Published October 28-November 1, 2022
The Mont Pelerin Society (MPS), created by F.A. Hayek shortly after the end of the Second World War in 1947, is a forum to discuss and debate ideas about liberalism. An explanation from the MPS website on the use of the word “liberal”: “[It] is used in its European sense, broadly epitomized by a preference for minimal and dispersed government, rather than in its current American sense which indicates the opposite preference for an extension and concentration of governmental powers.”
From the MPS website:
The Mont Pelerin Society is composed of persons who continue to see the dangers to civilized society outlined in the statement of aims. They have seen economic and political liberalism in the ascendant for a time since World War II in some countries but also its apparent decline in more recent times.
Though not necessarily sharing a common interpretation, either of causes or consequences, they see danger in the expansion of government, not least in state welfare, in the power of trade unions and business monopoly, and in the continuing threat and reality of inflation.
Again without detailed agreements, the members see the Society as an effort to interpret in modern terms the fundamental principles of economic society as expressed by those classical economists, political scientists, and philosophers who have inspired many in Europe, America and throughout the Western World.
Eamonn Butler writes in his book “Scaling the Heights”, a history of MPS:
…[W]hile the Society itself remains little known among the public, many of its individual members are indeed both well known and influential in the academy and in world affairs.
Some, for example, have been government ministers (e.g. Sir Geoffrey Howe in the UK, Antonio Martino in Italy, Ruth Richardson in New Zealand and George Shultz in the US) or senior officials (such as former Federal Reserve Chairman Arthur Burns and Polish National Bank Chairman Leszek Balcerowicz). A few have been presidents or prime ministers (among them Ludwig Erhard of Germany, Luigi Einaudi of Italy, Mart Laar of Estonia, Ranil Wickremesinghe of Sri Lanka and Václav Klaus of the Czech Republic). Several have influenced economics and culture sufficiently to win a Pulitzer Prize (Felix Morley and Walter Lippmann) or a Nobel Prize (including Friedrich Hayek, Milton Friedman, James M. Buchanan, Gary S. Becker and Mario Vargas Llosa). Others, including educators, journalists, businesspeople and leaders of policy think tanks across the world, have wielded influence in different ways.
Yet they have done all this as individuals, not as representatives of the Mont Pelerin Society. The Society’s sole contribution to world affairs is its provision of a forum for debate, discussion, study and self-education among its members, their guests at meetings and young scholars – not through political action. It has no official views, formulates no policies, publishes no manifestos, aligns itself with no party and accepts no political or public funding. It does not even try to reach agreement on anything. No votes are taken. Instead, it promotes free and frank debate, aided by a long-standing policy that its discussions are neither broadcast nor reported (though some of the set-piece lectures and presentations are now recorded and appear online).
I was introduced to MPS in 2014 by Parth Shah, the founder of India’s Centre for Civil Society. I became an MPS member in 2018. General meetings are held every two years. So far, I have attended the meetings in 2014 (Hong Kong), 2016 (Miami) and 2018 (Gran Canaria). (The 2020 general meeting was not held because of the pandemic. There was a special meeting held in early 2020 at Hoover Institution which I had attended.) I also recently attended the 2022 meeting held recently in Oslo in the 75th years of MPS. The theme was “Liberal Institutions and International Order—Renewing the Infrastructure of Liberty”. For me, attending an MPS meeting is a wonderful way to meet academics and intellectuals from all over the world, along with an exposure to ideas about freedom and prosperity, which are quite alien in the Indian context.
Society meetings are completely private, so this is not an essay about the meeting and the discussion that took place. Instead, what I want to discuss is the importance of MPS in creating a better, more liberal world order, and India’s pathway to creating a free, open and prosperous society.
The world in 2022 is looking eerily similar to the 1930s and 1940s. Russia and China have emerged as global threats to peace. A war is underway in Europe. Authoritarianism and populism are on the rise. Covid has seen a massive expansion in government interventions globally. Economic challenges (in the form of rising government debt, runaway inflation, high energy prices, trade wars, and a looming recession) are rising. In this context, it is worth reading the “Statement of Aims” outlined at the first meeting held at Mont Pelerin in 1947:
The central values of civilization are in danger. Over large stretches of the Earth’s surface the essential conditions of human dignity and freedom have already disappeared. In others they are under constant menace from the development of current tendencies of policy. The position of the individual and the voluntary group are progressively undermined by extensions of arbitrary power. Even that most precious possession of Western Man, freedom of thought and expression, is threatened by the spread of creeds which, claiming the privilege of tolerance when in the position of a minority, seek only to establish a position of power in which they can suppress and obliterate all views but their own.
The group holds that these developments have been fostered by the growth of a view of history which denies all absolute moral standards and by the growth of theories which question the desirability of the rule of law. It holds further that they have been fostered by a decline of belief in private property and the competitive market; for without the diffused power and initiative associated with these institutions it is difficult to imagine a society in which freedom may be effectively preserved.
