Speech of Milen Velchev, Doctor Honoris Causa
The Inequality of freedom,
The non-freedom of equality
Mr. Chancellor,
Dear Professors and students,
Ladies and Gentleman,
Let me address all of you to express my thanks for the high honor I was granted
today by being bestowed the honorable title “doctor honoris causa” of the
University of National and World Economy. I most sincerely thank the Academic
Council of UNWE for the tribute it has given to one of its alumni- proud, happy,
and honestly moved by the possibility to acquire the most valuable tribute for his
work and progress from his University. Let me share it with you – this moment is
more the happier for me also since the title I am bestowed is in recognition also of
the work of all followers, colleagues, professionals, without whom the
achievements which have attracted your attention would not have been possible.
Let me ad that I owe this high distinction to each one of us, who contributed to the
success of our country becoming visible, the achievements to be real, and the
progress – remarkable.
I would like to espouse an idea before you, an idea that inspires me and in which I
believe: a modern, and at the same time an old philosophy of freedom, of building
a free civil society of economic progress and well being, of building a society our
country is striving to have. I am talking about Libertarianism.
In a sense there have always been only two key concepts in all political
philosophies: freedom and power. The one admits the right of the individual to
control their own fate by following their own outlooks, beliefs, state of mind and
desires, so long as they honor the same rights of the rest of the individuals. The
other, figuratively speaking, “presents” and enforces its own idea of good and
rightful, while not admitting the right of humans to err even against themselves,
but, most of all, it does not admit erring against the exact tracks, marked out by
power itself. It is of no surprise, naturally, that the philosophy of power has
usually been more attractive for the ones holding the power.
The philosophy of freedom has had many names. It was presented in the ancient
eastern thinking, provoked the minds of the Greek civilization; it was espoused by
Christianity. The philosophy of freedom changed its faces, names, its exponents
during the centuries to finally reach us in its constant expression – respect for the
individual and confidence in the ability of normal people to make wise decisions
about their own lives.
Libertarianism, as the name itself suggests, is a belief in the concept that each
person exercises sole dominion over her/his own life and property and is entitled
to choose how to dispose of them as long as they respect the same right for the
others. Wherefore it is evident that the Libertarians name the individual as the
chief unit of public analysis – only individuals make decisions, but at the same
time only they bear the responsibility for their actions. Since individuals are moral
subjects, they have the right to be protected in terms of their life, freedom and
property. And government or society does not specifically grant these rights, but,
on the contrary, they are typical of human nature. It is of no surprise that one of
the most famous books of all times, which has played a significant role in the
development of Western civilization – “The Public Treaty” by Jean Jacques
Rousseau, begins with the following manifesto: “Man is born free, but is in chains
wherever he goes.” This notion predetermines the notion of the Libertarian
philosophy with respect to government: mainly that its role must be limited to the
one of defender of the primary human rights when violated. Though done with the
minimum intervention in the life of the individual so that it does not interfere with
his/her right to personal freedom. This is the right to the very freedom where man
may have unlimited creative and productive impulses, which gives each individual
the strength to interact with the others, to make choices, to err and bear the
consequences of her/his mistakes. But most of all, this is the freedom to create
welfare, a future and better life for him/herself and, as a logical consequence, for
society.
Where is the place of Libertarianism in this wide political spectrum – whether next
to the leftist idea of social government, or closer to the market outlook of the right
wing? Some say that Libertarianism is neither leftist, nor rightist according to the
definitions of the contemporary political spread. Others believe that it combines in
a relevant way the best of both opposing sides to lean, on the one hand, on the
leftist platform of self-government as tolerance to the others and, on the other, on
the rightist responsible economic behavior. And the combination of these two
platforms leads to social harmony and material welfare. Yet others paraphrase this
outlook and jokingly declare that the Libertarians are right wing in terms of
economic issues and left wing in terms of the social ones.
Today my goal is not to promote the governing coalition NMSS (National
Movement Simeon the Second) – MRF (Movement for Rights and Freedoms).
