Liechtenstein

August 11th, 2014   Submitted by Anthony Caprio

FireRepressionThe twentieth century was defined by the nation state, and the wars, which resulted from the clash of these leviathans as they competed for power and influence. The British, Soviet, American, German, Russian, Japanese, and Chinese empires all controlled nearly every square inch of the Earth at one time or another in the last century. There is one notable bastion of freedom that survived unscathed during this clash of empires, and it did so with no military. That country is Liechtenstein.

“Why have I never heard of Liechtenstein?” you ask. Well, if you went to a state sponsored school it could be that Liechtenstein existence defies most of the lessons you were taught in history class. Most of the lessons taught in public school history classes are about the importance of having a democratically elected head of state, a strong central government, a fiat currency, and a strong standing army to keep you safe from invading neighbors. Liechtenstein turns all of that conventional wisdom on its head.

Now I know I probably don’t need to say this, but Liechtenstein is not an Anarcho-Capitalist enclave. It is however a minarchist state, which has done away with it’s military. The absence of a state controlled military is essential to the existence of an Anarcho-Capitalist enclave. Most statists (even minarchists) argue that the primary role of the state is to maintain a military, which will defend the state’s national territory. If this is true, and no territory can stay free without a military, how then do they explain that Liechtenstein has remained free from invaders for over 140 years?

Liechtenstein is a tiny nation tucked between Switzerland, Austria, and Germany. The land mass is only 60 square miles, and since the 19th century its head of state has been a Prince from the House of Liechtenstein. Notice the head of state uses the title Prince, which comes from the Latin princeps, which means first citizen, not ruler.
Today Liechtenstein enjoys the worlds highest per capita GDP. The country’s wealth has been attributed to its extremely low tax burden, strong respect for property rights and fair court system. Like Costa Rica, Liechtenstein does allow private gun ownership but the laws are much stricter than the United States. The Princes of Liechtenstein are surprisingly anti-state, which I believe accounts for much of their success. Given the Prince’s distrust of the state, perhaps it is not surprising that in 1868 Liechtenstein decided the cost of having a standing military too expensive and abolished their army. So, without an army, how did Liechtenstein survive the turbulent twentieth century?

Well, to start with Liechtenstein does not suffer from the tragedy of the commons that plagues so many of today’s nation states. All of the land in this 60 square mile country is owned by someone who is accountable for that piece of property, and has an interest in what happens to that property. Let’s take a moment to look at why this is important. In most modern nation states the government is responsible for many critical services, like national defense, transportation, and the management of natural resources. Having a large faceless collective of people managing resources means there is little in the way of accountability, and incentive to manage those resources well.

Consider the National Forest Service in the United States. For decades they carried out a policy of preventing all forest fires. This allowed brush to build up to the point where forest fires became almost impossible to stop. Private landowners and people who relied on the forest to make a living knew that forests needed controlled burns. Not only to reduce the fuel load, but to germinate seeds that need fire in order to open, and give fertilizer to grasses that need the ash. Because the National Forest Service did not rely on the forest for its livelihood, they got away with this destructive policy for decades.

In the case of Liechtenstein, the Liechtenstein family owns most of the land. Think of the implications. Would George W. Bush have launched the war in Iraq if he were spending the Bush family fortune instead of taxpayer money? Would Bill Clinton have declared any land off limits to logging in the North West if he had owned the land himself? Spending other people’s money is easy, especially when your actions have few consequences. In the case of Liechtenstein, the Prince is directly responsible, and he has a huge stake in the outcome of his decisions. So, if the army is too costly he doesn’t have the luxury of inflating the money supply to pay for it. If he inflates the money supply no one will use his fiat currency. He can’t raise taxes on the land, because his family owns most of the land. This forces the head of state to make cost effective decisions, like abolishing the army. Without an army you can neither invade another country, nor be antagonistic towards other states. You’re pretty much left with just minding your business, and as it turns out, that is a great recipe for peace.

