PFP292 | Karl-Peter Schwarz, Between Restitution and Re-Expropriation: Desocialization in Eastern Europe (PFS 2012)

by Professor Hoppe to speak here in this uh delicious

temple of knowledge and liberty of wisdom and

delight i was not only I didn’t only feel very honored but I also felt a

little bit uneasy because I considered various negative options not to be able

to uh come to your expectations but also I considered uh

marginal things for instance I thought whether it would be appropriate to cover my head talking

here because as you know the Romans when they went to the temples to worship the gods they covered the

head and they did it with every god and the meaning of this gesture was obvious

no so you you hide your weaknesses and you hide your sins from the gods but

there was one god a temple one temple in which they did not cover their heads and

this was the uh temple of Kronos the god of time and Blut in his fragments about

Roman customs explains why because he says time brings to light everything

sooner or later the truth comes out so it’s completely useless to cover your

head in the front of time uh time we need time to

understand and we know that developments uh occur in time and they show

themselves they reveal their real nature in time uh my argument touches time because it’s

about crimes historic crimes and uh the way how these crimes were redressed or

not redressed afterwards i came in 1990 a few weeks a few months

after the velvet revolution in Prague from Italy to uh to Czechoslovakia and

to work as a foreign correspondent in several uh postcommunist countries

when I came to Prague I still shared the common belief that nationalization

expropriation confiscation was a specific more or less

exclusive feature of communism it is not it is just one of

three possibilities of governmental theft the first one the easiest one is

inflation almost without violence it allows the state to steal money

continuously and in relatively small amounts from almost from everybody until

withering confidence in the currency dies the second method is taxation

this is a little bit more difficult and potentially dangerous for the government

because it’s under the direct threat of violence and it provides much money from

a majority of people so if you overdo it you will have a rebellion and it’s difficult to to get to get away with

this and the third way is mass mass expropriation and confiscation

it takes all property from a minority which before has to be outlawed and

completely deprived of domestic or foreign protection it’s possible only under

exceptional circumstances basic basically during a revolution which

transforms a society in a in the gulak or after a war it is necessarily violent

and it’s very often linked to forced population

transferes and it’s by no means an exclusive feature of

communism the whole uh history of the uh of the uh 20th century could be told as

a history of confiscation and mass deportation

let’s start with the Parkhan wars in 1912 1913 uh between 1913 and 19 23 about 3

million people fell victims of population transfers and confiscations in Europe alone

approximately 900,000 Muslims from the Barkans Greeks and Bulgarians during the

Parkhan Wars about 160,000 Bulgarians and Greeks after the first war after the treaty of

Na about 1.6 million Turks and Greeks after the treaty of

Losan and there was an interesting case uh which is not so so well known in

Western Europe as well and it regarded the Germans mostly uh very much

assimilated Germans in the French province of Alsus under the presidency of George

Clemens about 150,000 Germans were selected by governmental commissions

they were called driage and had to leave als if they were

detected Germans and in order to speed up this whole process anybody who denounced his

neighbor as German could apply to get his

property the list of this I what I what I mentioned those three millions is

probably incomplete it’s a very conservative estimation

population transfer is understood in the most strict sense of the

definition not included in this uh three millions are people of uh uh who left

the their country and their homestead after the formation of new national

states it was about 800,000 Germans who left Poland about

425 mill,000 Hungarians uh who left Slovakia Romania and

Yugoslavia that means that in the new Wilsonian democratic national order

about four to 5 million people lost their homestead and their property

this uh let’s say democratic prelude to the forced population transfers of

millions of people under the totalitarian regimes of Stalin and Hitler between 1938 and

1944 affected then probably more than 7 million people it’s obvious that in this

figure uh the five to six million victims of the Holocaust are not

included the far biggest population transfer in Europe occurred at the end

and after second world war until 48 and it affected more than twice as many 12

million Germans from Eastern Europe 4 million among Fins Poles Ukrainians

Serbs Croats Sloines Hungarians Slovaks Italians about two million died during

those transfers all thing after the war communists contributed to these

crimes but they were by no means the only perpetrators in the case of Czechoslovakia they were they were even

rather reluctant with the democratic president Edward Benes presented his

plan to expel roughly 3 million Germans a quarter of the population of his

country and to confiscate their property the so-called banish decrees or

presidential decrees initiated the ethnic cleansing and the socialization

immediately after the war the national and social revolution

in Czechoslovakia was nearly accomplished when the communists ousted the

democratic parties in February 48 about 80% of the Czechoslovak economy

had been nationalized in 1945 and 1946 immediately after the war Banishes

ordered the nationalization of all banks of all insuranceances about and of about

