All posts by Andre Wendt

The demise of liberal democracy

GIS Statement* by Prince Michael of Liechtenstein

Big government, high taxes, massive debt, political polarization and social crises have become the norm throughout Western Europe and North America. But it is high time for leaders and citizens to take a look at the lessons history has to offer. Only then could the region avoid going down the same path as Rome and other fallen empires

Western governments appear to have thrown caution to the wind. Higher taxes are financing massive spending campaigns that have no clear implementation strategy (source: GIS)

Both the Biden administration and the European Union have announced unprecedented spending programs, $1.9 trillion and 1.8 trillion euros respectively, to fight Covid-19 and kickstart the green economy. There is no clear concept on how these funds will be spent or financed. But this kind of spending could serve as a pretext for a sharp tax increase in Washington. It appears that on both sides of the Atlantic, governments see the pandemic and the green economy as ideal excuses to keep overspending and increasing the role of the state and the administration.

This is alarming, given what took place in past societies and states that resorted to overspending and degrading the worth of their currency. In ancient Rome, during the late years of the empire, internal turmoil had disturbed trade flows and the government had become bloated and inefficient. Rulers had to find ways to appease rising discontent. So they tried to buy off the population with gifts. To find the necessary funds, they increased taxes, implemented aggressive tax controls and began debasing silver coins by adding copper (a method strikingly reminiscent of today’s quantitative easing).

With these new measures came a tangle of laws that opened the door to corruption. The people of Rome began demanding panem et circenses as their due. The regime had to feed and entertain the population to survive, to the detriment of a sustainable common good. These welfare handouts from the state created rivalry between different social groups who felt they were disadvantaged compared to others, further poisoning the political situation. As a result, the formidable Roman Empire, once an efficient and well-functioning system, decayed and collapsed. Still, the principle of redistribution by taxing the rich to feed the poor remained popular. But this created the wrong incentives, punishing the hardworking on one side and encouraging idleness on the other.

Likewise, Spain was once the dominating power in Europe. In the 16th century, its European territories included not only the Iberian peninsula, but also large parts of Italy and the Netherlands. Its overseas lands stretched from the southern tip of Tierra del Fuego up to modern-day Colorado and California in the Americas, and also included the Philippines in Asia and territories in Africa. But the Spanish state expanded so much that it required higher taxes, which in turn led to inflation. The defeat of the Armada around the British Isles was not the cause of this decline, but a symptom.

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The demise of liberal democracy


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defense, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyze the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyze and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.

Im Kampf fürs Bargeld: “Das Höllentor steht nun einen Spalt offen.”

Quelle: Ludwig v. Mises Institut Deutschland


Interview mit Carlos A. Gebauer über den „Kampf für das Bargeld“. Gebauer ist Rechtsanwalt, Fachanwalt für Medizinrecht und Publizist aus Düsseldorf. Die Fragen stellte Thorsten Polleit.  Das Interview erscheint erstmals am 23. April 2021 auf misesde.org.

Herr Gebauer, Sie vertreten als Rechtsanwalt in einem Musterverfahren einen Mandanten, der auf sein Recht pocht, den Rundfunkzwangsbeitrag bar bezahlen zu dürfen. Bevor wir über den Fortgang des Verfahrens sprechen und seine Bedeutung im „Kampf für das Bargeld“ erkunden wollen, möchte ich Sie jedoch zunächst etwas ganz Grundlegendes fragen: Was bedeutet eigentlich „gesetzliches Zahlungsmittel“? Und wie unterscheidet es sich von den Giroguthaben, die ich auf meinem Bankkonto habe?

