ON THE IDEAL NATION
OBSERVATIONS ON NATION-BUILDING
PREPARED BY THE CORUM RESEARCH GROUP(*)
UNDER THE DIRECTION OF J.A.KELLER
ON THE OCCASION OF
THE EUROPEAN CONFEDERATION CONFERENCE
CONVENED BY PRESIDENTS MITTERRAND AND
HELD IN PRAGUE, JUNE 12-14, 1991
[final report - in French - at: www.solami.com/a21.htm;
see also: www.solami.com/a2.htm]
June 11, 1991
CENTER FOR FREE ZONES
AND PANEUROPEAN STUDIES
POB 2580, 1211 Geneva 2
(fax: 4122-7400362 email@example.com)
(available also in word format at: http://www.solami.com/nations.doc)
This paper was inspired by roots which were to appear, and come into focus,
only several years later - i.e. in the 1997 essay The
Dawn of Monotheism Revisited (www.solami.com/a1.htm) and Franz
Blankart's magistral 2002 good-by
lecture Europa Helvetica
(www.solami.com/BLANKART.htm). It was prepared in the wake of the
fall of the Berlin Wall
(www.solami.com/Berlinwall.htm), i.e. at a time when very few anticipated
fewer still envisioning its vast social, economic and political ramifications
(www.solami.com/selex.htm). It reflects a joint - and essentially
on-going - effort by numerous contributors to the CORUM
Research Group, directed by J.A.Keller.
Without necessarily sharing the views expressed, had then contributed in
various ways: A.Albonetti, P.Dimier, B.Elbert, A.Fleury, C.Freitas,
P.Martin, E.Querio, F.Ruiz, H.D.Schultz, W.Simon, M.Soleiman, F.Sturm,
P.Tschopp, a.o. The editor, of course, is alone responsible for eventual
errors and omissions. He also wishes to express his gratitude notably
for the librarian and data processing assistance kindly provided by Mr.Michael
Stopford (Executive Assistant to the Director General of the United Nations
Office in Geneva), and by Mr.Pierre Pelou (Director of the UN Library in
Geneva) and his staff, notably Irina Gerassimova, M. and N.Wasser
CONTENTS (the pagination is that of the word format at: http://www.solami.com/nations.doc)
do we come from, where do we stand, and where do we go?
Yugoslavia as a revealing case 3
Is democracy yet perhaps a too demanding form of government? 6
memorable quotes from
Centesimus Annus, 1991 Encyclical by Pope John Paul II 11
do we get where?
"Train and educate man!" Shift powers back to the Citizens! 14
Stop criminalizing cash, decriminalize the market, and guarantee
the right to ANONYMOUS, UNDISCLOSED private property! 14
Direct income tax? Yes, but only a negative income tax! 18
Further qualitative factors affecting a nation's ideal size and structures 19
The Baltic, Kurdish, Kurile, Palestinian, Philippine (US Bases)
and other lose ends of history in light of principles associated
with individual as well as with national landholdings 21
D 700 years-old Switzerland: an example worth looking at? 23
Pacta sunt servanda? Not invented here!
We have Lex Americana, and Pax Americana is around the corner! 26
The legal hierarchy, in many places, has evolved aberrantly 30
Russian Commonwealth as a leader of Europe's regeneration?
A look at some roots 31
Which USSR Republic wants what? 32
In the divorce: Georgia versus USSR 35
The Soviet Union at present 37
Some observations on related human motivations 45
Some paths to implement the people's real will 47
An opportunity for a Soviet European Initiative 50
lessons from the past for Europe's future 53
Forgotten treaties 53
Citizens' Europe 54
Customs-free Geneva - Europe's D.C. of the future? 55
list: key ideas and concrete practical measures for statesmen and
providing for the reappearance of the Citizen-entrepreneurs, the reanimation of the
homo oeconomicus as society's and the market's indispensable central driving force 56
A Letter to President Vaclav Havel
Points essentiels du PLAN BRIAND
The plain-levelling European Community is not the only model for
The United States of America is a 200 years success story in free enterprise.
Yet, there is no unified American market (even trucks have to obey state laws).
And like in its days of the Habsburg Empire, Switzerland, on a smaller scale,
is not a bad case either for showing how diversity, how a decentralized state and economy
can be good for all, business and Citizens.
Aristide Briand and Gustave Stresemann have understood that well
and tried to apply these lessons to all of Europe.
Maybe Europe's architects can draw valid lessons from those visionary plans.
Injustice, rebellion and blood mostly preceded the transformation of states,
and insecurity, self-doubts and errors always accompanied the birth of nations.
A community's social and ecological fabric reflects and affects a nation's soul.
It is the breeding ground and support for individual happiness and frustration,
as it is the result of the community's individual and collective aspirations,
satisfaction, dispair and actions and ... inactions.
No community, be it local, national or supranational, can escape to be affected
by these and other constantly varying and fully interplaying factors.
Only selfish, discredited or mad leaders, and fools risk certain failure
by trying to suppress these factors or to unduly delay their consequences.
Helping to better understand these factors, helping the Citizens and their representatives
to recognize the direction as well as the root problems of their own community's evolution,
and encouraging them to actively find out about
and, eventually, to seek to realize their own ideal size and direction:
that's what this paper is all about.
Naturally, the transformation of a nation that has lived its time is always an opportunity. Moreover, Victor Hugo's reminder is still valid: "No army in the world can withstand the strength of an idea whose time has come". But it might also be helpful to bear in mind the less noticed side of that same coin: "No force in the world is strong enough to push through an idea whose time has not come". In any case - be it that the soul of the Citizens and the body politic, that the nation and its environment need healing - clear-sighted, courageous and competent use of the available cards is indispensable. And while able manoeuvering may spare the people avoidable hardship by better preparing it for the inevitable, delays-by-suppression invite needless calamities - just like some medicine is worse than the illness it intends to cure, and many measures taken to fight ecological desasters do more harm than good.
Coming to think of it, a nation's evolution and devolution, its constitution, dissolution, reconstitution and fusion, essentially are no less natural processes than the seasonal growth, the full projection, the crumbling and the eventual disintegration of flowers, trees, leaves and other appearances of nature. And like a tree provides the supporting structure for its fruits and leaves (and not the other way around) a nation derives its legitimacy essentially from its (presumed-to-be more effective) protection and support functions for its Citizens. The British philosopher Hobbes might agree - albeit for other reasons and with some conclusions apparently at odds with ours.
Indeed, this state legitimacy cannot be accepted as boundless. For there is also another side to that other coin, ie. the state's obligation to protect its subjects against any foreign aggression and hassling. Hobbes, naturally, did not anticipate today's economic, fiscal and administrative aggressions by foreign powers against individuals. Nevertheless, his writings suggest that he would have almost certainly relentlessly condemned the collusion of national authorities with foreign powers against one's own Citizens and residents. Yet, that is precisely what is going to happen - on an unprecedented scale - when the abolition of inter-European border controls will be compensated with increased "mutual administrative assistance". Instead of saving taxpayer money, the planned implementation of the Schengen and other - mostly secret - agreements may turn out-of-job customs and other officials into no less effective operators of invisible supercomputer-assisted data and fiscal curtains.
We are already far down the road to an Orwellian cashless society with its ill-considered implicit cash criminalization. Contrary official assurances notwithstanding, the envisaged comprehensive electronic surveillance notably of money transfers within and beyond national borders will undoubtedly surpass even the most zealous customs apparatus when it comes to effectively curtail the free movement of persons and capital - under fiscal and other pretexts. To illustrate:
a) the OECD and the Council of Europe - of all liberty organizations
- played midwife to INTERFIPOL, the nascent international fiscal police
[now FATF] (see footnotes 14, 17,
b) evidence suggests that Swiss officials routinely and dutifully have advised their US colleagues on such matters as how to promptly break the Swiss bank secrecy - and get away with it (see p.28).
Thus, as Locke and any other human rights supporter worth this description would call for, a state's legitimacy - in law and in fact, and more than ever - must be subordinated to the legitimate aspirations of each Citizen to privacy, the pursuit of happiness and to economic, cultural and political freedom. This, of course, is not to belittle the importance of competent executives and the dependence on them by modern societies. In fact, the competence of the governors is seen as a key factor determining a nation's ideal size and structures, its viability and its ultimate fate.
For many outsiders, Switzerland comes close to being ideal both size and organization-wise. The Wall Street Journal (June 1) has just added another, the 700-year anniversary hymn on Switzerland - as if our Swiss gnomes had found the stone of wisdom. Being opposite to the European Community's outlook and structure, and serving, rather than plain-levelling of its Citizens and communities, Switzerland, the Journal advises, should maintain and continue to develop its own standards and not bother with the European Community - except to consider EC members' eventual applications to join it.
For awake insiders though, that view of Heidiland needs correction. Some foreign journalists, notably of the Wall Street Journal, have long ago become alert to and outspoken about significant dangers eroding Switzerland's foundations and prospects. Clearly, that has yet to make a dent on Swiss leaders. In fact, those critics have all but lead to increased Swiss public awareness - thanks to an army of domesticated myopic, self-contented and/or self-censoring Swiss journalists. And that does not bode well if one cares to look at the prospects of another example of a small but disoriented state: Kuwait.
Being dynamic, the factor competence offers reason for hope and despair - like other home-made growth, stability and disintegration factors. Its importance rests in the fact that it may, essentially, compensate other weighty mostly dynamic factors which, basically, are outside a nation's control or influence.
Political borders mostly reflect static factors, such as geography (mountains, rivers), natural resources (soil fertility, water, percipitation, oil), climate, etc. Yet, as living testimony to the endless power shifts in the history of mankind, they continue to be subject to very strong dynamic factors, e.g. the economic and political fortunes and ambitions of a people and its leaders, their education, ethnic roots, religion, nationalities and laws, ecological desasters, and resultant testings of tolerance levels, tensions and conflicts within their society or with neighbors.
What we now see unfolding in and around the Soviet Union and the Mideast (e.g. concerning Kurds, Palestinians) thus should come to nobody's surprise. Moreover and inescapably, other areas and continents will be affected. Yet, it need not frighten us either, provided those concerned will recognize and seek to understand the underlying forces and the opportunities they offer. And - admittedly a big if - provided they'll manage to adequately channel these forces and, in the event, to properly take advantage of these opportunities.
What is called for, therefore, is a more flexible mindset, more imagination and courage in seeking to accomodate the very real and therefore not really and for long suppressable factors. And a prepardness to consider an eventual redrawing of political borders above all in terms of possible national quality gains - rather than a quantitative loss or even a national catastrophe. For they may, if not alone, also better reflect, and in a timely way accomodate, the dynamics of the people's legitimate economic, political and cultural aspirations and evolution.
Here are some thoughts on these forces and on their interplay. A
stock-taking on what a viable nation seems to be made of. And some
reflections on possible paths to get there - or to get lost.
A WHERE DO WE COME FROM, WHERE DO WE STAND, AND WHERE DO WE GO?
Yugoslavia as a revealing case
"At a minimum," Jim Hoagland recently wrote (1), Iraq, Yugoslavia, and the Soviet Union (and he might have added: Quebec, Corsica, Catalonia, Flanders, Scotland, South Tyrol and yes, even Geneva) are synonyms for either open or latent nationality crises which "force the world to rethink the automatic allegiance to 'territorial integrity' that national governments have pledged since World War II as a way to avoid wars and avoid responsibility for each other's problems." Jonathan Eyal (2) followed up with a lucid demonstration on how
The pressure the EC brought to bear to change all that to plain-levelled European standards has not only completely failed its objective. The Swiss voters, on June 2, 1991, rejected the VAT (value-added-tax) system used in the EC. This vote is widely seen as a popular rejection of EC pressures - and a resounding no vote to Swiss membership in the present EC architecture.
Of course, this vox populi vote of no confidence is not likely to make a dent at the EC (just as, a few years ago, the world's only - and negative - popular vote on membership in the political UN did not mean its end either). Yet, Europe could still benefit from this vote in that it might contribute to the joint development of more appropriate forms of cooperation. In its June 4 editorial, the Wall Street Journal Europe, for one, thus alerted "Europeanists" to "suggestions that membership in their club is losing its appeal." (emphasis added)
Moreover, if the ever more often reactive than active, the more self-serving than serving chancelleries of Western Europe, under any leadership (5), succeeded to stampede the European Community (EC) into some sort of "life-preserving" action or intervention in Yugoslavia's actual overdue account-taking and account-settling, that might turn out to be a not-so-enchanting repeat of history - it might benefit less Yugoslavia's presently constituent republics and their people than it would strengthen the bureaucrats and their institutions in Brussels and elsewhere. Given the historically inescapable fate of every and all repressive structures (with the Soviet Union merely a very big and actual case) this - if one really cared - would not exactly bode well for the present, regretfully plain-levelling EC either.
But the problem of national awakening, of people's all-too-long suppressed legitimate aspirations, goes much deeper. It leads straight to the question of the legitimacy of our leaders, of their decision-making-by-non-opposition-due-to-saturation, and of the resultant "decisions". This disquieting question applies not only to the new and the yet-to-be-born democracies. Even in a country like Switzerland, where voters are invited to cast their ballots several times every year on numerous communal, cantonal and national questions, the only formal sovereign, i.e. the Citizen, increasingly, and visibly so, throws in the towel. In the face of his creeping emasculation by growing regulations and criminalizations of essential market functions (see e.g. footnote 14), by a judicial system tending to protect the institutions rather than the individual, and by thus unwittingly favored private and public bureaucracies everywhere, he sees himself more and more in a nation of sheep. The ARIGIN syndrom, i.e. official ARrogance, IGnorance and INcompetence, increasingly dominates the political and the private economic landscape.
What's more, ours is a time of manifest information saturation. Under the pressure of the information flood - which, moreover, is vastly accentuated by the ever-more proliferating computers - both the ordinary Citizen and the decision-maker in politics and the economy increasingly takes to evasive, defensive measures. More and more, our leaders feel compelled to submit to the discipline of requiring one-page memos, with most everything else either left unattended or to be resolved by the geriatric method, i.e. trusting that the problem, like an "unproductive" or increasingly dependent senior Citizen, will simply fade away, e.g. by a natural death, or resolve itself otherwise.
Increasingly rare are those who still find the time to look for and apply wisdom developed in sometimes lengthy books, such as Paul Kennedy's The Rise and Fall of Great Powers. As a result, even the following truisms directed at our leaders (6) increasingly seem to be lost sight of:
Is democracy yet perhaps a too demanding form of government?(7)
The formula of free markets as the linchpins of free societies by now is almost universally recognized and strived at. Instructive testimony to that effect can be found not only in developments in the formerly "socialist" countries, but also in the Pope's latest Encyclical (extracts seen to be particularly noteworthy and helpful are reproduced below). The question then arises as to which structures of society might best be suited to given circumstances in order to effectuate the desired changes. And which ones might best assure the achievement and maintenance of a maximum of individual freedom contributing to the Citizen's and his community's overall welfare. Particularly in countries whose actual social, economic and political conditions reflect decades of manifest mismanagement of human and natural resources. Where high infant mortality rates testify to ecological desasters and constitute telltale signs of a society's inevitable collapse (8). Where many Citizens have effectively lost the feeling for many immaterial values and material goods. And where the soul of an entire people, its body politic is gravely ill, profoundly disturbed and in urgent need of healing.