3,000 companies in all industrial branches the expert Germans left about

5.68 68 million acres of fields and forests behind the major part of their

confiscated property was first divided between uh among Czech and Slovak

settlers then collectivized after the communist takeover from the 50s until

89 even groceries and flower shops in Czechoslovakia were run by government

why is it so important to understand that nationalization and confiscation were not an exclusively communist

feature because the restitution laws in the postcommunist countries after the

fall of communism set arbitrary and magical time limits in the case of the

Czech Republic and Slovakia this magical threshold is a 25th of February 48 the

day of the coup de Prague if your property had been robbed by communists

after this day you get it probably back it’s not sure but you have good chances

if it was robbed by Democrats the day before you have no chance at all

instead of giving it back to its legitimate owners most of this property was not

restituted it was privatized uh I want to quote uh

whenever I talk about restitution I quote Mor Rothbart from the ethics of

liberty i like this very much how he put it let us say he writes Roritania is ruled

by a king who has grievously invaded the rights of persons and the legitimate

property of individuals and has regulated and finally seized their property

a libertarian movement develops in Loritania and come to persuade the bulk of the populace that this criminal

system should be replaced by a truly libertarian society with the rights of

each man to his person and his fountain and created property are fully

respected the king seeing the revolt to be imminent immen imminent imminently

successful now employs a cunning strategy he proclaims his government to

be dissolved but just before doing so he arbitrarily parcels out the entire

kingdom to the ownership of himself and his relatives he then goes to the

libertarian rebels and says “All right I have granted your wish and have

dissolved my rule there is now no more violent intervention in private property

however myself and my relatives now own Ruritania and if you disturb us in this

ownership in any way you should be infringing upon the sanctity of the very

fundamental principle that you profess the inviability of private

ownership rosbart wrote this in 82 a few years later the communist kings in

Eastern Europe dissolved their governments and gave up their political

monopoly but at the same time they declared themselves the relatives and their cronies private owners of the

former nationalized property rothbart’s answer to this imaginary kings was the following we are

sorry but we only recognize private property claims that are just that

emanate from an individual’s fundamental natural right to own himself and the property which he has either transformed

by his energy or which has been voluntarily given to him by such

transformers the only way to red address the

injustice committed against private property would have been the restitution of stolen property to the legitimate

owners or their heirs a real and fair restitution without

restrictions regardless of nationality ethnicity language religion or

whatsoever instead the postcommunist states excluded the broad majority of owners

and the hairs from restitution and divided the property among a new class of nuvoish mostly from the rank and file

of the former nomenclatur the European Union in the process of

integration of those countries excluded the monitoring of the legislation on

property and restitution from the political criteria there was and is still

complicity in the behavior of the European institutions it is obvious that all this

happened against the rule of law as John Loach put it government can never have a

power to take to themselves the whole or any part of the subject’s property

without their own consent confiscation by the way is also

prohibited by international law in 1938 uh the US Secretary of State Corell

Hull demanded the prompt compensation for lands seized from West Farmers and

Ranchers in Mexico hull underlined I quote that under every rule of law and

equity no government is entitled to expropriate private property for

whatever purpose without provisions for prompt adequate and effective payment

thereof this is called the hal formula and it became since then part of many bilateral

and multilateral treaties and it’s nearly always respected when the United

States and their citizens in are in the game in international law the taking of

someone else property without compensation is simply theft

when the taking of the property is considered as an unlawful expropriation then compensation should also cover the

lost future profits in addition to the loss actually suffered nothing of this

happened in the postcommunist countries of post of of Eastern Europe and I want to to say all this was

also covered up by uh the American and the British government uh in the

agreement of Botam so the very same people who stated the principles

international law and codel uh were not so uh uh were not going to did not

respect it after 45 16 years ago there was a rare bright

moment in the history of the Assembly of the Council of Europe it adopted resolution resolution number

