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Václav Klaus at the 19th Vienna Congress com.sult: Save Freedom, not the Future

English Pages, 9. 2. 2022

I know that expressing disagreement with the main slogan of the 19th Vienna Congress com.sult is provocative, if not iconoclastic. I am fully aware of this. I also know that in the current crazy and demeaning pandemic atmosphere, in the shadow of the destructive Green Deal attack on the economy, in the moment of the return of high inflation (after years of fearing deflation) – which together create the most critical moment of the post-World War II era – one shouldn’t easily and light-heartedly disagree with someone who stands on the same side on these major issues of the day. In this situation, one should be positive and shouldn’t create new conflicts and disputes. Yet, in this case I have to.

Let’s accept that we are responsible for what we are doing now and, eventually, for what we will leave behind us.We can’t be, however, responsible for the future. We do not have any way to influence the behaviour of people in the future.

The only way to affect the future positively is to pass on to future generations, to our successors, the world in the best possible shape. That would be the best legacy we could leave behind. It asks for our understanding of the world we live in and especially of its weaknesses and pitfalls. We have to – in all humility – accept that we find ourselves in a civilizational crisis of the West right now and that it is our task to save the world (and the future) from this crisis. I am more worried about our current world than about the future. We shouldn’t run away from the current problems by escaping into the future. That would be a betrayal of future generations (and of ourselves as well).

It is necessary to be aware of the continuity of time, of the interplay of the past, the present and the future. Our world, our quality of life, our wealth and welfare, our level of health care, our high degree of economic development have not been created by our predecessors’ decision to “save for the future”. They didn’t explicitly and purposefully save anything for us because – I suppose – they subconsciously knew that doing so would have been counter-productive. Should they have saved more raw materials? More gold? Silver? Coal? Oil? Natural gas?

How much should they have saved to avoid our current energy crisis? Should there be more coal available? More uranium? How much should they have saved? One tenth, one hundredth or one thousandth of their consumption? Should they have thought about the future 20, 200 or 2000 years ahead? This is totally unimaginable and only all kinds of Gretas can fight for something like that.

Economists should give these topics serious thought by means of the concept of time preference which some other people, our opponents, disregard or regretfully don’t understand. This idea is, however, not difficult to grasp. The wisdom of ordinary people is sufficient, the intellectuals (and social scientists) seem to have a problem with it, however. They argue that – by introducing the concept of time preference – we disregard the future and have a myopic (short-sighted) way of thinking. To put it technically, they accuse us of having a very high (market level) discount rate on our mind, whereas they insist that the appropriate discount rate should be zero. The future is – for them – equal to the present. When the discount rate is low (or zero), time doesn’t flow. The future is here, we can “touch” it. Not to save for the future is in their eyes a crime.

It is disturbing and frustrating that we live with several such fallacies. The adherents of the global warming doctrine use zero discount rates in their climatological models, which distorts their results. The bankers use zero interest rates, which undermines the rationality of our investment and savings behaviour. These mistakes shouldn’t be extended into other fields of enquiry.

That is not all. Our thinking should be also based on the reasonable assumption that future generations will be richer and – due to this and due to the never-ending technical progress – will be much better able to cope with what we today consider to be unsolvable problems. Therefore, the worst thing we could do for future generations would be to artificially undercut our current economic growth and development, and thus reduce their future wealth.

Let’s base our thinking on common sense, let’s not abuse science and pseudoscience as we see in the arguments of the covidists. We shouldn’t accept the catastrophic forecasts implying that we are approaching the end of economic growth or the exhaustion of resources. We – especially – shouldn’t confuse natural resources with economic ones. Individual natural resources are exhaustible but the economic resources – with the help of endless human ingenuity – are not. Let’s not fall into the green trap. Into the trap of the so called sustainability (in their interpretation). Human action and human ingenuity is the ultimate resource. And this resource is inexhaustible. This stands as the basis of our optimism.

Let’s put our house in order first. Let’s stop our growing indebtedness. Let’s stop the acceptance of deficit financing as a standard principle of the era of “Anspruchsgesellschaft” (entitlement society). We should stop promoting and extending our leaky government pension and health care systems which are evidently unsustainable. To continue in the same spirit would be the worst “gift” to our children and grandchildren.

Freedom remains – at least for some of us – a fundamental principle. Let’s not try to mastermind the future – all undemocratic systems aspired to do that, all of them failed and their efforts led to disasters. We should try to hand over to our successors a free world, a democracy. We should allow them to make their own decisions, let them be “free to choose”.

Let’s behave rationally, in an economic, economizing way. To economize means to live efficiently. The slogan of sustainable development has been many times rejected and presented as a model of wishful thinking, as a way of manipulating people living today. The biggest attack on rationality (and eventual meaningful sustainability) is the Green Deal and similar plans and initiatives.

People should remain free to make decisions. There is no one who knows better. There is no “philosopher-king”. Neither Greta Thunberg, nor Klaus Schwab, nor Franz Timmermans, nor Madame Lagarde. In the spirit of Hayek, we should fight against their arrogant, but unjustified pretence of knowledge. We shouldn’t capitulate to them or to the aggressive pressure groups they create and support. This year’s Vienna Congress should express this message very strongly. We shouldn’t disregard our convictions. And the truth.

Václav Klaus, 19th International Vienna Congress com.sult 2022, House of Industry, Vienna, January 30, 2022.