2.1 Liberal Market Economy

Human rights, especially individual freedoms together with other fundamental rights such as the right to own property and the principle of freedom of trade and industry, led to a market economy and to a system known as capitalism. However, this word has a negative connotation for some people. In the twentieth century, capitalism stood in opposition to communism. At that time people could only really choose to become either a capitalist or a communist. Because many leftists felt that communism was the only system that could bring justice to the world, they disparaged capitalism to the point that many people still consider capitalists to be wealthy exploiters who humiliate and abuse the poor. Consequently, in this text I will replace the word “capitalism” with “liberalism”, which I understand to mean a free market economy in combination with human rights as well as democracy.

Liberalism requires a functioning legal system and an educated citizenry as well as a largely homogeneous value system. A medieval market without legal protection but with the dominance of the powerful was not enough. What is needed is full recognition of civil liberties, legal protection for everyone, protection of property (including intellectual property), etc.—in other words, a state governed by the rule of law.

Liberalism has been successful in many countries and has contributed significantly to the well-being of numerous people. For the first time in the several thousand-year-old history of mankind, many are living in freedom because of liberalism. It has also contributed to a dramatic increase in prosperity for many as well as to tremendous technical and scientific progress.

The free market economy in particular forces each competitor to be better than the other. The objective is to further success with innovation and inventiveness. In the meantime, left-leaning systems have failed. There is not a single example of a leftist system that has been successful.

However, the system is only equitable when capital and labor are well balanced.

We know that capitalism can lead to inequality and to the accumulation of wealth and power of a select group. In such situations, universal prosperity is no longer being fostered by the liberal system, but rather the prosperity of a wealthy and powerful elite. For this reason, liberalism needs rules that prevent this and I will address these later. They lay the foundation for democracy. Abuses of power are prevented wherever citizens have the power and when everyone has the same rights and responsibilities as well as access to the same level of transparency and information. If every citizen has a vote, the laws ensure that everyone shares in prosperity.

The system will only lead to sustainable prosperity and to the long-term satisfaction of free citizensFootnote 1 when the liberal market economy is linked to a genuine democracy that also includes freedom of the press and freedom of information. We refer to this system as a liberal democracy.

2.2 Freedom of Opinion Also Extends to Lateral Thinkers

Constant competition within a free market requires that products and services be continually refined and improved. This can only be done by people who are allowed to think and act freely. It requires proactive individuals who see market niches, listen to customers and take risks, and who can turn ideas into reality. These people drive progress. However, they alone are not enough to advance development so that it reaches that last small but decisive quantum level. This requires creative lateral thinkers—mavericks who go beyond conventional limits to formulate their opinions and develop new ideas. These lateral thinkers are not always pleasant because they question everything and rattle existing power structures. Nor are they always right or successful. Many of their ideas will fail because they are unrealistic or downright wrong. Only a few of them will lead to breakthroughs. A free system has to tolerate such mavericks, and nothing should be allowed to happen to them. They can only be active in a liberal system. They must have freedom of thought and freedom of speech. This is true not only for the innovation of products and services but also for the political system in general. Society is also changing and developing. And here too, lateral thinkers have contributed successfully to new developments.

While very courageous dissidents have only occasionally confronted repressive autocratic political systems and risked their lives for their values, liberal progress with its freedom of opinion and freedom of speech has led to many extreme lateral thinkers, who have consequently driven political and economic innovation.

2.3 Progress Without Freedom?

There are countries that would like to benefit from the market economy and participate in economic growth without respecting human rights. They argue that they have a different culture which must be respected. European human rights do not belong to their culture.

These countries (such as China, Russia, or those with a theocratic/religious system as in many Middle Eastern countries) claim that their values take precedence over human rights. These values are enforced by a centralized authority and, if necessary, in a manner which is antithetical to human rights. Under the pretext of protecting their countries from outside interference, the leaders of these countries claim that their cultures must be safeguarded from European values. Human rights can then be rejected because they are classified as European values. They ignore the fact that the concept of individual freedom, which accepts lateral thinkers, is a prerequisite for progress to grow in new directions. Using a centralized government to protect the existing culture and political structures prevents the final decisive steps of innovation. Restricting human rights because of such values prevents the final phases of progress. Countries or regimes that protect their own cultural values from human rights will never make it to the top. This applies to all centrally or autocratically governed countries without political change.

