INTERVISTA a Rainer Zitelmann – Come le nazioni possono sconfiggere la povertà (Baldini+Castoldi)

INTERVISTA a Rainer Zitelmann – Come le nazioni possono sconfiggere la povertà (Baldini+Castoldi)

[Music] Hello everyone. Good morning to Dr. Reinard Zetleman. First of all, my name is Marqueta. I’m a journalist and I work for the Italian public television. So hello to um everybody who’s watching or listening to this conversation organized and made possible by Institut and it’s the general director Alberto Mingardi. First of all let me say a few words about Reard Zetman. uh we will talk about his last book, The Rise of the Dragon and White Ego: How Nations Escape Poverty. Uh that has been published and translated into Italian by Casti with the title from his previous books mainly about capitalism, economics and luckily many of them have been published and translated into Italian by instituters. Let me quote capitalismo capitalismo studied and started his career in Germany as an historian. Now he’s become a journalist, an entrepreneur and also a writer about economics, public policies and free market. In his book, in this book we’re talking about the rise of the dragon and the white eagle. He focuses on the recent history of Vietnam and Poland, but we will soon understand how his analysis can contain general lessons for many other countries uh that go beyond the specific case study. But I cannot start without asking Dr. Zitleman, why should an Italian reader be interested in looking into these two countries and how did you choose them as your main uh topic of research? Yes. Thank you. A good question. You know, this book is about how nations escape poverty and why did I choose these two countries? Um maybe some of uh our listeners know the index of economic freedom. This is published every year by the Heritage Foundation. It’s an index including I think the last index 180 countries. And for every country we have a score to show how economically free are these countries. You can also call it the capitalism index if you like. So at the top of the index you find countries like Singapore and Switzerland and at the bottom you find countries like Venezuela or North Korea or Cuba and I checked which countries gained most scores over the time. For me the position of one country comparing it with other countries is important but not so important. Much more important is to analyze the changes over the time. And when I looked about the changes there were two countries that gained most scores in the last 25 years. They started the index in 1995 and these countries were Poland and Vietnam. These were the countries. There are some very small countries that gained more scores, but I speak about countries with a bigger population. By the way, a lot of people don’t know how many people live in Vietnam. When I ask people, somehow have the idea 20 million or 30 million. No, it’s 100 million. more people than in any European country for example including more country more people than in my country Germany uh Poland is also with like 40 million so from these countries with a bigger population Vietnam and Poland are those that gained most in economic freedom and we can we go more in in detail uh for for this these were countries that were very very poor after socialism and became prosperous. We we will go into details but one question. Vietnam and Poland reading from your book share one other aspect. They escaped poverty as you said without much or I would say almost any development aid. Uh is that a lesson too? Somehow they received some aid especially Poland from the European Union but I think development aid is overestimated. I have one chapter in my book where I show that in most cases development aid does more harm than good and there is not a single example in history that a country escaped poverty due to development aid. there is no but there are many examples where development age hurt. So even if they got some aid from other countries, this is uh absolutely not important if you compare it with the uh with the economic reforms we’re talking about. And maybe can I add your question why I choose this countries? It has also by chance a personal uh reason because I’m a little bit I I I know a little bit more about this countries because the two relation the two longest relationships with women in my life the one parents were from Poland and the others the parents were from Vietnam. So I have also like a kind of personal relation to countries that of course helps but you will see in the book there’s also a rich uh bibliography in um and also many real life examples. Um just one more question about Poland. Actually I have two but one is Polish contemporary history as you recall it is one of tremendous and positive change under the communist rule. Poland was one of the poorest country as you said in the western world where people needed to stay in line for hours just to get the bare necessities of life. So there was a joke that you recall and you remember in your book how and two people are talking and one says how will the problem of cues in shops be solved when we reach full communism and the other person says there were nothing there would be nothing left to queue up for. Uh but since 1989, Poland’s gross domestic product per capita has increased three-fold. Poland has recorded average real economic growth of 3.5% per year. Um now has become the sixth largest economy, you write, in the