Why do some microstates, especially those in Europe, tend to be immensely wealthy? e.g. Monaco, Singapore, San Marino
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Jackfuckistan isn’t. Unfortunately in the only person who recognises it. I think it’s because a lot of these places are tax havens. They have different laws regarding tax, so they attract a lot of rich ppl who want to protect their assets.
In what world Singapore is a microstate?
Some of the very small Pacific nations aren’t wealthy, like Nauru, Palau and Tuvalu.
But it’s often quite easy for small countries to effectively poach wealth from elsewhere by taking advantage of the things that being a sovereign nation allows you to do. For example, you can set low tax rates and pass financial secrecy laws, so that rich foreigners will want to move to your country and foreign companies will want to move some of their money there.
It’s a late 20th century phenomenon in Europe. They became tax havens. Billionaires and millionaires can hide their money there and still visit it ( if necessary) easily. They are safe from invasion and have stable governments.
These are the states who sold their souls to serve those in power to undertake theft of middle class wealth.
There is no good in it.
Singapore got built up as a British colony, got its independence while the Brits were otherwise occupied, and managed both prosperity and an enticing tax code through revenue of its sea post (for years, the busiest in the world thanks to its incredibly strategic placement).
When you have no space for manufacturing or agriculture, you need alternative sources of money and influence. And those small states are around anymore only because they came up with means to be important to those with wealth and influence, or got under the protection of a bigger mation.
I think selection bias plays a significant part. A small, poor area wouldn’t do well on its own. But a small area that’s wealthy and powerful enough would have both the means and motive to separate from larger surrounding countries.
So one metric of wealth is gdp/capita, meaning basically the value of the economy of a country divided by its population. Now lets say that you have an economy that doesn’t rely on having a large population size, like tourism, banking, gambling or being a tax haven.
If you have a tiny country you can have a relatively big economy attracting foreign wealth while also having a very small population, which makes the gdp/capita unusually large.
Like if I have a country of say 10 000 people but all the major countries of the world store their money in my banks then the amount of capital moving through my country is going to be massive compared to the population.
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