To achieve the possible, you have to continually try the impossible.Footnote 2

In addition, once awakened, individual civil liberties become a fundamental need of every human being. In this respect all people are the same. Such needs cannot be denied by suggesting they belong to another culture, other circumstances, or different values. A look at present-day Europe and its surroundings shows that within the core of Europe there are now stable democracies. These countries are unlikely to go to war with each other, as they did during two world wars. Conflicts have shifted to the periphery of Europe. In all of these conflicts—whether in the Ukraine, the Middle Eastern countries or in former Yugoslavia—many people long for the European values of freedom and democracy, while the ruling castes continue to try and defend their privileges. In the long run, they will not be able to maintain their hold and European values will even undermine the Russian regime, because wherever there is freedom, people look toward it and emigrate to those places. This is also true in Asia as can be seen in Hong Kong, where over a million people have participated in mass protests (July 2019); or in South America where mass protests are taking place in many different countries. If people have known freedom, they reject restrictions such as the extradition of their citizens to countries which do not have independent courts. They value freedom more than economic prosperity; they feel more at ease in a society without autocratic despotism and willingly accept economic hardship in return—all the more so as worldwide communication reveals that the liberal system is ultimately more successful. China and Russia will also have to learn this.

2.4 From Prosperity to Well-Being

In developing countries, development progresses from prosperity to well-being.

Starving people and those who have nothing strive for prosperity. They can see that other regions on the planet are doing well and they want their countries to follow suit. They want a standard of living that allows them to have not only enough to eat, but also some extras that go beyond basic survival—such as holidays, a car, a good education for their children, medical care, etc. In order to have this, they will accept dictatorial leadership, as long as it pursues this goal credibly. Such leadership is often more goal-oriented than that in a democracy. Things move forward more quickly. In addition, these people are often used to such a hierarchical order even if the state disregards human rights when pursuing these goals. However, this type of leadership will only be accepted under the condition that it strives for the good of all and makes use of competent economic experts. If autocrats are only concerned with their own power, which is usually the case, the emphasis on successful liberalism or progress via technocrats does not appear to be credible.

Once a country has achieved a certain level of prosperity, people also begin to wish for a sense of well-being. This includes a desire for freedom (freedom of opinion, freedom of speech, freedom of assembly, and freedom of the press) as well as the rule of law (independent courts, no corruption, etc.). In concrete terms, people want to have the freedom to criticize their government without fear of going to prison. They want to have the freedom to file a lawsuit against the state or the freedom to travel wherever they want. For it is only in such an environment that people really feel at ease. And it is only such a free society that creates the climate necessary to catch up with other similarly free societies and participate at the leading edge of research and development.

A free society is based on democracy—a democracy with a stable constitution and laws, as well as independent courts, so that there is no threat of being picked up in the middle of the night and forced into silence. It is based on a culture that insists on free elections, on human rights, and human dignity. This culture must be so stable that freedom and the rule of law have become sacrosanct.Footnote 3 Although not all democracies are equally successful, it is only within democracies that the freedoms of humans are protected. There is not a single political system in the world which protects human rights that is not also a democracy.

South Korea, Taiwan, Singapore and other countries rose to prosperity with dictatorial leadership and then made the transition to democracy and the rule of law (in South Korea a former dictatorial president was given a prison sentence by the courts for corruption). Meanwhile, the numerous demonstrations by young people in economically rising areas (Hong Kong, Moscow, Kiev, Istanbul, various South American countries, etc.) show that there will ultimately be a demand for a transition from prosperity to a sense of well-being. China, too, will have to abandon its police state if it wishes to take the final step toward becoming a leading nation.

The West and other freedom-loving nations will prevail as long as they continue to defend human rights within a resolute democratic system and other nations fail to do so.

Europe brought the world the system of human rights linked with a market economy. Human rights are the most important contribution Europe has made to the world.