Though I feel that the sharply reduced tax rates during the last several years show
something more than a linguistic coincidence between Libertarianism and the
liberal nature of our two political forces.
Libertarianism, though, is not only a political philosophy. It is an idea, an
understanding, intuition, as freedom is itself, and therefore it is a struggle for the
right of free choice and tolerance in all domains of our life. We discover
Libertarian ideas in the efforts for establishing religious tolerance, in the
Abolitionist movement in the USA, in the battle for non-discrimination of
different groups of people.
I hope you will forgive me for my pragmatism as a financier, dear ladies and
gentlemen – it made me choose only one of these fields and limited my speech
only to some of the chief economic outlooks of Libertarianism. To approach this
economic perspective of philosophy of freedom more closely, I would like to
share with you two main principles, which are, no doubt, primary features and
engines of free economy. They are simple, clear, and indisputable. Let us start
with the first one, presented as follows:
“Free people are not equal, equal people are not free.”
I shall not hesitate to point out which equality I have in mind. Of course, it is not
the matter of equality in the eyes of law or political freedom; it is not about
politically free people who are not equal in the eyes of law. “A person who
confuses political freedom with freedom as a whole and political equality with
sameness, has not pondered the issue for more than five minutes without
interruption”, Bernard Show said upon a similar occasion.
The issue here is economic equality – income and financial status - that is, all that
we may offer or acquire on the free market.
In order to clarify this principle more fully let us divide it in two and start from
“Free people are not equal”. I suppose you will agree that when people are free to
be themselves, to decide their fate, to freely make efforts for the improvement of
their welfare and of the welfare of their families, the outcome on the market would
not be equal income for everyone. Since each one of us is, without doubt, a unique
being, different from any other who has ever existed, why should we expect our
acts and market relations to give equal results? All of us have different gifts,
talents, and skills. Some have more, or more highly cherished, gifts than others.
Sometimes we find our real vocation at a later stage in our lives; the important
thing is to have the freedom to pursue it.
We differ also in our spirit of enterprise, in our readiness to work, in the efforts we
spare doing it; we differ in the skill of saving. I am ready to bet that if anyone
succeeds for a night, with one snap of the fingers, to make us all equal in income
and welfare, the next day, same time, once again everyone will be different,
because some will have saved part of their money while others will have spent it.
All this logically leads to the conclusion that if people are free to be themselves,
then they could not possibly be economically equal.
Therefore I am unable to concur with the thesis that the transition in Bulgaria will
come to an end only when all become rich and begin to live like the average
European. There is no average European. This concept needlessly hides the huge
chasm between the poor jobless and homeless people and the extremely rich
aristocrats in England, for example. It is the same as saying that because 30 % of
Americans do not have health insurance, the USA has not yet come out of the
transition.
As to the second part of this principle, mainly that “equal people are not free”, I
would suggest thinking for a moment about a country where people are indeed
economically equal. If you have already thought of one let me convince you that
the people in that country are not at all free. Why, you would ask? Honestly
speaking, the only way to even out the income and welfare in a society is to
suppress the abilities of the more ambitious individuals; to prevent them from
achieving and getting rich, to artificially hold the progress of the minority (since,
alas, the exceptionally skillful people always represent minority) in order to slow
down their speed to equal the speed of the more inactive and lagging majority. It
means there is one way to accomplish this: apply power directly to force the
talented to fulfill orders like: Do not achieve! Do not work more or better than the
others! Do not service your clients better than the competition! Do not save and
do not spend more sensibly than the others! I hope that none of us would like to
live in such a society, especially in the background of the hapless efforts of the
communist regime to unify everyone, often applying such power methods.
