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Václav Klaus: The Message from a Non-Young Leader to Future Young Leaders

Many thanks for the invitation. I take it as a very precious gift to have once again the opportunity to visit your beautiful country and especially Ohrid. I was delighted when my good friend, President Ivanov, asked me to address this special young audience, the future leaders of your country.

I take it as a positive and innovative idea of your President to organize this summer school. Young people should get a chance both to meet and to be confronted with the ideas of older people, of those who have already achieved something in various fields of life. This is how I understand the meaning of this gathering.

It evokes my similar experience when I was about your age. In the dark days of communism, I was privileged to attend a summer school in France, in Annecy, in a town with a similarly beautiful lake surrounded by the Alps. It was almost half a century ago, in August 1965. This school was organized by the American Quakers. There were 35 participants from 26 countries there, some of them from very exotic ones – exotic, and, therefore, extremely interesting. We lived in a world that was much more closed and fragmented than now. I am afraid there remains almost nothing exotic now, in the current, somewhat strangely globalized world.

The topic of the four weeks lasting debate there was: How to Overcome the Barriers to Development? WhenI look at this title now, I have the feeling that the same topic could be relevant for discussion today as well.

The speeches of distinguished professors were of a high quality and the following discussions were not less interesting. Very important were the unorganized debates among participants in our free time. I am sure your two weeks here will be very similar in this respect.

The issue in the 1960s’ was the development or perhaps, better to say, the lack of it, the underdevelopment, in many parts of the world and the political, social, economic and cultural barriers that were blocking the so much needed economic growth. Many countries seemed to be hopelessly stuck in a “poverty trap“, as it used to be called, but the discussion was well-defined and rationally structured. I am afraid we live in a less simple, less black and white, and less easy to understand world now. Today’s world is on the one hand undoubtedly economically more developed but on the other less easy to deal with.

Even the communist system was easier to discuss and criticise than the current world. We (or at least some of us) were convinced already at that time that communism couldn’t be reformed, that no kind of perestroika could lead to the creation of a free and efficient society based on parliamentary democracy and free markets. People like me also knew that there was no “third way”, no convergence of capitalism and communism which could combine only the more pleasant parts of both systems. Dreaming about it and advocating third ways was at that time (and is now as well) a wishful thinking. Suggesting and defending such utopian, but dangerous ideas is, in the words of my great teacher Friedrich von Hayek, a fatal conceit[1] and we should do all we can to refute it.

Communism is over now and fighting the old battles is meaningless. (Some people in our part of the world – to my great regret – still do it.) We are confronted with different problems and challenges, and the outcome is not considered satisfactory. The people are not happy, at least this is my feeling from what I see in the Czech Republic. Our freedom, our democracy, our markets and their efficiency, our prosperity and our way of life are much better, but different from what we hoped for in the moment of the fall of communism. They are better, but with many imperfections. Why is it so?

Is it a natural human tendency to permanently search for reasons to be disappointed? Or are there other reasons for such a feeling? Were our expectations wrong or unduly optimistic? Were the changes we introduced after the fall of communism insufficient or wrongly constructed (eventually wrongly implemented)? Was – and now I speak about my country, the Czech Republic – the impact of the changes which we – sometimes against our will – introduced as a precondition to our entry in the EU exclusively positive and helpful? Are not the currently undergoing processes in the world (not just in Europe, but in the whole Western world) part of our dissatisfaction? Let me briefly touch upon these four questions.

a) Some people probably did have unduly optimistic expectations. They assumed that getting rid of communism automatically means freedom, democracy, free markets, efficiency and prosperity. It did not fully materialize and we should have known that it could not be so. To get rid of the old bureaucratic and repressive institutions, to avoid some of the obvious irrationalities of communism, to eliminate its most visible errors, was a condition necessary, but not sufficient for the creation of a “good” society.

Our task was to build a new system, not only to supress the old one, but building takes time. A new system cannot be imposed upon society, it cannot be created in a revolutionary way and certainly not “overnight”. And even with a good and functional system, any positive development, progress, going forwards ask for never ending human activity, genuine efforts, personal courage, diligence and hard work. Without them no real change can be achieved. The system itself is “only” an open space for us, and it is upon us how we use it.

There are many of us who are afraid that our working habits, our morals and our motivation have not changed sufficiently and that our activities do not produce outcomes we would like to see.

b) All the countries which more than twenty years ago dismantled communism sooner or later launched a radical transformation process. Its speed, its concept and overall philosophy as well as its hundreds of details differed substantially among the former communist countries. In some of them, including my own country, the change was relatively smooth and its costs – measured in the temporary loss of GDP, in the increase of the rate of unemployment, in the accelerated rate of inflation, in the higher degree of social and civic disorder – were relatively small. In the Czech Republic probably the smallest. In some other countries, they were much higher.

