WRFH/Radio Free Hillsdale 101.7 FM - The Hillsdale Interview: Rainer Zitelmann

Episode Date: March 27, 2024

Rainer Zitelmann joins Moira Gleason on WRFH to discuss his new book How Nations Escape Poverty: Vietnam, Poland, and the Origins of Prosperity.In his book, Rainer Zitelmann identifies the reasons behind the sensational growth of both nations’ economies, drawing out the lessons that other countries can learn from these two success stories. To explain the source of their success, he returns to Adam Smith’s 1776 treatise, The Wealth of Nations: the only way to overcome poverty is through economic growth, Smith wrote, and economic freedom is the crucial prerequisite for such growth.

This is Radio Free Hillsdale, 101.7 FM. I'm Mora Gleason. With me today is Dr. Rayner Ziedelman. Dr. Zidelman is a German historian, sociologist, and multiple best-selling author. He holds doctorates in history and sociology and regularly writes for media outlets in 12 countries. He has published 28 books, including Hitler's National Socialism, The Power of Capitalism, and in Defense of Capitalism. His books have been translated into more than 30 languages. His most recent book, How Nations Escape Poverty, was released March 26th. Dr. Zidelman, thank you for joining me today. Thank you. Now, for listeners who have not gotten a chance to read your book yet, could you please give an overview of your book and why you decided to write it? You know, the good news is that poverty was reduced in the last 200 years since capitalism. Before capitalism, 90% of the...

worldwide population lived in extreme poverty today is less than 9%. But of course, there are still too much poverty today. And so the question in my book is, how can nations escape poverty? And no, I'm an historian. And so my answer is with case studies. I give two very interesting case studies. One is Vietnam and the other one is Poland. Vietnam was the poorest country in the world in the 90s, even poorer than all African countries.

You know, first they had this terrible war and not only one war. They had the war with France, with Japan, with the United States, with China. There were several wars, and what was not destroyed by all these wars was destroyed by the planned economy. And so in 1990, it was really the poorest country, even poorer than Somalia or Sierra Leone. But people in Vietnam, there are smart people, they understood that the planned economy did not work, that socialism did not work. And they introduced private property. They made free market reforms in Vietnam. They opened the economy to the world.

They welcomed investors, and the result is amazing. It's today one of the fastest-growing countries in the world, and you have their huge entrepreneurial spirit, and this country escaped poverty. And the other country in my book is Poland. Poland was in the 80s one of the first countries in Europe. Poland has something in common with Vietnam because they had also this, in the Second World War, Poland lost more people than any other country in the Second World War, of course, adjusted to the population. And then after the Second World War, they established the planned economy. And I have a lot of, in my book, not only statistics and numbers, I have stories from people where they had to stand in long lines, in queues, sometimes not only hours,

but days and days only to get some products that, that for us it's self-evident that we can buy it every day in a shop. And then in Poland, in 1990, they started also with free market reforms. There was a big reformer. Baljevich is his name. He was professor for economy. and he, by the way, he believed in the same theories as today Javier Milay in Argentina. He's a colleague from him, both Javier Milay today in Argentina and Balchorovich in Poland are professors for economy

and they believe in the teachings from Hayek and Mises. And Poland, what happened there, it's amazing. Since three decades, Poland is Europe's growth champion and one of the fastest-growing countries in the world. Standards living increased so much. And these are two case studies, our nation is key poverty. Okay, very interesting. You mentioned you use personal stories from people who lived in these countries while they were still impoverished. What did that process look like for this book, gathering those stories and conducting?

research. Yes, there are different things that I did first. Of course, I traveled several times to this country, to these countries. I met people, I met entrepreneurs, I met people from BingTangs, and then I had a partner who conducted interviews with people in Vietnam. And so I have their stories. We asked them, how was the life in the time of the planned economy? And they had these stories you can't believe, for example, in Vietnam, sometimes in a very small apartment with maybe only 50 square meters.

There were 10 people living. But in the second room, they raised a peak. because what they earned in their job was only enough for one week. And so they had to look how to survive. Hunger was a problem every day. And so a lot of people, even in the main capital in Hanoi, they raised peaks there in the second room. And we had all the stories.

But in addition to these personal interviews, I commissioned Pauls in both countries in Vietnam and in Poland. And by the way, also in 33 other countries. So the surveys took place in 35 countries all over the world. And the survey was about what people think about the market economy and what they think about capitalism. And the interesting result that the country with the biggest support for capitalism is Poland, more than in every other country, if more than in the United States,

because they have the experience. They know what socialism means, not in theory, not in books, but in reality. And so people in Poland, they are the pro-capitalism champions in the, in this survey. And in Vietnam, they were also much more pro-capitalist than you could expect because, as you know, Vietnam calls themselves today a socialist country and with a leading communist party. But I don't think that it's socialist meant. Of course, it's not communism.

