## Wednesday, July 14, 2010

### Václav Klaus: Freedom under attack

Classical liberals' difficult epoch: an essay for the 60th birthday of Gerhard Schwarz

by Václav Klaus, Czech president

Translation from Czech: L.M.

It seems almost unbelievable to me that - the always youthfully looking - Gerhard Schwarz has already turned 60 years old. It is a nice and, to some extent, distinguished age in which the people of previous generations began to slow down their lives and recapitulate. However, these days, it is still the undepreciated middle age. In the case of Gerhard Schwarz, that's a good news because there is a huge shortage of the people of his type - especially in the current and highly illiberal Europe. And I expect lots of things from him in the future.

I am not an expert who knows everything about his life and work which is why I begin with the things that are associated with him in my mind. They are:

► his enormously important and necessary editorial and publication activity in Neue Zürcher Zeitung, in the extraordinarily high-quality but unfortunately probably last liberal newspaper that still exists in Europe (at least when it comes to the German-speaking sources, but probably others as well);

► his deep knowledge of the economic theory and especially one of its subdisciplines, namely the theory of comparative economic systems. It allowed him to become one of the few people who has realized - from the very beginning - the difficulties of the transformation periods in which countries - such as the Czech Republic - were undergoing a radical shift from communism to the free society and market economy, and one of the people who showed a lot of understanding for the original path that we chose for our country in the early 1990s;

► his uncompromising and well-considered classical liberalism which is even amplified by the environment he is surrounded by - by the uniqueness of the Swiss history and the uniqueness of the Switzerland's position within the contemporary centralized and overregulated Europe;

the membership of both of us in the Mont Pelerin Society which gives us a good reason to know about one another and to occasionally meet. I also feel close to his work in other institutions - in the Friedrich A. von Hayek Gesellschaft, where he is the chairman, in the Swiss Progress Foundation, where he is a vice-chairman (and whose Prognos Preis I was honored to receive in 1995), and we are also connected by having shared the valuable German Ludwig Erhard Preis (he in 1996, I in 1993). The names such as von Hayek and Erhard, among others, are connecting us.

1. The classical liberalism's current defensive and the onset of post-democracy

Right now, at the beginning of the 21st century, it's necessary to intensely discuss these topics because none of the ideas defended by Gerhard Schwarz (or myself) is included in the majority opinion. The classical liberalism is once again - despite the hopes that were created by the demise of its antipode, the highly illiberal communism - slipped into the currently visible defensive. Although we expected just the opposite event to take place, the fall of communism hasn't strengthened classical liberalism and its position in the contemporary Western society. Instead, it has weakened its position, however paradoxical it may sound. And a remarkable (or, more precisely, sad) fact is that the silent loss of ambitions and zest, which we could witness a few years after the fall of communism, hasn't been explicitly discussed by any of the remaining great liberals. Have they also accepted Fukuyama's "end of history"?

The size, power, and therefore also the dangerousness of communism - in a similar way as in the case of Nazism - was a driver for all those who put freedom above everything else that motivated them to some extraordinary intellectual activity. It created the space for many giants of the genuine liberalism (in the European sense of the word) - from Mises and Hayek to Friedmann - who could dedicate their essential works exactly to this question. It was certainly a driver for Gerhard Schwarz, too.

However, this stage of the history has ended. Moreover, the universal watchfulness has disappeared. After the fall of communism, the majority of the mankind began to believe that the world has suddenly switched into a new state of permanent safety in which even the good old classical liberalism has become unnecessary. Either knowingly or unknowingly, they adopted the non-liberals' theses about the classical liberalism's being an obsolete and un-modern anachronism. They have also accepted a concept that contradicts all of history, namely that the mankind has entered a new, so far unknown epoch. They began to believe in de-ideologization of politics and in the "information" or "knowledge" society (and they are very upset whenever I remind them that Brezhnev has also similarly believed in the scientific-technological revolution, surely much more so than he believed in the communism itself). They began to believe in the end of the history or the end of ideologies. Gerhard Schwarz knows that these ideas are terrible mistakes that are soon going to strike back at us.

