Tomáš Sedláček: Greatest Transformation - Reflections on 1989

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Donde Plowman, Executive Vice Chancellor and Chief Academic Officer, introduces renown economist Tomáš Sedláček as he presents "Greatest Transformation - Reflections on 1989, Growth Capitalism, and the Price of Our Values" for Prague Spring 50. Friday, April 6, 2018 - 3:00 - 4:30 pm https://praguespring50.unl.edu

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[00:02:54.400]- It's a little bit humbling standing here in Nebraska,
[00:02:58.863]to be speaking after personalities
[00:03:01.640]whom I always been looking up to.
[00:03:04.090]So once more time, thank you again for including me,
[00:03:06.560]and being able to listen to you and to share my thoughts.
[00:03:09.750]I don't remember much of 1986, because I wasn't born.
[00:03:12.970]I wasn't even in the process of making.
[00:03:15.580]My parents weren't even married
[00:03:17.810]or whatever you call it these days.
[00:03:20.699]I would like to focus on.
[00:03:23.590]A little bit like Petra focused yesterday,
[00:03:26.170]on the events of 1989 and the transition
[00:03:29.330]from communism to capitalism.
[00:03:31.740]I feel somewhat aptly suited for it,
[00:03:36.020]because I was one of the few Czechs
[00:03:38.490]that could live outside of the communist regime
[00:03:41.340]and not be a son or daughter of some communist apparatchik
[00:03:46.280]because my father worked for Czech Airlines,
[00:03:48.380]so since the age of four weeks I've been spending my time
[00:03:52.130]in airplanes and in airports,
[00:03:54.840]and I had to explain to my Finnish friends
[00:03:57.130]how it works in Czech Republic or Czechoslovakia those days
[00:04:00.797]under the communist regime.
[00:04:02.638]At the age of six or seven,
[00:04:04.310]I have involuntarily become an economist
[00:04:06.870]because I had to explain to them
[00:04:08.600]how was it possible that in Czech Republic
[00:04:10.410]the same bottle of milk costs the same price everywhere?
[00:04:15.060]Then coming back to Czech Republic
[00:04:16.930]or Czechoslovakia for brief visits
[00:04:18.329]I had to explain to my Czech friends
[00:04:19.810]how it was it possible that the same bottle of milk
[00:04:23.893]costs differently in different places.
[00:04:26.510]I had to come up with terms like competition,
[00:04:29.110]and they said what do you need competition for?
[00:04:30.840]Et cetera, et cetera, et cetera,
[00:04:31.840]and also I had to become sort of a theologian
[00:04:34.180]because the same problem was
[00:04:35.240]in the theological grounds also.
[00:04:37.340]Czech Republic being an extremely atheist country
[00:04:39.890]all the way until today, by the way.
[00:04:42.530]It's the most atheist country in Europe,
[00:04:44.670]which pretty much makes it the most
[00:04:46.020]atheist country in the world, and Finland was the contrary.
[00:04:50.570]In Finland I had to explain that
[00:04:53.210]my friends don't believe in god,
[00:04:54.570]and my Finnish friends were knocking their foreheads
[00:04:56.980]and said, what sort of idiots do you live next to?
[00:05:00.373]Then in Czech Republic I had
[00:05:01.910]to do exactly the same in reverse,
[00:05:03.620]and my Czech friends were saying
[00:05:04.630]what sort of idiots do you live around?
[00:05:08.720]I even remember I had to promise to my Finnish friends
[00:05:11.818]who wouldn't believe me that there is
[00:05:13.840]such a person as a nonbeliever.
[00:05:15.260]I said well, next time the embassy people
[00:05:17.960]come to my parents for visit,
[00:05:19.980]I promise to show you Ana, and she is for sure atheist,
[00:05:24.740]and you can look at her and touch her if she allows you to.
[00:05:28.669]That was before the me too movement.
[00:05:32.130]So that happened.
[00:05:32.963]They really they made a big procession
[00:05:34.850]in front of our house when Ana came around.
[00:05:39.130]1989 was the most emotional moment for me.
[00:05:43.910]I am really the last generation that remembers it.
[00:05:47.163]My brother who is four years younger
[00:05:49.200]remembers nothing of it.
[00:05:50.790]When today we come into a pub with my brother
[00:05:53.630]and I say, I don't like it here.
[00:05:54.870]It's too communist.
[00:05:56.070]My brother looks at me and says, what do you mean?
[00:05:58.130]I don't understand.
[00:06:00.660]I was 14, 13 when the revolution came about.
[00:06:04.170]My father actually took me
[00:06:05.730]to all these revolutionary days in Wenceslas Square,
[00:06:10.390]where there was an army and my father
[00:06:13.700]always was trying to buy a hotdog.
[00:06:15.700]That was his trick to get into Wenceslas Square,
[00:06:18.620]and he always, when he was dealing with the army
[00:06:20.790]or with the policemen,
[00:06:22.060]and they were all those tanks everywhere,
[00:06:23.750]he always told me, remember this, remember this.
[00:06:25.787]Remember this.
[00:06:26.878]It'll be important later.
[00:06:28.320]I was standing there with my hot dog
[00:06:29.750]not really knowing what's going on.
[00:06:34.290]Just to give you a little bit of the feel,
[00:06:38.840]it was the strongest moment that I remember
[00:06:40.130]was the sort of the unexpected intelligence of the crowds.
[00:06:43.470]So when the communist apparatchik's
[00:06:45.815]were going around the country,
[00:06:48.700]trying to rally support in their most likely bases,
[00:06:53.650]those were the heavy working industry, the miners,
[00:06:56.520]and the heavy iron works and steel works,
[00:07:00.107]I remember he had this big speech in front of the
[00:07:04.920]sort of hardworking proletariat
[00:07:08.470]as we would call them those days,
[00:07:11.290]and the chairman of the communist party was saying
[00:07:15.000]these people on the streets, these children,
[00:07:17.938]they can't tell us what to do.
[00:07:21.260]We can't have this country run by small children.
[00:07:26.200]The crowd, it didn't take the crowd two seconds
[00:07:30.090]to chant back in unison as one person,
[00:07:33.950]immediately screaming back at the chairman.
[00:07:37.910]We are no children,
[00:07:40.080]and that's an answer that I think it would take
[00:07:42.350]a playwright a week or two to come up with
[00:07:44.750]and this crowd who is usually judged that crowds,
[00:07:48.050]anyway this is what sociologists tell us that crowds
[00:07:51.150]usually act in the lowest intelligence of the group.
[00:07:53.960]This wasn't really the case in Czech Republic at that time.
[00:08:00.060]It was also interesting that what happened,
[00:08:05.950]which I think happens in all transitions
[00:08:09.190]is when you want to change from one level of order
[00:08:12.250]to a higher level of order, and this I suppose
[00:08:15.930]works in management of companies as well,
[00:08:19.690]is that the pathway is never straight up.
[00:08:23.620]It's a sort of a reverse J curve rather.
[00:08:27.772]So if you are cleaning your room from one level of order
[00:08:30.769]which is to me very clear but the surrounding world
[00:08:33.659]doesn't understand my level of order,
[00:08:36.006]and if I am usually forced by an outside compulsion
[00:08:38.539]to upgrade the level of order in the room
[00:08:40.840]and if I stopped cleaning in the middle of the cleaning
[00:08:43.975]the room is messier than when we started.
[00:08:46.160]Also this hall, if you choose to repaint it from
[00:08:49.380]this beautiful whitish color
[00:08:51.690]to some color that you find superior,
[00:08:54.480]in the middle of the painting
[00:08:55.790]the room is messier and is actually useless.
[00:08:58.470]The idea is, you do your transformation,
[00:09:00.630]your transitions, as fast as possible.
[00:09:03.400]Also what we've learned in management theory
[00:09:06.830]is that you should have a fall back strategy.
[00:09:09.130]In case the transformation isn't successful
[00:09:11.320]some unexpected event happens,
[00:09:13.090]you should have a fallback strategy.
[00:09:14.690]Usually falling back to the last functional system,
[00:09:17.290]which by the way is one way how to read
[00:09:19.630]the political situation today.
[00:09:21.080]We are trying to fall back to
[00:09:22.790]the last functional political system.
[00:09:25.640]Being a little bit tired of globalization,
[00:09:27.440]we are sort of falling back on the
[00:09:29.543]idea of supremacy of a national state.
[00:09:32.020]But during the early 90s, this was exactly what we
[00:09:35.570]didn't want to do so we were deliberately burning bridges.
[00:09:40.940]There was no fall back strategy
[00:09:42.347]and this was a very deliberate idea.
[00:09:45.530]During the early 90s, when I still was a student,
[00:09:48.360]the predominant debate among the university people
[00:09:52.135]and our professors, was that there is,
[00:09:55.040]a sort of hill of resistance.
[00:09:58.055]If you are transferring from
[00:09:59.516]one level of order to another level of order,
[00:10:01.110]it doesn't go downhill, it goes, there is like
[00:10:03.630]a hill in the middle so if you are going from
[00:10:06.044]communism to capitalism, you have to give the ball
[00:10:08.956]enough of inertia, you have to sort of hit it with
[00:10:11.665]enough force so that the ball gets at least here
[00:10:15.610]just in case the stormy weather arrives,
[00:10:17.830]and we have to let go of our hands,
[00:10:19.950]the ball wouldn't roll back
[00:10:22.823]to this old functioning system.
[00:10:24.740]These two, sort of tools of logic,
[00:10:28.220]were there in advance or in advocacy of a shock therapy.
[00:10:32.520]Which of course had many critics,
[00:10:34.310]but this was the main argumentation that there has to be
[00:10:37.610]A, burning the bridges behind us,
[00:10:39.690]and B, giving the system enough force
[00:10:43.836]so that the inertia gets at least
[00:10:45.960]behind the tipping point so that if things go sour,
[00:10:49.910]we at least end up in closer to the desired location.
[00:10:55.815]Now, as for the debate that I think Petra very
[00:10:58.680]interestingly started yesterday, where is she?
[00:11:01.770]Yeah, so of course this is my big topic,
[00:11:05.060]and these are things that I've been
[00:11:06.970]thinking about for years as all of us,
[00:11:10.130]and I'd like to think a little bit about the third way.
[00:11:14.150]I think that's may be one way how to approach.
[00:11:17.130]Why didn't we develop something new?
[00:11:20.316]I think this was,
[00:11:21.220]and again I will stand corrected by,
[00:11:23.680]especially my American and Western friends,
[00:11:26.610]but I think the West was expecting that of us, little bit.
[00:11:31.847]To show us guys, Havel and others,
[00:11:34.753]you are well equipped to do this.
[00:11:37.100]You have a high level of education.
[00:11:40.170]You have a history of democracy.
[00:11:42.420]You have intellectuals,
[00:11:43.910]both let's say Vaclav Klaus and Vaclav Havel,
[00:11:46.480]who till today I would say are symbols of two ways
[00:11:51.330]or two approaches of doing it.
[00:11:53.210]I remember back in the 90s there was even a prayer
[00:11:56.850]because the patron there is some Catholics
[00:12:00.490]that we have believe in patrons of the nation
[00:12:03.854]so the patron of the Czech nation is St. Wenceslas
[00:12:07.040]and the prayer was thank you Wenceslas
[00:12:09.800]for giving us to Wenceslas.
[00:12:11.840]It's a strange name for you to pronounce, I know.
