Our Freedom Is Endangered

by Claudio Grass, Gold Silver Worlds Liberty is a fundamental human right and the cornerstone of our existence. But in our current world, liberty is being attacked from all directions, whether through higher state control or individuals themselves. Liberty is in search for its protector. Those that value and actively promote the ideals of freedom and liberty are few in such an enclosing environment. In the following article, Claudio Grass, Managing Director at Global Gold Switzerland, ventures into a discussion with one of the vanguards of liberty, former President of the Czech Republic, Prof. Ing. Václav Klaus. Mr. Klaus talks about how he embraced the values of classic liberalism and free markets while growing up under communism and the challenges he faced. He speaks about the peaceful split of Czechoslovakia which took place during his years as Prime Minister and also about the transition of the currency system, which was successfully initiated at the same time. You will learn about his stance on the situation in Greece and if a potential exit of countries like Greece from the Eurozone would really be such a disaster. This all comes from a man who says he never intended to be a politician or office seeker. After the fall of communism, his motivation was to establish the rules of a market economy – not to plan its outcome. Communism made me believe in the free market According to Mr. Klaus, it was communism itself which made him follow the concept of the free market. The system was irrational and based on something else, on the opposite of free markets, freedom and pluralistic democracy, which made it relatively easy to see that attempts to mastermind the economy from above were basically wrong. Mr. Klaus explains that his careful study of economics helped him see this difference, saying that the Austrian School of Economics, the Chicago School of Economics and public choice school offered more arguments than other schools of economic thought. In the 1960s, Mr. Klaus worked at the Czechoslovakian Academy of Science, in the Institution of Economics. Although the objective was for him to study and criticize non-Marxist economic theories, he found himself fully supporting them. After the fall of communism, everything was possible Mr. Klaus was born in Czechoslovakia during the communist regime. The idea of separation never occurred to Mr. Klaus, explaining that under communism, all serious discussions about nations, nationality, federation, nation-states and so on were prohibited. Such a debate did not exist. But after the fall of communism, everything became suddenly possible. It is then that the Czechs discovered that Slovakia did not just want the end of communism, but that they also wanted their own sovereign nation-state. He gives us his account as Prime Minister after winning the 1992 parliamentary election. Mr. Klaus was responsible for leading the negotiation process of the separation and therefore offers his interesting insider view of this experience. In the negotiations, the Czechs gave the Slovaks the option either to stay in a common state or to separate. They accepted the second solution. Mr. Klaus’ task as prime minister at the time was to make the separation as friendly, as smoothly and as rapidly as possible. In more or less six months, 25 intergovernmental treaties were signed between the Czech Republic and Slovakia and everything was divided in a peaceful and friendly manner. The 1st of January 1993 marks the official separation of the Czechoslovak federation. What can we learn from the Czech’s transition experience? The political split of the Czech federation entailed that its currency would be divided as well. Due to Mr. Klaus’ leading role in the orchestration of this transition, it is interesting to learn his opinion on whether a potential exit of countries like Greece from the Eurozone would really be such a disaster. Mr. Klaus believes that the political split of the federation was a very useful experience in many respects. The people in Catalonia, Scotland, Quebec, and Flanders have been approaching Mr. Klaus in the last twenty years, asking what to do. However, Mr. Klaus asserts he was never a proponent of separatism. He only understood that a division of a country is useful when the old arrangements could not function efficiently. On the other hand, he is confident that the split of his country set a good example that a friendly split is possible, and that it does not necessarily create big economic losses. However, to quantitatively measure how much the country lost because of the split was impossible, as it was not a controlled experiment. The Czech experience with currency transition is relevant for the current Euro. According to Mr. Klaus, it showed that it’s very easy to divide the currency. For the Czechs and Slovaks, it was practically a non-issue. He argues that “to say that the exit of countries like Greece from the Eurozone would be a disaster is a complete nonsense. It is wishful thinking, or even propaganda.” Mr. Klaus has to laugh when some Europeans keep telling him “look how deeply the Greek and European economies are intertwined”. The Greek economy represents around 2% of Europe’s GDP. Meanwhile, the Slovak economy was 1/3 of the Czechoslovak economy and the interconnections were much deeper and bigger. When asked about the Czech central bank’s decision to introduce a price limit on the Euro (similarly to the Swiss central bank), effectively tying the Czech Crown to the Euro, Mr. Klaus says that he does not consider the intervention of the Czech National Bank (CNB) in November 2013 as paving the way for the introduction of the Euro. The CNB tried to intervene because of its fear that the Czech economy is going down and that the small inflation could turn into deflation. It was a standard macroeconomic argument, but one that he totally disagrees with. “We wanted to give a chance to the citizens of the country to buy the privatized firms” Continue Reading>>>

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