Under such conditions, which formula suits best, that of "Pinochet" (with the military in command), of "Ozal" (with the military at bay), or which other free market formula, e.g. with the military mostly heading the nation's class rooms? (9) Could a monarchist presidency or a constitutionally constrained parliamentary monarchy provide the glue for getting basically not incompatible ethnic groups to effectively focus their energies on developing their own and their overall national welfare? And, in short, what are the essential requirements for a democracy to catch roots and to work?
Or, as we asked above, is democracy yet perhaps a too demanding form of government for very many freedom-aspiring people in this world? On the bottomline of many cases, democracy may appear as the most desirable, the most viable political framework for building a modern society. Yet, has it really and sufficiently been understood by all those who whole-heartedly favor it, that this most complex and exacting form of government is totally incompatible with the up-side-down Citizen-state relationship we can see everywhere around us?
With this last question in most cases answered in the negative, we have thus defined what essentially we have to aim for. Namely first, the resuscitation of the Citizen, the responsible, risk-taking and enterprising homo oeconomicus so that he may again take charge as the only true sovereign in his country. Thus effectively taking back the priority, if not the leadership role which is incumbent solely on him and which, by his default and for too long, he has left to the abounding public "servants" to which he has become used to submit in his daily chores.
All this requires a corresponding educational effort. It is to begin with one's self and in one's own family, e.g. learning to better respect and communicate with each other and nature, to receive and radiate human warmth, to respect eternal values and principles, to receive and transfer knowledge, to seek answers to one's problem within oneself, the family, and - only secondarily - on the community or "higher" levels which, in fact should constitute those levels of a society which are second to that of the Citizen.
It requires adapting the educational system to the needs of a genuinely free, market-oriented society. Which calls not only for trade schools providing specialized professional training. But it also involves the retransformation of the universities which in many countries now work best as vehicles for large-scale youth unemployment, as mainly self-serving incest vehicles producing mostly superficialists and specialists in passing examinations, rather than Citizens capable and willing to ask the right questions at the right place and themselves mastering the challenges and complexities of modern society. It needs an alertness to Orwellian realities and dangers (10). And it requires self-assuming Citizens to turn to defensive measures, such as overloading surveillance systems, and turning the phone system into an anti-Orwellian information and tax-free nation-wide barter vehicle (eg. as France's Minitel; see footnote 63).
Most importantly, it requires effective incentives for mobility of the mind and the body in order to reach and go beyond one's own cultural horizon. Strengthening the links between Europe's constituant peoples on the level where it counts most, i.e. that of its Citizens, might be achieved by deliberately favoring the acquisition of a second nationality, thus introducing a mental openness and concern for a second country. An Atlanticpass, a passport document available to American, Canadian and European Citizens could be another effective link booster. It might be issued on the basis of existing - but mostly forgotten or disregarded - bilateral friendship, commerce and establishment treaties (11).
Moreover, a genuine catalyst for building a viable, confederated Europe might be created in the form of a general Europass. Issued to all Citizens of member countries not only of the European Community but of the much wider Council of Europe(12), it could re-install the crucial Europe-wide freedom of movement, establishment and exercise of a profession as basic liberties. As such it would not be limited to an exclusive rich man's club. Instead it would encompass the enterprising and thus mutually most beneficial Citizens (13) of the European Free Trade Association (EFTA) and of all those countries who effectively abide by the Human Rights Convention of the Council of Europe.
And second, political and fiscal conditions must provide the fertile terrain for such grown-up genuine Citizens to do their thing, to prosper and to find happiness by and for themselves, their family and the community they discovered to fit them best.
Incidently, the LAFFER supply-side curve on tax loads versus tax revenues, on closer analysis and somewhat surprisingly, appears to be applicable as well even to such basic institutions as democracy. For the more a society deprives its individual members of the possibility to practice fundamental rights, freedoms and responsibilities - under whatever ill-considered pretext, such as fighting tax avoidance (14) - the less they seem inclined, for themselves, for their families and for society as a whole, to develop and put to work their inherent potentials.
To be sure, there are ever more numerous and sophisticated social constraints, namely laws, regulations and, more and more, purportedly innocent and simple "guidelines" (the stuff the EC bureaucracy produces in avalanches). Actually, the more innocent and sensible they are made to look, the more they are likely to be wild-grown outgrowths of - always primarily self-serving - bureaucracies, with ever less attempts to provide even an appearance of constitutional legality and effective legislative control. And the more the regulations are clumsy, crushingly voluminous texts, the more likely they have emerged from the same bureaucracies. Make no mistake, even if they bear the formal seal, the imprimatur of constitutional lawmaking, they have little more than that. This situation will continue as long as lawmakers have not managed to escape the effects of the information saturation which makes them dependent on these bureaucracies.
The results of all this have been foreseeable. The Citizen's saturation with ever denser, Citizen-emasculating and in the end self-defeating laws, regulations and "guidelines" increasingly constitutes a program for social and economic decline and even failure. Thereby the creators and erstwhile beneficiaries of most regulations, i.e. the public "servants", are not spared (contrary to most of their comrades in the West, even the communists in the East have begun to learn that lesson - some the hard way, others merely faster than expected (15)).
Apparently, this "social LAFFER curve" is beginning to be recognized and taken seriously elswhere as what might thus be called the "GORBACHEV curve", the "YELTSIN curve" or, perhaps most appropriately, the "SHEVARDNADZE curve". And while many of our Western leaders got elected on the promise "to get the Government off the back of the people", indications prevail that since they took office the grip of the bureaucracy they inherited has not losened decisively. In fact, in many areas it even continues to grow virtually unchecked. And in some cases it has reached proportions which signal dismaying prospects for some Western democracies - the purported banner-bearers of individual freedom and free markets.
These phenomena, of course, are nothing new either. Moses led his people into the desert with 10 commandments; and by the time they returned to their promised land they had some 600 laws on the books. Cicero raised his voice against such legal activism. And in the early years of the United States' history, some congressmen already expressed grave concern that the production rate of 50 new laws was surpassed in the preceding year. A revealing decisions on where, in the event, Europe is headed was furnished by the EC apparatus: in order to assure fair trade in Europe's future unitary market, the EC recently stepped in to keep Spain from favoring computer key boards adapted to the peculiarities of its rich language (e.g. ~) which, in effect forces Spain to simplify and change its language (16).
Even with the planned economies essentually gone or on the way out, all this may not really change to the better and by itself. In some cases "inaction" may be as valid as "action" but our upbringing still hinders us from recognizing this to be true not only on ecological matters and in agriculture (farmers are already paid for not working their land), but in politics as well. Citizens will have to get used to the idea to elect (respectively to vote out of office) representatives LESS on their contributions to new laws, and MORE on their successes, or failures, to prevent them, or to simplify or even abolish unsuited laws.
Under such generally disquieting circumstances we may find reason to look beyond the surface of things. To seek to better understand the underlying currents of events surrounding us now and in the future. And to recognize the developments unfolding in the formerly "socialist" countries also as mirrors of what has and is still going fundamentally wrong in our own Western societies. Moreover, we have every reason and interest to treat our Eastern brethren with the dignity they deserve. To accept them as co-responsibles for our mutual cultural heritage. And to demonstrate our solidarity with them not only in terms which are appropriate for meeting their urgent material and immaterial needs, but also in ways and areas recognizing their important role as capable contributors and full partners in the reconstruction of our common European environment.
Such considerations emerge from less evident, but by no means less important questions concerning
- the existence of man;And the pursuit of these questions and the development of answers to them may be found to be enlightening and rewarding sources of insights and information - also on that very question of the ideal nation.
- man's cultural, including man's religious heritage of which he is the beneficiery and the guardian; and
- the role of man, and his responsibilities and the relations between him, society and the state whose passport he bears.
Centesimus Annus, the Encyclical Pope John Paul II recently gave
us, has been found to be in this sense an enormously enriching document
providing morally and intellectually solid guidance in our time of turmoil
and break-up of outdated structures. It seems helpful to all those in search
of better defined aims and better considered ways and means to get there.
The following chapter thus draws extensively from this authoritative source.
SOME MEMORABLE QUOTES
FROM CENTESIMUS ANNUS
the Encyclical Letter by Pope John Paul II, of May 1, 1991
Pope Leo XIII, in Rerum Novarum, "frequently insists on necessary limits to the State's intervention and on its instrumental character, inasmuch as the individual, the family and society are prior to the State, and inasmuch as the State exists in order to protect their rights and not stifle them." (p.23)
Commenting on the "question of the working class" at a time when "socialism" was "not yet in the form of a strong and powerful State" producing deeply penetrating - and still lingering - effects on other societies, institutions and States, Leo XIII recognized "the evil of a solution which, by appearing to reverse the positions of the poor and the rich, was in reality detrimental to the very people whom it was meant to help. The remedy would prove worse than the sickness. By defining the nature of the socialism of his day as the suppression of private property, Leo XIII arrives at the crux of the problem." (p.25/26)
"...the principle of subsidiarity must be respected: a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to coordinate its activity with the activities of the rest of society, always with a view to the common good." (p.94)
"By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending. In fact, it would appear that needs are best understood and satisfied by people who are closest to them and who act as neighbours to those in need." (p.95)
"The individual today is often suffocated between two poles represented by the State and the marketplace. At times it seems as though he exists only as a producer and consumer of goods, or as an object of State administration. People lose sight of the fact that life in society has neither the market nor the State as its final purpose, since life itself has a unique value which the State and the market must serve." (p.97)
The Pope points out "a crisis within democracies themselves, which seem at times to have lost the ability to make decisions aimed at the common good. Certain demands which arise within society are sometimes not examined in accordance with criteria of justice and morality, but rather on the basis of the electoral or financial power of the groups promoting them. With time, such distortions of political conduct create distrust and apathy, with a substantial decline in the political participation and civic spirit of the general population, which feels abused and disillusioned. As a result, there is a growing inability to situate particular interests within the framewoork of a coherent vision of the common good. The latter is not simply the sum total of particular interests; rather it involves an assessment and integration of those interests on the basis of a balanced hierarchy of values; ultimately, it demands a correct understanding of the dignity and the rights of the person." (p.92)
"A person who produces something other than for his own use generally does so in order that others may use it after they have paid a just price, mutually agreed upon through free bargaining. It is precisely the ability to foresee both the needs of others and the combinations of productive factors most adapted to satisfying those needs that constitutes another important source of wealth in modern society. Besides, many goods cannot be adequately produced through the work of an isolated individual; they require the cooperation of many people in working towards a common goal. Organizing such a productive effort, planning its duration in time, making sure that it corresponds in a positive way to the demands which it must satisfy, and taking the necessary risks - all this too is a source of wealth in today's society. In this way, the role of disciplined and creative human work and, as an essential part of that work, initiative and entrepreneurial ability becomes increasingly evident and decisive." (p.62)
"Indeed, besides the earth, man's principle resource is man himself. ... Important virtues are involved in [the process to transform man's natural and human environment], such as diligence, industriousness, prudence in undertaking reasonable risks, reliability and fidelity in interpersonal relationships, as well as courage in carrying out decisions which are difficult and painful but necessary, both for the overall working of a business and in meeting possible set-backs.
The modern business economy has positive aspects. Its basis is human freedom exercised in the economic field, just as it is exercised in many other fields. Economic activity ... includes the right to freedom, as well as the duty of making responsible use of freedom. ... Whereas at one time the decisive factor of production was the the land, and later capital - understood as a total complex of the instruments of production - today the decisive factor is increasingly man himself, that is, his knowledge, especially his scientific knowledge, his capacity for interrelated and compact organization, as well as his ability to perceive the needs of others and to satisfy them." (p.63)
"[C]an it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?
The answer is obviously complex. If by "capitalism" is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a "business economy", "market economy" or simply "free economy". But if by "capitalism" is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative." (p.81/82)
"Man fulfils himself by using his intelligence and freedom. In so doing he utilizes the things of this world as objects and instruments and makes them his own. The foundation of the right to private initiative and ownership is to be found in this activity. By means of his work man commits himself, not only for his own sake but also for others and with others. Each person collaborates in the work of others and for their good. ... Just as the person fully realizes himself in the free gift of self, so too ownership morally justifies itself in the creation, at the proper time and in the proper way, of opportunities for work and human growth for all." (p.84/85)
"Widespread drug use is a sign of a serious malfunction in the social system; it also implies a materialistic and, in a certain sense, destructive "reading" of human needs. In this way the innovative capacity of a free economy is brought to a one-sided and inadequate conclusion. Drugs, as well as pornography and other forms of consumerism which exploit the frailty of the weak, tend to fill the resulting void." (p.72)
"It is not wrong to want
to live better; what is wrong is a style of life which is presumed to be
better when it is directed towards "having" rather than "being", and which
wants to have more, not in order to be more but in order to spend life
in enjoyment as an end in itself. It is therefore necessary to create life-styles
in which the quest for truth, beauty, goodness and communion with others
for the sake of common growth are the factors which determine consumer
choices, savings and investments. In this regard, it is not a matter of
the duty of charity alone, that is the duty to give from one's "abundance",
and sometimes even out of one's needs, in order to provide what is essential
for the life of a poor person. I am referring to the fact that even the
decision to invest in one place rather than another, in one productive
sector rather than another, is always a moral and cultural choice.
Given the utter necessity of certain economic conditions and of political
stablity, the decision to invest, that is, to offer people an opportunity
to make good use of their own labour, is also determined by an attitude
of human sympathy and trust in Providence, which reveal the human quality
of the person making such decisions." (p.72/73)
C HOW DO WE GET WHERE?
"TRAIN AND EDUCATE MAN!" - SHIFT POWERS BACK TO THE CITIZENS!
The aims we have developed and which we propose are thus:
criminalizing cash, decriminalize the market, and
guarantee the right to ANONYMOUS, UNDECLARED private property!
In France, e.g., with changing governments, the Citizen's traditional right to anonymous possession of gold has repeatedly been confirmed or abolished by law. This reveals the by now widely forgotten key characteristic of gold, cash and private property in general, namely their anonymity. In most states, in law and in practice, the privacy of private property - cash, gold, bank accounts, etc. - tends to be threatened rather than protected. This demotivating and progress-retarding upside-down situation calls for the corresponding privacy and burden of proof principles to be enshrined in the national constitutions.