Whether the nation of Liechtenstein realized it or not, they were following the advice of U.S. President Thomas Jefferson who called for “peace, commerce, and honest friendship with all nations, entangling alliances with none” in his 1801 inaugural address. Liechtenstein followed this course, and still avoided being invaded by Nazi Germany in World War Two, and even managed to get Liechtenstein passports to Jewish refugees, which likely saved their lives. Out of all the German-speaking countries in Europe only two, Switzerland and Liechtenstein, managed to stay unoccupied by Nazis. Austria’s politicians willing ceded their country to the Nazi regime. The countries antagonistic to Hitler’s Germany were overwhelmed by his military. France and Poland were run by politicians who lied to their citizens, or were just plain wrong about their countries’ defensive capabilities. Thus the average citizen of Poland or France was caught completely off guard when the blitzkriegs overwhelmed their defenses. Liechtenstein was not a vocal opponent of Hitler and his atrocities, but by remaining free, and not getting into “entangling alliances,” they managed to harbor refugees from the Nazi regime (and later the Soviet regime), and avoided the fate of their neighbors.

As I mentioned in a previous article, Liechtenstein had a Jewish Princess up until 1938 (Hitler took power in 1933). Princess Elsa Guttman was married to Prince Franz I, the ruler of Liechtenstein. She survived the war, and expatriated to neighboring Switzerland in order put some distance between herself and the nearby Nazi State. Liechtenstein has been accused of profiteering from the sale of its passports to Jews, but consider the fate of Jews with Polish or French passports, compared to those with Liechtenstein passports. Under Liechtenstein’s comparatively free market system persecuted people were able to pay a modest price and escape the Nazi regime. Under the statist model of relying on the state for protection the Jews of the occupied countries typically lost their life and property. Liechtenstein was also instrumental in helping hundreds of Russian soldiers escape the Soviet regime at the end of World War Two.

If history has taught us anything it’s that politicians lie. If a politician is telling you something is safe, beware. I imagine that many millions of Frenchmen thought they were safe behind the Maginot line, and the Poles thought that their horseback Cavalry would defend them from the German tanks. The price of freedom is eternal vigilance, but vigilance by the individual, not the state. A standing army emboldens politicians. It encourages them to take risks, and form alliances they would otherwise avoid. It provides a false sense of security, and lures its citizens into thinking they are safe from outside enemies, and safe from their own government. Of all the nation states of Europe only a handful remained unoccupied by the Nazi’s in WWII. Three of those nations did not have a standing army: Liechtenstein, Andorra, and the Vatican City. All of the nations Hitler invaded had a standing military, or a protection agreement with a country, which had a military. Monaco for example had a protection agreement with France and was invaded by the Nazi’s. I would also like to note that the wealthy Jewish citizens of Monaco had their lives and their property taken by the Nazi’s while Liechtenstein’s Jews remained free.

Some have made the argument that Hitler just never got around to invading Liechtenstein. An argument that seems quite ridiculous when you consider he found the time to invade three continents, and enslave millions. Yet he could not spare an afternoon to march a company (or even a platoon), and plant a Swastika in tiny Liechtenstein, which was next door? Other’s have argued that Liechtenstein owes it’s freedom to Switzerland (whose military was tiny in comparison to Germany’s). Or that Liechtenstein was somehow protected by the USA, which was thousands of miles away and didn’t send a single soldier to Liechtenstein until after the fall of the Nazi’s. I find both positions lacking in plausibility. There is no evidence that Liechtenstein ever made any protection agreements with any other nation. To claim that a benevolent state is responsible for the protection of a country that has never needed or asked for that protection is arrogant at best. I might as well claim that I am responsible for the safety of everyone who has never been attacked because I secretly watch over them. Such a claim is as ridiculous by an individual as it is by a nation. However, this narrative does play nicely into the hands of politicians trying to get more funding for their military, and adds more credibility to their war mongering.

Liechtenstein owes its freedom to following the non-aggression principle in foreign relations. It is often said that Hitler was born at Versailles. Meaning that without the treaty of Versailles after WWI that imposed crushing war reparations on the German people and led to runaway inflation, Hitler would never have come to power. Indeed Hitler gained the support he needed from the German people because he promised to regain German territory lost during WWI, and to avenge Germany’s humiliation by the Allies. Switzerland, Liechtenstein, Sweden, Andorra, and Vatican City all stayed neutral during both wars. They didn’t participate in the destruction of the German economy, so Hitler didn’t have the political capital he needed to invade them, despite their small size and weak defenses.

I’m no pacifist, although I do sympathize with that position. People do have a right to defend their lives and their property. But, is the state the best choice to provide the defense of your life and property? How often have we seen militaries that are incompetent, or just downright belligerent? Defense is always the reason given by politicians for having a standing army. Defense of life and property is arguably the most important service in the world, but given the lousy track record governments have running anything, why should anyone trust something as enormously important as defense into the hands of something as inept as a government? Especially when countries like Liechtenstein show that they can do a better job of protecting its citizens with no military than a country like France can do with one of the world’s largest militaries.