Believing that what is essentially an ideological movement must be met by intellectual argument and the reassertion of valid ideals, the group, having made a preliminary exploration of the ground, is of the opinion that further study is desirable inter alia in regard to the following matters:
- The analysis and exploration of the nature of the present crisis so as to bring home to others its essential moral and economic origins.
- The redefinition of the functions of the state so as to distinguish more clearly between the totalitarian and the liberal order.
- Methods of re-establishing the rule of law and of assuring its development in such manner that individuals and groups are not in a position to encroach upon the freedom of others and private rights are not allowed to become a basis of predatory power.
- The possibility of establishing minimum standards by means not inimical to initiative and functioning of the market.
- Methods of combating the misuse of history for the furtherance of creeds hostile to liberty.
- The problem of the creation of an international order conducive to the safeguarding of peace and liberty and permitting the establishment of harmonious international economic relations.
The group does not aspire to conduct propaganda. It seeks to establish no meticulous and hampering orthodoxy. It aligns itself with no particular party. Its object is solely, by facilitating the exchange of views among minds inspired by certain ideals and broad conceptions held in common, to contribute to the preservation and improvement of the free society.
MPS 2022 in Oslo, hosted by Civita, a Norwegian think tank, echoed some of the core ideas. As the Chair of the Organizing Committee, Lars Peder Nordbakken, wrote: “At a time of fundamental uncertainties and threats to both Liberalism and the open society and rules-based international order, it is also with a certain sense of urgency that we invite you to take part in this meeting. We will be covering many pressing and interrelated issues, some of them with clear parallels to the first meeting in 1947.”
So it was in early October that I travelled to Oslo. This was my first visit to Norway. With a per capita income of $67,000 (as of 2020), it is among one of the richest nations in the world. The country’s population is just over 5 million with 20% of the people living in Oslo. Norway has been greatly benefited by the discovery of oil; the value of its sovereign fund exceeds a trillion dollars. Like all the Scandinavian countries, government spending on social welfare is high.
The Airport Express covered the 48 kms from the airport to Oslo Central in 22 minutes. The conference hotel (Clarion Hotel The Hub) was just a five minute walk from the station. While most of the four-and-a-half days were spent in the hotel at the MPS meeting, we did have a half-day excursion to the Oscarsborg fortress via a 75-minute boat ride each way, which gave a glimpse of the beautiful fjords that Norway is so well known for. As National Geographic explains: “A fjord is a long, deep, narrow body of water that reaches far inland. Fjords are often set in a U-shaped valley with steep walls of rock on either side. Fjords were created by glaciers. In the Earth’s last ice age, glaciers covered just about everything. Glaciers move very slowly over time, and can greatly alter the landscape once they have moved through an area. This process is called glaciation. Glaciation carves deep valleys. This is why fjords can be thousands of meters deep. Fjords are usually deepest farther inland, where the glacial force was strongest.”
The meeting was organised as a set of plenaries, with presentations and discussion. The session titles tell the story of the themes:
- Challenges and Prospects for the Liberal World Order
- The New Totalitarian Threats: Russia and China
- The Recalibration of Globalisation and the Future of the WTO
- The Enemies of the Open Society 2.0
- The Climate and Environmental Challenge and Opportunity
- The Challenge of Neo-Planism and Top-down Industrial Policies
- Entrepreneurship, Innovation and Creative Destruction
- Reforming the Framework of the Market Economy
- Freedom, Economy and the Pandemic
- New Perspectives on Liberal Democracy and the Social Contract
- The Monetary, Financial and Fiscal Framework under Pressure
- Federalism, Subsidiarity and the Future of the EU
- Reforming Liberalism: From The Colloque Walter Lippmann to the Present
- Reinventing Liberalism for the 21st Century
For me, it was a wonderful experience being back in the world of liberal ideas, discussion and debate. I came to liberalism late in life – only when I started thinking about India’s lack of poverty and possible paths to prosperity. It was from these ideas that I had started Free A Billion which later morphed into Nayi Disha. While I failed to change minds or channel votes towards a prosperity movement, what became clear to me is that unless Indians demand liberty, it is going to be a difficult path ahead for most Indians. Having lost 75 years to illiberal and interventionist governments, we are in danger of losing many more.
Eamonn Butler’s book, published on the eve of the Oslo meeting, offered this view on the future:
… [T]here is every reason to believe that the Society’s members today can rise to the present challenges and hope to overcome them. Indeed, their predecessors have left them a much firmer foundation on which to do so. The failure of central planning has been exposed, both intellectually and practically. Inflation is better understood than it once was. There is a widespread and healthy scepticism about the ability of governments to run almost anything efficiently, and a broader questioning about the motives of those in power. There is a greater appreciation of the value of peace and stability in a more interconnected world. Trade, in both goods and, increasingly, services has become not only global but also a familiar part of all of our lives. Militarism and aggression are much less respectable.
