The Liberland Social Safety Net: Can We Build a Welfare System Without the State?

Social Policy & Welfare
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Liberland has an opportunity to explore an important question: Can we create a society where nobody is abandoned in times of hardship, without making welfare dependent on compulsory taxation?

In traditional systems, social welfare is usually funded and administered by the state. In a libertarian society, however, we have the opportunity to experiment with voluntary cooperation, decentralized governance, and community-driven solutions.

Rather than simply debating whether welfare should exist, perhaps we should ask a more practical question: How can we design a system that protects individual liberty while ensuring that people facing genuine hardship have somewhere to turn?

My Proposal: A Voluntary Social Safety Net

I propose exploring a community-based welfare network built around five principles:

1. Voluntary Contributions

Individuals, businesses, entrepreneurs, and organizations could voluntarily contribute to a transparent social support fund. Contributions could be one-time donations, recurring pledges, or project-specific funding. Participation would remain voluntary, without compulsory taxation.

2. Transparent and Decentralized Governance

A community-governed organization, potentially supported by a DAO, could oversee the fund. Public financial records, transparent decision-making, independent audits, and clear eligibility rules would help build trust and reduce opportunities for corruption.

3. Direct Assistance to People in Need

Support could initially focus on clearly defined needs, such as emergency medical expenses, temporary housing, food assistance, disability-related support, and disaster relief.

Whenever practical, assistance could be paid directly to recipients or verified service providers, with privacy protections for beneficiaries.

4. Incentives for Long-Term Sustainability

The system could encourage recurring donations, philanthropic partnerships, and voluntary contributions from successful businesses. A portion of the fund could be maintained as an emergency reserve, with safeguards against speculative investments and excessive administrative costs.

The goal should not be to promise unlimited benefits with insufficient resources, but to build a sustainable system that grows alongside the community.

5. Dignity, Privacy, and Personal Responsibility

People receiving assistance should be treated with dignity rather than suspicion or humiliation. Eligibility criteria should be fair, transparent, and proportionate to the assistance provided. Personal information should be protected, and support should help people regain independence whenever possible.

The Difficult Questions We Must Address

A voluntary system sounds attractive in principle, but its real value depends on how it performs under pressure.

  • What happens when donations fall during an economic crisis, precisely when more people need help?

  • How can we prevent fraud without creating an intrusive bureaucracy?

  • Should contributors have a say in how funds are allocated, or should an independent body make those decisions?

  • How do we protect vulnerable people whose needs are expensive or long-term?

  • Could private insurance, mutual-aid associations, charitable organizations, and community funds work together rather than compete?

  • What minimum level of assistance can realistically be guaranteed when contributions are voluntary?

These are not reasons to abandon the idea. They are reasons to design it carefully, test it on a small scale, and measure its results honestly.

Start Small, Measure Results, Improve

Liberland could begin with a pilot program focused on one clearly defined area, such as emergency assistance. The organizers could publish regular reports covering donations received, administrative expenses, the number of people assisted, response times, and unmet requests.

After six or twelve months, the community could evaluate whether the program was financially sustainable, transparent, and effective.

If it worked, the model could expand. If it failed, the community could learn from the results and improve it.

My Question to the Community

I believe the real challenge is not choosing between individual freedom and compassion. It is finding practical institutions that allow both to coexist.

If Liberland were to establish a voluntary social safety net today, what institutional model would you support: a DAO-managed fund, independent mutual-aid associations, private insurance cooperatives, a network of charities, or a combination of these approaches?

More importantly, what safeguards would you introduce to ensure that the system remains voluntary, financially sustainable, transparent, and capable of helping people when they need it most?

I would welcome concrete proposals, examples from existing communities, and constructive criticism. Let’s move beyond ideology and explore how a free society can put solidarity into practice.

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Hi Shahzad,

Thank you for starting this. I agree with the premise that support should be voluntary, and with your pilot-and-measure approach. I’d push on one design choice: whether this should be a single “Liberland Social Safety Net” at all, or whether support should come mostly from families and communities, and from many small institutions. A few concerns first:

  1. One central fund becomes a target. Published eligibility rules are necessary for fairness, but any fixed rulebook can be gamed. A single fund also concentrates money and control, and over time its administrators naturally work to protect the fund’s share and their own role.
  2. Administration is a cost. Every dollar spent on staff, audits and verification is a dollar not reaching someone in need. The larger and more formal the institution, the larger that layer tends to grow.
  3. Benefits not tied to contributions attract claimants faster than donors. That matters if citizenship becomes easier to obtain, which I’ve argued it should.
  4. Donations fall exactly when needs rise, as you noted. A fund that depends on giving is weakest when it’s needed most.
  5. A “guaranteed minimum” invites compulsion later. If an official fund promises a floor and runs short, the pressure to fill the gap with mandatory funding will be strong.
  6. Verification across borders is hard. Most citizens live elsewhere, under different laws and often with their own countries’ support systems. Checking hardship across many jurisdictions is costly and intrusive.
  7. Token-weighted DAO votes can be captured by large holders, or by a small, active minority when turnout is low.

