Free Market Road Show Madrid 2018

The West and the value of freedom

The Rafael del Pino Foundation, Free Market Road Show and the Juan de Mariana Institute are organising, on 19 April 2018 at 16.30, the event "Free Market Road Show Madrid 2018: the West and the value of freedom."

The event was structured according to the following programme:

16.30 Welcome

16.45 The values that made the West flourish
The body and soul of liberalism. Juan Ramón Rallo, DirectorJuan de Mariana Institute

Round Table
Federico FernándezSenior Fellow at the Austrian Economics Center and Chairman of the Bases Foundation
Juan Carlos GirautaSpokesperson for the Citizens' Group in the Spanish Parliament
Juan PinaSecretary General of Fundalib
Vanessa VallejoEconomist, writer and columnist
Diego Sánchez de la Cruzeconomic journalist (moderator)

18.00 Coffee break

18.30 Europe against Europe: are we betraying its founding values?

The origin of the European Union as an area of freedom. Ramón Pérez MauraJournalist, Assistant to the Editor of the ABC newspaper

Round Table
Eduardo Fernandez LuiñaInternational Relations Analyst, FAES Foundation, Spain
Almudena NegroJournalist specialising in digital communication and partnerships
Victor SantanaAdviser to British MEP Daniel Hannan, MEP
Manuel LlamasEditor-in-chief of economics, Libertad Digital (moderator)


