The Principality of Liechtenstein: A Model of Self-Determination
for a World Filled With Chaos
by Jim Karger: Lies,
Damned Lies and Government Statistics
a tiny alpine nation nestled between the Swiss and Austrian Alps
with a population of only 35,000 spread over 62 square miles, no
airport, one hospital, 155 miles of paved roadway, and only irregular
local train service be taken seriously by anyone? Because it has
the highest gross domestic product per person in the world when
adjusted by purchasing power parity (over $140,000 per capita),
the world's lowest external debt, and the second lowest unemployment
rate in the world (recently as low as 1.5 percent). But the Principality
of Liechtenstein happens to be just such a place.
is a constitutional monarchy organized as a unitary parliamentary
democracy with an enlightened Reigning Prince by the name of Hans-Adam
II. Since the constitutional reform of 2003 was implemented by the
Prince, the citizens of Liechtenstein actually have the right to
abolish the monarchy altogether. Hans-Adam has a quite unique philosophy
of government for a reigning monarch. In his view citizens should
not be seen as servants of the state, but rather as customers of
a benevolent service company, otherwise known as the state, whose
aim is to serve its customers. If the customers don't like the service,
they can replace the service company, namely, the monarchy. "Ask
not what a citizen can do for the state, but rather what the state
can do better for the citizen than any other organization," says
leadership of Hans-Adam Liechtenstein acceded to the United Nations
in 1990 and the European Economic Area in 1995. It is neither a
member of the European Union nor NATO.
Liechtenstein remained neutral during both world wars, it was practically
an economic basket case after World War II. Much of the credit for
turning it around economically lies with the Prince. Liechtenstein
is best known for its financial sector, which is a tax haven and
home to 73,700 corporations worldwide. It has 16 banks. However,
its high-quality, high-tech industrial sector which manufactures
a variety of products including machine tools and precision instruments
accounts for 36 percent of GDP.
of Liechtenstein is not paid for his duties as head of state by
either the state or the taxpayers. Unlike most other monarchies,
the total cost of the Liechtenstein monarchy is covered by either
the Prince's or the so-called Princely House's private funds. The
country's LGT Bank, for example, is owned by the royal family. The
Prince's personal fortune is thought to be in excess of $5 billion.
Switzerland, Liechtenstein bankers have not escaped criticism from
Wall Street and European bankers, the EU, and the US Congress for
the use of secret bank accounts, which can be used to evade foreign
taxes, dodge creditors, and defy court orders. In February 2008
the LGT Bank was implicated in a tax-fraud scandal in Germany, which
strained the monarchy's relationship with the German government.
bankers don't like the fact that Swiss and Liechtenstein bankers
don't always play by their rules.
In an attempt
to clean up its image abroad Liechtenstein has signed a number of
treaties related to money laundering and fraud with the United States
and the European Union, including the Tax Information Exchange Agreement
with the US and the Anti Fraud Agreement with the EU. On June 27,2012
Liechtenstein and the US signed an Agreement on Exchange Cooperation
in Preventing and Combating Serious Crime.
has always maintained a strong interest in the right to self determination,
so much so that in 2000 he founded the Liechtenstein Institute
on SelfDetermination at Princeton University. The Institute
supports teaching, research, and publication about issues related
to and emerging from self-determination, especially pertaining to
the state, self-governance, sovereignty, security, and boundaries
with particular consideration of socio-cultural, ethnic, and religious
issues involving state and non-state actors.
August 15, 2004, Prince Hans-Adam II appointed his elder son, Hereditaty
Prince Alois, his permanent deputy, in preparation for his succession
to the throne. He now devotes more of his time to managing the assets
of the Princely House, writing, and participating in international
In 2009 Prince
Hans-Adam II published an extremely interesting book entitled The
State in the Third Millennium spelling out his unique and
personal vision of the state at the beginning of the twenty-first
century as well as strategies by which it might be achieved. His
perspective as the reigning head of state of a monarchy which is
also an oligarchy and a democracy, a direct democracy, is truly
do not agree with all of the Prince's ideas, and indeed strongly
disagree with some of them, I find most of them to be quite insightful.