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15 Responses to “Liechtenstein”

  1. HReardenNo Gravatar says:

    Qatar has the highest GDP. Why would someone who is anti-state call himself a prince? Liechtenstein was lucky during WWII that it was not invaded by the Germans. The Germans has considered it and like I have state previously they had other things on their “plate” at the time. Had Germany invaded Liechtenstein they would have overthrown the state of Liechtenstein.

  2. info_bomberNo Gravatar says:

    @HRearden

    That is not the point, at least from what I gathered from the article, sure Germany could have invaded Liechtenstein at any time, however the reality is that Germany did not, by playing the hypothetical game you could change an entire course of history. Another hypothetical course could have been that the U.S. did not enter WW2, if at all, until after one of the tyrants, either Hitler or Stalin, had defeated the other and then made haste with dispatching the final tyrant, but this did not happen and it becomes a fool’s delusion to expend any more intellectual thought on it other than to point out another hypothetical argument that does not live up to reality by the course of historical events. Highest GDP and Highest GDP per capita are two different statistics the Ayn Rand Hank Rearden would know this difference perhaps you should give up that handle because you sir are no HRearden, perhaps you should change it to PRearden because your comments seems more in line with that character.

    • HReardenNo Gravatar says:

      First of all I know the difference between GDP and GDP per capita. I had intended to post “per capita”. Qatar has the highest GDP PER CAPITA. Here is a reliable source on that: http://photius.com/ranking/economy/gdp_per_capita_2014_0.html
      Of course any source could be in error and although unlikely I suppose it is possible that as of today Liechtenstein may have the highest GDP per capita. What is your source btw? Btw, the USA has the highest overall GDP.

      Apparently you don’t understand my point. My point is that Liechtenstein took a gamble on not being invaded by not having an army. Not having an army is not a virtue just like not owning a firearm is not a virtue and it does not follow that you will not be invaded by those who do have guns and an army.

      I probably will not respond to your posts in the future because of your ad hominem attack. That was uncalled for. I make it a point not to engage in ad hominem. I am confident in my statements and I take the high ground.

      http://youtu.be/93PKVxXF3i8#t=17s

      • don duncanNo Gravatar says:

        I do not buy your analogy that having an army is to a state as having a gun is to an individual. The gun is in your control. The army is not. The gun will not rise up and attack you, the army will eventually. Washington used a standing army to put down a particularly unfair whiskey tax (which at that time was used as money by farmers) so the war debt could be paid off to the benefit of rich insider friends of Hamilton. They made a deal with Hamilton to get the law passed when it looked like the war bonds would not be redeemed. Having done so, they were able to purchase the bad paper for 10% knowing their deal would generate a windfall profit. This was predicted by some Founding Fathers. It was not difficult. They had a long worldwide history of armies used against the citizens to instruct them.

        But as a voluntaryist you should know this. It is just a special case of the general case of concentrating political power in an elite, i.e., govt. As one Founding Father noted who presupposed no army, if the Constitution failed, the people, being better armed than the govt., would rise up and abolish it. Allowing an army gives the rulers way too much power. On top of that, we have numerous federal police, some secret. A secret police force is a de facto domestic army and the hallmark of a totalitarian regime.

        • HReardenNo Gravatar says:

          Washington did not confront the protestors with a standing army. Washington raised
          an army by calling upon the governors of VA, MD, NJ, and PA to provide him with
          militia from their states to confront the protesters with. At the time the US
          government did not have a standing army. In theory even today from a constitutional
          point of view the US government does not have a standing army because the military
          of the US government has to be raised refunded every two years via the constitution.
          It is a de facto standing army however.
          An army does not have to be a state funded and state run army. In a stateless “society”
          there can be an army that is voluntarily funded and operates according to the
          limitations of a contract agreed to.

          • don duncanNo Gravatar says:

            Obviously you are more well read than me on this subject. I stand corrected as to the mechanism used to enforce “taxation without representation”.

            However, the outcome is the same, even if the federal govt needs to turn state against state. I assume the Whiskey Tax did not impact the states Washington asked to lend him militia. Furthermore, I assume no referendum was taken by the states that ganged up on PA. This is a good example of rulers representing rulers, not their constituency. I’m just guessing on that but it must be so if we are to believe the rallying slogan, “No Taxation Without Representation”. How soon the liberators given power become the new oppressors! I believe Washington was a fine fellow, but he couldn’t handle the power. Who could? Probably, T.J. but even he lost his way a little. “Lord of the Rings” was a fictional story based on a profound political truth: Political Power Corrupts.

