Freedom or Equality

Cayetana Álvarez de Toledo, Daniel Lacalle and Pilar García de la Granja

On 4 June 2020, the Rafael del Pino Foundation organised a live dialogue via the Internet on entitled "Freedom or Equality: Why the development of social capitalism is the only solution to the challenges of the new millennium" in which Cayetana Álvarez de Toledo, Daniel Lacalle and Pilar García de la Granja participated.

Cayetana Álvarez de Toledo holds a PhD in History from Oxford University. She is a member of the Partido Popular for Barcelona in the Congress of Deputies of the Kingdom of Spain and has been director of the International Area of the FAES Foundation. In 1996 she obtained her BA in Modern History from Oxford University with honours and was made an honorary senior scholar at New College. In the same year she began her doctoral studies at Oxford University under the direction of the Hispanist and Prince of Asturias Award winner, Sir John Elliott. In 2000 he obtained his doctorate with a thesis on politics and reformism in the Spanish Monarchy in the 17th century. It was published by Oxford University Press in 2004 (Politics and reform in Spain and Viceregal Mexico. The life and thought of Juan de Palafox, 1600-1659) and translated into Spanish in 2011 (Juan de Palafox, Obispo y Virrey; Ed. Marcial Pons). After obtaining her PhD, Cayetana joined the newspaper El Mundo as editor of the Opinion section. She was an editorialist, columnist and Head of Section. During those years she also worked as a political analyst on the radio. In September 2006, she made the leap to politics, joining the Partido Popular as Director of the Cabinet of the Secretary General. In 2008, Cayetana was elected as a Popular Party Member of Parliament for Madrid. During the 9th legislature, she held the position of Deputy Spokesperson of the Popular Parliamentary Group, with responsibility for the Legal-Institutional area. In the general elections of November 2011, Cayetana once again won a seat in the Congress of Deputies for Madrid, where she has been Vice-President of the Joint Committee for the European Union and member of the Constitutional and Justice Committees. She also served as head of analysis for the Partido Popular in Madrid. In early 2012, Cayetana joined FAES Foundation as Director of the International Area, a position she held until January 2016.

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.

Pilar García de la Granja holds a degree in Information Sciences from the Complutense University of Madrid, specialising in economic, financial and business information. She studied International Relations at Columbia University in New York and worked as an editor at the Wall Street Journal. In 1997 she joined CNBC-Televisa to present and direct the economic news of CNBC en Español, where she was in charge of the New York correspondent's office. In that year she became the first Spanish journalist to start live broadcasts from the Wall Street trading floor, the NYSE and the Nasdaq electronic market. In 1999 she returned to Spain to join the Expansión Televisión project of the Recoletos Group. In 2002 she was appointed head of economics at Onda Cero. After developing her career in the Intereconomía Group, where she directs Telediario 1, and participates in other media of the group, she is a member of the political panel of El programa de Ana Rosa on Telecinco and is a regular on the programme Protagonistas on Punto Radio and a columnist for the newspaper El Economista.


On 4 June 2020, the Rafael del Pino Foundation organised a dialogue on "Freedom or equality. Why the development of social capitalism is the only solution to the challenges of the new millennium", with the participation of Cayetana Álvarez de Toledo, PP MP for Barcelona, and Daniel Lacalle, chief economist at Tressis, on the occasion of the publication of Lacalle's book of the same title.

Daniel Lacalle explained that he wrote the book as a petition in the face of the avalanche of magical solutions being proposed by the more radical wing of the Democrats in the United States. They were proposing things like government control of everything, increased public spending, price controls, basic income, money printing, higher taxes on the rich. The book, therefore, is a manual for debating and refuting these magical solutions. These seemingly innocuous things hide the pursuit of citizen control, repression and the destruction of individuals' ability to improve themselves. Measures such as COVID-19 are a path of servitude. The text provides arguments for rebuttal and solutions, because the only way to meet the challenge of COVID-19 is with freedom, competition, innovation, individual initiative.

The expression "social capitalism" is a provocation to show the reader what the manipulation of language has achieved, which is to make the word "social" squeak. That is why the idea of freedom must be recovered, because it is the best thing for society. When populism talks about social justice, in reality it is talking about political randomness, about clientelism. There is nothing more social than capitalism.