I do not want to bother you with a boring economic lecture. Visiting Macedonia – one of the ex-Yugoslav countries – inspires me, however, to add one more comment. I always asked myself whether the relatively softer version of communism in Yugoslavia – based on “workers’ councils” instead of on “state ownership” plus on several other specific characteristics – was a help in the transformation process or an obstacle. In my speech presented in the Serbian Academy of Sciences in Beograd in 2011, I made the following statement: “I only wondered whether the kind of political, social and economic system you had in the past helped in the subsequent transformation task or whether it was a burden (or at least an inconvenience). I do not want to pretend that I have an authoritative answer to that question but I am inclined to think that it was not a help.”[2]

Regardless of that, it is generally true that the quality of the transformation process, of its conceptual underpinning as well as of the consequency and consistency of its implementation played an enormous role. It sometimes unnecessarily introduced distortions which have implications until now.

c) Very complicated – and certainly not only positive – was and is the impact of our belonging to Europe and especially of our affiliation with the EU. The entry negotiations (and especially the entry requirements) on the one hand and the European economic and social system as well as the model of the European integration on the other influenced us (and keep influencing us) substantially. I am sure you have your own experience with it.

I would like to be well understood. People in the countries of Central, Eastern and Southern Europe lost almost half a century of normal life and of natural social and economic evolution in an irrational, oppressive, undemocratic, if not criminal, inefficient and unproductive communist regime, but in spite of that we are not different – mentally, culturally, definitely not ideologically (because communism taught us a lot) – from the people in the rest of Europe. We all were, and I am sure the same feeling was here, in Macedonia, deeply hurt when we finally became free and started to be patronized by West Europeans who were lucky enough to avoid our tragic and destructive era.

In spite of all the nice rhetoric, in spite of giving us plenty of – hopefully – well-meant but rather empty advice, in spite of sending us minor and, hence, practically irrelevant financial contributions, we were not helped by Western Europe in any meaningful sense. I suppose your interpretation of that must be very similar.

Especially at the beginning, we were blocked from West European markets in many, for us very sensitive commodities. We were accused of dumping but they did not want to see that we did have lower wages and lower costs. We were also forced to – very prematurely – introduce all kinds of European social, labour, environmental, health, security, and other standards which are economically not neutral and should be implemented only after attaining certain level of economic development, not before.

I do not complain. We did not make our Velvet Revolutions dreaming about European altruism or EU financial transfers (à la Spain and Portugal in previous decades). All we wanted was to be free. What we expected, however, was an elementary understanding of our unique situation at that time. 

We radically depoliticised, liberalized, deregulated and desubsidized our economy because we were sufficiently aware of the tragic incompetence of governments to mastermind or substitute the markets. We wanted to fully get rid of these practices. Our transformation process was, however, brought to an end by the fact that we wanted to participate in the European integration process and were forced to reregulate, resocialize and resubsidize our economy as a precondition to our entry negotiations with the EU. As a result of this, the entry itself was in many respects a mixed blessing for us.

We should say sufficiently loudly that the European economic and social system – the overregulated economy, constrained by a heavy load of social and environmental requirements, operating in a paternalistic welfare state atmosphere – does not make rapid economic growth possible. And what the countries of Central, Eastern and Southern Europe do need is rapid economic growth.

In addition to it, the existing model of the European integration process, based on the excessive and unnatural centralization, harmonization, standardization and unification of the whole European continent has led to the creation of the increasingly centralistic and bureaucratically intrusive European Union institutional arrangements. This model also blocks our economic growth and development.[3]

d) All that undergoes in the context of radical transformation of East-West relations. We are witnesses of the stagnation in the West, of the gradual evaporation of traditional Western values and traditions, of the destructive disorientation as regards our life-styles and habits, of the negative impact of multiculturalism, human-rightism, political correctness and similar “isms”.[4] On the contrary, we see a fast growth and development in the East, especially in the so-called BRIC countries that should indeed not be underestimated.

It brings me to the end, to the role of the European young generation, of the potential future leaders of our societies. You must do your best to be well prepared, technically very modern and up-to-date, and use these capabilities to restore the traditional values Europe, Southern Europe and Macedonia was built upon. Stopping the decay of the West is not an easy task. It requires sharp eyes, courageous and strong views, devotion to the ideas of freedom and democracy. It’s hard work, but it’s worth it.

Once again, thank you for the invitation. I wish we’ll hear more from you in the years to come.

[1] Friedrich von Hayek, The Fatal Conceit: The Errors of Socialism. London, Routledge, 1988.

[2] The arguments can be found in the full text of the speech “Remarks on the Czech and Serbian Transformations”, Beograd, Serbia, 2011 in “http://www.klaus.cz/clanky/2751.

[3] More about it in my book “Europe: The Shattering of Illusions”, Bloomsbury Publishing, London, 2012 .

[4] See my book “My, Evropa a svět” (in Czech), Fragment, Prague, 2013.

Václav Klaus, Notes for the speech at Ohrid School for Young Leaders, August 19, 2013, Ohrid, Macedonia.

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