Carlos A. Gebauer: Wer in einer arbeitsteiligen Wirtschaft Leistungen anderer in Anspruch nimmt, der hat dafür in aller Regel eine Gegenleistung zu erbringen. Meist besteht diese Gegenleistung darin, einen Preis zu entrichten. Den Preis einer Leistung drücken wir üblicherweise im Maßstab unserer Währung aus. Wir sagen zum Beispiel: „Die Ware X kostet 100 Euro“ oder „Eine Dienstleistungsstunde kostet 200 Euro“. Dieser sehr alltägliche Vorgang scheint auf den ersten Blick sehr banal zu sein. Er setzt jedoch – unausgesprochen – eine vorangegangene Einigkeit der Beteiligten über einige grundlegende Spielregeln der Transaktion und zugleich einige durchaus komplexe organisatorische Vorkehrungen dazu voraus: Der Gegenstand, in dem sich der Preis verkörpert, muß bereits feststehen. In Deutschland und in der gesamten sogenannten „Eurozone“ ist dies derzeit der Euro. Der Gesetzgeber hat der Europäischen Zentralbank in diesem Kontext zugleich die organisatorische Aufgabe zugewiesen, Banknoten mit dem Maßstab dieser Währung als einziges gesetzliches Zahlungsmittel zur Verfügung zu stellen. Euro-Banknoten (und Euro-Münzen) sind unser Geld und dienen uns als Zahlungsmittel.

Um den kommunikativen Vorgang aller geschäftlichen Vereinbarungen über Preise sinnvollerweise übersichtlich zu halten, hat der Gesetzgeber mit seiner Währung ein weiteres vorgesehen: Euro-Banknoten sind das sogenannte „gesetzliche Zahlungsmittel“. Immer dann, wenn sich die Parteien eines Geschäftes daher nicht ausdrücklich auf ein anderes Zahlungsmittel zur Begleichung einer entstehenden Zahlungsschuld verständigen, hat der Schuldner von Gesetzes wegen das Recht, sich durch die Leistung dieses gesetzlichen Zahlungsmittels von seiner Zahlungsschuld zu befreien. Für den Zahlungsgläubiger umgekehrt bedeutet dies: Er wird von Gesetzes wegen gezwungen, dieses gesetzliche Zahlungsmittel zu akzeptieren. Die auf den ersten Blick eigenwillige Verengung des Geschäftsverkehrs auf dieses eine (und einzige) Zahlungsmittel hat einen sehr guten praktischen Grund: Sie vereinheitlicht den Maßstab und verunmöglicht insoweit Streit über die Richtigkeit der Schuldbegleichung. Nicht zufällig heißt der Währungsmaßstab daher auch Währungseinheit (und nicht etwa Währungszweiheit oder Währungsdreiheit).

Der wesentliche Unterschied zwischen einer körperlich greifbaren Banknote und einem Giroguthaben läßt sich nun wohl am besten literaturwissenschaftlich ausdrücken: Eine Banknote ist ein realer Gegenstand, ein Giroguthaben hingegen ist nur die Erzählung von einem solchen Gegenstand. Übergibt ein Käufer einem Verkäufer daher nicht eine Banknote zur Kaufpreistilgung, sondern überweist er den Betrag, so tritt die Erzählung seiner Bank, für ihn eine solche Banknote zu verwahren, an die Stelle des Gegenstandes. Akzeptiert der Verkäufer anstelle der Übergabe eines Geldscheines eine solche Giralgeldüberweisung, dann begnügt er sich also damit, daß an die Stelle der Verwahrungserzählung der Käuferbank künftig die Verwahrungserzählung seiner eigenen Bank tritt. Ob die beteiligten Banken das Geld wirklich verwahren und ob sie auf Anforderung auch tatsächlich in der Lage wären, den Geldschein herauszugeben, wissen die Beteiligten nicht. Sie glauben lediglich daran, daß die Erzählung der Banken richtig ist. Weil dieser Glaube leider täuschen kann, sagt man wohl traditionell: „Nur Bares ist Wahres.“