European community in these decades. Can you explain the most powerful mechanisms and examples of economic freedom that brought these results? Yes. Um before I start with this uh maybe to to add something, Poland had a very high inflation rate when the reforms were started and a lot of debt there. There were only a few countries in the world that had so much debt as Poland. So in a way in some aspects you can compare it with Argentina before Malay came to power and there are more perils. This was this is the reason why the book was also published in Argentina and uh the spokesman of Yabia Mle wrote the preface for the Argentinian edition of the book because they have something in common and one of these things that they have in common that there was a reformer in Poland. The name uh is Leak Balerovich. who was minister of finance and he’s a colleague if you stay in this way of Yabia Mle because they are both economists economist they both believe in the uh teachings of Hayek and Mises so they believe in capitalism and they both chose um therapy that you call a shock therapy and what did it mean the shock therapy So, first of all, of course, to introduce private property. This was the most important thing. Also to to privatize some state-owned companies, but there are still state-owned companies today in Poland. More important than privatizing these companies was to create an atmosphere to have uh economic reforms that new companies could be founded. And I think also it’s very important to add how this priv privatization worked. We had also privatizations for example in countries like in Serbia or in Russia but they called it privatization but in the end it meant that some of the communist elites took them for them with a lot of you know uh they they they bribed people and this was not the kind of privatization that happened in Poland. So it’s um it also has to do something how honest are the people who uh led this process and in Poland there was a very humble and honest man Burov which sometimes uh sometimes politicians or people play also a great role and this was in in Poland. Yes. And then they started with all the things that um you have to do not only allowing private property and privatization but uh lowering taxes and and all all this stuff and the but one one very important lesson is that these reforms worked. You noted it uh since uh three decades. Poland is Europe’s growth champion. There’s also a book with this title Europe’s growth champion. But and this is the most important lesson I told also to the people in Argentina when I was there. First there were two years where the GDP decreased and the number of um uh the number of uh unemployed people rose. Uh and this happens always because you know in socialism according to official statistics there was no one without a job. There were like zero uh zero unemployment. Of course this was uh only fake. And of course, if you start with this radical reforms, some of the companies who are not able to compete with uh on an international or global level with other countries go bankrupt and you you can’t have reforms where things go better in in a half year or something like this. This is also what I told so often the people in Argentina. Be be patient. Learn this from the Polish experience. First, there are two years where things became worse before things become better. And this is exactly what happened in Poland. Well, well, one short question about what’s happening now in Poland. You in your book, you seem a bit less optimistic about changes that have been taking place since 2015. I ask you why. And did recent elections at the end of 2023 with the current government led by Prime Minister Donald Tusk and his civic coalition changed the course again maybe for the better. What is your idea on this? Yeah, you know this this peace party that came to power in 2015 in in other European countries we see them as a rightwing party. In a way this is correct. So with questions as migration for example or nation or maybe religion you can call them rightwing. But in social politics and in the economy this is a left-wing party. This is very important to to understand because they stopped privatization even they started to nationalize some banks again and they’ve started big redistribution program. So this is a really a left-leaning party in in economics and in social politics. We have it in some European countries that some parties it’s similar with a um Le Pen party in France they call them right-wing but if you look at their economic ideas and social ideas you find a lot of socialist ideas and this is what happened in a in a lot of countries. So yes, and then now we have another uh Donald Tusk again um another government and it’s it’s hard to say. Yes, in a way it’s better because they they didn’t go on nationalizing uh companies or uh with big redistribution programs. But on the other hand, they didn’t start new free market reforms. what would be necessary for Poland. So I think Poland would need now a new Balovich with new economic reforms because this is what happens very often in countries in the moment or after some years a country became prosperous they start again with redistribution and they they forget why they became successful in Germany my country is to say we became successful after the second world because of Ludwick Ahart’s free market economy but now we have a big government big state and and this this is