These majority attitudes are gaining an ever increasing amount of space and support and they lead to the gradual formation of a new version of Huxley's "brave new world" which is leading to a new (or old-new) form of an illiberal societal arrangement. In the political realm, socialism took over (or it may be more accurate to call it neo-socialism or social democraticism), whether or not its current champions are ashamed to use this word and they prefer to use modern sounding labels similar to the "environmental and social market economy". It is no coincidence that this ideology - especially in its current French-German incarnation - considers capitalism and the market (and, together with them, classical liberalism) to be its greatest enemy.

In the economy (as well as economics), a mildly updated type of Keynesianism began to dominate once again (in its European, social market economy version, as well as its current American Obama package). In the international relationships, the states are being increasingly suppressed and replaced by the victorious European communitarianism (a particularly successful branch of various globalization doctrines). Any sign of the efforts of one country or another to strengthen its sovereignty is labeled as nationalism. Something as absurd as the global governance is significantly strengthening at the global level.

In the realm of ideology (and among large secular religions), environmentalism became the latest fashion. During the recent decades, it has transformed into the largest - because more likable than anything else - threat for the human freedom and the prosperity that accompanies it. In the philosophical thinking, the dominant themes are the destructive relativism, contempt for rationality, the postmodern lack of correlative reasoning, and the inconsistency of thinking in general. Gerhard Schwarz has a lot to say about all these matters and it is important that he is actually saying it and he knows how to say it properly. I believe that he - just like me - isn't ashamed to publicly endorse capitalism, conservative thinking, and the traditional European values. And that he finds all the variants of socialism and modernist or postmodernist thinking to be inherently alien.

It was largely inevitable - and not just a historical mistake - that our Western world has pushed us to this highly illiberal arrangement again. In my opinion, the main reason is that for at least two decades, the rough, totalitarian push to suppress the freedom has become a matter of the past and that everyone has been largely satisfied which is why no one is currently trying to protect genuine freedom. It seems as though (or, at least, some people try to paint it in this way) freedom is just a pettiness or pedantry. What's wrong with mandatory helmets for bikers and skiers? What's wrong about the smoking bans? Why shouldn't the people be told to replace the light bulbs by allegedly more efficient ones (with inferior light)? Why shouldn't the vaccination against swine flu be mandatory? After all, it helps everyone, including those who don't know about its advantages yet.

In the current, highly triviliazed thinking about the human society, the decisive role is played by a schematically - and, consequently, completely incorrectly - interpreted dichotomy between the freedom and the totalitarianism. People such as Gerhard Schwarz know that it's not enough to be satisfied with this dichotomy; in fact, it might be very dangerous. There also exist other threats for freedom than the brute force, concentration camps, and gulags. A non-totalitarianism is still very far from freedom.

Even the misunderstanding of this difference has its causes. The main reason why the essence of genuine freedom on one side and the causes and consequences of the dramatic drop of the belief in freedom and individual responsibility on the other side is not understood is - besides the existence of nominal freedom and the relative material wealth and the associated lack of fear about its loss - an unbelievable superficiality and indolence of the current thinking.

They are also intensely amplified by the poor quality of the modernist or post-modernist scheme of education which leads to the non-existence of balanced and deeper education which was common in the past - at least among the educated people. These tendencies are importantly influenced by the omnipotent media's pop culture. Both are connected with the lack of humility which is induced by the disappearing belief in anything that transcends the individual and with the new dominance of an uncontested tolerance towards any behavior of this individual who has been liberated from all the "shackles". This behavior takes place in the context of the glorification of the current permissive society that is not being questioned by anyone. Again, permissivity is not freedom.

The problem with the education affects schools at all levels. But the most important change is that the university education has lost its original universal character. Instead of pursuing its actual mission, it works on the production of narrowly focused and merely partially educated specialists. Moreover, it is being increasingly quickly transformed into a system of factories to produce diplomas and degrees for those who don't deserve them - but the fashionable "knowledge-based" and harmonized, and therefore equalized European society (and economy) requires them.

The decline of the education is made worse by the very inflation of the universities themselves which is occurring under the likable, quasi-democratic slogan "no person left behind the college graduates". It has become politically incorrect and nearly scandalous to state the obvious truth that the people are not equal and that they do not arrive to this world with equal innate aptitudes. For the same reason, it is impossible to "produce" a sufficient number of university instructors to cover this excess of the schools themselves even though these instructors are the true basis of the school system itself. It's sad that almost no one is worried about these trends and that the consequences of the current and dangerous equalizing processes are not appreciated. Those of us who have spent half a century in communism are very sensitive about these matters.

