Exit, Voice, and Senator Schumer

A long time ago, a guy named Albert Hirschman came up with the concepts of "Exit," "Voice," and "Loyalty" to describe various decision-making processes. "Exit" decisions generally occurred in the market, while "voice" options generally occurred in politics, where exit options were considered unfeasible, or the costs of exit were too high. "Loyalty" existed when exit was somewhat or completely unavailable, but faith in the process of exercising "voice" was maintained.

The US has always prided itself as the land of exit options. The greatest example of course, as the opening up of the frontier: if you don't like your prospects, you can head out West. However, in many cases the act of immigration from other lands was itself an individual's expression of exit, leaving a land where voice options were insufficient to attain goals (in other words, a lack of democratic voice) or where exit options themselves (national economies) were too restrictive, disdained, or underdeveloped to function properly. In other words, when the US was seen as the Land of Opportunity, it was meant as the Ultimate Place to Exercise Exit. People were always free or not to enter or exit a contract. This gave people a great incentive to develop themselves as they saw fit, and to take part in society. It is a radically democratic idea, and ever subject to experiment.

This brings us to the peculiar case of Eduardo Saverin, a naturalized American from Brazil, who rightly saw the USA as a land of great opportunity. His foresight and hard work has made him fabulously wealthy; and in the process he has made the US a better place to live, work, and play... Farmville. Talents like this should be nurtured and praised by society. However, our current tax code has instead seen him as an asset for one reason only: that of a source of revenue for the government. As a result, Mr. Saverin has renounced his second citizenship, and will instead move to Singapore, where the burden of his talent will be lightened by the knowledge that he will continue to be well compensated for it in something other than virtual ducks and chickens.

If ambition is thwarted in the US, we should not be surprised to see this happen more often. A company like Facebook has truly global appeal, and Mr. Saverin is probably less "loyal" with respect to his citizenship than many Americans would like him to be -- indeed, the rise of a transnational elite is powerfully opposed to American ideas of sovereignty, accountability, and transparency, as John Fonte has written about. Nevertheless, it is hard to be loyal when one perceives government as an unfair or unreasonable object of one's loyalty. People are not cavalier about renouncing their citizenship. It is a difficult process bureaucratically, financially, and emotionally (we hope). If the US is to continue to be a land that attracts exits, rather than a land that breeds them, proposals such as those from Sens. Schumer and Casey must be opposed. Facebook is a distinctly American company, irrespective of its legal status. It creates communities from the bottom up, and allows a great range of freedom of expression, as well as allowing people to participate in what they see fit, and to the degree they see fit. Surely this is a classic example of someone doing well by doing good, and people that foster these sorts of innovation have already been a great boon to society, as Chuck himself surely knows.