also another lesson that countries you you you can’t gain freedom economic freedom or political freedom forever. It’s an on always ongoing fight between uh market economy on the one hand and socialism on the other hand. And um and for the future of Poland, it’s hard it’s hard to say, but I think they would need definitely new economic reforms today. And as far as I see it now, I don’t see this reforms. Okay. So before moving on to Vietnam as I wanted to do just let’s go in deep a bit about this that you just said there is always the danger that people forget the reasons for their prosperity. You’re right and this is true in many countries today. Uh whether the US you I me I’m quoting your book Germany, China or Chile. Now in your opinion are the European Union and the US running this risk and at what level the two of them I mean if you can uh elaborate a bit about this who’s forgetting the most. This is hard to say because you know Donald Trump’s politics are not predictable because they change maybe from one minute to the next. In the first time when he took office he did some good things. For example, he lowered taxes and he had some deregulation. But at the same time, now You mean in the first term? In the first term. Yes. The first term. But now he starts with a lot of crazy things, especially protectionism. This tariffs, you know what he says? Tariff is the most beautiful word in the dictionary. For me, it’s absolutely crazy. As if someone would say taxes is the most beautiful word in the dictionary. Of course, it’s not. And you see what is the result chaos and uh on the financial markets and capital markets and it will harm the economy not especially from other countries but also for the United States. You don’t know whether he will go on with this or whether he will stop it. he had to take back some of these things. But it, you know, as it is, it changes almost every week and every day. And you you don’t know what will come in the future. In in Europe, for me, it’s uh crystal clear. We are for capital feeders on the way to a kind of planned economy. Of course they don’t call it a planned economy but I only give one example that is important especially for my country but also for your country with the automotive industry. We in Germany became very proud were we’re were very proud because of our Mercedes BMW, Volkswagen and and others. But then the European uh commission decided uh to ban the registration of new cars with combustion engines from 2035. And this is planned economy because to to point out what’s the difference between capitalism on the one hand and um and a planned economy on the other hand. In capitalism entrepreneurs decide what to produce but in the end it’s consumer’s choice. You decide I want to buy an electric vehicle or with combustion engine or a Fiat maybe or BMW whatever. This is uh capitalism and in the planned economy politicians decide what to produce bureaucrats. And if you believe that politicians are the smartest people on the world, smarter than million of consumers, a million millions of entrepreneurs, then you should vote for socialists because this is exactly what socialism is. If you think that politicians are the smartest people on the world because they know everything better. But if you believe that entrepreneurs and consumers are uh are smarter than you should be for capitalist in the European Union we we we see so much almost every day I read about a new there’s a new idea new regulation for this and this and this they don’t do anything else all over the day than uh new new regulations and so we are really on a on a on a bad way and in the United States it’s it’s hard to predict some things for example what El Musk started uh to with us um to to cut back something from the government I think this this war’s good but I think El Musk and Donald Trump are on a different track and you know they they finished now almost cooperation he’s also against this uh this tariffs tariffs M has been talking about against charts. Yes. And I think he’s 1,000 times smarter than Trump and 1,00 1,000 times more successful as an entrepreneur as Donald Trump ever was in his life. So he someone like him never would subordinate to someone like Donald Trump in a long time. But of course uh in a way he’s depending on him for a space program. he can’t do it without Mesa and he can’t do it without Trump. It’s difficult but um the the the problem is that almost everywhere in the world since maybe 15 years we go in the direction of more government more socialism even China is another example you know China people lived in poverty this is another example in the in the beginning of the 80s 88% of the people in China lived in extreme poverty then they started also with free market reforms private property number of people living in poverty decreased from 88 to less than 1% and a great economic development. But now since Chi Ping took power, he goes back in the direction of more government and less free market. And uh you can see it also in most of the Latin American countries. Argentina is a positive exception, but in all the other countries, even in Chile, they voted for socialist or in Colombia or in Brazil. So, I’m not very optimistic. So, so far uh or not very positive what happened in the last uh 15 years. Okay, let’s go back to your book. Um let’s talk about bit uh about Vietnam or to be precise to use the official name of this Asian country. Let’s