Eine „Erzählung“ hat, so habe ich in der Schule gelernt, Einleitung, Hauptteil und Schluss. Gehe ich recht in der Annahme, dass es im Hauptteil der „Erzählung der Bank“ um die folgende Frage geht: Welche Beziehung besteht zwischen Giroguthaben und dem gesetzlichen Zahlungsmittel – hat man mit einem Euro-Giroguthaben einen rechtlichen Anspruch, sich es im gesetzlichen Zahlungsmittel ausbezahlen zu lassen, wenn man es wünscht? Oder ist mein Giroguthaben tatsächlich nichts „Wahres“, weil es ja nichts „Bares“ ist? Vermutlich ist die Antwort auf diese Frage entscheidend für den Schluss der „Erzählung der Bank“ …

Carlos A. Gebauer: Wer sein eigenes Geld in Gestalt von Banknoten nicht selbst tatsächlich besitzen möchte, indem er es gegenständlich behält, der bringt es meist zu der Bank seines Vertrauens und zahlt es dort auf ein Konto ein. Insbesondere Händler verfahren in großen Stil so, wenn sie abends den Bestand ihrer tagsüber vereinnahmten Gelder bei einer Bank abgeben. Würde eine Bank diese Geldscheine nun simpel auf einen Haufen legen und sie für den jeweiligen Kunden verwahren, könnte man denken, dass dieser sein Eigentum stets bei der Bank wieder abholen kann. In der Realität läuft es aber rechtlich und tatsächlich anders. Dies beginnt schon damit, daß die Geldscheine selbst gar nicht richtiges rechtliches Eigentum ihres jeweiligen Besitzers sind, sondern von ihm nur als Geld genutzt werden dürfen. Bargeld ist ein „Umlaufmittel“ und als solches dazu bestimmt, unter den Wirtschaftssubjekten herumzulaufen. Das englische Wort „currency“ enthält diesen Gedanken übrigens auch noch in sich: „currere“ ist Latein und heißt „umherlaufen“. Und weil Banken wissen, daß Geld gerne umherläuft, geben sie es auch nach jeder Einzahlung oft gleich wieder aus. Dennoch „erzählen“ sie ihrem Kunden auf dem Kontoauszug zu dessen Girokonto, daß sie den eingezahlten Betrag noch immer für ihn verwahrten …

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Im Kampf fürs Bargeld

Adapt And Be Adept

by Terry Anderson

Editor’s note: This is an excerpt from Adapt and Be Adept: Market Responses to Climate Change,edited by Terry L. Anderson, newly published by the Hoover Institution Press. Click here to buy a copy.

The globe is warming, ice caps are melting, and sea levels are creeping up. The most convincing evidence to an economist, however, is not measurement with thermometers or yardsticks but the fact that people are reacting to price changes, whether the result of government policies or the result of asset markets. Market forces are causing human beings to adapt to climate change, and that movement is the theme of a new book, Adapt and Be Adept.

Adaptation occurs in part because other policies aimed at slowing global warming show little prospect of being implemented or, if implemented, of having much effect.

First, the most common policy proposed for reducing global warming is regulation to reduce greenhouse gas (GHG) emissions. These regulations are the basis for most international agreements, such as the Paris Accord. Not surprising, not all countries sign on to such agreements, and not all that do abide by them, especially those wanting more development, such as China and India. Moreover, because so much carbon is already stored in the atmosphere, these agreements are unlikely to have much effect on global temperatures. In the case of the Paris Accord, even if all countries met the targets, projected temperatures by 2100 would be reduced by only 0.05 degrees Celsius, as Bjorn Lomborg showed in Global Policy in 2015.

Second, the alternative energy forms necessary to drive the global economy have inherent limits that, for the foreseeable future, will make a transition that eliminates hydrocarbons unlikely. Hydrocarbons are here to stay as a major share of the global energy supply, and therefore far more severe greenhouse gas regulations are unlikely to gain traction.

Third, and perhaps most important, politics, more than efficiency, drive climate policy. As Jeffrey Immelt said in answer to a question I posed at the 2008 ECO-nomics Conference sponsored by the Wall Street Journal, “If you’re not at the table, you’re on the menu.” Being at the table means having lobbyists who influence policy. This is why climate change policies promoted by economists as efficient are seldom adopted. Special interest groups seek subsidies, taxes, or regulations that make their products or services more profitable than they would be otherwise. Economists refer to this as rent seeking, meaning that political outcomes have little resemblance to theoretical efficiency depicted in economic models.

