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NO NUANCES, PLEASE: WE ARE EUROPEANS
The world is often a bit more complex than we like to imagine it
As Europeans, we have a major flaw: we look at the rest of the world with European eyes, we stick European labels on it, we judge habits, written and unwritten rules, forms of Government, political parlance and behaviours without even trying for a moment to put the European point of view into perspective. An old-fashioned colonial habit, one might say. Yet since Europe ceased to lead progress (and it’s been quite a long time!), this snobistic attitude ends up turning against us, because “the others”, those who suffered our colonisation and later gained their independence, know us very well and know how to exploit our mentality for their own interests.
Our memories go back to the time when a famous Italian Prime Minister during a heated parliamentary debate dared assimilate Arafat and PLO to Mazzini and Italy’s unification movement in the XIX century, thus raising the (not totally groundless, after all) indignation of those who considered themselves as the epigones of the national republican tradition. That misunderstanding was not a monopoly of Italian politicians and proved to have serious consequences, since any hope for enduring peace in the Middle East was thwarted by our unavailability to deflect from the typically European, romantic dogma of “Two States for Two Nations”.
Coming to more recent times, the echoes of the U.S Presidential Campaign. raised pointless and rather misleading controversies in our domestic political debate. Even a member of our “technocratic” Cabinet congratulated Obama for his reelection, on behalf of “all those who believe in the right to healthcare”. It is indeed striking to see a liberal President, having in his track record the first extension of public healthcare programmes ever since the introduction of Medicare, winning hands down a State like California, once the stronghold of a conservative President who started his political career raging against Medicare (“socialised Medicine”). One would add, however, that his opponent distinguished himself as Governor of Massachusetts as the inspirer of one of the most advanced healthcare reforms in the U.S., well before any initiative came from the federal Government. And that precisely for this reason he faced the opposition of conservative Republicans who saw him (as their blogs witness) an epigone of Lenin!
The same goes for Obama’s portrait as a friend of Italy and Europe: a masterpiece of the Italian media with actually very little evidence to rely on, since the President devoted little more than rhetoric speeches to both. We would humbly observe that, when Romney evoked the risk of a budget crisis such as that already experienced by Greece, Spain and Italy, these countries were less probably his polemical target than the opponent he sought to defeat. And we can have no doubt that when the Italian Prime Minister raises similar arguments against expansive fiscal policies talking to international audiences, he does not speak as an enemy of his own country. Just to mention another point, are we sure that the President who got the votes of Chrysler workers, employed by a company acquired by FIAT but rescued thanks to the money lent by the US Treasury, will have any interest to act as “a friend of Italy”?
Maybe he will not. But the fascinating portrait of the liberal multilateralist who defeated the conservative warmonger funded by the lobbies still keeps its appeal. No nuances, please: reality is too many-sided, and we are too concentrated on our decline to analyse it.
THE EVIDENCE THAT (ALMOST) NO ONE WANTS TO SEE
What if taxes mattered more than taxi drivers' licenses?
The debate on growth, or rather, on “why Italy’s economy does not grow anymore”, resembles one of those detective stories, where the evidence is before everybody’s eyes, but the detective discovers it only after lingering over trivial details. With one big difference: while the detective’s naivety is a literary expedient, such a strong focus on secondary aspects in the debate on Italy’s low growth rate leads us to suspect that the distraction is a well meditated one.
One only needs to have a look at Eurostat latest data to discover a competitive disadvantage, penalising Italy perhaps a little more seriously than its bureaucracy’s slowness. The implicit tax rate on labour in Italy is the highest in the EU, reaching 42,6% against 37,4% in Germany and 25,7% of the UK. The common corporate income tax rate is 27,5% in Italy (not to take into account the Regional tax on Productive activities, IRAP, whose common rate is 3,9%), against 15% in Germany and 24% in the UK.
Even more surprisingly, while the overall tax burden on incomes is higher in Italy than in most other EU Member States, our tax system is one of the least progressive in Western Europe. If we consider top personal income tax rates, Italy drops from the 1st place to the 12th, with only France, Luxembourg and Ireland having lower tax rates on the richest among the old EU-15.
We wonder why it is so heretical to suggest that making the tax system less punitive for labour and corporate incomes would be more effective in encouraging economic growth than liberalising shop opening hours; or that lower tax rates on labour incomes of the middle class might revive domestic consumption; or even that higher tax rates on the higher incomes would help tackling an increasingly worrying polarisation of wealth.
Or should we go on listening to the same old story of structural reform while our country sinks further into economic inequality? What if that old story were, in the end, a more or less conscious argument to justify the impoverishment of the middle class, perhaps for the sake of recovering competitiveness, while the mass media are entertaining the intended victim discussing pros and cons of increasing the number of taxi drivers’ licenses?
DON'T WE NEED INFRASTRUCTURES?