The recipes that were taken to get out of the 2008 crisis led us to a higher level of interventionism and a curtailment of individual freedom. There was an injection of money and a huge increase in the control exercised by governments. In this crisis the last thing we should be thinking about is giving more power to politicians who are unable to foresee risk, who consciously decided to hide it and who decide something brutal which is to shut down the economy without coordination with economic agents. How can we come up with the idea of these people having control of the economy? A government that hides data, manipulates information, overrides those who criticise it, in the face of complaints from citizens, is a bad thing. The countries that have done best in this situation are the ones with the most freedom and the least spending.

Cayetana Álvarez de Toledo pointed out that not all ideological systems are the same. Some generate freedom, prosperity and happiness, while others generate dictatorship and poverty. In Spain, left-wing national populism has a plan. Nationalism has a plan of disintegration and division. Podemos has a plan for the creation of an authoritarian left-wing state. The PSOE has a plan to stay in power at any cost. The question is what is the plan of the conservative liberal space for the defence of the space of freedom and economic prosperity. The answer has to come from having ideas and defending them, which is not easy. Having ideas implies assuming that one is going to have a conflict with those who have contrary ideas. Pedagogy, therefore, is an essential element in the battle for freedom. When the foundations of freedom are under attack, they must be defended.

In Spain and in Europe there is a balance between liberal and social democratic space. It is a balance between the tradition of freedom and that of equality before the law and equal opportunities. These two great Spanish pacts, the constitutional pact that makes us free and equal, and the Moncloa Pacts, are the ones that are now being called into question. They are being subjected to enormous erosion by the government and its allies. The radical left government and its separatist allies are attacking these balances.

Daniel Lacalle's book is optimistic. Over the last three hundred years, the policies of freedom have brought a high degree of prosperity, fact by fact, data by data. They have led to absolutely overwhelming levels of poverty reduction and welfare. The book vindicates this postulate in the face of the pessimism of the rupturists. What unites Sánchez, Iglesias and the nationalists is a rupturist pessimism. In their pessimism, the constitutional model and the welfare state have failed and must be overcome with nationalisations, etc. Against this, we must counterpose a rational optimism based on reformist attitudes, on the continuity that began in Spain forty years ago and in Europe a few decades more.

The book, continues Álvarez de Toledo, offers a vision of the citizen as an adult, demanding person, capable of standing up, of getting ahead, with the government support necessary to sustain the most vulnerable, but not to replace him or her or to tutelage him or her in perpetuity, leaving him or her without responsibility or freedom. Such welfarist rhetoric from the current government is a form of abdication and an insult to the citizen, a failure to trust in his or her ability to act as an adult and rational being. In the end, the citizen loses freedom and prosperity.

Daniel Lacalle explains that when people are willing to give up their freedom in exchange for security, you have to fight it with evidence and by attacking dogmas. The diabolical transaction of giving up freedom in exchange for supposed security is false because the one who offers it cannot give it to you and, afterwards, will not allow you to complain when you give him your freedom. People constantly receive a battery of advertising and educational messages that tell you that being free, taking risks, carrying out your projects is not worth it, so that nothing happens to you, but everything happens to you. As Bastiat said, anyone who wants to live off the state should know that the state lives off everyone. He forgets that the state does not give you what it says it will give you. Totalitarianism presents itself as the great generator of gifts that it does not give. Then it always resorts to repression when people protest. Then comes misery, because it leads to the greatest inequality, with one power rich and everyone else poor. The apparently easy alternative is the devil's alternative.

For Cayetana Álvarez de Toledo, the option of freedom does not succeed because taking responsibility is not easy. Freedom is not free, it has a cost, which is responsibility. Irresponsibility takes you to a state of permanent infancy, but this infantile dream usually ends badly. The liberal starting point is always more difficult, but in the face of accommodation in the rhetoric of infinite rights, freedom has allowed a remarkable capacity to advance in prosperity and democracy. In times of serious crisis this is also at stake. The left will sell the solution that the solution is more state and that Europe will pay for it, but that is a fiction. Fictions degenerate into frustration and frustration generates major social problems. The way out will involve sacrifices, but they will be useful. That is what needs to be said.

