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How Regimes Collapse and How to Go Back to Liberty? (Notes for Fez)
Mr. Rector, members of the Mont Pelerin Society, distinguished guests, ladies and gentlemen,
I would like to thank you for the invitation. Being here is very inspiring and motivating for me. I have never been to Morocco and to this part of the world before and already my first hours here indicate that it will be an unforgettable visit. And a learning process.
The first MPS regional meeting in Africa is a great, almost revolutionary event. Let me use this opportunity to say how honoured we, the Czechs, are to host the MPS 2012 General Meeting in Prague in September this year. I hope to see at least some of you there. The Mont Pelerin Society needs new faces and a new generation to react to new dangers and new challenges which the current era brings. We can´t expect to repeat the great MPS era half a century ago, we do not have the same big names among us now, but we have to be visible and useful again.
When I started preparing the notes for my today´s presentation, I wondered who suggested the title of this opening address of mine, because as it stands it sounds very immodest and ambitious. I probably made a mistake by accepting such a difficult topic. There is not and I am sure there will never be any science of transition, or transitology. That’s why there isn’t any generally accepted way to rationally structure the topic.
One thing is the difficulty of the topic, the other is the second half of the title which says “How to Go Back to Liberty”. Is it appropriate to talk about “going back” in this part of the world? Isn’t it rather “going ahead”? In the case of my country in the moment of the fall of communism, it was different. We did live in a highly developed democracy, at least in the 1920s and 1930s, in one of the most developed democracies in Europe at that time. Should Egypt, Tunisia, or perhaps Syria go back to liberty? Have these countries ever experienced a politically free and democratic era that they could reinstate? I am not sure and I doubt it. I will come back to this point later.
My starting point for our today´s discussion is my personal experience with the collapse of one totalitarian regime, with the fall of communism, but I am not sure this experience is sufficient and/or relevant here. I don´t think that it is appropriate to speak about totalitarian regimes in this part of the world. I am not sure the recent revolutions in Tunisia and Egypt were directed against totalitarian regimes as it was in our case. In this case, it would be probably more appropriate to speak about very oppressive, authoritarian, human freedom liquidating, human dignity degrading regimes, rather than totalitarian regimes. Totalitarism needs a unified (and uniform) ideology, a total political control, system of terror, absolute control over the economy, etc., and I am not sure it was (or is) there.
My second point is about the reasons of the changes here. Western countries try – usually in a very immodest, unhumble and insensitive way – to export their democracy into the rest of the world. When it succeeds, they try to interpret it as their victory and claim it to be their merit. I don’t believe in this story. Our experience tells us that regime changes are more often domestically motivated and home-made than imported from the outside. Of course, western countries and their politicians don’t like hearing it but we must tell them. It was true in the case of the fall of communism, it is, I guess, not less true in the more recent case of Arab and African countries and their regime changes. The role of the rest of the world in such changes is usually very small, if not negligible.
The previously existing friendly relations between some Western democracies and some of the authoritarian and totalitarian regimes are usually of no help. In the European context, we were not helped by the so-called Helsinki peace process orchestrated by European social democratic governments in the 1970s and 1980s. We were helped only by the tough stances of Ronald Reagan and Margaret Thatcher.
In November 2009, at a conference in the Ronald Reagan’s Presidential Library in California commemorating the 20th anniversary of the fall of the Berlin Wall, I dared say that according to my experience there is – in all kinds of regime switches – always a mixture of domestic and foreign influences and that communism fell mostly because of its already untenable internal weaknesses, of the far-reaching and deep going softening of its strength, of the noticeable emptiness and gradual disappearance of its ideology, of its inability to bring any positive results to the people, and of the loss of fear on the side of common people.
It seems to me that the same or something very similar happened also in this part of the world in the year 2011. At least, this is my – undoubtedly very imperfect – understanding of that.
It may be relevant to say that in the moment of the fall of communism our ambition was not only to change the political regime, but to change the whole system. It is much more. We had to fundamentally change the entire economic system – from a centrally planned and fully state owned economy to free markets and private property. Therefore a systemic change, not just a regime switch.
Private property practically did not exist in our part of the world, which is not the case of Arab and African countries. Markets were suppressed. Privatization was not the privatization of Telecom or of the main banks and steel mills but of the smallest grocery stores, bakeries and cafés. It was, conceptually and administratively, a difficult task, much more difficult than a political, in our case “velvet” revolution. The advantage my country possessed was that we – at least our older generations – had not fully forgotten the experience with democracy and markets from the pre-communist era, that we had relatively high living standards (very far from subsistence levels), well educated citizens and a quiet and beneficial neighborhood in – at that time – still quite well-functioning Europe.
In your part of the world, the economic transformation will not be a real systemic change, it will be a quantitative, not qualitative change, more of markets, less of governments, hopefully some deregulation and liberalization. The ruling ideology did not prohibit markets and private property in the past.
There will be, perhaps, a systemic change in another field. The difference between communist and capitalist countries in Europe was not cultural, civilizational, or religious. We both lived in a more or less secularized world. The role of religion in communist Czechoslovakia and capitalist France was not very much different.
It seems to me that Arab (and African) countries face a different challenge. In the last half a century, the authoritarian regimes in this region have weakened some of the cultural and religious traditions. Will the removing of their leaders lead to a new Enlightenment period (and a radical secularization) as in Europe or to the imposition of old religious doctrines and lifestyles in a more fundamentalist version? In any case, it will be a systemic change which we didn´t have to go through.
