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Cornell Speech: Personal Remarks and Recollections: Forty One Years After

English Pages, 25. 9. 2010

It is almost an adventure for the President of a small Central European country, the Czech Republic, to be back at Cornell after more than 41 years. It has been a long time since I was here last time but the campus and the landscape around still look quite familiar to me. Just the autumn colors are different from those I could enjoy here in the spring of 1969. Since the fall of communism, I have been to the United States 50 – 60 times but I did not get a chance to come here. Mr. President, thank you for the invitation, I have been looking forward to it.

Let me start by looking back and by saying a few words about the time I happened to be here. It was not an accident that I was able to come at that particular period of time. The political and economic reforms carried out in my country in the second half of the 1960s which culminated in the well-known Prague Spring of 1968 opened up a unique, yet very narrow and short window of opportunity for the Czechs and Slovaks and made it possible – among other things – to travel to the capitalist West and even to study there. I was lucky to be able to use this opportunity.

I came here at the invitation of a Czech born, now late Prof. George Staller from the Department of Economics in the College of Arts and Sciences to spend the spring term of 1969 as his teaching assistant. I did some teaching but I used my stay here mostly for studying, for attending various courses in the field of economics and for looking around in an attempt to better understand this great and for us – especially at that time – uncritically admired country.

I came here from communist Czechoslovakia shortly after the country was occupied by the Soviet Union and other Warsaw Pact countries, which occurred in August 1968. It is an irony of history that the invasion of Czechoslovakia was the only military act in the existence of the Warsaw Pact. The Moscow politicians decided to do it because they – rightly – understood that we wanted to get rid of communism and that fear motivated them to act. As a result of it, we lost another twenty years, many of us the best years of our lives.

It led to a feeling of deep frustration, which lasted in my country until the ultimate fall of communism in 1989. But the beginning was the worst. By a coincidence, I left Prague at the end of January 1969, only a day after the very sad and despairing funeral of the Czech student Jan Palach who burned himself to death in the center of Prague in protest against the Soviet occupation of the country. It was an unheard of act, especially in the relatively mild and unexalted Central European civilizational setting. It has become part of our history and will never be forgotten.

To leave Prague at that moment was fascinating, a sort of relief. I hoped I’d come to a quiet campus with an Ivory tower atmosphere, I hoped I’d come to a country where politics is not omnipotent and omnipresent, to a country where students are supposed to study and professors to teach. Something we were deprived of during those years. But that was not what I found here. I came to a country in the era of SDS (Students for Democratic Society), of Hair and Aquarius, of Bob Dylan and Joan Baez, of Flower Children, of Berkeley’s People’s Park protests, etc. Short time after my arrival the black students here at Cornell occupied Willard Straight Hall, for the first time at a university campus with rifles, and Cornell made headlines in the national media. I must confess, I had the feeling it was not much more quiet here than in Prague at that time and some of the views and arguments used by the radical students here sounded quite familiar. And quite alarming and dangerous. In spite of being from a communist country, I was here, at that moment of history, ideologically firmly on the right.

I happened to be here also in the moment of a fundamental dispute in the economic theory and especially in economic policy between monetarism and Keynesianism and – more from sitting in the library than from the courses I took – I left Cornell as a devoted monetarist. After years of living in an oppressive and inefficient communist society and economy, people like me had a built-in mistrust in the possibility of the state (and government) to successfully and productively control, direct, regulate, or plan the economy. That led to my lifelong preference for market failure rather than for government failure. I personally experienced that the government failure is always much bigger and much worse.

My using of the word “always” is deliberate. As a result of that experience of mine, I look at the current attempts to fight the financial and economic crisis here and elsewhere with the same eyes. That is why I am more afraid of the consequences of the measures used to mitigate the crisis than of the crisis itself. I will talk about it also tomorrow at the UN General Assembly meeting in New York City.

When I left Cornell and returned home in June 1969, the country was different than when I left it less than five months before. The communist regime, strengthened by the presence of the Soviet soldiers, succeeded to tighten its overwhelming control over our personal lives, an example of which was my dismissal from the Institute of Economics of the Czechoslovak Academy of Sciences after being labeled a leading non-Marxist economist of the country. On the one hand, it was a nice and flattering title, but on the other, it very much complicated my life in the following two decades. My Greyhound bus trip from Ithaca to the New York City Kennedy Airport was my last touch with American soil for the next 20 years. There is not much to say about these years now[1] and I am afraid that nobody cares. Sovietology is completely out of fashion now.