[00:12:14.750]We call it Vaclav.
[00:12:16.752]Wenceslas.
[00:12:17.914]But most Americans call it Vaclav.
[00:12:19.738]Whichever's your pick.
[00:12:21.210]The prayer was, thank you Wenceslas
[00:12:23.620]for these two Wenceslas,
[00:12:25.160]for giving us this balance,
[00:12:27.555]and this balance wasn't kept for very long.
[00:12:30.725]I think this was a little bit
[00:12:33.650]of a disappointment to the West.
[00:12:36.650]I know that the way the West was looking
[00:12:39.770]at the communist Czechoslovakia,
[00:12:41.670]from an economic point of view,
[00:12:44.304]that it was taught in the classes of comparative studies,
[00:12:48.430]and Czech Republic and other communist countries
[00:12:51.070]were looked at as a laboratory.
[00:12:54.210]Is there an alternative to capitalism,
[00:12:56.550]from which we can learn?
[00:12:58.330]It also should be remembered here
[00:13:00.300]that in 1968 when we had the anti Soviet riots,
[00:13:05.189]there were actually pro-communists riots
[00:13:07.700]in the Western parts of Europe.
[00:13:09.150]Especially in Paris and in France.
[00:13:12.040]There was this sort of misunderstanding
[00:13:14.550]and this is also why except for the Austrian school,
[00:13:18.780]there was little thought developed
[00:13:20.510]to what to do once the regime falls or crumbles down.
[00:13:23.940]In the beginning when the regime was quite successful,
[00:13:26.850]there was even some quite strong voices
[00:13:29.710]from Western economists,
[00:13:31.870]that were going thumbs up to the system,
[00:13:36.660]and there really was no cookbook.
[00:13:39.810]We didn't know what to do.
[00:13:42.426]Where do you go to buy capitalism?
[00:13:46.670]What sort of things do you add first?
[00:13:49.250]There is a famous poem by Seamus Heaney, the Irish poet,
[00:13:52.630]called Instant Fish,
[00:13:54.150]and don't worry it's not long.
[00:13:55.390]It just only has one line.
[00:13:57.472]It's called add water and they swim.
[00:13:59.660]This is sort of what we thought, might work.
[00:14:04.220]Just add water.
[00:14:05.890]Say the word abracadabra capitalism,
[00:14:09.631]and it's just somehow the fish start swimming.
[00:14:13.868]The third way didn't really materialize.
[00:14:18.030]Not because of lack of will,
[00:14:22.295]but it was really an intellectual lack,
[00:14:25.750]which I think we are lacking still today, quite frankly.
[00:14:28.700]If you look at Greece,
[00:14:31.110]six years ago when Sarisa won
[00:14:33.600]the quite unexpected elections
[00:14:36.020]that has really very little to do
[00:14:38.081]with the economic crisis.
[00:14:40.236]They were rather constitutional crises,
[00:14:42.790]where quite strong power was given to the left,
[00:14:47.148]with Varoufakis and others.
[00:14:49.300]I'm quite sure you have been following the situation,
[00:14:52.020]and everybody said okay,
[00:14:54.360]why don't you go ahead and try your hand?
[00:14:56.400]Of course to be fair,
[00:14:57.750]it was already a shipwreck situation for most parts,
[00:15:01.040]and now go and try your steering
[00:15:03.760]at a ship wrecked situation,
[00:15:07.756]where you are already at an impasse.
[00:15:10.260]But even there, the left, or let's even say,
[00:15:13.580]the communist left,
[00:15:14.440]because that's how I think Sarisa would identify themselves.
[00:15:18.020]They were unable to come up with a solution
[00:15:22.220]that would be in any way credible to their own voters,
[00:15:26.420]and to the international community.
[00:15:29.740]There was actually a third way, in Havelian thinking.
[00:15:34.770]There was a third way in democratic thinking.
[00:15:38.028]It was this non partisan democracy,
[00:15:41.070]which I will come back to later,
[00:15:42.620]because I think this idea can be revisited
[00:15:45.290]on a global scale, on a planetary scale,
[00:15:48.535]I think we could have non partisan democracy,
[00:15:52.076]because democracy has always been linked with a nation state
[00:15:55.040]but back then the idea didn't last for long.
[00:15:59.790]When it comes to economics,
[00:16:01.200]there actually was a very minor school of thought,
[00:16:04.449]that mainly developed in Northern former Yugoslavia,
[00:16:10.572]what we know today as Slovenia.
[00:16:13.260]It was something that was called then, back in the day,
[00:16:17.990]democratic capitalism,
[00:16:20.129]and the main idea was that the owners,
[00:16:21.390]I'm sorry, the workers of the company
[00:16:23.360]become the owners of the companies.
[00:16:26.020]In Czech Republic, we adopted the infamous
[00:16:29.870]voucher privatization, which was.
[00:16:36.810]The idea was that the government
[00:16:39.850]gets rid of its property,
[00:16:41.760]but who do you sell it to,
[00:16:43.200]when nobody has money?
[00:16:45.010]The only people who had money.
[00:16:47.488]You can't auction it really,
[00:16:49.335]because you can't auction, let's take,
[00:16:51.100]my favorite example of beer.
[00:16:56.940]You can't really sell the whole brewery
[00:16:59.797]to a nation of have nothings.
[00:17:02.860]98% of Czech GDP was actually government owned.
[00:17:06.540]We were more Catholic than the pope so to speak.
[00:17:10.519]We were the most communist country
[00:17:17.250]of all communist countries,
[00:17:19.040]or real socialist countries.
[00:17:21.280]The only people who had money,
[00:17:23.339]were people who were either stealing from the regime
[00:17:24.900]or people who were political apparatchiks,
[00:17:27.940]or foreigners, and there was very little will to do
[00:17:30.830]the path of Hungary which was quite readily
[00:17:34.360]sell capital to capitalists.
[00:17:36.660]It doesn't really matter whether
[00:17:38.433]they're Greek, Chinese, or Indian.
[00:17:39.550]By the way, who owns the majority share in Coca Cola?
[00:17:42.270]Who knows today, and who cares?
[00:17:45.370]It's not a big deal.
[00:17:46.690]It's not actually an American company,
[00:17:49.023]although it looks like it had
[00:17:50.657]an American management for a long time.
[00:17:52.140]Nobody cares, but back there in the day,
[00:17:54.564]it somehow for reasons
[00:17:55.750]that may be more understandable today
[00:17:57.450]than they were 10 years ago, mattered.
[00:18:00.880]The idea was that we create artificial money,
[00:18:04.000]artificial markets by not giving money out to people,
[00:18:06.690]but giving vouchers.
[00:18:07.720]It was actually a very communist idea,
[00:18:10.310]that everybody should have
[00:18:13.100]exactly the same amount of money, or vouchers.
[00:18:17.200]Everybody who was 18 plus,
[00:18:19.010]had thousand points, vouchers,
[00:18:22.250]that you could invest into any company,
[00:18:24.740]and then there were three rounds of solicitations
[00:18:26.710]and at the end of the day you ended up
[00:18:28.450]with 2% of Pilsner,
[00:18:30.740]and the voucher privatization
[00:18:32.450]wasn't such a bad idea, looking back in these days,
[00:18:36.270]but it had nowhere to land.
[00:18:37.750]We didn't have capital markets.
[00:18:39.830]The idea of voucher privatization,
[00:18:41.750]was couple fold,
[00:18:43.524]and one of the biggest advantages
[00:18:45.294]was that it would create capital markets
[00:18:47.375]out of thin air.
[00:18:48.780]In continental Europe,
[00:18:50.756]we'd rather rely on banking,
[00:18:51.940]when you need to finance a firm.
[00:18:53.400]When an American company,
[00:18:56.271]or an Anglo American company,
[00:18:57.660]rather relies on capital markets for its financing,
[00:19:00.480]traditionally or stereotypically, if you will,
[00:19:03.340]while a continental German type companies
[00:19:06.500]rather go to, and this is also the case in Japan,
[00:19:09.460]they rather finance themselves from banks.
[00:19:13.130]It wasn't even in our tradition
[00:19:14.450]to have very strong capital markets,
[00:19:16.370]but the capital markets were not ready.
[00:19:19.090]For those of you who study economics
[00:19:20.810]and are interested in
[00:19:23.220]whether spontaneous markets work or not,
[00:19:25.460]this was actually a laboratory.
[00:19:27.130]Czech Republic alongside with our other nations,
[00:19:31.959]has become a laboratory.
[00:19:33.840]You guys had what, 200 years to develop
[00:19:36.130]your rules of corporate governance.
[00:19:38.760]Back in the day it was basically a share of rules.
[00:19:42.925]That's the first corporate governance rules, if you will,
[00:19:45.453]and then as time went by you had case after case,
[00:19:47.510]so you fine tuned your rules,
[00:19:49.950]until you came up with what you have today
[00:19:52.290]and God knows as well as you do,
[00:19:54.210]that it still needs a little bit of fine tuning
[00:19:55.930]and we're still not sure
[00:19:57.320]whether we have the system functioning
[00:19:59.210]because one of the nice things about this system
[00:20:00.930]is you can't really tell whether it functions or not.
[00:20:04.416]It's a little bit, and I'll come back to this,
[00:20:07.450]in the year 2008, it was clear that
[00:20:11.970]the whole system of checks and balances in economics,
[00:20:16.077]and this might be also true of politics and democracy,
[00:20:19.160]I'll come back to that later,
[00:20:20.610]but the whole idea was that,
[00:20:22.620]the system of checks and balances,
[00:20:25.100]and all sorts of very carefully weighed interest rates
[00:20:29.320]and securities and credit default swaps,
[00:20:32.430]to make sure that you're very sure
[00:20:34.650]and the whole system look very certain,
[00:20:37.500]but the certainty, the uncertainty sorry,
[00:20:40.080]moved from a business person, vis a vis a company,
[00:20:45.210]there was almost no uncertainty in owning risk,
[00:20:48.340]because you could insure that.
[00:20:49.900]The uncertainty moved from this,
[00:20:53.350]to the system itself.
[00:20:55.460]Resulting in creation of a system,
[00:20:57.700]which a little bit reminds one of an umbrella,
[00:21:02.800]that works always and flawlessly,
[00:21:04.710]and it's a great umbrella,
[00:21:05.620]and it'll protect you from everything,
[00:21:07.726]except for when it rains.
[00:21:09.506]You can also think of a car,
[00:21:11.555]with a air bag system that works flawlessly
[00:21:15.691]with one single exception.
[00:21:19.768]You guessed it, car crashes.
[00:21:22.440]Let me stop here telling you about
[00:21:28.100]how privatization works.
[00:21:29.410]Let me just finish by an example,
[00:21:31.420]which I think is precious even for today.
[00:21:33.950]We created a market,
[00:21:34.930]but we didn't create any landing zone.
[00:21:36.620]We didn't create regulation,
[00:21:38.883]because the idea from the Austrian school
[00:21:39.920]which is tending to be very liberal,
[00:21:42.310]or even libertarian,
[00:21:44.130]was the market will settle its rule itself.
[00:21:47.790]I remembered having this debate with Vaclav Klaus,
[00:21:50.849]and he said when you play tennis,
[00:21:52.750]you don't first start studying the rules.
