 Good morning. I want first to thank Hans Hermann Hopper for inviting me at this outstanding meeting. I must say that I do like what Hans Hermann is writing. And for instance, recently I wrote a review of his last book which has been translated into French. And I say that everyone ought to read this book, which is very important. I must also say that I'm very happy to be in Broad Room which is called the Turkish Saint-Tropez after having spent my whole summer in my house in the French Saint-Tropez. So now about France and the French intellectuals. France has happily the sad record of being one country with the highest ratio of public expenditures and taxation and maybe also the highest ratio of public regulations. And the consequence is that for decades we have had a very low gross rate and a high rate of unemployment. So there is a contrast between two things, this situation in France and the fact that we had in the past some of the most famous liberal writers people like Bastiat, Jean-Baptiste Saint-Turgo and so on, there are a lot of people and I will have the opportunity to quote some of them. So we may believe that ideas have consequences. And so we may wonder how it is, why we can explain that these very important liberal writers who have been known all around the world could not convince French people so that France would be a model of liberalism. I must say that I have tried to give an answer to this question forever and I'm not certain that I could really find the explanation and this meeting was for me an opportunity to think again about it. Someone asked once to Milton Friedman how is it, how can you explain this situation, this contrast between the two things. And Milton Friedman answered, you know, in order to describe hell you have to live inside it. So this is true, this is true, but anyhow, anyhow, the most important liberal thinkers have written their book at a period which was not the worst. France, it was at the beginning of the 19th century and little by little France has become less and less liberal, especially in the 20th and 21st century and I think that right now we are in hell, I have to accept that. But it is not during these recent decades that these important liberal writers wrote their books. Therefore we may assume that there is a reverse causality. State interventionism is an obstacle to the development of liberal ideas and I think I can give some example of that in my presentation. In reality, there has always been in France the juxtaposition of liberal and extremely interventionist and authoritarian ideas. And I will try to summarize this history, both history of France and history of intellectual ideas. In the 18th century, the physiocrats believed in the importance of individual freedom. One of them is a very famous history, Thurgo, who is a great liberal. And the physiocrats, I think, led the foundation for a liberalism which will develop later in French and English, for instance, Adam Smith. The French Revolution in 1789 may be considered as an example of the influence of ideas on social events. In fact, one may consider that the physiocrats had contributed to a change in public opinion and thus the French Revolution has been a strong supporter of individual freedom, freedom of contract and human rights. The official motto as you may know, the official motto in France is freedom, equality, fraternity. It appeared during the revolution but it became the official motto in the Constitution of 1848. Initially equality meant equality in rights as it has been claimed in the declarations of the rights of people and citizens of the revolution according to which there is a famous sentence, all human beings are born free and equal in rights. However, in the 20th century, particularly, equality has been interpreted as an equality in standards of life and a justification for redistributive policies. However, the French Revolution also offers to us an example of the ambiguity of French ideologies and policies. As soon as 1793, there was what has been called the terror period in which the statesmen killed their opponents. The revolution also, I think, put the basis for a development of public powers. Some years later, Emperor Napoleon took power and he developed very important state activities and authoritarian regime. In particular, he decided that education had to be done by the state, which has, I think, many consequences. At that time, certainly, liberal ideas had not disappeared. It has been the time with the most famous liberal writers and I can quote some of them. You know, I suppose, most of them Benjamin Constant, for instance, who thought that political power, even if it is democratic, has to be limited in order to be respectful of individual liberty. I think that the best one is Frédéric Bastia. I will not try to summarize the ideas of Bastia. I suppose that most of you have read Bastia and if you have not, as soon as you come back to your home, you buy books by Bastia and you read them. It is really fantastic. But it is characteristic that from the end of the 19th century until quite recently, it was impossible to buy a book by Bastia in France. And it was in 1983 that a friend of mine, Florent Aftaliou, decided to publish a book with several texts of Bastia. So it had been completely forgotten. Jean-Baptiste says another well-known liberal ideas and, for instance, you know, says love, which can be considered as a fruitful argument against kinesianism. So what is characteristic is that in the 19th century, liberals were called economists and the opponents were socialists. For