After our Velvet Revolution in November 1989, we started a process of a radical dismantling of all kinds of communist institutions and of building a pluralistic parliamentary democracy and market economy. We did not want to reform communism, we wanted to get rid of it. We were not flirting with various “third ways”. As the first postcommunist minister of finance, I was in charge of the economic side of the transformation process. It was a fascinating challenge. In the first half of the 1990s, our experience was an interesting topic. I was often invited to speak here in America and in many other countries all over the world about this unique metamorphosis, about the transformation of the whole political, social and economic system. But that is also all over now, and the interest has – rightly – shifted to other topics.[2]

In a relatively short period of time, the Czech Republic has become a full-fledged political democracy and market economy, member of NATO and of the European Union. We consider it a success. We can proudly claim to be a “normal” European country again. As a result, we already face standard “European” problems, not problems of a post communist society. They are certainly easier to live with but are more serious than we expected. We were dreaming of introducing American style capitalism, but have been – step by step, together with our preparations for the EU membership – importing the European model of an over-regulated welfare state which is neither a very productive, nor a progressive, or a dynamic system.[3]

That’s not all. The European socio-economic model, the so called “soziale Marktwirtschaft”, is not the only problem we face. After half a century of communism, we wanted to be a free, sovereign, independent country but we became a part of the very dominant and more and more centralized European Union instead.

Originally, in the 1950s, the European integration was based on the concept of intergovernmentalism, but in the last two decades it turned into supranationalism with the autonomy of individual member-states probably smaller now than in the American “Union.”[4] This is not what I wanted and I am glad not to be alone in this position. Neither in my country, nor in Europe. Rather than being pushed into a position of being a European, which is something I don’t authentically feel, I prefer to remain a Czech, but making such a simple and innocent statement is not politically correct in Europe these days. You are immediately considered an anti-European.

Having been deprived of freedom for half a century, we are sensitive, if not oversensitive when it comes to freedom and react quite strongly and rapidly to all the slightest symptoms of its endangering. For that reason, we are nervous to see various new “isms” emerging around us, “isms” which become more relevant now than the forgotten and already almost no one inspiring old communism. The one I consider particularly dangerous today is the statist ideology of environmentalism, and especially its extreme variant, the global warming alarmism. That is why I wrote a book on this topic several years ago entitled “Blue Planet in Green Shackles”[5] with the subtitle: “What is Endangered: Climate or Freedom?” My answer to this question is clear and straightforward: “Freedom is endangered, climate is OK.”[6]

To be here after such a long time, a relevant question would be which of my views and to what extent have been shaped or influenced by my stay here in Ithaca? It is difficult to say, I came here already as an adult, not as a teenager, but I can argue with conviction that I had been very productively using what I had learned here for many years which followed and that the whole stay here, studying and meeting co-students and professors, was a great experience for me. I learned a lot. I have not had a chance to say thank you yet, so I do it now.

Václav Klaus, Statler Auditorium, Cornell University, Ithaca, NY, USA, September 24, 2010.

[1] I recently wrote a book about it in the Czech language under the title “Kde začíná zítřek” (Where Tomorrow Begins), Knižní klub, Prague, 2009.

[2] See my speech “20 Years after the Collapse of Communism,” Reform Club, London, November 12, 2009; online at: https://www.klaus.cz/clanky/1787.

[3] See my “Reflections on Potential Global Power Shifts: Notes for Lago Maggiore”. The Ditchley IIF Conference, Stresa, Italy, July 1, 2010. Available at www.klaus.cz/clanky/2637

[4] See my “Criticism of the Current Form of the European Integration Process”. Walter Hallstein Institute of European Constitutional Law, Humboldt University, Berlin, April 29, 2010; translation from German. Available at www.klaus.cz/clanky/2580

[5] Blue Planet in Green Shackles. What Is Endangered: Climate or Freedom? Competitive Enterprise Institute, Washington DC, 2008. Its Czech original version was published in 2007. The book has already been published in 16 different languages all over the world.

[6] Short summary of my position can be found in a recent speech in Palm Beach, Florida, entitled “Global Warming Alarmism is a Grave Threat to our Liberty”, 2010 Club for Growth Economic Winter Conference, March 5, 2010; https://www.klaus.cz/clanky/2529.