What's more, the umbilical cord between the Citizen and the state must be cut. For the present situation is seen as an intolerable perversion of Citizen-state relations, with the Citizen now obliged to take down his trousers before the taxman so as to prove what he declared to be his income by substantiating his figures with bank extracts, salary certificates, bills, etc. All the while the taxmen, increasingly, have discretionary power over the thus extorted information (17). Involving the signature as a signal element of each Citizen's personality and status in society, this outgrowth of all-too-long tolerated fiscal arrogance and fiscal inquisition can even be seen as the linchpin of society's present decline.
Indeed, a hallmark of a civilized nation is its strict adherence to such fundamental principles as the rule of presumed innocence and of the burden of proof of wrongdoing to unvaryingly rest with the state. These principles have been burnt into Western society's collective mind notably by the inquisition and its degrading practices of mental and physical torture to extort confessions. By now, the lessons of these dark ages are not only on the books but are routinely and generally well applied in most civilized countries in penal matters.
But this is not the case in all civil matters. Not even in Switzerland whose Civil Code (art.8) explicitly says that "the burden of proof rests on whoever derives a claim from a fact." And it is particularly not the case in fiscal matters - even though they regularly entail penal clauses. In fact they provide the state with an insidious instrument for effectively persecuting real or framed criminals on unrelated charges (e.g. Al Capone's conviction in the 30ties was only for tax evasion; see also footnote #14) - all of which entails an unwitting transformation of social values and a corruption of justice and the state apparatus.
Such aberrations and perversions of banking, fiscal and other principles can also become counter-productive, e.g. for policemen who have grown accustomed to let bankers do their job. For the number of countries offering safe and efficient banking havens is still growing - also in response to the growing pressure to develop new sources of hard currency income. The real criminals are thus likely to be able to find alternative safe havens elsewhere, while the regular bank customers see their fundamental rights to privacy increasingly pierced on ever thinner grounds and pretexts (18).
Are bankers a state's legitimate long arms against the citizens? Are they to exercise their profession with a double, eventually conflicting loyalty? And, moreover, can there be any real substitute to solid police foot work? To be sure, there is no such thing as a criminalistic panacea in any field. Evidence also suggests that the drug problem may in fact be abused to promote hidden agendas, such as "bringing down the walls of Swiss bank secrecy" for marauding SEC, IRS and other US regulators (see chapter "Other alarm signals") (19). Or what rationale lies behind the fact that the drug campaign focus has been on the tail of the animal (i.e. on the "drug money") while its head, i.e. the US supplies of the chemicals needed for drug production, are hardly touched and have accounted for between "80 and 90%" of the supplies reaching Columbia? (20) This brings back memories of the prohibition, a past American drug problem. And it suggests that the US authorities could do better showing their willingness and capacity to do a proper police job in their own backyard (21).
With most narco-dollars effectively hiding behind a screen of mostly legitimate businesses and customs, it has, of course, been tempting to criminalize these businesses and practices. This, in some cases, has been done with foreseeably paltry results if the objective was indeed to bring the big narco-players before justice. At the same time, the economic, social and political risks and costs of these measures have been disproportionately high. Swiss rent-payers, e.g., have discovered the costs of letting their country be fingered, culpabilized and stampeded into questionable and holier-than-the-Pope banking policies: their apartment rents skyrocked with the drying up of flight capital which, for decades, had secured low interest rates, thus fueling its economy and real estate market.
Once the public will have become aware of what is really going on behind the various nice-sounding smoke screens, the return to sensible practices will likely be swift, radical and durable. Real narco-dollars may then still be caught in the net, but more through sound police foot work and less because bankers let themselves be pushed into an alien role, a dubious secondary loyalty to serve as police auxiliaries. In fact, with the pseudo-criminal activities no longer binding scarce resources, police may then have a better chance to bring their investigative powers to bear on the real narco-criminals. Capital merely fleeing illegitimate fiscal confiscations may thus again become available for legitimate investments, as it will then no longer be mistaken for criminal proceeds. Until then, awake bankers in awakening countries may find capable politicians to capitalize on the related opportunities.
In summary, the inquisition mentality is not only a matter of past aberrations. Adapted to modern society, it is very much alive in various forms in most Western countries. E.g. as the Schengen agreement between Belgium, France, Germany, Italy, Netherland and Luxembourg shows, the imminent abolition of the intra-European borders will not result in reduced government payrolls and savings for the taxpayers due to laid-off customs official. These "public servants" will merely be retrained and become inland investigators chasing notably tax avoiders and evaders and suspected violators of whatever new crimes their colleagues might have gotten into the books (like cash changers, cash transferors, tax cash launderers, etc.). Moreover, they will be assisted by supercomputers providing effective electronic surveillance of most economic activities of unsuspecting regular Citizens. These systems, planned to be based in Paris and Strasbourg will remain effectively uncontrolled for as long as the taxpayers will tolerate it.
All of which shows that both present and planned fiscal and related practices are and likely will remain extremely harmful to the taxpayer's state of mind, his knowledge of his rights and obligations, and his capacity and willingness to exercise these fundamental prerogatives in ways favorable both to his individual pursuit of happiness and, eventually, to his community's well-being.
A key counter-measures will provide for
burden of proof to be shifted back to the taxing authority. At present,
the taxpayer's signature under his tax filing only binds him, i.e. it engages
his civil - and eventually his penal - responsibilities. It must again
become binding for both, state and Citizen. Otherwise every Citizen's
signature is officially devalued and his personality denigrated. And the
signal instrument to reverse this aberration - i.e. society's unwittingly
tolerated and even promoted trend to denigrate its own Citizens - may be
found in the decriminalization of tax avoidance and the formal re-introduction
of the right to privacy, to ANONYMOUS, UNDISCLOSED
private property even in fiscal matters. Switzerland, for one, has
preferred to responsibilize its Citizens rather than to criminalize its
tax evaders. It hasn't gone broke sticking to that road and, in fact, may
thus have equipped itself with a potent -and readily available - weapon
in the increasingly world-wide competition for foreign investors.
Direct income tax? Yes, but only a negative income tax!
The U.S. Taxpayer Alliance (22) calls for "Implementation of a 10% flat tax en route to complete abolition of the IRS [Internal Revenue Service] and the income tax system". Its program says:
More serious is the proposition to do away with the income tax. For this taxation form is notoriously inefficient (30-50% effective return due to wastefulness and high administrative costs). It is in violation of fundamental principles and generally undignified and denuding (it is a self-incrimination and undermines Citizen morality; see also preceding chapter). And it is unfair particularly to the low-income taxpayer (for he can practically never manage to organize a significant tax break; he also has to invest a disproportionate amount of his time filling out complicated tax forms, and he gets a disproportionate exposure to the public powers).
The case for abandoning the income
tax thus looks good even from a treasury point of view - provided an
adequate substitute can be found. The most efficient tax to be considered
to that end might be a VAT system, combined with a negative income tax
which might provide for global - and thus unbureaucratic - direct and commensurate
compensation of low-income Citizens who paid an unfairly high VAT every
time they purchased goods or services.
Further qualitative factors affecting a nations's ideal size and structures
To be sure, there is no permanent ideal size of a nation, and the leaders of even the longest enduring nations, such as the Swiss Confederation, risk losing the family silver and put the national existence at risk if they fail to adequately attend to the qualitative factors which make up a nation and which provide for its continuity. Also, small can indeed be beautiful. Small nations may indeed be easier to govern. And competently governed small nations may indeed be more likely to withstand the hurricanes of history, to prosper in rapidly changing circumstances, and to provide for conditions conducive to their residents' individually successful pursuit of happiness. But, make no mistake about it, by and for itself smallness is no virtue - just as bigness is no guarantee against failure. Essentially, it is the quality, i.e. the competence, the industriousness and the morality of its Citizens and of their leaders which really matters, which makes the difference, and which ultimately determines the ideal size and thus the fate of any and every nation at any given time in history. To illustrate:
- smallness linked with mediocrity can be a recipe for successful survival, but only for as long as others bungle even more (e.g. Switzerland); and
- smallness linked with incompetence IS a recipe for failure (e.g. Kuwait (23); to quote a diplomat who worked hard on the side of the Allies:
"Kuwait was saved not because but despite of the persistently unqualifiable actions and inactions of some nominatively 'responsible' Kuwaiti officials." (24)).
- mediocritly handled bigness can be a recipe for successful survival, but only for as long as others bungle even more, and the resources don't run out (e.g. Australia, Canada, the United States and even the USSR(25)); and
- incompetently handled bigness IS a recipe for failure (e.g. Roman and Byzantine Empires [not excluding the "Sole-Superpower" empire dreamed up - and talked about even more after 9/11 - by some apparent members of the Flat Earth Society]).
Indeed, it will be exclusively up to these people and their leaders to set the course which will decide whether, in what timeframe and under what conditions all their miseries eventually will lead to the consolidation or the break-up of states which presently are still held together with difficulty and no clear purpose or viable unifying theme. And whether, in the event, the resultant structures can and will be molded into dignified, recognized and viable members of the family of nations. And though all data and ideas compiled in this paper are aimed and may effectively be used to that effect, we invite everybody to beware of illusions as to the real world.
The not-invented-here and the
syndrom in high places, i.e. said critical mass of arrogance, ignorance
and incompetence, are indeed quite human and thus omni-present phenomena.
Yet, it deserves to be repeated that they are also sure-fire recipes for
failure anywhere, for any nation, big or small. Also, just like in the
wilderness, the forces of history have a way of sooner or later catching
up with societies whose leaders have lost their moral moorings and whose
manifest moral corruption and decadence - as the Pope in his latest
Encyclical makes unmistakably clear - have become an intolerable insult
to fellow humans everywhere. Characteristically, their only real power
of conviction is the power of the gun or the power to bribe - usually on
the basis of unearned wealth whose real purpose apparently still escapes
their present guardians.
Baltic, Kurdish, Kurile, Palestinian, Philippine (US bases)
and other lose ends of history in light of principles
associated with individual as well as with national landholdings
The saying goes that an individual may lay claim to the land
For example, some Baltic problems
might find a prompt and even regionally stabilizing solution on this path.
Reference is made to what is already called the reawakening 4th Baltic
State, i.e. the Kaliningrad Oblast (formerly East Prussia; for details
see chapter on the proposed Soviet European Initiative).
Using as vehicle the never-abrogated Memel Convention of 1924 and
the related treaty rights of the United States, France, Germany, Great
Britain, Italy, Japan and Lithuania, interested parties might negociate
with the USSR for a mutually beneficial long-term lease agreement involving
related territory and eventually leading to the establishment of a prosperity-generating
Also, Messrs. Yeltsin and Kaifu might find happiness for their people with an agreement for a long-term lease of the Kuril islands to the Russian Federation - in return for leasing to Japan a continental settlement zone facing the Pacific (which, incidently, could not only provide badly needed development impulses to the Russian Federation, but could offer the Japanese people a well-prepared refugee area whenever the widely expected cataclysm will hit its islands).
Foreseeably, in the Mideast, reliable adequate water supplies will soon become a key economic and political factor - perhaps even surpassing the importance of oil. The countries making up Kurdistan and which, water-wise, are dependent on this veritable water castle (from which flows notably the Euphrates and the Tigris rivers), might thus develop viable political solutions around this common denominator. Interested riparians might complement existing(27) or conclude new water development agreements entailing the long-term lease to the Kurds traditionally living in these upper catchment areas. And they might find it possible, indicated and mutually advantageous to entrust these Kurds with corresponding trustee or water guardian functions providing for the equitable implementation of the related agreements.
In the case of the Palestinians, a similar solution (e.g. involving Jordan or Southern Iraq [or, temporarily, Iraq's Diyala district www.solami.com.babylon2]) may provide for early statehood of this people, too - independent of the fate of current Mideastern hagglings which may lead to genuine peace negotiations, "in our time" or "insha'allah".
The case of the US bases in the Philippines,
for some time now, might find an answer imposed by nature, i.e. by the
volcanic eruptions foreshadowing even more profound effects in that and
seismically related regions. If both parties will find it indicated to
negotiate a succession bases treaty to the one running out this fall, they
might also agree to a lease exchange formula. To that effect the United
States might offer a mutually beneficial long-term lease to the Philipphines
of some continental or overseas US territory, in exchange for, e.g., a
rent-free substitute for, or a corresponding long-term extension of their
present bases agreement.
D 700 YEARS-OLD SWITZERLAND: AN EXAMPLE WORTH LOOKING AT?
When in 1291 three liberty-minded Citizens representing the inhabitants
of three valleys in the center of Europe's alps promised to assist each
other in fending off the imposition of foreign rule, taxes and judges,
they laid the basis for one of the most durable and instructive experiments
in nation-building. 4-languages rich Switzerland has its roots in the French,
German, Italian and Romansch cultures. As Europe's water castle, it also
gives birth to four of Europe's most important rivers (Rhine, Rhône,
Po and Donau). Perhaps then a look at what the Swiss Founding Fathers really
agreed upon in 1291 may be of interest not only to those seeking inspiration
for addressing actual nationality problems, but also to those trying to
fathom what may have lead Heidiland off its successful original track.
Here then is a translation of Switzerland's basic document:
THE SWISS FEDERAL PACT OF 1291(this author's translation)
In the name of God, the Almighty, amen.
It is accomplishing an honorable and beneficial action for the public well-being to confirm in the established forms the conventions aimed at peace and security.
[1.] Let it be known to everybody, considering the prevailing evil and in order to better defend and maintain, in their integrity, their families and their property, that the People of the valleys of Uri, Schwyz and Unterwalden, in good faith, have pledged to assist each other with help, with advice and with all favors, persons and goods, inside their valleys and beyond, with all their power and resourcefulness, against all and against anybody nourishing bad intentions or who committed a crime, an offense or an injustice against any one or more of them, or concerning their property.
[2.] Each Community has pledged to come to the aid of the other, whenever that is necessary, to help against and, in as much as that is indicated, at its own costs, to resist and revenge the attacks of ill-intended people, having previously made such an oath which is herewith effectively renewed,
[3.] notwithstanding each person's right, to the best of its abilities, to be obedient and helpful to his [or her] master.
[4.] After joint consultations, we have also unanimously agreed, set and ordered that the People of the above-named valleys will, under no circumstances, receive or accept a judge who is not one of us [i.e. a resident Citizen], or who has bought his judgeship with money or any kind of favor on any way.
[5.] Should a difference occur among any of the Confederates, it is incumbent on those who carry the most respect to intervene and appease the difference with the most effective means considered indicated. All other Confederates shall unite against the party which refuses the [arbitration] sentence.
[6.] Also they have agreed to the following rules to be observed: he who, with intent and without being provoked, caused somebody's death, shall, as is indicated by the infamy of this crime and unless he can show his innocence, be put to death when he is caught; if he escaped he shall never be allowed to return. Those giving shelter and protection to such an evil person shall be banned from these valleys unless the Confederates have called them back.
[7.] He who, with intent, by day or in the dark of the night, set fire to the property of a Confederate, shall have lost forever his rights as a member of our Communities, and he who shelters and protects this offender shall in our valleys compensate the injured.