[00:21:54.860]You start playing tennis,
[00:21:56.259]and then you fiddle around rules later as you go,
[00:21:57.640]and I as a young student remember
[00:21:59.120]raising my hand and saying what about chess?
[00:22:02.220]You also start moving stones around
[00:22:04.355]before there is actually a chess board.
[00:22:10.396]Depends on what game you pick as your example.
[00:22:15.537]Let me say that the answer to this question
[00:22:19.370]was a little bit hard to say.
[00:22:21.620]Another experiment which will test
[00:22:25.040]whether we can organize ourselves continuously
[00:22:27.355]without governments, is actually the internet.
[00:22:30.010]The internet could be a good case study.
[00:22:33.130]I would like to see a thesis written on that.
[00:22:37.690]The government, the internet,
[00:22:38.810]that is actually taxless.
[00:22:40.220]It is actually government less.
[00:22:42.545]The rules on internet are sort of optional.
[00:22:44.910]We have rules, but everybody can work around them quite well
[00:22:49.430]and we do have really good examples
[00:22:51.370]of the internet actually serving greatly
[00:22:53.290]and you know that if you have
[00:22:54.123]a small little problem with the back of your car,
[00:22:56.610]that is 1968 special edition,
[00:22:59.360]you go on YouTube, you press two clicks,
[00:23:01.920]and there's going to be 10 videos
[00:23:03.980]on how to fix your exhaust pipe.
[00:23:06.110]There's actually good examples of altruism,
[00:23:08.620]and people are not being really paid for that,
[00:23:10.822]but there is also the dark side.
[00:23:12.660]The dark net.
[00:23:14.524]The it, the psychological shadow of internet.
[00:23:19.010]There's even a whole new personality
[00:23:20.880]being born as we speak today.
[00:23:22.940]Would you call internet an organization or an organism?
[00:23:26.820]I'd say that it's rather resembles an organism
[00:23:32.188]rather than an organization.
[00:23:36.508]The Czech capital markets almost bankrupted.
[00:23:41.330]Not one fund but the whole of idea of markets
[00:23:44.650]because we started tunneling.
[00:23:46.350]It's also interesting to look in terms of numbers.
[00:23:49.430]In the beginning, the numbers looked really good,
[00:23:52.737]because people in totalitarian regimes
[00:23:55.970]are very much more following the rules than freer regimes
[00:24:00.120]because the punishments
[00:24:03.532]in totalitarian regimes are much more severe
[00:24:07.120]and the judgment takes really shortly.
[00:24:11.260]We just had Easter and it was only in my 41 years of age
[00:24:14.760]that I realized that Jesus was sentenced
[00:24:16.680]and crucified in 24 hours.
[00:24:19.120]Imagine the paperwork that it would take today,
[00:24:22.260]but then it was, Thursday, then they caught him,
[00:24:27.400]and the next day around that time,
[00:24:28.970]he was already crucified.
[00:24:30.560]He had two or three courts to go to.
[00:24:33.750]The Jewish court pilot and Herod's,
[00:24:37.102]and somehow they managed to do that in 24 hours
[00:24:38.940]and it was done.
[00:24:40.300]There are actually advantages to slow bureaucracy,
[00:24:42.850]from that example.
[00:24:46.071]The brutal question which I want to come to
[00:24:51.170]is would communism, would it have ever fallen
[00:24:56.500]if it would have given us 7% of GDP growth annually?
[00:25:03.950]That's the Chinese question, and not anymore,
[00:25:07.180]but a couple of years back,
[00:25:09.198]I got this from very many business people
[00:25:10.893]all over Europe and even in America,
[00:25:12.720]when I was talking about this,
[00:25:15.790]the question was, shouldn't we learn from the Chinese?
[00:25:18.230]Look at their rates of growth.
[00:25:19.990]It's almost double digit, and we're so slow.
[00:25:23.450]The famous example of the airport in Heathrow,
[00:25:28.023]was the second or third terminal,
[00:25:30.250]when they were starting to build that a terminal in London.
[00:25:32.870]Before they even got the paperwork done,
[00:25:37.060]the airport in Shanghai,
[00:25:40.610]which was thought of at pretty much the same time,
[00:25:43.490]the idea was born pretty much the same time,
[00:25:46.628]planes were already landing,
[00:25:48.450]and there were water fountains
[00:25:50.820]in Shanghai already functioning,
[00:25:54.286]and our English friends didn't
[00:25:55.843]even get through the paperwork,
[00:25:57.050]because its quite clear.
[00:25:58.320]A totalitarian wakes up one morning
[00:26:00.500]and says okay, we need an airport,
[00:26:02.060]and in the afternoon just like in the case of Jesus,
[00:26:03.950]there is actually already bulldozers,
[00:26:06.350]bulldozering the villages away and what not.
[00:26:08.690]Nobody has a way to object to that.
[00:26:11.130]There was certain fascination of our bureaucratic
[00:26:15.890]and democratic and caring
[00:26:18.560]and all these sort of rules of the greens and stuff.
[00:26:23.470]The real question is, what caused the fall of 1989?
[00:26:29.590]Was it economic reasons, or was it political reason?
[00:26:32.630]Was it rather freedom?
[00:26:33.960]Would we be ready to sacrifice
[00:26:36.010]certain amount of freedom like they do in China?
[00:26:39.160]The way the system functions there is,
[00:26:41.230]okay, we'll give you growth,
[00:26:42.460]and you shut up about the political executions
[00:26:44.620]that we still do till today in our stadiums,
[00:26:47.540]which basically sacrifice all the political prisoners
[00:26:50.460]by shooting them,
[00:26:52.260]but you will get a percent of GDP growth,
[00:26:54.270]and China seems to be pretty okay with that.
[00:27:02.564]Hard to say what was the main motive of 1989.
[00:27:07.050]Was it an economic motivation to be like the West
[00:27:12.430]like we heard today, the question,
[00:27:15.200]or was it rather a struggle for freedom?
[00:27:18.290]I am firmly convinced that it was the second,
[00:27:21.750]but then again, I am, as I'm learning again and again,
[00:27:25.050]not the majority of even my own country.
[00:27:34.120]The question of whether we can compare
[00:27:36.870]capitalism and communism which was raised
[00:27:38.690]I think quite bravely and quite well yesterday,
[00:27:42.060]and always in my lectures I,
[00:27:43.580]because I compare European Union
[00:27:45.040]with United States of America,
[00:27:46.960]and I say I am fully aware that,
[00:27:49.310]EU is not the same like United States of America.
[00:27:53.220]That's why I can compare it.
[00:27:56.708]People say you can't compare oranges with apples.
[00:28:00.279]Apples and oranges,
[00:28:01.614]and actually that's the only thing that you can compare.
[00:28:03.650]Oranges are orange, and apples are green and red.
[00:28:06.270]I just did.
[00:28:07.140]I just compared apples and oranges,
[00:28:08.690]and in fact that's what you do most of the time,
[00:28:10.840]and then always somebody asks a question,
[00:28:12.430]oh, but you can't really compare,
[00:28:13.590]because America's not Europe.
[00:28:15.577]I said yep, that's exactly why I'm comparing it.
[00:28:17.140]You can't compare the same.
[00:28:18.640]Nobody compares one with one.
[00:28:21.090]You compare one with two.
[00:28:22.710]Or one with half.
[00:28:24.060]One weighs double the size of half,
[00:28:25.640]and one is half of two, but one is not two,
[00:28:28.340]just because when you're comparing something
[00:28:29.950]you are not saying that it's the same, by no means.
[00:28:33.890]Let me ask a second provocative question.
[00:28:37.240]One way, how to look on our system,
[00:28:39.210]which I would call liberal democracy,
[00:28:41.017]for lack of a better word,
[00:28:42.900]because it's not liberal,
[00:28:44.302]is that it's actually somewhat of a miracle
[00:28:46.274]if you think about it historically,
[00:28:49.010]that from a clash of two totalitarian regimes,
[00:28:52.590]which today we call extreme right, Nazism or fascism,
[00:28:56.800]with extreme left which is communism,
[00:28:59.566]from a clash of those two systems,
[00:29:01.900]the remaining particle was liberal democracy.
[00:29:06.370]It's the large hydron collider.
[00:29:08.870]Two great systems were clashed together,
[00:29:11.990]and the remaining particle
[00:29:13.610]was quite surprisingly not totalitarian communism,
[00:29:17.530]and not totalitarian Nazism either.
[00:29:19.290]It was actually a sunny side hippyish,
[00:29:21.810]almost meek caring liberal democracy
[00:29:27.527]and the irony about liberal democracy is,
[00:29:29.680]and this is something that I find extremely interesting,
[00:29:31.700]is that we won over both of these systems,
[00:29:34.990]in their own arms of choice.
[00:29:39.210]We won over Nazism, with their weapon of choice,
[00:29:43.240]which was brute force.
[00:29:45.945]We actually beat them in fist fight,
[00:29:50.947]because that was their weapon of choice.
[00:29:54.306]Communism was beaten in terms of ideology.
[00:29:57.600]If you reread some parts of Marx,
[00:29:59.812]which I don't recommend.
[00:30:01.740]It's just enough to read The Communist Manifesto
[00:30:03.780]if you are so inclined.
[00:30:05.410]For study reasons it's a very short.
[00:30:07.250]It's six, seven pages, of a manifesto,
[00:30:11.789]and in there at the end of it,
[00:30:13.900]there is eight or ten dreams that Marx and Engels have
[00:30:20.070]about what they want to do, what they want to achieve,
[00:30:22.620]and you take a pen and you can actually crisscross it.
[00:30:25.749]General Insurance, yeah we've got that in Europe,
[00:30:29.431]and here now too, I believe still.
[00:30:32.162]No, not anymore.
[00:30:33.920]But in Europe we got that.
[00:30:36.344]Free education for everybody.
[00:30:38.977]Pretty much.
[00:30:40.120]In Europe all the way to University level.
[00:30:42.460]Here all the way to some degree of education.
[00:30:46.800]You go one requirement after another,
[00:30:49.890]and we in Europe can say yeah, yeah, yeah, yeah.
[00:30:54.274]We got that.
[00:30:55.670]Without the revolution that Marx was saying,
[00:30:58.380]because the basic idea of Marxism was
[00:31:00.994]that capitalism will never be nice.
[00:31:06.420]Easy example is that a capitalist
[00:31:10.900]will always try to take all the profit from its workers.
[00:31:15.120]If a capitalist decides to give increased wages
[00:31:20.064]just because he or she is nice.
[00:31:22.630]Let's say okay I made this much profit,
[00:31:25.310]I will increase your wages by 20%.
[00:31:27.520]That person will go bankrupt next year
[00:31:31.213]because he will or she will
[00:31:32.813]not have enough return over capital,
[00:31:33.860]not enough money to reinvest.
[00:31:35.110]Et cetera, et cetera, et cetera.
[00:31:37.421]This logic Marx used to say it has to be done by force.
[00:31:40.480]If one of them decides to be nice,
[00:31:42.900]the others will not follow,
[00:31:44.430]and this will lead to the collapse,
[00:31:47.300]so it's even a vicious circle.
[00:31:48.534]Not even beneficial circle like we know in business cycles,
[00:31:52.920]but a vicious circle.
[00:31:55.130]There must be a revolution.
[00:31:56.580]It is not natural for the system,
[00:31:59.530]for the spontaneous system of capitalism
[00:32:01.560]to produce these eight or ten outcomes
[00:32:04.262]that we want to do,
[00:32:06.550]and we want to achieve that by revolution.