Unlike myself, Hans-Adam is very libertarian, very free-market oriented,
and very Roman Catholic, but he is very smart.
of geopolitics and global economics is highly sophisticated, not
to mention his psychological sophistication as well. He seems to
know exactly who he is and what it means to be the reigning monarch
of a tiny European country. His lack of hubris is indeed refreshing.
As a card-carrying
libertarian, there are no big surprises in the Prince's portfolio
of economic policy prescriptions for his third millennium state.
Essentially what he has in mind is a libertarian state, if that
is not an oxymoron. He calls for the privatization of social welfare,
the elimination of government subsidies, an educational voucher
system, a value added tax, little or no national debt, private ownership
of mineral rights, and a sophisticated precious metal based currency.
Since the constitutional
reform of 2003, the Principality's eleven municipalities have all
had the right of self-determination. The Prince correctly points
out that the 15 former republics of the Soviet Union also theoretically
possessed that right, even though it was never exercised.
book concludes with a draft constitution for a prototype third millennium
state whether it be a monarchy (kingdom X) or a republic (republic
Y). Although I have never been a great fan of monarchies, the thought
has passed through my mind, "Is the difference between a republic
and a monarchy as great as we try to make it appear to be?" Maybe.
of the Liechtenstein Embassy in Washington, D.C. in 2002 is but
one example of how Hans-Adam has attempted to foster closer ties
with the United States.
website contains numerous photographs of Washington dignitaries
such as the Obamas and Hillary Clinton appearing at the Embassy.
In a 2010 interview HansAdam is reported to have said, "The Americans
saved us during World War II and during the Cold War?" But does
that, therefore, mean that Liechtenstein owes its soul to them?
But in a surprising
turn of events for a country which disbanded its military in 1868
for financial reasons and is ruled by a live-and-let-live libertarian
committed to the right of self-determination, Hans-Adam embraces
the notion of the United States serving as the world's global policeman.
That is, if a particular country such as Iraq, Libya, North Korea,
or Syria has an authoritarian regime which is not playing by the
rules set forth by the United Sates, the US would have the right
to intervene in that country forcing it to agree to the establishment
of a functioning democratic state. Although the Prince gives high
marks to the US for its 2003 invasion of Iraq, he would have the
US partner with the EU to rebuild a rogue state brought down by
the Empire by establishing a functioning democratic constitutional
state to replace the original one.
this tantamount to getting in bed with the American Empire and supporting
its imperialist foreign policy which is based on the concepts of
full spectrum dominance, imperial overstretch, and might makes right.
Would the Prince also endorse attacks by drones, Navy Seals, and
Delta Force Death Squads aimed at those unfortunate enough to find
themselves on the White House kill list? All of this from an enlightened,
well-educated monarch who is a staunch defender of the right of
How can this
Of what is
the Prince so afraid? Who would ever invade Liechtenstein? If so,
what would they do with it?
IIis uniquely qualified and extremely well positioned to be the
foremost advocate for self-determination worldwide. Indeed the small
nations of the world such as Bhutan, Costa Rica, Denmark, Finland,
Iceland, Norway, Senegal, Sweden, and Switzerland and the aspiring
nations of the world such as the Basque Country, Kurdistan, Quebec,
Scotland, South Ossetia, Tibet, Vermont, and Western Sahara desperately
need his support to enable them to stand up to meganations such
as the United States, China, Russia, India, Japan, and Brazil.
With admiration and respect, I urge him to reconsider his position.
The future of the planet is at stake.
August 28, 2012
Naylor is founder of the Second
Vermont Republic and Professor Emeritus of Economics at Duke
University. He is the author Secession:
How Vermont and All the Other States Can Save Themselves from the
Vermont Manifesto: The Second Vermont Republic and co-author
of Ajjluenza, Downsizing
the USA, and The
Search for Meaning.
© 2012 Thomas