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Thursday, March 28, 2019

Lawrence W. Reed on Austrian Economics, FEE, Liberty in Serbia, Venezuela, and More

Larry Reed's interview with the Serbian student magazine, The Monopolist.

On Friday, April 5, 2019, FEE president Lawrence Reed will keynote LibertyCon-Europe in Belgrade, Serbia, sponsored by European Students for Liberty (ESFL). In advance of his visit to Serbia, Reed was recently interviewed by The Monopolist, a student magazine published in cooperation with ESFL by the Faculty of Economics at the University of Belgrade. Topics that came up include Austrian Economics, FEE, the potential for liberty in Serbia, the crisis in Venezuela and more. The text appears below in English and is also available via PDF here and HTML here.

1. Which economic school of thought are you closest with, when we are talking about academic economics?

Since my college days in the 1970s, I have identified strongly with the principles and methodology of the Austrian School of Economics. The Austrian economists I appreciate the most were Ludwig von Mises, F.A. Hayek, Henry Hazlitt, and Hans Sennholz. My primary economics instructor in undergraduate college was Dr. Sennholz, who earned his Ph.D. under the tutelage of Mises. More than any other school of thought in economics, Austrian thinkers emphasize that to understand the so-called “macro” economy, you have to trace all economic phenomena back to acting, decision-making individuals. The contributions of the Austrian School are immensely valuable on a wide range of topics, including subjective value, marginal utility, the entrepreneurial process, the inevitable failures of the planned economy and socialism, the trade cycle, and the importance of money as a market phenomenon.

I also respect and admire the work of economists in the Public Choice tradition, such as the late James Buchanan, and even many ideas of certain Chicago School economists like Milton Friedman. But to this day, my sympathies lie principally with the Austrian School. More than any other school of thought in economics, Austrian thinkers emphasize that to understand the so-called “macro” economy, you have to trace all economic phenomena back to acting, decision-making individuals, none of whom ever possesses by themselves or in groups of any size the voluminous information that would be required to centrally plan an economy. Hayek put it well in one of my very favorite quotes: “The curious task of economics is to demonstrate to men how little they know about what they imagine they can design.”

2. You will soon be coming to LibertyCon, Europe’s biggest international conference of pro-liberty students that will take place in Belgrade, Kolarčeva zadužbina, for the second consecutive year and hold a lecture there. What do you expect from the future visit and the conference?

In 2019, I will be speaking again in several countries in Latin America, Europe, and perhaps the Asian sub-continent, but I am certain that my visit to Serbia and LibertyCon will be among the highlights of the year. I always enjoy interacting with young people who are passionate for liberty and free markets. My hope is that I can inspire them further. In Belgrade, I expect to see personal as well as social media friends and to make many new ones. I look forward to learning more about what they are doing on behalf of the ideas and values we share. After two days in Belgrade, I will go on for some sight-seeing in Bosnia-Herzegovina, Croatia, and southern Italy. So, this trip will be a combination of business and pleasure.

3. You are the president of the Foundation for Economic Education, the oldest free-market think-tank in the US. Can you tell us more about your mission, goals, and the Foundation itself?

Our vision at FEE is of a world where the ideas of liberty are familiar, credible, and compelling to the rising generation of young people. Our mission is to inspire, educate, and connect future leaders with the economic, ethical, and legal principles of a free society, which include free-market economics, entrepreneurship, private property, high moral character, and limited government. One of the things we are most proud of is that with a relatively small budget and staff, we generate the output and impact of groups many times our size. We accomplish this through multiple programs and publications: a robust web site ( that attracts a million and more unique visitors each month; free, online courses in economics and entrepreneurship; one-day and three-day seminars for high school and college students; stimulating videos and podcasts that we produce ourselves in our studio and on the road; and speakers on campuses and in public venues that reach tens of thousands around the world each year.

We have a full-time staff of about 30 people with a headquarters office in Atlanta, Georgia, and a budget of more than $5 million. One of the things we are most proud of is that with a relatively small budget and staff, we generate the output and impact of groups many times our size. Our emphasis on strategic planning, quality products, customer focus, and high productivity have given us a reputation as one of the world’s best free-market educational think tanks.

I also maintain my own personal website,, as well as my own “public figure” Facebook page. They are extensions of both my personal philosophy and FEE’s mission, so I invite my European friends to give them a look, too.

In a few months, after nearly 11 years as president and as I approach age 66, I will step into a very active president emeritus role at FEE. That will hopefully give me more time for writing and, of course, I will continue doing a great deal of public speaking around the world. I am extremely proud of what my team at FEE and I have done in the past decade. My successor, whoever it is we choose, will inherit a fantastic organization on solid financial footing with a sterling international reputation as I explained in an article on our website last year.

4. Do you think there is a global crisis of concept in liberal democracy and “laissez-faire” capitalism in recent years? Especially when we consider several political turnovers that occurred in EU countries and the US, or when considering that there is an ongoing trade war with China.

