The Czech political spectrum has interesting legacies of its richly varied past. The Velvet Revolution of 1989 is portrayed both here and in the West as a liberation from a dictatorship, and that's what it looks like to me. But roughly 10% of Czech voters still pull the lever for KSČM, the Communist Party of Bohemia and Moravia, which is the successor to the KSČ, the Communist Party of Czechoslovakia.
And while most people were glad to break the power monopoly of the KSČ, that didn't necessarily mean rejecting socialism. In his book Češi a němci (Czechs and Germans), Václav Makrlík cites polls finding that 80% of Czechs still wanted socialism in 1991. Support for the ideals of socialism goes back to the late Habsburg period, and during the first Czechoslovak Republic (1918-1938), the social democrats and the national socialists were two of the country's key parties (Czech "National Socialists" were not comparable to German "National Socialists," better known as Nazis). In the most recent national elections (Spring 2010), the social democrats (ČSSD) won the most seats of any single party, but a coalition of more "liberal" parties was able to put together a governing coalition.
In the European context, being more "liberal" than the socialists isn't hard, because "liberalism" here has a very different meaning than in the U.S., where “liberal” is roughly synonymous with “left.” Roughly speaking, an American liberal favors government action to deal with various social problems: Welfare programs to help the poor. Integration of public education. Bans on various forms of discrimination even in private business (such as hotels not being allowed to refuse a room to a person simply on the basis of race). In the sphere of behavior, American liberals are more likely than conservatives to be open to changing social structures: women's rights in the workplace; same-sex partnerships and marriages; freedom in reproductive choices.
The European sense of “liberalism” is more theoretically consistent, deriving from the roots of the word in “free.” People should be free to form the personal relationships they want, such as same-sex marriages. But European liberalism says people should also be able to form the business relationships they want. The role of the state is to be limited to only those things it needs to do. This set of ideas is also sometimes called “classical liberalism.” In American terms, it's something like being "socially liberal and fiscally conservative."
The justification for this position is not merely that it’s good to stay out of other people’s business, but that the state is fundamentally limited in what it can do well, so that even an imperfect market-driven outcome is likely to be better than what the state could come up with.
Though the social democratic ČSSD is the largest single party in the Czech Republic, liberalism has a generally good reputation and broad following here, grounded partly in a fondness for the Czech nation's industrial glory in the 19th and early 20th centuries, and partly in the relative success of the transition from communism. In the immediate post-communist period, there were huge decisions to be made about how to turn such a state-run economy into something more market-based. The state owned not only car factories, steel mills, and coal mines, but department stores, grocery stores (which looked nothing like Western grocery stores), convenience stores (and I use the word “convenience” in the most figurative sense), newspaper stands—all of it. The only entities that had the money to buy a large factory were generally foreign companies, so there were concerns about loss of economic sovereignty. At the smaller scale, the people with the money to buy a retail outlet often had money from questionable sources, whether they were former members of the communist regime who’d acquired wealth through corruption and the oppression of their fellow citizens, or others involved in more overtly criminal behavior.
The group of liberals around Václav Klaus pushed for privatization anyway. They argued that the longer the state ran things, the longer things would be run poorly. It was more important to get property into private hands, even if those would inevitably be in some sense the “wrong” hands. A private owner, even a corrupt one, would be disciplined by the market into one of three choices: running the business well, selling it to someone who would run it well, or going bankrupt.
“But if lots of firms go bankrupt, unemployment will skyrocket!” came the objection.
But liberalism has an answer to that. If a firm goes bankrupt, either it was being poorly run, or it was doing something that people didn't care enough to pay for. If it was merely poorly run, someone would step in and provide the same good or service, and reemploy at least some of the folks who'd lost their jobs when the firm went under. And if it wasn’t doing anything useful, better it should go bankrupt rather than keep using labor (and energy, and space, and material inputs) in the creation of something nobody wanted. The job-loss would hurt the unemployed, of course, but in a properly functioning economy some entrepreneur would find a use for a skilled person willing to work. And some of the unemployed could become entrepreneurs themselves, seeking out unmet needs in the economy and using their creativity to meet those needs. The pain in the short term might be greater, but without it the economy would never become productive.
The other big concern with moving slowly was the threat of “wild privatization,” where the managers actually running some entity, supposedly on behalf of the nation’s citizens, would find ways to sell off pieces on advantageous terms, presumably to their friends, and presumably in return for some advantage to themselves. By the time the government figured out the right way to privatize, there’d be a lot less value there to be had.
It’s hard to measure the success of different post-communist strategies. The policies followed by a particular country clearly matter, but other things also come into play, such as proximity to Western Europe and a country’s pre-communist heritage. So without being able to run the counterfactual experiment of how some other approach might have worked in the Czech Republic, all you can say for sure is that the country’s liberal approach has been reasonably successful. There was stagnation in the late 1990s as they unwound what was known as “bank socialism” (using state-owned banks to prop up inefficient industrial outfits, out of concern for unemployment), but otherwise the country has had reasonable growth and relatively low unemployment. It’s certainly not as rich as Germany or Austria, but the overall impression compared to 20 years ago is that the country is doing OK. My sense is that while some people are materially worse off than under communism, most people have seen some improvement, and a few are vastly more wealthy.
