How big does a country have to be?

I have friends who live in the ‘Independent Republic of Houghton Bay’. Those outside Wellington may need to know that they live in a cove between Island Bay and Lyall Bay, with magnificent views of Cook Strait, its sea life and its shipping. Its total population is probably around a hundred and perhaps not all the locals are as devoted to the republic as my friends are.

They are not alone. There is the independent Republic of Whangamomona in Taranaki (it has no views of the sea) and, on a slightly larger scale, there is the People’s Republic of Christchurch, which was undermined by earthquakes but which, no doubt, will be back (like Catalonia) when the Monarchy of New Zealand ceases to fund the reconstruction.

There will be other bits of New Zealand which claim similar status, as do elsewhere other bits of world. Recall that a third of a century ago, various parts of New Zealand declared themselves nuclear free, defying the government’s foreign policy.

All a bit of a summer holiday joke, I suppose, but it raises the critical issue of just how big do you have to become to be independent.

Vatican City with about 800 is the smallest country by population in a list of 233 countries. It is a very special case, not least because it is the only country in the world with no female citizens. Next is Tokelau, population about 1300 (so it has fewer men than Vatican City). There are more Tokelauans in New Zealand. The smallest country in the UN (and 226th in the world) is Tuvalu with 11,000 odd inhabitants. Vatican City aside, the smallest countries with land boundaries are San Marino (33,000) and Gibraltar (34,000). So some areas of New Zealand apparently could make a go of independence. Why don’t they, Catalonian difficulties aside?

The issue may not be boundaries or population but the practical meaning of independence. I was struck by a headline which claimed Ireland had more political power than the United Kingdom. The article pointed out that, given the way the European Community works, the Irish Republic (5 million) effectively has a veto on the terms under which Britain (66 million) could leave the EC other than by a complete break.

But isn’t Brexit about increasing Britain’s power? Some of the Brexiters may think so – and be humbled by Ireland – but their rhetoric was about independence. The example shows that independence does not equate with power. Nor does it equate with prosperity, as the Brits are reluctantly learning.

The issue becomes more acute when we think about economics. Prior to their decolonisation, many countries assumed that once they got independence their economies would boom. I do not understate the damage imperialism could do to a colonial economy. For instance, the British imperium prevented the development of colonial India’s cotton manufacturing industry in order to protect Lancashire’s mills. Nor was the damage confined to legal colonies. The trade deal following the mid-nineteenth-century Opium Wars handicapped China to the point that its per capita income was much the same a hundred years later (not to mention the health effects of China’s loss of ability to regulate the use of opium).

But the fact is that independence of a colony has rarely resulted in exceptional economic prosperity. Often the stagnation has been associated with increased local inequality as the new ruling elite took over from the imperial one.

Practically then, there can be a trade-off between independence and prosperity; at the very least there is no necessary positive connection. How power fits in is even more complicated.

That is the challenge faced by New Zealand, ranked 125 in the word – closer to Vatican City than to China at the top. We could merge with Australia. Monetary union as the next step has been popular among some. But there has been little enthusiasm since the evident difficulties of some countries in the European Monetary Union after the GFC. Because there is no fiscal union they found the fixed exchange rate a straitjacket when substantial economic adjustment was necessary. Unfortunately the advocates of the Australasian Monetary Union were too besotted with the restricted neoliberal account of how economies work and their ideology overruled rationality. The reality is a sustainable AMU requires a fiscal union and, ultimately, governance from Canberra.

But even if we avoid the Australian merger (or merging with an even larger entity) the challenge remains. It includes trade deals but not just free trade agreements; there are others covering such things as civil aviation and shipping. Then there are climate change, communications, education, health, international finance, international law, migration and related civil rights, standards, tourism sport and recreation and ... I cannot think of a government department which has no international responsibilities. It is fascinating to observe (unemotionally) how Brexit has triggered so many of these issues; I cannot recall most being mentioned during the referendum campaign.

So how about the citizens of the Independent Republic of Houghton Bay as they sit on their decks, gazing out to sea, sipping chardonnay? The reality is that they rely on the Monarchy of New Zealand for their jobs and almost all the facets of their lives mentioned in the previous paragraph.

Does it matter? They are a community and probably that is what matters. Bless them, we need to ensure that their community – all our communities – have the maximum of freedom to pursue their own goals. We need to talk more about decentralisation, devolution and subsidiarity, if not to Houghton Bay certainly to other larger entities.

We should demand the same principles apply to all countries in an increasingly complex and interlocked world. Perhaps Britain would not have got into its current muddle if it had been more insistent that those principles be applied more rigorously in the European Union. Unfortunately Britain is one of the most centralised nations in the democratic world – the very recent devolution to Scotland aside.

So I lift my glass of chardonnay to the success of life in independent communities such as in Houghton Bay. Perhaps I should join one.