[8.] Moreover, the property in the valleys of any Confederate who, by way of robbery or otherwise, inflicted any damage on the property of any other Confederate, shall be sequestrated in as much as is needed to compensate said damage in due course.
[9.] Also, nobody among ourselves shall seize the other's property without a valid public title or a guarantee, and then only with a special authorization from his [the competent] judge.
[10.] Each one shall be obedient to his judge and if that becomes necessary, shall indicate the judge which he is prepared to recognize.
[11.] Whoever opposes or refuses obedience to a [competent] court and thus causes damage to anyone among us, shall be liable to render satisfaction which is to be enforced by all other Confederates.
[12.] Should war or a conflict break out among the Confederates and one party refuses to respect the laws and customs, all other Confederates shall protect the other party.
[13.] The above-mentioned laws, set as they are in the interest and for the benefit of all, shall, God permitting, remain in force forever. In witness whereof the present act, set up at the request of the aforesaid, has been validated with the affixed seals of the above-mentioned Communities and valleys. Done at the beginning of August in the year of the Lord 1291.
then makes Switzerland still tick after seven centuries?
In a nutshell the answer may be:
Switzerland's sovereign political entities, its 26 cantons, still evolve. Some of them continue to split, like the Canton of Berne which is about to transfer sovereignty over part of its territory to the Canton of Basel-Landschaft and which, 10 years ago, even gave birth to the Republic and Canton of Jura. Others, notably the Republic and Canton of Geneva, seem to be moving again into a more independent orbit (see chapter on Geneva). Sometimes the Swiss government is overrun by events; it also has its wings cut by the popular vote (see Switzerland's unique UN vote). And it may happen again with the government's handling of Switzerland's relations with the - as presently setup - moribund EC.
Modern Switzerland, in 1848, was largely modeled after the United States and its Constitution. It managed to survive virtually unscathed the tempests ravaging Europe in the first half of this century. This has been recognized to be due, to no small degree, to its policy of permanent armed neutrality resulting from events in 1515 when, in the battle of Marignano, Swiss soldiers of fortune fought each other because of service on opposing sides. An agrarian state until the last century, the evolution of its society and economy is seen to have benefited decisively from the influx of enterprising foreigners from its major European and American trading partners who were encouraged to settle freely by way of fully valid friendship, commerce and establishment treaties which, symptomatically, are being mostly ignored in practice.
In recent years, the thus developed basis of Switzerland's enviable prosperity has indeed been undermined by official neglect of individual rights and - no less alarmingly - of fundamental sovereignty and fiscal principles. Pressures of neighboring governments and, particularly, American officials working in growing factual power vacuums have been allowed to cause havoc on the libertarian structures and laws of the country (e.g. the published and the unpublished cooperation agreements and, more visible, the growing numbers of lex americana, i.e. the laws against insider trading, money laundering, and export controls).
These testimonies to friendliness bordering on servility and worse would, of course, be quite worthy of a banana republic. Another question is whether they are compatible with the dignity of an independent country like Switzerland with its rich cultural inheritance. And, as indicated before, still another question is:
On its present course, Switzerland may indeed not continue to be a successful
experiment in political, economic and social engineering. For indications
are that on this course it may have been successful despite, rather than
because of its leader's actions and inactions. That, of course, would not
exactly be assuring. Particular significance thus falls on the question
of another "invisible hand" - that of US judges and US officials and
their effective reach into Switzerland.
E OTHER ALARM SIGNALS
Pacta sunt servanda?
Not invented here!
We have LEX AMERICANA, and PAX AMERICANA is around the corner!
On June 15, 1987, the U.S. Supreme Court (28), in the Aerospatiale case, in effect, handed down a blanc check for the U.S. Administration and the U.S. Judiciary for disregarding treaty obligations and channels for obtaining evidence abroad. The Court approved recourse to the national means of coercion - such as the subpoena power and contempt of court citations - if they promise quicker results at less costs, i.e.
However, this opportunistic disregard for fundamental legal principles and treaty obligations formally entered into by the United States also constitutes an illegal exercise of power. For this blatently arrogated and executed treaty breaking power not only severely undercuts the U.S. President's treaty-making power, but it also flies in the face of the U.S. Senate's constitutional advice and consent rôle and, moreover, is not seen to be compatible with either the text or the background of the U.S. Constitution's respective provisions. Indeed, in their Declaration of Independence of July 4, 1776, the Representatives of the United States invoked notably
"The Congress shall have power: ... To define and punish offenses against the law of nations" (art.1, sec.8, al.10).
"No State shall ... pass any ... law impairing the obligation of contracts ... No State shall, without the consent of Congress, enter into any agreement [or dispute] ... with a foreign power, or engage in war" (art.1, sec.10, al.1 and 3).
"The judicial power shall extend to all cases, in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority" (art.3, sec.2,al.1).
"This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land" (art.6,al.2).
"This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be [in harmony with the law of nations, thus constituting] the supreme law of the land" (which is seen as the real meaning of art.6,al.2).
We would like to believe that this was indeed what the former Swiss Attorney General,Hans Walder, had in mind when, with his "LEGAL OPINION" of October 26, 1981, he advised his friends at the US Securities and Exchange Commission on how to break the Swiss bank secrecy without exposing the banks in question to Swiss criminal proceedings. Walder's advice (31):
Not surprisingly, some Swiss lawmakers thus wanted Walder to be tried for economic high treason. But they eventually threw in the towel upon learning of Walder's possibly very ancient source of inspiration, and after considering the argument with which the then Minister of Justice Häberlin, in 1928, fought in Parliament against the adoption of the penal clause (art.267 CP) that would have to serve as basis for prosecution:
Further down the road, in another unfamous case (34), the New York Times headlined its editorial "This is Gunboat Law", saying:
The legal hierarchy, in many places, has evolved aberrantly
The U.K. High Court, on April 4, 1991, upheld an order for Nazir Chinoy, a manager of the Luxembourg-based BCCI (Bank of Credit and Commerce International) to be extradited to the U.S. to stand trial for allegedly taking part in a conspiracy to launder profits from illegal drugs - despite allegations that the evidence against Mr.Chinoy was obtained in breach of the European Convention on Human Rights. Lord Justice Thomas Bingham said
This is another example (37) of how rules originally intended to safeguard interests of the Citizen have been lost sight of, respectively have gradually been voided or turned to the relative advantage of the state institutions. For said, in effect, deprivative British rule seems to have its origin in the 1627 Petition of Right, whereby the King granted in Parliament that
A look at some roots
In 1914, the Russian Empire, after its 1867 sale of Alaska to the United States, was limited to an area which embraced most of the Euro-Asian continent. It included Finland, the Baltic States, Poland and Moldavia in Europe and stretched all the way to Vladivostok and beyond (excepting e.g. the Kurile islands).
As was common practice then, the Russian diplomats, too had woven a dense network of bilateral commerce agreements, thus securing its industry and commerce most-favored-nation status with most of its trading partners in Europe, the Americas and the Far East(38). Neither Lenin nor any of his successors abrogated these treaties; they may thus be dormant and avail themselves for reanimation by able diplomats.
Expanded trade and commerce will be crucial for those charged with the herculian task of cleaning up the economic mess brought about by over 70 years of mismanagement of human and natural resources. In the event, the reanimation or recovery of such fundamental, even if ancient rights, might significantly contribute to the viability also of those republics which have already chosen, or which may yet opt for genuine independence. And their leaders, too may thus strengthen the chances of success of their perestroika programs by seeing to it that these key principles will be heeded on every administrative level:
Reforms must aim for conditions liberating and responsibilizing Citizens, and they may be considered to be successful only if
Which USSR Republic wants what?
The Referendum of March 17, 1991, intended to take the Soviet peoples' temperature on the future of their centralized union, symptomatically, broke up into fragments. Yet, on the surface of the official figures, with 80% of the eligible voters participating in the USSR's first substantial exercise in democracy, and with 76% of those voting said to favor the maintenance of the USSR, the will of the majority of its peoples seems to be clear - or not? On closer analysis and in light of the questions asked, the results are more complex and colored differently.
Of the USSR's 15 republics, only 5 strictly followed directives from Moscow, asking their voters bewilderingly:
The Ukraine (another "independent" UN member state) asked:
"Do you want the Ukraine to be an independent state?"Nearly 90% said Yes.
Six republics - Lithuania, Estonia, Latvia, Georgia, Armenia and Moldavia - boycotted the vote. They also did not sign the new in effect economic break-up Union Treaty of April 23, 1991 (39).
On February 9, three out of four eligible Lithuanians cast their ballot and 90% of them voted for independence (thus even meeting the Soviet secession law's prohibitive requirement of two-thirds of all eligible voters). The Georgian and the Baltic governments already refuse to recognize Soviet law. On March 3, 73% Latvians and 77% Estonians voted also for independence, with about half of the Russians living there estimated to have boycotted that poll. Georgia voted for its independence on March 31 (see also next chapter). While Armenia will hold its independence poll coming September 21(40); its independence leader Levon Ter-Petrossian who, last August, became Armenia's first non-communist president, reportedly said it would be impossible for his republic to break away from the Soviet Union five years from now, as he envisages, unless the Armenians were able to surmount historical enmity and normalize relations with Turkey whom it has traditionally accused of genocide against the Armenian people in 1915(41):
The Armenian leader criticized the Union Treaty of April 23, 1991, as "extremely dangerous," saying: "It allows the nine republics to discriminate against the other six through a hypothetical formulation. The nine will benefit from special conditions. This means the others will be disadvantaged." President Ter-Petrossian linked the accord to the Soviet-Azerbaijani operations against Armenian villages in May, saying that Azerbaijan had declared after signing the document that it had to protect itself and asked for help from Moscow.
Even if the government, as it says it has, already effectively declared said pact between Germany and USSR as "nul and void" it is somewhat disturbing to note that the new treaty, through its unreserved support of the principle of the inviolability of existing frontiers and territories, at least in effect, seems to confirm the results of the Hitler-Stalin pact. As such it would undercut rather than promote Moldavia's case. Moreover, with its article 4, it obliges either party to abstain from entering into any security arrangement which is directed against the other party - a formula which cannot serve as model, raising disturbing intervention specters in its present form. Indeed, Czechoslovakia, Hungary and Poland are rejecting it.
Finally, in the interest of Romania and
its leadership, it must be assumed that all this has not really escaped
their attention. Or that now, after they had let their negotiators lose
on a secretively handled rush job, they are glad to have awakened and critical
lawmakers which seriously check the results developed in the power vacuum
and, if found lacking, refuse ratification. We have not yet seen evidence
of such willingness to play the parliamentary game, to let the elected
lawmakers stop an apparent wildcat train before it can cause further damage.
In the divorce: Georgia versus USSR
Georgia's centuries-old ambitions for national independence, according to an account by one of its emigrés(44), have been, and continue to be, frustrated mostly by its own policies and sons. In 1783, Zar Irakli II, signed a union treaty with Russia in order to better protect his native Georgia against expansionist designs by neighboring muslims. Still, Georgia's dream of national independence evaporated not under the onslaught of Turkish hordes but when, at the beginning of the last century, it fell under the rule of the Russian empire. And though, in 1918, its social-democratic government proclaimed independence, the bolcheviks prevented the mencheviks from making this independence stick and from defending it against the 1921 agression of the Russian bolcheviks - which, eventually succeeded with the help of such Georgian sons as Stalin, Ordjonikidzé and Makharadzé.
On this background, Tenguiz Goudava fears that the family silver is again about to be stolen. And that a unique chance to finally attain genuine national independence is being wasted due to what he identifies as "national infantilism" which has brought a new "national father-figure" in the person of the dissident leader Zviad Gamsakhourdi, but who is seen to have already successfully manoeuvered the majority of his fellow-Citizens and lawmakers into granting him little less than ominous, dictatorial powers.
To be sure, the Round Table-Free Georgia political bloc last fall apparently won, hands down, 166 of 250 seats in the republic's Supreme Soviet. But these elections were boycotted by both the radical national liberation movement of the National Democratic Party, the National Independence Party and other opposition groups making up the unofficial "National Congress". The conflictual relations between Georgia's Supreme Soviet and the National Congress seem to characterise the actual political scenery inside Georgia. Fueled by illusions, it might jeopardize its relations with the USSR and the outside world in general.
Of course, it is always - and particular in the case of formerly tightly closed societies - extremely difficult to fairly and reliably assess from the outside the eventual direction of what is really going on anywhere. And it is the more difficult and hazardous if it concerns the social fabric of a nation which is in the midst of the most complex processes to rediscover, reanimate and organize itself and to eventually find and occupy its proper place in the family of nations.
Still, the significance of what is happening in Georgia for the future of the USSR - and perhaps for Europe as a whole - makes it advisable to look for some objective if not conclusive clues. Among them may be mentioned the apparently unanimous decision, taken last December by the deputies of Georgia's Supreme Soviet, to essentially abrogate the autonomous region of South Ossetia. This, reportedly, has given rise to a bloody revolt there - in an already tense unsettled multi-ethnical context.
Perhaps unwittingly, it also provided - and continues to provide - the USSR's central government an opportunity to intervene. Thus, the residents of South Ossetia and of another Georgian region, Abkhazia, obtained directly from Moscow the means to participate in the March 17 vote on the maintenance of the USSR -which they approved by large majorities. Though this may indeed set the stage for these regions' separation from Georgia, this eventual quantitative reduction of Georgia might also be seen as an example of qualitative national gains in the form of being unburdened from energy-absorbing simmering regional conflicts, and correspondingly enhanced national unity, coherence and vitality.
On May 26, the voters of Georgia, by some 70%, brilliantly elected Mr.Gamsakhourdi as President of the Republic. On the same day, radio Franceinfo carried an interview where Mr.Gamsakhourdi indicated Georgia's interest in UN membership and closer economic and political ties with the countries and institutions of Europe. That would seem to be welcome news. For it might help the people, leaders and institutions of Georgia to become better acquainted with the real world and the uncircumventable requirements accompanying its aspirations to become a recognizable independent state based on genuine democracy. To that effect it might be helpful to consider concrete measures effectively turning the page on some past practices, measures which would convincingly disprove the allegations contained in the above-mentioned unflattering - and perhaps somewhat excessive - account given by Mr.Goudava, e.g.:
Moreover, the growing world-wide demand and competition for scarce private and public foreign investment capital all but rule out significant soft credits for dictators anywhere. Georgians may thus yet discover the real world and quickly adapt to the indispensable conditions any sensible investor of today and tomorrow would ask from his prospective debtor:
2. strict rule of law and independence of justice;
3. such economic prospects which are
offered only by a genuine market economy (inseparable from points 1 and
2), requiring free prices, private property, no administrative hassles,
low taxes and free capital and profit transfer.
