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[Adapted from an interview with His Serene Highness Prince Michael of Liechtenstein. H.S.H. Prince Michael of Liechtenstein is the Founder and Chairman of Geopolitical Intelligence Services AG, as well as president of the Think Tank ECAEF (European Centre of Austrian Economics Foundation). He is Chairman of Industrie- und Finanzkontor in Vaduz (Liechtenstein).]

Claudio Grass (CG): The spirit of governance, as well as the local culture of Liechtenstein, seem to support and work in harmony with the ideas of personal freedom, independence and especially respect for private property. To what extent do you think this was influenced by the heritage and the history of your family and of past generations?

H.S.H. Prince Michael of Liechtenstein (PML): We have a very well-balanced governance system here in Liechtenstein, which results in cohesion and prosperity. It is proof that the combination of monarchy, direct democracy, and the high autonomy of the municipalities works well. This combination forces all parts of government to apply credible politics. The monarchy’s reputation and strength are based on the balanced family constitution and the rigidity applied by the Princely family toward its members with the effect of discipline and a high sense of responsibility. It is widely agreed that a democracy can only function on the ideals of personal freedom, independence, subsidiarity, personal responsibility, and respect for private property.

CG: What about today? Do you see these values and individual rights as being under threat in recent years and how are they defended in Liechtenstein?

PML: Unfortunately, even in Western democracies, the values of freedom and independence and the respect for private property get more and more eroded. A flood of laws limits freedom of choice and regulations violate property rights. In today’s European societies, many are tempted to happily exchange freedom against an illusion of security. Unfortunately, also in Liechtenstein we see such an attitude, much less pronounced but still existing. However, our systems are robust enough to protect individual freedom and property rights.

CG: The European Center for Austrian Economics Foundation (ECAEF) has played a key role in researching and promoting sound ideas and advancing arguments for self-responsibility and limited government. It can be argued, however, that the political trend seems to be headed in the opposite direction for quite some time, with some even claiming that WWI marked the end of civilization. What is your view on this and do you think we should still remain optimistic about a possible reversal toward more individual freedom?

PML: World War I might not have marked the end of civilization, but it marked the start of the phase where Europe’s influence in the world and its combination of Christianity and Liberalism (a very successful model) started to decline. Liberalism, which includes values such as personal freedom and property rights, is based on Christianity. Personal responsibility is a basic factor in Christianity.

This system has played very well also for Western economy and prosperity. But Europe became very saturated. After seventy years of peace after World War II, Europe left the path of a drive to achievement and turned to a drive of self-protection, anxiety, and redistribution. This saturated situation will necessarily lead into a crisis and I believe — as unfortunate as it is — that a big disruption will be necessary for a return toward more individual freedom. In case this does not happen, Europe will again fall into poverty and a loss of freedom. However, I am optimistic in the long term, but I see quite some troubles in the near future.

CG: The last few years have seen a sharp decline in the quality of public debate in Europe and in the US, as deep divisions and political polarization has turned civilized dialogue into name-calling and shouting matches. Freedom of speech and its limits have also come under scrutiny and many attempts to curb it have backfired. How important a role do you think freedom of expression will play if we are ever to return to a higher level of public discourse?

PML: Political correctness has degenerated the public debate in Europe and the US to a high degree of mediocrity. The essence of democracy and free society is an open debate of sometimes clashing opinions. Under the term “polarization” deferring opinions are decried and ideas, which do not correspond to the accepted mediocrity, are marginalized as either radical or populist or right-winged, etc. As a result, freedom of expression is limited.

Therefore, all of a sudden, as soon as there are differences, name-calling and shouting matches are replacing a sound public debate. In order to get to a higher level of public discourse, we have to come back to the real freedom of expression, which unfortunately is more and more limited. Sometimes polarization is a necessary ingredient of a functioning and healthy democracy.

CG: What are the key challenges and opportunities you can see emerging from this ongoing technological push toward decentralization and digitalization? As new ideas and systems give power back to the individual, do you expect to see a social impact, apart from an economic one too?

PML: All new positive technologies make men more efficient and a society more prosperous. The fear that there will be less jobs due to new technologies such as robotics, artificial intelligence, etc., is unjustified. In fact, new technologies will create new types of jobs. The challenge will be to manage the transformation.

Blockchain with its system of decentralization has the big advantage that the individual becomes much more independent from centralized institutions such as state agencies or some private providers such as banks, notaries, etc. This will have a very positive social impact, as the grip of government on individuals will become weaker. And the economic advantage will be a considerable reduction of transaction costs. Blockchain will be successfully applied in many areas, but it will need time for the benefits to ripen.

CG: It can be argued that we are going through strange times geopolitically, with the US shifting away from its traditional leadership role in many global issues and with rising trade tensions threatening to rupture or redefine key alliances. At the same time, we see a lot of political undercurrents in Europe rise to the surface, with key electoral victories of anti-establishment parties and movements. In your position as the Founder and Chairman of Geopolitical Intelligence Services (GIS) in Vaduz and from your own extensive experiences, do you believe this period to be unique or do you see historical parallels and patterns that might guide our expectations and outlook?

PML: The World is in a time of extreme political disruptions. But we had similar times before, especially in the age of Renaissance in Europe which finally shaped today’s situation in the Continent. It is very difficult to apply historical parallels and patterns. World War I was an incident not as disruptive as the Renaissance, but started a new period of European and Western decline. But the time before is a good example to see today’s lingering conflict between the US and China. The mistakes that the European powers made in the late nineteenth century with the outbreak of World War I should be a warning for today’s politics.

CG: The global economy also seems to stand at a crossroads. After a decade of heavy-handed interventions by central banks in all major economies, combined with an explosion in debt levels, it would seem that unsupported, “organic” growth is arguably dead, while financial markets are addicted to low rates and central bank accommodations. How do you evaluate the impact of these policies and what are, in your estimation, the biggest economic risks moving forward?

PML: The biggest problem, not only economically but also politically, is the debt problem. It is unimaginable, how this madness of creating more and more debt and just pushing the economy by inflating the money supply will end. The only outcome one can imagine now is that the resulting catastrophe will be big. A small group of people already believes that the only solution, as terrible as it is, will be a major war. I cannot really disagree with that assumption, because the resulting crisis might lead to more and more political tensions, which could unload like a thunderstorm in a war. How such a war will happen is unclear, it might be limited to the cyber sphere or it might also be likely that traditional military forces will be deployed.

CG: In this context, what do you think the role of gold will be in the coming years? What do you make of the fact that we’re seeing key central banks, e.g., in Russia and China, racing to increase their reserves in recent years?

PML: I think gold will always play an important role. People simply trust in it, although it is not always very practical. I believe that the central banks in Russia and China have seen the possibility to increase trust in their currencies by having larger gold reserves. This is important, because we must not forget that the value of money is based on the trust of the people who use it. Gold is a good hedge against the inflated amount of the currencies which will finally destroy the trust that people still have.

[Adapted from an interview with His Serene Highness Prince Michael of Liechtenstein. H.S.H. Prince Michael of Liechtenstein is the Founder and Chairman of Geopolitical Intelligence Services AG, as well as President of the Think Tank ECAEF (European Centre of Austrian Economics Foundation). He is Chairman of Industrie- und Finanzkontor in Vaduz (Liechtenstein).]