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Dr Václav Klaus
Dr. Václav Klaus received his DSc honoris causa in March 1996. The following text is taken from the formal address given at the graduation ceremony.
''An economy brought low by controls and restrictions; a bloated central bureaucracy of administrators, officials, and clerks; exports of grain forbidden; trade between regions in grain forbidden; taxes high and resented but revenues insufficient to finance government spending - these were the unpromising conditions facing Anne Robert Jacques Turgot in 1774 as he was appointed by Louis XVI to the position of Controller of Finances. Turgot was a distinguished economist. He knew what was required - freedom to trade, economic decontrol, an attack on vested interests, financial stabilisation. He lasted twenty months. His reforms failed. Fifteen years later the King who dismissed him lost his head and not merely his job.
Like Turgot, Václav Klaus is a distinguished economist. He was educated at the Prague School of Economics and Cornell University. He worked at the Czechoslovak State Bank and became head of the Department of Macroeconomic Policy at the Institute of Forecasting.
Like Turgot he became a Minister of Finance - in 1989. Like Turgot he faced the most daunting problem in political economy - the transition from a failed system of economic controls to a system of economic liberty. Unlike Turgot he has lasted for more than twenty months. He became Prime Minister of the Czech republic in 1992 and the reforms he has championed have been, no doubt to the chagrin of those who predicted otherwise, remarkably successful.
From a country in which there were no private businesses in 1989 the Czech Republic now has a stock exchange with over 1800 quoted companies. The method of transformation was radical - the issue of coupons or vouchers to citizens which could be used to exchange for shares. The private sector now accounts for 70 per cent of the Czech Republic's gross domestic product. After the adjustment years of 1992 and 1993 when Gross Domestic Product and industrial production fell and inflation reached 20 per cent, the Czech economy began to respond. By 1995 inflation was 9 per cent, growth in excess of 4 per cent. More than any other Central European country, the Czech Republic has reaped the rewards of a rapid move to free markets and private property. Further, this economic transition has been accompanied by important political changes. Democratic politics based upon competing party organisations has taken root, and Václav Klaus played a major part in bringing this about. He became the Chairman of the conservative Civic Democratic Party in 1991.
Politicians do not always show evidence of fully understanding the issues which confront them. Under the immense pressures of office, some are driven, understandably, to a heavy reliance on their advisers. There is, however, an elite group of statesmen for whom this description would be totally false, and Václav Klaus is now one of its most distinguished members. What marks out this group is a mastery of a coherent economic and social philosophy. Without this understanding of the workings of the economic system there is a danger that the politician is left merely with a commitment to a set of aspirations - a set of things which it would be nice to bring about. Václav Klaus has far more than this. He is noted for a clear view of how the economic system actually works and the ability to analyse social and economic problems using a consistent framework.
This intellectual grasp gives such a statesman great advantages. He becomes not the creature but the scourge of his advisers. His words are his own, and, combined with a ready wit can carry huge persuasive power. Václav Klaus is credited with some telling epigrams. Asked about the so called "third way" between communism and capitalism he famously replied: "the third way is the way to the third world". When asked whether he wished to introduce the "social market" to the Czech Republic, the biting response came back that he wanted "markets without adjectives, without ifs and buts".
It is not merely in his own country but also on the wider European stage that the influence of Václav Klaus is increasingly felt. As the Czech Republic regains the position achieved earlier in the twentieth century as one of the most prosperous regions of Europe, the nature of its relations with the European Union will have to be settled. A person who has dismantled a bureaucratic and over-regulated system in his own country will not lightly succumb to its re-imposition from another source. It is reassuring to know that there are some European statesmen who fully understand that free trade will generate social benefits only if opportunity costs differ between regions and that to suppress or distort such differences by regulations and controls will not, in the language of Article 3 of the Treaty of Rome, ensure "the proper functioning of the common market" but will undermine its most basic purposes.''