We understood that it was easier to make a rapid change in the political sphere than in other fields. In the moment of our Velvet Revolution, the communist system was already so weak that the old political elites were not able to organize a serious resistance. They gave it up and did not try to prolong their existence at the top of the old regime. I provoke some of my compatriots by arguing that communism was not defeated, that it – sort of – melted down. As a consequence, our task was to liberalize the entry into the political market. Almost nothing else was necessary.
New political parties (42 of them at one moment) emerged and were established very soon and 5 parties were elected into the Parliament. One of them was my Civic Democratic Party (right of centre, not centre-right party). These political parties were ideologically “well-defined” and this political structure existed till the last parliamentary elections in June 2010. Their clear ideological profile partly changed as a result of a broader attack on the traditional political system of parliamentary democracy which is now so common in the Western world and which I consider very dangerous. Europe entered an era of postdemocracy, political parties are losing their ideological substance, and another Velvet revolution would be needed to change it again. To my great regret, many Europeans are still not aware of this problem.
The economic transformation was absolutely crucial. The institutions of the old economic system disappeared almost immediately. We inherited, however, a very distorted market structure, a semi-closed economy, low efficiency and no private property. We had no domestic capital and no capitalists but enough people prepared to make use of the newly born freedom to participate in all kinds of economic activities. They were prepared for that. It was not necessary to teach them how to do it. The people – always and everywhere – are “homo economicus”. They just need an opportunity to reveal their capabilities.
To build a new and substantially different economic system is a more complicated task than to liberalize the political system. This is generally true but there is a specific problem for MPS members and supporters how to do it. They are – most of them – Hayekians. They believe in the spontaneous order and are against all kinds of political constructivism. The Misesian and Hayekian dictum “the world is based on human action, not on human design” is absolutely crucial for many of us. Nevertheless, as I already said, a systemic change is quite inevitably a mixture of spontaneity and constructivism, the proportions of this mixture, of course, vary in individual places and historical occasions. The Hayekians and especially the Euckenians would, of course, argue that the rules of the game must be established at a very early phase of the transformation process.
It is probably self-evident but it should be stressed that the transition from one system to another is a process, not an overnight change. It takes time and it has its costs, something the people do not like and are not prepared to accept.
The task of politicians is to minimize these transition costs and to explain to the people the unpleasant truth that the transition costs cannot be zero. The reforming countries must undergo a specific J-curve, even though the people expect a growth path following a linear, if not exponential, upward going line.
It is also necessary to minimize the unavoidably arising expectations-reality gap. When the gap reaches a high level, intractable political problems start. There are many experiences of that around us. One thing is important: politicians should promise freedom and a chance of prosperity. Nothing more. They should not promise results. They should make it clear that the results are not in the hands of the reformers and the politicians, that they are in the hands of the people themselves.
1. They must have a clear and straightforward vision of the future which means they must be able to formulate quite explicitly and understandably where to go;
2. they must demonstrate their mastery of the fundamental technicalities of the transition process, they must know how to get there; and finally
3. they must be capable of explaining these ideas to the people of their countries because without their active involvement the process will not go ahead.
The whole triad is absolutely crucial, all three points being of equal importance. Many countries and many politicians failed because of forgetting (or not being able to fulfill) any one of them.
The “where to go” issue is not simple. Today´s situation in some countries of the Arab world is probably similar to our situation in one important respect. We, the reforms organizing politicians, had a very strong support for rejecting, abandoning and dismantling the old political regime but did not have the same support in where to go. The people did not want communism. They wanted freedom and political democracy, but they were not sure whether they wanted capitalism and free markets. We succeeded in persuading them that this was the only way to become free and prosperous.
I am afraid I don´t see explicit formulations of “where to go” in Arab and African countries. Such views undoubtedly exist but I don´t see them. There are always conflicting visions of where to go and I hope to learn something about them at this conference. Does liberty the people talk about mean full-fledged parliamentary democracy? Is liberty in the MPS meaning the real goal of the reform politicians in this part of the world? Are there “reform politicians” in the countries of Northern Africa where people were protesting against “the old regimes”? Isn´t the term “leaderless revolution” more appropriate? Does the silent majority really want liberty? Aren´t religious forces more organized than any other group in society? Etc. I don´t know the answers to these questions, but I have my doubts.
The issue “how to get there” is not less important. The sophisticated but personally uninvolved observers and commentators of our reforms or revolutions like to speculate about the so called sequencing issue.
At the beginning, in the first years after the fall of communism, we were confronted with the artificial dispute between “gradualism” and “a shock therapy”. People like me were accused of imposing a shock therapy on the people of our countries. It was not true. There is not such a dilemma in the real world. The reformers must put together a “critical mass” of reform measures and realize them at any moment there is a chance to do it. No sophisticated sequencing is necessary. There is no reason to wait for anything. People will not wait, but will become tired of the whole process. The J-curve will have a more unfavourable shape and the reforms will be stopped. I am afraid the Arab world may be moving into such a stage.
As I said at the beginning, it is easier to get rid of the old regime than to build a new one. I wish the countries in the region succeeded in both tasks.
Václav Klaus, opening speech at the Mont Pelerin Society Regional Conference, the Big Hall of Batha Prefecture, Fès Medina, Morocco, 21 April 2012
Václav Klaus, opening speech at the Mont Pelerin Society Regional Conference, the Big Hall of Batha Prefecture, Fès Medina, Morocco, 21 April 2012
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