According to the CIA's annual Report to the U.S. Congress on the Soviet Union (as reported in Switzerland's Neue Zürcher Zeitung, May 17, 1991), the Soviet Union actually endures its worst depression ever. Its gross national product for 1991 is thus estimated to be declining by 10%-15% (1990: -4%), with inflation exceeding 100% - assuming governmental measures not to cause Citizens to come out in open rebellion. At the end of 1990, the Soviet Union's external debt reportedly reached $45.4 billions - compared to $20.9 billions in 1986 - with a correspondingly growing debt servicing, credibility and new-credit problem. Its hard currency earnings from its oil exports are expected to decline 1991 by 25-60%, while hardly any other export sector is seen, at present, to offer positive perspectives.
Against this below-detailed backdrop, the circumstances surrounding and the reactions to the defences-testing trial balloon of an "erroneously" reported $100 billion aid "request" by President Gorbachev are revealing (his adviser, Yevgeny Primakov, has since spoken of an "official request" for some $200 billions over 5 years to be considered, the Washington Post said June 1). During a joint press conference with Italian Prime Minister Giulio Andreotti, Mr.Gorbachev said in fact:
John Robson (US Treasury), stressing that the Soviet Union must earn economic help by making tough decisions to reform its economy and by acting on them, also said: "The Soviets havn't accomplished any economic reform. They've just talked about it."
Hungarian President Arpad Goncz:"Of course, $100 billion is a great sum, but you have to balance which is better: To help the Soviet Union or let the Soviet Union go bankrupt?"
Half the Soviet Union's $40 billion in commercial debt comes due within a year, according to a report by Deutsche Bank, a major lender to the Soviets in the past, and the country's foreign exchange reserves have sunk to their lowest level in years [thus driving it to flood the market with gold, which not only continues to depress that market but also hits the foreign commerce life-line and causes havoc to the economy of the world's other major gold producer, South Africa, as The Economist showed recently].
Meanwhile, other sources say the Soviet Union's arrears on trade credits have mounted to $5 billion. ... In an interview in Washington this week, Oleg I.Ozherelyev, an economic adviser to Mr.Gorbachev, urgend the United States to remember that "providing a loan is a mutually beneficial arrangement, not a charitable activity." Mr. Ozherelyev said that if the United States was not forthcoming, "there are enormous opportunities in Western Europe for loans. But the Soviets might have trouble raising money there too, especially in light of the increased need for capital worldwide. Germany, traditionally a heavy lender to the Soviet Union, is already burdened by the need to invest in Eastern Germany. And major lenders are pessimistic about Soviet prospects. "The best we can hope for is that it is not a complete catastrophe," Norbert Walter, a senior economist at Deutsche Bank, said recently.
The Internation Monetary Fund and the World Bank say that lending money to the Soviet Union now is tantamount to pouring water in the sand, and they have urged industrialized nations to wait until the Soviet Union moves more decisively toward economic change. A senior IMF official from Europe said: "No country in the world is ready to put money in a rotten structure. Reform is a must." And a senior U.S. Treasury official said: "The question is will the money stick. What is the return on the investment?"
The CIA and the Defense Intelligence Agency estimated in a report that accompanies congressional testimony on Thursday that the Soviets had lined up commitments of $14 billion in government loans from non-Communist countries, including $1 billion in commodity credit guarantees pledged by the United States in December. One-third of the aid will come from Arab states and South Korea, the agencies said. But that might be less than [what] Moscow needs. The credit squeeze is coming aginst a background of what the CIA's chief Soviet analyst said Thursday was a rapidly worsening Soviet economic outlook."
The reservations are: will it help? Will it be true? Will it encourage reform? There is something positive there, and that is that Yeltsin and Gorbachev appear to be in communication. Gorbachev has reiterated to me, which he did not have to do, his continuing commitment to reform. And you see these agreements that are worked out between the republics. I want to look at it positively, but we have to look at it realistically."
Otto Graf Lambsdorff(53): "The grave emergency situations prevailing in the Soviet Union entail the danger of huge new refugee movements to burden and destabilise the internal order of its neighbors. Thus, it behooves the West to render [effective] assistance to the Soviet Union in its perestroika policy, on its way to Europe and in its efforts to integrate itself into the world economy.
Nobody can have an interest at distabilizing the Soviet Union; it would entail a high risk for Western Europe, but also for the United States and the whole of the Western World. ...
The Federal Republic of Germany also contributes substantially to the financial efforts to stabilize the Soviet Union. The contributions agreed upon 1990 alone reach almost DM$25 billion [some $15 billion] ... With these funds we also contribute significantly to the stabilization of Europe's security order which, all by itself, was a precondition for bringing about the East-West coalition against the aggressor Saddam Hussein. Unfortunately, this aspect is often neglected when Germany's contribution to the Gulf war is being discussed. ...
Credits without reforms - that amounts to filling a bottomless barrel. ...
Important as governmental support for assistance is, really decisive is the availability of privately raised capital and the [lasting] willingness of Western enterprises to take risks in the Soviet Union. This, however, in reality is badly lacking. ... And there is no sign that conditions will change soon, for the reasons responsible for this Western investment restraint essentially remain unchanged. ... After five years of reforms there should be light [at the end of the tunnel]. [Yet darkness prevails and] this discredits the entire reform enterprise. ...
One cannot speak of a comprehensive [coherent] concept for a market economy as long as their is no [solid] commitment to the unconstraint right to private property, notably to real estate, as long as the prices are not truly decontrolled, or as long as essential decisions are merely rolled over to [essentially unprepared] Union republics. Doubts are being aggravated when at the same time all sorts of new central plans pop up and are [seriously] being considered at the Council of Ministers.
[For private foreign investors it is revealing, sobering and] of signal importance that to date none of the adopted reform programs seriously questioned the ideological linchpins of socialism, namely the preeminent role of the national plan and the keeping in the hands of the state the means of production, notably the [arable] land. ... Barter trading, black market, speculation in [scarce] goods of all sorts are on the upswing and have attained Union-wide dimensions. This development demonstrates that there can be no successful mixed economy and that such experiments [can be no real substitute] to consequently and rapidly executed genuine market economy reforms. ...
Investors look for legal security; it is absent in an atmosphere of [uncertain and hesitant lawmakers], vacilating and even contradictory reforms, rules and regulations, unstable and ill-defined competences on the various levels of the Republics and the Union. Investors need flexibility, [mobility and effectively operating telecom services] which the planned economy does not provide them. They are not encouraged [to either come or stay with their funds in the USSR] if the currency they earned cannot be converted, if they are not free to transfer their earnings abroad and if bank services are lacking. ... Neither production and delivery constraints, nor an inadequate infrastructure are good for business. Moreover, invincible bureaucratism, lacking transparency [and reliability] of who is competent [to decide what], and permit procedures [whose outcome sometimes reflects more a lottery than a governmental agency bound by the rule of law, with revenues formally taxed in excess of 100%] are anathema to any economic activity everywhere. Dynamic small private enterprises, which regularly spearhead the technological advances [and which, in modern society, increasingly constitute the economy's driving force] cannot realistically be expected to contemplate working under such [demotivating, productivity-slashing] conditions. ...
As if it were intended to drive away even the most stoic and undeterred of the remaining private investors, the Presidential Decree against economic sabotage of January 26, 1991, provides for the KGB and others to have unrestrained round-the-clock access to all offices and facilities of enterprises and organisations, including joint-ventures, to check their books, storages and available funds and[, at will,] to take possession of company documents. This, of course, can be no fertile ground for investments to flourish, and it creates a climate and conditions where foreign capital is all but attracted. What's more, it flies in the face of treaties in force ..."
The fierce Soviet struggle over reform presents a precious opportunity for President Bush. As Moscow teeters on the verge of transformation, concerted Western action might be enough to tip the political balance towards the reformers.
Now - before the internal battle is settled - Mr.Bush has to overcome his hesitation and get the United States and its allies to offer a grand bargain: Western aid conditioned on Soviet reform. Aid would not flow until reform began, and aid would stop if reform aborted. At worst, the West would squander a few tens of billions of dollars. At best, it would transform the Soviet Union and make a new world order possible. For the United States, which has been spending more than $100 billion a year to deter the Soviets militarily, that is prudent risk.
Mr.Gorbachev has promised radical reform in the past, only to shrink from it at the last moment. Last fall, he abandoned the 500-day plan to convert the Soviet economy to markets when conservative forces marshaled opposition. But his economy is imploding, and Mr.Gorbachev has learned that further delay in moving to markets would be catastrophic. The West can lend him a hand, so long as he irreversibly commits the country to the essential reforms already embraced by Poland, Czechoslovakia and Hungary:
* Political democratization: Progress toward pluralism must be assured, based on the rule of law and fundamental freedoms. Without an unshackled press, freedom of association and competitive elections, no government can rightfully claim the mandate it needs to sustain economic reform.
* Economic stabilization: Moscow cannot head off hyperinflation and move to markets unless it stops printing mountains of rubles to finance huge deficits. That requires slashing subsidies for inefficient enterprises.
* Price reform: Markets cannot work unless individuals can calculate costs using prices that reflect scarcity. That requires quick decontrol of most prices, also key to breaking bureaucratic control of economy.
* Convertible ruble: Soviet consumers will be prey to monopolies set free from bureacratic controls. One protection is readily available foreign imports. That requires a convertible ruble, allowing enterprises engaged in trade to buy and sell foreign exchange at fair market value.
* Private property: Markets cannot work if the individuals making economic decisions have no stake in the property, factories and stores they control. Privatizing small shops can be rapid; privaticing everything else takes time - and a blueprint as comprehensive as Poland's or Czechoslovakia's.
If Moscow and key republics sign on to these radical reforms, the West should pitch in enthusiastically with substantial economic aid. The Soviets will need immediate cash to ease their balance-of-payments problem and to stabilize the ruble. Later the World Bank, the International Monetary Fund and the new European Bank for Reconstruction and Development will need to provide development aid.
How much money will it take? Jeffrey Sachs of Harvard University, who helped design Poland's transition to markets, estimates $150 billion over five years. The sum need not be daunting if the United States, Western Europe, Canada and Japan share it.
Mr.Gorbachev may be ready to head the Soviet Union toward markets. But that path is too treacherous to navigate alone. If he tries to, he will risk reaction from those who want to roll back reform.
Western aid will not guarantee a Soviet move to markets. But it might just suffice to sway wavering forces in favor of reform. That tantalizing prospect calls out for a bold response by Mr.Bush and Western allies."
After spending the winter cozying up to the military and the KGB and cracking down on pro-democracy and independent forces, Mr.Gorbachev appears to have pivoted again. He has made some concessions to the Russian federation leader, Boris Yeltsin. And , in a gesture to the West, he has finally kept his promise to have the Soviet parliament formally ease restrictions on emigration.
But President George Bush is wise to view Mr.Gorbachev with skepticism, particularly when it comes to offering economic aid.
The case for caution emerged clearly in the Senate debate this month on a resolution urging the administration to look sympathetically at Mr.Gorbachev's request for $1.5 billion in credits to purchase U.S. farm products. Although the resolution passed, 70-28, critics of the measure seemed to have the better of the argument.
'All of us in this debate want economic and political reform in the Soviet Union to succeed,' said Senator Carl Levin, Democrat of Michigan, who supported the credits. 'But there is disagreement over whether expanding agricultural credits will help or hurt the chances [of reform] ... Neither proponents or opponents of this resolution can be absolutely sure.'
Many of those urging the food aid, including the prime sponsor, the Senate minority leader, Bob Dole of Kansas, come from states whose farmers are eager to expand their subsidized overseas sales. But that does not discredit their arguments. Competing nations, including France and Canada, are offering the Soviets credits for purchases of their crops. U.S. farmers, who have seen exports shrink and prices fall this year, would benefit from Soviet purchases.
On the Soviet side, Mr.Dole and other proponents could argue, the calls for credits came not just from Mr.Gorbachev but from former Foreign Minister Eduard Shevardnadze, a strong advocate of reform, and from close allies of Boris Yeltsin. Their statements that emergency aid is needed to avoid food riots, civil chaos and repression cannot be dismissed.
But it is disquieting that within a month of the United States' granting Mr.Gorbachev's previous request, in December, for $1 bilion in farm credits, he sanctioned the bloody repression of democratically chosen governments in the Baltic states.
For all the political conditions that Mr.Dole, a Republican, attached to his resolution, there can be no guarantee that new aid will keep the Soviets from cracking down again.
'At a miminum,' said Senator Bill Bradley. Democrat of New Jersey, 'we should say no credits until the Soviet government withdraws, evacuates and returns those buildings [it occupied] to the democratically elected governments' in the Baltics.
Mr.Bradley made another compelling point. The $1.5 billion in credits would finance the purchase of 4.2 million metric tons of U.S. grain. But Soviet farms grew 235 million metric tons last year - and got less than half of it to consumers, because of corruption and inefficiency.
Providing 'emergency' aid to Mr.Gorbachev, Mr.Bradley said, 'is simply putting off the day when Soviet leaders recognize that the only way they are going to improve the standard of living of their people is by moving to a more market-oriented system, which they have consistently refused to do ... and by a move to more democratically based reforms.'
Mr.Bradley cited recent testimony by a State Department official, Curtis W.Kamman, to back his argument.
'There is no natural reason for the
Soviets to have the food problems that they do,' Mr.Kamman said [and the
fact that trains earmarked for grain shipments were sequestrated by the
military trying to circumvent conventionally agreed-upon disarmenent measures
by moving military hardware in time beyond the treaty-covered areas tells
a lot about the real priorities of the USSR's real power players]. 'They
are blessed with fertile soils, adequate water resources and hard-working
and resourceful farmers.' Farmers' markets and private cooperatives 'have
proven that they can succeed without the intrusive intervention of Moscow.'
Privatizing farming, food processing and distribution [and cut-down-to-size
military prerogatives on the USSR's transportation system] would produce
'a marked improvement in the condition of Soviet farmers and in the availability
of goods for Soviet consumers. To date, however, the Soviet leadership
has been long on talk ... but very short on effective market-opening measures.'
America cannot do for the Soviets what their leadership will not do for itself. It would be a mistake to try."
A slight, yet positive variation of this generally bleak outlook - say a Soviet GNP decline of only some 10% and less inflation - could be expected, in the view of the Washington correspondent of the NZZ. Provided the agreement of April 23, 1991, for a mutually beneficial structure of genuinely sovereign republics freely joining resources in a real Confederation, turned out to be a generally acceptable, viable and developable basis for overdue - and in fact inevitable - fundamental reforms deserving this name. Also, according to Professor Vladimir Treml (Duke University), the USSR's underground economy accounts for 21-25% of its GNP. Reflecting the presence of significant market-relevant and even indispensable structures, individual capabilities and administrative practices (or forced tolerances), such a strong and readily de-criminalizable underground market, in the eyes of Professor Treml, makes a total collapse of the Soviet economy not unavoidable.
