For the first Austrian Economics Monthly of 2022 we hosted Barbara Kolm, Daniel Mitchell, and Christof Zeller-Zellenberg. The discussion was moderated by Pietro Paganini.
Barbara Kolm began the discussion by stating that after two years of lockdowns and other measures the world has changed, and we cannot go back to normal. With high inflation, low-interest rates, an immense amount of money in circulation, etc, we have many issues to tend to. Peoples’ mindset has shifted to other things than individual and entrepreneurial freedom. We need to regain these values, as they are essential. With COVID, the four European Freedoms did not work anymore: borders were closed, so we could not move goods from A to B, the freedom of movement was questioned all of a sudden…
Barbara emphasized that we need economic growth in order to have well-being for everybody. The expected growth rates for this year are nothing compared to the losses of the past two years. One-size-fits-all measures only make matters worse. We need to go back to the subsidiarity principle and solve problems on the local level.
Dan Mitchell added the issue of tax policies. The measures against COVID lead to increased government spending. This emergency spending all over the world leads us toward a debt crisis, referring to the Greek bailout. Such a measure is impossible with bigger economies. The next problem is the corporate minimum tax. Dan is more worried about the principle applied here: some countries impose a tax harmonization upon the world and penalize those who prefer growth and lower tax rates. This might be a template for other taxes because politicians do not like competition. The establishment prefers stakeholder capitalism to shareholder capitalism. Profit maximization – the goal of every company – should no longer be part of the economy. People advocating for that forget that profit maximization helps the entire economy.
Bringing in a third perspective, Christof Zeller-Zellenberg concentrated on a philosophical point of view. He contrasted two major groups of thought. The first group wants to build upon what we learned from the past, wants to enable people to make their own educated decisions, advocates for freedom of the individual and entrepreneurship, low taxes, no redistribution, but charity, and minimum regulation. This group believes plurality will lead to the best possible outcome. The second group believes that the multitude of choices will not lead to the best possible outcome. These people want politicians to intervene, regulate and stir society. They do not trust in the honesty and decency of the human being. Christof himself strongly advocated for the first group.
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