Václav Klaus live and unplugged

A few years ago I honestly told myself that I would spend less time academically on Czech right-wing politics and more time on other things. The world really did, after all, need some decent research about Central European interest groups and under-the-radar new parties threatening to break through into Czech politics. Inevitably, things didn’t work out like that.

As the Czech media have noticed rather than sit at home and write his memoirs the former Czech president is embarking on the political equivalent of a European and world tour and – as with 1980s electro pop or – when you’re got all the albums, but didn’t manage to catch the acts live, it’s hard to stay away.

And so it was that I found myself in Pembroke College (Cambridge) listening to Klaus giving the Adam Smith Lecture (transcript including asides faithfully posted by the Václav Klaus Institute here).

In recent years figures on the left, not least fellow Scot Gordon Brown, have tried to reclaim Smith from his totemic status as an icon of the free market right, but – following in the footsteps of previous lecturers Charles Moore and Nigel Lawson – this will be a strictly orthodox interpretation.

 Accordingly, Klaus tells us about the Smithsonian influence over his career, explaining to semi-approved of status of classical pre-Marxian economists in communist Czechoslovakia and his position as a junior researcher attracted to liberal market economics in the 1960s, critical of the market socialist plans of the Prague Spring.

 Adam Smith, the Adam Smith Institute and the politics of Thatcher and Thatcherism were also an inspiration after the fall of communism when he is – he says – promoting the idea of a fully fledged capitalist market economy against residual ideas of a Third Way on the liberal left. Anglo Saxon liberal ideas helped see off the threat of a French – or German inspired social market economy in the Czech Republic.

 This is the classic Klaus back story.  The tale of Third Ways in 1990s is politically spun – and perhaps flattering to British Thatcherites about the real scope of their influences- while as far counter-elites in communist Czechoslovakia as far the 1960s and 1970s are concerned and in need of some careful historical research. (What memoirs and academic research, we have suggests was perhaps more cautious and less ideological then he claims in retrospect).

 Then we move to the real topic of the lecture – and the real topic of almost every Klaus lecture –  the European Union.  The Czech Republic, Klaus realistically concedes, had no way out other than to join the EU. It was after all his government that submitted Czech Republic’s formal application to join the Union (in 1996).

 Adam Smith’s writing had little to say about international economic integration – but in a slightly awkward Justin Bieber turn of phrase Klaus says that thinks Smith

 would support the European economic integration as the final step in the demercantilization of Europe … would be against the massive politicization of life in Europe, against the stifling of free markets and against the concentration of such an enormous power in Brussels.

 A rather striking recognition that there is a free market liberal case for European integration (Hayek and von Mises, I believe came to similar conclusions in 1940s thinking about the post-war reconstruction of the continent), but the question of how you get economic without political integration is characteristically ducked.

 We then leave the Scottish Enlightenment behind and the Adam Smith lecture becomes unabashedly the Vaclav Klaus Lecture. This is, after all, what most people (including me) have come to hear. There are few surprises here. The Maastricht Treaty. Klaus says, is when things went awry, and in hindsight, although still one of his great political heroes, Margaret Thatcher did not oppose it as vigorously as she might have done. (This (and her acceptance of the idea of man-made global warming) was one of the few things about which he was critical of the Iron Lady.

 We finish up tub-thumping euroscepticism – or at least as close as Klaus comes to tub-thumping. Europe needs fundamental change. The EU should certainly not become a transfer union. But how should it be achieved? As always, somewhat vague – it will come about visible and invisible hand not of politics and civil society (obvious not his word) not economic forces, but of a from below initiatives of free citizens challenging the current direction of integration.

….the free discourse of millions of people on the European continent. The change must come from bellow, not from above. It must be a Smithian (or Hayekian) process of spontaneous evolution, not constructism. It must be human action, not human design, to quote another great social scientist, Ludwig von Mises.

 Things become more interesting during the Q and A session.  Like Mrs Thatcher, Klaus conveys the critical quality of believing what he saying and actually wanting to convince his listeners, although unlike Mrs T. Klaus is clearly better talking to people than addressing an audience.  (And we get something of the flavour why Klaus is – or at least was – such an effective and winning politician.

 He is, he says – diplomatically for any Tories in the audience – roughly on the same page politically as David Cameron as regards the European Union or at least committed to the same political direction, but  it would be a tragic mistake to see fiscal union as the only way out of the EU’s cuttent crisis. The experience of Czechoslovakia shows that it is ‘ very easy to split a currency union and it would make sense for the Eurozone to be narrowed. One, two or even three countries (he does not say which) might leave. In the historical example of the Latin Monetary Union of the late 19th and early 20th century highlights the same point, he says.

 He has no regrets about the course of economic transformation in the Czech Republic or any sense the greater regulation would or could have helped. Critical question along these lines is ‘Communist’ in its logic – economic transformation was a pressing political imperative that had to be accomplished rapidly or it would not of been accomplished at all.

 Klaus’s answers and arguments are, as ever, often far from convincing, but, as ever he often has a point. (He is very far from the only villain of the piece in the corrupt and distinctly sub-optimal economic transformation of the Czech Republic and, like other eurosceptics can claim some justification for pointing out fragility and political and sustainability on the Eurozone project has implemented).

 We never do learn, however, quite how he sees eurosceptic movement of the people, which will supposedly bring change from below. He is not, he tells is, planning to lead a European-scale ‘Velvet Revolution’, but whether he is thinking of a continent-wide UKIP-style electoral insurgency, the sullen eurosceptic disengagement of voters or some kind of longer-term cultural change, we never find out.

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