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By John F. Sase, Ph.D.
Gerard J. Senick, general editor
Julie Gale Sase, copyeditor


“Work is about a search for daily meaning as well as daily bread, for recognition as well as cash, for astonishment rather than torpor; in short, for a sort of life rather than a Monday through Friday sort of dying.”
— Louis “Studs” Terkel (1912-2008), ­American Author, Historian,
Actor, and Broadcaster

Being a good economist requires more than a facility with Mathematics. The profession also requires a knowledge of history and, more importantly, of people. These traits have been underscored by Robert Schiller and Richard H. Thaler, who won the Nobel Prize in Economics in 2013 and 2018, respectively, for their work in Behavioral Economics. This subfield demands a grasp of History, Sociology, and the Psychology of human beings.

As we are concerned with what people do and why they do it, we find that the economics of human thought, feeling, and belief influence behavior and, consequentially, financial decision-making.

Before economists started to merge the Behavioral Sciences and Liberal Arts with Economics formally, others had been on the radar, laying the groundwork for decades. The author of our opening quote, Louis “Studs” Terkel, is one of the main practitioners of humanistic writing. He remained active for more than a half a century doing the fundamental research for this interdisciplinary field. We will use Terkel’s approach to storytelling to present our example of economic recovery in the country of Liechtenstein.

“Studs”

Terkel, who passed away at the age of 96 in 2008, devoted much of his professional life to interviewing and writing down the oral histories of everyday people, focusing on their jobs and their personal feelings about them as they attempted to survive and to thrive.

Terkel earned his Juris Doctorate from the University of Chicago Law School in 1934 and was admitted to the Illinois Bar the following year. However, he decided to forego the practice of Law, instead taking a job as a concierge at a hotel and joining a theatre group. Known politically as a Liberal, Terkel also joined the Federal Writers Project (FWP) through the Works Progress Administration (WPA). These experiences led Terkel to work in radio, where he wrote scripts, did voice work, and presented recorded-music shows, among other things. His best-known radio show is The Studs Terkel Program, which aired on WFMT 98.7 in Chicago from 1952 through 1997. On this program, he interviewed many people about their life stories. Currently, 1,625 recordings are available for listening at http://studsterkel.wfmt.com.

As students, many of us outside of Chicago first became familiar with Studs through Working: People Talk About What They Do All Day and How They Feel about What They Do (Pantheon Books, 1974). In his book, which remains known popularly as Working, Terkel investigates the meaning of work as he condenses the oral histories of people from varied life circumstances.

These writings reflect his belief in the general idea that work can be difficult while still proving meaningful for workers. Terkel explores the everyday lives within a wide swath of society, ranging from waitresses to business executives. Through his narratives, Terkel moves through existential questioning and emotional truths as well as mundane details of the lives of his subjects.

For myself (Dr. Sase), the work of Terkel has provided an important influence and touchstone for my continuing interdisciplinary studies in Humanities that I began at Justin Morrill College at Michigan State.

Making Liechtenstein  Great Again

In keeping with the title of our column this month as well as examples from the interviews, writings, and broadcasts of Studs Terkel, let us explore the economic redevelopment of the tiny country of Liechtenstein through the story of a man who has been a lifelong resident of that country.

For those of us who may be unfamiliar, Liechtenstein exists as a double-landlocked mountainous region between Austria and Switzerland. In 1866, this small German-speaking, Roman Catholic state separated peacefully from the German Confederation before the latter transformed into the German Reich in 1871. The small realm of Liechtenstein measures 62 square miles, roughly half the land area of the City of Detroit. In respect to population, Liechtenstein numbers about 37,000 residents, less than 6% of the current population of Detroit.

However, to quote German-born political-economist E. F. Schumacher, “Small is beautiful.” Small economies tend to be much less complex than larger ones. Therefore, they can serve as better “laboratories” for economic study. Fewer variables to consider can help us to make demonstrative analyses that are much more intelligible to the non-economist.

In the spirit of Studs Terkel, let us examine the economic redevelopment of this small European state through the eyes of Johannes Adam, who was born into the household of Liechtenstein in 1945. Johannes has lived most of his life in the country of that name. When he was a child, his family suffered through the aftermath of World War II. They sold many treasured possessions in order to keep their business (generally banking and real estate) afloat while similar families who had remained in Europe went out of business.

Johannes grew up on the hillside that overlooked the border town of Vaduz. Here, he attended elementary school and participated in the Boy Scouts. As his family began to prosper again during the 1950s, Johannes went to the Schottengymnasium (Scottish Academy) in Vienna before returning closer to home for high school at the Lyceum Alpinum in Zuoz, Switzerland, forty-two miles (as the crow flies) from home.
Though he would have preferred to study Philosophy, History, and Architecture, his father encouraged Johannes to study Business and Economics. Following this path, Johannes worked briefly as an intern at a bank in London, England, before starting college.

Rather than attending one of the more prestigious universities in Europe, Johannes went to study Business and Economics at the small but well-respected public university in St. Gallen, Switzerland, about twenty-three miles from the family home in Vaduz. After earning his Masters Degree in 1969, he traveled to the U.S., where he worked as an aide to the late U.S. Senator Claiborne Pell (D-RI). Many of us remember the Senator for his work in developing the Basic Educational Opportunity Grants (Pell Grants) for higher education.

Following his experiences on this side of the Atlantic, Johannes returned to Liechtenstein in order to work in the family business. In 1972, his father entrusted Johannes with the management of the family estate. He performed this task successfully over the following twelve years.