How the "more important issues are at stake" argument affects the debate on economic growth
Two eminent economists warned the Government that it’s taking a wrong direction. Their criticism was so ruthless that the Prime Minister could not help expressing his disappointment in public. This would be enough to arouse our curiosity; but we feel compelled to deal with this debate, when we recall that one of the two economists involved was officially appointed to deliver “analysis and recommendations” to the Government whose policy he so utterly disagrees with.
The story Alesina and Giavazzi tell us treads the same path of the arguments they have delivered for at least a decade. In a nutshell, Italy is not growing because its economy is oppressed by an inefficient public Administration and its economic institutions are not able to compete in an open market environment. Hence, structural reform is needed to put the country back on a high-growth path, by making Italy attractive to productive investments: liberalisation, labour market reform, improvement of civil justice high education, bureaucratic simplification.
Curiously, the two commentators are rather elusive on one point: the Monti Cabinet has already passed reforms going in this direction. Disappointed though one may rightfully be of certain compromises, it is not fair to blame the Government for taking "steps back" in fields where no step at all had been taken for years! Most importantly, Alesina and Giavazzi do not address the issue of how effective these supply-side policies actually are. The IMF recently estimated that the level of Italy’s GDP could be 6% higher with structural reform. We are pleased to hear so, but the most striking meaning of this estimate lies in what it does not tell, i.e. in the implicit admission that the impact of structural reform on the growth rate of GDP is negligible to the extent that it cannot even be estimated.
Alesina and Giavazzi do not share Minister Passera’s idea that the economic recovery should be stimulated by promoting investments in infrastructures. They stick to the principle that “a post-industrial economy needs no physical infrastructures anymore”. We have to admit we are a bit confused: 1) does this principle apply to a country where the average commercial speed is among the lowest in Europe? 2) when did de-industrialisation - a risk to be avoided at any cost – turn into an unspoken assumption?
Above all, it seems depressing to us that each time a proposal is put forward to improve infrastructures, so many intellectuals react by raising the argument that “so much more important issues are at stake”. Not only does this suggests to us that the Italian version of economic conservatism shares the same view of radical environmentalism; most importantly, it is not at all clear to us which issues they are referring to. Unless they really think that the difference between Italy and, say, Germany lies in the duration of civil trials.
or when language does not describe reality
From time to time, it is still possible to hear or read that politics should lead processes of change. Sure: but it should first understand processes of change in order to be in the capacity of leading them. Above all, it should resist the temptation to build convenient truths.
For many, the Monti Government was a blessing. For others, it was simply the lesser of two evils. Yet, the appointment of the Professor was looked with suspicion by some, who evoked the risk that the time had come for (not very well defined) “international financial powers” to exploit Italy’s difficulties and complete the country’s plunder. Thus, the technocratic Cabinet’s would ultimately undermine the workers’ achievements, pursue a wild liberalisation and, most of all, undersell the industrial assets still in public hand. Under such a point of view, the appointment of Monti revealed a conspiracy going on: or better, the final phase of a plan intended to colonise of a once prosperous country, better known as “Britannia Plan1".
Months after, we deem it appropriate to recall a few simple facts to those professional conspiracy theorists. The State-owned assets are still untouched, compared to when the so-called “Government of the Banks” took office. The State’s budget was balanced following the principle that has inspired the economic policy of any Italian Government over the last 20 years: raising taxes. The only operation envisaged so far to reduce the sovereign debt stock is the sale of State-owned companies to the Cassa Depositi e Prestiti: not exactly a privatisation, given that the Cassa raises funds from the postal savings of the Italians, and that it is controlled by the Italian Treasury!
But there’s more. That ruthless agent of the City’s conspiracy who leads the Italian Government ordered Eni to sell the gas transport network. Yet, the Italian followers of Milton Friedman had to refrain from their convulsive enthusiasm when they realised that, despite the pressures amplified by the foreign press, Snam shares would not be sold to the market, but, once again, to the Cassa Depositi e Prestiti! And probably their initial enthusiasm turned into despair when the recent initiatives taken by the Italian Strategic Fund (a creature of Monti’s predecessor as Minister of the Economy, Giulio Tremonti) showed that resorting to the Cassa is not an occasional expedient, but rather a strategy aimed at preserving the national productive environment in strategic sectors such as the broadband, aerospace and biomedical through an (indirect) expansion of the Government’s control.
Isn’t this by any chance… industrial policy? And if so, isn’t “Mario-the-trustee-in-bankruptcy” continuing the strategy pursued by his predecessor “Giulio-the-State-planner”, only with much less rhetoric and a few more achievements? Who benefits, then, when the debate on structural reforms is distorted by the evocation of Britannia Plan? Not Italy, for sure.
1The expression“Britannia plan” refers to the meeting hosted by UK institutional investors aboard the Royal yacht Britannia, where Mario Draghi, at the time Director General of the Treasury, presented Italy’s privatisation programme in June 1992.
