The Free Market Road Show visited Vilnius last May 7th. The capital of Lithuania greeted the Road Show with a big audience of entrepreneurs, professionals, and members of NGOs and civil society institutions. Our partner was the Lithuanian Free Market Institute (LFMI).
A lecture by Deirdre McCloskey opened the Vilnius event. Prof. McCloskey made her first appearance in the FMRS there and will accompany us for several more stops. She is very well known for, among other works, her trilogy on bourgeois ideology. As she explains, it was not due to savings or exploitation that the West grew rich, but due to an ideological change that allowed certain practices to flourish.
Prof. McCloskey started her talk acknowledging that “people in Lithuania know that central planning does not work very well”. Some free market critics argue that in the times of Adam Smith perhaps laissez faire was possible, but today our economy is “too complex”. But McCloskey believes that the more complicated an economy becomes, the less likely that a central authority would make intelligent decisions. That is why the best way to organize an economy is by experimenting: try things, make discoveries and be open to change our minds quickly. As McCloskey put it: “You have to allow people to have a go, if not you are going to have a slow economy”.
The American economist also focused on the relationship between free markets and poverty. She denied that Libertarians do not care about the poor. On the contrary, it is precisely an open economy what allows innovation and invention. These are the keys to lift people from poverty. On McCloskey’s own words: “It is liberated human ingenuity that made us rich, not trade unions or government regulations. And invention comes from a free society”.
Prof. McClosey concluded: “A free society program has worked everywhere it has been tried”.
A panel on stagnation and growth followed.
Italian Professor Enrico Colombatto gave the keynote speech. He said that Europe cherishes technological advances but has forgotten that they are fueled by entrepreneurs. “Our ability to attract entrepreneurs or keep them here is very low”.
What is more, Keynesians offer easy solutions and shortcuts for Europe’s problems that are quickly accepted. “Some people have made mistakes, some have been living above their means, and some have made bad loans. Keynesians are offering magical solutions to these problems and our politicians irresponsibly apply them.”
Finally, Vytautas Zukauskas (the vice president of LFMI) criticized how the EU responded to the financial crisis. According to the Lithuanian economist, “there has not been a year since the crisis in which public spending decreased”. Nonetheless, politicians keep saying that austerity has failed and that is used as pretext to the Quantitative Easing (QE) program. Ironically, Mario Draghi (president of the European Central Bank) says that reforms are needed, but at the same time lowers interest rates making it easier for governments to delay those reforms.