Thank you for bringing me back to Mexico and even more for honoring me with the ”Una vida por la libertad” award. Getting the Truman-Reagan Medal of Freedom in Washington D.C. a few weeks ago and your very high award here today is an enormous pleasure and honor for me.

I take it as a recognition of my life and of my achievements in the communist era, in the moment of the fall of communism and especially in the subsequent years devoted to the radical dismantling of the institutions of the old regime and to the building a free, democratic society based on political pluralism and market economy. As the first non-communist minister of finance, as a prime minister, as a president of the country, as a party founder and leader, I was privileged to get the unique opportunity to help creating a free society in my country after almost half a century of communism. I tried to use this opportunity as much as possible.

The term “la libertad” is absolutely crucial in both our continents, in Latin America as well as in Europe, but it is probably more important for us who spent most of our lives in a “dictatorship of the proletariat”. The communist regime which ruled in my country from February 1948 till November 1989 collapsed when I was approaching the age of 50. This depressive experience gave me enough time to be confronted with all the aspects of this regime and to understand its irrationality, its oppressiveness, its lack of respect to individual human beings and its inefficiency. Among all the problems we had to face, the most frustrating one was the absence of freedom, of “la libertad”.

There was no freedom – as we understand it – in my country and in our part of the world at that time. I know that Mexico also went through years of undemocratic absolutist regimes but you did never have a totalitarian system. It is a big difference. You always had a market economy, however curtailed and distorted. In your country, the institution of private property was always respected, whereas we could possess only items of the so called personal property. You used to have some degree of political freedom and free press, not to speak of the elementary freedom to travel abroad, etc.

I don’t pretend to know the history of your country well enough to allow myself making strong statements about it. I suppose you have more than sufficient reasons to be critical of some parts of it. I don’t, therefore, dare compare our feelings, our relative degrees of dissatisfaction, of powerlessness, of hopelessness.

As an economist, I am aware of many characteristics of Mexico as a developing country, of huge income and wealth disparities, of regional differences, of brutality of police and army forces in dealing with those who protested against the existing regime in the past.

The difference in economic development of our two countries was also an important factor. Prior to the communist era, my country was rather developed and highly industrialized and the issue of poverty had never been an important aspect of our life. We “only” dramatically lost as compared to the much faster development in non-communist Western Europe where we economically belonged in the past. It led to a huge frustration but the poverty – known in Latin America – has never been there. (GDP per capita – based on purchasing power parity data – was 27 000 $ in the Czech Republic and 15 400 $ in Mexico in 2012 and this difference is not the result of our faster developments after the fall of communism. On the contrary. The economic growth was much slower in my country than in yours in the last 20 years.)

This is my third trip to Mexico. I was here in 1993 on a formal, but very friendly state visit with President Salinas and his economic and finance ministers. I had the feeling of progress, the country was visibly moving ahead. It was interrupted by the – for some people unexpected – 1994 crisis, but I am (and I was) aware of the enormous fragility and vulnerability of countries undergoing a transition. My second visit took place in the autumn of 2002 with a speech at a conference organized by the Universidad Tecnológica de Mexico. The title of my speech was “How to Build a Free and Functioning Society?”[1] Looking at it now, it seems to me excessively ambitious.

I tried to outline the substance, the logic and the process of our fundamental systemic change, which we used to call transformation. It was based on our understanding that incremental changes, small steps, partial reforms do not change the system. And this is what we wanted to achieve. I stressed several points I considered relevant. Let me repeat them, because they may be useful 
even now:

- a fundamental systemic change is predominantly a domestic task because democracy and market economy cannot be imported;

- succeeding in it requires endurance, energy, competence and know-how;

- the transformation must be prepared and carried out as a sequence of policies, not as a one-shot policy change;

- its costs are far from zero. They should be anticipated and explained to the people in advance. An immediate improvement must not be expected.