talk about the socialist republic of Vietnam. Now, how does self-defined socialist country escape poverty and become an example for you? You’re of course a supporter of free market. Yes. First, you have to know in the ‘9s, in the beginning of the ’90s, Vietnam was the poorest country in the world, poor than all African countries. The GDP per capita was uh $98 the year. It was poorer than S Somalia or Sierra Leon. Very very poor. There were did several reasons. Of course, everyone knows they had the war not only with the United States. This everyone knows this war, but they before the war with the United States, it was with France and then with Japan and with China, the war with of course everyone. And u what was not destroyed by the war was destroyed in the end by the terrible planned economy. Because if they uh if where the communists won the won the war, they started uh to establish this uh crazy socialist plant economy also in the south of Vietnam. And the results were so terrible. I have a lot of examples in my book. I spoke with people. It’s that’s really means hung hunger be hungry at this time starvation and being so so poor but they’re smart then in the end of the 80s they started with economic reforms they called it the domoy reforms opening of the economy they introduced private property they started with privatization and especially they opened the country for the whole world they have a lot free trade agreements with uh a lot of other countries. They welcomed investors and the result is amazing. Only to give you one number in the beginning of the ‘9s 80% 80% of the people in Vietnam lived in poverty. Today it’s 3%. From 80 to 3%. Of course it’s not a pure capitalist country, but there is no pure capitalism in Germany and in Italy. It’s also not pure capitalism. Everywhere in the world, we have like a mixture between socialism and capitalism. I compare it with a test tube with two ingredients, market and state. Oh, capitalism and socialism. And then you can watch what happens if you add more market as they did in Vietnam or if you add more state as it did for example in in Venezuela the last 25 years and um and yes they call themselves socialist and with a communist party but I had lectures there at um four different leading universities and it’s easier to find a Marxist in a university in Germany or Europe or in the United States than in Vietnam. I I I don’t think that there’s uh many people who believe in Marxism or socialism. They call themselves this this way. They call it a socialist market economy, but they think very entrepreneurial way. And what is also important, they admire rich people. They Yeah, that was the the next question I wanted to ask you because I found this book really fascinating and it’s uh 237 pages of the Italian edition. You recall history of course as you said as you have done until now. You describe public policies that have been enacted and many interesting statistics but also you go in depth into explaining uh society and its cultural developments. And one particularly interesting result of your surveys in Vietnam that you were maybe was to mention was that nowhere else in the world is the percentage of people who say that becoming rich is important. You’re right. Uh as high as in Vietnam. So we also learned that social envy is really low in Vietnam compared for example with other European countries. How do you explain this and what are the main consequences of this attitude in real life? Yes, this is correct. U to add this, we did a survey in now 13 countries also Italy was included. Uh I I have it in this other book that you mentioned at the beginning about their attitude toward wealthy people and about the social envy. I I calculated something the the social envy coefficient to compare how envious are people in different countries and the most envious uh people in our survey in these third countries were French people. France was at the top uh and followed unfortunately by my old country uh Germany being so envious. Italy was a little bit like in the middle uh not so extreme ambience as France or Germany but on the other uh end of the spectrum you see Poland, Vietnam, South Korea and Japan of course they are also envious people but much less than in the other countries and you see it if you ask them questions about wealthy people they they see wealth healthy people more as a role model and not as a scapegoat. And the funny thing is I was I’m invited to many lectures in many countries. In the last two years I’ve been in in 30 countries and I was invited a lot of cases to universities or young people but the only time I was invited from one of the leading universities of a country for a lecture. How can we improve the image of wealthy people was in Hanoi Vietnam Foreign Trade University. They read my book, they translated my book and uh they had their own survey about it and so they had a workshop uh about how to improve wealth with people and I can’t imagine being invited in uh Germany even Italy in Italy uh about such so they have a very positive uh attitude towards rich people and the same is in Poland the same is in Poland and why is this important you ask about the consequences Um I think economists you know I’m not an economist. I have two PhDs in history and sociology. Of course my focus was always economic history but uh I’m not in a narrow sense an economist but historian soologist but I think that some economists they