On the other hand, and with regard to
what all this really means with regard to the above detailed results of
the USSR's March 17 Referendum, it may be fair to say that the USSR's thus
described general state of the Union, its evidently unstable, rapidly and
badly - and apparently out-of-effective-control - deteriorating background
would make it unreasonable and even frivolous to interprete those results
as a public mandate for, in essence, more of the same. Rather, they seem
to have a ring of a general public outcry in favor of fundamental reforms.
Some observations on related human motivations
In 1816 some exceptional volcanic eruptions caused the sunlight to be significantly reduced, resulting in 1817 in a sharp fall in agricultural output over much of Europe. Part of Switzerland was hit by famine and Zar Alexander I manifested his solidarity with the affected Swiss through a gift of 100000 gold rubles(56). Swiss dairy farmers, cheese makers, sheep raisers, mechanics and other professionels gladly returned the favour by going in numbers to Russia, until the beginning of this century, in order to help develop notably that country's milk, wool and textile production. Solidarity and genuine freedom of movement and settlement made it possible then to effectively assist each other, to help each other out. Will today's leaders still find inspiration in such time-tested wisdoms and down-to-earth simple recipes when they seek answers to today's pressing needs? Or will they listen only when high-tech and big projects involving big money (affording kickbacks à la Marcos) are at issue?
Admittedly, the above-specified situation in the Soviet Union appears to be one big mess requiring big means. And may be the ever-more persistently called-for breaking up of not only the economic, but first and above all the political problem parcel into smaller and perhaps more manageable problem units will indeed offer, in some instances and problem areas, some viable long-term solutions.
As pointed out before, a country's size
- as a general rule - can play an important role but by and for itself
is determinent neither for a state's failure, nor for its successful survival.
And if the Citizenry in Vladivostok may benefit from some properly devised
and competently managed local customs free zone eventually attracting
notably Japanese investment, so may the Citizenry of Leningrad from similar
- and actually planned - nearby free zones(57).
But in order to draw maximum benefits from such - in fact from any other
- institutional advantages, the Citizens attracted to these zones have
to be street-wise, i.e. they must have professional qualities, such
as motivation, discipline and commercial talents enabling them to succeed
in a competitive environment. All of which requires well-focused and
adapted educational efforts and training programs for people who are or
can be motivated to take their destiny essentially into their own hands.
And that is where the above observations of Pope John Paul II can become
real social and economic catalysts which deserve the widest possible dissemination
In order for the Soviet Citizen - and essentially any other Citizen - to be motivated to work harder, he must become convinced that the fruits of his labour are really going to be and to remain his, that he can truly enjoy them the way he sees fit, and that he is really going to be free to decide when, where and under what conditions he may invest whatever savings he's made.
As only a relatively small part of the working population manages to overcome the administrative hurdles still tied to the exercise of independent professions - which, incidently, is an alarmingly growing phenomenon in all Western countries too - the demonstration effect alone cannot be relied upon. This holds true even if all these independent activities (e.g. of lawyers, consultants, money changers, etc.) were promptly relieved of unnecessary administrative burdens and were fully decriminalized (a measure which is anyway highly indicated and recommended).
Still, it is the Citizen's independent
activity which is seen as the individually most rapid and fruitful vehicle
for significant economic progress favorably affecting the entire social
fabric. The above-specified central condition for getting Citizens
to work harder may thus require other measures, such as the introduction
of a readily tradable, perhaps constitutionally gold-backed hard-currency,
and a determined effort by the clergy to encourage the members of
the church to consider the respective writings of the Pope. As the public
receptiveness for related spiritual guidance appears to be generally high
in the newly reborn East-European democracies, and highest in Russia, such
a course of action could promote a groundswell positively affecting the
business attitudes and practices even in the West. Moreover, it could favorably,
and decicively at that, influence the relationship between the peoples
of the Eastern and the Western parts of Europe. And it could facilitate
the evolving structure of a Europe of perhaps over 30 sovereign countries
providing for full preservation of their rich cultural heritage as the
basis for their Citizens to truly and responsibly enjoy all economic and
political freedoms (58).
This enchanting long-shot perspective should, however, in no way detract
anybody from the actual grave situation which, as the basis for all real
solutions, requires unrestricted openess and mutual goodwill.
Some paths to implement the people's real will
As pointed out elsewhere, the best case for devolution is that policies should be forged at the most local practical level. This cardinal message seems increasingly to get accross to both the people and the leaders who are participating in the USSR's reform debate. Attention might thus be focused on ways and means to help these processes. One potent vehicle for helping along the indispensable educational and structural economic reforms may - paradoxically - be found in the military(59). In a runaway environment the military often dispose over the best, if not the only, usable infrastruture and competence left both for containing the dangers of disintegration and chaos and for reconstructing a downtrodden society. Soldiers with a motivating mission are, of course, more reliable than when there is lack of direction and occupation. Moreover, enrooted in traditions of obligation, loyalty and professionalism, and used to discipline and receiving and executing orders, the military institutions of the nuclear-equipped Soviet Union may in fact become the West's most reliable important transitional partners (60).
Another potent instrument may be found in external political self-interest. As detailed below, in June 1989,
As indicated above, the Soviet Union, the Russian Commonwealth or whatever political entity eventually may be recognized as the legal successor to the Russian Empire, might yet benefit from the commerce agreements which the latter concluded with most of its traditional trading partners abroad. Assuming further research to confirm this preliminary finding, and - admittedly an even taller order - presuming the far-sightedness and indispensable political will in the capitals concerned to be either there or to be sufficiently mobilizable for such reanimation efforts to eventually overcome any opposition from the EC bureaucracy, the following medium-term prospects arise:
2. The leadership of the Soviet Union and its constituant people may find it to be in the interest particularly of the present Soviet Union's core republics (i.e. those who will have ratified the April 23, 1991 agreement) to seek to develop a Europe-wide political-economic structure. To this effect it may even take the initiative, eventually involving the EC, the European Free Trade Association and/or other suitable bodies. And it might, with mutual benefit, seek to draw inspiration from the premature Briand/Stresemann plan (see chapter "Citizens' Europe").
3. The leadership particularly of the Soviet Union might want to develop and apply its military structures and forces to the herculian task of educating and training its people, particularly its youth, to meet challenges of today and tomorrow, including notably preparing themselves to become effective market players but, no less importantly, effective guardians of their environment, their ecological inheritance.
4. The low- and middle-level officials must be given the right to spend up to 50% less time on official business and to exercice independent functions compatible with, and not linked to his official duties - naturally with corresponding cuts in their salary and social benefits (62).
5. The leadership particularly of the Soviet Union might want to write into the Constitution the most effective direct promoters of market-relevant liberties, notably the right to ANONYMOUS, UNDISCLOSED private property. It might want to substitute the income tax with a consumer tax which would become tailor-made in combination with a negative income tax.
6. The Soviet leadership in particular might want to benefit from the French Minitel experience by considering introducing not only modern telephone exchanges but placing priority on equipping all households with such cheap, simple and educationally instrumental intelligent end-user phone systems (63).
7. The Soviet leadership in particular might want to develop additional opportunities for promoting regional economic growth (e.g. by creating customs and tax free zones, mutual territorial leases involving suitable partners, like Japan for the Kuriles), and it might want to complement its sources and channels for earning hard currencies - e.g. through providing genuinely safe havens to capital fleeing fiscal confiscations - by way of special arrangements with competent representatives abroad.
The best industrial policy is to keep inflation low, real interest rates gently positive and exchange rates stable. The people will save and businesses will be naturally far-sighted - ie. willing to take a chance on investments that might pay for themselves only after many years. Without these conditions, nobody, not even a bureaucrat with many years' seniority, can guess what long-term investments will turn out to make sense.
After this, the most promising industrial
initiative is to invest in human capital: a well-educated labour force,
able to aquire new skills and adapt to changing demands, is the most valuable
asset an economy can have. And governments need to invest adequately in
infrastructure (such as roads), because there are good reasons for thinking
that private businesses will not. Macroeconomic stability, education
and infrastructure are the elements of a boring industrial policy that
would work." (emphasis added)
In his enlightening contribution "The Awakening of a Fourth Baltic State" to The Wall Street Journal (10/20/90) the historian Johann Fink detailed said agreement between Chancellor Helmut Kohl, and President Mikhail Gorbachev, concerning the Kaliningrad Oblast [administrative department]. He wrote:
The Kremlin also toyed with the idea of creating a German Republic in the northern corner of Kazakhstan. But the Kazakhs, like the Russians, are unwilling to see their land divided up and staged demonstrations against the plan. So the decision was made to place the new German Republic in the Kaliningrad Oblast, ....
Last October, the proposal to establish a homeland for the German minority in the Soviet Union came one step closer to reality when the Soviet publication, Literatura Gazetty, queried its German readers about it. More than 80% said they would prefer moving to northern East Prussia rather than migrate to West Germans. A few weeks later, Moscow announced plans to attract Germans from various Soviet republics to settle in the Kaliningrad Oblast by proposing to rename the capital Kantgrad, in honor of Immanuel Kant [the great German philosopher who lived there]. ...
Meanwhile on the economic front, the present government in the city of Kaliningrad is encouraging German tourism and also wants to have the Oblast declared a special economic zone, which is now under discussion by the Kremlin. ... Although this fourth Baltic state is only planning on becoming an autonomous republic within the Russian Republic, sovereignty may become an issue if Lithuania succeeds in seceding from the U.S.S.R. If Lithuania is independent, the autonomous German Koenigsberg Republic would have no land connection with the remainder of the Soviet Union."
When he first raised the idea with [Prime Minister Nikolaj Ryshkov and Foreign Minister Edward Shevardnadze in the Kremlin in 1988], he got little response. Since then the Russian Federation has taken the initiative. Last year the Russian parliament named Kaliningrad one of six potential free-trade zones to be set up within the Federation.
A plan for the free-trade zone has been drawn up by Juri Matochkin, head of the Kaliningrad Technical Institute, and is awaiting approval from Russia's parliament."
The Lithuanian(68) and third party rights and obligations emanating from the 1924 Memel Convention, in the hands of visionary and competent politicans, might furthermore serve to help resolve some actual regional issues. Belately rediscovering and honoring formal treaty obligations might in fact facilitate, in that region too, the realization of economic progress based on democracy, enterprising Citizens and the rule of law. As such, this would seem to meet not only vital economic but eminently political interests of all concerned.
An International Baltic Conference might thus be called to these effects by the Soviet leadership. It might involve notably France, Germany, Great Britain, Italy, Japan, Lithuania and the United States as the parties whose rights are affected by the Memel Convention. And it might thus effectively draw on and even enhance the considerable goodwill some Soviet leaders' continue to command among Western politicians. Conceivably, both the Memel Territory and the present Kaliningrad Oblast, with the help of Western and Arab investments and Soviet Jews emigrating there - instead of contributing further to the Mideastern problems - might thus indeed be turned into a most viable Baltic Hong Kong: as a treaty-based international free zone contributing to regional stability, prosperity and security (69), which might be linked to a Russian or - why not? - a European Commonwealth inspiring full confidence and radiating mutually beneficial cultural, political and commercial impulses in all directions.
from: Atlas of the World, 1963
G MORE LESSONS FROM THE PAST FOR EUROPE'S FUTURE
For the Wall Street Journal (May 17, 1991), the resignation of the German Bundesbank President Karl Otto Poehl and the appointment of fiercely nationalist Edith Cresson as French Prime Minister may, or may not
That's not bad news. Neither for the entrepreneur anywhere. Nor for the just reborn European democracies - who still find themselves locked out of the design and construction departments of this New European House. Having just escaped from one tutelage, these newly sovereign states deserve better - and not to be hoodwinked into serving new Orwellian masters.
After 30 years of benign neglect by governments
who were only too glad to export their socialists to Brussels, it should
surprise no one that the supranational structures they designed "to contain
the German clout" are now irreparably out of step with the course
of history. Margaret Thatcher - and, though less forcefully, even her successor
at 10 Downing Street, and a growing chorus of European politicians - have
not been taken in by Europhoria. Instead, they have been looking
for ways to keep their organically grown and deeply enrooted European countries
off the road to where Gorbachev and his reformer friends struggle to extract
their trapped fellow-Citizens from.
A symptomatic and, at that, a particularly unkind cut, is the EC's sly offer to unsuspecting former COMECON countries to conclude seemingly advantageous bilateral cooperation agreements. Besides weakening their sovereignty in favor of the EC bureaucracy - for a plate of lentils at that - these agreements recently concluded by Czechoslovakia, Hungary, Poland and Romania jeopardize and erode the mostly comprehensive most-favored-nation rights written into their old commerce treaties with most EC states. Apparently, the timely, repeatedly and on different levels given warning signs have either not reached the decision-makers in question - or they elected to follow contrary advice(70).
These treaties constitute real treasures of libertarian principles, providing for tax, commerce, establishment, customs and other regional freedoms that some of our peoples can now only dream about. Moreover, they take precedence over Community law by virtue of article 234 of the EC's fundamental Rome Treaty. In fact, the EC Council, on February 12, 1990, again provided for the official prorogation of 271 commerce treaties of EC members with other states, some dating back to 1815. These include the invaluable treaties of the United States with all but two EC member states (Portugal and Spain).
Like Great Britain - with its on-going "special relationship" with the United States -France, Austria, Switzerland, Malta, Turkey, and the East European countries have indeed too many valuable cultural and historical assets as well as bridging functions between Europe and non-European states for them to be politically plain-levelled. They would lose their identity in a hamburger design perpetuating discredited policies.
The some 200'000 pages of mostly self-serving
new regulations the EC produces annually for "guidance" of Europe's entrepreneurs
speak for themselves. Can such a new Tower of Babel serve
the Citizens? The Citizen's welfare also depends on individuals
and enterprises capable and willing to play viable markets. Yet,
to hassel their players, to regulate markets towards extinction, continues
to be the bureaucrats' privilege.
Mobilizing Europe's dormant potential requires de-criminalizing the markets, less bureaucracy, deregulation and even devolution, but not supra-nationalism, centralization and plain-levelling. Only the former provide the fertile terrains, the preconditions, for needed growth and development in harmony with the environment. With that, open markets, borders, universities and minds and, of course, real value currencies, could again work wonders.
What is called for is the Old Continent's responsible homo oeconomicus, the Citizen-entrepreneurs, rather than the aparatchiks here and there, to be again the masters and driving forces of Europe's future. For economies, too can only advance as much and as fast as they succeed in unlocking the individual's productivity and creativity - which thrive most in small units. For all that to really happen, society needs to evolve to recognize and honor again another human right: the right to ANONYMOUS, UNDISCLOSED private property (see above).
In contrast, the present concepts for encouraging the formally free Citizen to put his capacities to work, and for accomodating the non EC European countries, testify to official mediocrity. They must be revised in favor of a new EC - the EUROPEAN CONFEDERATION, as proposed by T.G. Masaryk, Aristide Briand, Gustav Stresemann, Charles de Gaulle, François Mitterrand, Helmut Kohl and Margaret Thatcher. Indeed, a Magna Carta II is needed. It is to secure the continent-wide peaceful transition from state tutelage to individual liberties and responsibilities. Not the bureaucratic, but the historic, cultural and social "acquis" of Western and Eastern, Northern and Southern Europe deserve safeguarding.
