Vaclav Klaus, Speech on the occasion of receiving the Adam Smith Award, Foundation for Economic Education, New York, May 6, 2006
President Ebeling, Ladies and Gentlemen,
let me start by saying that I consider it an enormous pleasure to be here with you today.It is a great honor for me to receive the Adam Smith Award and – as a value added – to receive it from you. To tell you the truth, I have already got one Adam Smith Prisen. It was in 1994, in Copenhagen, Denmark and the institution which gave it to me was called Society Libertas. It is such a privilige to have one's name, in this way or another, connected with the almost sacred name of Adam Smith. Thank you very much.
Adam Smith will be always recognized as the founding father of economics, of this extremely important and powerful social science which I respect and humbly follow. This discipline has given me, since the time I was confronted with it more than four decades ago, a clear compass, a guiding principle, applicable every day, the very useful and productive way of looking at the world around me, the way of my thinking. It literally opened my eyes.
Adam Smith gave us something more than a pure science. He put economics into the field of moral sciences and by doing that he provided us with very needed arguments against those who don't want to understand us and who see us as merciless, almost inhuman, robot-like utility or profit maximizers only. For Adam Smith, and for us, economics is a very human science. We believe it is more human (or man-oriented) than the moralistic preachings of politically correct, progressive public intellectuals who claim to be better than us (see my „Intellectuals and Socialism: As Seen from a Post-Communist Country Situated in Predominantly Post-Democratic Europe“, Mont Pelerin Society Regional Meeting, Reykjavik, Iceland, August 22, 2005).
Even that is not all. Adam Smith explained to us not only the morality but also the efficiency of markets and – consequently – the immorality and inefficiency of government intervention. His well-known and widely referred to doctrine of the invisible hand as well as his explanation of the widely-spread benefits coming from following narrow private interests are absolutely crucial.
We can also afford to say that Adam Smith was the spiritual founding father of the Foundation for Economic Education which I see – at a distance – as one of the most important liberal (in European sense) institutions not only in the United States of America but in the whole world. I was extremely influenced and enriched by being in contact with its collaborators and by reading – now already for more than 10 years – the Freeman (originally Ideas on Liberty). This publication is irreplaceble in my library and practically unsubstitutable. I can assure you I read it very carefully, I use it, and I often quote it in my texts. You recently celebrated the 50th anniversary of this publication and it gave me the opportunity to read the old articles you republished. I read it with great interest and was fascinated by their quality and up-to-dateness. Once again, I am extremely honored by getting this award from the FEE.
Six years ago, I myself founded a small think-tank in Prague, called Centre for Economics and Politics (CEP), which has been trying to promote the same ideas as FEE. A few months ago we were priviliged of having your President, my good friend, Richard Ebeling with us and of listening to his very interesting and in many respects canonical lecture.
I am afraid I will not be that canonical. I am supposed to speak about "The Threats to Liberty in the 21st century". There is nothing to be said here today what you don't know or – with only a slight exaggeration – what I did not learn from your publications.
It should be explicitely stated upfront that there are no threats to liberty now, at the beginning of the 21st century, which were not known to Adam Smith 250 years ago or to the founding fathers of the FEE half a century ago. The current threats to liberty may use different „hats“, they may better hide their real nature, they may be more sophisticated than before. Due to the very high degree of interconnectedness of the whole world the current threats to liberty may be more easily transferable from one place to another, but they are – in principle – the same as always.
As a life-long student of economics I always try to follow its laws and principles. One of the most important of them is the law of comparative advantages formulated by one of Adam Smith's pupils, by David Ricardo. My comparative advantage here tonight is probably not in knowing more texts of classical liberalism than the American libertarians were exposed to. I see three potential comparative advantages of mine in:
- my living – for most of my life – in communism,
- my personal active involvement in its dismantling and in building free society,
- my recent frustration with the situation in Europe, especially with the developments of the European Union.
Some of you may be surprised that I consider my living in communism a comparative advantage, and not a disadvantage. It was, definitely, not an advantage as regards my personal happiness or my material well-being but I do believe it helped me to understand what liberty really means and is about. To use an analogy, you do not understand health when you are healthy. To take liberty for granted is similarly dangerous. Not to have it for such a long time, and it was a long time, has made our eyes sharper, and our sensitivity to its endangering greater.
My understanding of liberty and of its preconditions was reinforced by my involvement in the radical transformation of the political, economic and social systems in my country in the years after the fall of communism. We learned that the institutions of free society had to be built. It was not possible to get rid of the old communist institutions, to wait for the gradual evolution of new institutions and of behavioral patterns connected with them. This would have been too slow and too costly.
We succeeded in liberalizing the country but we have a slightly different experience now. In recent years we went through a rather complicated process of our approaching and finally joining the European Union, which is an institution where the liberty – as it is understood by the FEE – is not the guiding principle. We have been – to my great regret – moving again towards a less free and more controlled and administered society.
Those are – shortly described – my personal experiences. It is due to these experiences that I do not see as threats real, factual problems like the global warming (I enjoyed reading the book-review of M. Crighton's State of Fear in one of the last issues of the Freeman), the exhaustion of oil resources, the bird flu, the growing noise in cities, the insufficient using of modern ITs, the lack of government funds for public schools, the easiness of constructing the weapons of mass destruction, etc.
I see the threats – as always – in ideas, in policies (based on these ideas) and in human behavior influenced, motivated and justified by both these ideas and policies. The ideas and government policies I am afraid of are the ideas and policies which were criticized already by Adam Smith. Their basis are claims and presuppositions that following private interests is wrong, that the people are basically not rational and moral, that the people must be controlled, guided and made better by the annointed who know what is good for them, that the rulers act in public interest, that freedom and democracy is allowed to be restrained in favor of „higher goals and values“, etc. We lived in such a system but I see many symptoms of such a system again – in Europe and in this country as well.
The whole issue cannot be systematically discussed in such a short speech. Let me touch only one problem which I see as extremely important. It is the emergence of new, partial, seemingly non-ideological but often very aggressive „isms“ (or ideologies). They are really new. They did not exist when I attended the university. I can only give their names. We all care for human rights (even if I would prefer to speak about civic rights) but I am afraid of human-rightism. We all want to have healthy environment but I see tremendous danger in environmentalism. To put it politically correctly I admire the second gender but I fear feminism. We are enriched by other cultures but not by multiculturalism. I respect homosexuality but not homosexualism. I am aware of the importance of voluntary associations, now fashionably called NGOs, but I consider NGOism to be another powerful threat to our liberty.
What should we do? Let's look at what Adam Smith wanted to tell us. In The Theory of Moral Sentiments, published in 1759, he tried to understand the people who want to restrain freedom and liberty. He wrote that they want „to arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board.“ And he added that they do „not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them but that in the great chess-board of human society every single piece has a principle of motion of its own, altogether different from that which the legislation might choose to impress upon it.“ I see the current, all-embracing legislation prepared by legislators who follow powerful pressure groups, representing the new isms that I mentioned, to be a real danger for the liberty of all of us. There is no other way than going back to the classical liberalism, to the ideas of Adam Smith and the FEE.