Rebuilding a war-torn economy: Economic reforms and making them stick.
The below is a speech delivered by Ron Manners at the Warsaw/Kyiv leg of the Free Market Roadshow 2023
My good news for you today, is this.
“It only takes one person to change your country, or perhaps your world.”
Most of you are aware of the damage done by one individual, the Marxist strategist Antonio Gramsci.
Fortunately there are many examples of one person transforming economies and I will give you five such examples.
You may not be aware that it was one person who saw the benefits to flow from the free market policies that he brought to Hong Kong.
It was Sir John Cowperthwaite, the Financial Secretary of Hong Kong, who installed an economic system so ingrained in Hong Kong’s policy setting that even China is having trouble unstitching it.
A study of John Cowperthwaite’s policies and the outcome is worth careful study.
You may also not be aware of an example of how one person master-minded the economic reforms in New Zealand in the early 1980s. Roger Kerr was his name and he inspired two courageous and determined New Zealand Members of Parliament (Roger Douglas and Ruth Richardson) to turn his policies into reality.
This gave the world an excellent example of how a free economy, and free people, can lift a country, and its people, quickly up the ladder of prosperity.
Another classic example of what one person can achieve is Ireland, where 100 years ago Ireland’s statistics mirrored Nicaragua’s.
Then in 1957, the single person in Ireland’s case was T. K. Whitaker. As Ireland’s head of the Civil Service Commission he produced a policy paper entitled The Irish Economy and proceeded to introduce economic free-market reforms that subsequently lead to Ireland’s economic success and prosperity.
Bert Kelly, an Australian farmer and later, Member of Parliament, watched this happen and wondered if Australia could replicate this success story. Bert Kelly was a lone voice for much of his life, poking fun at the shackles of protectionism which throttled progress in New Zealand and Australia, for most of last century.
John Hyde, another farmer, this time from Western Australia, caught this ‘economic reform bug’ from Bert Kelly and it was John Hyde OAM who constructed the detailed reforms, over every aspect of Australia’s economy, which would lift our country.
He had assistance from others in his group (referred to as the ‘Dries’) but single-handedly he master-minded Australia’s reform program from beginning to end.
As a Member of Parliament, John Hyde was unable to convince his own Liberal Prime Minister, Malcolm Fraser, to adopt any of these policies. But, surprisingly, the newly elected Labor Party Prime Minister, Bob Hawke, was convinced by John Hyde that these reforms, instituted immediately, would establish Bob Hawke’s reputation in the longer term.
Prime Minister, Bob Hawke, accepted John Hyde’s program with enthusiasm and announced to his Cabinet, “We will do the lot”.
From a personal point of view, it was my good fortune to be in business, at that time, and experienced our country – Australia – being ‘set free’. Australia was just like a becalmed boat starved for wind suddenly receiving an enthusiastic full wind in our sails.
The full implications of John Hyde’s contribution to Australia’s reforms were captured in one document – https://www.mannwest.com/john-hyde-in-three-words/
John Hyde’s archives are available here – https://www.mannkal.org/research-publications/john-hyde-archives/ These have been collected and include thousands of his regular newspaper articles detailing the economic challenges and the results from sensible reforms.
John Hyde inspired our Mannkal Foundation to produce a book – Project Western Australia (A Growth and Productivity Agenda for the Next Government) that was circulated, in print form, to every Western Australian politician and the media.
Copies of our Project Western Australia were forwarded to Ukraine, last year, under the guidance of Tom Palmer from the Atlas Network and formed the basis of our extensive communications and Zoom conference with Maryan Zablotskyy, a Member of the Ukraine Parliament. We were also able to submit several sample copies of Australian legislation where various updates had overcome some problems of earlier legislation.
Now, all that sounds fairly simple, and it reminds me that all things do not go well, such as the collapse of the former Soviet Union.
In September. 1990 as a Member of the CATO Institute visiting team to Russia and St. Petersburg, we held a large conference called Transition to Freedom.
At that time, we had the opportunity to physically see the Soviet Union falling to pieces.
All this gave us, as free market proponents from the West, was a false sense of jubilation.
Let me quote from a Foundation for Economic Education publication, Beware of Despair, by their President, Hans F. Sennholz, in 1994, where he stated – “A free-market counterrevolution is rising, sweeping away socialism in all its forms and colours, and bringing hope to poor people everywhere. Governments are being downsized, public enterprises are privatized, and taxes are lowered. The ‘houses’ which Marx and Keynes built are being razed and replaced by ‘houses’ designed by Adam Smith and Ludwig von Mises. The light of economic freedom is shining brighter now than at any time in this century.”
Yes, it was an easy trap for us to rejoice that the free market had won the battle of ideas!
This was to under-estimate the ongoing March of Gramsci’s ‘The Long March Through our Institutions’.
Similarly, the remarkable free-market steps made by New Zealand and Australia did not persist and anyone trying to start a new business, in either of those countries today, risk being overwhelmed by the weight of bureaucratic tentacles that inhibit any forward movement.
What have we learnt from this failed experiment to free the world’s economy from the continuing overreach of governments and their attached bureaucracies?
If we are again successful in introducing free-market reforms what should be foremost in our minds?
How to make economic reforms stick!
For advice on locking in such reforms on a permanent basis it is of utmost importance to adopt the strategies outlined by Niccolo Machiavelli.
If you are not familiar with Machiavelli’s strategies start by reading “Australia Could Use a Machievelli” by Gary Furnell. It is important to absorb and follow the content of the collection of Machiavellian links listed in the footnotes.
Now, with some background the importance of Machiavellian strategies, to lock in long-term reforms, it is time for me to hand over to my colleague and fellow director of the Mont Pelerin Society, Prof. Nils Karlson, of the Ratio Institute of Sweden.
In Prof. Karlson’s book – Statecraft and Liberal Reform in Advanced Democracies – he covers, in detail, the economic reforms executed in various democracies and gives expert advice on making such reforms permanent.
Prof. Karlson’s full deck of illustration slides can be viewed here.
So, in conclusion, I have stressed the importance of developing and instituting sweeping economic reforms to free up economies, in all our countries.
Of equal importance, is to focus on the strategies required to make those economic reforms permanent this time.
I have also outlined that these reforms are often brought into being by the work of one individual. You have heard my story of those strong individuals who have masterminded significant change to their countries.
My challenge, therefore, to you is to either become that one person or to discover and support such a person in your country. Give them your fully focused support.
Equally important is to adopt strategies that will lock in and make it impossible for the reforms to be undone. That will then be your major contribution in rebuilding our civilisation.
Let me leave you with this question: “Who will be remembered as Ukraine’s economic reformer of this century?”
The Prince – Niccolo Machiavelli
Management and Machiavelli – Antony Jay
New Machiavelli – Alistair McAlpine
The Seven Books on the Art of War – Niccolo Machiavelli
EDIT: July 6, 2023
Thankfully this visit went better than Ron’s visit to Kyiv in 2016 as told by Federico N. Fernández in Strong emotions in Ukraine: coming to Kiev is anything but ordinary!