Spaniards are not going to give up their freedom easily. It is quite another thing to try to impose totalitarianism. The freedom and equality of Spaniards before the law are at stake, but the truth is also at stake. The foundation on which a free society is built is being destroyed. When facts cease to matter, the basis for political discussion is lost. The truth ends up being what the majority dictates, and that is what we are seeing. When the facts about the pandemic cease to be valid because the president denies them with impunity from a podium, when he denies that he has not touched Justice, when the truth does not count, political debate is eroded. Facts do not matter, and when they do not matter, political discussion loses the basic framework for a democratic system to function.

Daniel Lacalle points out that the evidence is that this strategy does not work for Sánchez. He can try, but it does not work because he does not manage to manipulate public opinion. Erosion in the face of what citizens perceive as the use of political machinery to manipulate happens. That is why socialism can only be implemented by imposition. Everyone understands that you can criticise management with a figure, but when you deny the pain you cannot say that we came out stronger. Nor when there are 133,000 fewer companies, nor with eight million people in some form of unemployment. Socialism always judges itself by its best intentions, never by the facts because the result is atrocious. Despite the constant use of education, of the media, it always fails. This is the marvellous thing about reality and this is what is most annoying to socialism, to communism. In spite of everything, it fails.

Cayetana Álvarez de Toledo warns that when lies are in power, the opposition must stand up for the truth, make politics out of evidence, try to return the public debate to the rational, to the scientific, to the facts. They try to muddy the ground and make it emotional. We have to reintroduce the evidence, the facts. A week ago, the government began to put forward the new thesis that the opposition is plotting a coup d'état in Spain. That is the new mantra. It has to be dismantled. It is a nauseating camouflage operation to cover up their mismanagement of Spain's worst health crisis. Moreover, it is part of their fertile civil war imagination. Thirdly, they are inventing a coup while advancing in the degradation of the democratic state, institution by institution. Finally, it is a vulgar technique of delegitimising any criticism of their actions. This is part of the politics of truth that must be done, to dismantle these sinister insinuations, while claiming that this is not and will not be one Spain against another. We defend the Spain that refused to kill each other and reconciled, that brings together very different people who agreed on the Spain of '78.

Daniel Lacalle finds this insinuation abject. If there is one reason why institutions in this country such as the Guardia Civil and the army have the level of affection and respect it is because of their exquisite independence and absolute service work. What is being done is part of the way in which the abuser talks to those he abuses, tries to transfer to the other person what he is doing. They are trying to dynamite the institutions and while doing so they are blaming those who question the governance. Totalitarianism always blames others for what it is doing. The citizen should be looking at the possibilities of alarm at the possible control of government and institutions for years to come.

They try to introduce the idea that all problems are generated by inequality and that inequality justifies the introduction of totalitarian themes, which then increase inequality. Populism sells the magic solutions, such as printing money or the state spending more. Money creation, however, is not neutral. Money is monstrously increased, disproportionately benefiting governments and hurting savers and wage earners. Savers and wage earners are then dissatisfied. Then they are told that they have to print more because there is no inflation, which is not true because wage earners and savers perceive that things are costing them more and more. This is a problem of statism, which is the destruction of the purchasing power of the currency.

Cayetana Álvarez de Toledo commented that the generation that lived through the crisis ten years ago is once again on the threshold of a new crisis. This must be addressed and a way out must be found through a realistic, intelligent approach, protecting the most vulnerable, through rational measures. Repealing the labour reform that allowed employment to recover is a very serious mistake if we want to protect this generation that has been hit. How are we going to get out of it in the coming years? With this government that is impossible. In the next few years we are going to have to carry out profound reforms, make resignations and assume responsibilities. Resignations from the world of independence to the split, from the world of Podemos to the rupture of the Constitution. Reforms in all areas that enhance the strength of the Spanish private sector, that affect the autonomous model.

Daniel Lacalle warns that, in all this, we are being introduced to the idea of reconstruction, which is completely ridiculous. What has happened here is the forced closure of the economy by government decision. Productive capital is intact. And it turns out that the decision to rebuild has to be taken by people who have never created a job. This is a crisis of the most ridiculous decision ever taken, which is to think that the closure of the economy has no impact. This has not happened to everyone, far from it. The best leaders have less economic impact, less deaths, less impact on employment. Portugal does better.

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.