Freedom, equality, debates of our time

Isabel Díaz Ayuso and Daniel Lacalle

The Rafael del Pino Foundation organised, on 10 June 2020, the meeting live on entitled "Freedom, equality, debates of our time" in which Isabel Díaz Ayuso and Daniel Lacalle took part.

Isabel Díaz Ayusois President of the Community of Madrid. She holds a degree in Journalism and a Diploma in Advanced Studies from the Complutense University of Madrid, and has also obtained a Master's degree in Political Communication and Protocol. She has worked in the communications departments of several companies and foundations, as well as in radio stations and digital press in Spain and other countries. She was elected to the Assembly of Madrid in 2011, and renewed her seat in this chamber in the elections of 2015 and 2019, being in 2015 Deputy Spokesperson of the Popular Parliamentary Group in the Assembly. In the regional government, she has been Deputy Minister of the Presidency and Justice.

Daniel Lacalle Economist, international advisor and Chief Economist at Tressis. He holds a PhD in Economics, a degree in Business Studies from the University of Madrid, a CIIA (Certified International Investment Analyst), a postgraduate degree from IESE (University of Navarra) and a Master's degree in Economic Research. His career in portfolio management and investment began at the hedge fund Citadel, in the United States and London, and continued at Ecofin Limited, covering equities, fixed income, private equity and commodities, and later at PIMCO. He has been voted for five consecutive years in the Top 3 best managers in the Extel Survey, the Thomson Reuters ranking, in the general, oil and power categories. Prior to his time as a manager, he worked as a financial analyst at ABN Amro (now RBS), and held various responsibilities at Repsol and Enagas, where he received the award for best IPO (IR Awards 2002). Daniel Lacalle writes regularly for El Español and is a regular contributor to La Sexta, CNBC, CNN, Epoch Times, Hedgeye, Mises, The Commentator and The Wall Street Journal. He is also a lecturer at the Instituto de Empresa, UNED, OMMA and IEB. He has also written the books Nosotros, los mercados, Viaje a la libertad económica, La madre de todas las batallas, Acabemos con el paro, La Pizarra de Daniel Lacalle, La Gran Trampa and Libertad o Igualdad, all of them published by Deusto and bestsellers both in their original Spanish edition and in their translations into English and Portuguese.


On 10 June 2021, the Rafael del Pino Foundation organised the dialogue "Freedom, equality, debates of our time" with Daniel Lacalle, chief economist at Tressis.

For Lacalle, the vast majority of citizens are liberal. You can only convince a person of being illiberal from the policy of using the same mechanisms as the abuser. These mechanisms are two: telling a person that he cannot and that nobody will love him more than he does. Everyone agrees to defend liberal principles, which are respect for individual freedom, respect for contracts, the rule of law, respect for the ability of each individual to carry out their project in the way they consider best because they know best how to manage the resources for their own well-being and that of their loved ones. Liberalism means wanting the same for society, the state and the government as one wants for the family. You want freedom to grow, to carry out your project and to be responsible for the management of resources so that the most disadvantaged members become generators of wealth and prosperity who do exactly the same.

There is no such thing as neoliberalism. Faced with the ideas of Hayek and Mises, a group of people created a current that tried to call social democracy neoliberalism. These pejorative arguments are used to soften something as atrocious as a person openly declaring himself to be a Marxist, like Varoufakis, who, in order to defend Marxism, has to say that he is quite liberal. Socialism is always compared to its best intentions and capitalism to its worst results. It is the sweetening of the idea that has always failed while criticising something that works.

The use of adjectives also has a divisive purpose, which is to say that one is not liberal enough. The more divided the liberals are, the better for the anti-liberals, who are united without the slightest doubt.

Liberalism is not only freedom to do what you think you want to do. It is also responsibility and the value as a Christian person of free will, which is granted to us as the most precious good we have. That is key to understanding that we are all liberals and the only way to convince us is through extortion and propaganda.

There are only two systems, a free market system or a command economy. Historically, since the Roman Empire, dirigisme has always led to failure. It starts from the basis of denying the reality of the human being and tries to generate a different and uniform human being through social engineering that acts according to the expectations of a group of intellectuals. The economic history of the world, the wars, all the devastating episodes come from maximum interventionism, like the French revolution. It is essential to remind citizens of that. When interventionists say there is another way of doing things, they are not showing anything new. They are trying to sell the same old wolf in sheep's clothing. Competition, creative destruction, innovation as an incentive weigh much more heavily. The first thing to do is to avoid messianic decisions because with messianic decisions everybody is wrong. The free market works best because it is the only system that is not based on a dogma that seeks to mould a different human being.

Capitalism, like any economic system, will never be perfect. Only Grasmci imagines that idyllic world, or Marx, who never worked. When someone has the idea that it will never fail, it fails. Capitalism now gets a bad press because prosperity is taken for granted. It is also about convincing the citizen that, with intervention, he will be no worse off than he is now. This is a big mistake. The natural state of human beings is not wealth, but abject poverty, absolute poverty, brutal infant mortality, the destruction of family economies by extractive elites. What needs to be done is to remind people that they are wrong when they think they have never been worse off, when they are told that today's generation lives worse than their parents' generation.

