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Liberty, diversity and subsidiarity

Lesedauer: 41 Minuten

Contending with triplets

Ladies and gentlemen,

I have been very much looking forward to giving this guest lecture at your institute in Utrecht. The honour that it is to speak here derives from your own characterisation of the Telders Lecture. ‘An annual Telders Lecture is held, in which we invite an influential scholar or politician from abroad in order to stimulate the debate in the Netherlands with original liberal thoughts and insights.’ I hope that I will at least not disappoint you with regard to originality.

This is the first time for me here in Utrecht, but the name of this beautiful city, whose university many Swiss students have attended over the centuries, has been familiar to me since my secondary school days – more than 50 years ago.

Back then, we read the comedy The Broken Jug by Heinrich von Kleist, a German romantic poet.1 The play presents an exposure of the judiciary, but it also deals with the fragility of the terms ‘justice’ and ‘honour’, ‘innocence’ and ‘guilt’. This serious comedy upsets the naive notion of a just world. It did not, however, keep me from later studying law. After this, I never worked as a judge or lawyer, but rather, after studying the history of ideas, I turned to economics and political philosophy as a think tanker and journalist. The scepticism conveyed by The Broken Jug towards a blind faith in the judiciary and all authorities that embody law and justice has remained with me all my life.

The owner of the jug, which has been broken under complicated circumstances, enquires at the end of the play as to a place of appeal for the material damages. The court inspector who is present, named Walter, refers her to the ‘Great Market of Utrecht’. According to one interpretation, there really was a higher court there. The other interpretation, to which I personally incline, says that the inspector, and therefore the author of the play, simply wanted to point out that it would be possible to buy a new jug far more cheaply there at the market if you chose not to carry justice to extremes.

I. Subsidiarity can save the European Union

The EU is in the middle of a crisis today and it would seem obvious for a guest speaker from a non-member country to use the opportunity to give the EU a good bashing and paint a bleak picture of its future. Nothing could be further from my intentions.

The EU and the Euro, in particular, have some serious structural flaws; nonetheless, they have passed their probation period, and for many they still carry hope. It gives these institutions credibility at home and abroad and with it also some robustness. This compensates for many flaws, making some of them bearable and others modifiable and correctable. My optimism is rooted in the experience of my own country, which has always taken time over reforms and has also often been favoured by good fortune. The German poet Friedrich Hölderlin, a contemporary of Goethe and Schiller and a harsh critic of blind faith in the state and politics, wrote the following remarkable statement: ‘Where danger is, deliverance also grows’.2

Conclusion 1

More market, less legal dogmatism, first peace and then justice.

This is an entirely up-to-date, pragmatic and peace-fostering maxim that I would like to place at the beginning of my remarks. I will return to the central significance of peace again at the end.

Likewise the nation state, the monarchy, the constitutional state, the welfare state and democracy have survived for centuries despite structural flaws. There is no reason to panic and nothing could be further from my intention than to provoke a feeling of doom. Some of my British friends predict that ‘the party is over’ and some of my German friends can envisage no other scenario than the current system coming crashing down in the near future: ‘Das knallt letztlich alles an die Wand’ (note the linguistic difference between the British and the German EU-pessimists). Whether a liberal Europe would then rise from the ashes like a phoenix, I am inclined to doubt. As liberals we must do all we can to keep Europe diverse, ready to learn, open within an international context and able to adapt. Like you, I am concerned about the future of the EU, but I know that it is not possible to simply turn back the clock in the history of institutions.

Conclusion 2

All friends of liberty, all liberals are called to first seek out the liberal core of the European idea and then to revitalize and defend it tenaciously against all opposition and undesirable developments. This means to be pro European in the best sense.

The EU is not a fixed condition but an ambitious, maybe too ambitious project and a piece of unfinished business. Therein lie its risks and its chances. At present, it is partly in a bottleneck and partly in a dead-end street. This does not make the problem easier to solve, since a bottleneck requires more force in the same direction, while the only answer in a dead-end street is to turn around and change direction. It would be disastrous to use the same strategy in a dead end as you would in a bottleneck. In the EU there are currently both bottlenecks and dead-end streets, but this is also no reason for panic. Every human project is confronted with such challenges from time to time.

At present, the possible bankruptcy of a Member State is being dramatized as a major disaster. As federations, the USA and Switzerland have no bailouts for bankrupt member states. This has both increased the spending restraint of the financially independent member states and sensitized creditors to be cautious. In Switzerland we have had, and still have, considerable regularized equalization payments, but we have not yet had a case of the bankruptcy of a canton. In the USA, California was insolvent for a while, and I am amazed at the lack of willingness in Europe to learn as much as possible from this case.

Years ago in Switzerland, we had the insolvency of the famous spa municipality of Leukerbad in the Canton Valais.3 One official had to go to prison and many creditor banks lost a lot of money, but the people in the community survived without difficulty and now the municipality has been redeveloped. However, the risks of municipal debt have been examined more carefully by banks and private creditors since that time. Insolvency is not a disaster but the chance of a new beginning. This fact should finally be acknowledged in the case of Greece.

Europe is not only made up of Greece, Portugal, Spain, Ireland and Italy. As liberals we are against higher taxation. But the willingness of the population in richer northern states to be taxed even more highly ‘for foreign and domestic peace’ and for the continued existence of functioning state benefits, transfers and industrial-policy-driven large contracts should not be underestimated by people like us, which hate the idea of more statism, more centralisation, more taxation and more transfers.

The state is still that organisation that seeks to obtain the money of the rich and the votes of the poor, both under the pretext of protecting one from the other. This works in relation to individuals and private households as well as in the case of poor and rich member states and nations, provided there is no general mass misery. In crises it is well known that faith in the state and in the central association of states as a ‘knight in shining armour’ grows, while the liberal scepticism in the state, which is principally very justified, is sadly anything but popular.

In Sweden, during the worst times of the transfer state, the rich allowed up to 80 percent of their income to be taxed away from them without it leading to a revolution or a mass exodus. The public refusal of Astrid Lindgren to pay the tax remained a commendable, isolated case. Before the rich will ‘take to the streets’ or leave (where to?), it takes longer than the liberals would like to hope. And it is indeed the group of the rich who have a keen interest in the poorer people precisely not ‘taking to the streets’, setting cars on fire and looting stores. The rich would rather be partly dispossessed, in a way that is calculable, by the state via tax than be plundered and killed by the mob. What is more, they know of more subtle ways of tax avoidance through international networking.

The middle classes are a very patient bunch, as it is, with little potential for resistance. Why should ‘Swedish standards’ (by which I mean those before the remarkable reform of the 90s) not also be possible in countries showing solidarity to Europe, such as Germany? The fiscal capacity of the net contributor, including Germany, has not yet been exhausted in my opinion. From a liberal point of view, I regret this, since it is delaying a radical turnaround.

I am convinced that Europe today needs more than short-term political crisis management. Neither will the flight forwards into a centralized economic, financial and social policy solve the current problems. What is required is a consideration of the conditions and facts that form the secret to the success of our little continent in world history. It is our diversity that enables competition in the broadest sense and mutual learning – that diversity which tenaciously resists the spirit of standardization and harmonisation.