underestimate the importance of such cultural factors. they look in the numbers and GDP and all this and yes it’s important but I think it’s also very important the attitude of people how people think because of course it makes a difference when there’s a country where people worship entrepreneurship and everyone want to be an entrepreneur and they admire entrepreneurs or whether you live in a country where where entrepreneurs and rich people are are scapegoats that that you could should should harm And this makes really a difference. And I think these are factors and I and they’re so Poland and Vietnam have a lot of things in common especially that the envy against wealthy people is on a very low level in both markets. Okay. Very interesting. We have last 10 minutes where I would try to do three questions. One, you already touched on it. Um Vietnam’s growth possibilities today as in many countries that are very integrated into global supply chains are put at risk by protectionist attitude in the uh Trump administration in the US. Now, how is um from your point of view, you’re of course well informed about this country. How is this Asian country reacting and uh being an historian and a sociologist as just said, what are your predictions about what is going to happen about protectionism? Um in general, it’s hard to say. Um be you know to predict what Donald Trump will do is of course very difficult. First of all, his crazy idea with uh tariffs being beautiful, it’s one of the maybe the only constant things in his life. I think he has only two things where he was that that’s never changed all over his life. First, that he believes that he’s the greatest in in mankind. The the first thing and the other that tariffs are a great thing. He changed a lot of other opinions. what a lot of people don’t know he adapted to a lot of uh left cleaning uh opinions in the in the 80s for higher taxes for the rich and so but his belief in uh in tariffs being a great thing uh is a constant in his life and because I think he believes in what I call zero sum belief what is in other cases typical for anti- capitalists to believe that the advantage of one is the disadvantage of the other. So if one will win the other has to lose and he believes in scapegoating. So skateboarding means uh if we have problems in the United States in the 80s he said this is the fault Japanese and today’s Chinese or German or is everyone else and tariffs but of course he sees now that what he does the consequences especially on on the capital markets and I hope so this is what I hope that it will force him to uh to to to stop and to to correct it. He did it in some way. That’s for this pause for 90 days. Now, especially for Vietnam, it’s very interesting. The first post that Donald Trump did on his own social media account after he had this taxes was about Vietnam because he said that the prime minister of Vietnam contacted him and making a suggestion. And this suggestion is very typical for Vietnam because he said let’s have zero tariffs for all what I would predict. You see it’s a very free tech free trade approach whether he will be successful this or not is another question but he was Vietnam was the first country uh also the European Union European Union no but only for some industrial not some industrial products but Vietnam said for everything let’s have zero taxes what is of course like a free market approach and Donald Trump was very uh proud to get here they reacted and I talk with You you don’t know what happened. But the the great thing with Vietnam is watch. So I see some opportunities. They have a very very good relationship with the United States and they love Americans. This was also surprising. Yeah. That’s in the surveillance coming to me because you know after this war I have it in my book in the in the American war against Vietnam there were 10 times more bombs and explosives from United States on Vietnam that in the whole second world war on Germany. So you you you can imagine what meant but they they love Americans and they have a very positive attitude and strong relations and I think you know Donald Trump is against China. This is his thing and so I think he needs Vietnam because Vietnam is this the strongest you know in if you have want to have a balance in in Asia against China then Vietnam is very important. So I hope for Vietnam that they will find a good agreement uh with the United States because otherwise it would be really terrible. Then you can forget about my my my book in a couple of years because it all depends on free trade. Yeah. But as we said before, this book even if uh Paris will kick in uh still remains useful I think because as I said it goes into history and sociology and also cultural uh cultural differences within Vietnam and Polo and Poland. Um, now one last question um about capitalism and declining demographics in Poland because in your book you write that Poland is among the countries with a serious financial problem in relation to its pay as you go state pension scheme and this is due Poland’s low birth rate. You’re right, which is below the EU average and its aging society. Now, can free market address our demographic malaise or is capitalism instead bound to reinforce this decline in your opinion? It’s hard um to be honest um I don’t know so much as I should know about this, but what what I know of course is the more developed the country becomes on general