These assessments are the result of three errors. The first is presentism, saying that what is happening now is the greatest thing in history. The second is nostalgia, the idea that life was better in the past. The third is dystopia, the idea that everything is going down the drain, that this is horrific. None of the estimates made in the 1980s by the great experts of the Club of Rome of what was going to happen in the year 2000 have been fulfilled. Dystopia is being sold by people who benefit from being handed political freedom, people who will not be held accountable for their mistakes when contrasted with reality. It is very important to remind people that current prosperity is not guaranteed. That is what has led to a very important movement for change, in the Netherlands, Luxembourg, Ecuador, who are moving away from the promise of heaven, which, in the end, always offers you hell.

You can have an economically capitalist system that is illiberal in other respects. There are systems in Africa and the Middle East that are economically capitalist and at the same time illiberal and anti-social. Capitalism is criticised because, they say, it creates monopolies. Monopolies have nothing to do with it; they can only exist if they are imposed by the state. What many people don't like about capitalism is the intervention of political power, so they want to give more power to politicians, but to other politicians. This is a contradiction. How this dogma is attacked is by talking about anti-freedom populism, because it tends to sweeten the enemy.

What they call social justice is political randomness. We have to fight the battle of ideas because the battle is happening, for example, with the manipulation of language. People have to be reminded that they cannot surrender their freedom in the face of a promise that, when it is broken, socialism resorts to three immediate actions: repression, propaganda and more intervention. You have to fight against that because everyone agrees with the fundamental ideas of the liberals.

The idea that things have to be one hundred percent public or one hundred percent private is stupid. A school is not one hundred per cent public because the school buildings, the materials, the food are private. The important thing is not ownership, but management and service. The problem is that those who want everything to be public have to take into account that public resources are not infinite, nor that everything can be done by printing money. Citizens react immediately to such things. We want maximum benefit for the majority with limited resources. That can only be done through efficiency, competitiveness and competition. Society must be based on profit; profit is the demonstration of sustainability. A profit-based society is sustainable, a loss-based society is not.

One of the things they are trying to convince us of is that the advance of sustainable investments is something that they are trying to impose on us from the political power, but the truth is that it has been coming from the investors, from the banks, for a long time. There is no long-term investment that is socially profitable if it is not economically profitable, and it will not be profitable if it is not respectful of all those around it. When a big project company goes to Africa, it builds social infrastructure around its project. This has always existed and it is promoted because investors advocate that it should be an increasingly important factor. What you cannot do is think about eliminating the profit motive, because there is no other factor of sustainability than it, because it means that you will have reserves to invest in the future.

The idea that today's big technology companies are a novelty that has never existed is false. Nor are they impregnable or omnipotent because things can change at any time. There is no need to harmonise the big tech companies. Some of these companies have decided to approach the most populist positions in order to be left alone, but this is a mistake because they will not be left alone. This is a huge mistake because the populists don't appreciate it. What they have to defend is the greatest generation of value for everyone ever generated in less time, with the benefits that come with it. It is the greatest evidence of the democratisation of access to culture and knowledge. When one application is not liked, another may appear to replace it. The other part is also a mistake, for business leaders to tell people not to eat meat thinking that they will be left alone, because they will not be left alone.

Equality of opportunity is a fundamental pillar of the liberal order, but it does not mean that everyone starts equal, continues equal and ends equal. It does not mean bringing those with competitive advantages down to the lowest common denominator simply because you want to equalise, for example, in education, because it penalises those with greater abilities and the most disadvantaged. Equality of opportunity does not mean that the foundations of two houses are the same, but that they have the same ability to lay them.

People tend to forget the net present value of something offered for free because it is actually negative. Something has been promised that cannot be given and the chances of being able to fend for oneself in the future are eliminated. Society has always had redistribution mechanisms. The first and most important is employment. Inequality is not only not negative, it is positive, because mimetic inequality is what makes us progress. Then there is inequality by intervention, because the government, by choosing between winners and losers, introduces a person among the losers by decree. Nothing can be done against that. We've all had a time in our lives when we've needed help to keep going. That's how it has to work, not telling the person who is ahead to stop, that's the problem. We have to ensure that the mechanisms are not disincentives. Universal basic income is a perfect subterfuge to eliminate competition for the elites, because the children of the recipients will never make it and the children of the elite will.

It sounds very nice that China is substituting democracy for data, but that is a horror. Whoever says that has never been to China has never been to China, because China is wild capitalism for those who are close to the government, but not for others. Now there is a massive protest in the universities because they have lowered their valuation and that makes it difficult for future graduates to find a job. The Chinese model is not replicable. A super-government-driven economy is not impregnable.

The reason why we have experienced the first pandemic in history in which there has been no famine or shortage of supplies is not the state, but the capacity of companies to respond to the situation. The role of the state is not to decide but to structure. The government has no better information than the private sector and has every incentive to waste and to try to maintain what exists now at the expense of the future. That is why Europe is losing the technological battle.

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.