Freedom needs Laws

Good Morning Ladies and Gentlemen

“Regularities are characterised by the fact that they are stable over time; otherwise, they would not be regularities.”

by Dr. Philipp Sterzer

John Locke

John Locke, the great pioneer of liberalism, described freedom as freedom from the coercion and violence of others. However, freedom does not mean that everyone can do whatever they want. Who can be free if the whims of others can tyrannise them?

Freedom in the market

The market is traditionally hailed as the exemplar of a system under which people enjoy freedom, particularly the negative sort of freedom associated with liberal and libertarian thought: freedom as noninterference. The appeal of the market from within that viewpoint is that it represents a regime of unobstructed consumer choice and, as a bonus, a regime in which consumer options may be expected to increase and diversify under the pressure of competition. (By Philip Pettit, Princeton University).

Carl 1 and free speech?

Carl 1 sits in his favourite, cheap and busy Restaurant in the centre of Moscow and debates over his dinner and lots of alcohol with friends and other guests about the war in Ukraine, sanctions by the West, and their constraints on the everyday life of middle-class Russians. He is critical of Russian policy and the war and would like to see peace talks between Russia and Ukraine. Carl 1 walks home to his wife and wants to tell her about his political discourse. He never reaches home and risks being locked away indefinitely. Carl 1 is not to be seen anymore. Is Carl 1 free, and is he a hero?

Sanctions

So far, it seems, the sanctions on Russia have led to a particular shift in prosperity. While Europe, above all Germany, has been hit by higher energy prices due to the sanctions, India does not comply with them and imports the sanctioned fossil fuels from Russia at discount prices, refines and then exports them worldwide on an unprecedented scale and with high margins. The U.S., at the same time, is fracking as if there was no tomorrow, taking advantage of higher prices on non-sanctioned fossil fuels and exports to Europe, above all to Germany. Germany complies with the sanctions and does not buy cheap gas from Russia anymore but expensive gas from the U.S. and other nations. I imagine the effect of the sanctions must be challenging for the average Russian, and I imagine the effect of the same sanctions must also be challenging for the average German. Are the sanctions hitting the right institutions or people? Is Germany a free country deciding what is best for its citizens?

Carl 2 and free speech!

Carl 2 sits in his favourite and very busy Restaurant in the centre of Berlin and debates over his dinner and lots of alcohol with friends and other guests about the political system in Germany and the incompetence of the country’s political leadership. Representatives of the authorities and members of the Bundestag sit at the surrounding tables. Carl 2 goes home to his wife, has another sip, proudly tells her about his political debates and feels like a hero. The day after, Carl 2 visits his family in Frankfurt. Together, they go for dinner in a bustling Restaurant in the centre of town and debate over food and lots of alcohol with family, friends, and other guests about the political system in Germany and the incompetence of the country’s political leadership. Carl 2 again goes home to his wife, has another sip, proudly tells her again about his political debates and feels like a hero. Nothing happens to Carl 2. Is Carl 2 free, and is he a hero?

Tricky

The tricky thing about these questions is the realisation that there is no freedom without rules, but rules (may) limit freedom and, to some extent, prosperity. Freedom for all also means preventing a group of people from creating a situation through their behaviour – for example, by invading another country – that massively impairs the freedom of all. I firmly believe the principle «where there is no law, there is no freedom» still applies. However, rules (may) limit freedom and, as I have pointed out in the above example, to some extent, prosperity.

Prosperity and Freedom

Sanctions create new opportunities. In this case, for U.S. fracking companies and fossil fuel refiners in India. Yet, as in the above case, they are also a burden for average German and Russian citizens. History shows that free markets lead to prosperity, and prosperity leads to security and peace. And sanctions, what do sanctions lead to?

Ladies and Gentlemen

As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

I wish you an excellent start to the day and the weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li