Conclusion 3

European diversity also includes the individual responsibility of EU-memberstates for their own budgets, which means a consistent no-bail-out policy that expects each member to take on responsibility for its own financing and to bear the consequences of national bankruptcy.

The combination of diversity and autonomy is what Eric Jones called ‘The European Miracle’.4 When the British cultural historian chose this book title 25 years ago, he subjected himself to the reproach among his colleagues that he was still clinging to a Eurocentric worldview and conception of history. Since that time, a growing number of voices are calling on Europeans to show the kind of intellectual humility that reflects their loss of significance at the economic and, above all, globally strategic level: Europe, they say, is a small, craggy peninsula, a western offshoot of the emergent Asian continent, an inhomogeneous entity whose diversity has generally not competed in a peaceful fashion but rather in the form of bloody, nationalistic civil wars that escalated into world wars in the 20th century.

At the same time, it would also be mistaken to dismiss Europe as a whole and particularly its economic political organisation, the EU, as a historically interesting but ultimately unsuccessful experiment. Anyone looking around the world for successful and long-term practicable models of a peaceful and prosperous civil society will come across many approaches that could be described, with good reason, as having been ‘inspired by the European spirit’.

Europe has experimented with different forms of coexistence over the centuries. There were culprits and victims, the victorious and the defeated. The latter is not, however, a typically European phenomenon, for which Europeans should feel especially guilty. Every continent and every culture has its own record of brutality and barbarity in world history. The fact that political, economic and cultural ways of life have been practiced in Europe on a small scale, sometimes short-term and in great diversity, has allowed an abundance of experience to develop which the rest of the world would be foolish to ignore.

As a Swiss, I often get invited for presentations. The preferred topic in Europe is direct democracy; in Asia the requests are more subtle and practice-oriented: Tell us the secret of your success! That is no easy task. We all know that the success of a country, a company or an individual can never be fully accounted for. Success always has several fathers and mothers. In politics, in economics and in culture, there are no simple recipes for success.

Conclusion 4

Liberals do not have recipes but principles. Politics and the economy should be kept as distinct as possible. The economy and culture, on the other hand, should be grasped as an organic unit.

Is there a formula behind this? Can we summarize it in a liberal slogan? The slogan of the French Revolution ‘Liberté, Egalité, Fraternité’ is said to have been coined by a Catholic priest on the basis of the Christian teaching on the Trinity. Due to the irresolvable tension between freedom and equality, it is barely sustainable. The term fraternity, or brotherhood, always makes me think of the first pair of brothers: Cain and Abel. They are certainly no model for a peaceful future. I will leave open the question as to whether replacing or supplementing it with sisterhood would bring about greater peace or merely a more subtle form of aggression. The blood-soaked formula ‘Liberté, Egalité, Fraternité’ belongs, from a liberal point of view, on the scrap heap of the political history of ideas. Here is my personal new proposal of liberty-formula for the future of Europe:

Conclusion 5

In a new liberal slogan for Europe we have to put: Instead of liberty – more modestly: openness. Instead of equality: diversity. Instead of fraternity and sisterhood: voluntariness in the sense of the absence of aggression and coercion.

In this form this still sounds very abstract, and so we have to make it more concrete and thus more open to attack: Openness is the principle of anti-totalitarianism and anti-dogmatism. The belief that man is constantly searching for the truth and the good – and that, while there are convictions about this, there is no definitive proof and no conclusive knowledge. Diversity is the belief in pluralism which is not identical with relativism and nihilism. The diversity of mankind and the diversity in Europe is part of the order of creation. It is risk and opportunity at one and the same time.

Diversity also means – and I will come back to this later – a diversity of order systems in society, a coexistence of economics, politics and ethics, which, though they are related to each other, do not form a universal hierarchical system. Voluntariness: this refers to autonomy, and in particular personal autonomy. The absence of coercion is a modest but a clear definition of liberty.

Man is homo oeconomicus when he maximizes benefit, homo politicus when he makes and applies law, and homo religiosus when he believes, hopes and loves; he is always the same person, but the challenges posed by the three realms of life are to be distinguished.

When I wish to explain the classical liberal standpoint to someone, I ask them to pick up a code of civil law and read the categories – only the categories: Person, family, inheritance, property, contract/liability, companies, securities and back to person. This, in a manner of speaking, is a list of to dos in view of personal autonomy, as it has been discovered – not invented – in the course of cultural history.

Another three-fold formula is the base of Catholic social teaching: ‘personality, subsidiarity and solidarity’ is a sound basis even for a liberal protestant as I am. It is likewise linked to the teaching of the trinity. Personality is associated with God the Father, subsidiarity with Christ and solidarity with the Holy Spirit.

I would now like to compare the three principles of Catholic social teaching with the three principles of classical liberalism aforementioned. If I first focus on the principle of subsidiarity in this presentation and later, using an example, also talk about solidarity, I am aware that they are not genuinely liberal principles. The room for interpretation that this opens up is simultaneously a risk and an opportunity. In the course of the political history of ideas, the subsidiarity principle has repeatedly been misused as an excuse for greater centralisation. In my opinion, it has been turned upside down on many occasions.5

Conclusion 6

We have to put the subsidiarity principle back on a footing that leads once again to an affirmation of federalism and localism.

The term ‘federalism’ is unfortunately vague and ambiguous, especially when it is translated. In The Federalist Papers, it describes the tendency towards more central power at the Federal Government in Washington.6> In the American Civil War, the Federalists of the northern states fought the Confederalists of the southern states. In order to avoid confusion, I will use the term non-centralism. It has the advantage that it also includes the smallest political unit, the municipality, which is very close to my heart.

The principle of personality ties in with the dignity of human person. In the Encyclica Gaudium et Spes it says: ‘Hence a human being’s dignity demands that he act according to a knowing and free choice that is personally motivated and prompted from within, not under blind internal impulse nor by mere external pressure’.7

The principle of personality is based on natural law, and natural law is an important root of both liberalism and Catholicism, despite the fact that it is open to interpretation, and despite the fact that there are liberals who are sceptical of all forms of natural law. The majority of classical liberals were, however, staunch advocates of a natural law. And the principle of personality does not stand in fundamental contradiction to the core liberal content in the categories of our private law, which is rooted in Roman law and remains a handed-down, Christianity-tinged cultural asset of the highest order (comparable, perhaps, with the fund of classical scientific knowledge).

In summary, there are no fundamental tensions or problems between the principle of personality in Catholic social teaching and basic liberal and capitalist values. On the contrary, the principle of personality corresponds, to a great extent, to the classical liberal concept of the responsible individual and his integration in the community on the basis of personal autonomy.

Now to the second principle of Catholic social teaching, the central principle of subsidiarity.
It forms a link between personality and solidarity and establishes a kind of correspondence between the natural law ‘physics’ of the personality and the ideological ‘metaphysics’ of solidarity. Subsidiarity also assumes a relative independence of areas within society (state, economy, socio-culture) and even establishes a hierarchy at the expense of politics. Politics, which imposes coercion, is always to remain subsidiary to economics on the one hand and ethics on the other. Politics should step in only where necessary.

