July/August 2010

Forging Slovakia’s Future

Slovaks headed to the polls on June 12. In Slovakia, the ruling coalition of socialists and nationalists has been weakened by a number of corruption scandals. The Greek debt crisis turned Slovakia’s ballooning budget deficit and national debt into election issues. There is a growing sense that something must be done about the unsustainable social spending and inefficient welfare state.

Cato teamed with Trend, a well-regarded local business magazine, to organize a oneday conference, “Slovakia at the Crossroads of Reform,” in the Slovak capital of Bratislava in May. Following the fall of communism, Slovakia greatly liberalized its economy.

The conference started with libertarian author and American Enterprise Institute scholar Charles Murray delivering the keynote address on “Freedom in the 21st Century.” He emphasized that while, in the short term, the cause of freedom faces many challenges from an overbearing welfare state, in the long run, freedom will prosper.

Murray was followed by a panel on corruption discussing the practical measures that could be implemented to increase accountability of public officials and transparency of government spending. Cato’s Marian Tupy emphasized that, in the absence of a vibrant civil society, independent media, and parliamentary independence that keep Western governments in check, ex-communist countries should focus on business deregulation and reducing government procurement.

Richard Vedder, a higher education specialist from Ohio University, criticized the obsession of many European governments with increasing the number of students enrolled in taxpayer-financed public universities.

Instead, he advocated tuition-based and quality-oriented higher education. The healthcare panel discussed ways of moving away from a wasteful Soviet-style “single-payer, single-provider” system toward a marketbased system of personal health insurance.

Charles Murray joined a number of Slovak reformers for a spirited discussion of the welfare state. Murray’s concept of a “basic income grant” as an alternative to the current mishmash of welfare grants and social engineering policies drew strong support from the father of Slovakia’s flat tax reform, Richard Sulik, but was vigorously opposed by other panelists who felt that it would reward idleness.

The conference drew an audience of about 150 people, including some of the country’s past leaders, such as former finance minister and deputy prime minister Ivan Miklos and former justice minister Daniel Lipsic. It was covered by most of the largest newspapers and TV stations, and contributed to the preelection debate about the future of reforms in Slovakia.