Category Archives: GIS Statements

GIS Statements

Freedom and innovation are keys to Europe’s success

GIS Statement* by Prince Michael of Liechtenstein

Unleashing free-market force and entrepreneurship is the only way forward for Europe. Instead of mimicking China’s central planning, the West needs to return to the values that initially made it powerful and prosperous: innovation, freedom and entrepreneurship. Only then will it revive its mismanaged economies and boost its global relevance.

GIS statement Prince Michael of Liechtenstein
Returning to liberal state principles – in the classic sense – is the best strategy for Europe as it gropes for ways to restore its economic vigor and face with confidence the looming Asian power (source: GIS)

Technology is neither good nor bad. It can be used in ways either beneficial or detrimental to society. The innovation process, however, creates fears as many do not sufficiently understand the new products and systems and the advantages they bring. People fear that efficiency- and productivity-boosting technologies will take away their jobs and that no alternative employment will be available. Such anxieties ran very high after electric power, the steam engine and motor cars first appeared. Yet these industrial revolutions had the opposite effect: the unleashing of new forms of energy and machine power ramped up productivity, income and overall prosperity grew. New kinds of economic demand led to new jobs and professions – often in sectors that did not exist before.

Dramatic improvement

Today, a vast majority of the developed world’s population can afford products and services that in the past were reserved only for the superrich. People from all walks of life enjoy manufactured goods that not so long ago did not even exist – be they dishwashers or coffee machines or home movies. The nutritional quality, variety and affordability of foodstuffs have improved dramatically. Medical services have been upgraded far beyond what was even imaginable two generations ago.

All this material wealth was increasing in Europe and the United States – until recently. This growth was driven by free markets, which allowed room for competition and forced businesses to innovate and improve efficiency. The free Western societies rewarded creativity, invention and hard work. The notion of personal responsibility sustained an effective social ecosystem.
In the 19th century and early 20th century, manual work became assisted (and partially substituted) by technical means. Later in the 19th century, communication technologies started with the telegraph and telephone. Broadcasting began soon after.
From the 1960s onward, information technology began to develop at an exponential speed. This brought on radical efficiency increases in the white-collar sector of the economy, especially in research and development.

New dawn

We are now witnessing the dawn of another revolutionary technology of the information era: artificial intelligence and quantum computing. Both will significantly disrupt the way humans work – and, at the same time, open up tremendous new opportunities …

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Freedom and innovation are keys to Europe’s success


*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.

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 …

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*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.

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 …

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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.

The loss of constitutional protection

GIS statement by Prince Michael of Liechtenstein

In an atmosphere of panic over the Covid-19 crisis, European governments are enacting more and more open-ended measures that are often of dubious utility for containing the pandemic but severely restrict personal freedom, privacy and entrepreneurship. Alarmingly, citizens’ rights enshrined in constitutions are being set aside.

The governments’ approach toward citizens has been shockingly paternalistic; they treat the population like misbehaving children (source: GIS)

As the Covid-19 pandemic spread across the globe, harsh measures were gradually introduced. Governments have begun to limit individual rights and privacy. The media and politicians, as well as some virologists and medical professionals, have stirred up panic. Those who question the necessity of taking drastic steps are intolerantly marginalized and branded as either idiots or radicals.

The success of Western democracies is based on the guarantee of freedom and human rights. The United States Declaration of Independence and constitution provide citizens with unalienable rights that include liberty and the pursuit of happiness (which is not guaranteed, as it is defined individually), as well as privacy and property rights. The constitution’s objective was to protect the individual from the state. Tolerance and freedom of opinion were also protected.

Stealing freedoms

Property rights have since become restricted because of ever-expanding regulations and excessive taxation. The high tax burden is not solely a result of the governments’ tendency to overspend. Leftist ideologies and populist slogans demanding “more equality” also play a role in raising taxes. 

Waves of regulations are steadily narrowing the boundaries of individual activity and increasing the state’s power over citizens. Unfortunately, this is a global phenomenon.

In 1998, the so-called great eavesdropping law (grosse Lauschangriff) was passed in Germany. It allowed security agencies to plant surveillance devices in suspects’ homes without approval from a judge. The measure was highly contested at the time. In 2014, the European Parliament enacted a directive requiring telecommunication and internet providers to retain all communication data for two years and make it available to law enforcement agencies upon request. Every EU citizen is now treated as a suspect. The Court of Justice of the European Union considered the directive to be “a wide-ranging and particularly serious interference with the fundamental rights to the respect for private life and to the protection of personal data, without that interference being limited to what is strictly necessary.” The EU Parliament was supposed to amend the directive but has failed to do so, and it remains in force. 

In many cases, the measures enacted to contain Covid-19 encroach upon personal rights. Such extraordinary circumstances can require restrictions, but they should have a clear expiry date. Many of the present guidelines appear unjustified. And there has been no reliance on individual responsibility. The governments’ approach toward citizens has been shockingly paternalistic; they treat the population like misbehaving children …

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The loss of constitutional protection


*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.

In a panicked world, critical thinking is essential

GIS* Statement by Prince Michael of Liechtenstein

The world is focused on the pandemic and the U.S. elections, and the dire scenarios many say they will bring. While both are important, it is crucial to understand that reacting with alarm will only lead to bad outcomes. Not considering solutions in a levelheaded manner puts individual freedoms at risk.

As they try to protect themselves from the Covid-19 pandemic, societies may be running toward an even bigger danger (source: GIS)

The Covid-19 pandemic and the presidential election in the United States have completely absorbed the attention of the Western world. The panic surrounding the coronavirus is blinding societies to other critical issues and leads them to adopt measures that limit personal freedom. In the U.S. election campaign, each side is predicting disaster if the other side wins. Trust in the checks and balances that the U.S. Constitution provides is faltering.

Unfortunately, dogmatic thinking dominates both the media and politics. Certain ideas have been declared “alternativlos,” to use German Chancellor Angela Merkel’s preferred mantra – they must be adopted by all, because there is no alternative.

At times like these,
some independent thinking is necessary.

There are always alternatives. The danger of ‘groupthink’ Many worry that Covid-19 – to paraphrase Klaus Schwab, the founder of the World Economic Forum – is humankind’s greatest catastrophe since World War II. Societies are now willing to tolerate any means to contain the disease, regardless of whether it violates constitutions, laws or personal freedoms …

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In a panicked world, critical thinking is essential


*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.