My final point – referring to your country – was that “the old Latin American equilibrium (or quasi-equilibrium) must be broken and a new one should be built”. I came here now to check whether you have already succeeded in it.

Part of my lecture was devoted to the discussion of our radical privatization. In my country, in former Czechoslovakia, in the moment of the fall of communism, state-owned firms represented almost 100% of the whole economy. This is something what the non-communist countries – however centrally administered – have never experienced and probably cannot even imagine. Such a massive privatization was difficult politically, technically, and administratively. Whatever the government did and however did it, the politicians were accused

- either of favoritism and selection of inappropriate new owners;

- or of not getting the best price.

I am sure you have your own – probably very similar – experiences with it.

When I was here 11 years ago, it was two years before our entry into the European Union. In 2002, we did not have the experience we do have now – the experience of almost 10 years of EU membership. Nevertheless, I have to claim that my ex-ante estimation of our future membership costs and benefits was a correct one. I stressed here that – in spite of all our radical domestic changes but due to our pre-entry obligatory adjustments – “we did not succeed in avoiding the European disease of a regulated society, of an unproductive welfare state, of new, more sophisticated, more hidden and more intrusive methods of government intervention, not to speak of an empty and artificial Europeanism, corporativism, environmentalism, political correctness, human-rightism, etc.”

I may formulate it more radically now, not being tied-up by the very high political offices I held at that time but the substance of my criticism remains the same. Two years ago, still in my presidential office, I wrote a book about it with the title “European Integration without Illusions”, which was written and originally published in Czech language and later translated into English, German, Italian, Spanish, Bulgarian, Danish and recently also into Russian. The Spanish version “La Integración Europea Sin Ilusiones” was published in 2012.[2]

The book reflects my deep frustration with the current developments in Europe, calls in question the naïve and excessively optimistic expectations as regards the size of the economic benefits of territorial integration and of monetary unification of economically too heterogeneous countries (without paying due attention to its inevitable costs) and criticizes the undemocratic consequences of the existing form of the EU institutional arrangements.

As I see it, the present, rather gloomy situation in Europe is a consequence both of the non-efficient European economic and social system and of the increasingly centralistic and bureaucratically intrusive European Union institutions. They together represent a fundamental obstacle to any future positive development, an obstacle which cannot be removed by marginal corrections (or cosmetic changes) or by – eventually – more rational short term economic policies. The problems go much deeper. Their solution needs something else.

For an economist, who understands – or at least hopes to understand – the dominant role of an economic system in shaping the economic performance, it is more than evident that the European economic and social system itself, the overregulated economy, additionally constrained by a heavy load of social and environmental requirements, operating in a paternalistic welfare state atmosphere, cannot lead to economic growth. This burden is too heavy and the incentives to a productive work are too weak. If Europe wants to restart its economic development, it has to undertake a fundamental transformation, a systemic change, something we had to do 20 years ago in our part of Europe: radical and far reaching depolitization, deregulation, liberalization and desubsidization of the economy.

The other part of the problem is the European integration model and, as a consequence, the undergoing de-democratization of Europe. The excessive and unnatural centralization, harmonization, standardization and unification of the European continent based on the concept of “an ever-closer Union” become a fundamental problem. I dare put it sharply: the European Union conquered Europe and deprived it of its democracy. The issue of democracy or, better to say, of the lack of it, is for me the most important and the most pressing one.

It brings me back to the title of this lecture. Let me quote from my speech at the award ceremony in the Victims of Communism Memorial Foundation in Washington D.C. earlier this year [3]: “Our today’s fight with communist ideas should not be limited to fighting the old battles. We have to fight communism in its new disguises, in its new clothes, which are sometimes so chic and colorful that they camouflage their true content. I have in mind

- the aggressive human-rightism which transformed itself to a powerful vehicle for suppressing traditional civic rights and the irreplaceable institute of citizenship;

- the transnational progressivism which favors global governance and looks with contempt at the nation state, the cradle of democracy;

- moral relativism which – as a conglomerate of various unconnected streams of thoughts – denies traditional values and institutions which formed the foundation of the Western civilization;

- modern environmentalism, and its extreme version, global warming alarmism, which try to mastermind all of us and destroy the economic basis of the modern world.”