instance, you find that in Gustave de Molinari's very interesting book in which there is a dialogue between different persons, the economists, the socialists, and the conservatives. And you can find in Molinari what will be said later on by Hayek, who said that the real distinction is not between the right and the left, but between constructivists and liberals. Constructivists can be on the left or right, but the real opposition is, and I think Hayek is a certain right, but Molinari said about the same thing. So liberal economists, anyhow, have been important in France in the 19th century. They had created a magazine, the Journal des Economistes. But strangely enough, they were not, most of them, university professors, and I will explain why later on. Anyhow, this period, the beginning of the 19th century, maybe an illustration of the fact that there has always been divergence between dominant ideas. We had these great liberals, but at the same time we had Saint-Simon. Saint-Simon believed that the human will can rationally decide economic activities. And the members of the Saint-Simon school, the Saint-Simonians, who are also called positivists, are against private property and they suggest that the state be the owner of the means of production. Also at that time, there was Fourier, who suggested to create a corporation where workers would live together and would own the factors of production. Proudhon is famous for having said, what is property? It is robbery. So there were a lot of divergence between intellectuals in this period, both liberals and very interventionist ideologies. Hayek has given, I think, a good explanation of that and maybe the best explanation of the French situation. Thomas says that very admiring Hayek, he had a knowledge of French history and French writers, which is really exceptional. And just to summarize, he has a methodological explanation. He says that at the end of the 18th century and the beginning of the 19th century, France had some of the most famous physicists. And people thought that the method, pragmatic method, empirical method, which have been fruitful in physics and other science could be applied to social science and that people could know how to manage society. And this was, according to Hayek, this was the beginning of what he calls the social engineers. And I think he's right, we had a lot of social engineers until now. People who believe that they can rationally organize society. From this point of view, Hayek stressed the importance of the so-called political technique school, which has educated a great part of the French elite, even now, either in business or in politics. Many people are former students of the so-called political technique and these people are positivists, as they are called by Hayek. I must say that if ever Hayek was to write his book again now, he would stress not only the importance of the political technique school, but also of what is called the School of National Administration, which is educating people who will become high civil servants. And so most high civil servants in France and politicians are former students of this school. And just to give an anecdote, strangely enough, I was asked once to deliver a course on international economics to the students of this administration school. And the president of the school told me, but first you have to meet the students to explain what you want to deliver as lecturers. So I did it. I explained the theory of international trade and so on. And all students, all of them answered to me, we are not interested in ideas. We don't want to understand. We want to know how politicians decide. So you see that education in this school is very bad. They don't want to understand. It is very bad. It is a corporation or something. But as I told you, most people who are in charge of France are former students from this school. Hayek, to come back to Hayek, he has also written in his book, The Counter-Revolution of Science, he has written a lot about Saint-Simon and Saint-Simon School, Saint-Simonian, the positivist. And he says rightly that they have played an important role in French ideology and French policies. So the characteristics of the French society and French politics are certainly contrary to what the famous liberal thinkers have written, but they are coherent with other dominant ideas, the ideas of the positivist. And from this point of view, there is not a paradox in France, but there is a coherence between these realities and part of the intellectual mainstream. Hayek has devoted many pages in his book to discuss Saint-Simon ideas, and he says that he has inspired Hegel. From this point of view, it can be said that ideas have consequences, at least bad ideas, unhappily. And the importance of Marxist ideas in France in the 20th century may be considered as coherent with the importance of Saint-Simonian ideas. I must say that I have always been fascinated by the attention given by Hayek to French problems, which may mean that it is impossible to find in other parts of the world some similar situations. Frédéric Hayek used to say, if ever, one day in the future, France is liberal, it will mean that the whole world had already been. So he considered that France was the last liberal country in the world. Let me just quote something which is one of my great memories with some friends of mine. We had organized a lecture of Hayek in the National Assembly, and the day after I visited him and he told me, you and your friends are part of the hope I have in the world. He just considered that