When people look to the state as their savior, they set themselves up for endless disappointments, systemic corruption, erosion of personal liberties, and needless poverty.

If there is a crisis, it’s not in the concept or ideas of what you call “liberal democracy” or what I would call “classical liberal republicanism.” The truth and virtue of those noble objectives are underscored every day, especially through the predictable, intractable, and serious problems created by all forms of interventionism, from socialist central planning to the welfare state. The crisis arises from departures from liberal democracy or classical liberal republicanism. When people look to the state as their savior, they set themselves up for endless disappointments, systemic corruption, erosion of personal liberties, and needless poverty.

That’s where the crisis is, and the deeper the interventions, the more pervasive the crisis. Nothing about the track record of government intervention shakes my confidence in liberty and free markets; quite the contrary, in fact. I look at Venezuela’s tragedy, for example, as a crisis of socialism for which the only answer is the radical diminution of government and the liberation of the individual.

In Europe, the crisis is also one of top-down, bureaucratic, soul-crushing statism, and the solution is the same—namely, to get politics and politicians out of people’s pockets and lives. Everywhere, advocates for liberty must work harder and better to explain to people why liberty offers a far superior future than statism could ever hope to achieve.

5. Serbia is a post-socialist society and it does not have a long-lasting democratic tradition nor does it have strong economic or political institutions. In what measure do you think that ideals of economic and political liberty are really achievable in mentioned conditions in Serbia and in the region?

Nothing is impossible. Anything is achievable, even if it takes some time and even if there’s no precedent. It all depends on the ideas in people’s minds—what they understand, what they believe and how much they will work to implement those ideas. With hard work and persuasiveness, lovers of liberty in Serbia can make this country a model for Europe and the world. Even if a country has utterly no history of liberal ideas or liberal institutions, it can always move in new directions and establish new precedents if its people change their thinking. So I would never abandon any worthy goal, especially one of such inspiration and with such great potential as liberty.

I’m well aware of the difficulties—cultural, historical and political—that lovers of liberty face in places like Serbia. But remember that just a few hundred years ago, almost nobody anywhere was free. All of humanity was in slavery or serfdom, or lived in constant fear of those with political power. Since the Enlightenment, the power of liberty ideas has lifted a substantial portion of humanity out of that morass. But progress has never been a straight line and it hasn’t come to every corner of the globe at the same time. With hard work and persuasiveness, lovers of liberty in Serbia can make this country a model for Europe and the world. Set your sights high, avoid pessimism or defeatism in your outlook, don’t sell yourself or your country short, and never give up. Liberty is just too important to give up on. Life itself is almost unthinkable without it. We are made, by our very nature, to be free, not to be somebody else’s personal, programmable robots.

6. What are some critical economic and social challenges the world needs to overcome in order to avoid future crises and depressions?

Psychologically, the world must reject the debilitating impulses of socialism. I’m referring to such mentalities as envy, dependency, irresponsibility, short-term focus, and “equalness” in all things. People must embrace and celebrate their differences. They should put their attentions on self-improvement instead of dragging down or denigrating the successful and productive. They must cultivate voluntary, civil society institutions where they will do a much better job than governments. They have to see the wealth-creating entrepreneur as the great, positive change-maker in society, not politicians who sloppily redistribute what they could never create themselves. I think the #1 issue is the same as it has always been, in all countries and in all times: personal character. We must understand that initiating force against innocent fellow citizens—no matter if it sounds like a good idea—is anti-social, anti-progress and anti-liberty. If these psychological challenges are not successfully met, nothing in the policy world is going to make much difference.

People all over the world ask me the same question: “What do you think the #1 issue is?” They expect me to say “war” or “terrorism” or “national debt” or “school reform” or other policy matters. But I think the #1 issue is the same as it has always been, in all countries and in all times: personal character. Ultimately, we get the policies and outcomes that our character produces. A corrupt, dishonest, irresponsible people will support corrupt, dishonest, and irresponsible politicians and policies and that’s what they’ll get. A timid people will get tyranny because tyrants will take advantage of their lack of courage. In my belief, no country ever rose to genuine liberty and greatness without strong, widely-held character. At the same time, no country ever lost its character and kept its liberties.

I wrote a book about this, titled Are We Good Enough for Liberty? and added a new section to its second edition last year, a section titled “Liberty as a Life Philosophy.” Anyone can read it online, for free, here.

7. The world’s attention is focused on a situation in Venezuela for quite a while, and tensions are hardly subsiding. What is, in your opinion, the main cause of the Venezuelan economic, and consequently social depression? How much did Maduro’s leadership affect this and how impactful were American sanctions to Venezuela?