A key role in the deepening and strengthening of these processes is played by the media's pop culture [1] and especially its most visible component - television. It has replaced the words by images. A consequence is that the thinking - which takes place in the form of words - has been replaced by watching. Most people have become mere viewers who watch the world around them and passive objects of their own fate. This majority is not being seriously informed about the world; it is being mystified and manipulated. In the infinite flood of the internet data, one thing that is essential for the people's decision making has been lost. It's the information. (At this moment, I am tempted to elaborate upon the idea that the data are not the information and the information is not knowledge and understanding but that would drag me too far from the main topic.)

The mainstreams in politics and the media are exhibiting an unprecedented unity, at least in some aspects. While in the classical era of liberal democracy, the media were usually playing the role of the opposition towards the establishment, today we see something completely different: the politicians are adopting the media's catastrophic scenarios (for example, global warming) and they are adjusting politics to match these scenarios. In the same way, the media are propagandistically supporting governments (e.g. when it comes to the ever deepening integration of the EU) and they manipulate the citizens to uncritically accept many questionable political decisions and trends. They are unanimously painting the world as an arena where new threats are constantly emerging - but also a space where only one correct solution exists.

In front of our eyes, one catastrophe comes after another every day. As soon as it gets depleted in the media, it's replaced by its successor. Today, almost no one will remember the insanity surrounding the so-called mad cow disease when whole droves of cows were killed and liquidated even though there has never been a single verified case of a transmission of the disease onto the humans. The so-called bird flu has repeated the same scenario in the context of poultry. We don't even need to mention the recent hysteria concerning the "swine" flu. In that case, the WHO has even changed its existing rules in order to irresponsibly declare it a pandemics.

The same causes also pushed the alarm that "closed the skies above Europe" during the eruption of Eyjafjallajökull, a volcano in Iceland. There are more powerful active volcanos in many parts of the world but they have never been used to justify the closure of the densely used air space above one half of a continent. All these things share not only the universal fearmongering but also another denominator: huge transfers of finances from the public sources to the private entities. Surprisingly, the investigative media seem to be uninterested in this obvious fact, too.

So far, this kind of unity among the propagandistic and manipulative playmates in the political and media mainstreams has only been known from the totalitarian dictatorships - some of us still remember it very well. Mediocracy has become the postmodern alternative to democracy.

Similarly destructive processes are affecting politics and political thinking. The politicians no longer attempt to defend "big" ideas. They have also given up the search and articulation of the greatest common denominator of the interests of the groups of citizens whom they represent or should represent. Instead, they focus on their images in the media, being driven by the only genuine and authentic interest that can be seen in the current politics: it's their interest to be re-elected which brings the politicians a tool to leverage the power or economic benefits of particular personal or narrow groups aligned with the politicians.

2. Keynes is reborn

These tendencies are very obvious in economics and economic thought, too. While politics has largely abandoned the extremes of the 20th century - Nazism and communism - and almost no one is defending them anymore, the situation in economics is different. For most people, the crisis in the late 1920s and early 1930s was accepted as the ultimate proof that the current form of capitalism is unsustainable. [2]

In the 1930s, a doctrine painting itself as a product of scientism was born - as a reaction to the crisis. It wasn't formulated by an outsider but rather by a visible personality of the economic science establishment of that time (Cambridge University), cultural sphere (London's Bloomsbury group), and economic policymaking (important jobs at key international conferences after both world wars) John Maynard Keynes and his likable and easily politically graspable doctrine has been accepted.

Using his ingeniously sensitive perception, Keynes localized what the society demanded. He successfully managed to misinterpret capitalism (and the whole economic science as it had exist by that time, by a caricature of classical economist Jean-Baptist Say) and he succeeded in forcing the economists, politicians, and media to believe that capitalism could only continue if the governments violently enter the economy in the form of extensive "state expenditures" which would complement the inherently insufficient "effective demand" of the non-state sectors of the economy - the demand by all of us playing the role of consumers and investors. Keynes has dramatically "overplayed" the hypothetical market failures while he neglected the government's failures.

