For more on the influence of Thomas Piketty, see my June 5, 2014 column, "Piketty Fever."
Presidential Address of Pedro Schwartz at the General Meeting of the Mont Pelerin Society in Miami, Florida, 19th to 23rd September 2016.
Aristotle denounced demagoguery many centuries ago as being a degeneration of democracy. This is true but is not all. Populism is a flood to which four currents contribute: the beguiled voters; the power-hungry intellectuals; the short-sighted politicians; and the appeasing elites.
The fault of the people?
It is usual but unfair to put all the blame on the people. In fact demagogues have it so easy because the people have been fed with unfeasible promises of welfare. They have been promised good free education, quality free healthcare, ample free pensions, with no attention paid to cost or incentives. They have even been promised the end of the business cycle and unemployment. When voters discover they have been tricked, they grow angry and turn to even more irresponsible dreamers.
The anger is there all right. During the American election campaign, we are hearing angry demands for total protection from competition or of money poured into pharaonic infrastructures. Many Britons voted for Brexit from a disillusionment with a fancied European Union imposed by politicians in London and Brussels. The egregious failings of the French way to socialism may result in Marine Le Pen becoming the National Front President of France. Similar populist revolts can be seen in Austria, in Germany, the Netherlands, and Italy on the right; and in Portugal, in Spain, and in Greece on the left.
As regards the people, not all is gloom and doom, however. Voters in Argentina, Brazil, Peru, Colombia, Guatemala, Mexico, seem to have had enough of Populism and have been throwing out vote-buying politicians. Not that the new ones have proved an unmixed success in every case but still the fight for liberty is present on that Continent. So, if a gullible people are not wholly to blame for the dangerous flirting with utopia that we are witnessing in so many lands, who is?
For more on the treason of the clerisy, see the EconTalk podcast episode McCloskey on Capitalism and the Bourgeois Virtues. For more on Thomas Piketty, see the EconTalk podcast episodes Thomas Piketty on Inequality and Capital in the 21st Century and Daron Acemoglu on Inequality, Institutions, and Piketty.
A group deserving blame are the professors, philosophers, sociologists, economists, and journalists who have committed la trahison des clercs, as Julien Benda called it, or the treason of the clerisy, to use the name given them by Deirdre McCloskey. For more than a century mainstream intellectuals have done nothing but extol the virtues of socialism, harp on the defects of the market, lament the alleged exploitation of the poor, and denounce the immorality of capitalism. Marxists, socialists (whether Christian or not), Fabians, progressives, radicals, New-Dealers, Beveridge liberals, and Keynesians have in effect done nothing but inspire or condone the fattening of Leviathan and the servitude of the individual. Intellectuals, undeterred by the failure of socialism, now speak of fairness, social equality, and wicked bankers. I call this 'Pikettying'1 holes in capitalism. They are always silent on the magnificent results of the capitalist economy and the free market, especially for the poor. We see with dismay that the universities of Europe and America have been transformed into places where the philosophy of freedom has no place and is even forcibly expelled. Thus, Alan Kors has more than once explained what it means to be a believer in academic freedom in the liberal arts faculties of the United States or the social science programmes in Europe.2 Those unfaithful teachers and students shamelessly follow the recommendation of Antonio Gramsci that the way to make the socialist revolution is to monopolise the field of culture. The paradox is that we the classical liberals and libertarians do have in our midst the outstanding thinkers that can help us push back the tide of politically correct intellectual dishonesty but they are not heard in society as they deserve. The battle of ideas is as important as it was at the birth of our Society. It is a battle that especially concerns us here.
The treason of the clerisy deeply influences politicians. We know from the work starting with Gordon Tulloch and James Buchanan that politicians maximise just like any other human being. They maximise votes but they could try to maximise votes also by helping maintain the institutions of freedom. However they do not want to appear as cynical seekers of personal gain. They need justification for what they do in the name of the common good. They also need public opinion support. It may be too much to ask them to be far-sighted and ask to strike out for freedom when the philosophers justify an inflation of rights and the media perpetually call for state action. Jose Pi–era, in his crusade to save democracy from the disaster of failed public pension schemes, has shown how crucial it is that we change the atmosphere in the media and the social networks. Why do the traitorous clerisy have such a wide hearing and the demagogues such a large following?
The rich and the media
To put it bluntly, it is because 'the rich' have a bad conscience. For the socialists 'the rich' is the likes of us here in the professions, in business, in gainful employment, and also the captains of industry and finance. Not us in the Mont Pelerin Society, of course, but many in the more affluent part of society are prepared to compromise, to take the middle road, to curry favour, especially in Europe and Latin America. The well-to-do seem to be always ready for compromise with the enemies of liberty. I sum their position with the symbol of an umbrella—the umbrella Neville Chamberlain carried to his meeting with Hitler in Munich. He thought he could face the monster with sweet reason, by showing his willingness to compromise—at the cost of Czechoslovakia!
The role of the Mont Pelerin Society
"We must always be ready to Battle for Freedom and to open new ways for the progress of our societies. We are still very much needed."
Is there no hope? Of course there is. Nearly seventy years have passed since Hayek gathered a small group of thirty eight thinkers around him in the small village of Mont Pelerin, overlooking Lac Léman in Switzerland. The contribution of those pilgrims of liberty to building a better world, and the work of the many of us who have followed in their footsteps, has been crucial—I affirm without false modesty. But there is still so much to be done. We must always be ready to Battle for Freedom and to open new ways for the progress of our societies. We are still very much needed.
We must do so while preserving the 'broad church' spirit proclaimed by our founding members. Let me echo the Statement of Aims of our Society, agreed at the founding meeting of 1947. Ours is not a political intent. We want to join in the battle of ideas because the central values of civilisation continue to be in danger. The position of the individual and the voluntary group are being undermined by administrative power. That most precious possession of Western Man, freedom of thought and expression, is threatened by the spread of creeds whose object is to supress and obliterate all views but their own. We are unfairly presented as extremists to dismantle our defence of private property and the competitive market. Economic nationalism is rearing its ugly head again in the programs of those who would resist change and progress. Let me read in full the last paragraph of that Statement:
The group does not aspire to conduct propaganda. It seeks to establish no meticulous and hampering orthodoxy. It aligns itself with no particular party. Its object is solely, by facilitating the exchange of views among minds inspired by certain ideals and broad conceptions held in common, to contribute to the preservation and improvement of the free society.
For more on these topics, see Pedro Schwartz, "The Erosion of Political Economy and the Retreat from Freedom", Library of Economics and Liberty, April 4, 2016; and the EconTalk podcast episode Burgin on Hayek.
The latest danger for freedom is the spread of populism in our democracies, be it of the democratic kind or of those who use our liberties to try to destroy our freedom. We pilgrims of liberty have much to contribute to the fight against this new plague, because much of it originates in the realm of ideas.
We have the best ideas to win the battle against the treacherous clerisy. The battle of ideas is as crucial as it was in 1947, when Hayek founded the Mont Pelerin Society. Not only in the media and the social networks. Never forget: truth will prevail if the seekers for truth do not falter.
*Pedro Schwartz is "Rafael del Pino" Research Professor of economics at Universidad Camilo José in Madrid. A member of the Royal Academy of Moral and Political Sciences in Madrid, he is a frequent contributor to the European media on the current financial and social scene. He currently serves as President of the Mont Pelerin Society.
For more articles by Pedro Schwartz, see the Archive.