All posts by Andre Wendt

Freedom besieged

GIS Statement* by Prince Michael of Liechtenstein

Even before Covid-19 struck, many governments had dangerously high debt levels. Now that they have been given a new excuse to spend, the public sector is becoming even more bloated. Such a strategy will prove unsustainable in the long run, and inflation will inevitably appear. But meanwhile, states keep on expanding their influence, wielding more and more power over citizens.

Faced with unprecedented interference in their daily lives, citizens place progressively less trust in the governing political and bureaucratic elites (source: GIS)

A successful society should have a dedicated administration, a legal and auditing sector to ensure compliance, and functioning controlling systems. It should also provide an efficient social security system, but one that is still based on personal responsibility.

In several countries, welfare programs have become overly expensive and inefficient. A flood of laws and regulations have been issued under the pretext of reducing risk. This was yet another excuse to enlarge the public sector, which now accounts for an unhealthy proportion of the economy in many countries, sometimes close to 50 percent. As a result, the professional sector responsible for ensuring compliance, like lawyers, auditors and surveyors, has also grown excessively, harming the production and service industries to an extent.

High levels of public spending are creating unsustainable debts. Also, talent is disproportionately drawn to the public and controlling sector, leading to additional overheads for the real economy, businesses and employees. This gives states ill-advised possibilities to influence and control society and the economy, and it creates a wonderful playground for oversized government and bureaucracy.

All this is combined with byzantine, frequently contradictory and overly complicated tax rules. Because of their ambiguous nature, they allow authorities to make arbitrary decisions. These ineffective systems are extremely costly for both governments and taxpayers, especially businesses but also individuals.

Eroding value

Tax regulations, and all the disclosures they require, have become an instrument of control for governments, whose scope probably exceeds what some authoritarian systems used in the past. But taxation alone was not sufficient to justify these exaggerations.

When the sovereign debt crisis broke out a new remedy was found. Interest rates had already been low since the early 2000s, in order to eliminate the necessary downturns of the economic cycle and to relieve governments from rising interest costs. No one cared that these measures destroyed the savings of many, especially affecting pensioners. Central banks are now going even further and have started buying the bulk of government debts. Shockingly, even the International Monetary Fund has been encouraging countries to spend more …

Continue reading -> Freedom besieged


*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.

Vernon Smith Prize – Virtual Awards Ceremony

vernon smith prize 2020 winners online awards ceremony
13th International Vernon Smith Prize  |  Winners received their Prizes in an online awards ceremony. Top left to right: Carlos Gebauer (Moderator), Susanna Gopp (ECAEF Host), Dikshya Mahat (3rd Prize). Bottom left to right: Ethan Yang (1st Prize), Prinz Michael of Liechtenstein (ECAEF President), Jorge Jraissati (3rd Prize). The second co-prize winner Krzysztof Lesniewski could not join the conference call due to illness. (Sceenshot: ZVG)

Back in January, we announced the winners of the 13th International Vernon Smith Prize, leaving us organizers with a very uncommon problem: How to run the Awards Ceremony with strict Covid-19 restrictions in place?  The winners were not able to follow the usual invitation. They could not attend a physical event in Vaduz, Liechtenstein. Instead, the award ceremony was held virtually through a Zoom Webinar on 8 February 2021. Because now, more than ever, it is important that we continue to recognise the achievements around us. It is a powerful way for us to continue forward, even when it feels like we are at a standstill.

Via Zoom Webinar, the winners did successfully defend the essays after an international jury did judge their works. Prince Michael of Liechtenstein honored the winners.

1st Prize:
Ethan Yang (USA)


2nd Prize:
Christoph Lesniewski (Poland)


3rd Prize:
Dikshya Mahat (Nepal) and Jorge Jraissati (USA)
ex aequo


The prizes have been awarded on the basis of originality, grasp of subject, and the logical consistence of the argument.

Topic was:
‘Is the Public Interest really in the public’s interest?’

