Is Liechtenstein a Libertarian Utopia?

Liechtenstein isn’t just one of the world’s smallest countries, it’s one of the most prosperous.

Despite having just 37,000 citizens and covering just 61 square miles in central Europe, the microstate has a per capita income of about $100,000, a corporate flat tax of 12.5 percent, and an income tax of just 1.2 percent.

Now well-known as a banking and financial hub, the principality wasn’t always so flush. In fact, in 1967 the royal family had to sell a prized possession—Leonardo da Vinci’s first known portrait—just to keep the country afloat.

Reason’s Nick Gillespie talked with the country’s leader, Prince Hans-Adams II, at the International Students for Liberty Conference in Washington, D.C. about how Liechtenstein turned itself around while becoming world famous for its banking privacy and openness to immigrants.

And he talked with Hans-Adams’ about his new book, The State in the Third Millennium, which outlines the reforms he brought to Liechtenstein and argues that modern government should treat citizens as customers who have the option to live elsewhere.

About 8 minutes. Produced by Joshua Swain.

For links, downloadable versions, and more videos, go to http://reason.com/reasontv/2016/03/21/prince-of-liechtenstein

Liechtenstein isn’t just one of the world’s smallest countries it’s one of the most prosperous despite having just 37,000 citizens and covering just 61 square miles in Central Europe the microstate has a per capita income of about $100,000 a corporate flat tax of twelve and a half percent and an income

Tax of 1.2 percent now well known as a banking and financial hub the Principality wasn’t always so flush in fact in 1967 the royal family had sell a prized possession Leonardo da Vinci’s first known portrait just to keep the country afloat when I studied economics in law and the sixties prevailing wisdom

That was that small countries like leashed and have no future no economic future and no political future we talked with the country’s leader Prince Hans Adams the second at the international students for liberty conference in Washington DC about how Liechtenstein turned itself around while becoming world famous for its banking

Privacy and for its openness to immigrants and we talked about the princes new book about the future of government the state in the third millennium Prince thanks for talking to us yeah fine first off you’re at the international students for liberty conference talk about your interest in

Reaching a new generation of people who believe in classical liberal ideals of free minds and free markets what it also that I wrote the book which has been on how to stay to devolve in this third millennium which is sort of a very liberal or a free-market model and so

I’ve been invited to make speeches and and take part in discussions so I got an invitation to come here to one of the things that Lichtenstein is best known for is its banking and financial securities sector talk a bit about the role of Liechtenstein as a place both

Where taxes were low so it acted as a haven from other countries but then also how by guaranteeing the privacy of the funds there how did that not just help Liechtenstein but how does that help the rest of the the countries of people who might be dealing with you it was in

Used quite early and it was also introducing and strengthened like in Switzerland also I think after World War one to protect political refugees speciality Jews Jewish people who saw the danger persecution coming or where persecuted there it was important on how to protect them also then afterwards

From Eastern Europe and so that was the background but that has not been we have been forced with some English time to open up room so we had basically had to abolish the banking secrecy what gets lost when banking secrecy goes away because in the United States often and

Certainly in Europe they’ll say well the only people who want secrets are people who have something to hide but that’s not the end of the story is it it’s not the end of the story I think we have states where people are persecuted people who have managed to hide some

Money outside to flee to save themselves and their family if we don’t have a certain privacy we still have it to a certain degree but we have to give in when there some requests right how do you deal with immigration and this is a fascinating question in the American

Election we have the Republican Party is incredibly hostile to immigration in Europe we’re seeing hostility or pushback from Syrian refugees or people from outside of Europe coming there but also within the European Union you know the Irish don’t want Polish people coming there and the Germans don’t want

You know Italian people coming there how do you deal with immigration in this kind of situation what we intended a tradition to do it quite a high level of foreigners about 40% and as if I’m right I think it may be the high licked and I may have the highest percentage of

Foreign-born population in here I would say so and we also took in refugees it and tradition to taking of course only a certain amount II cannot take hundred thousands into but there we have a tradition and we have been able to integrate them quite well with the

Common European market has that been a success or a failure in your view and or is it coming apart because even as we speak the British are talking about possibly executed it seems to me that the original idea of the European Union to create the United States of Europe I

Think that is not going to be realized so I think on the political side probably going to move backwards but on the economic side I think there will be further deepening I would imagine so that it’s Europe itself will be a large trading bloc with either no or very few

Tariffs and and yes rules between yes I think that in your book you you discuss how the the state should really only be involved in a relatively few things but do those well what are the things that the state should be involved in and how do you determine where that where the

Role of the state ends well in my book and also what we more is realized in Liechtenstein through also some changes to constitutions through direct democracy it’s basically to have the the rule of law so that works often of course you need foreign policy and then you have to have the educational system

And am very much in favor of ultra system how does that fit in with the contemporary European and actually North American welfare state where in the United States for instance about something like two thirds of all spending is on health care is on old-age pensions it’s on transfer payments it’s

It’s about a social safety net as opposed to those other things how do we how do we change that balance as we is a very small state we can do it ourselves so it means that small communities like small cities or villages even can have their own social system and what awesome

Posing is to have a separation between indirect taxation which would be with the state and/or direct taxation with the local communities where you have direct democracy also also on a state level but that should take care of the social expenses are you optimistic you know there’s a lot of pessimism you know

About the global marketplace you know there the economy globally is not good its weak in various parts of Europe the Middle East is a nightmare China seems to be falling North and South America are kind of languishing are you optimistic about the future and if so what what drives your optimism well I

Think if I look back the 20th century it could have been much much worse we were lucky it could have ended in atomic war god knows what it would have been World War 3 or whatever yeah we still don’t live in a perfect world and

And for me it was also to write the book end and end so to try to influence in what way we should go so that we live in a more peaceful and prosperous world I think that’s important I think the politicians who are influential to think

About new models how to do it how to deal with all these problems well we will leave it there thank you so much for talking with us fine we’ve been talking with Prince hans-adam of Liechtenstein for Reason TV I’m Nick Gillespie