Most current policies proposed for reducing global warming or mitigating its effects require collective action. International agreements to reduce greenhouse emissions require global agreements that are difficult to enforce, even if agreed to. National and regional greenhouse gas reduction is easier to enforce but has little hope of reducing global warming because the GHG emissions immediately mix in the global atmosphere; any effect they have cannot be separated from other GHG emissions. Hence, local economies bear costs with few identifiable benefits locally or globally. Moreover, greenhouse gas limits placed on a local economy most often result in “leakage,” meaning emissions are shifted to economies without such regulations …

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Adapt And Be Adept

Strategy, Independence, and Governance of State-owned Enterprises in Asia

Essay by Henrique Schneider*

State-owned enterprises (SOEs)—are important, especially in an Asian context. According to Fortune Magazine’s (2018) 500 list, three out of the world’s top-10 largest companies by revenues were Chinese SOEs: State Grid (rank 2), Sinopec (rank 3), and China National Petroleum (rank 4). Depending on the degree of direct and indirect government support, the next five ranks contain at least a group of near-state enterprises—near-state meaning compa- nies in which the state either is a minor shareholder or has an institutionalized stake: Royal Dutch Shell, Toyota Motor, Volkswagen, BP, and Exxon Mobil. This only leaves two of the world’s ten largest companies neither belonging to nor being backed by the state, Walmart (rank 1) and Berkshire Hathaway (rank 10).

Adopting an even more restrictive understanding, SOEs—companies of which the state is the majority shareholder—account for around 25% of the Fortune 500 entries by number of companies. Around 15% of them are in the People’s Republic of China (PRC), 5% are in other Asian countries, and 5% are in the rest of the world. Following the same criterion, in the list for the year 2005, SOEs constituted only about 6% of the total.

SOEs not only seem to be important as an economic phenomenon; they also seem to be especially relevant to economies in Asia. Some SOEs are not only economi- cally important but also play other, non-economic roles, like attracting, fomenting, and diffusing knowledge and education or securing the political interest of the state.

In recent years, successful SOEs have served as symbols of the (re-)emergence of many Asian economies. On the other hand, there are concerns about SOEs’ governance structures. The Organisation for Economic Co-operation and Development (OECD) published its Guidelines on Corporate Governance of State-Owned Enterprises as early as 2005, most recently updating them in 2015 (OECD 2015). In a 2016 report, the same organization cautioned governments to strengthen their governance standards in SOEs (OECD 2016a). In 2017, the OECD again reminded governments that SOEs could lead to remarkable distortions and to unfair competition (OECD 2017). In 2018, the OECD compared different practices on the governance of SOEs around the globe. It insisted on the need to strengthen monitoring and reporting mechanisms (OECD 2018a). In another report, it identified the independence of boards as success factors in the performance of SOEs (OECD 2018b), and, in yet another, it highlighted risk management as elemental (OECD 2016b).

However, not only international organizations but also state agencies are paying attention to the governance structure of SOEs. An example of national evaluation— in the “East” and the “West”—is the PRC’s State-owned Assets Supervision and Administration Commission (SASAC), which is advancing an agenda on the reform of SOEs to strengthen their governance, focusing especially on the independence of the institutions and their board members as well as on the economic desiderata that the SOEs must fulfill (SASAC 2018). India is considering restructuring and privat- ization (Khanna 2012; Mishra 2014).

On a regional level, the Asian Development Bank (ADB) has published many reports on SOE reform, the most recent being its thematic evaluation State-Owned Enterprise Engagement and Reform (ADB 2018), in which it states that “SOE reform is challenging, but critical” (xxii). This reform, according to the evaluation, should focus on government oversight and the political independence of SOEs, because they tend to improve the governance and performance of those entities (xxv).

