CULTURE Is Capitalism Really Cracking Up Nation-States?

By Lee Harris

Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy

By Quinn Slobodian Metropolitan

The micro-monarchy of Liechtenstein, jammed between Switzerland and Austria, might seem an unlikely archetype for 21stcentury political organization. At roughly the size of Brooklyn, the territory that is now Liechtenstein was purchased by a member of the Viennese court in the 1700s, before becoming part of the Hapsburg Empire.

But, as Wellesley historian Quinn Slobodian shows in his highly anticipated new book, Crack-Up Capitalism , Liechtenstein, which technically became a sovereign state in 1806, would not remain a relic of feudal Europe. Over the next two centuries, the territory learned to innovate its way out of crisis. It became “something that did not yet properly have a name: a tax haven.”

Liechtenstein became known as “the capital of capital in flight,” playing host to the corporate offices of IG Farben and Standard Oil and encouraging the super-rich to purchase citizenship. And it did not stop at being a tax shelter. It plowed revenue into intensive factory output, relying on a migrant workforce to become, by the 1980s, one of the most industrialized countries in the world.

Liechtenstein’s innovations in political economy continued in 2009, when Prince Hans-Adam II suggested that citizens be considered “the shareholders of the state.” The modern nation, the prince announced, had been “reduced to a service company, which has to offer its customers a more or less decent service for a certain price.”