They call themselves this way, but I've been several times in Vietnam, and I had teachers there at the university. And it's easier to find a Marxist in a university in the United States or Europe much easier than in Vietnam. So this is important to understand that don't believe if they call themselves socialist. They have a very entrepreneurial thinking kind of spirit. And we asked in our poll, what other countries or which economic system in which country do you admire? And at the bottom, what they least admire or not the admire at all was North Korea. And the champions were countries like Japan and Singapore. and South Korea and also the United States.

The United States was for young people number two. This is also interesting thing that I saw there when I was there and Vietnam. I spoke with a young female entrepreneur. And she was born after the war. But she told me that my parents, of course, they told me about the war and how terrible it was. But I never heard any negative word about the United States. And I've heard it interesting because, to be honest, I could understand them if there was anti-Americanism in Vietnam. You have, you know, a lot of countries today all over the world who hate America, Arab countries and also Europe.

But not in Vietnam. They admire the United States. It's also one of the result of Paul's. And she told me this young female entrepreneur that her parents said to her eat like

American, dress like American, he'll say music and think like American, then you will be successful. So they admire the United States. And you know, today it's one of the the most important partners of Vietnam in trades is the United States.

And this is also maybe a part of their success. They don't look back. Of course, they have memories about the war. And I've been in some Eusayams where they remember or remind people about the war. But they are not bad with the United States or with other. They look at the future. And I think this is the same as for individuals. If you want to be successful in life, you as an individual,

don't blame other people and don't look back. Don't correct things that you can't change. Look at the future and be honest with yourself. that you are on the wrong way, on a wrong track. This is exactly what people did in Vietnam. They saw that the planned economy did not work. And so they started with free market reforms. They called it Doymore reforms. And this made them successful. And they didn't blame other people for poverty. This is a difference to a lot of African countries in the beginning of May, I will go to Uganda in Africa.

And they blame always what happened decades ago. They blame the colonialism and the British Empire. And this is not a way to be successful. If you always look back, blame other countries, blame other people. Now, if you have a problem, it's the same for an individual and a country, look for the cause of the problem in yourself. And you can't change the past. You can't change history, but you can change the way you think. And if I speak about the way, how people in Vietnam think, they admire rich people.

This is a difference to a lot of countries in Europe, in my country where I come from, Germany and in France, you have a lot of stereotypes, negative stereotypes and prejudice against wealthy people, against rich people. They are scapegoats. And not so in Vietnam, they admire rich people. We had another survey about the attitude towards the rich. and the two countries that were you have the most positive attitude towards rich people,

it was Vietnam and Poland. And in spite of the fact that they already have such a positive attitude towards wealth, they invited me at the Foreign Trade University that is one of the most prestigious universities in Hanoi, and they invited me for, for a workshop and the topic was, how can we improve the image of wealthy people had I've never been invited in the United States or in Europe to a workshop about this topic.

So this is very important, if you want to understand the success of these nations and how they escape poverty, that they changed the way how they think. They didn't blame other countries. They didn't blame rich people. they didn't blame things that happened in the past on the contrary. They admire rich people and they looked what did we wrong and then they corrected it. Okay. Once again, this is Radio Free Hillsdale 101.7 FM.

I'm Maura Gleason and I'm talking with Dr. Rainer Ziedelman. You talk in your book about how economic reform has to come from the people rather than being opposed imposed from above. Could you just talk a little bit about how you saw that in the growth of Poland and Vietnam? Yes, that's a very important point. You can't establish

a free market economy only from the top. This is possible with socialism. This is the way socialism, you know, there's a party that takes the power and then they start with their banned economy stuff.

This is not. not the way how capitalism works and how capitalist was established. I spoke about the planned economy in Vietnam and especially, you know, at this time, this was a country with a lot of peasants and they had this collectivization that failed in all socialist countries that you didn't own your own piece of land, but it was like what they called a common good in reality it was state owned. And this did not work. And of course, the peasants they saw that it didn't work.

And they, as a spontaneous process, they started to introduce private property. They gave people their own piece of land. And this is the same what happened in China, the 80s after Mao Zedong's socialism that failed. There are a lot of parallels between China on the one hand and Vietnam, on the other hand, in both cases, people in this rural areas, peasants, they saw that they can't survive. To say, yes, some of them would really die or have. have, they had hunger and starvation.

So they started to change it. And then what the Communist Party did, they were smart enough at one point in China. It was in the beginning of the 80s with Deng Xiaoping and his economic reforms in Vietnam. It was in the end of the 80s. Even the communists, they realized that the planned economy did not work. and the first thing that they did to legalize the changes that had already happened as a spontaneous process. This is the same. I wrote another book, The Power of Capitalism, and there I have a long chapter about what happened in China,

and it was the same in China as in Vietnam. So this is a market economy is something like a grassroots revolution. You can't establish it top down, but it's like a grassroots movement. Okay, that makes a lot of sense. So with that principle in mind, what can other countries who are struggling with the problem of poverty learn from Poland and Vietnam? Yes, the first very important thing, development aid will not change anything. I have one chapter in my book. This is about development aid.