This paper is interested in the governance of SOEs. With insights gained from institutional economics, it answers the following question: How can countries reform SOEs to strengthen their governance? Here, this paper claims that, although the guidelines and lessons learned that the above-mentioned authors have identified are necessary for SOE reform, they are not sufficient.

This paper asserts that, in a setting based on new public management (NPM), the ownership strategy and independence are building blocks for the good governance, and for the reform, of SOEs. As important as this answer is, it comes with a limitation of scope. Why does the state set up a company under its control or of which it is the main shareholder? The answer is either to secure strategic sectors or operations or to produce goods in a productive, innovative, and customer-oriented way. While the first part of the last sentence follows a political paradigm, the second follows an institutional paradigm, in this case NPM. In answering the question about how to govern SOEs, this paper limits its scope to the latter, deliberately leaving questions about politics and political economy aside. In reality, however, the two paradigms come together. The last section of the main body of this text briefly addresses this limitation of scope. Other papers deal in more detail with the interaction of politics and institutions regarding SOEs.

The remainder of this text proceeds as follows. After defining state-owned enterprises and new public management, the paper develops a framework for ownership strategy and independence. An examination of how the three factors— new public management, strategy, and independence—enhance the governance of SOEs leads to its conclusion (reviewing its limitations) and to policy recommendations …

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Strategy, Independence, and Governance of State-Owned Enterprises in Asia


*Henrique Schneider is a professor of economics at the Nordkademie University of Applied Sciences in Elmshorn, Germany and chief economist of the Swiss Federation of Small and Medium Sized Enterprises in Bern, Switzerland.

Henrique Schneider’s essay “Strategy, Independence, and Governance of State-Owned Enterprises in Asia” is the first of 16 contributions from various Economists in the book “Reforming State-Owned Enterprises in Asia – Challenges and Solutions”, published by ADBI, in the “ADB Institute Series on Development Economics”.

This book analyzes state-owned enterprises (SOEs), which are still significant players in many Asian economies. They provide essential public services, build and operate key infrastructure, and are often reservoirs of public employment. Their characteristics and inherent competitive advantages as publicly owned enterprises allow them to play these critical roles. Their weaknesses in governance and inefficiencies in incentive structures, however, also often lead to poor performance.

The gorilla and orangutan, or how freedom could be lost

GIS Statement* by Prince Michael of Liechtenstein

As in the dystopian “Planet of the Apes” films, people in the developed, democratic world may find themselves stripped of their freedom and wealth if they continue turning a blind eye to the autocratic tendencies of expanding governments. Another big leap in this expansion is taking place during the coronavirus pandemic

Today’s collusion between politics and science looks like it comes straight from a certain classic film (source: GIS)

Wearing masks may be a sensible precaution during a pandemic but looking at the people hidden behind them brings to mind the famous Asian pictorial maxim of three monkeys embodying the principle of “see no evil, hear no evil, speak no evil.” Like them, we are turning a blind eye to an alarming situation, refusing to hear and talk of it.

When the Covid-19 drama started in China in late 2019, Western democracies were unimpressed. Europe slept until mid-March, when governments began panicking: closing borders, ignoring the right to the free movement of goods originating in the European Union by blocking deliveries of medical supplies to other member states, and freezing the continent in hard lockdowns. Fundamental civil rights, such as the freedom of movement and assembly, were suspended. Public debate was practically silenced

Governments assumed authoritarian powers based on the opinions of selected virologists. Those questioning the measures taken, or merely demanding an open discussion, were marginalized and called all sorts of names. In many countries, governments presented their strategies as the only ones possible, “alternativlos.”

No brilliant results

In an emergency, such a heavy-handed approach may be acceptable for a brief period when a government acts quickly on imperfect knowledge in the face of significant danger. However, one year later, little has changed: arbitrary policies remain in place, and so does the ban on debating them. When you shut down public debate, making the proverbial monkey cover its mouth, inevitably, frustration rises and the opposition becomes radicalized. And your “alternativlos” policies cause all sorts of damage in the real world.

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The gorilla and orangutan …


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defense, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyze the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyze and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.