[00:32:08.870]Today we are living much better off,
[00:32:12.102]than any Marx even dreamed.
[00:32:16.582]Why am I saying this?
[00:32:18.395]Nazism we managed to beat
[00:32:20.240]in their own weapon of choice, which was brute force.
[00:32:22.740]Communism, our system of liberal democracy
[00:32:25.210]managed to beat in their own weapon of choice,
[00:32:27.630]which was welfare and prosperity.
[00:32:31.510]It's also challenging to,
[00:32:35.067]when you compare these two systems,
[00:32:38.900]one of the most clearest ways of comparison for me,
[00:32:41.990]is that capitalism does allow communist experiments.
[00:32:45.590]If you want to take your friends,
[00:32:47.856]and you want to start a farm out there
[00:32:49.264]and not use money, not use electricity,
[00:32:50.160]not use social stratification,
[00:32:51.860]you're really welcome to do that,
[00:32:53.750]and everybody will applaud you
[00:32:55.610]and there will be articles and movies
[00:32:56.980]and documents written about you,
[00:32:58.200]and nobody will really go around
[00:32:59.460]shooting you or putting you to prison.
[00:33:02.118]The other thing on the contrary,
[00:33:04.310]was not allowed, and was not welcome.
[00:33:05.770]You could not have a capitalist experiment
[00:33:07.570]in the middle of communism.
[00:33:09.360]These systems are comparable,
[00:33:11.720]but the comparison of course,
[00:33:13.780]shows quite quite quite quite clearly.
[00:33:18.924]Now, also one way of looking at this,
[00:33:25.850]is the crises that we had during the communist time.
[00:33:30.570]That's another topic, I would say.
[00:33:32.730]We had crises of communism,
[00:33:34.900]and we know in economics,
[00:33:36.080]we divide everything on demand and supply.
[00:33:40.970]During communism we had crises of supply.
[00:33:44.581]We wanted razor blades.
[00:33:50.000]The demand was fine.
[00:33:51.750]It was ready.
[00:33:52.830]There was hunger,
[00:33:54.350]but there were no razor blades.
[00:33:55.510]The supply side simply was collapsing all the time
[00:33:58.440]because the whole idea of communism was,
[00:34:01.737]it was a monopolistic system.
[00:34:03.320]Why monopolistic?
[00:34:04.610]Because the ideas of Marx was that
[00:34:06.600]there is so much waste in competition.
[00:34:09.510]So much energy put in neutral fighting,
[00:34:12.310]that it would be better if we all do this.
[00:34:14.409]If there's actually one company
[00:34:15.710]that produces razor blades,
[00:34:17.010]because we pretty much know
[00:34:18.100]how many razor blades we need,
[00:34:20.201]so we all put that to those many companies.
[00:34:22.110]We save a lot of money on advertisement.
[00:34:24.030]We save a lot of money,
[00:34:25.694]and that will be huge economics of scale,
[00:34:29.554]which means that if you're making one car,
[00:34:31.850]in the factory that car is gonna cost
[00:34:33.699]you billions of dollars.
[00:34:35.580]If you make hundred cars,
[00:34:36.969]it's gonna be much cheaper.
[00:34:38.150]If that same company make million cars,
[00:34:39.980]the average cost of a single car
[00:34:42.040]goes dramatically down.
[00:34:43.880]The larger your company is,
[00:34:45.370]the cheaper the average price of the car is.
[00:34:48.989]That's why communism was monopolizing companies.
[00:34:53.360]The basic idea was that this clash,
[00:34:55.989]this fighting, this competing,
[00:34:57.880]is a waste of energy.
[00:34:59.410]We should put all our energy
[00:35:00.880]into making cars or razor blades.
[00:35:02.610]We shouldn't fight each other.
[00:35:03.650]We should be nice.
[00:35:04.810]In theory, that's how it sounded.
[00:35:06.730]That's the ideology, the argumentation,
[00:35:08.881]behind monopolization.
[00:35:11.305]But this was faltering all the time.
[00:35:17.810]You remember this much better than I,
[00:35:19.330]but I still remember there was a summer
[00:35:21.370]where we didn't have sugar.
[00:35:23.320]It was really random and unpredictable.
[00:35:24.970]That was the whole trick,
[00:35:25.803]that it was unpredictable,
[00:35:28.638]and as a Boy Scout,
[00:35:29.670]we were running around town buying sugar,
[00:35:32.300]and that was the task,
[00:35:34.930]and there were no razor blades,
[00:35:36.310]and there also was no toilet paper,
[00:35:38.240]and I'm quite sure you would be able
[00:35:39.600]to come up with more better examples.
[00:35:42.010]I remember though that in the time
[00:35:43.630]where we didn't have toilet paper,
[00:35:45.770]my parents were saying that
[00:35:47.347]that was the only time that newspapers
[00:35:48.470]were actually useful.
[00:35:53.710]To give an example from more common experiences,
[00:35:59.990]people were hungry, the demand was there,
[00:36:02.500]but there was nothing to eat.
[00:36:04.470]The table was, so to speak, empty.
[00:36:07.090]That was a typical situation, of a communist country.
[00:36:12.435]On the contrary, the crises that we see
[00:36:15.891]in our day, in our time,
[00:36:18.120]in capitalist or liberal democracies,
[00:36:20.810]are crises of demand.
[00:36:23.000]The problem is exactly opposite.
[00:36:25.630]There are enough cars.
[00:36:27.010]There are enough razor blades.
[00:36:28.420]You can get out of here and in five minutes.
[00:36:30.830]I'll bet you'll be able to get,
[00:36:32.400]maybe 10, maybe seven different types
[00:36:34.950]of razor blades according to your preference of sharpness.
[00:36:39.570]You can even get five of them in one go.
[00:36:42.380]It's crazy.
[00:36:44.442]The amount of choice is,
[00:36:46.793]you can make jokes out of that.
[00:36:49.850]The supply is fine.
[00:36:51.280]We have more than we want, but we don't want.
[00:36:54.958]It's not the problem to produce,
[00:36:56.320]a certain number of cars.
[00:36:58.200]The problem is to sell them.
[00:37:00.340]Here today, we are in a opposite problem.
[00:37:05.590]The table is full of food,
[00:37:07.690]but we're not hungry.
[00:37:09.580]I don't know if anybody,
[00:37:10.580]if you saw the disturbing French movie.
[00:37:12.850]Sorry, that's redundance.
[00:37:15.240]If you saw the French movie, La Grande Bouffe.
[00:37:22.460]Anybody?
[00:37:23.980]There you go.
[00:37:25.753]In Czech.
[00:37:27.950]There's a movie of gluttonous French.
[00:37:31.800]Again, maybe redundance.
[00:37:34.290]Sorry for that.
[00:37:36.100]My cousin's French, so I can make fun of that.
[00:37:40.238]They decided that they will die by overeating,
[00:37:43.650]and I remember one very disturbing scene in the movie,
[00:37:47.600]is one man was completely full and couldn't eat anymore
[00:37:50.500]and they had these delicacies,
[00:37:53.410]and the other comes to him and say,
[00:37:55.342]come eat they're really nice
[00:37:56.633]and he starts praising the quality of the food.
[00:37:58.841]How it was picked during the full moon and what not.
[00:38:01.160]You hear that today a lot in restaurants
[00:38:02.840]and the guy said no really I can't,
[00:38:04.643]and then this other guy
[00:38:05.945]starts telling him about poor people in India
[00:38:08.686]who are dying from hunger,
[00:38:11.118]and we were sort of importing their hunger psychologically
[00:38:17.700]to continue our gluttony,
[00:38:19.843]and I don't know if your parents did that to you.
[00:38:22.950]Yeah, they did.
[00:38:23.930]Same here.
[00:38:25.336]My grandmother.
[00:38:26.275]This was really brutal.
[00:38:27.108]My grandmother, bless her heart,
[00:38:28.630]she would open a book of concentration camp kids
[00:38:31.875]and put that in front of me and say come on look.
[00:38:34.910]You should be grateful.
[00:38:36.110]You should eat more,
[00:38:38.830]because, use their hunger for your gluttony.
[00:38:43.370]Which is as perverse an image as you can imagine,
[00:38:46.930]but from your head nods, head nods?
[00:38:50.090]Nodding heads.
[00:38:51.200]Not have nots, but head nods,
[00:38:54.099]I understand that this is a common experience.
[00:38:56.489]I would say this is what's happening
[00:39:00.777]in terms of the crises of capitalism
[00:39:04.517]and the crises of communism.
[00:39:08.160]Now one other way to look at the situation today
[00:39:13.470]which I think is quite difficult to read,
[00:39:15.290]but this is the task of us readers
[00:39:18.750]to read the situation around us,
[00:39:20.740]is that what happened in 1989.
[00:39:23.930]There was a very famous book called
[00:39:26.070]The End of History,
[00:39:27.200]which I think as a little bit maybe over criticized
[00:39:30.174]and it does still today deserve some respect,
[00:39:33.480]if for nothing else for being still quoted,
[00:39:36.310]and the idea was that the great ideological crash
[00:39:39.380]between communism and capitalism was won.
[00:39:41.710]There is no single happy communist country today,
[00:39:45.075]except for North Korea,
[00:39:47.027]which by the way, I think,
[00:39:51.294]if you want a country where
[00:39:53.250]people love their politicians, go to North Korea.
[00:39:58.220]I think the tears when the older one died,
[00:40:01.100]those are genuine tears.
[00:40:03.370]People really really really loved him,
[00:40:05.993]because he was a demi-God.
[00:40:08.890]Virgin born by the way.
[00:40:12.410]He's a little bit like Chuck Norris.
[00:40:16.990]He was born in a hut that he himself built
[00:40:19.490]by his bare hands,
[00:40:22.370]but people really really really love their leaders
[00:40:25.900]in totalitarian countries.
[00:40:27.620]In free liberal countries,
[00:40:29.700]they usually despise their own leaders,
[00:40:31.420]which is interesting,
[00:40:33.120]because there has never been a time
[00:40:39.500]where you could voice your opinion so audibly
[00:40:41.940]as you do today.
[00:40:43.570]Yet, people have a genuine feeling
[00:40:45.100]of not being able to speak.
[00:40:47.200]There is never a time where politicians
[00:40:49.010]were so lip reading, the wish of their own people,
[00:40:52.920]as today.
[00:40:55.347]Read through the history of Western civilization.
[00:40:58.420]The leaders usually didn't give a care
[00:41:00.460]about what the people are saying or what the people want,
[00:41:03.955]because that's why you are the boss.
[00:41:05.240]The feudal leaders, the kings,
[00:41:07.080]exceptionally paid attention.
[00:41:09.460]Those were the good kings like Charles IV
[00:41:11.920]but otherwise it was not your duty to do
[00:41:14.460]to care about whether your people are happy or not.
[00:41:16.730]Your duty was to make your country large
[00:41:18.500]or to make your family prosperous.
[00:41:20.370]Et cetera, et cetera.
[00:41:21.850]There was never a government,
[00:41:23.470]that would be so lip reading the whims of its population,
[00:41:29.320]Even today, we have populism.
[00:41:31.450]We have a special name for that.
[00:41:32.640]That's a new feature.
[00:41:34.268]Populism is only possible in democracy, by the way.
