Will the State Survive the 3rd Millennium?

Oksenberg Conference Room
  • HSH Prince Hans-Adam II of Liechtenstein

Prince Hans-Adam II has dedicated his reign to bring Liechtenstein into the modern international community. Under his leadership Liechtenstein has joined the United Nations and the European Economic Area with the European Union.

In 2003 Prince Hans-Adam II was able to accomplish the monarchy’s constitutional reform, after the failure of parliamentary negociation, with a plebiscite outcome of a majority of voters in favor of the Princely House’s constitutional proposal.

Having appointed Hereditary Prince Alois his permanent deputy for exercising the duties of Head of State of the Principality of Liechtenstein, Prince Hans-Adam II has returned to devoting himself more to managing the assets of the Princely House.


Event Synopsis:

HRH Prince Hans-Adam II asserts that to survive, states must reflect a new model geared toward preventing wars, serving not only the privileged but the whole population, promoting democracy and the rule of law, and being globally competitive. To achieve this, the state must operate like a service company. It must avoid behaving like a monopoly, including with regards to its territory. The prince cites legislation he introduced to allow each of Liechtenstein's 11 communities to vote on whether to remain with or leave the principality and outlines other relevant examples from Europe. In the "service company" model of states, defense spending fueled by taxpayer money will be unnecessary. Many current government functions would be privatized or transferred to local communities, with the exception of foreign policy, law and order, education, and state finances. He details all four of these areas, discusses ways in which they intersect, and outlines suggested reforms to legislative systems to achieve these goals.

The prince makes a special case for private education funded by state vouchers to parents; for indirect taxation by the state and the opportunity for local communities to impose direct taxes; and for using tax surpluses and proceeds from selling unwanted state property to pay down the national debt. Above all, he emphasizes a "lean and transparent" state that can be financed by only a small fraction of GDP, with funds flowing directly to local communities. In conclusion, he predicts that the state - and even monarchies - will survive the millennium, but not in the traditional model or large, centralized states.

A discussion session raised such questions as: Who "owns" a state operating like a service company? What options exist to deal with the growing global imbalance of wealth? Should healthcare and waste disposal/natural resource management be provided by the state or privatized? Does Lichtenstein derive any direct benefits from its association with the European Economic Community? Is Liechtenstein large enough to have an impact on world politics with its foreign policy, or is foreign policy an area better handled at a higher level like that of the EU? What is the current situation of minorities in Europe?