<strong>The seven virtues of capitalism</strong> For capitalism to work, a set of values based on justice, prudence, fortitude and temperance, as well as secularised versions of faith, hope and charity, need to flourish. Juan Ramón Rallo explains: What values are necessary for capitalism to flourish, for it to provide widespread progress for the population as a whole? According to Juan Ramón Rallo, director of the Juan de Mariana Institute, the most common answer is that we need institutions, understood as a common legal framework that respects private property, contracts, individual freedom, within a context of macroeconomic stability and a limited state. These are the ideas that emerged from the Washington consensus and are a necessary condition for economic development, for capitalism to flourish. In addition, other values are necessary, such as virtuous trading behaviour. In the West, there has been talk of seven virtues, four of them cardinal - justice, prudence, fortitude and temperance - and three theological - charity, faith and hope. These seven virtues are essential for capitalism to function. Justice is to give to each his due, that is, to respect the freedom and property of others, to keep one's word, to make amends, to combat privilege, to recognise equal rights. Capitalism requires justice for all this. It also requires prudence, that is, acting properly and with moderation, thinking maturely, deciding wisely and executing righteously. In capitalism, prudence is necessary to pursue self-interest by trading rather than free riding; to seek profit without taking crazy risks; to reflect critically on our decisions; to execute our plans diligently; to seek continuous improvement of our business activity; and to calculate the consequences of our decisions in the marketplace. Fortitude is overcoming fear without falling into recklessness in order to pursue what we find difficult to achieve. It is to attack to conquer higher goals in our lives and to resist discouragement and despair. Capitalism needs it to innovate, to penetrate new markets, to compete with other companies, to challenge unfair regulations, to resist pessimism in the face of a crisis, etc. Temperance is to control our passions so as not to fall into socially dysfunctional behaviour. Capitalism needs it to save and accumulate capital, avoiding unbridled consumerism; to listen to the customer with humility, not to fall into entrepreneurial complacency and to recognise that life is a continuous learning process in order to emulate the achievements of others. The theological virtues, which must be secularised to apply to capitalism, are headed by faith, understood as trusting in that which we do not fully understand. In this case, the tradition, norms and usages that have shaped social cooperation before us and accept our cognitive limitations. Capitalism requires it in commercial usages so as not to fall into the planner's trap. Hope is confidence in a future we do not know, not to be paralysed by fear of change. Capitalism requires hope not only in our own success, but also in the success of others, in progress, technology, economic growth and new enterprises. Charity is the concern for the good of others and the trust that others will also care for our own. It is a way of structuring cooperative human relationships for the common good, rejecting the view of society as a fratricidal struggle. It is harmony of interests. Capitalism requires charity towards workers, consumers, suppliers, partners and the rest of the community, to avoid envy towards the successes of others. The cardinal virtues applied to commerce provide the basic scaffolding for capitalist cooperation to be possible. However, respect for the entrepreneur and the capitalist is also necessary. We do not have capitalism with formal institutions alone. We also need secularised theological virtues, i.e. we also need informal institutions. Trying to transplant purely formal institutions in countries where there is no such an underlying foundation has not worked. <strong>The decline of European values</strong> Why are the values that made Europe different now in crisis? The attitude of contemporary governments towards them, as well as the rise of the welfare state, explain this decline During the Free Market Road Show 2018, a panel discussion was held on the values that made the West flourish. The panel began with the intervention of Federico Fernández, senior fellow at the Austrian Economics Center and president of the Bases Foundation, who pointed out that many of Europe's current problems have to do with values. In his opinion, Europe is facing a complex situation, with a Welfare State that demands more people, but with immigration that generates more instability, and in a context characterised both by the fall of the values linked to Christianity and by the fall of the values that capitalism needs, including competition that is increasingly demonised. Vanessa Vallejo, a Venezuelan economist, writer and columnist, pointed out that the West has very different values to those of Muslims, which is why it is very worrying that Europe closes its eyes to this and does not see it as a threat, except when it comes to economic issues. It is therefore necessary to talk about the fact that Europe has values and that these values come from Christianity. In his opinion, immigrants should take on these values. For his part, Juan Pina, Secretary General of Fundalib, pointed out that Europe's problems are not due to immigration, but to the Welfare State. In this sense, it should not be forgotten that one of the values of the West is to be open to the movement of goods, people and ideas. This is what made Europe different. In reference to competition, Federico Fernández commented that competition makes us become the best we can be. Therefore, a society that denies competition tends towards mediocrity, because it wastes talent. As for technological change, he recalled that there have always been technological changes that put certain workers out of the market. The question, at present, is how to make this reconversion smoother. To do this, it is necessary to act on the labour market and on an education system that does not prepare people for the world to come. In turn, Vanessa Vallejo warned that we are not seeing the benefits, in terms of a change of mentality, that technological change can bring. In Venezuela, for example, cryptocurrencies such as bitcoin are a success because people have no choice but to use them when they realise how the state is stealing from them. This is what Juan Pina said when he prophesied that bitcoin will be the tomb of socialism. In fact, the new technologies, which disintermediate everything, work in favour of liberal ideas because they make it possible to dispense with the state in matters such as public records or currency. From this perspective, Federico Fernández accuses governments and the European Union of being the source of the threat to European values. According to him, governments have the task of destroying these values and the question is what values we are prepared to defend. Vanessa Vallejo emphasises, rather, the feeling of paternalism that prevails in Europe, in the form of more welfare state, more aid than in the United States. And Juan Pina calls for a rethink of European political union. For Federico Fernández, the Welfare State is one of the main destroyers of the social fibre of societies because it robs people of their own individual responsibility. Unfortunately, Vanessa Vallejo points out, this is hardly discussed nowadays, nor is there any talk about how it destroys the family with divorce regulations, or about not having children because the state will take care of people when they grow old. People tend to believe that the Welfare State has come to fill a gap that, in reality, did not exist because the family was there. In this respect, Juan Pina denounced the ethical and moral error of the public pension system, which destroys a basic principle such as solidarity, which must be voluntary. <strong>Paneuropa and the roots of Europe</strong> The first time Europe was mentioned as a political unit was in Richard Coudenhove-Kalergi's manifesto 'Pan-Europe'. Ramón Pérez Maura traces the evolution of this idea up to the present day through the work of Kalergi's ally, Otto of Habsburg Ramón Pérez Maura, deputy editor of ABC, spoke at the Free Market Road Show 2018 with a lecture on the origin of the European Union as an area