[00:41:38.050]As we have today, yet people feel
[00:41:40.900]that their leaders are detached,
[00:41:42.780]far, foreign, distant, unapproachable,
[00:41:44.980]and going their own path.
[00:41:47.280]There has never been a time where
[00:41:48.480]transparency was so cheap and easy
[00:41:50.260]and actually quite readily available.
[00:41:52.680]Thanks to internet and to all the NGOs, as today,
[00:41:56.100]and yet few people feel, they can't see through.
[00:42:00.260]Even I can't read the system anymore,
[00:42:02.830]and I'm paid to do that, or sort of paid.
[00:42:06.760]I get bed and lodging for that,
[00:42:08.730]which amounts to being paid.
[00:42:13.127]There was another example.
[00:42:14.640]There's never been a time
[00:42:17.606]where you really literally
[00:42:19.900]could elect your leaders
[00:42:22.930]and give them your voice,
[00:42:24.260]and yet there's also never been a time
[00:42:26.550]where so massive demonstrations.
[00:42:28.840]Which leads me to a second point.
[00:42:30.940]What we manage to do in this great idea
[00:42:33.300]of the last man and The End of History,
[00:42:36.680]it seems to me when it comes to liberal
[00:42:40.110]democratic capitalism,
[00:42:43.207]or free market democracy,
[00:42:44.970]there are two things in that system.
[00:42:49.050]Capitalism or social capitalism.
[00:42:50.770]Whatever you wanna call it,
[00:42:52.350]and democracy.
[00:42:54.270]Two systems, which are actually
[00:42:55.620]more independent than we thought.
[00:42:57.820]I remember when I was a student your age,
[00:43:00.260]they were always teaching us,
[00:43:01.580]these two things go hand in hand, like love and marriage.
[00:43:08.650]This marital sex.
[00:43:09.640]I really enjoy that.
[00:43:14.780]It's also the hardest.
[00:43:18.800]These two things.
[00:43:19.900]Market democracy.
[00:43:21.470]Sorry, market capitalism, and democracy,
[00:43:24.710]are more independent than we thought,
[00:43:26.960]and what we managed to do since 1989,
[00:43:30.100]is I think we managed to export capitalism really well.
[00:43:33.700]Pretty much everywhere,
[00:43:35.990]but export of democracy not so good,
[00:43:40.250]and this is of course elicit question.
[00:43:43.530]I just leave that to disturb your
[00:43:45.570]falling asleep process.
[00:43:47.840]If you could choose,
[00:43:49.350]out of these two systems,
[00:43:50.580]which one would you export rather?
[00:43:53.620]Would it be democracy and freedom of expression,
[00:43:56.600]freedom to travel, tolerance.
[00:43:58.330]Et cetera et cetera.
[00:43:59.868]Being able to be free.
[00:44:02.160]Or being able to be rich?
[00:44:04.780]Would you rather export democracy?
[00:44:06.440]Would you rather, if you had a magic wand,
[00:44:09.550]and you could have one wish fulfilled,
[00:44:11.380]would it rather be a democratization of the world,
[00:44:14.740]or would it rather be a capitalization of the world,
[00:44:18.230]and again I leave that question burning I hope
[00:44:21.160]as a splinter in your head,
[00:44:23.020]because that in fact is the role of intellectuals
[00:44:26.450]is to put a splinter in your head.
[00:44:28.230]I also think this is the role of art.
[00:44:29.880]Not to make things more beautiful or more ugly,
[00:44:32.270]but to put a splinter in your head.
[00:44:35.350]That painting.
[00:44:37.192]Why did I love or hate?
[00:44:41.587]What you see is again,
[00:44:43.900]in Arabic countries with Arabic spring,
[00:44:46.540]whether it was a disappointment or not
[00:44:48.480]is a good question to ask.
[00:44:51.200]In my understanding, it majorly was a disappointment,
[00:44:54.440]but again I'm not trying to push that on you.
[00:44:57.960]We've managed to export.
[00:44:59.340]Capitalism managed to export itself to Russia,
[00:45:01.758]and to Africa and to Latin America.
[00:45:05.340]Democracy not so much.
[00:45:07.580]I would even claim that Czech Republic
[00:45:09.220]alongside with our neighbors,
[00:45:10.430]let's call that Central and Eastern Europe,
[00:45:12.660]is about the only region where the export
[00:45:15.280]or re export of democracy actually went reasonably well.
[00:45:20.420]We are members of European Union.
[00:45:22.930]Some of the countries are even using Euro as their currency
[00:45:25.430]and we are sort of legitimate members of the debate,
[00:45:29.681]as long as we enjoy it.
[00:45:35.170]In terms of capitalism,
[00:45:37.170]we westernized the east,
[00:45:40.240]but in terms of democracy,
[00:45:42.040]I'd say west got easternized.
[00:45:46.350]We now in my country, and in other countries,
[00:45:50.650]understand democracy rather as a means
[00:45:53.860]of getting to power,
[00:45:56.040]rather than a means of steering the country.
[00:45:58.520]We don't understand democracy
[00:45:59.990]according to what I see majority vote.
[00:46:02.430]We don't understand democracy
[00:46:03.590]as the process in which the best ideas are chosen,
[00:46:06.520]and your opponents are appreciated
[00:46:08.140]because it's written also somewhere in the bible,
[00:46:11.665]in the Old testament in the book of Proverbs actually,
[00:46:14.790]that iron sharpens iron.
[00:46:16.250]This is I think exactly.
[00:46:17.440]Iron is not sharpened by wax or by clay.
[00:46:21.120]You need iron to sharpen iron.
[00:46:22.960]You need somebody sharp to sharpen you
[00:46:25.440]and that's to me, the whole idea of democracy.
[00:46:28.170]Iron sharpens iron,
[00:46:29.140]and thank you for correcting me,
[00:46:30.380]and it's important,
[00:46:31.790]especially in humanities,
[00:46:33.370]where we don't have a laboratory.
[00:46:35.632]When we don't have reality,
[00:46:37.114]to slap us back into our faces and correct our theories.
[00:46:39.010]We don't have that.
[00:46:39.843]We have to talk.
[00:46:40.676]We have to talk a lot,
[00:46:42.620]because I'm allowing you to
[00:46:43.770]pick the bad splinters in my head
[00:46:46.050]and to correct my opinion,
[00:46:47.150]and if you do so I will love you
[00:46:49.210]forever and ever and ever,
[00:46:50.380]because you've served me.
[00:46:51.830]You've corrected me.
[00:46:53.500]You've made my view better.
[00:46:54.510]You took a splinter,
[00:46:58.225]or a whole log out of my eyes.
[00:47:02.748]It would be little bit,
[00:47:04.210]and I hope what I'm gonna say now
[00:47:06.860]is not in any way insulting,
[00:47:08.300]but it's just that democracy is the fashion today.
[00:47:12.330]If it be 200 years ago, those would be warlords,
[00:47:15.790]because that's how you got to power 200 years back,
[00:47:18.510]but today we don't do that anymore,
[00:47:20.740]so it's rather democracy and market manipulation.
[00:47:25.780]Whatever weapons are allowed we're gonna use,
[00:47:28.730]because we get to power.
[00:47:29.720]Once we get to power, we insult our opponents.
[00:47:34.310]Et cetera, et cetera, et cetera.
[00:47:36.840]Now you tell me,
[00:47:37.980]whether what to do with a nation,
[00:47:40.610]and whether it is a collapse of democracy,
[00:47:43.710]and you can please check this out.
[00:47:46.311]There is this thing.
[00:47:48.030]I don't know if you do this in the United States of America
[00:47:49.900]but in Europe we do this.
[00:47:50.820]From time to time we happen to elect
[00:47:53.969]the biggest Czech
[00:47:55.066]and the French elect the biggest French.
[00:47:55.899]I don't know.
[00:47:57.201]Do you do this here?
[00:47:58.034]Americans electing the biggest.
[00:47:59.010]It's happens once five years,
[00:48:00.460]just like the elections,
[00:48:02.236]but those are not the elections.
[00:48:03.069]It's just a popular survey
[00:48:04.500]where people get to send their favorite Czechs.
[00:48:07.783]When it comes to Czechs in 2012, five years ago,
[00:48:12.796]Timelmon won.
[00:48:16.150]Timelmon you will not know
[00:48:17.936]because he's a fictional non existent character.
[00:48:19.480]A very funny inventor who always came second.
[00:48:22.530]He was famous in discovering blind alleys,
[00:48:25.760]which is of course as you know for science,
[00:48:27.100]very very important,
[00:48:28.000]because simply there's nothing there,
[00:48:29.800]and nobody else has to inquire,
[00:48:32.210]but Czechs elected this guy,
[00:48:34.893]which then was ruled out by our much more boring
[00:48:37.910]British colleagues who invented the whole idea
[00:48:40.800]of finding the best Czech,
[00:48:42.410]but now the sad news,
[00:48:43.630]you know who won in Russia in 2017?
[00:48:47.680]The biggest Russian,
[00:48:49.390]and Russians were electing the biggest historical Russian.
[00:48:54.920]Yes, correct.
[00:48:56.790]Joseph Stalin.
[00:48:59.240]The murderer who murdered his own people.
[00:49:05.270]But you know, he had a mustache, or what.
[00:49:11.320]This also happened in the year 2012.
[00:49:14.500]This was Stalin won 2017, a year back.
[00:49:18.260]Guess who was second?
[00:49:21.190]Yeah, he was third.
[00:49:23.460]That's correct.
[00:49:25.350]Vladimir Putin was second,
[00:49:28.360]and he even won this a couple of years back,
[00:49:31.500]and in the year 2012 Stalin got 42%.
[00:49:35.740]It's an easy number to remember,
[00:49:37.570]if you know Hitchhiker's Guide to the Galaxy.
[00:49:39.740]42 is usually your answer to pretty much everything.
[00:49:43.710]Stalin sadly, got 42% of Russian votes.
[00:49:53.030]Second to none.
[00:49:54.450]Second was 28%.
[00:49:57.330]Very very clear.
[00:49:59.745]Putin combined with Stalin would make the perfect rule.
[00:50:03.860]Talking about Russia,
[00:50:05.110]also one must bear in mind
[00:50:06.550]that communism never crumbled in Russia.
[00:50:09.590]There was no revolution against communism.
[00:50:12.530]We had a small revolution.
[00:50:13.860]Pole had a small revolution.
[00:50:15.510]Luckily nobody was murdered,
[00:50:16.910]but it was quite dangerous.
[00:50:17.920]I remember the beatings,
[00:50:19.690]and till today I have goosebumps
[00:50:21.970]when I think back to that time,
[00:50:24.740]when hippy flower power won over
[00:50:27.160]heavily armed police men,
[00:50:31.650]who were just a second from the orders of shooting,
[00:50:36.820]and the dogs and the gasoline in the air,
[00:50:40.120]and the immense electricity,
[00:50:43.810]of hope combined with fear,
[00:50:45.810]that no movie can ever make inside of you.
[00:50:50.920]It's also interesting.
[00:50:51.753]I don't understand how we did that,
[00:50:53.792]without Facebook and Twitter,
[00:50:54.625]and we didn't even have cell phones,
[00:50:56.450]and yet, the crowds knew exactly what to do.
[00:50:59.300]It was amazingly energetic.