having liberals in France was something very important, given the idea he had about France. So let me just come back a little to the beginning of the 19th century to stress that in fact the policies which have been made, economic policies, I am an economist so I am focusing on the economics, economic policies in the 19th century can be considered as liberal policies, trade, etc. It was the development of capitalism and so on. But at the end of the 19th century there was a development of social Catholicism. And in the 20th century it was very active and social Catholicism has inspired many organizations. We had a great influence in France. But Marxism also has been very influential in France in the 20th century. After the Second World War it has been I think the most important ideology in France, in particular in university. At the end of the 19th century a revolutionary trade union had been created and this trade union is still very active and it is at the origin of many of the strikes we have. We may be also a record state as regards the number of strikes. Let me point out some things about education in the 19th and 20th century. France has always been a very centralized country with a very strong state. And we have always been in a situation in which the state had the possibility to influence mainstream ideas. For instance, in education there is a monopoly of the state. Nearly all schools are public schools. It is forbidden to have in France more than 20% of private schools even now. And even those so-called private schools are obliged to hire the professors nominated by the state and they have to teach the program decided by the Ministry of Education. So there is a very great influence of the state. That's why I told you that there may be a reverse causality. It is not ideas and happily when they are liberal who are influencing the society and policies but the state has a possibility to influence ideas. As regards universities, all of them are public universities and they are developing ideas we are in favor of the state. I must say, believe me, that it is not that easy to be a liberal in a French university. And whenever, for instance, a student came to me to write with me his doctoral dissertation I felt that I had to tell him, you know, to take a risk because for instance, if ever you want to become, to have an academic job it is dangerous to have written the dissertation with me. Anyhow, some of them did it and some very good students and happily most of them are out of France now and I do regret that. So at the end of the 19th century and in the 20th century there were still some professors of economics who were considered as liberals but in fact they were quite often in favor of state interventionism and the socialists have been more and more influential. During the Second World War, communists had first been close to Russia and Germany but some trade unions came close to the liberalization movement and at the end of the war, General de Gaulle, who was considered as a conservative politician in fact was very close to communist and socialist and several ministers at that time have been communists and many state interventions have been created at that time and they still exist now and many banks and firms have been nationalized. General de Gaulle used to say that planning is an ardent obligation so he was considered as being on the right but he was in fact very interventionist. For long the Communist Party has had members in the parliament and we have had several communist ministers. Now the Communist Party has nearly disappeared but we have very active extreme left parties. The social Catholicism which I have already quoted has been developing and inspired many ideas and many policies. I must say that in this context I did not learn anything about liberalism when I was at school and when I was at university however learning microeconomics I had the feeling that individual behavior has to be considered as a foundation of an understanding of economics. Let me quote some economists who were considered as liberal after the Second World War. Maurice Aller has got the Nobel Prize in economics but he had some liberal personal inspiration but he tried to create a synthesis between liberalism and socialism. For instance he claimed that profits and interest rates should be suppressed. He was in favor of collective property for soil. He participated in the first meeting of the Montpellier Society and he declined becoming a member because he thought that the Montpellier Society stressed too much the importance of private property rights which means that he was not really liberal. He was a former student of this eco-politechnique which has been quoted by Hayet and his methodology was closer to positivism than certain Austrian methodologies. He developed mathematical models of economics and he can be considered as a social engineer according to the word of Hayet. Aller was even in favor of protectionism and quite often people told me but you know why not protectionism? You see a liberal like Aller is protectionist. So that's the symptom of the ambiguity of ideas in France. There is a tremendous gap between an economist like Maurice Aller and Frédéric Bastia. I say that because in my book which is titled Liberalism I am doing comparison between both and I consider that Frédéric Bastia is a representative of what I call humanistic liberalism and Maurice Aller is representative of what I call utilitarian liberalism. The comparison between both I think is an illustration of the change in ideas in France between the