Galt’s Gulch Chile: Libertarian Paradise Turned Nightmare

By: Adriana Peralta - @AdriPeraltaM - Sep 4, 2014, 1:53 pm
Galt’s Gulch promised to be the free man’s paradise. (PanAm Post)

EspañolOn Monday, August 25, Canadian author and speaker Wendy McElroy wrote a column for the Daily Bell, in which she revealed the deception she, her husband, and others had suffered at the hands of leaders of the Galt’s Gulch Chile (GGC) project.

The idea for Galt’s Gulch Chile initially emerged from the pages of Ayn Rand’s dystopian novel Atlas Shrugged, which depicts a post-imperial United States in economic ruin and under police control. The GGC development project promised to be a purely libertarian community available to those who wished to avoid the “imminent” downfall of the United States, while living out their days in freedom.

According to the GGC website, project leaders designed GGC to be a self-sustaining community outfitted with renewable energy, clean drinking water, fish-filled artificial lakes, and prosperous organic fruit and vegetable gardens. GGC project promoters laud the Chilean location as “thousands and thousands of miles of natural beauty where you can hike, bike, mountain climb, or horseback ride for days on end, exploring the community space.”

McElroy begins her Daily Bell column by explaining how she and her husband came to purchase 1.25 acres of GGC property in July 2013. She notes that she was one of many such investors, and some even bought upwards of 10 to 25 acres of land, investing small fortunes in the project.

Problems Arise

Soon after completing her purchase, McElroy received an anonymous email claiming the GGC was engaged in fraud, causing her to question the legitimacy of her investment.

The anonymous author told McElroy that she had been scammed, citing the subtleties of Chilean land ownership law as evidence. According to the email McElroy received, the GGC may have been able to sell her the land, but the project lacked the necessary water rights to develop it. Purchasing land and water rights are separate processes in Chile, and without water, the land was effectively useless.

Los derechos de propiedad del agua fue uno de los primeros signos de problemas en el proyecto. (Facebook)
Lack of water rights was the first sign of trouble for Galt’s Gulch Chile.  (Facebook)

McElroy tried to respond to the email, but the message bounced back. She then wrote to GGC project leaders Jeff Berwick and Ken Johnson, forwarding them the warning message she received. The project leaders responded to McElory’s concerns with assurances, and said the email she received was from a disgruntled former employee. They said water rights had at one point been an issue, but GGC had since resolved these legal programs and McElroy had nothing to worry about.

In November 2013, things began to unravel even further, after the GGC held a celebration with the stated goal of completing the lot selection process. Project leaders, however, failed to parcel out any of the remaining property, since no zoning permits had been acquired. Six months later, in April 2014, McElroy participated in another ceremony as one of the event’s keynote speakers.

It was during these months that several dramatic changes took place behind the backs of GGC investors. Ken Johnson had managed to sideline Jeff Berwick, an original GGC founder, and assumed complete control of the project. Months later, McElroy learned that GGC property had been developed on environmentally protected land, and it would be nearly impossible for anyone to build any sort of community.

When she learned of this seemingly premeditated scam, McElroy questioned the GGC salesman who sold her the land in 2013 if he willfully deceived her and her husband. “Did you know you could not legally sell us the lot you were offering?” she asked. “That is correct,” he replied.

Despite the duplicitous nature of the project, McElroy does not condemn the GGC movement in her column. On the contrary, she defends the “founding fathers” of the project and says their desire to live in a community of like-minded people is legitimate.

McElroy writes that the current odds of success are low, but hopes GGC can regroup, reevaluate, and move forward. She also notes not only the damage done to investors, but to the Chilean community and neighboring merchants in the city of Curacavi, who are owed hundreds of thousands of dollars in hardware supplies and utility services.

McElroy says she remains optimistic about the project and has maintained her friendship with original founder Berwick. While the project works toward a solution, she strongly recommends that no one further invest in Galt’s Gulch Chile.

Jeff Berwick Responds

Berwick, one of the original leaders of the project, recently outlined his version of events via his website, the Dollar Vigilante. He asserted that disputes and concerns mean he has “not talked about GGC for nearly the last year.”

However, his statement appears to have only added fuel to the fire, as 123 comments have accrued on his Facebook page, many of them negative. His appearances on Bloomberg, CoinDesk, and Mother Jones (in the March/April 2014 issue) also contradict his claim of silence for the past year.

Still, Berwick concludes by assuring readers that the “founding fathers” of Galt’s Gulch Chile will continue their work to rectify the scam that has plagued their libertarian project.

Editor’s note: the final section includes a correction, to note that Jeff Berwick was not silent for the past year.

Translated by Peter Sacco.

Adriana Peralta Adriana Peralta

Adriana Peralta is a freedom advocate from El Salvador and a @CREO_org board member. She is a PanAm Post reporter and blogger, a 2005 Ruta Quetzal scholar, a trained engineer, and an SMC University masters student in political economy. She is also a Pink Floyd fan. Follow @AdriPeraltaM.

The Bolivarian Myopia of the Capitalist as Crook

By: Joel Fensch - Sep 4, 2014, 1:07 pm

EspañolThe regents of the Venezuelan economy over the last 15 years have based their planning on the perception that everyone in the private sector is a crook. Crooks need to be scrutinized and controlled to ensure their corrupt practices stay clear of the people’s well-being. From this premise is derived the massive number of controls, permissions, official seals, procedures, and licenses that have become necessary in order to do business in Venezuela or from Venezuela. A case in point is the exchange control which now dates back more than 12 years. In the beginning, there was a legitimate reason for the controls, given the backlash of a banking crisis at the onset of the new government. However, more than an economic tool, it became a political tool. Those in power used it to guide infidels toward becoming acquainted with and accepting the socialist agenda, so as to be favored with hard currency for imports of raw materials and/or services. In that time, the country has been the victim of a corruption tsunami that has created mind-boggling fortunes, crippled the government’s capacity to function, and brought the private sector to its knees. As if that were not enough, all this has condemned the common Venezuelan, who began with limited options to escape from the clutches of poverty. He now must remain in his place and enjoy the additional perks relating to shortages of basic foods, medicines, and services. In all the years of our imperfect democracy, Venezuela has not seen the likes of this insane quest to become another Cuba. Despite the unfavorable results of this political experiment, the thirst to remain in power has not been quenched and oddly enough 30 percent of the people remain committed to the “movement.” These believers are most likely those who have not yet had the good fortune of benefiting from this distorted bonanza and who dare not speak out lest they be stricken from the insider list. So time plays against the revolution, and one hopes sooner rather than later. One good morning they’ll open up the vault to find nothing left and discover, much to everyone’s lament, that what has occurred is precisely the opposite of a wide distribution of wealth. So who are the crooks?

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