[00:51:03.380]It's also funny,
[00:51:04.213]and I wanted to thank you especially
[00:51:05.870]because we Czechs,
[00:51:07.360]when you invited me here to celebrate this Prague spring
[00:51:10.120]I thought to myself,
[00:51:10.953]but that happened in Summer.
[00:51:12.330]That was the summer events, until I realized,
[00:51:15.780]no, no, no that was the end of Prague Spring.
[00:51:18.830]That's what we celebrate in Czech Republic today.
[00:51:21.270]We don't actually celebrate Prague Spring in the Spring.
[00:51:23.900]We celebrate that, the invasion,
[00:51:26.680]that quenched the Prague Spring,
[00:51:28.700]and made it over.
[00:51:32.581]You have this situation where,
[00:51:37.950]and is that a fault of democracy?
[00:51:41.050]The people really genuinely,
[00:51:44.020]we would say brainwashed,
[00:51:45.260]but that would be too easy a solution.
[00:51:48.210]The other solution is that people
[00:51:49.810]really actually enjoy this style of politics.
[00:51:52.350]It was very difficult for me to understand
[00:51:54.310]until Brexit happened,
[00:51:57.640]and until Trump happened.
[00:51:59.760]To me it was very difficult to understand,
[00:52:02.500]how am I to explain to my students,
[00:52:04.810]that United States of America,
[00:52:08.560]with the Republican president,
[00:52:10.040]who is right of Republican.
[00:52:13.051]Republic party is too left leaning to him,
[00:52:16.760]from and forgive my European reading of your politics.
[00:52:20.420]We shouldn't meddle,
[00:52:21.560]but then again I'm not a diplomat, so I can,
[00:52:25.060]and yeah, how can that China today
[00:52:29.040]is a bigger proponent of free trade
[00:52:31.210]than United States of America.
[00:52:43.320]How much more time do I have?
[00:52:47.250]Oh, see I'm good at this.
[00:52:52.470]The thing with competition is,
[00:52:54.040]put three children in a room
[00:52:55.350]and they start competing at something,
[00:52:57.530]and actually if you realized,
[00:52:59.660]and we even compete in stupid things like dancing.
[00:53:02.130]We have this dancing contest.
[00:53:03.690]What's it called, on TV?
[00:53:07.890]Dancing with the Stars.
[00:53:09.380]Since when was dancing supposed
[00:53:10.950]to be a competitive thing?
[00:53:12.570]Or skiing?
[00:53:14.040]Or skating?
[00:53:14.950]Or I don't know, beauty contests.
[00:53:16.640]I just learned that you have Czechoslovakian
[00:53:18.790]beauty contests not far from here.
[00:53:20.690]Since when was beauty made to be competed with,
[00:53:23.310]but yet, we, and nobody's forcing us.
[00:53:25.560]No bad evil capitalist forcing you to compete,
[00:53:28.810]and in fact if you think of the way we play games.
[00:53:31.270]Games are an interesting example.
[00:53:33.030]Games always begin in sort of a communist dream.
[00:53:36.130]Complete equality.
[00:53:39.320]Monopoly is a good example.
[00:53:40.820]Same number of money everybody,.
[00:53:42.820]and the dice is fair.
[00:53:47.346]It starts in communist ideal,
[00:53:49.640]but the very point of the game,
[00:53:51.080]is to end in what?
[00:53:52.880]In monopoly.
[00:53:54.925]That's where the name of the game comes from.
[00:53:57.744]Now, it will be extremely unfair,
[00:53:59.420]if when you are fooling around,
[00:54:01.440]at the age of 18 or 21,
[00:54:03.430]you would play such a monopoly game once in your life
[00:54:06.060]and then you would win for example,
[00:54:08.410]and the rest of us would be cleaning your shoes
[00:54:10.220]and you would be giving us funny paper money.
[00:54:12.150]Also realize the value of the funny paper money
[00:54:14.544]is valuable in monopoly,
[00:54:16.730]only as long as the game lasts.
[00:54:19.580]You would kill for those little fun paper money,
[00:54:21.580]while the game is on,
[00:54:22.640]but then when the game is off,
[00:54:24.540]everybody knows that it's just funny paper money.
[00:54:27.350]The whole system has to be done,
[00:54:28.880]in a way so that people want to play again.
[00:54:32.731]The idea is to start equal,
[00:54:34.890]but the idea is not to end equal.
[00:54:36.770]The would make sports irrelevant.
[00:54:40.920]It would make music, well music.
[00:54:42.950]Music is a different,
[00:54:44.622]but even in music you have competitions.
[00:54:46.448]You have best CD, and the best band,
[00:54:48.900]and the whole idea is to make the system such
[00:54:51.100]so that everybody wants to play again.
[00:54:53.780]So that the game is fair,
[00:54:55.427]but let me end here with a great hope.
[00:55:00.000]We are forgetting one great Czech here who is.
[00:55:03.700]Also Vaclav Havel talked about this.
[00:55:05.510]If you want to make.
[00:55:07.370]When he was here.
[00:55:08.640]Accepted by your congressman
[00:55:10.846]in the joint session in 1980.
[00:55:12.450]This was many times remembered here.
[00:55:14.280]They ask him what can we do to help you,
[00:55:16.820]and I'm quite sure you and others remember his answer,
[00:55:20.170]and he said if you want to help us, help Russia,
[00:55:23.810]and I'm a great fan of theoretical physics.
[00:55:27.020]This is a tendency for which I apologize,
[00:55:31.250]but there is a Kardashev scale in theoretical physics,
[00:55:34.570]judging the advance of a civilization
[00:55:36.280]according to the use of energy they use.
[00:55:38.530]Civilization type one can harvest
[00:55:40.150]the energy of the entire planet.
[00:55:41.430]Civilization type two can harvest the energy
[00:55:43.330]of their nearest star,
[00:55:45.570]which is in our case the sun.
[00:55:47.720]Civilization type three,
[00:55:48.750]can harvest the whole galaxy,
[00:55:50.830]which is the sort of energy you need,
[00:55:52.066]if you want to do Star Trek and Star Wars.
[00:55:55.210]Now guess which planetary type,
[00:55:58.520]civilization type is our planet.
[00:56:05.570]Say it out loud.
[00:56:07.910]Zero.
[00:56:09.710]0.787.
[00:56:11.420]Physicists just like economists
[00:56:12.830]like to have things precise.
[00:56:15.530]Why am I torturing you with this?
[00:56:16.970]Well the Kardashev scale says that,
[00:56:20.046]type one is a planetary organization.
[00:56:23.520]Type one is a organization which has global rules.
[00:56:27.330]Just realize that we are living in the year 2018,
[00:56:31.507]and we do not have one single planetary rule.
[00:56:34.330]We have suggestions.
[00:56:37.290]United Nations and World Health Organization and what not.
[00:56:41.500]Suggestions, yes.
[00:56:42.490]Rules, not.
[00:56:43.831]Just imagine that I took your rules away
[00:56:45.020]and I made them into suggestions.
[00:56:47.160]Don't murder, but if he's real pain in the neck,
[00:56:49.820]then yeah, do it,
[00:56:50.653]but do it in the humane vein.
[00:56:52.460]Do it quickly,
[00:56:53.293]and so that his kids are not watching.
[00:56:55.550]That wouldn't work.
[00:56:57.187]Even the fine people of United States of America
[00:56:58.840]would turn into brutes,
[00:57:00.000]which there's a beautiful movie about that.
[00:57:01.700]Guys, please tell me that you've seen The Purge.
[00:57:05.180]The girls say yes.
[00:57:06.470]Good.
[00:57:08.360]Anyway, look at The Purge.
[00:57:10.440]It's actually a horror movie.
[00:57:12.430]A slasher horror movie about
[00:57:13.730]what happens when law is dismantled for one day.
[00:57:17.790]You can do whatever you want to.
[00:57:20.419]I'm going to close with this.
[00:57:23.063]In 30, 40 years,
[00:57:25.800]this civilization will transition
[00:57:27.410]from type zero which is a local
[00:57:29.790]type of civilization where green against blue
[00:57:32.640]and blue against red,
[00:57:33.740]and Germans against Czechs,
[00:57:34.970]and Czechs against Chinese,
[00:57:36.360]and Chinese against Americans,
[00:57:38.250]and this planet will according to physicists
[00:57:40.580]which I by the way,
[00:57:42.371]find the best political theory comes from physics
[00:57:44.290]to my great surprise.
[00:57:45.850]That I've found anyway,
[00:57:49.016]and we will be a planetary civilization type one.
[00:57:50.720]Also this is why I think,
[00:57:53.040]we are over regulated at the level of governments,
[00:57:55.690]because we are trying to regulate
[00:57:58.120]things that should have been regulated on a global level
[00:58:01.920]and we're doing that in an appropriate level of regulation.
[00:58:05.480]What I'm saying is, our rules,
[00:58:07.770]our bureaucracy would be much much smaller,
[00:58:09.860]if it would be planetary.
[00:58:11.940]I was very happy when your president Donald Trump
[00:58:17.400]actually had this great motto in his campaign.
[00:58:23.875]The campaign motto of Donald Trump was,
[00:58:25.730]when I heard it first,
[00:58:26.610]I rejoiced in my heart.
[00:58:28.500]This let's make America great again.
[00:58:30.310]I thought to myself, wow.
[00:58:32.110]Finally a politician who thinks little bit type one.
[00:58:35.886]There is actually a huge Freudian slip
[00:58:38.650]of tongue in that motto.
[00:58:40.860]Did you ever spot it?
[00:58:45.770]Again, that's wrong,
[00:58:47.500]but its not a Freudian slip.
[00:58:49.940]I would say.
[00:58:50.773]There's a bigger Freudian slip.
[00:58:54.220]Last time I checked,
[00:58:55.860]no country called America.
[00:59:00.430]I'm thinking oh my God, finally somebody,
[00:59:02.979]president of United States of America,
[00:59:05.160]who wants to make America great again.
[00:59:06.930]Including Canadians, Mexicans, Venezuela,
[00:59:11.256]Cuba, the whole continent of America,
[00:59:16.090]and I rejoiced in my heart,
[00:59:18.010]that we finally have a president who understands this.
[00:59:21.150]That the only way how to make
[00:59:22.710]United States of America,
[00:59:24.020]because I think that's what he meant maybe.
[00:59:27.340]The only way how to make United States of America
[00:59:29.678]great again is to make America great again.
[00:59:31.713]There's no peace here until
[00:59:33.300]there's peace in the Middle East.
[00:59:35.660]I'm sorry.
[00:59:37.198]You guys have become willy nilly.
[00:59:39.050]Willingly or unwillingly you've become the consciousness
[00:59:41.290]and also the policeman of the world,
[00:59:42.660]so you will not rest in peace
[00:59:44.230]if there is one human being
[00:59:45.410]who is actually suffering from hunger
[00:59:46.730]and that's the great thing about this wonderful country.
[00:59:51.070]Let's maybe hope, and this is absolutely
[00:59:53.960]in line of thinking of Vaclav Havel
[00:59:56.270]and also one other Czech great name
[00:59:58.211]who has not been mentioned yet,
[00:59:59.406]but he is mentioned here to my great happiness.
[01:00:02.440]Arkomenus who wrote a wonderful book called
[01:00:05.080]The betterment or the improvement of all things.
[01:00:09.052]Let's hope following personalities like that
[01:00:13.360]somewhere in the future,
[01:00:14.310]that maybe one day we will be really
[01:00:16.470]able to vote for a politician
[01:00:17.940]who will without a slip of tongue say
[01:00:20.550]let's make the world great for the first time.
