Prosperity

Good Morning Ladies and Gentlemen

«Prosperity is a state of mind. It is your expectation. Expect to expand your wealth, your wealth of knowledge, your relationships, your income and your wisdom.»

Anonymous

What is the best environment for people to prosper? The other day, I was thinking about China and Russia, the U.S. and Europe, and I asked myself in what sort of environment and as a young person I would try to find my way to prosperity today.

Why?

You may ask why I was thinking about that. The thing is that I was asked to write an article about the advantages of Liechtenstein as a centre for financial services and I was thinking about the difference between Liechtenstein and other places. Let me share some of my thoughts.

My basic belief

Any sensible national economy moves in the triad of freedom, peace and prosperity. Freedom and prosperity are closely linked. Freedom in a constitutional state and as a private law society of potential and actual owners is a society that supports its citizens in creating and maintaining prosperity. A society of free people will be a prosperous society in the long run. To me, prosperity means access to material goods and services and human freedom. It includes well-being, peace, security, independence and the chance to participate in society.

Liechtenstein

The Principality of Liechtenstein has created and offered almost ideal conditions to prosper for its population over the past decades. Freedom, peace and prosperity are a cornerstone of these conditions.

Tax and prosperity

The spiritual fathers of modern Liechtenstein realised early that no social safety net could be built without monetary means and that any state has such monetary means only when its economy is functioning. They installed incentives to maintain a flourishing economy, such as competitive tax laws or allowing its communities to secede, thus granting them ultimate self-determination under the country’s constitution. The other day, I read that “no nation ever taxed itself into prosperity.” I could not agree more!

Too much politics

Some short-term political trends may seem very tempting, as they promise votes at least in the short-term, but in the longer term, as can be seen in various examples of Western economies, they usually lead to a reduction in competitiveness and, thus as a result, less prosperity for the country’s population. Looking at long-term cross-border movements of human- and financial capital offers a good insight into any economy as both human- and financial capital go where it pays to invest labour and/or capital. For decades, the tiny principality has attracted human and financial capital and offered by far more jobs than it has inhabitants. Liechtenstein has a healthy social market economy, no government debt, follows a strict budget discipline, and is open for business but not at any price.

Copy paste

Why other countries are not taking the political and economic basics of Liechtenstein, and trying to create a prosperous environment along those is a mystery to me. Obviously, we are talking about a small country with a small population but 120 years ago that population was among the less fortunate in all  Europe.

Your point of view

Ladies and Gentlemen, please share your opinion with me, but please remember (instead of hitting the reply button) to send your messages to: smk@incrementum.li.

Many thanks, indeed!

I wish you an excellent start to the day and a wonderful weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li