But what is necessary? Herein lies the practical weakness and the political popularity of the principle. It becomes arbitrarily applicable. Who decides who is unable to cope and to what extent? Who decides what constitutes need in a specific case, need which demands a helping or punitive intervention from top down?

The political and practical significance of the principle of subsidiarity is highly dependent on three factors: the instances applying it in each case, the premises that are presupposed (concept of man) and the competing principles with which it is combined.

Those who view the principle with the greatest possible scepticism and intellectual distrust will be appalled by how little content there is in this. But does this not apply – more or less – to all principles? They are an aid to deliberation and decision making, but offer no guarantee of successful application. Those who approach the subsidiarity principle with a little goodwill and trust and endeavour to take it radically serious enough in terms of the history of meaning and ideas will perhaps arrive at the political structures and processes which optimize its use and prevent abuse.

To summarize, from the classical liberal point of view there is a formal agreement with the principle of subsidiarity, but also a substantial need for interpretation that is open for both sides.

The profoundest problems between liberalism and Catholic social teaching are raised by the principle of solidarity. Solidare means to join together firmly. On a voluntary basis as a free, humanitarian option vis-à-vis our fellow man, liberals, too, can subscribe to the principle of solidarity.

But fraternity has been a problem ever since the time of Cain and Abel. It is no coincidence that during the French Revolution the lack of fraternity was punished with the guillotine, and there is a saying that goes: ‘Be my brother, or I will kill you’.

Today, in the context of the future of the EU, I am concentrating on the second of the three principles and will refrain from placing it in a religious context anymore. As far as I am concerned, it does not conflict with the other two principles. It mediates in a subtle way between these two. The subsidiarity principle is, by the way, not of Catholic origin. It was first formulated by the Calvinist jurist and political philosopher Althusius.

Johannes Althaus, called Althusius (1557-1638), has been called the ‘first federalist’ and ‘the most profound political thinker between Bodin and Hobbes’.8 Alongside his professorship of law, he was simultaneously an advisor to the Nassau Count Johann VI, a brother of William of Orange. In 1603, his main work Politica Methodice Digesta was published. He remained in the city of Emden until the end of his life and turned down several offers of a position as jurist at Dutch universities.9

The principle of subsidiarity means that common problems must be resolved at the lowest possible level: the private and local community. The higher level should step in only if social and political support is required from below. This is one of the most important and most basic principles of living together in free-market-oriented, confederal and federal systems.

The principle of subsidiarity has become topical since it was used as a cornerstone of the EU Treaties of Maastricht and Amsterdam. Everybody speaks about it, but nobody actually knows exactly what it should mean. Swiss subsidiarity draws from a healthy scepticism of the centre. This kind of subsidiarity requires taking away power from the central state. The principle also draws a line between the private and the public sector. Subsidiarity as such is based on a fundamental distinction between the individual, the state and society. It is the opposite of the socialist and national-socialist approach (ideologically very close to each other), according to which the community is always more important than the individual.

Conclusion 7

In essence, subsidiarity means that we have to try to find the solution to political, social and economical problems in the most private and the most local framework possible.

The principles of federalism and subsidiarity are, of course, open to interpretation and therefore often misused to justify a transfer of powers upwards. The genuine idea of subsidiarity can be endangered by ‘different interpretations’ of conditions and efficiency definitions under which the higher level would seem justified, when all is said and done, in taking over some powers. There are always alleged ‘good reasons’ for centralizing. And this is why it happens so often.

Numerous constitutions and written sets of rules often lead to the objective of ‘harmonized redistribution’ of wealth and to large regional subsidies. Maybe it is the true reason for the ‘Euro-malaise’, for the current financial crisis. Interventionist and protectionist support, redistribution through regional, structural funds and massive subsidies are some of the most favoured roles of the central government, including the EU Commission. Politics then degenerates into a general fight of all against all for more and more subsidies and interventions. In my opinion this is the worst case scenario of the future of the EU.

This is why I am sceptical of all types of transfers by the central government and especially of transfers that take place at the international level. Relatively poor taxpayers of rich regions transfer tax money to relatively rich people in poor nations, who invest it again in rich nations. So it can be shown that the transfer system is a vicious circle.

Conclusion 8

The only effect of transfers is to strengthen the dependency of the periphery on the centre and to stifle any beneficial competition between nations and regions.

But this would provide enough material for a separate lecture. What is the connection between transfers, subsidiarity and the majority principle? Local and national authorities financed by the centre are usually dependent and corruptible. More often than not, such policies achieve the very opposite of what they were hoping to bring about. The subsidiarity principle is thus often misused to ‘justify’ a transfer of powers upwards to reach a so-called better solution.

Things get even more difficult when increased centralisation is ‘justified’ by the inability of poor member states to provide sufficient financial backing for specific functions of government. A centralized system of taxation will obviously deprive the lower level of national, regional, and local taxation, and it is obvious that such impoverished communities regions and states will find themselves unable to raise their own funds for their own tasks. Centralizing the taxation system paves the way to full centralisation. It would obviously be a strange system to collect money centrally and attempt to decentralize only the functions of government.

Perhaps the worst solution in this case would be an artificial decision from the centre about the distribution of money and credits among the lower levels in a federal system for the completion of government functions. The best solution is not to centralize the taxation system at all and leave the nation states and the lower jurisdictions in charge of both the expenditure and the revenue side. The failure to do this has often undeservedly discredited the principle of subsidiarity.

Recently, in connection with the Greek crisis, there has been a lot of talk of the EU being headed towards a transfer union. This step has already taken place, however. No political alliance system is completely free of redistribution and transfer. To take from a minority of rich and to give it to a majority of (relatively) poor is one of the most popular political programs. In the EU there is a minority of four net contributor countries, of which the Netherlands is one. The fact that the EU is already a transfer union is by no means its greatest weakness. A far greater threat is the planned bailout union, or in German: Haftungsunion.10 That is a high risk experiment – without any experience all over the world.

In fiscal terms, the EU is not the redistribution giant that it is represented to be. Redistribution is, admittedly, blithely taking place via subsidies and regional development funds, but the really big socio-political redistribution is still at a national level.

Conclusion 9

A bailout union is not affordable in the long term for those doing the bailing out. But, what is even more damaging: It gives those being supported false politico-economic incentives, prevents learning and adaptation processes and will sooner or later destroy the whole system.

The definitive step towards a bailout union has not yet been taken. The case of Greece has also triggered learning processes and new terminology is being sought in order to avoid the spectre of national bankruptcy. The nation state and the European association of states is the ‘sheet anchor in times of need’, not only for ‘the little man’ but also for the really big guys. Only an association of states has the kind of multi-billion Euro loans available to it at short notice that are needed to pay for national and continental rescue programmes. The greater the scaremongering, the greater the willingness on all sides to be taxed and dispossessed to a greater extent in order to avert the heralded doom.

Conclusion 10

The flight that is taking place today towards a more central alliance should be replaced by a return to national and less centralized and more local and individual responsibility. The economic ‘too big to fail’ concept is wrong and dangerous and must not be reproduced at a political level.