As of this writing, which is January 31, Venezuela is in the grip of the worst economic and political calamity of its history. Events are moving fast and may change a lot by the time this interview is published. I can tell you without hesitation that the source of the calamity is socialism, pure and simple. Socialism is an evil iron fist wrapped in a tempting but delusional velvet glove. Here’s how it works:

Socialists buy votes with promises of free stuff. Gullible people who refuse to think further than next week, don’t care about the math, or can’t muster the personal character to avoid being accomplices to theft, support it. They’re egged on by envy and demonization of the productive. Socialists then concentrate power and money in the hands of the State. When the economy crumbles, socialists then use the crisis they created as an excuse to control virtually every aspect of life. Big Brother arrives. The only thing that socialism, in the long run, does for poor people is give them lots of company.The velvet glove is ripped off and people find themselves trapped in poverty and tyranny. When you concentrate money and power in the hands of the State, this is what you sooner or later get.

Hugo Chavez, of course, set this awful process of destruction in motion almost 20 years ago. Venezuela had a lot of cronyism and too much government even before he came to power, but it was still one of the freest and richest countries in Latin America. Chavez set one class against another and postured as savior of the oppressed, only to become their greatest oppressor. He showed us once again, as I like to say, that the only thing that socialism, in the long run, does for poor people is give them lots of company.

Nicolas Maduro proved to be even worse than Chavez. He’s a very stupid brute, the kind of person who is attracted to power and whom power easily corrupts. He learned nothing from the failures of socialism under Chavez and has doubled down on the government’s lunacy, from price controls to printing money to nationalizing businesses. His first resort is the use of violence, even as a way to deal with the terrible consequences of his previous violence. I look forward to the day soon when he is brought to justice for his crimes, one way or the other.

American sanctions have hurt, for sure, but their effect has been minimal compared to what socialism has done to Venezuela. In fact, American sanctions may have even been offset considerably by subsidies from Cuba, Russia, and China. Socialists the world over cannot honestly point the finger of blame for Venezuela’s disaster at anything but their own bizarre, hate-filled and preposterous philosophy.

I’m fond of quoting a line from Robespierre, the bloody left-wing architect of the French Revolution’s Reign of Terror. He was apparently the first to justify ruthless political violence with the phrase, “To make an omelet, one must break some eggs.” But Venezuela is the latest in a long string of examples that illustrate this: Socialists never make omelets. They only break eggs. Again and again and again. Needless to say, they never learn and they never apologize, unless of course, they wake up and stop being socialists.

8. Do you see the Venezuelan state in the near future as a persistent South American pariah or are there are possibilities for changes towards liberal democracy and a free-market orientation?

I am very hopeful for Venezuela and have many friends there, including many thousands on my Facebook page. I have friends in the Venezuelan exile community in the United States and other parts of Latin America. I refuse to give up on them. Yes, Venezuelans in great numbers once embraced socialism and Hugo Chavez in particular. But now they are realizing in equally great numbers how mistaken they were. There is a strong, grassroots movement in Venezuela to get rid of socialism and bring freedom again to the country. I think it will succeed and I look forward to the day soon when I can go to Caracas and help the people celebrate their hard-won liberty. Meantime, the absolute, unmitigated, tragic and predictable failure of Venezuelan socialism can teach the world some very valuable lessons.

I have hope, in fact, for every corner of the globe. We are fighting a battle of ideas, not a battle of personalities. Good ideas are contagious if presented effectively. They are taking root in unexpected places. I was thrilled, for instance, to speak to a huge audience of young Russian libertarians in Moscow just last November.

9. If you could recommend one book to economics students, which one it would be?

Henry Hazlitt’s classic Economics in One Lesson would be that book. It’s available free in pdf form on our web site here. But very close behind that one would be Frédéric Bastiat’s “The Law” because any society that embraces its principles will automatically get its economy in proper order. More on Bastiat as well as the link to the book online can be found in my essay here.

On my personal website, I feature my own books including the most recent, Real Heroes: Inspiring True Stories of Courage, Character and Conviction. Though the subject matter extends beyond economics, I profiled a number of heroes in the book who made a difference in the world of economics, such as Adam Smith, Frederic Bastiat, Andrew Mellon, and Ludwig Erhard.

10. Lastly, what would you like to tell the students of the Faculty of Economics in Belgrade who will be reading this interview?

When I interviewed underground pro-liberty activists in communist Poland in 1986, I asked them how they knew if anybody was listening to their illegal radio broadcasts. The answer was, “One night while on the air, we asked people to blink their lights if they believed in liberty for Poland and the message of our radio. We then went to the window and for hours, all of Warsaw was blinking.”

So I want to tell the students of the Faculty of Economics in Belgrade to think of themselves as blinking lights for liberty. Have courage. Be principled. Keep your character high. Master your subject and the ability to communicate it. Be persistent and relentless. You can change your country and you can change the world. Friends of liberty in all corners of the globe are with you and are counting on you.

  • Lawrence W. Reed is FEE's President Emeritus, having previously served for nearly 11 years as FEE’s president (2008-2019). He is also FEE's Humphreys Family Senior Fellow and Ron Manners Global Ambassador for Liberty. His Facebook page is here and his personal website is