The victory of Keynesianism and the economic policymaking based upon it in the countries of the prosperous West has had fatal consequences. If we compare the percentage of the states' expenditures in 1930 and 2000, the difference is enormous. If we compare the tax rates, there is also a big difference (and it may be more sensible to compare 1930 and 1980, the world before R. Reagan and M. Thatcher). The same conclusion applies to the comparisons of the public debts and the fraction of the social income as a part of the total income. An equally massive growth can be seen on the number of government bureaucrats or the number of pages of legislation.

Crises can't be completely avoided. Crises have to take place. In their very essence, they're curative processes. They represent a necessary and irreplaceable liquidation of unsustainable economic activities that were based on previous mistaken decisions. It's not sensible to liquidate crises by an artificial conservation of these activities which is paid by the immense increase of the debt.

Soon or later, every crisis passes away. The long-term damage is created by nothing else than the installation of these government interventions - of macroeconomic as well as regulatory kinds. The adversaries of the market succeeded once again in creating an extensive distrust towards the system. But this time, by the system, we mean not only the free market capitalism, the laissez-faire system, Adam Smith's or Friedrich von Hayek's or Milton Friedman's capitalism (which was the case 70-80 years ago), but even the highly regulated, partially state-controlled capitalism of the present epoch. Today, the critics pretend that the current system is not being enormously regulated and controlled by the state, that it is still a "free market" system, but it is not the case. The current socialist visionaries are no longer satisfied with Keynes' revolution. They want to go one step beyond it - to restrict the markets even more so than Keynes intended.

They were being helped by the recent financial and economic crisis which was undoubtedly more serious than the crises in the recent decades. But it was not caused by the markets. This particular crisis was caused by ambitious yet irrational interventions of the state to the interest rate policies and to the money supply in the U.S. which was accompanied by an ill-conceived state regulation of the financial sector. Another wave of suppression and distortion of the markets is being proposed as a solution: it de facto removes the market from the game. The market ceases to be - and it's something we sufficiently realized during communism - considered an autonomous system. Instead, it is becoming a tool in the politicians' hands. I can't believe my eyes - although we live more than two decades after the fall of communism - when I encounter statements such as "the economy has to serve the people" (the main slogan of a recent gathering in Davos) or "financial systems in the services of the mankind" (headline above one EU country's president on a big financial conference). The worst news is that the economics (memorial) Nobel prize winners, Stiglitz and Krugman, are saying something very similar in their texts pretending to be pieces of scholarly work.

I am not sure whether capitalism and the markets will survive all these tendencies. The market either exists or it doesn't exist. The market is not a tool even though the central planners wanted to believe so as soon as they had understood that the economy can't work completely without the markets. That was the reason why they wanted to use the market. But the market is not an object to be used. In the same way, the supply of goods and services is a result of the market's functioning, it is not something that lives in a "parallel world". Without the market, there can be no production of goods and services. It is therefore impossible to eliminate future crises by new interventions to the markets. It is only possible to liquidate the market. Especially in Europe, we are not too far from that point.

3. The transformation of the European integration to the bureaucratic unification

Growing problems can be seen everywhere around us and we don't have to go too far. Those of us who live in Europe and especially those of us who have lived through communism and who have tried to understand this tragic era and to deduce some deeper insights out of it have to be interested in another fact than the generally known wisdom that it was a terrible totalitarian dictatorship: we must be concerned with the ongoing events in the European Union and "above" the European Union. In recent years, I have said and written quite a lot of things about this topic in the German language. Let me remind you of my speech in the European Parliament (in February 2009) [3], my speech in Bertelsmannsforum (April 2008) [4], the speech in Bochum (February 2009) [5], a talk in Passau (September 2009) [6], but especially my recent "European speech" in Berlin (April 2010) [7].

My opinion about the European trends is pretty clear, often published, and therefore well-known. That's why I will only add a few simple theses. As I said in April 2010 in Berlin, I don't accept the opinion that "the more European, the better", "the more we integrate, the more we can win", and "the more state power goes to the European institutions, the better". I am convinced that a positive future of Europe can't be guaranteed by continuing in this direction. Another thesis of mine is that it is necessary to respect Europe and its historical evolution rather than to try to construct it right now and from scratch, using our disdainful reasoning. That's what we learned from Hayek (and Mises) and day after day, the events are showing us that the contemporary Europe has forgotten about this respect.