About 85 years ago, F. A. von Hayek already has warned us that even “if people agree about the desirability of planning in general, their agreements about the ends which planning is to serve will in the first instance necessarily be confined to some general formula like ‘social welfare’, the ‘general interest’, the ‘common good’, ‘greater equality’ or ‘justice’ etc. ”

Agreement on such a general formula is however, not sufficient to determine a concrete plan, even if we take all the technical means as given”. Although, these ambiguous, emotionally charged and politically domineering slogans still arouse the fantasy of intellectuals and politicians alike, a conceptual definition of these ‘multi-purpose’ terms appears to be of no concern for them. It is a regrettable fact that especially economics, far more than the other social sciences, is obsessed with the reiteration of popular, yet meaningless buzz words.

The following prize money was given to winners:

1st Prize: €4,000  |  2nd Prize: €3,000  |  3rd Prize: €2,000


The International Vernon Smith Prize for the advancement of Austrian Economics is an annual essay competition sponsored and organized by ECAEF – European Center of Austrian Economics Foundation, Vaduz (Principality of Liechtenstein).

CEPROM/ECAEF Conference postponed

Due to the current development of the Covid-19 pandemic regretfully we are forced to postpone our V. CEPROM/ECAEF Conference (scheduled March 30, 2021) to December, 2021. We apologize for the inconvenience and will keep you posted.

Principality of Monaco:

V. International
CEPROM/ECAEF Conference

(In honor of Jacques Rueff, 1896-1978)

Topic:

“Is the Public Interest
really in the public’s interest?”

– with Lessons from the Past Pandemic –

The conference is developed and organized by ECAEF (European Center of Austrian Economics Foundation, Liechtenstein). It is hosted by CEPROM (Center of Economic Research for Monaco). By invitation only. Stay tuned for updates regarding the Conference Program.

Designed and Arranged by ECAEF – European Center of Austrian Economics Foundation (LI)

Locally hosted and organized by CEPROM- Center of Economic Research for Monaco (MC)

By invitation only

Academic Director: Kurt R. Leube (ECAEF; krleube@gmail.com)
Administrative Director: Emmanuel Falco (CEPROM; cecile@mlp.mc)
Media Contacts: nsaussier@palais.mc
Conference Date: December 2021 (exact Date to be announced)
Location: Musee Oceanographique de Monaco, Principality of Monaco
Conference Languages: English/French; simultaneous translation

Conference Program

09:00-9:30 Registration
09:30-9:45 Welcome: H.S.H. Prince Albert II and H.S.H. Prince Michael of Liechtenstein

9:45-12:00
Session I: The Public Interest: On its Substance as a Governmental Concept
09:45-10:00 Chair: Peter A. Fischer (CH)
10:00-10:30 Limits and Necessities of Regulation: Public Interest Lessons from the Past Pandemic – Henry I. Miller (USA)
10:30-10:45 Discussion
10:45-11:15 Coffee break for all participants
11:15-11:45 A false Dichotomy? The Public Interest and Inequality – Axel Kaiser (CL)
11:45-12:00 Discussion

12:00-13:45 Break

13:45-15:30
Session II: The Public Interest: On its Meaning as an Economic Policy Function
13:45-14:00 Chair: Carlos A. Gebauer (D)
14:00-14:30 Bliss Point Economics: On the Root of Public Interest Evil – Terry L. Anderson (USA)
14:30-14:45 Discussion
14:45-15:15 In the Name of the Public Interest? Government Debts and Reckless Monetary Policies – Lars P. Feld (D)
15:15-15:30 Discussion
15:30-16:00 Coffee break for all participants

16:00-18:00
Session III: The Public Interest: As a Guide to and a Fact-Check on Public Policy Measures
16:00-16:15 Chair: Peter A. Fischer (CH)
16:15-16:45 Conjectures, Refutations or Fakes? Only an Unbiased Science is in the Public’s Interest – Josef H. Reichholf (D)
16:45-17:00 Discussion
17:00-17:30 On the Zeitgeist and the Public Interest – Johan Norberg (S)
17:30-17:45 Discussion
17:45-18:00 Closing Remarks: Kurt R. Leube (A/USA)
18:00 End of Conference

Please note: Some paper titles might be edited or changed.