Subsidiarity means, I repeat it, priority for smaller or private units. It calls for decentralisation, privatization and deregulation. In the 21st century the concept of subsidiarity should be refined to suit the current environment.

Conclusion 11

Any centralized organisation should give back competences, powers, responsibilities and financial backing to smaller political units, closer to the root of the problem as soon as the centralized organisation appears unable to fulfil or afford a government function.

So-called ‘unsolvable problems’ can be solved by cutting them into smaller pieces and allow the smaller units to experiment and find the best solution. This is obviously easier said than done. Even Switzerland has not yet been able to stop the trend of centralized welfarization and redistributionism, neither of the interpersonal nor of the interregional types. Transfers are very popular, more popular than the rhetoric in favour of decentralisation.

Subsidiarity means going back to the bottom. At the bottom of the political system are the local communities, the municipal autonomy of towns and even villages. The question arises as to whether municipal autonomy and democracy are, in fact, still appropriate in a service and information society that is characterised by high mobility, the complex division of labour and interdependence. The question is after all: Are small-scale, democratic political units and communal autonomy not more rooted in those static, rural/agricultural small-town societies that are scarcely to be found any more these days?

The Basel-based Swiss historian Adolf Gasser, who also debated on politics, sociology and psychology, has today been wrongly almost forgotten as the pioneer of municipal autonomy. In his book Gemeindefreiheit als Rettung Europas, Gasser shows how local autonomy can also form a protective barrier against all forms of left and right-wing totalitarianism and create an effective counteracting force against a mass media ‘bread and circuses society’ that is centrally controlled at a political level and patronized by the state.11

Adolf Gasser understood the role of municipal autonomy as a counterbalancing element in a social and welfare-state political system, for it is only in conditions that are easily understandable and true-to-life that the citizen can acquire ‘what is usually described as political perceptiveness and a sense of human proportions […]. Only here, in the soil of freedom, is it possible for that minimum of trust in the community to develop, and it is precisely this that usually effectively stems the tendency towards both authoritarianism and anarchy’.12

An increasingly sophisticated, highly specialized society and economy can only function with non-central and, ultimately, local decision-making, where individuals take the initiative and are willing to assume responsibility. Such a system favours politically non-central solutions and is an indication of the increasing importance of municipal and private autonomy. The fight for national, regional and local autonomy is identical to the fight against an oversized, central political power and financing structure.

The antidote to centralisation is the competition of systems. ‘Competition may not only prevail among individuals or private firms in a market, it may also take place among public institutions. Usually, these public institutions belong to different states but the term “institutional competition” has also been applied to competing legal orders within the same territory.’, according to Roland Vaubel.13

He further adds: ‘In the early twentieth century, a crystal-clear account of how the potential exit of capital has checked the power of governments in Europe can be found in Max Weber’s General Economic History.14 “The competitive struggle (among the European nation states) created the largest opportunities for modern western capitalism. The separate states had to compete for mobile capital, which dictated to them the conditions under which it would assist them to power”.15

The EU, according to its own self-conception, or self-misconception, is neither an intricately networked system of treaties between sovereign states, nor a confederation, nor a federal state, nor a centrally administrated technocratic infrastructure-bureaucracy, but rather a little of all of these. It defines itself as ‘a political, economic and cultural association sui generis’. That cannot but lead to problems.

In reality, the EU is a bureaucratic, corporatist empire, a political cartel in which the economically influential parties keep the smaller or economically weaker parties happy with transfer payments and then demand financial and political tributes in return, while cutting off competition between the systems as far as possible. The more ambiguous and indistinctive the foundations are, the better it is for the self-assigned, self-empowering bureaucrats. The Eurocrats in Brussels can live quite well in this state of unclearly defined responsibilities, since bureaucrats are masters at muddling through. You can always present unnecessary restraints as inevitable practical constraints ‘without alternative’. It is well-known that necessity knows no law.

The EU, in terms of its origins and structures, is an attempt to overcome the crises of the nationally structured, social democratic industrial age at a supranational or continental level. In fact, however, the problems that, due to a generally binding, democratically legitimized, national legislation, are no longer resolvable, such as those found in monetary policy and in the ticking time bomb of collective pension schemes, are simply raised to a European level.

Conclusion 12

The EU is an attempt to artificially keep alive for a while the ‘welfare-state ancien régime’ of the national economy-based industrial era that has become questionable in this age of globalisation.

The EU is an outdated project that has got stuck in the organisationally conservative mentality of mercantilism, of the market economy tamed or perhaps shackled by corporatism, of the Cold War and of the welfare and nanny-state that deprives people of the right of decision. It is a project ill-suited to the global challenges of the 21st century. It is focused on internal market (Binnenmarkt) instead of global free trade.

Postulated and practised in wide circles right to the core of civil parties, the ‘supremacy of politics’ is nothing other than the dogmatized delusion of the 19th and 20th centuries. It has been given authority once again by the statist, or what has become the statist wing of the 1968 generation. It was and is all about replacing religious faith with faith in the state and replacing private autonomy with a generally binding network of ultimately unsuitable regulations.

Conclusion 13

The Europeans are faced with the decision as to whether they want to head for a legitimacy crisis and an implementation crisis through even more regulation, centralisation and harmonisation, or whether they want to risk a departure towards open structures in which autonomous civil societies with small, lean and cost-effective political structures and largely privatised infrastructures compete and cooperate peaceably.

With this option that is very much rooted in civil tradition, the European idea has a future. Europeans must preserve and cultivate their diversity and pursue the path towards a new EFTA in the original sense of a European Free Trade Association, a community that is inwardly and outwardly open, in which members enjoy a high level of autonomy. For this reason, we Europeans should put behind us the ambitions of a politico-administrative, nation-state-like megastructure and the dreams of a world power that is capable of anything. Europe needs close and flexible economic and cultural contacts based on free exchange.

Europe also needs that peace which it has itself repeatedly destroyed in the course of the centuries. As the basis of a common security policy, it is sufficient to have a robust military peace alliance with national armed forces that can safeguard defence and nip internal and, if the need arises, mutually rekindled aggressive cravings in the bud. In place of the indecipherable Constitutional Treaty of Lisbon, a short document like the Magna Charta Libertatum or the Federal Charter of the Old Swiss Confederacy would be worth considering.

Conclusion 14

Free trade is not achieved by means of new, complicated bilateral and multilateral rules but rather by the gradual dismantling of existing boundaries that is offered and carried out by the parties involved, in their own interest and at their own discretion.

Non-centralism is not a piece of textbook wisdom for state and economic policy but rather a principle for life and survival that must be protected against all mainstream and populist and technocratic critics of localism.

Compared to a highly centralized system, all the small non-central errors that compete with one another are, on the contrary, more efficient and less dangerous, both internally and externally, in the long term, also as regards the level of freedom and learning ability. Non-centrality provides the advantage, above all, that pioneers (who are often the insignificant ones who would be outvoted on a majority committee) are not forbidden from behaving in a way that is different, or ‘creatively dissident’. The successful attempts of the pioneers then trigger learning and imitation processes that are more effective than anything that could be brought about by means of central coercion and imposed majority votes.