beginning of the 19th century and the recent period. I just quoted Maurice Aller after the Second World War. I could quote Bertrand the Juvenel. I will quote it again later. Jacques Ruff is also someone who is very famous as a liberal but he is also an utilitarian liberalist. He was also a former student of political school in some sense a social engineer. He has been a high civil servant. He has been director of the treasury and he has been, I have the feeling, more famous as a high civil servant as someone having some liberal ideas. May I just quote an anecdote. We had the opportunity, my wife and I, to invite for dinner at home Frédéric Hayek with Jacques Ruff. They did not debate together and they had friendly relations but in fact they were very different. Jacques Ruff was certainly not really Hayekian. He considered that liberalism was fine because the price system made possible economic equilibrium. So he was against state intervention modifying the price system regulations for instance on prices but he never criticized for instance taxation because he thought that taxation was not modifying the price system. So he had a view of liberalism as something efficient for the price system and not as something which is ethically founded. So he is also an example of this characteristic of many French economists just as social engineers. At the same period, some politicians have been considered as liberal but in fact they developed internationalist policies. One of them is Remombard who has been a prime minister and I remember that once I asked Remombard when he was prime minister to meet with Frédéric Hayek who was then in Paris and me so Hayek and I went to visit Remombard who had translated in the past in French part of the counter-revolution of science of Hayek but he did not translate the chapters about France which is really strange. And so I was surprised because our meeting could last only a quarter of an hour and it seemed that Remombard was not really interested in meeting Hayek and Hayek told him that he had to do a very strong policy against inflation and Remombard laughed. Oh, it's not that easy as you believe. He was really not very close to Hayek so in spite of the fact he was considered as a liberal prime minister. Giscard d'Estaing who has been president of the republic just before Mitterrand, the terrific socialist president said that he was developing advanced liberalism but in fact I had always the impression that he was preparing the coming of socialists. Whenever the socialists were proposing something he did not propose the river a contrary policy but he said okay that's good but maybe we have to do it a little smaller and he had said that France would become a socialist country if ever taxation was 40% but during his presidency taxation increased from 33% to nearly 40% so he really transformed France into a socialist country as a liberal. After he had been president I had the opportunity of a meeting with Giscard d'Estaing and I asked Mitterrand was the president and I asked him but why have you not done a liberal policy when you were the president of the republic and he answered as there was an economic crisis I did not want to implement liberal policies because people would have said that liberalism was responsible for the economic crisis. He had not understood that liberalism was a way to solve the economic crisis. So after Giscard d'Estaing we had this terrific socialist president Mitterrand who developed many interventionist policies and nationalized banks, firms, increased regulations, taxation and so on. It was elected in the first 1980 and very happily people had the feeling that he was not successful and liberal ideas were growing in importance. I was very optimistic at that time and with some friends we organized regular meetings with liberal politicians in order to prepare the alternation because we knew that in 1986 there would be an election at the national assembly and that probably the right would be successful, which has been the case. At that time Jacques Chirac was considered as the leader of the right and in fact in 1986 he became the prime minister Mitterrand was still the president of the republic and Jacques Chirac had said that we should develop a what he called Travaillisme à la France I should translate that a labour philosophy as a French fashion but he discovered that liberal ideas were getting more important and so he asked me to organize to make an interview of him in order to give the feeling that he was a liberal. So I did a very long interview I must say I wrote both the question and the answers but in fact we had the opportunity to discuss with Chirac and his advisor Alain Juppé who will be later on his prime minister and more or less agreed with what I wrote but some months later he made some statements quite different from what I had written in this interview and my children laughed at me because anyhow in 1986 he has been the right won the election at the National Assembly I was still very optimist because there were six liberal ministers ministers who were very close friends of mine but Jacques Chirac was the prime minister and he did not do liberal policies except maybe he suppressed happily the wealth tax created by Mathieu Mitterrand but anyhow two years later in 1988 he lost the presidential election and people said that he lost because he had done liberal policies and that has always been a similar problem in France I know I have not much time maybe but may just add something I just would like to come back to the problem of education and