I know that even contemporary European liberals have a trouble to see through the ongoing developments in Europe which makes me immensely sad. I would say that they're underestimating the trends in some respects and overestimate it in others. It seems that for a long time, they have believed - or wanted to believe - that the European Union was dominated by liberalization processes, i.e. the opening trends, free movement through the borders, cancellation of various barriers of such a movement. But it hasn't been the case for quite some time. To some extent, it had to be true in the first stage of the European integration right after the World War II. Since that time, the European integration has been long transmuted into another project, the unification. This unification doesn't mean liberalization but harmonization of highly illiberal policies and a quick increase of the democratic deficit.

Generally, it is certainly true that the word integration has - unlike the word disintegration - positive connotations. Many European liberals wanted to believe that the European integration meant the weakening of the state, which meant the state at home, and they considered it a positive development. They didn't appreciate that the new - one that is much further from the supervision by the citizen - European state is, by its essence, far worse. The "liberating" impact of the current stage of the European integration is therefore far smaller than its contribution in the opposite direction. [8]

Another problem I see in Europe today is its non-humble and arrogant constructivism of the politicians in Brussels and their ideologues that is increasingly strongly and increasingly often colliding with the reality. *Contemporary Europe is an immensely complex conglomerate of historical deposits, rational and irrational complexes and prejudices, various historical experiences that make things more difficult, but also entirely legitimate and significantly differing interests of the individuals and whole nations that live in Europe as well as the states that constitute Europe. To move across this terrain without the respect towards its fragility is a symptom of political blindness and deafness which are hiding significant risks. [9]

Because I realize these things very strongly, my position sharply contradicts the fashion of our time. That's why I want a totally different institutional arrangement of the European Union. *If I were asked to summarize my view very concisely, in a few sentences, and go beyond a normative proposition, I would have to say that I prefer a Europe based on intergovernmentalism i.e. on a minimum amount of supernationalism. I want a Europe that will build on a rational and friendly collaboration of equal and sovereign states, not a "homeland" of all Europeans that is artificially organized from above. In particular, however, I want the citizenship to remain the main principle in the arrangement of any human community in which it is possible to live freely. So far, that was also the most characteristic feature of Europe relatively to the rest of the world. However, to create citizenship on a continental level is not possible. An authentic citizenship can only exist at the level of natural state entities. I consider this thesis of mine to be the key to the whole problem.

My sharp opinion about these things originates, among other things, from my personal experience with communism in which I have spent more than two thirds of my life. This system has also denied the equal rights and sovereignty of states. It was organized from above rather than from below. It has de facto suppressed the principle of citizenship because it was based on internationalism rather than the respect towards the state as a necessary and irreplaceable primordial entity that underlies any genuinely democratic political arrangement. This fact has induced a high level of oversensitivity towards any sign of similar phenomena. And exactly because my experience has sharpened my views in this way, I may observe the European Union and see many developments that I consider to be extraordinarily dangerous.

But that's not everything yet. The quickly increasing unification, harmonization, standardization, and reglementation of Europe is just one of the elements of the current evolution of Europe. The EU has been completely substantially changed in one more aspect in recent years. This change was caused by the immense expansion of the Union that took place in the first decade of the 21st century. The European Union that began as a bloc of 6 countries has been expanded to 12 and 15, later to 25 and three years ago to 27 countries.

We could say that at least to some extent, the initial group of six, but maybe even the bloc of twelve or fifteen countries constituted (up to a few exceptions) a specific and relatively homogeneous entity that was defined in a clear contrast to the rest of Europe. That's why they could aspire to create a special kind of federation or a quasi-state that could - eventually - be gradually unified and centralized by new and new Lisbon-like treaties. However, the admission of the first Central and Eastern European countries in 2004, followed by the accession of Bulgaria and Romania - which became inevitable because the EU could no longer act as a closed, elite, and exceptional club - extended the EU into nearly pan-continental dimensions. Up to exceptions in the post-Yugoslav space in the Balkans and the former Soviet Union, the European group of 27 currently includes a crushing majority of all the countries that have ever belonged or still belong to Europe.