One of the most impressive and momentous achievements of technical civilization, the internet, is likewise based on the principle of non-centralism, in other words, on the fact that every recipient can potentially also be a sender and every consumer also a producer, and no-one presumes to improve the overall system by means of central control. Many collective committees for exchanging ideas and harmonisation (not to be confused with standardization) should work on the same principle as the internet: everyone sends and receives what they want, while allowing everyone else to send and receive what they want, and everyone benefits.

To quote Roland Vaubel again: ‘As far as we know, the first to realize the benefits of institutional competition was David Hume. We read in his essay Of the Rise and Progress of the Arts and Science.16 “[…] nothing is more favourable to the rise of politeness and learning than a number of neighbouring and independent states connected together by commerce and policy. […] But where a number of neighbouring states have a great intercourse of arts and commerce, their mutual jealousy keeps them from receiving too lightly the law from each other in matters of taste and reasoning and makes them examine every work of art with the greatest care and accuracy”.17

Conclusion 15

A peaceful civil society is characterised by the fact that it can get by with few public regulatory provisions and little technical and socio-political infrastructure provided by the state and solves its conflicts in private autonomy between the parties affected and involved.

The fight for regional and communal autonomy is identical to the fight against an oversized, central political power and financing structure that is geared towards emergencies and towards maintaining power. With the help of an example that is currently relevant to Switzerland, to the Netherlands and to the EU, I would now like to turn to the connection between subsidiarity and solidarity: Immigration.

II. Immigration and the tension between autonomy, subsidiarity and solidarity

Is there such a thing as an unlimited solidarity of everyone with everyone else? I believe that solidarity always arises between groups and is therefore always a kind of group egoism. What is the essential difference between ‘solidarity’ and group egoism? Solidarity is what you call the group egoism of a group that you belong to or are employed by. But this open paraphrase also offers no criteria for distinguishing between solidarity and group egoism. It similarly ignores the fact that, as citizens of a political community by birth (nationality), we belong to groups that we did not originally choose and where voluntariness is only guaranteed by the open option of emigrating.

Can every immigrant compel the locals to solidarity? I remember Milton Friedman’s answer in a televised interview at the ISIL Congress in Costa Rica in 2002. Question: ‘Professor Friedman, are you in favour of free immigration?’ Answer: ‘Yes, I am in favour. But you cannot simultaneously have free immigration and a welfare state.’

While this may be a good answer, it solves neither the problem of illegal immigration nor the problem of an orderly retreat from the welfare state. It serves as an excellent excuse for classical liberals and libertarians when they struggle to find the right solutions to the problems of free immigration. It is no surprise that the welfare state in Europe is unsustainable and is in trouble. However, it cannot be dismantled overnight. Neither can we wait for a solution to the problem of immigration, especially illegal immigration, until we have solved the problems of the welfare state. While I have no personal solution to offer, I will present three approaches, which, though different, nevertheless qualify as liberal.

Is open immigration compatible with the principles of the classical liberal society? This society builds on the self-determination of the people, not political organisations. Both contractually and compatibly these self-determined people must be able to formulate and agree on the rules necessary for co-existence and constantly adapt them to new situations.

It builds on a large number of small, non-central, competing and cooperating units, not central political control. In millions of small and micro experiments, people must learn together through trial, error and interaction.

It builds on diversity, not egalitarianism. Civil society is nothing other than peaceful coexistence, cooperation, occasional confrontation and frequent confusion between different people. It builds on flexible roles and life patterns. In the ‘school of life’ there are no fixed roles for instructors and learners. Everybody alternates between being a teacher and a pupil. The fundamental principle is mutual consideration and respect for human dignity. I will try to describe three liberal approaches to immigration and use names for the different models.18

First, the ‘Gournay model’, named after the French businessman Gournay, who created the laissez faire, laissez passer formula in the 18th century. Laissez faire, laissez passer, also for persons, without any restrictions only works within a non-welfare-state framework that does not offer any benefits not financed by the immigrants themselves.

In the EU, there is personal freedom of movement for EU members, but it is subject to restrictions for as long as social and tax policies are not yet standardized. These restrictions do not contradict liberal principles; they protect all the citizens of EU states from heteronomy through forced solidarity. For immigrants from outside the EU, there are even stricter restrictions that have been uniformly established.

Second, the ‘Mises model’. The classical liberal Ludwig von Mises (an Austrian economist who emigrated to the USA in 1940) was in favour of free immigration. Of course he was also aware that while a nation state offers several benefits to its people, these benefits cannot be offered for free to all immigrants. There is no such thing as a free lunch. In other words, citizens have the right to fix a price for membership of the club called a nation state. All those willing to pay the price must be accepted without discrimination. This system is based on the notion that the state is an institution open to those prepared to pay the entrance fee or those who find a person or an institution who is ready to pay an advance.

At a first glance, this model shows little solidarity. However, it might be altogether sensible to examine it from the point of view of a liberalization of purposeful immigration of elites from other continents as an alternative to the intolerant ‘three circle model’ of the EU.

Third, the ‘Röpke model’. Röpke was a German economist who was forced to emigrate to Switzerland because of his opposition to Hitler. The model is based on a completely different philosophy of citizenship. Röpke believed that the political community is a corporation of free individuals. One of the most fundamental rights is the right to determine who is to be granted club membership. In fact, to obtain citizenship and even the right to immigrate depends on being elected as a new member of the community. This approach is not unlike the Swiss solution. At the local level, in some cantons people are asked in an open election whether they are ready to accept a person as a new citizen.

In an open society, diversity is an opportunity and not a handicap. But over-protecting immigrant minorities ‘from above’ or ‘from outside’ can stifle the growth of a minority-friendly environment.

Conclusion 16

The best way of dealing with immigrants lies in the principle: ‘I am accepting you because you bring me a net benefit because, and not even though, you are different’.

Assistance for minorities offered by the central authorities may not only anger the majority (envy), but can also hamper the minority in its efforts to stand on its own two feet. If one walks on crutches for too long, one eventually forgets how to walk without them. Minorities should not be discriminated or persecuted. By the same token, however, they should not be seen as people in need of social assistance in their efforts to survive. If this kind of minority protection based on ‘enlightened self-interest’ is not artificially supported ‘from above’ or ‘from outside’, there must be a mechanism of highlighting the beneficial contributions of minorities. Initially it may appear naive to purport that such a mechanism may arise spontaneously of its own accord.

The mechanism most suited for underlining the advantages of diversity and heterogeneity is the mechanism of competition – the peaceful competition of systems and countries.

Conclusion 17

Particularly now, in the modern age of globalisation, the benefits of diversity, ethnic impurity, overlapping systems and non-centrality will become more apparent.

Heterogeneous societies will make rapid progress and put this to good use. Countries that have undergone such experiences could share them with others. However, in the name of ongoing diversity, they should not aspire to serve as permanent and universal examples.

Classical liberals see immigration as an opportunity and not as a burden. However, we should be honest enough to admit that every community has the right to define membership. When immigration leads to a selection of people who are ready to do the dirty work, it impacts negatively on the social structure of a country. Switzerland was successful in the nineteenth century because it encouraged the immigration of elites.