um the bigger is this demographic problem. you see it in a country as like Japan also uh also Germany. So I think what Poland would need is uh migration. Uh I I don’t think that they can do it alone. But the but with migration they are very skeptic and in a way I understand them. They don’t want all this migrants as we have in Germany or Italy from uh Arab countries or African countries in most cases. People who are not educated in a lot of cases, people who who prefer to live on the welfare state. These are the people who come to Germany and I support Poland. I think it was a good decision not to follow this politics as we did in Germany for example. On the other hand, they were open for people from, for example, from Ukraine or from piano Russia. I met a lot of entrepreneurs from piano Russia, for example, that are very industrious uh uh people in in Poland. But I think they would need more definitely more migration. They should when I would be a politician in Poland, I would think how can we attract for example people from Asia because in the in the in channel these are very industrious and educated uh people. H how could we do do this? This would be one of my objective questions. Okay. to finish this conversation, I would like you to elaborate a bit um on the relationship between free market and political freedom because you say um in your book that the condition for Poland’s economic miracle were created by the political transformation of Poland that began in 1980s, meaning by its political liberalization. Of course, Vietnam though, as we said before, is still a one party system and authoritarian regime. Now in your view what is the link the connection between economic freedom and political liberty? This is a very good question. There was always the theory that both will also always come together. And of course, we have much more cases with a combination of democracy on the one hand and free market economy on the other hand as in the United States or Western Europe. But we have also other examples. For example, in Chile when they started with uh economic reforms at this time, this was with a dictatorship from uh from Pinochale. uh but after the dictatorship they went on with this uh free market politics and in China we have also uh the combination of a one party system on the one hand and then they had this uh um free market reforms on the other hand and as in Vietnam. So it’s it’s hard to say. I would love that there’s more also especially intellectual freedom in Vietnam as it is today. I can give you example from my book from my books for example my my book about how to become rich you know I have some books that are not translated in Italian language like dare to be different than crow rich or psychology of super rich people they love this books and they they are translated but my books on capitalism that are published in Italy I can’t publish them in I can’t publish them in Vietnam and uh because there’s no intellectual freedom And the funny thing is even with this book that is very positive about Vietnam, I had a contract with one of the leading I think with the leading publishers in Vietnam, but they don’t publish it right now. And and I have I I have emails with them. as it’s not according they told me it’s not according what a lot of people in Vietnam believe but what they mean it’s not according to the official uh line of the communist uh party and so then maybe we published but only like for three or 400 you know print run or but it’s still not published it’s there since a long time so I have problems or I I see it and I have now by the way I should add there there two movies from me. Uh, one movie you can see it if you go on YouTube, Poland from Socialism to Prosperity. It’s if you’re interested in Poland, you find this for free on on YouTube if if you Google this Poland from Socialism to Prosperity. And now I made another film about Vietnam. Uh, I will uh it it will be released at the Anthem Freedom Fest in uh Palm Springs in June. is the biggest uh libertarian film festival in the world. A film about Vietnam. And there was also the problem. We had all time a sensor besides us. So from the from the uh foreign minister. So it’s not it’s better than in China. For example, in China you can’t use uh Google, you can’t use uh X or you can’t use Facebook. only with a VPN but in China it’s in Vietnam it’s different you can use all this like Facebook so it’s more free than in China but of course you can compare it with uh with western standards so um to come back to your question of course I would hope that they would add what’s very important for me intellectual freedom to economic freedom but to be honest so far I don’t see any signs that it goes in this direction. Okay. Well, thank you. Thank you again to all the viewers and listeners. Thanks to Dr. Rard Zman, author of the rise of the dragon and the white eagles. Of course, Bruno will show it even better. But this is the cover of the Italian edition. It has been published and translated by with the title Vietnam. So I would say to enjoy the reading everybody and thank you Dr. Zman. Thank you very much. I appreciate it. Thank you. [Music] Thank

Marco Valerio Lo Prete intervista @rainerzitelmann4574 in occasione della pubblicazione de
“Come le nazioni possono sconfiggere la povertà. Vietnam, Polonia e la via della ricchezza” (Baldini+Castoldi 2025)

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