By this extreme expansion, the notions of the EU and Europe began to overlap which actually brings the old, historically "verified" formulae of the behavior of the European countries back onto the scene. Aside from the weakening of the member states in favor of the headquarters in Brussels and the central European government that is increasingly intervening into all matters - which are processes that I have never been pleased by - the traditional influences of the powers which were mostly dominant in the 19th century are gradually being recreated as a pillar of the political arrangement of the continent.

So the current European policies are not being formulated by the supernational bureaucracy in Brussels, which is the prevailing interpretation (one pretending to be a "critical" one because it's "allowed" to criticize the European bureaucracy), but rather by the trio of the old European powers - Germany, France, and Great Britain. The voices of Italy, Spain, and Poland are already far weaker while the voice of the other members is nearly negligible. The recent appointment of the chief of the European Council and the so-called minister of foreign affairs is just another piece of evidenec that the EU is supposed to primarily remain a mechanism to promote the interests and the will of the key powers. These jobs were created by the Treaty of Lisbon which was being sold as a step towards the political unification of Europe. It's not the case. H. van Rompuy and C. Ashton directly symbolize the derived, second-class, and dependent character of the headquarters in Brussels, relatively to the heavyweights of the German, French, and British political systems. This is in direct contradiction with the ambitions of the Treaty of Lisbon.

In this "new" Europe, one that is returning to the Metternichian and Bismarckian roots, Russia is - somewhat paradoxically - returning to its old place, too. It turns out that the traditional formulae for alliances, spheres of influence, and economical interests have never ceased to exist. That's the actual fact that rehabilitates Russia in the eyes of its traditional centennial European playmates - especially Germany - as a partner with legitimate interests that have to be respected. After the fall of communism, which was a global threat and was able to transgress the traditional European historical contingencies, and after the return of the weakened and reduced Russia to the status of a power with comprehensible power interests, nothing (and not even the strategic separation of the spheres of influence) can veto its collaboration with the contemporary EU. However, some countries of the Central and Eastern Europe that have been traditionally afraid of Russia don't want to understand this new reality.

It seems that a complementary process for the evolution described above is that the role for the U.S. in Europe is shrinking. After the World War II, the European powers had to hand out the dominant position to the U.S. as they ceased to be superpowers themselves. The European Union is building a kind of a special barrier against the U.S. which is being squeezed from the positions where they have spent decades. In this concept which could be summarized by the slogan "Europe to the Europeans", Russia plays a bigger role for the European politics than the U.S. Even this fact fails to be explicitly discussed which is a self-evident mistake, especially when we look at the trends through the central European eyes.

The understanding of the contemporary problems of Europe is getting more difficult because of the deliberate denial of the fact that there exists nothing such as the common, widely shared, and by all the Europeans accepted European identity, that there is no single political nation or "demos" and that the naturally evolved and Europe-dividing national identities remain dominant. These identities come associated with the boundaries, historical experiences, but also fears, prejudices, and antagonisms that can be identified in various national interests. The absence of the common European identity means that there doesn't exist a sufficiently deep solidarity at the European level that would actually be genuinely felt by the people living across the continent. This is a reality that has to remain a starting point of all the ideas about the future of Europe. It can't be circumvented by attempts to artificially split Europe into regions, to transfer new and additional competences to the Brussels, to sign new treaties and approve new bills, to artificially centralize and unify, or to regulate the union bureaucratically and administratively.

To ignore the reality means to take the risk that after a certain threshold is breached, the European Union will change - from an old block that was able to calm down old conflicts and prevent the new ones - into a space that stimulates new extreme nationalisms, new national antagonisms, and new conflicts.

The diversity of the national identities, traditions, cultures, habits, and historical experiences has always been and still is a European treasure. But the present European integration views it as a problem and it ignores the complexity of this historical terrain. That's why there are strengthening attempts to force all aspects of lives of the citizens of the European member countries to follow unified rules. The absence of the political assumptions and the impossibility to create new functional democratic mechanisms at the European level have an inevitable consequence, however: the deepening and acceleration of the European integration is increasingly occurring via technocratic and bureaucratic methods, behind the backs of the citizens. The questionable approval of the Treaty of Lisbon is just one recent example.