And, you know, countries like the United States or my country, Germany, we give billions and billions and billions to African countries, but they are still poor. It doesn't help them. In the second chapter of my book, I, I, I, I, I, I, I write about a lot of scientific studies. And they all come to one result. Development aid. In the best case, it leads to nothing. But in a lot of cases, it even makes countries poorer. You can't believe it.

But because all this money doesn't go to the poor people, but to corrupt elites. And it helps to their... that they remain in power as we have in Africa. So the first lesson is don't rely on development aid. It will not change anything in your country, on the country. The next lesson is don't look back, as I said, with Vietnam. Don't blame colonialism or other countries for your situation. The reason for poverty is in your own country, in the mistakes that you made, not others.

This is also very, very important. And the next thing is capitalism works. And this is not only the story from Poland and Vietnam. I mentioned it before that 200 years ago, 90% of the worldwide population lived in extreme poverty. to date less than 9%. And, you know, this is what anti-capitalists tell us, what professors and teachers tell their students at school or university that capitalism is to blame for hunger and poverty. But this is absolutely nonsense.

Exactly the opposite is true. And these are only two examples in my book. I can give you a lot of other examples. And on the other hand, you can also, I have a last chapter about wealth and poverty of countries. And on the other hand, how do countries become poor? My book is how they escape poverty. But of course, you can also ask how do they become poor? And I have two examples.

The one example is Argentina. Argentina was 100 years ago. one of the richest countries in the world as rich as the United States. There were only three or four countries as rich as Argentina. And then they started with big government, with the statism, with the kind of left, a right-wing socialism, and about decades and decades. And it was 100 years now that they became so poorer. And now we hope, you know, they elected last year a new president, Javier Millet. And he understands the reason for the situation.

I hope people in Argentina will be patient enough to understand that what went wrong in 100 years can be changed in six months. So I hope they are patient enough. And then you will see Argentina, hopefully, as a next country that escapes poverty or another very, very, very. bad example that I mentioned in the last chapter of my book is Venezuela. Venezuela was in

the 70s, one of the 20 richest countries in the world. My father richest country in Latin America. And then they started with a lot of regulation, especially labor market regulation, big government

and the situation became bad. And then they made a big mistake in the end of the 90s. They voted for a socialist Hugo Chavez. And all the socialists in the United States and Europe were so enthusiastic about what they called the socialism of the 21st century with Hugo Chavez. And what he did, he started with nationalization, all this crazy stuff that socialists always do.

And the result is, a few years ago, they had an inflation rate of 1 million percent, 1 million percent per year. Now, 7.5 million people escaped from Venezuela. This is 25 percent of their population. 25 percent escaped to other countries, split to other countries. the people who stayed there on hunger and poverty, and by the way, of course, they abolished democracy, they abolished freedom of press, freedom of speech. This is what happens. And in the end, it's not complicated. I like to compare it with a test tube, a test tube, as you used in chemi, with two ingredients, market and state.

or capitalism and socialism. And then you see what happens if you add more markets as they did in Poland, as they did in Vietnam. People escape poverty, countries escape poverty. And then you see what happens if they add more state, more big government, as they did in Argentina or in Venezuela. And this is the way how nations become poor. These are the lessons from history. I write about capitalism, but I'm not a theorist. I don't believe in any theory, but I'm an historian, and I look if I study history, what worked and what not.

All right. My last question for you. Where can people buy your book or find out more about it? You can order it How Nations Escape Poverty on Emerson or Barnes & Noble And today, by the way, is the day It's published exactly today

And it will also be published in Argentina And I'm proud that the spokesman of Javier Milley will write the preface for the Argentinian edition And I hope if people in Argentina are studying, in this book, it will help. But it's also very important for the United States. I can recommend it to give it to your children, if you have children or friends, because at school, at university, they will not learn about all these facts.

I know. I had lectures in the last 20 months, in 30 countries all over the world, in the United States, in Asia and Latin American Europe. And I spoke with people and I saw at the universities, at schools, they don't teach people like this. And if you have the pets in this book, you can win every single discussion

with your left-cleaning teachers or professors. And so give it to your children and to students that it's a kind of weapon because it's so much indoctrination from left cleaning people there today at the universities. And you need books like this to fight against them. Okay. Thank you so much for talking with me today, Dr. Zidlman. Thank you very much.

It was a pleasure for me. I appreciate it. Our guest has been Dr. Rainer Zidlman, and I'm Maure Gleason on Radio Free Hill. Willsdale 101.7 FM.