[01:00:23.840]Thank you very much.
[01:00:25.553](audience applause)
[01:00:34.960]Is there time for debate, questions?
[01:00:39.970]I'd welcome to critical remarks first,
[01:00:42.353]because those will be more valuable for me.
[01:00:48.450]You can express the level of your criticism from one to ten.
[01:00:56.647]Sir, if you just wait a second.
[01:00:58.700]Do we have one mic or two mics?
[01:00:59.890]Just one.
[01:01:01.650]Okay, please.
[01:01:03.110]He is the yielder now.
[01:01:07.271]- [Man] You mentioned that liberal democracy
[01:01:10.162]in Western culture
[01:01:11.990]checks all of the boxes of Marx's and Engel's manifesto
[01:01:17.180]and that it actually offers a brighter conclusion
[01:01:22.880]than the manifesto.
[01:01:24.920]How do you reconcile this with the fact that
[01:01:28.040]capitalism, in America, has created,
[01:01:31.142]swaths of abject poverty,
[01:01:35.370]leaving people with no access
[01:01:36.810]to education, leaving them hungry, with no housing,
[01:01:40.944]and no healthcare?
[01:01:43.110]- I think, that's a great question,
[01:01:46.090]and to be quite frank,
[01:01:48.090]it's a very legitimate question.
[01:01:49.430]If you look at what happened in the last 30 years,
[01:01:52.454]and I'm quite sure you are aware of this,
[01:01:55.470]because I hear that in your question,
[01:01:57.851]in the last 30 years,
[01:02:00.020]what capitalism did for us,
[01:02:02.416]if you pull up the advantages and your income level,
[01:02:06.410]but don't think now about Americans only.
[01:02:08.580]Think about the whole world.
[01:02:10.576]This is another thing that the communists
[01:02:12.251]always had the proletariat of the whole world unite.
[01:02:15.299]It looks like this elephant shape.
[01:02:18.320]You're familiar with this.
[01:02:20.530]People who earned zero are still earning zero.
[01:02:23.960]That would be the extremely poor,
[01:02:26.230]but a very small portion of population of the planet.
[01:02:29.560]Very very very poor people didn't gain anything,
[01:02:32.432]in the last 30 years.
[01:02:34.390]Then there are the Chinese, the Indian,
[01:02:38.128]the India Indians,
[01:02:41.510]and Latin America, also partially.
[01:02:45.896]There were famines in Ukraine as well,
[01:02:48.430]and those were deliberate famines.
[01:02:50.690]During communist regime.
[01:02:52.776]Things you are describing,
[01:02:54.870]are unfortunately something that does happen,
[01:02:57.970]but it happened on both sides of the game.
[01:03:00.490]Anyway, I don't use PowerPoint but now I wish I had it,
[01:03:03.490]and then there is this back of an elephant,
[01:03:05.910]all these Chinese people rising dramatically out of poverty
[01:03:11.966]going up and then it dips again and it goes up.
[01:03:16.950]It looks a little bit like an elephant
[01:03:18.220]with what do you call this?
[01:03:19.870]Nose, no?
[01:03:20.930]Trump?
[01:03:22.350]Trunk.
[01:03:23.940]Sorry, sorry, sorry, sorry.
[01:03:25.299]My bad, sorry.
[01:03:26.814]Slip of the tongue is not only for president elects.
[01:03:31.646]The point is that, a huge part of the globe,
[01:03:35.980]gained tremendously.
[01:03:37.840]People who lived on $2, and $2.25 a day,
[01:03:43.000]have decreased radically.
[01:03:45.510]Life span of an average human being on this planet
[01:03:49.010]went up unbelievably.
[01:03:51.450]15 years in the last three decades.
[01:03:55.006]Also child mortality is going down every year
[01:03:58.820]annually by 4%.
[01:04:01.000]That to me is something to celebrate
[01:04:02.700]much much more than some hideous increases in GDP
[01:04:06.750]in certain rich countries, and we don't look at that,
[01:04:10.290]but then these people gained tremendously.
[01:04:13.040]Czech Republic would be somewhere here.
[01:04:14.550]Poland and others.
[01:04:16.380]Then there is a dip,
[01:04:18.120]and that's exactly the class that you're speaking of.
[01:04:20.100]It would be the American working class.
[01:04:23.219]Those didn't really gain, and then the trunk.
[01:04:29.490]Trunk, like in a car?
[01:04:31.750]Okay, cool.
[01:04:32.670]Cool with me.
[01:04:33.940]It's your language.
[01:04:37.840]Those will be the extra rich.
[01:04:39.190]That would be your 1% or 5% actually.
[01:04:42.908]That's the honest snapshot of who gained and who lost.
[01:04:48.280]Yes, there is a class of people
[01:04:50.500]who have not gained from the 30 years,
[01:04:52.570]but on average the living and dying people
[01:04:56.530]gained tremendously.
[01:05:01.803]Good question.
[01:05:03.080]Needs to be addressed.
[01:05:04.040]I'm not saying, by the way,
[01:05:05.200]that the world is perfect,
[01:05:06.550]but people were literally dying.
[01:05:09.670]When was the famine in Ukraine?
[01:05:12.935]Those people were dying.
[01:05:15.770]These poor impoverished American people
[01:05:19.280]who really are in need of help,
[01:05:21.790]in need of education, et cetera, et cetera,
[01:05:23.300]their situation is terrible, but they're not dying,
[01:05:26.172]and again hard to compare, but you get my point.
[01:05:31.470]Yes, please.
[01:05:37.020]- [Man] Havel came to Washington to Georgetown University
[01:05:41.310]and he emphasized democracy.
[01:05:43.680]The liberation and the freedom.
[01:05:46.490]One student asked, how did this all happen,
[01:05:49.490]and Havel simply pointed to the six students
[01:05:52.200]he brought with him from Prague and said,
[01:05:54.310]they're the ones who did it, ask them.
[01:05:57.420]10 years later,
[01:05:58.770]the president of South Korea came,
[01:06:01.550]and I remember he formulated it this way.
[01:06:04.340]The great benefit of democracy is,
[01:06:06.718]that it brings prosperity.
[01:06:09.700]I was wondering at the time,
[01:06:11.300]what happens when the prosperity disappears.
[01:06:15.130]You still appreciate democracy so much.
[01:06:19.020]10, 20 years later,
[01:06:20.630]you have in Europe and in America,
[01:06:23.130]people who are economically
[01:06:25.470]better off according to the raw statistics,
[01:06:28.730]but then feeling it's failing them somehow,
[01:06:32.410]and thinking here of the,
[01:06:34.570]people said in Czech Republic,
[01:06:37.246]that Klaus and his party,
[01:06:39.496]forced prosperity and they brought Thatcher capitalism
[01:06:43.150]but without the safety net,
[01:06:45.250]and so I don't know if that lacking safety net in some areas
[01:06:49.110]is enough to explain populism
[01:06:51.336]or is it at least a factor?
[01:06:53.770]- It's a very good question, sir,
[01:06:56.072]and what happened in 1919.
[01:06:57.320]You can see this wonderfully in our data,
[01:07:00.930]and as much as I criticize GDP let's just use it now
[01:07:03.700]because for this question it will suffice.
[01:07:07.980]Like I said, that when the system goes through
[01:07:11.120]a reverse J curve.
[01:07:12.070]When you are upgrading from
[01:07:14.036]one level of system to another,
[01:07:14.869]this seems to be philosophically true.
[01:07:17.150]You have this in mythology as well.
[01:07:19.894]That's exactly what happened to our GDP.
[01:07:22.560]Our GDP dipped, and they're actually,
[01:07:27.711]I was listening to Petra yesterday, I remember.
[01:07:30.176]I don't know what his name was.
[01:07:31.734]Maybe you will remember,
[01:07:33.760]but in 1990 there was an American singer
[01:07:36.930]or an intellectual visiting Czech Republic,
[01:07:39.410]and he said, and I'm sorry but it's a direct quote,
[01:07:42.290]this is the parallel he used.
[01:07:45.452]He said you've been holding your,
[01:07:47.542]what's the polite way of saying shit?
[01:07:50.260]Stuff?
[01:07:51.820]You've been holding your stuff,
[01:07:53.150]thank you, inside for 40 years.
[01:07:56.000]That stuff needs to come out,
[01:07:59.318]and there were warnings,
[01:08:01.216]and my mother and I were very angry at him.
[01:08:03.920]How can you spoil our enthusiasm,
[01:08:07.440]and in fact if you actually listen
[01:08:09.270]to Vaclav Havel's first presidential speech,
[01:08:12.210]it wasn't a hippy happy speech.
[01:08:14.690]It was a speech of only saying,
[01:08:16.234]that I will not lie to you.
[01:08:18.120]This country is not flourishing
[01:08:20.390]and it will not flourish,
[01:08:22.130]and even Klaus said very clearly,
[01:08:23.729]we have to we say tighten our belts,
[01:08:25.803]so that these warnings were in place
[01:08:28.140]and we all knew that this dip will happen.
[01:08:30.689]It little bit reminds me of this example of Moses
[01:08:34.868]going from the land of slavery to the promised land,
[01:08:39.540]through 40 years of desert,
[01:08:42.270]where they're exactly the children of Israel
[01:08:44.590]were complaining about the thing you're asking.
[01:08:47.939]Why don't we go back to Egypt
[01:08:49.630]to the land of slavery,
[01:08:51.490]where we have pots of flesh,
[01:08:53.569]which they didn't, by the way.
[01:08:55.550]This is also another thing,
[01:08:57.760]that we tend to have the better memories,
[01:08:59.350]from things like that,
[01:09:01.693]and I think it was the brilliance of Moses,
[01:09:06.090]as fictional as that character could have been
[01:09:07.910]to explain that freedom is much more important than wealth
[01:09:13.950]and the 40 years that these people
[01:09:15.479]had to spend in the desert, that's beautiful,
[01:09:17.810]because the road from Egypt
[01:09:21.471]to what is today Israel and Palestine,
[01:09:24.380]that's a two weeks trip max,
[01:09:26.886]and people used to do that all time.
[01:09:29.210]Remember Joseph would send his
[01:09:30.439]brothers back and forth like yo yo.
[01:09:33.428]Go back to your father to bring Benjamin
[01:09:35.892]and they would come back
[01:09:37.729]in a couple of days, a couple of weeks.
[01:09:40.109]It was even a known route,
[01:09:42.420]and so I think that was exactly the reason
[01:09:44.700]for this longitude which
[01:09:46.210]goes against this shock therapy method,
[01:09:48.540]is you stay in poverty,
[01:09:50.630]you stay homeless, literally homeless,
[01:09:53.210]not homeless, homeless,
[01:09:55.460]sleeping under the bridge, but homeless homeless.
[01:09:57.791]Not even having the idea of a home.
[01:09:59.920]Never even having one.
[01:10:01.160]You stay homeless till you get the point,
[01:10:03.466]that you are not going to be rich
[01:10:06.500]in any other way except for wandering around.
[01:10:11.278]That's how I would answer.
[01:10:16.350]If that was the first part of your question.
[01:10:18.010]Was there a second part to your question?
[01:10:19.980]Okay, thank you.
[01:10:22.180]Yes, please.