To limit immigration and allow new citizens to be selected as new members of a club on the basis of enlightened self-interest is not illiberal. If a country or a community allows in immigrants whose chances of integration are virtually non-existent, it solves one problem by creating a new one. It is better to say ‘no’ at the border, than to discriminate against immigrants inside the country.

From a liberal point of view, there is a strong case for peaceful competition between small states or small regional authorities. In the future, from a liberal perspective, the freedom of establishment (i.e. the exit option as a vote with the feet) will play a more significant role than the democratic co-determination which is, in effect, minimal anyway. By choosing your place of residence, you can select the variant of solidarity, the immigration policy and the regulatory policy that appeals to you. Home is where you feel at ease, where you need have no fear, not even of the tax authorities.

At a European level, the fight of the national group egoisms, a fight between differently defined versions of solidarity, has not yet broken out. Until now, the advocates of the EU were largely also advocates of an actively redistributive national social policy. It is to be expected, however, that the EU will, in the future, come under political pressure, even from socialists and social democrats reasoning from a national point of view. They want to protect their nationally supported job market and social security biotopes and politically administer a left-wing xenophobia. A renaissance of national populist socialism is to be feared.

This is when the time comes for those resolute, pro-European liberals who want to abolish the social state, deregulate the job markets and privatize the pension systems, in order for an intra-European freedom of movement beyond all national group egoisms to remain possible.

III From the “Great Market” to “Eternal Peace”

Conclusion 18

The EU’s rescue will not come from the socialist statist centralisers and harmonisers but rather from those who favour the subsidiarity principle, free trade and independent, competing Member States with cosmopolitan civil societies.

As I draw to a close, I would like to look at a further triad and a philosophical development of the term ‘subsidiarity’. This triad was first formulated by the Swiss pedagogue Heinrich Pestalozzi and is symbolically best represented as a triangle or a pyramid.19 Pestalozzi, with his gradations, is a forerunner of the behavioural scientist Maslow.20

This pyramid has three vertical layers of which each is literally subsidiary to the ones above it. The symbol of a pyramid with three vertical layers is very important. In the basic layer are the basic needs of nature, food, clothing, sex, all based on exchange in the broadest sense. It is the man as an animal in the best sense, homo oeconomicus. In the second layer (the middle one) we have the man as a social and political animal, a citizen, a member of the organised church, creating rules and networking in contracts and hierarchies. On the top layer we have men as children of God (liberi). From a Christian point of view, the most important thing is to accept the lines between the layers in a first step, but to open a (maybe small) door from top down and to let the Spirit flow in top down. The ‘Child of God’ has to inspire the ‘citizen’ in the middle layer, and the citizen has to lead the animal in the basic layer from nature to culture. But, in fact, we do not have to fight against the animal (homo oeconomicus) and against the citizen (homo politicus). The children of God should be aware and should accept that they also still remain citizens (middle layer) and animals (basic layer).

Conclusion 19

A top-down inspiration cannot be organised and we should be careful with any type of power and coercion. There must be a kind of free market between the offers and demands between the three layers of homo oeconomicus, homo politicus and homo religiosus.

Exchange starts with borders: they must define, but not isolate. The semi-permeable membrane of a living cell is a strong symbol. It separates and connects the cell tissue and enables osmosis and metabolism as the basic exchange process of life. No layer of the pyramid is good or bad in itself, but no layer should be totalitarian. Every layer has its internal type of morality that is lower than but not opposite to the morality of true love. The ‘Children of God’ should be careful with the presumption of knowing what is ‘good’ for everybody and introducing it as a ‘law’ or as a dogma in the middle layer (political system) and basic layer (economic order).

Conclusion 20

Our political aim as liberals should be the homo oeconomicus cultivatus, all over the world.

In my opinion, we should not try to improve the homo oeconomicus as an animal by too many political regulations and by religious dogmas. Exchange, free trade, has a cultivating power in itself when we combine it with private property, family and private law responsibility.

The family is the ‘school of morality’. The market breeds a simple type of morality (tit for tat), not in every case and not always, but as a trend. Coercion for ‘the good’ is counterproductive. Politics (meaning to change people by coercive rules) has been overrated since the time of the ancient Greeks and Romans. And the Christian Church of the Middle Ages tried in vain to use the coercive arm of the political system to lead the people closer to God. The Church has been infected by the spirit of power and has not been able to inspire the political system by the spirit of love.

I began my presentation with a reference to the ‘Great Market of Utrecht’. I would also like to conclude in The Netherlands. Immanuel Kant took the title of his famous essay Perpetual Peace from the sign on the inn of a Dutch innkeeper.21 The subject that related to the name of the inn, a churchyard, was painted on the sign. A profound and ambiguous inn sign is certainly not a bad emblem for a political philosophical treatise.

In his essay, Kant calls for a federalism of free states. With federalism he means – as distinct from today’s terminology – not a European or global federal state or even a confederation but simply a peace alliance that is based on free trade and on diverse, cosmopolitan, hospitable allies with a republican constitution. If people had listened to him a good 200 years ago, Europe and the world would have been spared a lot of suffering and misery. Kant also expressly warned against too much harmonisation. This, too, is highly remarkable. We would do well today to take Kleist’s allusion to the Great Market of Utrecht and Kant’s reference to a Dutch inn sign as seriously as the gravity of the situation demands. This is my optimistic liberal vision of the future of Europe: The way from ‘The Broken Jug’ via the ‘Great Market’ toward ‘Perpetual Peace’.