Some alternatives that might fit Liberland better:

  • Keep more money with families, and let help come from those closest to the need. With no compulsory taxation, families keep more of what they earn. Relatives, neighbours, congregations and local groups already know who is struggling and why. They can help faster and more personally, and they’re harder to fool than any formal organization.
  • Build opportunity rather than fund need. Human creativity is the one resource that doesn’t run out. Instead of focusing on aid, Liberland could make it easy for people to find and offer work, trade skills, lend to each other on small scales and start ventures together, all in ways that build trust and relationships. This also answers the downturn problem: when needs grow, so does the work there is to do, so a system built on opportunity gets busier in hard times rather than poorer. Aravind Eye Care System in India shows this works at scale. It began in 1976 as an 11-bed clinic, with six beds set aside for patients who couldn’t pay. Today it performs around half a million eye surgeries a year: in December 2025 alone, 60,291 surgeries and more than 560,000 eye examinations. Patients pay what they can, and many pay nothing. The paying patients fund the free care, without charity money for core services. Its surgeons perform up to 2,000 operations a year, against an Indian average of about 300. Making its own lenses cut their cost from about $70 to $2, and cataract surgery can cost as little as €40. Aravind reports a serious complication rate under 2 per 10,000 operations, against 4 to 8 in Britain and the US. Why it matters here: Aravind solved the problem by designing for efficiency at volume, not by redistributing other people’s money. And because patients decide what to pay, there’s no means test to administer or game. A good overview: “McSurgery: An Indian hospital restoring eyesight to millions” (AFP, 2021).
  • Communities can govern shared resources themselves, for centuries. Elinor Ostrom won the 2009 Nobel prize in economics for showing how. One of her cases was the irrigation of eastern Spain. Valencia’s Water Tribunal has settled farmers’ water disputes for roughly a thousand years. It meets every Thursday at noon at the cathedral door. Each canal community elects its own representative, and verdicts are given on the spot, orally, with no lawyers’ fees and no paperwork. Why it matters here: disputes are settled in minutes, at almost no cost, by people who know the land and the parties. The rules have outlasted every regime that has ruled Valencia, because the users made them and enforce them. The State’s part has been to recognize the tribunal rather than run it: it was formalized in the 13th century and made part of Spain’s legal system in 1978. Ostrom found the same pattern in commons that lasted: clear membership, rules suited to local conditions, members who help change the rules, monitors accountable to the members, graduated penalties, cheap local dispute resolution, and outside authorities that respect their right to organize. That’s close to a ready-made answer to your fraud and governance questions. For more: FAO on the Water Court, and Ostrom’s Nobel lecture, “Beyond Markets and States”.
  • Many small mutual-aid societies instead of one fund. Members contribute and receive benefits, and because members know each other, fraud is policed without bureaucracy. Before state welfare, millions of people in Britain and America were covered this way, through friendly and fraternal societies that paid sick benefits and life insurance and even provided doctors’ care.
  • Insurance cooperatives for defined risks such as illness, disability and loss of income, with real reserves and reinsurance. Long-term needs are better handled by insurance than by charity.
  • Transparency for anyone using the label “registered charity.” Any organization collecting donations under that label could be required to publish its accounts: what share of donations reaches recipients, and what it pays its leadership and staff. In some organizations, a small fraction of what is raised reaches the people it’s raised for. I’ll admit even this can be gamed, for example by reclassifying staff costs as “program” spending. So it should be a minimum, with donors still judging results for themselves.
  • The State’s role: fast, cheap registration and clear legal standing for mutuals, cooperatives and charities, enforcement of their contracts, and the disclosure rule above. It shouldn’t run or brand a fund itself.

If you’d like a first test you could start next month, a small mutual-aid circle would show most of what we’re debating. Ten to twenty members each put a small fixed amount, say $10 to $20, into a shared wallet that needs two of three keyholders to sign. A one-page rulebook sets what counts as an emergency, a cap per request, a short waiting period for new members, and decisions within 48 hours by a rotating panel. Post a monthly ledger in this thread.

Before you start, write down what you expect: how many members by month three, how many still paying by month six, how fast requests are paid, and what share of each dollar reaches recipients. Then, on a set date, have someone other than yourself check the results against those predictions, and publish them, misses included. That approach is the core of a method I’ve written up as a free guide, The RECORD Method, and I’m expanding it into a book, Reason of Record. I’d be glad to talk through how it could apply to your pilot.

Two cautions: keep amounts small and make no guarantees, since promising payouts for regular payments can count as insurance in some countries, and check what rules apply where you live.

Many small, accountable institutions, supported by families and communities that keep their own resources, are harder to game and harder to capture than one large one. I’d be glad to help think through the pilot if you try it.