1,096 in which it warned against the dangers of a biased desolic

desocialization process that could lead to oligarchical power structure to state

capture increasing corruption and organized crime had at so you can read

in this uh resolution at worst the result could be the velvet restoration

of a totalitarian regime regarding restitution the Council

of Europe therefore advised I quote that property including that of the churches

which was illegally or unjustly seized by the state nationalized confiscated or

otherwise expropriated during the reign of communist authoritarian systems in

principle be restituted to its original owners in integr if this is possible without violating

the rights of current owners who acquired the property in good faith or the rights of tenants who rented the

property in good faith in cases where this is not possible just material

compensation should be averted the denial and the restriction

of restitution causes many negative consequences in the postcommunist

countries first of all it breaks the rule of law and undermines the legal

order the acquisition of robbed and stolen assets from the government in the course of privatization is not a

legitimate transaction it is fencing for a low cash price theft and fencing were already

punished in the same way in Roman law as property is not given back to the

legitimate owners or their hairs it ends in most cases in the hands of the old

boys networks former communists who easily compensate their loss of formal

political power with state capture and economic dominance this leads to still greater

distortions of competition and still more graft and corruption communists are still in power everywhere

in Eastern Europe sometimes they call themselves socialists or social democrats sometimes liberals or

conservatives only the old communist relationship between state and

corporations has been inverted before it was the party and the state which

organized the economy now the network of oligarchs control the state the

government the judiciary and the political parties this is together with with with

big government the corrupting effect of mass democracy and the increasing burden of the welfare state the most serious

limitation of liberty in postcommunist societies both communist oligarchies represent a

collective security risk as well because they can be used and they are used by

Russia which tries to regain the influence it once had in this part of Europe but let us return to the Czech

experience the lack of redress for countless illegal property confiscations that took

place in the wake of the second world war has been documented by the United Nations human rights committee so far

with can’t response from Prague big or small land owners businessmen

professionals members of the nobility or the Jewish community all of them Czech citizens are still denied their

ownership rights there was the case of Mrs elisa Fabriova born in

1916 her father was murdered by the Nazis in the concentration camp of Awitz

his property was aronized as the Nazis calledist mrs fabiova’s restitution case

has been denied by Czech courts one of the arguments that her father was that

her father was not only a Jew but a German as well and a traitor because I

quote he had lived in a German way there are only very few examples of

restitution in favor of the aristocracy which opposed Nazism during the war

a former Czechoslovak socialist minister of culture Pab Rishetski explained this

once in the following way i quote him “The current aristocracy in this country

is basically an occupying force they all arrived after the Battle of the White

Mountain.” Well the Battle of the White Mountain occurred in November 1620

during the 30 years war the Catholics defeated the Protestants and aristocrats

from Catholic countries settled in Bohemia accordingly the descendants of

the Norman conquerors should be regarded as an occupying force in England too

the late prince Kinsky born in 1936 was a child as he inherited the

entailed fid is the exact legal title for it as he inherited the entailed

fortune of his family his father who right who died in

1938 before the arrival of the Germans at the Nazis had only been the trustee

the administrator and limited beneficiary of the entail but not its

owner his mother immigrated in 1940 with her children to

Argentina among her papers after her death Prince Kinsky found his Czechoslovak children’s passport based

on which his set is his Czech citizenship was confirmed and the

corresponding certificate issued the first five of 157 claims were

still successful the Czech civil courts confirmed in

2003 that the state had assumed ownership without due legal order

without due legal ground the then socialist minister of culture already mentioned sounded the alarm politicians

from all political parties got together for council about what to do to avoid

the misuse of what they called a few former discrepancies

the government created a 30-man special union called Mayate that means property

to block all property claims this specialized policy unit focusing on

aristocratic restitution investigations asked the intelligence service to collect evidence in Austrian

