Professor Gérard Roland (University of California, Berkeley), Visiting Professor at CERGE-EI, has been recently awarded the highest honor from the Czech Academy of Sciences. One of the most influential and successful European economists, admired among CERGE-EI community for his striking humbleness and inspiring thoughts, spoke with us about some of his recent works on China, but also about his first meeting with the co-founder of CERGE-EI, Professor Jan Svejnar.
- You have received the highest honor from the Czech Academy of Sciences – Honorary Medal De Scientia et Humanitate Optime Meritis. It was established to recognize eminent personalities for their contributions in the area of science and humanitarian ideas. How do you feel about it? Is there any particular thing you did in this area that you are proud of?
I am very proud to have received it and feel very honored. The research in the economics of transition, in which I have been engaged since the late 80s, was very important in terms of policy, but we knew very little when the whole process started because this transition from socialism to capitalism had never really happened, and because the process was so complex, involving changes at so many levels of society. I felt more lucky than proud that my research immediately got a lot of attention at the time. Researchers have their pride, of course, but mostly we feel humble, because we know that we know so little. One thing that struck me in the nineties, especially at the beginning of the transition, was how policy-makers knew so little, and their arrogance was often proportional to their ignorance.
- Could you tell us the beginning of the story between you and CERGE-EI? What brought you here?
I had met Jan Svejnar at the European Commission at a high level meeting on transition issues. Jan and I were the only economists who thought it was very important to do rigorous high level research in the economics of transition. In 1993 I was invited to the first CERGE-EI conference in the beautiful Schebek Palace. I sat on a policy panel and many people liked my intervention. A few years later, I was asked to be a member of the Executive and Supervisory Board on which I have been since 1996. I have been able to participate in all developments at CERGE-EI since then, and could see all the progress made by the institutions in those years, which makes me very optimistic, knowing where we came from.
- Do you remember your first impression when you arrived in the Czech Republic? When was it? Could you mention the biggest differences you see between the Czech Republic then and now? Is there any special memory you would like to share?
Any first traveler to Prague cannot not be charmed by the old city center that was preserved from the destructions of WWII. One thing that struck me the first time I came: it was spring time and one could hear people playing the violin and music from their apartment windows. This made me feel this is a town where Mozart’s music is still alive and well. At the same time, going a bit in the suburbs of Prague felt at the time like the suburbs of Moscow, like Yugo-zapadnaja for example. I have been coming to Prague several times per year since the mid-nineties. It is striking how buildings have been cleaned and restored. Every year, there are new restaurants, new shops. One feels the economic progress. The only negative thing is the quality of the tourism. In the nineties, young people came to spend the spring and summer, and there was a clear bohemian feel. It smelt of freedom, the exquisite lightness and bewitching smell of freedom. Low cost airlines have brought a lot of tourist hordes who can be very noisy at night. I have rarely been outside of Prague though, and would love to see more.
- It´s been almost 30 years since the fall of communism in then Czechoslovakia and other countries in the region of Central Europe. As an expert on this topic familiar with the region, could you say if there was anything that surprised you during the whole transition period or even in recent development?
Several things struck me.
First, I expected violent conflicts to break out. It did happen in Central Asia and former Yugoslavia, but for the rest, in Central Europe and most Former Soviet Union countries, the process of transition did not lead to bloody conflicts. The degree of violence, in particular the ethnic cleansing, in former Yugoslavia exceeded all pessimistic expectations. However, I thought that Ukraine’s independence declaration could lead to a war. It did not happen at the time. Yeltsin played an important role in preserving peace in that regard. When I was visiting Hungary in 1993, there were many shows on TV talking about “Hungarian” territories in Slovakia and Romania. There, I think that the European Union also played an important role in preserving peace.
Second, I did not expect the magnitude of the output fall following price liberalization. Nobody did. It took us a long time to understand it because it could not be understood on the basis of traditional general equilibrium theory, which is why some people still believe the output fall did not happen.
Third, what struck me was the extent of secessions that took place after the fall of communism: former Yugoslavia, Czechoslovakia and the Soviet Union. I also did research on the topics of secession as well as the output fall to understand the forces in play.
- Some of your recent works focus on China, whereas here in Central Europe the transition of economics was part of the transition of the whole political system, often understood as part of the ‘path towards democracy’.Do you see anything like that China?
People thought, and I was among them, that the economic reforms in China, which were enormously successful, would be followed by some kind of political liberalization, maybe not full-fledged-style Western democracy. These hopes were, I think, definitely buried when Xi Jinping came to power. We now realize that China introduced a system unknown until then, a communist political regime overseeing a capitalist market economy. It seems like a contradiction in terms since communist ideology is opposed to capitalism, but this is the reality we are living in. I recently wrote about this, and will give a keynote lecture in early December at a big conference in Hong Kong on the subject.
- Your speech at the CERGE-EI Gala this year was about the rise of populism in the world. You mentioned that science and its values might help to face this situation when fundamental values are being compromised in order to get political power. Could you explain how?
What I meant is that the science that brought so much good to humanity in terms of welfare and health is based on particular values: openness, tolerance, fundamental respect for evidence and reality. These values are being violated by populist politicians who spread lies, closeness and intolerance, censorship and repression. Those who believe in science must also fight for the values behind science. I did not mean it as a foolproof recipe to beat populism, but as the need for those who believe in science to stand up for its values. Academics cannot stay in their ivory towers. They must also clearly and loudly denounce lies and corruption. We must hope that light will triumph over darkness.