In 1984, Johannes’s father handed over the greater part of his executive authority to his son. However, his father remained the titular head of their interests, which have been held by their family for three centuries. Upon the death of his father in 1989, Johannes assumed full control of and title to the family business. As is the custom in that part of the world, Johannes Adam began to use the more formal name and title of Prince Hans-Adam II, Reigning Prince of Liechtenstein.

Economic Brief

Let us consider what Johannes has accomplished over the past four decades. In the first couple of years of the 1970s, economic growth was slow in Liechtenstein. He took over the management of the family estate in 1972. The GDP increased with some noticeable cyclic activity through the early 1980s. After Johannes assumed the greater part of the executive authority in 1984, the GDP began to grow at a faster rate.

Cyclic economic activity has been more apparent over the three most recent decades. During the Information Age of the 1990s, growth remained steady, with a significant surge in 1995 and 1996.

By this time, Windows technology had become well established as we progressed from 3.1 to Windows 95 while PCs and digital cameras became significantly more visible around the world. Among the chief exports of Liechtenstein, we find small specialty machinery, audio and video connectors, electronic equipment, and optical products. Today, 40% of the labor force there works in the industrial sector: furthermore, half of the total labor force commutes from nearby Austria and Switzerland.

When the $8 trillion Internet Bubble burst around the world in 2000, Liechtenstein took a large hit. However, they regained rapid growth through 2008. Along with the U.S. and other countries that experienced the Great Recession of 2009, the GDP of Liechtenstein took a rapid downturn. At the end of the preceding decade, the country focused on the reduction of government expenditures in order to eliminate a 15% gap in its state budget.

Privately, the family bank had suffered a 35% decline in profits. We must note that part of this disruption may have emanated from the tax-evasion scandals in 2008. This financial episode brought international investigations and subsequent demands for greater transparency within the banking sector of Liechtenstein. Nevertheless, the Organization of Economic Co-operation and Development removed Liechtenstein from the “uncooperative tax-haven” list in May 2009. This event may help to explain the strong recovery of the Liechtenstein GDP throughout 2010 and 2011. Following an apparent setback in 2012, we notice a cyclic recovery through 2014.

Let us take a deeper look at this situation. Within the past few years, we find some economic indicators that may explain, or are at least concurrent with, gains of the post-2009 period. Per-Capita GDP has exceeded $170,000 in recent years. Meanwhile, the Unemployment Rate has fluctuated between 1.5% and 2.5% with Price Inflation remaining around 0%. Exports have exceeded Imports by more than $3 billion while the state revenues have exceeded expenditures by more than 11%. The average tax rate is at 15% of GDP.

By most economic standards, the long-term performance of the Liechtenstein economy hardly seems shabby. Summing up, there are two points that we should address as we admire more than four decades of work and perseverance: Taking the Liechtenstein GDP from $125 million in the early 1970s to more than $6 billion in recent years was not accomplished by attempting futile quick-fixes that pander to a political base. In the writings and public speaking of Hans-Adam II, no air of braggadocio appears in respect to the success that was orchestrated by a state-crafter who has moved forward with the support of 70% of the Liechtenstein voters.

In future columns, we hope to return to Liechtenstein and consider its long-term vision from the perspective of Liechtenstein’s leading political-economic author, Prince Hans-Adam II, as laid out in his insightful and enjoyable book The State in the Third Millennium (I. B. Tauris, 2009). In this work, Johannes does not hide behind his title. Instead, he speaks about the modern nation-state as a head of state and as a politician who had to win popular votes in a direct democracy. He also speaks as a businessman experienced in multinational markets and as an historian who has studied the influence of the economy on the workings of the state.

Finis

In developing this month’s column, I (Dr. Sase) reflected on what I had read in Working and in The State in the Third Millenium. Many ideas from both works resonated with me as I sensed the logical connection between the thoughts in these two books. One author was educated in Law and the other in Business and Economics. In considering the two works together, I found a relevancy to situations taking place in our own country at this time. Though Studs and Johannes grew up in different locations and social backgrounds, both of them have a similarly strong grasp of basic humanity, the human condition, and how to envision change for the good of all. Studs provides a philosophical model for attorneys as how best to understand and serve their clients. In addition, he knows the importance of the search for spiritual meaning along with the physical support of work as a way of life rather than as a way of dying. Johannes provides a practical model on how best to understand and to serve clients through what was once called noblesse oblige. He has applied his skills and resources to build meaning and support for himself, his family, and the 37,000 residents who live in the mountains with him. The takeaway of all of this is that we, as human beings, must end our divisiveness. Instead, we need to be both unified and unifying. Both Studs and Johannes provide good role models for these qualities.

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Dr. John F. Sase teaches Economics at Wayne State University and has practiced Forensic and Investigative Economics for twenty years. He earned a combined M.A. in Economics and an MBA at the University of Detroit, followed by a Ph.D. in Economics from Wayne State University. He is a graduate of the University of Detroit Jesuit High School (www.saseassociates.com).
Gerard J. Senick is a freelance writer, editor, and musician. He earned his degree in English at the University of Detroit and was a supervisory editor at Gale Research Company (now Cengage) for over twenty years. Currently, he edits books for publication (www.senick-editing.com).
Julie G. Sase is a copyeditor, parent coach, and empath. She earned her degree in English at Marygrove College and her graduate certificate in Parent Coaching from Seattle Pacific University. Ms. Sase coaches clients, writes articles, and edits copy (royaloakparentcoaching.com).