[01:10:24.474]If anybody else has a question,
[01:10:26.560]raise your hand so that we can get to you, microphone.
[01:10:29.751]- [Man] In one part of your speech,
[01:10:32.700]you mentioned this crisis of capitalism.
[01:10:36.216]When the supply is okay but the demand is changing,
[01:10:40.570]or is going through changes.
[01:10:42.575]I think it's, I'm not sure if
[01:10:44.273]this is causal relationship or not,
[01:10:46.747]but it's given to the demographics,
[01:10:49.580]the millennials, internet, sharing economy,
[01:10:52.530]and so on and so forth,
[01:10:54.070]but don't you think we are sort of
[01:10:56.680]fighting the changing back
[01:10:58.910]and we want to have this system we have right now.
[01:11:03.823]We don't want this capitalism 2.0,
[01:11:07.683]given the example of Air BnB's getting banned in some cities
[01:11:12.820]as well as Uber.
[01:11:15.370]I think Uber got banned last month.
[01:11:18.543]Now in Prague the mayor
[01:11:22.511]is facing a big pressure from
[01:11:25.498]the lobby of the cab companies, taxi companies.
[01:11:30.930]Don't you think we are holding on to this status quo
[01:11:34.570]that we have right now?
[01:11:35.990]- Great question.
[01:11:39.980]What I see today,
[01:11:41.043]that we are actually living through two tectonic changes.
[01:11:44.040]One tectonic change I touched on a little bit.
[01:11:45.840]This is the transfer from type zero to type one.
[01:11:48.710]By the way GDP is a good example.
[01:11:50.930]GDP as objective as it looks,
[01:11:53.870]it's actually a remnant of nationalism,
[01:11:56.340]because it measures gross national product.
[01:12:00.000]We're no longer nationalists like the Nazi sort,
[01:12:02.692]but we still that's why we measure it,
[01:12:04.960]because we want to compare.
[01:12:07.354]If we measured GDP of women versus men,
[01:12:10.541]which we could, which we basically do,
[01:12:14.863]but nobody gives a damn about these statistics,
[01:12:17.000]the news that you would read in financial times would be
[01:12:19.370]okay the GDP of males went down 4% again.
[01:12:22.682]Now should the females be fiscally solid with the men,
[01:12:25.818]or should we make some incentives
[01:12:28.230]to make these men work harder?
[01:12:32.602]That's one trend, is globalization,
[01:12:38.290]or I prefer the world planetization.
[01:12:40.230]Trying to understand with each other.
[01:12:41.860]We're no longer racist,
[01:12:43.760]when it comes to the color of skin.
[01:12:45.090]At least legally we're not racist.
[01:12:46.780]It's not allowed.
[01:12:48.345]It's against the law, thank god,
[01:12:49.178]but it's completely legal,
[01:12:50.690]to be judging people according
[01:12:52.660]to the color of their passport.
[01:12:55.720]Simply if you are a member of the European Union
[01:12:58.100]you are welcome to this and that,
[01:13:00.350]but if you happen to be a Syrian refuge,
[01:13:03.354]then we will not.
[01:13:06.110]That I think is yet another hurdle,
[01:13:08.140]that I think is perhaps for your generation to tackle.
[01:13:12.271]I think what we had in Europe,
[01:13:14.910]this refuge wave also here,
[01:13:16.530]that to me was a case study.
[01:13:17.990]That's a case study of much much more bigger movement
[01:13:20.620]of nations which will happen most likely in the future.
[01:13:24.210]You might be refuges as you once were.
[01:13:26.010]We might be refuges as we once were.
[01:13:28.160]Let's take this as a case study.
[01:13:29.810]Small case study.
[01:13:31.120]Couples of hundreds of thousands of people
[01:13:32.620]and let's come up with rules for the next one.
[01:13:35.550]No, we were unable to do that.
[01:13:38.220]That's something.
[01:13:39.160]That's one tectonic change.
[01:13:40.530]Going from zero to one.
[01:13:42.450]How would democracy look like,
[01:13:44.030]if it was actually not national,
[01:13:45.270]but it was actually planetary?
[01:13:46.740]What sort of questions would we ask?
[01:13:48.070]I think it's a completely interesting topic.
[01:13:51.250]The other great change that I didn't have time
[01:13:54.420]to speak on today, is digitalization.
[01:13:58.276]Is actually great movement of nations from here
[01:14:00.180]to some abstract new digital world
[01:14:03.110]that is actually habitable.
[01:14:04.800]All the abstract worlds that we have in art, cinema,
[01:14:08.200]mythology, religion, are functional but not inhabitable.
[01:14:11.670]They're fictional.
[01:14:13.140]You can't live in the world of mathematics,
[01:14:14.930]for more than half an hour,
[01:14:15.840]if you're lost in it.
[01:14:17.510]I hope this happens to you sometimes.
[01:14:19.428]It's beautiful.
[01:14:20.810]It's a little bit like when you read a book
[01:14:22.890]and you forget that you're that reader
[01:14:24.210]reading the book,
[01:14:25.934]and you're literally there
[01:14:27.063]with Tom Sawyer and Huckleberry Finn
[01:14:28.463]having slightly racist comments at each other.
[01:14:30.522]That part of the soul is moving to here.
[01:14:35.940]This is actually.
[01:14:36.773]This is the wormhole we carry.
[01:14:39.440]This is the biggest neighbor.
[01:14:40.960]No longer a human being.
[01:14:42.150]Our biggest neighbor is this.
[01:14:43.630]Look at where we carry it.
[01:14:45.080]It's either close to our heart, or in our pockets.
[01:14:49.039]That is another great tectonic change,
[01:14:53.040]that the world of abstract has become habitable
[01:14:55.180]and I have lecture about this on Youtube
[01:14:57.487]that you're welcome to watch.
[01:14:58.350]Those are in English, and in Czech.
[01:14:59.850]I understand that you are concerned
[01:15:02.724]so you must be Czech.
[01:15:03.612]These two tectonic changes,
[01:15:06.150]that have been building up for millenia,
[01:15:07.820]are now going up against each other,
[01:15:09.910]and what's happening very often,
[01:15:11.140]you can see that beautifully here,
[01:15:12.240]in the case of Trump,
[01:15:13.550]is that instead of fighting digitalization.
[01:15:16.071]Let's put it this way.
[01:15:17.874]He's fighting and many politicians do the same,
[01:15:21.500]he's fighting digitalization,
[01:15:23.360]with the weapons of the last warfare,
[01:15:25.500]which is nationalism.
[01:15:28.150]Instead of actually addressing
[01:15:30.260]the problem of millions of unemployed drivers,
[01:15:33.724]he is building a wall.
[01:15:36.880]I always say that a stupid New York taxi driver
[01:15:40.130]is afraid of cheap competition from Mexico.
[01:15:44.562]A clever New York taxi driver
[01:15:48.020]is afraid of self driving cars.
[01:15:50.360]Because that is the proper fear.
[01:15:51.930]That is the uncanny.
[01:15:54.070]There's this whole new useless class as Herari calls it
[01:15:57.720]that will be here,
[01:15:58.880]and maybe you will already be graduating
[01:16:00.780]into a world where your skills and my skills
[01:16:03.260]will be useless.
[01:16:04.640]I always say become philosophers,
[01:16:06.620]because that probably will never be solved.
[01:16:09.010]That's what, I think what was happening,
[01:16:12.510]we're fighting the challenge of digitalization,
[01:16:14.810]with the weapons of last warfare.
[01:16:19.569]- [Man] Comments on books.
[01:16:24.039]- Yeah, the comments are brief.
[01:16:24.872]The answers are the problem.
[01:16:28.764]- [Man] One last question.
[01:16:30.226]This is the last one.
[01:16:33.424]- [Man] I want to go back to the razor blades.
[01:16:36.059]Your explanation about the cause of these endemic shortages
[01:16:42.791]the cause of these shortages is monopoly,
[01:16:47.230]but it would seem to me,
[01:16:48.700]if you're thinking about central planning,
[01:16:51.290]it would seem to me,
[01:16:52.123]you have a finite number of male faces,
[01:16:54.600]and a finite number of human bums,
[01:16:57.790]why are there,
[01:16:58.830]even with monopoly you should be able to produce enough
[01:17:01.543]toilet paper to satisfy the needs of the bum
[01:17:04.540]and blades for the face.
[01:17:08.933]- That is a great question,
[01:17:10.760]and it actually comes from extreme right wing economics.
[01:17:16.320]The tea party,
[01:17:18.060]which ironically believes that human behavior
[01:17:22.510]is so perfectly mathematical modeled
[01:17:24.890]that you don't have to include things
[01:17:27.010]like culture and sociology and whims,
[01:17:29.400]et cetera, et cetera.
[01:17:30.300]Again here you see,
[01:17:31.630]how the extremes unite perfectly,
[01:17:33.780]because actually Nazi regime, and communist regime,
[01:17:37.520]these two regimes I would compare.
[01:17:39.470]I don't think it's really comparable
[01:17:42.120]with liberal democracy with communism.
[01:17:44.160]It was rather the extremes.
[01:17:46.930]Extreme right with extreme,
[01:17:48.190]but they were united in their planned economy
[01:17:50.530]because Nazis were using planned economy
[01:17:52.850]just like in communist China and Russia till today.
[01:17:58.680]In Russia, oh I didn't finish that thought.
[01:18:00.650]In Russia, communism, they didn't have men in Moscow.
[01:18:05.500]In Russia, the system just happened
[01:18:07.940]to unfortunately collapse.
[01:18:10.791]They didn't want its collapse.
[01:18:13.270]They were very sad when it did.
[01:18:15.870]We did these revolutions
[01:18:17.480]and Chinese tried to do revolutions.
[01:18:19.300]They were quenched in their case.
[01:18:20.627]Not in our case, thank goodness,
[01:18:22.600]but this did not happen in Russia,
[01:18:24.510]but anyway, sometimes I don't finish my thoughts
[01:18:27.620]at the expense of others better, I hope.
[01:18:31.079]The answer to your question,
[01:18:32.470]which I've been thinking about that since my youth,
[01:18:35.380]is that communism actually would only be possible
[01:18:38.430]after a period of capitalism,
[01:18:41.367]because you would know your relative prices
[01:18:43.666]and you would know your demand and supply
[01:18:45.138]because you would know,
[01:18:46.108]but it would not be possible
[01:18:47.473]to have communism right from the beginning,
[01:18:48.850]without capitalism,
[01:18:50.300]and also this idea of weakened planet,
[01:18:52.210]comes from the fact that,
[01:18:53.720]human behavior has no freedom in it,
[01:18:55.690]which is irony because the extreme right
[01:18:58.620]economic policy actually don't account
[01:19:03.750]for human freedom at all.
[01:19:05.220]It's based on the assumption of human freedom, ironically
[01:19:08.080]but then in the models it completely disappears.
[01:19:10.860]Human behavior is absolutely modelable,
[01:19:13.080]so let's say an extreme crazy social scientist
[01:19:18.354]on the right wing would agree with a mediocre
[01:19:22.700]communist social planner,
[01:19:25.190]and they would use each other's models, ironically.
[01:19:30.520]Thank you very much.
[01:19:31.353]It was a great pleasure for me,
[01:19:33.074]and a great enjoyment.
[01:19:33.907]Thank you.

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Tomáš Sedláček: Greatest Transformation - Reflections on 1989

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