The Mont-Pèlerin Conversation

A couple of weeks ago, in Mexico City, I gave a speech to the Mont Pèlerin Society, of which I am the current president. On the left, the Society is viewed as a conspiracy of conservatives. But it’s actually a quite open conversation of essential liberals—not conservatives. We converse about what leads to liberty. Yes, it’s a private conference, though hardly secret. And yes, we regularly conclude, on the basis of logic and evidence, that liberty is not served by state socialism. But surely it’s best to discuss such matters, not to haul out the guns, or fabricate dark conspiracy theories about people you disagree with.

The topic of the conference was “Liberty in the Americas: Rebuilding the Foundations of Prosperity.” For a monolingual gringa to pretend to know precisely what is best for human flourishing South of the Border would be highly presumptuous. That sort of presumption has been typical of Anglo economists since the War. No wonder the World Bank and the International Monetary Fund are both located in Washington.

You know that I think that great liberty, free from state coercions, is what caused the Great Enrichment from 1776 to the present. The overwhelming evidence, I have argued at length in many of my wonderful scientific contributions, which I urge you to study as you would the Bible or “The Communist Manifesto,” is that liberalism, not science or Enlightenment or investment or slavery, made us very rich, and reasonably virtuous.

I’ve not always believed it. When I was a graduate student at Harvard during the 1960s, I was a research assistant on a project to advise the Colombian government on its transportation system. As a typical young economist, I knew all about input-output analysis, cost-benefit, Keynesian fiscal policy, central planning. But I then knew about the actual foundation of prosperity for Colombia as much as I knew about Spanish. Namely, nada. I was a statist, and Harvard was to rule.

What I did not then know, but what the Society knew already at its founding on 10 April 1947 in the shade of Mont Pèlerin near Geneva, is that liberty makes for flourishing. Top-down engineering of humans doesn’t work. Or more exactly, it does work, perversely, to make adult citizens into dependent children—on the road to serfdom, as a non-Anglo economist once put it.

What we know, as another president of the Society, James Buchanan, said, is not engineering but constitutions. Yet even Jim may have been a little too constructivist. We’ve learned from the old and new assaults on liberalism that good politics depends not so much on institutions as it does on the moral sentiments supporting the institutions. “Add institutions and stir,” I’ve noted, is not a recipe for prosperity. If people of malice take over a nation by coup or by vote, no structure of institutions, such as the American or Brazilian constitution, can help. Not much.

So, damas y caballeros, it comes down to the sources of morality—our mothers, our teachers, and above all, our beloved friends in liberty, gathered in Porto Alegre or Mexico City.

Weekly column in Folha de São Paulo, Brazil
Translated into Portuguese for the newspaper.