Moreover, markets have spread into areas once thought to be the preserve of the state. Margaret Thatcher, greatly influenced by Hayek and Friedman and supported by Society member Sir Geoffrey Howe, began Britain’s privatisation of state industries, an idea that would go round the world, even into the former communist-led countries of Eastern Europe. Many other countries replaced their old state-run Ponzi-scheme pension systems with individuated private accounts like those designed by the Chilean minister (and Society member) José Piñera. School choice and school vouchers, ideas rediscovered and popularised by Friedman, began to reform and improve education in yet other places. Property rights have been expanded and business paperwork scaled back in large parts of South America, thanks to thinkers like the Peruvian economist (and another Society member) Hernando de Soto. And parts of the former Soviet bloc have opened up to (or returned to) social and economic freedom, thanks in large part to the ideas, understanding and influence of the Society members located there such as Mart Laar, Václav Klaus and Leszek Balcerowicz.
It is impossible to measure with any precision the impact of the Society in these achievements, and impossible to predict its influence on future events. In a very important sense, while its members may have considerable impact individually, the Society itself has none: it is, in Hayek’s words, only a ‘community of liberal scholars’ with no policies or programme of its own. But by bringing authoritative liberal thinkers together, and by expanding the scope and depth of liberal ideas, it ensured that liberalism could not simply be ignored. By offering a challenging critique of socialist thinking, it guaranteed that the assumptions on which socialism was based, and the presumption of its beneficial results, could not simply be taken for granted. By providing its members with mutual support, it gave isolated liberals the strength to hold their ground against the seemingly overwhelming force of the political consensus. By creating networks of liberal scholarship, it brought liberal ideas to active and enquiring young minds across the world. By informing the work of liberal policy institutes and a few thinking politicians, it helped change real events. All these activities continue, and on an ever-expanding scale. So in that sense, the Society’s influence will indeed continue to be significant.
India needs the equivalent of an MPS and economists like Hayek, Buchanan and Friedman who can make the case for liberalism and persuade people that it is only freedom (and especially economic freedom) which offers the lasting path to human flourishing and a life of dignity.
India missed out on two revolutions which brought prosperity to some nations (especially those in the West) in the 19th and 20th century: the classical liberal ideas centred around individual and constitutional constraints on government (with Adam Smith as the guiding light, along with the likes of Mises, Hayek, Friedman and Buchanan) and the Industrial Revolution (which multiplied human productivity). This is what lifted many hundreds of millions out of what had seemed until then as perpetual poverty. Liberalism, entrepreneurship and technology (especially in the harnessing of energy) created the modern world as we know it. And India, colonised first by the British and then subjugated by its own leaders after Independence, remained poor. 75 years after the British left, the per capita income of Indians is only $2,000, a sixth of the world average. Indians have created wealth for themselves outside India (the household income of Indians in America is the highest among all ethnicities) but have not been allowed to do so in India.
Even as the liberal world order faces challenges, India has this moment in time when it can rise. A politically stable and secure leadership can free Indians and open India to the world. A decade of breakthrough ideas like Dhan Vapasi, low taxes, protecting property rights, enablement of education, decentralisation of powers to cities, freeing agriculture from all its constraints, removing trade barriers, ensuring speedy justice and contract enforcement, and eliminating all discriminatory laws can see India rise rapidly to middle-income levels. [For more, see my Nayi Disha writings.]
The next Mont Pelerin Society general meeting will be held in India (New Delhi) in September 2024. The theme is apt for countries like India: “Freedom for the Next 6 Billion.” India needs the vision and ideas that MPS embodies. The intellectual heft of the MPS can be India’s guide as it seeks a roadmap to enable wealth creation for 1.3 billion Indians. Every other system to engineer prosperity has failed; it is only an environment of freedom with minimum government that creates the incentives for people to flourish. As the title of a book by Dierdre McCloskey and Art Carden puts it: Leave Me Alone and I’ll Make You Rich. Indians do not need another welfare scheme or subsidy or handout; what they need is economic freedom. Prosperity is the best legacy any leader can leave.
It all begins with the right ideas. As Mises wrote in 1957, “The genuine history of mankind is the history of ideas. It is ideas that distinguish man from other beings. Ideas engender social institutions, political changes, technological methods of production, and all that is called economic conditions.” Forums like Mont Pelerin Society are the incubators of ideas. We, the educated in India, have a responsibility to take these ideas, which are so aligned with human nature, to the people. A free and rich India can be the real Vishwaguru. With the West caught in the aftermath of its own financial excesses, with Russia and China being led astray by authoritarian leaders, India has a unique opportunity in its 75th year to transform itself (as this book by Atanu Dey explains). India’s Amrit Kal can become truly that if Indians embrace the ideas of freedom – not just political independence, but real economic freedom for every Indian and in every action. This is the Nayi Disha India needs.