The Threats to Liberty in the 21st Century
By Dr. Václav Klaus
President of the Czech Republic
May 6, 2006, the Foundation for Economic Education had the honor of
presenting the 2006 Adam Smith Award for Excellence in Free-Market
Education to two great champions of the free society: Dr. Walter E.
Williams and President Václav Klaus of the Czech Republic. The
following are the unabridged addresses by Dr. Williams and President
Klaus delivered at the Adam Smith Award Ceremony at FEE’s
headquarters in Irvington-on-Hudson, New York.
It is a
great honor for me to receive the Adam Smith Award and especially to
receive it from the Foundation for Economic Education. It is such a
privilege to have one’s name connected with the almost sacred name
of Adam Smith. Thank you very much!
Smith will always be acknowledged and admired as the founding father
of economics, of this extremely important and powerful social
science that I respect and humbly follow. Since the time I
discovered it more than four decades ago, the discipline of
economics has given me a clear compass, a guiding principle, a very
useful and productive way of looking at the world around me.
Applicable to everyday life, economics shaped the way I think. It
literally opened my eyes.
Smith gave us something more than just a pure science. He viewed
economics as an integral part of moral philosophy, and by doing so
he provided us with muchneeded arguments against those who don’t
want to understand us and who see us only as merciless, almost
inhuman, robot-like utility maximizers. For Adam Smith and for us,
economics is a very human science. We believe it is more human, more
man-oriented than the moralistic preaching of politically correct,
progressive public intellectuals who claim to be better than we are.
than that, Adam Smith explained not only the morality, but also the
efficiency of markets and, consequently, the immorality and
inefficiency of government intervention. His famous concept of the
Invisible Hand, as well as his explanation of the widely dispersed
benefits that come from pursuing narrow private interests are of
absolutely crucial importance.
also suggest that Adam Smith was the spiritual founding father of
the Foundation for Economic Education, which I consider one of the
most important classical liberal institutions not only in the United
States of America but in the whole world. I was extremely influenced
and enriched by FEE and by reading—now for more than 10 years—The
Freeman: Ideas on Liberty. This publication is irreplaceable in my
own library at home. I can assure you I read it very carefully, I
use it, and I often quote it in my own writings and speeches.
recent commemorative issue of The Freeman gave me the opportunity to
read classic articles from the early years. I was fascinated by
their quality and timeliness. What an honor to receive this award
years ago, I myself founded a think tank in Prague, the Center for
Economics and Politics (CEP), which has been trying to promote the
same ideas as FEE promotes here in the United States. A few months
ago we were privileged to have FEE’s President and my good friend,
Richard Ebeling, as our speaker and listen to his very interesting
and in many respects canonical lecture.
afraid I will not be that canonical this evening. There is nothing I
can say that you don’t already know or—with only a slight
exaggeration—that I did not learn from your publications.
important to emphasize that today, at the beginning of the 21st
century, the threats to liberty are the same as confronted by Adam
Smith 250 years ago or to the founders of FEE more than half a
century ago. The current threats to liberty may wear different
“hats,” or better hide their real nature; they may be more
sophisticated than before. Due to the high degree of
interconnectedness of the whole world those threats may more easily
move from one place to another, but in principle they remain the
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 advantage formulated by one of Adam Smith’s pupils, the
famous 19th-century political economist David Ricardo. I have three
comparative advantages here tonight:
you may be surprised that I consider my life under communism a
comparative advantage and not a disadvantage. It was definitely not
an advantage in regard to my personal happiness or my material
well-being. But I do believe it helped me to understand what liberty
really means and is all about. To use an analogy, you do not
understand what health means 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 endangerment greater.
understanding of liberty and 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. It was not possible to get rid of the old
communist institutions and at the same time to wait for the gradual
evolution of new institutions and the behavioral patterns they
require. This would have been too slow and too costly. We learned
that the institutions of a free society had to be built and
succeeded in liberalizing our country. But in recent years we went
through a rather complicated process of approaching and finally
joining the European Union. The European Union is an institution—and
FEE clearly understands this—where liberty does not serve as the
guiding principle. To my great regret we have been moving once again
towards a less free and more controlled and regulated economy and
society as a whole.
due to this personal experience that I do not see a real threat to
liberty in global warming. I don’t see it in the depletion of oil
resources; noise pollution; bird flu; and definitely not in
insufficient government funding for public schools.
the real threat to liberty, as always, in ideas. I see the threat in
policies based on these ideas. I see the threat in human behavior
influenced, motivated, and justified by those ideas and policies.
The ideas and government policies I fear are the same ones that were
feared and criticized long ago by Adam Smith.
substance of such ideas and policies are claims and presuppositions
that following private self-interest is always wrong, that people
are not rational and not moral and should be controlled, guided, and
made better by the anointed who know what is good for the rest of
us. Thus the rulers acting in the public interest must restrain
freedom in favor of higher values and goals they choose to set.
lived in such a system in the past, but I see its many symptoms
again in Europe today, and probably, dare I say, in this country as
finally, there is another danger: the emergence of nonideological
but very aggressive “isms,” which are really quite new. Let me at
least name them:
Theory of Moral Sentiments, published in 1759, Adam Smith tried to
understand those who seek to restrain our 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
chessboard.” They do not consider that the “pieces upon the
chessboard have no other principle of motion besides that which the
hand impresses upon them; but that, in the great ‘chessboard’ of
human society, every single piece has a principle of motion of its
own, altogether different from that which the legislature might
choose to impress upon it.”
the current all-embracing legislation influenced by the powerful
special-interest groups representing the new “isms” to be a real
danger to the liberty of all of us.
is no other way for us to preserve liberty than going back to
classical liberalism, than going back to the ideas of Adam Smith and
to the Foundation for Economic Education.
Václav Klaus is Europe’s premier political advocate of classical
liberalism and economic freedom. Born in Prague in 1941, he earned
his Ph.D. from the University of Economics in Prague, and also
studied in Italy and the United States. His discovery of the
writings of Ludwig von Mises, Friedrich Hayek, and Milton Friedman
changed forever the way he looked at the world.
Following the Velvet Revolution of 1989, which ended communist rule
in Czechoslovakia, Dr. Klaus served as the minister of finance and
then prime minister from 1992 to 1997. During that time he guided
one of the most successful transformations from Soviet-style
socialism to a vibrant market economy.
February 2003 Václav Klaus was elected the President of the Czech
Republic. In this role he continues to be an eloquent and
uncompromising voice for liberty and a staunch critic of growing
centralized power and control in the European Union. We are very
privileged to present President Klaus the 2006 Adam Smith Award for
Excellence in Free-Market Education.
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