voluntary obedience also experience milder consequences of the pandemic. Why? Because pandemic restrictions are ubiquitous and no police or another repressive apparatus can ever hope to enforce them efficiently.

Last year, the lockdowns often didn’t reflect on their pandemic tests and deaths ratio as well as their instigators had planned because, functionally, it was as if they hadn’t happened due to voluntary disobedience.

How do you get to this situation? The governments:

• Don’t keep their promises, for instance, by marketing the vaccination as the end to restrictions and then mandating fresh restrictions;
• Change the rules too quickly and erratically;
• Break own law and constitution, get called out by the courts and then responding “that’s not us, that’s the virus!” and repeating their illegal actions;
• Make restrictions that make no sense to anyone (big workplaces may remain open, small shops and schools must close…);
• Being just plain too though in their measures; mandating lockdowns where the people don’t want any and are willing to suffer the increased risks of a big epidemic wave.
• Demonising certain segments of the populace (anti-vaxxers, travellers for vacations).

This trouble into which Your Country probably got itself the last year will be virtually nonexistent in Liberland. Liberland’s system is set up by design to prevent this very thing. 

The feedback loops might lead to a bit slower response, yes.

The twofold competition in user-friendliness, as well as sheer efficiency, might lead to the discarding of the most “raw effective” measures; Liberland is very unlikely to experience a China- or Australia-style lockdown;

BUT, the resulting measures will have a higher likelihood of being voluntarily obeyed. The people will see that the authority that creates them are “their” business partner, not a big State. They will see the consequences which may occur to the insurer and the provider should they set up inefficient or too strict measures, i.e. bankruptcy.

They will see that it is the market and nature itself, which prompts the insurer to the reaction it takes. And they will always have a way to leave this insurer for another.

The increase in voluntary obedience can more than offset the tendency for more relaxed restrictions. We have ample examples of this in the current pandemic situation.

Conclusion

As we have seen, Liberland’s healthcare system will be built on a realistic, down-to-earth approach that does motivate quality and efficiency in no worse way than what Your Country has; perhaps in certain ways even better.

Come the pandemic, healthcare-specific systems already established and tested thousandfold will be in place that Liberland’s healthcare can use.

There will be countermeasures, but they will be set up by private insurers and providers of healthcare – the experts who furthermore have very personal skin in the game in the success of their systems!

This is unlike what we have in much of the western world. In Our Countries, we are forced to use the “hammer” of centralised restrictions instead of the precision tools of insurance mathematics and medical expertise. Not much skin in the game in that.

The free competition based system is dynamic, responsive and designed to evolve. It will also lead to innovation in the measures’ raw effectiveness and user-friendliness. We may thus mitigate the negative effects of the pandemic on the economy.

Lastly, the decentralised and contractual nature of Liberland’s measures is likely to motivate voluntary obedience. This, in turn, increases the efficiency of those measures.

All in all, we ask you to consider Liberland’s proposed way of dealing with a pandemic. If inspired, please visit us in Liberland or at least at www.liberland.org! Give us a message. We will be happy to talk with you about this or any other topic on our online forum: https://forum.liberland.org/. Who knows, you might yet become a Liberlander!