Governing asylum, especially in Western migration zones, is correctly understood as an expression of centralized state power, or sovereignty. Still, there is much to learn about asylum regimes by turning critical attention to how sovereignty is de-centralized. This critique focuses on Australia where sovereign power is diffused into privatized detention, outsourced decision-making, and offshore processing. The reliance on diffused sovereignty, the article contends, is a maneuver by the state as it attempts to evade legal obligations enshrined in refugee law and human rights. As discussed throughout, economic mentalities figure prominently in the Australian asylum system. In particular, the notion of economic man continues to shape the government’s perception of asylum seekers as being highly rational and responsible, thus manageable by way of deterrence and prolonged detention. Special attention is given to recent disputes between the High Court and the then Gillard government with respect to the processing of refugees.