Let me give you another example from the universal tax practices. Without
examining in detail the newly approved tax legislation by the Bulgarian
parliament, I would like to point out that the Libertarian idea of non-interference
of government and of free market relations envisions low tax rates which would
stimulate production and business. Naturally, we must not forget that what our
government endeavors is a smooth process by stages. I wish to share with you
something directly related to the high taxes and, more precisely, to the highly
segmented taxing scale for the income of individuals traditionally proposed by the
leftist political powers. When we increased the budgetary salaries this summer,
many of the employees were dissatisfied. This was normal. It was no secret that
the increased income of many of them put them into the next tax bracket, which
automatically meant higher tax rates. Then many people asked themselves “Why
do I need a higher salary if my real income grows much more slowly?” We know
that compensation may be increased due to various reasons – individual decision
on the part of the employer if the employee has performed well, improved their
qualification, or other. What motivation would you have to increase the quality of
your work or to improve your skills if your compensation, in fact, won’t increase?
Mustn’t people try to work more and better to increase their welfare? And must
they be penalized in the process? Must we aim to relatively level out people in
terms of their pay despite the different efforts, time and skills devoted to their
work? The tax legislation in countries like Great Britain, the Netherlands, Ireland,
where there are no more than three tax brackets for individuals, confirms this
opinion.
Herewith I would like to benefit from the opportunity to express an opinion which
in the following days might be considered bold by the well wishers, and rash by
the ill favored. For me it is a challenge to be the first financial minister supporting
the recent call of Prof. Victoria Curzan Price, President of the “Mon pereline”
Society, to remove the corporate income tax in the entire world.
A little while ago I said that I would examine two basic principles of the economic
philosophy of Libertarianism. So far I described the principles of free inequality
and the non-free equality. Here is the other principle:
“Men take care of what belongs to them. What belongs to everyone or to no one is
usually left to rot.”
This principle is at the basis of the “magical effect” of private property. It gives
the key explanation of the failure of the socialist economies in the world.
Before 1989 in the Soviet Union, as well as in Bulgaria, the officials proclaimed
the superiority of central planning and state proprietorship. They believed that
private property was egotistic and unproductive, and wished to convince us that
under the skilled leadership of central authority the resources would be used for
the public good. The food of the agricultural worker became the “food of the
people” and people were hungry. The factory of the entrepreneur become “factory
of the people” and began producing goods, unmarketable on any outside market.
And if you are convinced you can attend to any property with equally the same
care, I beg you to go live in the home of someone else and drive his/her car for a
month. Believe me! - neither the home, nor the car will look the same way as your
own after a similar period of time.
Therefore the concept where people are more diligent and use resources more
reasonably if property is privately owned is a working concept.
Other benefit from private property, not so purely economical, is that it divides
power. When an entity, like the state, owns the entire property, individuals are not
protected from its will. The institution of private property allows a lot of people to
find their own place where they are protected from the hostile actions of other
people or of the state.
Dear ladies and gentlemen,
Actually, the liberal and Libertarian ideas have a long tradition in Bulgaria as well.
Immediately after the Liberation of our country in 1878, many of the draftsmen of
the Third Bulgarian State adopted this philosophy and this approach to the
management of society, economy and the state. This was completely logical – a
considerable part of them were active participants in the national movements for
freedom. In their eyes the idea that man from birth had right to existence, freedom
and property was a natural extension of their ambitions and dreams to see their
motherland independent and prospering.
Nowadays, after a continuous and difficult period of isolation and totalitarianism,
after another, also continuos and tough period of transition, the majority of
Bulgarian society once again perceives a chance for a more successful and faster
development of the country along these ideas. A development based on
transparency in politics, on private property, low taxes, free markets and
competition in the economy, on decentralization of power, on free choice for the
people. But freedom is no luxury. It amounts to a lot more than lucky coincidence
or a concept we support by dint of habit. Freedom is a stirring force for everything
happening in us, with us and through us. Let us live in this freedom to be ourselves
and to remain tolerant to others. Or, as Doctor Keneth Bisson, member of the
American Libertarian Party, jokes from time to time, “Libertarianism is what your
mom tells you: behave yourself and don’t hit your sister.”
I am happy to have had this opportunity to share these ideas with you today and
once again I thank you for the high honor you conferred to me.
Thank you very much for your attention!