A completely different dimension of the sobering from the original dreams about the European superstate has been presented to us in the form of the recent economic crisis that has led to the crisis of the euro and the eurozone. [10] These events are clearly showing the extent of the risks and expenses that the - uselessly accelerated and uniformly premature - unifying decisions have brought to the large ones and the small ones, to the wealthier as well as poorer member states. Today, after the approval of the Treaty of Lisbon, we can say that Germany has peacefully acquired a clear European hegemony that it has unsuccessfully struggled to gain in two world wars.

However, if we watch carefully, we must notice that the German reaction to this "historical success" is a disillusion and their reluctance to accept the expenses that Germany is generally expected to pay. The Greek debt crisis and the German reactions to it show it very clearly. Instead of being another event that stimulates further integration, the Greek debt crisis could become an igniting mechanism to reevaluate the integration ambitions as we have known them. If this were the result, it would certainly be good news.

If nothing like that will take place, the badly needed "reevaluation" will begin spontaneously. As the Greek example shows, spontaneous processes may be very dramatic.

While I don't want to ascribe opinions to Gerhard Schwarz (and I have surely not consulted him on this issue), it seems to me that many of the things I have been saying on the previous pages have been said by him in a very similar if not identical way. He doesn't like the current politics, either. In NZZ (Dec 31th, 2008), he wrote: "In politics, a new bizarre coalition of omniscient moralists, left-wing ideologues, explosive romanticists, and opportunistic henchmen has been born. They've been turned into a team by their common belief in the failure of the markets and liberalism and the desire to create a paradise that is full of the good people without scurvy mammon."

Just like me, he is also concerned with the "growing political influence of the intellectuals who are spiritually aligned with socialism" (NZZ, Aug 15th, 2009). At the World Economic Forum in Davos in 2009, I was saying to the important world's politicians who have gathered (during a closed session of the "world economic leaders") that I am more afraid of their proposed state interventions and regulatory crackdowns than of the crisis itself. That's why I was pleased when Gerhard Schwarz wrote two months later, in a very similar way, that "we are in the situation when the cure is more pernicious than the illness" (NZZ, Apr 3rd, 2009). And we haven't consulted the formulations.

[1] Its analysis would expand this text by an unacceptable amount which is why it will be omitted here.

[2] That's what I was describing in some detail in the Threat of the aggressive Keynesianism of the 2nd generation, printed in Lidové Noviny daily, Apr 25th, 2009. The German translation was published in WirtschaftWoche, May 18th, 2009.

[3] A speech in front of the European Parliament, Brussels, February 19th, 2009 (German)

[4] Zukunft Europas: Beethoven oder Schönberg, Ode an die Freude oder Dodekaphonie? A speech at the Bertelsmann foundation in Berlin, April 23rd, 2008

[5] "Was sagt uns die heutige Zeit über Europas Zukunft?", a speech in Rahmen des Projektes Herausforderung Zukunft, Christuskirche, Bochum, February 19th, 2009

[6] Passauer Gespräche, Mediazentrum der Verlagsgruppe Passau, Passau, September 16th, 2009;

[7] Humboldt Rede: Kritik der heutigen Form der europäischen Integration, Das Walter Hallstein-Institut für Europäisches Verfassungsrecht, Humboldt-Universität, Berlin, April 29th, 2010

[8] I recall e.g. the article by one of the former Mont Pelerin Society presidents, my friend Antonio Martino, who was defending the common European currency using such a "retarded" argumentation. He believed in its liberating influence which is a complete mistake. (Milton Friedman and the Euro, PDF, CATO Journal, vol. 28, No. 2, 2008.)

[9] In the paragraphs that follow, I use paragraphs from my Humboldt Rede: Kritik der heutigen Form der europäischen Integration (Question marks about the current form of the European integration), in Czech: MF DNES, April 30th, 2010

[10] When will the eurozone collapse? (English: TRF, official)

Václav Klaus, a contribution to a booklet to commemorate the 60th birthday of Gerhard Schwarz

Originally in German. The Czech version was published on 7/7/2010 in the Euro weekly