especially education in economics because I think liberal ideas are quite often expressed by economists for long there has not been a department of economics in France and even when I began to be a student I had to be a student in law and there was only one course in economics so economics were considered as being a part of law you may say that the lawyer can be liberal but maybe not in France where the state is so important and there are so many laws and the lawyers are inclined to care mainly about existing laws and not about ethical problems so it may be one reason why liberal ideas did not develop in French universities according to a French economist who have studied this problem at the end of the 19th century among professors of economics 64% were liberals and only 9% socialists in 1970 liberals were only 8% and socialists 32% which means that there has been a great change the magazine Journal of Economics which had been founded by liberal economists in the 19th century disappeared and a new magazine came to educate politicians and high civil servants and so on all the economists I have known from the 50s to the 80s were Marxist and or Kinesian Napoleon had decided a monopoly in the teaching of law and this monopoly extended to economics and there has always been a vicious circle between state activities and academic activity from this point of view one might say that ideas have consequences but ideas may be manipulated by public authority and to end I would like to give some personal memories when I was a student I remember that I was taught something which was more sort of social charter with good feelings more or less inspired by Catholic social Catholicism and with a few friends we had the feeling that we did not learn economics and we created what we called the Jean-Baptiste Seminar which still exists and our professors told us you are reading American magazine and you are therefore in the trailer of American imperialism you ought to develop a purely French way of thinking so little by little we discovered economics by reading American and British magazines at that time Kinesianism was not that developed developed very rapidly later on and for instance we had been surprised with my friend to discover that Jacques Grave did not know anything about Keynes but our first discovery was a Chicago school because we wrote a book on permanent income and it gave me the opportunity to meet Milton Friedman I discovered Robert Mandel whose writings inspired my doctoral dissertation I still consider that he is a great economist and that it is possible to find some coherence between what he developed and Austrian economics except as regards to the optimum monetary area and later on but rather late I discovered Hayek and the Austrian school and I had immediately the feeling that I had always been an Austrian without knowing it I think that the first text I had to read was the role of knowledge in society of Hayek in two, if I can just add one personal anecdote in 2004 I was appointed as the president of what we call Concours d'Agrégation it is a recruiting committee every two years there is a committee which is appointed to nominate all the new professors in economics for all French universities which is important so it may be considered as strange that I was appointed as president but it was because there were rules and I had to be and the minister of education decided to appoint me but there has been a terrific media campaign against me and the jury because people said it is not normal that a liberal be the president of this committee to recruit professors in economics just to show you how intolerant is the opinion and so it has been a very difficult time and I would like to finish with two things first I would like to quote the following I just finished a book in which I republished articles I have published in newspapers for more than 40 years and the title for the time the professional title I give to my book is right and left united in errors I want to show that there has been a lot of alternations and especially when socialist governments were failing as they did people thought that the right would do better but the right did exactly the same policies and taxation for instance steadily increased from Giscard d'Estaing, Mitterrand to now that's why we are a record country so the problem is that each time the right is in poor it fails it cannot solve French problems and people say you see liberal policies have failed liberalism is a bad solution just because they are on the right it is considered that they are doing liberal policies in fact they are doing socialist policies that's a real great problem in France and I would like to conclude with an idea of Bertrand de Jauvenel Bertrand de Jauvenel said that whenever the state is important it's powerful people do not try to fight the state but they try to get the power and so I think that in that case people are more inclined to care about politics than about ideas there is a politicization of social life in France and people are more concerned by the choice of politicians than by the programs and the role of the state it can be considered as an illustration of the famous sentence of Bastia the state is this great illusion according to which anyone tries to live at the expense of others therefore political debates and intellectual debates are more interested by the possibility for specific categories of people to get power than by general views on the working of the society and this may be one more reason why liberals have difficulties in being heard thank you