Summary of Conclusions

  1. More market, less legal dogmatism, first peace and then justice.
  2. All friends of liberty, all liberals are called to first seek out the liberal core of the European idea and then to revitalize and defend it tenaciously against all opposition and undesirable developments. This means to be pro European in the best sense.
  3. European diversity also includes the individual responsibility of EU Member States for their own budgets, which means a consistent no-bailout policy that expects each member to take on responsibility for its own financing and to bear the consequences of national bankruptcy.
  4. Liberals do not have recipes but principles. Politics and the economy should be kept as distinct as possible. The economy and culture, on the other hand, should be grasped as an organic unit.
  5. In a new liberal slogan for Europe we have to put: Instead of liberty – more modestly: openness. Instead of equality: diversity. Instead of fraternity and sisterhood: voluntariness in the sense of the absence of aggression and coercion.
  6. We have to put the subsidiarity principle back on a footing that leads once again to an affirmation of federalism and localism.
  7. In essence, subsidiarity means that we have to try to find the solution to political, social and economical problems in the most private and the most local framework possible.
  8. The only effect of transfers is to strengthen the dependency of the periphery on the centre and to stifle any beneficial competition between nations and regions.
  9. A bailout union is not affordable in the long term for those doing the bailing out. But, what is even more damaging: It gives those being supported false politico-economic incentives, prevents learning and adaptation processes and will sooner or later destroy the whole system.
  10. The flight that is taking place today towards a more central alliance should be replaced by a return to national and less centralized and more local and individual responsibility. The economic ‘too big to fail’ concept is wrong and dangerous and must not be reproduced at a political level.
  11. Any centralized organisation should give back competences, powers, responsibilities and financial backing to smaller political units, closer to the root of the problem as soon as the centralised organisation appears unable to fulfil or afford a government function.
  12. The EU is an attempt to artificially keep alive for a while the ‘welfare-state ancien régime’ of the national economy-based industrial era that has become questionable in this age of globalisation.
  13. The Europeans are faced with the decision as to whether they want to head for a legitimacy crisis and an implementation crisis through even more regulation, centralisation and harmonisation, or whether they want to risk a departure towards open structures in which autonomous civil societies with small, lean and cost-effective political structures and largely privatised infrastructures compete and cooperate peaceably.
  14. Free trade is not achieved by means of new, complicated bilateral and multilateral rules but rather by the gradual dismantling of existing boundaries that is offered and carried out by the parties involved, in their own interest and at their own discretion.
  15. A peaceful civil society is characterised by the fact that it can get by with few public regulatory provisions and little technical and socio-political infrastructure provided by the state and solves its conflicts in private autonomy between the parties affected and involved.
  16. The best way of dealing with immigrants lies in the principle: ‘I am accepting you because you bring me a net benefit because, and not even though, you are different’.
  17. Particularly now, in the modern age of globalisation, the benefits of diversity, ethnic impurity, overlapping systems and non-centrality will become more apparent.
  18. The EU’s rescue will not come from the socialist statist centralisers and harmonisers but rather from those who favour the subsidiarity principle, free trade and independent, competing Member States with cosmopolitan civil societies.
  19. A top-down inspiration cannot be organised and we should be careful with any type of power and coercion. There must be a kind of free market between the offers and demands between the three layers of homo oeconomicus, homo politicus and homo religiosus.
  20. Our political aim as liberals should be the homo oeconomicus cultivatus, all over the world.

Outline of the discussion following the Telders Lecture 2011 by Robert Nef

After the lecture, Robert Nef answered some questions from the public. Frits Bolkestein, the host of this evening, invites the audience to take part in the discussion.

In the beginning of his speech, Robert Nef compared the crisis in Greece and the EU with cases of bankruptcy in Leukerbad, a Swiss municipality, and in California, USA. From this comparison it could be concluded that Robert Nef defines the European Union as a federation, like Switzerland and the United States are. Is that indeed the case, and how would Robert Nef define a federation?

Nef answers that, in the technical sense, a federation is defined by the many veto positions within a political system, for example between two chambers. In this sense, the EU cannot be defined as a federation as it lacks a complete two-chamber veto system.

From the point of view of decision making, veto is not a practical instrument. But a political system with many veto positions suits well with the concepts of liberty and freedom. The USA has a lot of veto positions and in Switzerland the majority of people in referendums is counted as a veto. As a rule, when we look back in history, the veto system worked in favour of the individual liberty.

The municipality of Leukerbad and the State of California were both insolvent at a certain moment, but they have not been bailed out by the federal government. According to Nef, this has led to increased spending restraints as well as caution among creditors. Robert Nef used these examples in his lecture by way of showing that the EU does not need to fly forward to centralized economic, financial and social policy to solve the current problems. But if bailing out is not an option, what is the alternative option to save Greece?

The alternative, naturally, is not bailing out. In fact, nobody really knows what the consequences will be for people or banks when Greece is not bailed out by the Union. Initially nothing might happen at all. It is seen as a kind of shame for a country to go bankrupt, but Robert Nef’s opinion is that we should forget about honour and shame when it comes to politics. It was indeed a shame for Leukerbad to go bankrupt, but the municipality survived with a new generation of politicians. Likewise, maybe Greece also needs a change of the political elite.

In history bankruptcy happened very often. As a rule, banks and government suffered a lot from it, but a revolution rarely followed. It seldom resulted in war. Nef is therefore of the opinion that the current panic regarding a Greek bankruptcy is not justified by experiences in history. His opinion is that bankruptcy in Greece is unavoidable. At the same time, he thinks politicians will not call it ‘bankruptcy’; they will find a new terminology for it in order to avoid this word. Only after bankruptcy has in fact happened, we can tell what the consequences are and who the real victims are. That is the moment when solidarity must come in politics.

One of the visitors thinks Robert Nef is naive to believe in competition between financially independent EU member states. Decentralisation would only succeed in perfect markets where men behave perfectly. Trusting on smaller communities to rule themselves will not work, even if we like the idea and even if the principles they function along are liberal. Nobody was in place to correct Greece for their budget policy. That is why we now understand that we do in fact need a better centralized control mechanism for Europe in Brussels.

Robert Nef answers that he does not believe in (free) markets as an ideal, neither should markets be understood as systems that one could believe in. A market just happens, even if you try to forbid it. There is no need to believe in markets, there is just a need to observe them and to try to understand how they develop. It might be a good learning process to save Greece, if we are at the same time ready to learn from mistakes, for example by accepting the principle other countries in the same difficulties, following Greece, cannot be bailed out anymore.

Nef admits that he may be somewhat naive and provocative.

The European Union has a strongly centralized competition policy. How does Robert Nef think competition rules will be upheld in a decentralized Europe?

It is very important, according to Nef, to distinguish between politics and economics. If a clear line is drawn between the two, we will find that there is no such thing as economic power. For instance, Coca Cola has no power that forces us to drink Coca Cola. They can make use of public relations, but as rational consumers we always have the possibility to say: ‘No’.

Once we clearly distinguish between political and economic issues, the question of power monopolies can be solved. Robert Nef knows that this sounds utopian, but liberals should be against all types of corporatism where big business goes to big government and big government goes to big business.

Robert Nef presented twenty conclusions in his lecture. The seventh of these is: ‘In essence, subsidiarity means that we have to try to find the solution to political, social and economical problems in the most private and the most local framework possible.’ The question for Robert Nef following from this conclusion is whether he sees the benefit of harmonization with regard to economical problems.

Nef is possibly too critical when it comes to any centralized organization. If the most intelligent and capable people are gathered in this centre, centralization probably works well. As a first step therefore, centralism is a good thing. But when the people in the centre start to be in power, the decline sets in as power corrupts. France had been a centralized country for 200 or 300 years and it is now a centralistic country in decline, according to Nef. He adds to this that his propositions and conclusions should be read in a long-term perspective.

Maybe non-centralism is a better concept to keep in mind than the concept of anti-centralism. Nef is not completely against centres; he likes competing centres that are able to make mistakes. Even a nation making mistakes contributes to a learning process. It helps to make clear what to avoid in order to make the same mistake. We learn more from mistakes than from success, because success always comes with a little bit of good luck.

According to Robert Nef, what is the main reason that Switzerland is not a member of the European Union?

The main reason is the Swiss political system based on direct democracy. Nef always says that Switzerland not being a member of the EU is better for Switzerland as well as better for the EU. Decision making would be very difficult with a member at the negotiation table that has no mandate, therefore constantly having to interrupt in order to ask the people in a referendum whether they agree with these decisions. It would be easier for Switzerland to join the EU if it develops in the direction of a union focused on free trade, such as the European Free Trade Association of which Switzerland is already a member.