The economic cost of lockdowns – a closer look

a GIS Statement by Henrique Schneider

Every lockdown had economic costs. It seems duration had less of an effect than did more extreme measures (source: Getty Images)

As many countries face their second or even third lockdowns (Germany, Austria, Israel), others (Switzerland, the United States) have done what they can to escape such repetitions. Much of the discussion about this drastic move involves its costs.

As Covid-19 became pandemic in early 2020, most countries opted for a similar set of measures. They implemented social distancing, slowed down the traffic of people in public spaces and eventually put a stop to large amounts of economic activity. While countries structured lockdowns in different ways, they all generally closed some parts of their economies and limited social activities for lengthy periods.

In some countries, for example in China or Italy, the lockdown entailed physically closing points of entrance and exit to certain regions. In others, like France and parts of the United Kingdom, the lockdown included curfews. In countries such as Germany, Austria or Switzerland, lockdowns meant closing all restaurants, entertainment locations and nonessential shops. These measures led to a considerable slowdown or even a halt in communal practices, be they social or commercial.

Countries have also used their lockdowns in different ways due to varying public discussions about their efficacy. Some question if lockdowns mitigate the pandemic or are compatible with human rights. In the economic realm, the main debate is over how much they cost.

Direct costs

Before continuing, it is worth adding a general methodological disclaimer. Here, we will address only the lockdown’s economic cost in the first half of 2020 since the best research and comparable data regards that time frame. Also, this is an exercise in approximation, as is all empirical economics. There are many more factors at play than can be covered by any model. The conclusions of these approximations are to be taken with a grain of salt.

There are two ways to assess the economic costs of the lockdown. One is calculating the fiscal (and possibly monetary) expenditures that governments (and central banks) use to soften the economic impact. Typically, this involves direct aid to affected firms, subsidized credit lines and labor market stabilizers like compensating workers for lost hours.

These costs are cash outflows that can be determined using standard economic accounting tools. This way, we find that in the European Union, for example, the lockdowns have cost around 540 billion euros. This is the sum of the programs set in motion via the European Stabilization Mechanism, the European Investment Bank and the European Commission …

Continue reading ->
The economic cost of lockdowns


*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.

Vernon Smith Prize 2020 – winners announcement

The winners of the 13th International Vernon Smith Prize are:

1st Prize:
Ethan Yang (USA)


2nd Prize:
Christoph Lesniewski (Poland)


3rd Prize:
Dikshya Mahat (Nepal) and Jorge Jraissati (USA)
ex aequo


The prizes have been awarded on the basis of originality, grasp of subject, and the logical consistence of the argument. An international jury did judge the essays, and the winners were initially invited to present their papers at a special event in Vaduz, the Principality of Liechtenstein. Due to Covid-19 restrictions, this event will have to be held virtually through Online Conference Call on 8 Feb 2021.

The 2020 topic was:
‘Is the Public Interest really in the public’s interest?’

About 85 years ago, F. A. von Hayek already has warned us that even “if people agree about the desirability of planning in general, their agreements about the ends which planning is to serve will in the first instance necessarily be confined to some general formula like ‘social welfare’, the ‘general interest’, the ‘common good’, ‘greater equality’ or ‘justice’ etc. ”

Agreement on such a general formula is however, not sufficient to determine a concrete plan, even if we take all the technical means as given”. Although, these ambiguous, emotionally charged and politically domineering slogans still arouse the fantasy of intellectuals and politicians alike, a conceptual definition of these ‘multi-purpose’ terms appears to be of no concern for them. It is a regrettable fact that especially economics, far more than the other social sciences, is obsessed with the reiteration of popular, yet meaningless buzz words.

The following prize money will be given to winners:

1st Prize: €4,000  |  2nd Prize: €3,000  |  3rd Prize: €2,000


The International Vernon Smith Prize for the advancement of Austrian Economics is an annual essay competition sponsored and organized by ECAEF – European Center of Austrian Economics Foundation, Vaduz (Principality of Liechtenstein).