The Briand/Stresemann plan was worked out in 1930 under the League of Nations auspices; its principle features were (71)
- "Establishment of a common market for maximum elevation of the level of human well-being on the entire territory of the European community ... by way of progressive liberalization and systematic simplification of the exchange of goods, capital and persons".
- "Regeneration of agricultural regions ... Cooperation of universities and academies ... development of contacts and exchange of views between lawmaker circles of different European countries."
Customs-Free Geneva - Europe's D.C. of the future?
E.g. imaginative French diplomats might thus not only get their hands strengthened vis-à-vis their increasingly powerful German counterparts. Switzerland could also be asked to honor old treaty obligations providing for Geneva to be the freely accessible market place for the surrounding French communities(72). Some call for transit rights between Italy and France which might facilitate the resolution of some actual transit problems with the EC (see page 4). Others provide for the withdrawal of the Swiss customs from all of Geneva. Which, in turn, could open the path to all of Switzerland eventually benefiting, vis-à-vis the EC members, from Geneva's ancient trade and commerce privileges (73).
In short, the called-for boldness for shaping Europe's future might thus not consist in designing some fancy new framework. Europe may be rediscovered by looking at its roots, by reanimating and applying forgotten old treaties, e.g. on regional free zones. It may best be served with a re-focused, envigorated and enlarged Council of Europe. And its most effective single manifestation may be found in placing the public trust back into the individual Citizen, his judgement and, yes, his sense of social responsibility.
In a nutshell: Give Europe back
to its Citizens!
IDEAS AND CONCRETE PRACTICAL MEASURES
FOR STATESMEN AND LAWMAKERS, PROVIDING FOR THE REAPPEARANCE OF
CITIZEN-ENTREPRENEURS, THE REANIMATION OF THE HOMO OECONOMICUS
AS THE MARKET'S INDISPENSABLE CENTRAL DRIVING FORCE
2. Provide for the Citizens' and the nation's soul to be healed through guidance towards individual self-fulfilment, private property and social responsibility! (e.g. see the Encyclical Centesimus Annus by Pope John Paul II).
3. "Train and educate man!"
Encourage particularly your people to widen their horizon and venture to foreign lands! Recognize and strengthen the Citizens abroad and reinstate those who have lost their Citizenship (they are all economic ambassadors)!
4. Shift the powers from the bureaucracy
back to the Citizens!
A nation's key responsibility - and source of legitimacy -, i.e. its capacity to safeguard its Citizens' pursuit of happiness, may be met most effectively through genuine liberation and responsabilization of the Citizen as its only real sovereign.
6. Provide each household with an anti-Orwellian telephone, e.g. the French Minitel, for a tax-free electronic flea-market, for round-the-clock bartering, and for buying and selling all sorts of new and old goods and services.
7. In as much as a society of genuinely free Citizens rightly rejects slavery, forced prostitution, etc., there can be only a willingness for, but no right to employment and dependent work which, essentially, reflects a society's level of organization, notably its economy's - unemployment-prone - division of labor. "Full industrial employment" - as long as the market provides for it - thus represents a mutually satisfactory anomaly; whereas unemployment (the risky part of this anomaly) expresses the individual's incapacity and/or unwillingness to recognize, organize himself and exploit the economic opportunities which surround him everywhere.
"The Signatory States,
Recognizing social and economic gradients between and within countries to constitute root causes for tensions and resulting conflicts, for which reason the methods and instruments of production, marketing and trade should take account and advantage of all opportunities for slowing down, arresting and, wherever feasible, even reversing the further growth of these gradients;
Aware of the socio-economically adverse effects of production investments which orient themselves on, and indeed may feed the wasteful cycle of non-genuine short-term markets - rather than bringing to light, following and responding to the more basic trends of human aspirations;
Noting the geometrically growing economic and social costs of essentially unlimited and disoriented growth;
Recognizing the ecological and/or human and animal health hazards associated with some prevailing methods and instruments of production, marketing and consumption of many of our foods and goods as unwittingly diminishing the quality of life for both the individual and society as a whole;
Aware of the rapidly growing demand particularly in industrialized countries for, inter alia, natural medicines, biological food and quite generally for such natural products for man's immediate surrounding which afford a warmer relationship to them;
Appreciating the world-wide symbiosis thus afforded, and which should enable developing countries to benefit from these highly potential quality demands through concentration of their resources on the development and application of corresponding production methods and instruments reflecting their own cultural roots - while providing for the industrialized countries to benefit primarily in the field of public health and with a view to the quality of material life in general;
Anticipating a more deliberately nature-, culture- and labour-intensive production of quality goods to entail the preservation and creation of professions, rather than mere jobs, and thus to provide among others
- the indispensable basis for the production of ever more sophisticated goods,Considering equitable market access for, and unimpeded international trade of basic commodities, semi-finished and finished quality products, services and technologies of all degrees of sophistication to be of importance for both developing countries and their partners in the more industrialized parts of the world:
- the vehicle for socio-economic development focused on rural areas, and thereby
- a potent incentive towards reversing the uprooting of rural populations and their excessive migration to urban centres particularly in developing areas;
Therefore declare their readiness to cooperate individually and jointly with suitable interested parties in the development and implementation of measures in line with the following guiding principles for international trade and commerce:
2. Any customer providing
for adequate end-user responsibility shall have politically unimpeded access
to whatever goods, technologies and services he may require and obtain,
under normal commercial terms and conditions free of restrictive business
versus Separation: Apart Can be Better", Washington Post/ International
Herald Tribune, May 9, 1991. See also: Clyde H.Farnsworth,
Say a Free Quebec Could Cope", IHT 6/7/91; Neil Henry,
New Age for Africans?", IHT 6/1/91; "Ethiopia - Falling apart",
The Economist, 6/8/91.
(2)"Balkan states crack on rock of reality", The Guardian, May 10, 1991.
(3) Harold Temperley, History of Serbia, 1919, quoted in: The Guardian, May 10, 1991.
(4) Neue Zürcher Zeitung (Reuter), June 1, 1991.
(5) The Guardian reported May 10, 91, that Britain's Foreign Secretary, Douglas Hurd, urged "the European Community to offer to conciliate between Yugoslavia's warring republics, to avert the break-up of the country. ... Britain would be ready to support Yugoslavia's transformation into a loose confederation, but is strongly opposed to secession by Croatia, Slovenia or any of the other republics. ... [Mr.Hurd tried] to pursuade the EC to issue a statement supporting continuation of Yugoslavia as an entity." The Guardian thus commented: "The West ... fears the implications for its backing of Gorbachev against the independence movements in the Soviet Union. It even fears the implications in its own back yards - in Scotland, Catalonia, Corsica."
(6) Helmut Schmidt, "Der Niedergang des roten Reiches", Die Zeit, 3.Mai 1991 ("Le déclin de l'Empire rouge", Courrier International, 23 mai 1991).
(7) What follows is, basically, a look beyond the apparent contours and guideposts of the recognized problems. In part, that inevitably leads us onto little explored ways and even into uncharted directions. Thereby, we risk to come accross ideas which may have been discarded before but, seen in a different light, may anyway help us ahead. But we may also find our-selves confronted with - and indeed challenged by - apparently new perspectives and insights. All of which, essentially, will be but the result of applying common sense and a time-tested, yet not widely practiced method of purposely looking beyond the apparent contours of a problem and escaping traditional but in fact unreal limits thus providing for a round-about analysis and resolution of complex problems.
It may best be illustrated with the nearby graphic, posing the famous mathematical problem of linking all nine points of a square with only four straight lines drawn uninterruptedly, i.e. without taking the pen off the paper. Thus it can be seen that within the confines of the apparent elements - i.e. the square deliminated by the 9 points - the problem is unsolvable as it takes 5 lines. As is the case with many problems, only by breaking out of the apparent confines of the square can the problem be solved.
(8) Emmanuel Todd, "Chute finale", 1975, in "L'invention de l'Europe", Antenne 2, May 4, 1990.
(9) For details see the ground-breaking "IRON MOUNTAIN REPORT - On the Desirability and Feasibility of Peace", Leonard C.Lewin, edit., Dial Press, New York, 1967; French translation: "La Paix Condamnée", Calman Lévy, Paris, 1968; German translation: "Verdammter Friede", Econ, 1968. See also: William Pfaff, "Soviet Decay: When Only the Army Works", International Herald Tribune, May 31, 1991.
(10) E.g. cashless payments take all privacy out of inidivual economic transactions, deprive Citizens of the anonymity associated with cash and provide for the electronic surveillance of the Citizen's economic activities and movements (see also below).
(11) Ian Guest, "Swiss Are Said to Deprive Foreigners of Due Rights", International Herald Tribune, August 25, 1979; "Portée des traités d'établissement", Direction de Droit international publique, JAAC, 1977, 41-II, 56; H.A.Keller, "Des traités internationaux 'grignotés' par l'administration", Journal de Genève, 12-15 juillet, 1979; Walter Stoffel, "Die völkervertraglichen Gleichbehandlungs-Verpflichtungen der Schweiz gegenüber den Ausländern", Diss., Schulthess Zürich, 1979; Erich Reyhl, "Ausländer hätten mehr Rechte - können sie aber nicht wahrnehmen", Basler Zeitung, 11 August 1979.
(12) Each member of the European Assembly has the right to formally set things in motion to this effect - as, in theory, has each Member of the Council's governing Council of Ministers. Any takers?
(13) For recent lucid accounts of the cultural and economic net benefit of immigrants to their host societies, see also: Julian Simon, "Europe's Costly Immigration Myths", The Wall Street Journal Europe, April 18, 1991, and: "Yes, they'll fit in too", The Economist, May 11, 1991.
Some sceptics may be reminded that, e.g., Switzerland, in the last century, was essentially an under-developed agriculture-oriented society whose transformation into one of the world's most sophisticated commercial and industrial societies is largely due to the enterprising treaty immigrants let in freely notably until 1914. Of course, present circumstances are not, in all details, comparable to those prevailing in the last century. In practice, adaptions reflecting also the labor market and other economic conditions in the sender and the receiver countries may thus be indicated and carried out without undue official interferences - in line with the treaties' basic aims and principles.
(14) The OECD Convention of December 14, 1960, lists among the aims and purposes of this key organization of industrial countries the "preservation of individual liberty" (Preamble) and to "maintain and extend the liberalisation of capital movements" (art.2,d). Yet, the OECD Recommendation on Tax Avoidance and Evasion of September 21, 1977, calls for strengthening "powers of investigation for the detection and prevention of tax avoidance" (emphasis added) - even though the free movement of people and capital to wherever the taxpayer may consider fiscal and other conditions to be more suitable, constitutes an essential human right, a key market factor, and a formal liberty protected by the OECD, Council of Europe and other statutes fundamental to Western society (www.solami.com/billiard.htm ¦ .../oecdmandate.htm). In setting up machinery to "combat" sound and entirely legal business practices, as the OECD has done with its Fiscal Committee's most secretive Working Party No.8 on Tax Avoidance and Evasion, the OECD's aims and purposes are seen to be effectively - and increasingly so - undermined from within, and outside the Member government's and the constitutional lawmakers' effective control at that. This symptomatic phenomenon of our time may have been decisively helped by the manifestly misleading, if not outrightly false French translation in all official OECD documents of the terms tax avoidance and evasion. For tax avoidance is legal anywhere and in fact constitutes a key characteristic of the free market; the French translation of these legal key terms into évasion et fraud fiscal brought not only confusion for businessmen. With both practices being in most countries subject to criminal proceedings, it also opened the worldwide Orwellian chase of innocent taxpayers by way of the supercomputer-assisted international fiscal police INTERFIPOL, provided for in the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters of January 15, 1986 (for details see: H.A.Keller, "Europe's Taxmen Plot an Orwellian Scheme", Wall Street Journal, May 9, 1986; .../Orwell.htm#plot).
(15) Douglas A.Rediker, "Hongrie: les ex-apparatchiks font de bons consultants", Courrier International, 23 mai 1991 (transl. from: The New Republic)
(16) This ill-considered directive has given rise to anxiety and consterna-tion in Spain and else-where. It could not only seriously affect Spain's cultural life at home, but disturb its relations particularly with the other spanish-speaking countries in the Americas. And it appears to be in line with other plain-levelling decisions emanating from a Tour of Babel sort of ivory tower aloft of the realities prevaling in the provinces (see also: "Bashing Big Bad Brussels", Time, June 5, 1991).
(17) In fact, fiscal authorities almost everywhere have come to routinely - and even spontaneously! - pass on key fiscal data to interested other, including foreign authorities, thus violating fundamental sovereignty and fiscal principles behind the smokescreen of ever more complex and purportedly pro-, but in fact anti-taxpayer fiscal agreements (see also footnotes 14 and 37).
(18) This effectively forces the some 99% law-abiding Citizens and their bankers to foot the bill of an ill-considered, badly designed and dangerously executed world-wide witch hunt. It would be self-deluding to treat these abused Citizens as insensitive, hassle-tolerant sheep who see no alternative and will put up with whatever constraints the authorities claim to be necessary. For one thing, they may walk out in numbers of a bank and a country. And, eventually, they may force a radical swing back of the pendulum (.../goldpossession.htm).
(19) The US Senate's Permanent Subcommittee on Investigations urged treaty negotiations "to end foreign bank secrecy [in] Switzerland", arguing: the bank "havens are drawing from the U.S. Treasury each year ... billions of dollars ... [and that] the users of the havens are thought to include growing numbers of tax-avoiders who are otherwise law-abiding. Haven secrecy enables assets and investment income to stay hidden", Wall Street Journal, October 11, 1985. Alan L.Otten, "Swiss Banking Haven Losing Luster", WSJ 4/27/82; W.L.Luetkens, "The secrets of bank secrecy", Financial Times, 12/20/84; Beat Brenner, "Schweizer Antworten auf amerikanische Ideen", Neue Zürcher Zeitung, 11/7/87; Jean Mussard, "A Trojan Horse in Switzerland", WSJ 4/12/88; "Spooking Switzerland?", WSJ editorial, 3/25/88.
(20) While the US chemical indus-try, according to a CIA report, delivered practi-cally uncon-trolled the bulk of the indispensable chemical products to the Columbian drug producers, the Swiss political establishment was manipulated to lower Swiss laws to the level of pretended "US drug enforcement needs", and some Swiss banks were, to say the least, directly pressured into becoming informants for the US administration. See also: Stanley Penn, "U.S.-Made Chemicals Supply Narcotics Labs Across Latin America", Wall Street Journal, July 15, 1988; "Thornburgh's Own Laundry", "On Switzerland's Grievious Mistake", Wall Street Journal, November 29, 1988; Pascal Auchlin, Frank Garbely, "Das Umfeld eines Skandals", Werd Verlag, Zürich 1990.