The set of twenty conclusions in Nefs lecture are contradictory to the set of principles followed by China. Yet China is an economic miracle. Should we prepare for the next economic crisis being China taking over the world economy?

Nef does not think of China as the Yellow Danger (die Gelbe Gefahr). China has a big market. They might not be organized in a democratic, liberal way. For doing business however, liberal democracy is not a priority. The first question a business man asks his business partner is the question whether he has a good price or a good product. This is where they search for agreement. In civil societies all over the world, differences in political systems are not that important anymore.

One of Nefs messages is that politics should not be overrated. The generation of 1968 proclaimed that everything is political. This is an outdated idea. The Netherlands is a country that is ready to go back to the concept of homo oeconomicus cultivatus. People acknowledge that politics is necessary, but it should not rule our lives or the economy. The difference between a Chinese business man, a Dutch business man or a Swiss business man is not as big as the difference between the political systems of China, the Netherlands or Switzerland. This offers chances.

Robert Nef talked about the benefits of migration and diversity. What does he have to say about the ‘clash of civilizations’ in immigration countries?

From a liberal point of view, migration is a very important topic. Nef does not present any concrete solutions. He puts forward that liberals should not be completely against immigration, but they should at the same time allow themselves to be selective. This is not only in the interest of immigration countries, but also in the interest of the immigrants. We do not need immigrants if they cannot find good jobs. It is not fair, neither is it a good development for society. We need a mixture of intelligent egoism and an understanding of what is good for the immigrants.

Nef is not happy with the European three-circle model for immigration. This model has a racist feature. When we look at it closely, we will find that this model means that Europe is more willing to accept people from the second circle than from the third circle. Why would gifted people from the third circle not be welcome if they are ready to integrate? Swiss experience with integration learns us that successful integration does not depend on colour, it rather depends on education. A surgeon from Pakistan is more able to integrate than an analphabet from Kosovo.

Could Robert Nef elaborate on the ban of minarets in his country, as a result of a referendum in 2009?

As a liberal, Nef was against this referendum. This problem should have been solved at the local level. When a small village refuses the minarets, the question goes back to local construction law. Others will have to accept that these inhabitants do not accept a big tower in their village. In Zürich or Geneva, the majority of people voted in favour of the minarets. A lot of Muslims live in these cities. So in fact, the problem could have been solved in accordance with one of Nef’s principles, i.e. to cut the big problem in smaller pieces.

Nef thinks this referendum was a mistake, but he is not sure whether other countries would have been more tolerant when a similar referendum was being organized.

Being Swiss, Robert Nef is invited regularly to speak about direct democracy. He supports direct democracy, but only in combination with small units deciding on the particular political question. The referendum system at the national level in Switzerland is in decline.

Patrick van Schie, the director of the Telders Foundation, is somewhat surprised by the last comments on direct democracy related to immigration. Robert Nef described three models for dealing with immigration questions, the third model being the ‘Röpke Model’. Within this model, the individual citizens of a community should have the right to determine on the club membership of immigrants. Isn’t the implication of this that migration policy, or migration laws, should be subject to referenda?

In Switzerland, there will indeed be a referendum next year on the subject of additional restrictions in immigration policy. This referendum also deals with the sovereignty issue, as sovereignty was given away with the Swiss membership of Schengen. There is a bad coalition here, with the right-wing xenophobes in favour of more restrictions and the left being anxious that the labour market will be spoiled by people who are ready to work on cheaper conditions.

All over the world immigration is being restricted. Maybe as liberals and as intellectuals we have to admit that foreign people are an enrichment and create possibilities. However, if you are a taxi driver or you live in poor conditions, you might have another view. As the upper or middle class, we should also approach these people.

The last question refers to conclusion twenty of Nef’s lecture: ‘Our political aims as liberals should be the homo oeconomicus cultivatus, all over the world.’ What do we have to activate in order to achieve this goal?

Robert Nef does not have a concrete answer to this question. He is inclined to say ‘Do not panic, communicate, exchange, learn, wait and see.’ Market promotes mutual learning and is a school without teachers. The European Union is a learning process and tomorrow we know more than today.

1 R.E. Helbling, The Major Works of Heinrich von Kleist, New York, 1975.

2 This is from Hölderlin’s poem Patmos. See F. Hölderlin and E. Mörike, ‘Patmos’, in: C. Middleton (trans.), Selected Poems, Chicago, 1972, p. 74.

3 C.B. Blankart and A. Klaiber, ‘Subnational government organisation and public debt crises’, Economic Affairs, 2006, no. 3, pp. 48-54.

4 E. Jones, The European Miracle. Environments, Economies and Geopolitics in the History of Europe and Asia, Cambridge, 1981.

5 R. Nef, In Praise of Non-Centralism, Berlin, 2004.

6 C. Rossiter (ed.), The Federalist Papers, New York, 1964 (1787-88).

7 Pope Paul VI, Gaudium et Spes. Pastoral Constitution on the Church in the Modern World, Boston, 1965.

8 C.J. Friedrich, ‘Introductory Remarks’, in: J. Althusius, Politica Methodice Digesta, New York, 1979 (1603), p. xv.

9 F.S. Carney (trans./ed.), The Politics of Johannes Althusius. An abridged translation of the Third Edition of ‘Politica Methodice Digesta’, Boston, 1964. The work of Althusius was essentially a theoretical justification of the republican system in the northern Netherlands.

10 R. Vaubel, The Centralisation of Western Europe: The Common Market, Political Integration, and Democracy, Hobart Paper 127, London, 1995 and R. Vaubel, The European Institutions as an Interest Group: The Dynamics of Ever-Closer Union, Hobart Paper 167, London, 2009.

11 A. Gasser, Gemeindefreiheit als Rettung Europas. Grundlinien einer Ethischen Geschichtsauffassung, Basel, 1947.

12 A. Gasser, op. cit., p.61 (translation R. N.)

13 R. Vaubel, ‘A history of thought on institutional competition’, in: A. Bergh and R. Höijer (eds.), Institutional Competition, Cheltenham/Northampton, 2008, p. 29.

14 M. Weber, General Economic History, New York, 1961 (1923), p. 249.

15 Cited in: Vaubel, A history of thought on institutional competition, p. 31.

16 D. Hume, ‘Of the Rise and Progress of the Arts and Sciences’, in: Idem, Essays. Moral, Political, and Literary, Indianapolis, 1985 (1742), pp. 119-120.

17 Vaubel, A history of thought on institutional competition, p. 30.

18 More detailed in: R. Nef, Migration and Liberalism, Lecture at the European Liberal Youth (LYMEC) Congress, Winterthur, 7 April 2006.
http://www.vonmisesinstitute-europe.org/pdf/MigrationLiberalism.Nef.pdf

19 H. Pestalozzi, Meine Nachforschungen über den Gang der Natur in der Entwicklung des Menschengeschlechts, Darmstadt, 2002 (1797).

20 A. Maslow, Motivation and Personality, New York, 1987 (1954).

21 I. Kant, Perpetual Peace. A Philosophical Essay, London, 1917 (1795).

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