The price, however, has been absolutely mind-blowing corruption. I first started becoming seriously aware of it in December with the sewage-plant affair. The country received about $250 million from the European Union to fund a new treatment plant for Prague, to help bring water quality in the river Vltava into line with EU standards. The money was run through the State Fund for the Environment, an outfit that provides money for various environment-friendly activities. An aide to the (now former) minister of the environment is on tape explaining to the head of the fund that, in essence, they need to run the contract through certain inflated bids, in order for there to be money that can be skimmed off to help the minister’s career, “if he’s going to have any chance of becoming prime minister.” But that was really the least of it.
There have been purchases for the military where the Czech Republic has paid two or three times the price that some other country paid for the same piece of equipment, and politicians say with straight faces that it’s not clear the Czech prices are inflated. There’s a whole phenomenon of so-called “godfathers,” people with unimportant positions in various parties, or without any position at all, who nonetheless are the people you have to make happy if you’re going to get certain contracts with the government. And on and on.
The national elections last spring were supposed to mark a change. The two big parties ČSSD and ODS lost votes as people got disgusted with both parties’ complicity in the state of affairs. The beneficiaries were two new parties: TOP 09, which billed itself as a true liberal party, what ODS was supposed to be, what ODS perhaps would be if it weren’t busy fighting ČSSD for its share of the corrupt spoils of government. And VV (Věci veřejné – Public Affairs), which mixed conservative and left-populist positions, but whose main calling card was its platform against corruption.
A coalition was put together with ODS as the senior member, along with TOP 09 and VV as junior partners. VV turned out to be a three-ring-circus all on its own (I may get to that in another post), but what interests me here is the intellectual bankruptcy of ODS.
In February the weekly Respekt published an interview with Pavel Blažek, described as the number-two man in ODS and the party’s “regional hope” in the Brno area. (“Nečas nenabízí srdce”—Nečas doesn’t offer his heart”, February 7, 2011, pp. 46-51)
“The fight against corruption should be a given and not the only or the main program of a party, as is the case with Public Affairs. Policy should be focused on other work and non-corrupt behavior should be a matter of course.”So far, so good. This sounds reasonable enough.
“In general I’d say that over the last 20 years Czech politics has never relieved the state of a bunch of responsibilities and a lot of property. That’s a problem. As long as the state has a lot of responsibilities and a lot of property, there will be corruption here. And you can have a thousand Public Affairs and a thousand Not Public Affairs, but it’ll be hard to change the situation. There’s always the opportunity [for corruption].”Here’s where it starts to break down. This is a standard and logically consistent liberal position. In the market (goes the argument), what decides is efficiency. The customer looks out for his own interests and chooses the seller with the best price that still provides the desired level of quality. When the buyers are politicians, spending the taxpayers’ money rather than their own, they have no particular reason to look for the best deal—particularly if the bidder with the high price is willing to … do something nice for the politicians in return. So the less purchasing the government has to do, the less opportunity there is for corruption.
The argument is logically consistent, but it relies on a naïve faith that corruption is the only economic phenomenon that can harm the citizenry, so that what happens in markets absent government action must be good. But let’s overlook that and think about whether the argument even applies. Even the staunchest liberal knows that there are some necessary functions of government—the army, the police, and the contract enforcement through the courts being the classic minimal set of necessary governmental powers. The case that was prompting the questions was exactly the sewage scandal mentioned above, since the environment minister who was trying to build his war-chest on the kickbacks was from ODS. Sewage treatment is arguably one of the necessary powers of government. In practical terms, when water quality along a long river is left to markets and private action, the water quality is poor. If it’s going to be cleaned up, government has to step in somehow. When your own people take corrupt advantage of sewage treatment to further your party or their own careers, it’s not a very good answer to say, “There would be less corruption if government took on fewer responsibilities.”
In a related vein, there was an interview recently with a guy named Stanislav Bernard, who’s like a textbook case of a productive entrepreneur. In the early 1990s he and a couple of friends bought a run-down small brewery and with a lot of sweat equity turned it into a successful brand that wins beer competitions. To secure an adequate supply of good-quality malt, they set up their own malting facility, and now they sell malt to other brewers. In short, this is how capitalism is supposed to work.
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| "Bernard with a clear head--non-alcoholic beer" (the guy in the picture is Stanislav Bernard). Image from here. |
And then he gets going on the EU. I would hardly say that the EU is above reproach, but it needs logical criticism if it’s even going to have a chance of improving. And Bernard’s complaint?