(21) "How can this be dirty money in Panama, but not in New York or Miami?" Ruben Carles, Panama's Comptroller General asked (Shirley Christian, "Panama Banks Say U.S. Laundering Concern Goes Too Far", IHT 6/7/91).
(22) Founded by Howard Phillips (a former director of the U.S. Office of Economic Opportunity who thus got what he describes as a "solid four-year education in just how badly the Federal government is permeated with waste, corruption, moral cowardice, and destructive ideological activism"): 450 Maple Avenue East Vienna, Virginia 22180.
(23) See notably: Tony Horwitz, "Desert Drift - Their Nation Saved, Kuwaitis Now Wait for Someone to Fix It - Many of Them, Meanwhile, Plan a Summer Elsewhere As Decisions Go Unmade - Reform? Perhaps Next Year", Wall Street Journal, May 17, 1991; "AMERICAN OUTRAGE boils over the post-war policies of Kuwait's royals", "The Kuwaitis 'seem to have slipped back to a state of prewar arrogance,' fumes Rep. Ackerman, a Democrat who backed sending U.S. troops to free Kuwait", Wall Street Journal, May 24, 1991; Lisa Beyer, "No Quick Fixes in Sight", Time, June 3, 1991.
Also: "... this resolution [adopted by the Interparliamentary Union meeting at Punta-del-Este in favour of Kuwait], in the words of one of several profoundly disappointed and disturbed pro-Kuwait politicians, has come out the way it has 'unfortunately not because but rather despite of the Kuwait authorities' actions, respectively lack of them.'" (from a letter of 10/24/90, of the Good Offices Group of European Lawmakers to a Kuwaiti ambassador).
(24) If it had not been for reasons of principle, geopolitical imperatives and significant down-to-earth interests of the other members of the family of nations, the indulent Kuwaitis would not, and should not, have been spared the destiny to which they allowed their leaders already twice to drive them. For while the method or trial and error has indeed been nature's main vehicle for all of its evolutionary processes, and while the never-completed process of education, on both the individual and the national level, calls for a natural right to commit errors, the repetition of errors is a telltale sign of incompetence and perhaps even decadence and decay. Accordingly, no similar right may legitimately be invoked for the repetition of errors or, for that matter, for escaping the responsibility for committing any error, be it the first or the third time, on the individual or the highest state level.
(25) And if it were not for such enlightened, courageous and confidence-inspiring Soviet leaders as Eduard Shevardnadze - see his new book: "L'avenir s'écrit liberté" - who, with their actions and inactions demonstrate genuine honesty and willingness to do their utmost best in addressing the root causes of the Soviet society's present miseries, the people of the free world would rightly not give any moral or hard currency credit to the remnants of an utterly discredited and futureless power structure. Indeed, they would be ill-advised, fail their own obligations and best interests and, what's more, do no real good to the people still vegetating under the terminally ill, yet still somehow surviving Soviet structures, if the help they were led to render under whatever title, in fact, contributed to the latter's maintenance rather than to the mutually beneficial genuine fundamental reforms of Soviet society.
(26) Eduard Shevardnadze, former USSR Foreign Minister and more visible and appreciated than ever, reportedly favored the eventual participation of the United Nations in the resolution of regional conflicts in the Soviet Union (NZZ, May 17, 1991). Evidently, the adoption of the humanitarian intervention principle by the UN Security Council (Resolution #688, April 5, 1991) did not take long to get concerned citizens anywhere to think of this ground-breaking legal principle's eventual application in areas far apart from its original focal point, i.e. the intolerable plight of the fleeing Iraqi Kurds. Yet, it remains to be seen - particularly in the Kurdish, the very case which gave birth to it - if its utility and full potential will not be undercut by the UN Representative's signature under the UN-Iraq Memorandum of Understanding of April 18, 1991, which unreservedly states that the "Resolution 688 ... has not been accepted by the Government of Iraq" (see also: Mario Bettati, "When It IS the World's Business", International Herald Tribune, April 19, 1991).
(27) To this effect, Iraq and Turkey might complement their Treaty of Friendship and Neighbourly Relations of March 29, 1946 (UN Treaty Series, vol.37, 1949, p.280ss). Its Protocol 1 (concerning the development of the waters of the Tigris and Euphrates) and Protocol 6 (relative to the frontier), together with the Helsinki Rules on the Development of International Rivers could serve as guidelines.
(28) Thereby, it ignored the fervent pleas of the British, French, German and Swiss governments, as manifested in their noteworthy amicus curiae briefs.
(29) ibid. See also: A.A.Hermann, "Long arm laws: A lesson from the US", Financial Times, June 25, 1987; S.Wermiel, "U.S. Justices Rule on Access to Foreign Data", Wall Street Journal, June 16, 1987; Dolf Weber, "Sieg des amerikanischen 'Konsumerismus' - Gerichte dürfen Europa ausforschen", Frankfurter Allgemeine Zeitung, 6.Juli 1987.
(30) Emphasis added; the texts in cornered brackets  constitute interpolations based on the available relevant source material, developed by the author in line with the Salamonic principle.
(31) For those familiar with some skeletons in Berne's history, this will be neither original nor particularly surprising, for Berne is said to have received payment from the Duke of Savoy in return for Berne's agreement to withdraw its protective troops from its ally Geneva, on condition that the Duke creates for them a state of necessity by marching on Geneva with sufficiently strong forces (Treaty of Nyon, October 1, 1589)!
(32) According to the SEC, "the funds which Judge William C.Conner froze in the Santa Fe case were on deposit with U.S. branches of these Swiss banks at the time they were frozen. ... Judge Conner was thus able to exercise his own jurisdiction to freeze these funds without causing any violation of Swiss sovereignty." (Letter of April 9, 1985, to a Swiss parliamentarian, signed by SEC Acting Director Gary Lynch). According to the lawyers representing the Santa Fe clients, this involved funds originally held in an account at a Geneva branch of one of the big Swiss banks, but which were frozen on an account of a New York firm affiliated to same; the problem was only that the account holder reportedly never gave any such transfer order or consented to such a transfer.
(33) The American legal assistance request of March 22, 1982, refers to a "written opinion" by the "Chief of the Division of International Assistance and Police Matters" which provided help for overcoming the lack of a US criminal procedure as an obstacle to Swiss legal assistance. After the Swiss Federal Tribunal, on January 26, 1983, had refused to lift the bank secrecy in this matter, Swiss officials and representatives of the involved banks went to Washington for discussing possible ways to satisfy the SEC's information hunger anyway. Ignoring the objections of the bank clients, they provided the SEC with guidance and data permitting it to submit a second legal assistance request which the Federal Tribunal admitted on 16 May 1984. But before all legal appeals were exhausted, said Division of International Assistance and Police Matters informed the SEC of the bank clients' names.
(34) International Herald Tribune, March 7, 1990. This case is not seen to strengthen the indispensable respect of American officials for the sovereignty of foreign countries. It seems to directly encourage the world-wide spread of an American tradition, namely the bounty hunting on behalf of US "justice". And it should thus surprise nobody if such notorious fugitives as Marc Rich - who is not regarded as a criminal under Swiss law and, therefore, cannot be extradited - one day finds himself kidnapped, be it in his fortified Swiss residence in Risch, or anywhere else in the world.
(35) Stephen Rosenfeld, "The General Scratches His Head", International Herald Tribune, June 1, 1991 (also: IHT, 5/20/91).
(36) The Wall Street Journal Europe, April 12, 1991
(37) One other most notable example being the gradual reversion of the fundamental principle of exclusive taxation by way of treaties originally intended to prevent double-taxation but which have become the legal basis for allowing the taxmen of several countries to hassle the same taxpayer.
(38) E.g. its commerce and navigation treaty with France dates from March 20, 1874 and January 28, 1906, while its commerce treaty with Great Britain dates from the early 19th century.
(39) Reached between the central government and the 9 core republics, i.e. Russia, Belorussia, Azerbaijan, Kirgizia, Tajikistan, Turkmenia, Kazakhstan, Ukraine, Uzbekistan, this treaty provides notably for the devolution of the so-far centralised economic powers, for a return to the individual republics of the sovereignty over their natural resources, and for increased, preferential economic cooperation among the signatories. As such it may itself become a cause of tension, and serve primarily as a catalyst for, respectively as a vehicle for or a bridge into an era which will see political and economic structures fundamentally different from present ones.
(40) Armenia reportedly refused to participate in the March 17 referendum also for fears it might thus undermine its interests concerning the embattled enclave Nagorno-Karabakh.
(41) Meg Bortin, "Armenian Says Thaw With Turkey Is Key to Independence", International Herald Tribune, May 25, 1991
(42) Helmut König, "Das deutsch-sowjetische Vertragswerk von 1939 und seine Geheimen Zusatzprotokolle. Eine Dokumentation", Osteuropa, May 1989
(43) C.Sr., "Rumäniens Beziehungen zur UdSSR - Umstrittener bilateraler Freundschaftsvertrag", Neue Zürcher Zeitung, 24.Mai 1991.
(44) Tenguiz Goudava, "Géorgie: vers le national-bolchévisme?", Courrier International, 23 mai 1991 (translated from: Novoie Vremia, Moscow)
(45) Francis X.Clines, "The 100 Billion Mistake: Gorbachev was Misunderstood", International Herald Tribune, May 25, 1991
(46) Ann Devroy, "Bush Wary on Plea From Gorbachev", IHT, 5/24/91
(47) International Herald Tribune, May 18, 1991
(48) Gerald F.Seib, "Bush Will Consider a Western Aid Package For Soviets Linked to Economic Reforms", WSJ, 5/24/91
(49) Martin Walker, "Bush wavers on Moscow's $100bn plea", 5/24/91
(50) on French TF1, 7sur7, May 26, 1991
(51) Organized at the suggestion of David Smick (organizer of the initially apparently mistaken private "G7 Council", held at the US State Department, to which Mr.Yavlinsky received an invitation in early April), with the support of both Yevgeny Primakov (member of Gorbachev's national security council responsible for economics) and President Yeltsin, in consultation with Western experts, notably Graham Allison and Jeffrey Sachs (Harvard). President Gorbachev, according to The Economist ("Tale of a letter", 5/25/91) "endorsed the letter, giving Mr Yavlinsky the authority to negotiate a new reform plan with western aid." The letter reportedly "promises that the Soviet Union will pursue 'a rigid fiscal and monetary policy ... liberalisation of prices ... an extensive programme of privatisation and demonopolisation". In exchange it asks the G7 to draw up an aid programme, to reschedule Russia's foreign debt, and to admit the country into the IMF and the World Bank."
(52) "Der Niedergang des roten Reiches", op.cit. (authorized translation)
(53) "Investments and Joint-Ventures in the Soviet Union", keynote address held March 1, 1991, at the "Forum Institut für Management", Munich (authorized translation)
(54) "Yes, Help Moscow Reform", IHT, May 25, 1991
(55) "Soviet Aid: The Case For Caution", International Herald Tribune, May 25, 1991
(56) Parliamentary Question Hansjörg Weder, December 3, 1990.
(57) Mathieu van Berchem, "Novgorod, entre Moscou et Leningrad, future zone de liberté économique", Tribune de Genève, 9 février 1991; see also: "Les Zones Franches en Europe", J.A.Keller (édit.), CORUM, 1989 Genève
(58) Maurice Duverger, X.Pellegrini "Trente nations, une Communauté" Hébdo 12.4.91, A.Campiotti "Le continent de l'inquiétude, les incroyables scenarios" 2.11.89; Maurice Allais "Non à l'Europe de Delors" FIGMAG, 15.12-.90.
(59) See particularly: "IRON MOUNTAIN REPORT - On the Desirability and Feasibility of Peace", op.cit. Also: William Pfaff, "Soviet Decay: When Only the Army Works", International Herald Tribune, May 31, 1991.
(60) There can be no question of the military substituting themselves for the Citizens and the civilian authorities. In the event, a national consensus would have to be developed as a prerequisite for any viable interim solution. For Helmut Schmidt, "a Soviet military dictatorship aiming at transforming the Soviet centralised economy into a market economy would likely turn the failure of the economic reform attempts to date into a cataclysm, entailing the enhanced dangers of an external demonstration of its forces in order to compensate for internally unkept promises", "Der Niedergang des roten Reiches", op.cit. (authorized translation).
(61) Johann Fink, "The Awakening of a Fourth Baltic State", The Wall Street Journal Europe, October 20, 1990.
(62) The enterpreneurs constituting and playing the market - in both the West and the newly reborn democracies - increasingly find their indispensable freedom of economic action effectively and discouragingly reduced if not indeed voided by uncomprehending, suspicious, non-cooperative, obstructive and/or careless officials affecting their businesses. This may be changed by deliberately encouraging officials to become themselves market players and thus develop a more business-friendly mindset.
(63) Following a "coup de génie", the French Telecom, over the last ten years, installed free of charge over 5 million Minitel. These intelligent household sets replace both the ordinary telephone and the telephone book, provide prompt access to an ever-increasing number of services and constitute the core of a nation-wide tax-free round-the-clock flee-market for bartering, buying and selling all sorts of new and old goods and services. The simplicity of the Minitel's handling, its everyday usefulness, and its availability at no upfront costs (only the communication time is billed like in the case of an ordinary telephone call) has allowed even elderly people to learn playingly to handle modern communication equipments and computers. It has already produced a quantum jump for the French society and will enable it - second to none if its leaders grow up to the challenge - to provide economic and cultural leadership in the dawning information age.
(64) "Of state and industry", leader, June 8, 1991, p.15.
(65) "Kaliningrad - Inside Russia's western enclave" (4/27-/91); Timothy Aeppel, "Restless Ethnic Germans in USSR Make Bonn Nervous", WSJ, 5/24/91; L.Delattre, "Kaliningrad rève de Hong Kong", Journal de Genève, 22 mai 1991.
(66) Other note-worthy Statute provisions include:
"The port of Memel shall be considered as a port of international concern. The recommendations adopted by the Barcelona Conference concerning ports subject to an international regime shall be applied thereto, unless otherwise herein provided." (art.2)(67) Helmut König, "Das deutsch-sowjetische Vertragswerk von 1939 und seine Geheimen Zusatzprotokolle. Eine Dokumentation", Osteuropa, May 1989, op.cit.
"There shall be a Harbour Board, which shall consist of three members appointed for three years and eligible for reappointment, as follows:
1o one representing Lithuanian economic interests, to be appointed by the Lithuanian Government;
2o one representing the economic interests of the Memel Territory, to be appointed by the Directorate of the Territory;
3o one to be appointed by the Chairman of the Advisory and Technical Committee for Communications and Transit of the League of Nations. This member shall not be a citizen of a Niemen riparian State. He shall give special attention to international economic interests served by the port and particularly to those of the districts for which the port of Memel is the natural outlet." (art.5)