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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

How can we expand the space of freedom?

18 October, 2005 - 00:00

Since the days of Adam Smith, the pioneering liberal economist, the best minds in Europe have known that real progress is possible only through the emergence of the so-called “economic person,” a subject of economic life, who is maximally independent of the state. Most importantly, such progress is possible after a critical mass of such people has formed in society. Proposed and developed by liberal thinkers, this idea gradually became the cornerstone of flourishing capitalist economies that have enabled their citizens to engage in free enterprise.

Even though the liberal movement is widespread in Ukraine, with several political parties sharing a liberal ideology, so far it has not produced any tangible results. Further proof of this is the roundtable discussion entitled “Liberal Economic Prospects in Ukraine.” Hosted by the Institute of Liberalism, the roundtable attracted a number of politicians and economists, who discussed ways to cultivate the economic person in Ukraine. However, they failed to propose a viable recipe for Ukrainian conditions. Neither could they find one in the agenda of the pro- presidential Our Ukraine People’s Union, which also proclaims a liberal policy. Volodymyr Klymchuk, the director of the Institute of Liberalism, describes this party’s agenda as a “textbook management program.” Viktor Lysytsky, cabinet secretary in the 2000-2001 Yushchenko government, said seriously or jokingly, “[The liberals] have to deal with the wrong kind of people,” adding, “It is part of the historical heritage.” According to Lysytsky, this is the very reason why the Ukrainian state cannot be liberal. He describes the heavy-spending budgets drafted by the government and passed by parliament as “anti- liberal” because they do not provide funds for the development of private enterprise and do not create tools of a multiplicative nature, i.e., nourished and supported by private capital.

Lysytsky believes that under these conditions businessmen live in constant fear of government harassment. How can this situation be remedied? Lysytsky says that the government must not only change its attitude toward business, but also pay greater attention to free speech and personal development, including the development of the economic person.

Oleksandr Paskhaver, president of the Economic Development Center and presidential aide, discussed the key element of the liberal model, i.e., the privatization process, a frequent target of public criticism in Ukraine. During the roundtable Paskhaver asked, “What are liberally-oriented people to do in a non-liberal society?” He thinks Ukrainian society today has clearly defined characteristics that restrict the adoption of liberal values and efforts to spread this ideology. These are egalitarian psychology and paternalistic expectations. Ukrainian society does not preach law-abiding values. Violations of the law are often justified and even moral, and are not publicly condemned. Finally, it is a society with a cult of corruption. A liberal democracy envisions opposite priorities. Therefore, from the very outset Paskhaver has viewed privatization as a political rather than economic process. “I would call it a civilizational process,” he says. “The main goal of privatization, which is not mentioned in any documents, was to create a subject of change, i.e., a social class whose core interest would be a historic movement toward market reforms,” says Paskhaver, adding, “What happened before the Orange Revolution is the prehistory of the new Ukraine because before the revolution the country did not have a subject of history. The revolution defined it. It is the so-called third estate, which has emerged in the process of privatization. Significantly, it’s not just big capital and businessmen but millions of self-sufficient citizens, who earn their own living. They made up the bulk of the crowd in Independence Square, because the old power was constraining the growth of their wellbeing.” Paskhaver is convinced that in this sense last year’s events have a majority of the characteristics of a revolution, because all revolutions emerge against the backdrop of quick economic growth, when “the period of existence on the verge of survival is over.” “This is a good lesson for our current leadership,” he says. “If we prove unable to make it adaptive, i.e., sensitive to change, this inability will ensure that we will move in the opposite direction from liberalism, meaning a return to a government of populist radicals, who appeal to the lower social strata or preach egalitarianism through antibourgeois rhetoric; or we will have a rightist dictatorship or more public unrest.” Summing up his remarks at the roundtable, Paskhaver said, “All these scenarios are extremely unwelcome.” The goal of the new government is to become adaptive, or capable of registering historical progress. He says that privatization is what removes the state’s monopoly from our lives. It expands the space of freedom, especially important in a corrupt society in which the state offers a very weak and ineffective resource for change. Paskhaver predicts that further privatization will not receive social approval, since it does not correspond to society’s moral standards. Nonetheless, he says it is crucial to continue privatization in the broadest sense of this word, to develop the infrastructure of private enterprise, and to reform the state with a view to establishing public control over the bureaucracy.

By Vitaliy KNIAZHANSKY, The Day
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