“The whole system of quotas is aberrant. How can some bureaucrat from Brussels tell me how many vineyards I can have in Moravia? And that if I have more acreage, I won’t get a subsidy?” (Nora Grundová, “Rozčílený muž” (An angry man), Víkend, Hospodářské noviny, June 3, 2011, pp. 8-13; p. 12)There’s a serious liberal concern about subsidies, related to Blažek’s point about excessive government responsibilities. The idea is that the power to grant or withhold subsidies gives government officials power over the actions of private individuals. But the true liberal approach (as Blažek’s answer suggests) is to get rid of the subsidies. From Bernard’s quote, you can discern a purpose in the policy, which is probably to help small farmers, as opposed to larger operations less vulnerable to market fluctuations. One can criticize the intent of the policy. One can criticize the level of the acreage cutoff, or argue that the acreage cutoffs need to be better tailored to different regions or different kinds of farming. Or you could argue that financial indicators are a better tool than acreage. Or you could go the full liberal route and say that the subsidies themselves are the problem. Bernard doesn’t do any of those things. Instead, he says, “How dare you tell me what to do when you’re giving me money?!”
But back to Blažek, who has his own issues with the EU:
“When we look at the problem of the European Union, there are still too many of these requirements to deal with officials. We’re fighting against that. In 1989 people thought that what democracy would look like would be that they wouldn’t know or hear too much about the government, because for the previous 40 years they’d heard about it from dawn to dusk. So one goal of the post-November [1989] developments has been the creation of a liberal government. That means a government that carries something out without annoying its citizens, and the citizens have a good life. It’s just that we’re still in thrall to the trend of the paternalistic state. The state is simply always getting mixed up in things where for hundreds of years before it didn’t get involved, and it was fine.”So the ideal of this particular liberal is not an engaged citizenry, discussing matters of the common good and holding politicians accountable for their actions. Rather, his vision (and what he claims was the vision of 1989) is of a public that sits back and lets the government do its thing, in return for being left alone to enjoy prosperity. True, there’s a strain in classical liberalism that doubts the very idea of the “common good.” It suspects that whenever someone says something needs to be done for the “common good,” they really mean that they can’t get what they want through legitimate means (i.e., the market), so they want to use government action to force their agenda on others, in the name of a higher good. So Blažek’s vision of a citizenry that doesn’t trouble its little heads about collective decisions is at least sort of consistent, even if depressingly atomistic, and really not what Havel and a lot of others in 1989 were aiming for.
But then there’s the touching confidence that there exists on this earth a government that will just putter along doing good things, even when the citizenry is paying it no mind at all. This … well, there’s really nothing in classical liberalism that would support this idea. He’s just phoning it in on this one.
And finally the apotheosis:
“If there’s something that I’m working for—and I haven’t yet been successful in this—it’s a new policy for ODS, one that’s not related to campaign slogans about cleaning up corruption. I’ll give a related example, something that drives me crazy, and that’s the government’s announcement that its policy is ‘budgetary responsibility.’ Government policy can’t rest only on the state budget. That’s another slogan that we put up for the outside world, but a liberal should be mainly concerned with how people are doing, not with how the state is doing.”Here he’s simply gone off the rails. “A liberal should be mainly concerned with how people are doing”? No, just no. A classical liberal believes that the only person who can know how well you’re doing, the only person who can make the right decisions about your well-being, is you. As a matter of liberal principle, my concern for your well-being can only be either irrelevant or morbid.
The point of liberalism is that government doesn't have to look after people—in the words of Václav Klaus, a man for whom Blažek has a lot of respect, “People need to take care of themselves.” The government needs to exist in order to create a framework in which people can effectively look out for themselves. That framework needs to be paid for, which means taxes. So the real situation is that, if you're a liberal, there’s no more important discussion in politics than figuring out what the state should be doing, and doing that as effectively as possible, with as little corruption as possible, so that you can tax as little as possible and let the economy go along its merry way. In other words, the very “budgetary responsibility” that Blažek dismisses as a mere campaign slogan.
From what I can tell, the intellectual bankruptcy of ČSSD is fully comparable to that of ODS. The socialists are eager to point the finger at the obvious and blatant corruption of ODS, but they have their own “godfathers,” their own history of placing friends in well-paid positions, their own members on the boards of directors of government-owned enterprises, where they pull down large salaries for doing no discernable work. But ODS is in power now, and more than the socialists, they present themselves as a party of ideas, a party of a philosophy that showed itself superior to socialism when the communist system collapsed. In the end, it may be foolish to expect too much of Blažek, he may be just a political functionary or an operator. But I still think it’s revealing when the number-two man in a party created around an idea can’t deliver an intellectually consistent explanation of what that idea is.
I get the feeling that the word “liberal” on the Czech scene today is just the label for one of the two major brands of thieves running the show. It has ceased to have any substantive meaning—other than, “We’re not those dirty socialists.”
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