of freedom. He began by recalling that the origin of the EU has a lot to do with the Austro-Hungarian Empire, within which there was much more real free trade than in other parts of the world at that time, as well as free movement of people. In 1921, the first manifesto was published which spoke of Europe as a political unit. It was Richard Coundehove-Kalergi's 'Paneuropa'. On the basis of his ideas, the fathers of Europe set in motion the European communities from which the EU was born. Otto of Habsburg, who wanted to rebuild the Austrian monarchy after World War II, joined forces with Kalergi, and when Kalergi died in 1972, Otto of Habsburg became president of Paneuropa. At the time, Europe was torn in two by the Iron Curtain. On the other side, they were unaware of the quality of life we enjoyed in the West. In the first elections to the European Parliament, Otto von Habsburg was elected MEP for Germany and was able to fight for the unity of Europe from the European Parliament. The first thing he did was to join the Political Committee, which dealt with international affairs. At its meetings he ensured that there was always an empty chair, representing the countries on the other side of the Iron Curtain. On 9 November 1989, the Berlin Wall fell. At that time it was decided to give priority to the expansion of the EU, to incorporate the former communist countries of Eastern Europe, and to leave everything related to the deepening of the process of European integration for later. This is where some of the EU's ills come from. But to improve Europe, the most important thing is that Europe exists. The alternative to a badly functioning Europe is a well-functioning Europe. Today the EU is dominated by social democratic politicians. This must be changed by promoting the ideas of freedom. The EU was born on a continent marked by fratricidal wars. That there is peace on the continent today is a great achievement. <strong>The uncertain future of the European Union</strong> The European Union was born inspired by the values of peace, trade and a common culture with Christian roots. Today, these are being replaced by statism, which calls into question the future of the EU. To recover it, it is necessary to return to the founding values of the EU Within the framework of the Free Market Road Show 2018, a round table was held under the title "Europe against Europe: are we betraying its founding values?", with the participation of Almudena Negro, journalist specialised in digital communication and associationism; Eduardo Fernández Luiña, analyst of International Relations at FAES Foundation, and Víctor Santana, advisor to the British MEP Daniel Hannan. Almudena Negro began by referring to the current values of the European Union, which, in her opinion, are those dictated by the State. The founding values were clearly liberal, such as the principle of representation or the free movement of goods, people and capital. Unfortunately, European culture is the organisation of lies because the founding spirit of the Treaty of Rome has been betrayed. What are these founding values? In essence, that Europe is Christian. In fact, European history is the history of the Christian ethos. But the EU fell into interventionism and abandoned all principles. For example, it cannot be that there is a European Parliament that legislates how many minutes an electric coffee machine can remain on. It is precisely this kind of thing that populism is using today to sell us the idea that the EU must be liquidated. What we need to do is to return to the founding principles. For his part, Eduardo Fernández explained that there are three key words to identify the birth of the European Union: peace, trade and common cultural links, basically associated with religion. These are the core values of the EU. It is legitimate to criticise the EU, but the EU is a process rather than a structure and it has the capacity to mutate. What is missing are various ideas of Europe to discuss them, to define trends and to build this space that has brought so many benefits to so many people. On the other hand, Víctor Santana believes that the values of European society must be differentiated from the founding values of the EU, because the latter are profoundly anti-democratic. In the EU, institutions have been created far removed from the people, governed by experts, not by people elected by the citizens, and it was thought that, if citizens were not given a voice, Europe would never be at war again. The European Parliament, for example, is the only parliament in the world that cannot pass laws. Nor can we kick anyone out of the European Commission. If we have to talk about the EU's values, the fundamental one is the deep fear of the people's vote because people are thought to be stupid. Almudena Negro replied that one of the EU's great problems today is that it is liberal. The problem is that the limits of EU government today are not clear, not well defined. This does not invalidate the founding idea of the European Union. The real problem is that the EU is more democratic than liberal. In turn, Eduardo Fernández responded that when analysing the theory of integration, there are three ideas: functional scope, institutional capacity and geographical dominance. These are at the centre of the debate today. In the functional sphere, what is being discussed is what supranational institutions should be devoted to, and even whether there should be supranational institutions at all. In terms of institutional capacity, the question is how strong we give the European institutions, or whether they need to focus on other things. The geographical domain, in turn, is variable. In any case, the debate should not be understood as taking positions for or against Europe; that is what populists do. The debate has to focus on the range of greys. Maybe federalisation is wrong and a more confederal logic should be created, and so on. On the question of whether the EU is social democratic, Víctor Santana commented that the EU is not social democratic, but the things it is doing in foreign trade are more focused on protectionism than liberalism, because it affects certain interest groups. Almudena Negro added that Europe becomes interventionist through the welfare state. The problem, therefore, is the statist mentality of the Europeans, which makes it impossible for any liberal sliver to emerge in the EU. For Eduardo Fernández, on the other hand, the tension lies between supranational institutions that want more power and states that do not want to give it up. This affects things like who is in charge of what, and so on. The problem, ultimately, is that the state has too much presence in social life and needs to be reduced. Another task is to come up with ideas for making the EU compatible with liberal principles, because the EU has brought benefits for many people, not just for interest groups. In this sense, Almudena Negro indicated that, more than changing the system, it is necessary to change the statist mentality that we suffer from in Europe, because we have been moving towards more and more interventionism. This has meant that we are facing a total crisis, a crisis of religion, of values, of freedom. Eduardo Fernández added that when a bureaucracy is created, that bureaucracy will try to maximise budgets, often with the complicity of citizens, companies and lobbyists. Since the European Commission was created, it will try to do the same thing and justify its existence. We should be very concerned about this. There are public policies that may be good at the European level, such as defence, security or public order, but other types of issues may be better, for example, at the local or municipal level. When people talk about this government of all Europeans, Almudena Negro has the impression that they are talking about Narnia, because this implies a ceding of sovereignty that national states are not willing to cede. For this reason, we need to rethink the EU and ask ourselves what we want it for. In this sense, Víctor Santana put the finishing touch when he stated that Brexit has been the failure of the EU and the success of the citizens, because it has taught us that it is possible to recover democracy.

The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio González, are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of the authors.

The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio J. González, are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.