For many of us, equally versed in history, political affairs or socio-economic issues, current conditions in the West, and particularly in Europe, can sometimes resemble the plot of a bad movie. It is often said that history does not repeat itself, but it does rhyme, and what we see today is a fine example of this. Nevertheless, one might have expected that at least some of those in charge of the “big decisions” would have learned something from the mistakes of the past – if not from the mistakes of their predecessors, at least from their own.

The current political trajectory, which is merely an acceleration of the trend of the last decades towards greater centralization and concentration of power in the hands of a few “anointed ones”, has now clearly entered a particularly dangerous phase. The deliberate disempowerment of the individual, the infantilization of the body politic, the suppression of free debate and the demonization of dissent have brought our societies and economies to breaking point.

A real war is raging in Ukraine, with countless direct and indirect victims, an economic crisis like no other in recent memory is ravaging working households and this “invisible thief”, namely inflation, is wiping out what was left of the middle class, forcing formerly benefactors of food banks to become beneficiaries. All the while, it seems no one is blaming it for him.

It is thoughts and questions like these that we recently discussed with the former President of the Czech Republic, Professor Ing. Vaclav Klaus. In the interview that follows, he offers many avenues for reflection, drawing on his vast political experience during the most difficult periods of modern memory and on his deep understanding of geopolitics, economics and human nature. -same.

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Claudio Grass (CG): Although we can say that Europe has been in a state of crisis for at least a decade, we can say that this time is different. There is a real war on our doorstep and everyone is paying the price in one form or another, not just the direct adversaries. Russia’s advances have essentially stalled, while the cracks in Europe’s economy and the tears in the social fabric are getting worse by the day. How long do you think this can last and what are your biggest concerns about the continuation of this conflict?

Vaclav Klaus (VK): I agree it’s different now. The current crisis, which is much deeper than the situations that we (or politicians) have irresponsibly labeled “crises” in the past. It is the result of a unique combination of factors and causes. Some of them are directly visible and make the headlines, others are invisible and therefore not sufficiently exposed or discussed.

The first group of factors consists of individual events, while the second consists of slow and gradual changes in the political, social and economic system. They are not statistically measurable. No one can see them, because they happen in small steps. Nevertheless, it is this second series of developments that is the most worrying.

War, energy crisis and mass migration make the headlines, but not systemic change. I fear we are not paying attention to how far we have already moved away from free markets and political democracy.

CG: As we usually see in every conflict, the propaganda machines go into overdrive and alarmist campaigns sow panic and division among the population. A few weeks after the beginning of this war and more and more since, the general hatred against “all the West” or “all Russians” spreads. How do you assess collectivist viewpoints like these?

CV: I sometimes wrongly underestimate the role of propaganda, because I believe that by not watching TV or being isolated from social networks, I am immune to it. I admit that this is a bad prospect.

Direct propaganda is one thing, but general bias and media bias are much worse. What we’re going through now is like what we last went through in the 1950s and 1960s. I admire George Orwell, consider him a genius, and his book “1984” a historic achievement. But I have always been opposed to the hyperbolic and dramatic use of Orwellian aphorisms to describe real world affairs. I was afraid of trivializing the situation or my enemies and adversaries. It’s different now. Orwell became directly applicable.

CG: There are growing calls in Europe for a “Marshall Plan” for Ukraine, the strongest among those coming from figures like German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen. According to the World Bank, rebuilding Ukraine would cost about $350 billion. Given the results of the original Marshall Plan, do you think repeating it now would be a good idea?

CV: As an economist, I don’t believe in the Marshall Plans in general and the post-war Marshall Plan in particular. The importance of the original has been exaggerated by propaganda.

I know of studies that demonstrate its marginal role. Post-war European reconstruction was the work of Ludwig Erhard, not George Marshall. The role of foreign aid has been canonically expounded by Peter Bauer, Deepak Lal and others. Foreign aid appeals more to donors than to recipients. I see it now in the eyes of Czech politicians. It is not their own money that they give.

CG: While the war has monopolized media attention and political discourse, there are many more issues and threats facing Europeans and most of them preceded it, but no one there. really paid attention. Inflation is the most severe of these and forces countless households to make impossible choices. Western politicians blame all of this on “Putin’s war”, but do you think that those responsible for monetary and fiscal policy in the Eurozone in particular should bear any responsibility themselves?

CV: I consider inflation to be the biggest problem these days. It’s not just about Putin, it’s about the Green Deal and especially inflationary monetary and fiscal policies, which became “normal” after the 2008-2009 recession.

Quantitative easing and zero (or negative) interest rates in central bank monetary policy and deficit financing in government fiscal policies have created a macroeconomic imbalance. We live in an inflationary atmosphere and we cannot get rid of it without fundamental changes in monetary and fiscal policies.

To my great regret, Keynes is today’s winner, not Milton Friedman. It’s something I didn’t expect, but it’s the new reality. Friedman, not Keynes, was my hero in the dark days of communism and it is frustrating that in the heyday of the ‘better new world’ of EU and ‘liberal democracies’ Keynes is back on the pedestal.

CG: We have seen a lot of wrong policies adopted in the EU that have divided the public and ultimately inflicted a lot of damage on the economy and society in general, from immigration to the “green agenda”. There have been many protests over the years, but little, if any, change. However, do you expect the public anger to be fiercer and more effective this time around, as more people struggle to put food on the table?

CV: EU policies are absolutely wrong and therefore harmful. You mention potential protests – I don’t see any. Europe and all of the West are marching to the left, towards collectivism, towards state interventionism. If there are protests, they are against the market.

There are hardly any significant protests against the European system of massive state interventionism and those that exist cannot change anything. There is dissatisfaction, but no real protests. People still believe in the possibility of improving the functioning of the existing system, they still call it a market economy and a parliamentary democracy. However, this is not a correct interpretation of the current state of affairs.

CG: Having lived under communism and having experienced first-hand how the state uses fear to manipulate and control the population, to muzzle dissent and open up debate, and to enforce policies that no rational, free-thinking individual can would otherwise accept. Even though our politicians today insist that our Western democracies are synonymous with freedom, fundamental values ​​such as freedom of speech or individual financial sovereignty have been increasingly restricted over the years. Do you think this is all reversible or are we destined to repeat the mistakes of the past that you had to go through?

CV: It’s definitely reversible, but I don’t see anyone willing and able to do that. What is needed are not just marginal reforms. There needs to be a fundamental transformation of the system and I’m not sure voters are interested in that.

Changes may occur, but not in the foreseeable future. I know that sounds pessimistic, but I think making a change is not a task for me or for my children, but for my grandchildren.