Will Liechtenstein's Autonomy Prevail?
Freedom havens are always of interest to libertarians. For instance, the
The Principality of Liechtenstein is a small State in
Once a part of the
Upon its independence, Liechtenstein's interests abroad were maintained by
This German-speaking Principality is governed by a hereditary constitutional monarchy, but in fact, it is often referred to as a representative Republic. According to its modern Constitution, state power proceeds from the Ruling Prince and the People. With its eleven municipal areas and a population of 33,000, its constitutional neutrality proviso requires that it refrain from all foreign aggression and political alliances—a truly libertarian foreign policy as espoused by Washington and Jefferson.
In the post-World War II era,
Tax-wise, both business and personal tax rates are moderate compared with the
Over the years, Liechtenstein's magnificent wealth creation has been helped along by a lack of public debt. It owes nothing, and its annual revenues are truly higher than its expenditures! Try to find that in a democracy, where the majority wolves and minority lambs vote on what will be dinner. In addition, inflation and unemployment are nearly invisible as are cultural shortcomings such as illiteracy.
The glory of Liechtenstein's political freedom, overall, has been due to unequivocal banking secrecy; lax regulatory oversight; anonymity in business formation and banking; legal company structuring that is friendly to wealth-creating holding companies; overall moderate taxes; tax laws allowing for tax-efficient asset management; and a minimal licensing and permit environment.
However, the future could be bleak for this Principality. The Financial Action Task Force (FATF), a unilateral organization that operates under the auspices of "anti-money laundering", had long ago made Liechtenstein a favorite target because of its tax haven status and its refusal to "cooperate" with regulatory measures. Essentially, the FATF is a pro-big government blackmail organization that adopts a fluffy and well-meaning name, but operates to rid the world's individuals of financial wealth and privacy. By 2002, the
Additionally, the rotten "know your customer" banking laws have recently taken hold for banks belonging to the country's Bankers' Association. This has effectively destroyed the guarantee of anonymity for account holders, making
In other words, governments and alliance organizations around the world will continue to target
In a related note, this tiny nation has been making the rounds in world news in recent times. Traditionalist-minded Liechtensteiners recently voted to give their ruling Prince more powers, and especially, a wider range of veto rights. The democracy talking heads 'round the world are appalled that this monarchy insists on continuing its tradition while shunning their notions of all-inclusive, egalitarian-democratic government.
The Council of Europe is one of those organizations that has been trying to force its model of "democratic principles" upon this seemingly "uncooperative" nation that demands to be left alone to exercise its monarchical traditions. Council of Europe Secretary General Walter Schwimmer has recently said that "the Council of Europe will have a closer look at the practical application of the amended constitution. I hope that the new rules will be used to strengthen the democratic institutions and that the courts will keep their independence." A translation of this would indicate that ruling decrees will be forcibly imposed on this tiny freedom enclave should it not fall in line with Europe's ruling regime. Liechtenstein's options for self-rule in the future will likely be shut down as it eventually will have to succumb to the edicts of Europe's multitude of pro-E.U., anti-independence governing bodies.
If truth be told, with wealth and liberty-hating organizations like the Financial Action Task Force, the United Nations, and the Council of Europe sniffing around Liechtenstein's borders and enforcing their diktats by way of intimidation and blackmail policies, its autonomy and reputation as one of the world's most emancipated societies will likely give up the ghost.
Karen De Coster, CPA is a freelance writer and Business Consultant in the Midwest. Send her MAIL and see her Mises.org Articles Archive. Also, see her website at www.karendecoster.com. This column is a modified version of an essay that will appear in the Encyclopedia of Capitalism (forthcoming, 2004).