and German archives against Prince Kinsky czech police wire tapped not only the

prince but also his lawyer this wiretapping was approved by a Czech

court the government presented even a falsified confiscation notification in

the court it came out that the district national committee which allegedly

signed this notification in 46 did not even exist in that year because the

district was only created in 49 in the meantime the parliament passed

the so-called Kinsky law which enables the state to interfere in ongoing court

proceedings with restitution plaintiffs who dare to request pro property from

towns now the towns obtained from public funds qualified legal aid which the

adverse part doesn’t have the right to an evident preference of public entities

at the expense of private plaintiffs in order not to give back the

stolen property the state doesn’t hesitate to manipulate and undermine its

own legal order the government interferes in court proceedings it

falsifies documents it controls and observes plaintiffs and lawyers with metals which are in open contra

contradiction with the rule of law and all this does not bother the European

institutions which cover up these crimes with a wheel of silence the Czech Republic whose

president is a longtime member of the Montel Society is no exception there are

thousands of similar cases in other postcommunist countries as well

let’s have a look at tiny Slovenia a former Yugoslav republic under Tito where communism was no less communist

than Soviet communism or any other communism tito socialism is still

considered as being penny and moderate also the reign of terror in Yugoslavia

relative to its population hardly differed from Stalin’s great terror

according to various assessments between 200,000 and 300,000 youth loves were

murdered in 1944 1945 1946 between 45 and 50 at least 1

million people were caught up in the wheels of the communist judiciary and the secret police every tense inhabitant

of Yugoslavia the West rewarded Tito’s break with Stalin at the beginning of the Cold War

by overlooking his crimes elena Roosevelt in her regular newspaper

column praised I quote the dictatorship of the proletariat interwoven with

humanism and called Titoism as Yugoslavia’s last hope dito was

successful she explained to her democratic leadership because he told the people the truths from the beginning

uh by the way it’s quite interesting that um the attractiveness of totalitarian regimes was uh always

particularly uh strong in uh uh in the most bloody periods of totalitarian

history during the Stalinist purchase in the certis there were a lot of western intellectuals which were affected by

this idea that Stalinism is the this communism as the future of of mankind

this was the case during uh regarding US slavery in the 40s and it was also the

case during the the cultural revolution in China so whenever when most blood flows no uh the applause from the

western intellectuals is uh is is growing uh in

1947 Luboss now 92 years old was sentenced to

death at a short trial in Ljubljana because of his well-known anti-communist

positions and his contacts with British diplomats the secret police arrested him

on the eve of Tito’s birthday on his way home in prison he met Colonel Mitia

Riich the chief of section two of the Communist Secret Service Osna

responsible for persecution of the internal enemy ribeich directed summary

executions of actual and potential enemies of the regime he later became

Yugoslav Prime Minister and president of the central committee of the League of Yugoslav Communists

ribeich and his men interrogated Seirs into the early hours of the morning for

four weeks he was dragged from his cell each night for interrogation and was not

allowed to sleep during the day the Secret Service officer and his

victim are approximately the same age ribeich was born in Triesta in

1919 Sez in Crin in 1920 both enrolled in the law faculty at the

University of Ljubana in 1938 when Germany invaded Yugoslavia in

April 41 Sir joined the left-wing nationalist resistance group Star Taba

meaning ancient rights the communists discovered the apatriotism only two

months later namely when Hitler’s attack on the Soviet Union rendered the Hitler

Stalin pact obsolete ribbitic a political commisar with the

rank of a coloner supervised the party reliability of the partisan detachments

in German occupied northern Slovenia as Seir says his most important

task was ensuring that no non-communists would join the armed resistance the

commissiles subjected the volunteers to a strenuous interrogation including

torture forestry workers found the corpses of partisans clubed to death by

the commisars the so-called protective order of the Slovenian people’s liberation front of

uh of September 41 provided for the liquidation of those resistant fighters

who did not submit to the communist control liberation front contacts with foreigners which