Let me develop the last point. I consider environmentalism and global warming alarmism the main freedom-endangering ideology of our era. It slightly retreated recently but it is still there. In 2007, I wrote a book about it with the title “Blue Planet in Green Shackles” which was translated into 20 languages, including Spanish. The Spanish title was “Planeta azul (no verde)”.[4] Its substance and message are summarized in its subtitle “¿Qué está en peligro: El clima o la libertad?” I suppose you know my answer.

My book discussed the dangerous interplay between economics, science, environmentalism and politics, which brings me to the issue of poverty. I agree with Deepak Lal in his recent book “Poverty and Progress”[5] that “the greatest threat to the alleviation of poverty is the continuing campaign by Western governments, some climate scientists and green activists to curb CO₂ emissions from burning fossil fuels” (p. 181). Similarly, in my speech at the UN Climate Change Conference in September 2007 in New York City, [6] I stressed that “the already developed countries do not have the right to impose any additional burden on the less developed countries”.

I am frustrated that so many people believe in this almost totalitarian doctrine. The debate about it is becoming – rightly and at last – a fundamental ideological and political dispute of our era. In my book, I put it in the following way: “Environmentalism intends to change the world radically regardless of the consequences. It intends to change humankind, human behavior, the structure of society, the system of values – simply everything” (4, p. 2).

That was almost seven years ago. Today, this danger is still underestimated. I am horrified by the fact that human freedom and liberty ceased to be the issue of the day – at least as I see it in Europe. The situation in other continents is evidently not better. As I put it in my speech at a CATO Institute conference recently “some people do not consider liberty a very high if not the highest value worth fighting for” and – what is even worse – “many people have other priorities and preferences”.[7] I don´t have in mind totalitarian regimes, I speak about people in “nominally free societies” – as in Europe – who are not ready to protest sufficiently strongly against the incremental losing of liberty we are experiencing now.

We should reread Hayek and his warning against the “slippery road to serfdom”. The nominally guaranteed freedoms, which did not and do not exist in communist and other totalitarian societies, should not confuse us. We should raise our voice against political correctness, aggressive human-rightism, transnationalism, multiculturalism, europeism, feminism, etc.

I see new threats to liberty and am convinced that our liberty is attacked from the inside much more than from the outside. We should devote “nuestra vida por la libertad” which is – I guess – the true meaning of your award. Thank you once again for conferring it upon me and for listening to me tonight.

[1] Address at the conference “Efficient Government, Responsible Society”, Universidad Tecnológica de Mexico, 16th October 2002, http://www.klaus.cz/clanky/2039.

[2] Klaus V., La Integración Europea Sin Ilusiones, Editorial Club Universitario, San Vicente, Spain, 2012.

[3] Klaus V., The Victims of Communism Memorial Foundation Award Ceremony, The Georgetown Club, Washington, D.C., October 8, 2013, http://www.klaus.cz/clanky/3453.

[4] Klaus V., Planeta azul (no verde), FAES Gota a Gota, Madrid, 2008.

[5] Lal D., Poverty and Progress, CATO Institute, Washington D.C., 2013.

[6] Klaus V., Speech at the United Nations Climate Change Conference, New York City, September 24, 2007, http://www.klaus.cz/clanky/1638.

[7] Klaus V., CATO Club 200 Retreat, Laguna Beach, California, September 27, 2013, http://www.klaus.cz/clanky/3443.

Václav Klaus, Caminos de la Libertad Foundation Award Ceremony, Hyatt Regency Mexico City Hotel, Mexico City, November 28, 2013.