  3. don duncanNo Gravatar says:

    Anyone who claims Liechtenstein was not invaded because it was protected by some other country bears the burden of proof. I have seen none. But even so, this raises the question: Who protects Liechtenstein from its protector? Protection is not free.

    The claim of HRearden that Germany intended to invade but was too busy needs proof also, considering the very little time or effort needed to invade.

    Inept govt? Govt is often inept but not nearly as much so as it appears to observers who buy govt lies. The mistaken assumption that govt exists to provide services leads to the evaluation of govt as almost always inept. This assumption is proven to be false when one is intimately acquainted with any bureaucracy. The bureaucracy serves itself, and this often means at the expense of the stated goal.

    Pacifism is not a noble goal. Why sympathize with one who refuses to defend against a violent offender? Doesn’t this encourage violence? What is the meaning of inaction? Is it not condemnation of all violence, initiated and defensive? I find this moral code repulsive.

    • Anthony CaprioNo Gravatar says:

      I am not a pacifist so I cannot speak for that philosophy. It does seem to me like that position is borne out of a respect for human life and the individual. That is the part I am sympathetic with. Whether pacfism is misguided or not I cannot say.

      • don duncanNo Gravatar says:

        I am not a collectivist but I can critically evaluate that philosophy. You don’t have to be a pacifist to evaluate that position. For example, if one respects a person’s right to life, including your own, it is not a contradiction to take a life to save a life from an aggressor who is acting out of malice or just wants what you have and is willing to kill to assure you do not stop him.

        The opposite position being that under no circumstances would a life be taken, even to save lives, is to reject context, and declare that refraining from killing is an absolute, not subject to context. I have not heard a defense of than position.

  4. EugeneNo Gravatar says:

    Perhaps Lichtenstein was just lucky not to be invaded by Nazi Germany. But it should be noted that a Liechtensteinian military would not have made any difference anyway, apart from leading to greater loss of life and property. Against this must be weighed the fact that if you allow the state to defend you, you inevitably also allow the state to control you.

  5. Anthony CaprioNo Gravatar says:

    Thanks Eugene you illustrate the point perfectly. How is it that several nations without army avoided occupation? Lichtenstein, Vatican City, Andorra, San Marino all were Micro States with no standing army that fared better than France which had one of the worlds largest armies. I think there is something more than just luck at work here.

    • don duncanNo Gravatar says:

      “Luck” is an epistemological word meaning ignorance, as in “it was magic” or “it was chance”, i.e., it is unexplained. So, “…more than luck at work…” is always the case, i.e., there is always an explanation because of “cause and effect”. Cause and effect is a metaphysical term describing how the world works. When someone says good luck is why Lichtenstein was not invaded as happened in this thread, they are not explaining why Lichtenstein was not invaded, they are doing the opposite. The statement says nothing about the non-invasion but is a confession of ignorance by the writer. Therefore, it hardly refutes our premise that states without armies are less likely to suffer invasion.

  6. Sam SpadeNo Gravatar says:

    Where to start with argumentation such as this.

    I am a sovereign state. Those who know me would be disappointed if I didn’t begin by declaring my statehood. And those who don’t will merely presume it to be the ranting of a crazy old man (anarchist to boot — everybody knows anarchists are looney-tunes).

    The only free state or country is that with a population of one — and even that is no guarantee. I fight some fierce battles between my ears at times before coming to rational conclusions.

    Germany could not have invaded Lichtenstein. Germany does not exist. Nor does Lichtenstein.

    People exist.

    Psychopaths claiming jurisdiction (whatever that’s supposed to mean) over sycophantic slaves who have access to deadly weaponry in an area called Germany, might have successfully overwhelmed and murdered many individuals in a place called Lichtenstein — I have no argument with that. After which they would claim that particular area to be a protectorate (like an area called Texas is so claimed by folks in a place called District of Collectivism….er, Columbia).

    I suggest an essay titled Insanity as the Social Norm by the late Delmar England for those who want to present sound and logical arguments over these kinds of matters.

    Sam

  7. ThomasNo Gravatar says:

    Liechtenstein’s independence was guaranteed by Switzerland in WW2. So it was the Swiss guns that saves them.