Against Populism in Madrid

The Free Market Road Show made its second stop on Spanish soil in its capital: Madrid. Our local partner there was the Think Tank Civismo, a private institute that specializes in fiscal issues.

The event was opened by a member of the clothing company “El Ganso”. He talked about the history of the now very successful company. But the emphasis was put on its earliest times. The beginnings of a start-up is always difficult. For instance, the Cebrián brothers, the owners of “El Ganso”, had to sell their cars to be able to pursue their dream. Thus we can see that “behind a history of success there is a history of sacrifice”.

Panel I featured Leszec Balcerowicz, a Polish reformer, and Juan Ramón Rallo, an economist who belongs to the Austrian tradition. Both of them focused on the issue of investments. Against what Mario Draghi and Jean Claude Juncker are doing, Balcerowicz explained that “public investment cannot substitute for private investment”, and continued, “if that were the case, socialism would have been as efficient as capitalism. And we know it was not, it was total disaster”.

The EU was not the only point of his criticism. The Polish economist also threw some darts at the national politicians. According to him, “most of the regulations are produced domestically”. That is why “there are no European solutions to the national problems”.

Rallo, in turn, picked up on Balcerowicz’s talk and reflected on the real estate bubble which burst in Spain some years ago. He wondered about how to correct the malinvesments. His answer was very simple: “Savings and economic freedom. This mixture is the only one which allows innovation”.

The Spanish economist was not as kind as his predecessor about the European Union. Rallo defined the EU as a “cartel of governments” which coordinate effects in order to prevent the emergence of an “oasis of freedom” within Europe.

In any case, the most touching speech of the day was the one by José Cordeiro. Venezuelan by origin, Cordeiro raised awareness about the current state of his home country and about the dangers that the new Populist Party“Podemos” represents for the Spanish political landscape.

Nowadays Venezuela has an oligarchic system of financial repression and foreign exchange controls which makes it almost impossible for ordinary citizens to travel or to transfer money abroad. However, these draconian regulations do not apply to government officials. This repugnant system has been designed by Juan Carlos Monedero, a founding member of “Podemos”. Moreover, Pablo Iglesias, the leader of the leftist organization, in a myriad of occasions has praised Hugo Chávez and his so-called “revolution”.

Venezuela nowadays has shortages of everything you can imagine – from toilette paper to medicines. Cordeiro knows this first hand. His father was last year in need of a dialysis. The treatment could not be provided in Venezuela. Since international airlines have either dramatically reduced or ceased their flights to Venezuela due to lack of payment, Cordiero’s father could not be flown abroad to receive the much needed treatment. The result, in Cordeiro’s own words: “My father died because of populism in Venezuela”.