Seir maintained as translator for the Yuguslav government decided his fate in

the show trials of 47 of 14 defendants three were sentenced

to death rubers’s father Frano who had no connection with the anti-communist

opposition was also sentenced to 10 years imprisonment with hard labor

because his son was an enemy of the people and he himself a class enemy

franio Sez was a successful entrepreneur until the Nazis confiscated his property

dismantled his textile factory and destroyed the buildings what was left by

the Nazis was confiscated by the communists franio Seirs died after four years in

prison luboss remained in prison for seven and a half years in

1945 he succeeded in escaping over the mountains to Italy he taught economics

economics in Dhaka in Dundee and in Glasgow and founded the center of

research into communist economists in London he has written several books on the failure of central planning and the

biography called between Hitler and Tito which is amongst the best and most vivid

descriptions of life in Yugoslavia in those times sir has tried to recover his

property for over 20 years the short trial sentence was rescindered

in 1991 he immediately applied he immediately applied for restitution and

compensation for unjust imprisonment he did recover a few scattered pieces of

his family’s property consisting of a house in crime except the business

promises on the ground floor part of the garden and 600 out of 15,000 square

meters of land belonging to his father’s textile factory in 1990 the Slovenian Parliament decided

to return all confiscated properties but restitution was dragged out and came to

a complete halt sir had to appeal adverse decisions three times eventually

Slovenia was fined with a mere €18,000 by the European Court of Human Rights

for the letter handling of the claim where the value of property involved amounts to almost€ 10 million euro

in 1998 the Slovenian leftist parties that regained power after a brief interlude

retroactively modified the property restitution law of 90 of 91 to the

detriment of the claimants the rational given was that fiscal exigence exigences

of the social state were more important than the rights to property in rejecting

in rejecting the complaint made by se of discrimination as a result of the new

law the constitutional court of Slovenia argued that public interest justified

justified the retrospective application of the law over 40% of property in Slovenia is

still owned by the government all nine judges in the Slovenian constitutional

court were still appointed by the former uh president Milan Kuchan who had also

been the leader of the communist party of Slovenia one of the nine eight were

non-communists including uh uh of the nine eight were non-communists was also

Terriil Ribbich the son of the communist bacha Mitia ribich tiel was his father’s

partisan name s’s case was supposed to be a test case but the European court of

human rights took eight years to reach a judgment in a left-leaning newspaper

called Dello in Ljubljana ostian Shupanchich the Slovenian judge in

Strasburg criticized I quote the gap between Western and Eastern thinking by

which the European Court of Human Rights is characterized uh and where Bourgeoa mentality still

prevails and he ranted against yappy legislation instead of feeling

themselves bound by as he called it legal formalism the jutsu should

according to shupangich exercise their legal power

lubocitz reports that that he had drawn the attention of Lutius Wilhabber until

2007 the president of the European Court of Human Rights to the peculiar

understanding of law by the Sloven church yet Wilt Harour could not dictect

in the Slovenian judge’s view any infringement of the unated doctrine at the Strasburg court

sir accuses the Slovenian constitutional court and the section of the European

Court of Human Rights chaired by Shupenich of bias what is involved says

is the disregard of his right to a fair and public hearing by an impartial and independent court and therefore of the

disregard of his human rights particular of his right to to own his property in

the meantime Sir has no more legal options to get his property

back for utilitarians restitutions is simply a nence it is probably much

easier to make a plan for a swift IMF compatible transition 10 years ago Tyler Cohen

wrote a paper which is quite often quoted among transition engineers in

postcommunist countries cohen argued sarcastically against

intergenerational restitution i quote “The Hopy charge that the lands were

stolen from them by the Navo if the United States government returns the land to the Navajo should it also

returned subpropy to the HPI the postcommunist and uh transition

economies should we remedy only the injustice of the communist era or should

we go much further back and try to rectify previous injustice as well

should it matter that the nobles virtually enslaved the Russian peasantry

should it matter that changes Khn sacked Baktat in two

in 124 58 now it is obvious that restitution is

only feasible where property rights are evident and verifiable i doubt whether

this is the case with the hoppy the lvahos the Russian peasantry or the victims of changenis cheap sarcasm is

not very helpful it is true Kronos the god of time devoured some of his

children and Kyros the god of the right moment is unpredictable

we do not know whether those crimes will ever be properly redressed probably not

but at least this must not blur our moral discernment thank you for your

attention

[Applause]