There is a country in Europe with a federal income tax rate of 1.2% and free trade, recognition of same-sex unions and yet no anti-discrimination legislation, people can own handguns for self-defence, welfare is done at a local level, their leader believes the State should just concentrate on the rule of law and foreign affairs, citizens can veto any piece of legislation with a referendum, local autonomy is so extensive that a local community (about 3000 people) have the freedom to vote themselves independent at any time, there is no standing army, they refuse to join the EU, and have a GDP/person of $134,392. Welcome to the Principality of Liechtenstein — libertarian wonderland.

27 thoughts on “Liechtenstein

  1. Thats just superb. Marvelous. Can we find out anything about their monetary policy and arrangements? A free country will still be a crap place with crap money.

    Thats what we ought to aim at. The human race divided into many thousands of little Liechtensteins. We ought to start the process here by encouraging many more states. And offloading the personal income tax from the Feds to the states, old and new. The Feds ought to handle navy and airforce. But the individual states ought to handle army. Thats just enough force at the centre to be able to quell and disuade border wars, but not enough power at the centre to betray us to the UN, and internationalist rorts more generally.

  2. They use the Swiss Franc as their currency, and they also outsource much of their international diplomacy to Switzerland.

    I find myself in an usual amount of agreement with you Graeme. My ideal world would be divided into many thousand Liechtenstein-like communities… and the most important reform in Australia (in my opinion) would be to decentralise the income tax to the State level and encourage new States to form so that we could have greater governmental diversity and jurisdictional competition.

    When Australia became a nation we had 6 states and 4 million people… if we kept with that ratio, then we should currently have 35 states. I’d be happy with more.

  3. Right. Direct democracy ought to work if the electorate is right down in the thousands.. But failing that I would say that only the states that are contiguous cities ought to be in the millions. Hows Liechtensteins form? Like 11 somewhat autonomous villages averaging 3.5 thousand each. Just brilliant.

    Supposing you were in a small collection of pretty wealthy families in a “village” of 4000? You are going to find cheap ways to help those who are struggling with finding a good job, or having health or education problems. If you cannot get together with your rich businessman mates, and help some stragglers in a group of 4000 keep up and living a decent life, thats not particularly good going. And if you lost your independence through lack of creativity and generosity in this department, how would you feel?

    You’d feel like a damned loser is how you’d feel. And you’d deserve to feel that way. So this group-of-3000 rule they got going there is just where the human race ought to be heading. We can look after our mates if we have that sort of incentive and that sort of political size. But for starters we ought to make it part of the movement to get to 35 states for sure. Thats when we had one of the healthiest political setups in the world. Thats when public servants and politicians were serious about looking after the interests of their constituents.

  4. Won’t somebody please think of the children? They threaten to wreck the OECD’s goal of tax harmonisation! Reckless Government in the OECD nations should be supported by non member states!

  5. Very nice. Would I have to learn German to fit in there? Hopefully there are some jobs for english speakers.

    Seems like a very beautiful country as well, situated near the Swiss Alps.

  6. Switzerland, although not a perfect libertarian country, probably would be easier.

    Given the obscurity etc, perhaps the Free State Project can go to Liechtenstein?

  7. We could solve our boat people problem by turning Christmas Island into an Australian protectorate with it’s own autonomous government. It could be a new Singapore. We could grant Australian citizenship to the current residents and a special right of return for them and their decendents. Look at where it is on a map and you know it makes sense. It could be the first of many Australian charter nations.

  8. i agree that this place sounds damn good, and i always agree that we need to reverse our current path of centralization and return to a much more federalized system (with more states if possible). I know that Malcolm Fraser offered to give the states back their income taxation powers back when he was PM and for the life of me i cant figure out why they declined, especially when its essential for the states to be able to control their revenues if we are to get the full benefits of de-centralization.

  9. I don’t think it was Fraser. I think it was Menzies. Fraser was a rapacious overspending bastard. As pretty much all leaders were after the gold link was cut.

    Thats a pretty good idea Taya. We ought to have a lot of these little charter-townships to deal with the refugee problem. Why not? The more we can put little Liechtenstein setups about the better.

    Also look at Afghanistan. Look how strategically inept our policy is. But if the goal is to set up safe zones for Afghan women, then I’d be sympathetic to tiny charter-statesg that our lads might help out with security with, if the central government wasn’t going to actively oppose it. Compare that to this nutty idea of trying to make a nation out of the mess that is Afghanistan, when we lack the means, the strategic interest, or control of the outcome, which will be the second Islamic State.

    If looking after Afghan women is the goal, and I think its a worthy goal, then we have to SAY THAT, and help out in some sort of humble way commensurate with our capacities, And a small charter-state may be possible.

  10. Yes, Menzies definitely offered to abandon the uniform taxation, but I’m fairly certain that the Fraser government also proposed reforms that would have at least given the states some ability to adjust the taxation rates levied on their own citizens

  11. It’s not all roses. Income tax is levied by both the federal government and the provinces. Including levies, the total is up to 29%. Corporate tax is up to 20%. There is also a progressive inheritance tax of up to 27%.

    I found Liechtenstein to be more boring than Switzerland when I was there, but it is certainly living proof that low taxes and less regulation are good for prosperity. Singapore and Hong Kong are similar, at least economically.

  12. From memory, Fraser did make the offer more as a challenge to the states to dare levy their own income taxes, a proposition they refused. They had ‘threatened’ to take back their taxing powers and he called their bluff.

    Totally agree with the rest of your opinion of him though.

  13. DavidL – is your tax comment referring to Liechtenstein or Switzerland. I have trouble believing that a nation of 35000 is a federation.

  14. For us English-speakers, I hear the Isle of Man is as close to a libertopia as we could wish for. I wonder if that is true? Does anyone know much about the place?

  15. I like that idea; lets get started. We can start by supporting the idea of a “North Queensland” and “New England” state movements. 🙂

  16. I mentioned this before, but I’ll say it again- the states are mentioned in the Constitution, but never defined. If W.A. were to say that it’s northern border ended just south of the Kimberley Mountains, would the Kimberleys automatically become a new australian state, or a separate nation?

  17. It’s a libertopia if you intend to shut yourself off from the rest of the world. They won’t let you in unless you’re needed. Same as Liechtenstein I guess.

  18. Ah, Singapore, the bastion of libertarianism that steals 2 years of the life of every man and kills people for non-violent crimes.

  19. The Swiss and Liechtenstein are pretty happy with their country at the moment, and rich. If you are involved with the “Free State Project” I doubt you would have anywhere near as much money as them, so why would they want anything to do with you?

  20. Did you read the wikipedia article you referenced? The only reason Liechtenstein is “prosperous” is because of its financial industry, and … “the United States Senate’s subcommittee on tax haven banks said that the LGT bank, which is owned by the royal family, and on whose board they serve, “is a willing partner, and an aider and abettor to clients trying to evade taxes, dodge creditors or defy court orders.”

    They import just about all their food, energy, everything. They benefit from the graft and greed of foreigners and leech off the rest of the world.

  21. But they have 40% of their people in manufacturing, and only 20% in banking. Plus their banking industry has to compete with the Swiss banking industry. So their performance has to be seen as exemplary any way you cut it.

    Note that the notion of comparative advantage did not mean they had to lose their manufacturing. The idea that they would have to lose their manufacturing is directly opposite to the implications of a true understanding of the notion of comparative advantage. But the Australian economists speak with a single forked tongue on this issue. We ourselves cannot hope to have an healthy economy unless we get to that sort of percentage of the population in manufacturing.

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