THE WORLD IS FLAT …
in the mind of those who strive for a flat world!
Sheltered from the clamour (and the scrutiny) of the public debate, the idea is circulating within the circles that rule the Italian University system, that the time has come to generalize the use of the English language in degree courses. At the forefront of such a major transformation of high education in Italy is the rector of the Politecnico of Milan, among the protests of the Professors of his own University. His aim is to suppress Italian as a teaching language in all Master degrees starting from 2014.
The official reason is to attract a higher number of foreign students, basing on the observation that, for example, foreign students amount to 20% of the University population in England. Sure: but do really brilliant students strive to be admitted to Oxford or Harvard just because English is spoken over there? Or is it rather that learning English is necessary for the most brilliant and ambitious students because Anglo-American Universities are more prestigious than the Italian ones? And, if so, what’s the deal in changing the language courses are taught in, when our Universities are at the rear of international ranking?
The intellectual élite that, due to the culpable neglect of the political one, rules de facto the Italian University, achieving results that should not actually do it proud, suddenly discovered a panacea that relieves it from any responsibility. No worries! The problems afflicting the Italian University do not stem from the quality of its teaching programmes, or from the recruitment mechanism of Professors: its only problem is that it is too much … Italian!
Of course, Italians must learn to speak and work in English, just as all Europeans. But we feel confident that this aim can be achieved without eradicating from their education the cultural heritage that finds expression in the Italian language. It is our concern that making Italy just another province of a “flat world” (a world that exists nowhere but in the minds and projects of the élites that seek to build it) would have no effect but to accelerate our country’s decline. As citizens, we would like politicians to pay a bit more attention to the destiny of the education system (or better, of the cultural identity?) of the country that they have the ambition to rule.
AFTER THE ELECTIONS:
the chronic lack of a national Conservative party
How should we interpret the outcomes of the recent administrative elections? The impression of a landslide defeat of the moderate area is undeniable, but it would be an undue simplification to explain it with the decline of Berlusconi’s personal popularity and the rise of an anti-politics mood.
Berlusconi’s hegemony over the moderate environment cannot be simply dismissed as belonging to the past, without trying to understand why a party such as Pdl, born to compete in a 2-party system, is now struggling for its own existence after only 4 years. It is our view that the reason lies in the anomaly which is typical of every political force in the moderate field over the whole Italian history, i.e. the inability to build a modern political party, in which the natural interaction between the national and local level contributes to shape the party’s features and programme, without impairing its national dimension.
On the contrary, from the Notabili of the XIX century liberal era, to the factional struggle within Democrazia Cristiana, and the proliferation of Pdl’s co-founders, the moderate political field has witnessed the convergence of local élites, in latent competition with one another, each agreeing to give its temporary contribution to a national political project in exchange for the recognition of the requests of its constituency. The failure of nearly all the attempts to adopt structural reforms, e.g. in the institutional and fiscal field, over the last decade stems precisely from the permanently precarious character of the political forces led by Berlusconi. Those were not parties, but occasional coalitions supporting a charismatic leader, who seemed unchallenged but was perpetually doomed to stoop to compromise.
Basing on the outcomes of the elections, we would rather say that the moderate area is still well recognizable, and maybe it even includes the majority of voters. But in the South, and in Sicily in particular, the centre-right unitary party imploded into the local leader-based factions that established it, whereas the Northern middle-class, deprived of a conservative party with national ambitions, structures and programmes, expressed its discontent by voting movements of protest.
ECONOMIC CRISIS AND GREEN MOVEMENT:
even the Greens look after the wallet?
Greenhouse effect, the ozone hole, global warming, climate changes, cap and trade? Words that neither warm the hearts nor wake up the consciences anymore. Is it the crisis’ fault once again? In the US the number of those who are concerned about the greenhouse effect, for example, has been constantly going down during the last 5 years, the political polarisation goes up (70% of the Democrats fears the impact on the planet of global warming, whereas among the Republicans we only find a tiny 30%). The environmental protection associations are looking for the reasons behind such growing indifference. Many are the possible answers: increased distance between science and society? Little impact of the green message? A recurring theme is that people have a lot more to think about than that!
Is there a possible way to bring back the interest on the green issues? Speaking about themes and pointing out arguments closer to everyday life. The US Greens are following the example of the European ones (above all of the Italians): to focus on the deep cultural roots that refer to the territory, as an example. Food is becoming a major theme through the proposal to choose the local production instead of the industry one. But not only that. Even looking at the wallet made them use a new language: should the car industry build low carbon engines? Yes, but to make us save fuel money and to reduce the energy dependence, not to fight pollution.
So, did the crisis bring the time of the great concepts and of the global battles for the sake of humanity to an end?
WAR ON PRIVILEGE …
or the poor fighting among themselves?
There was a time when any analysis of economic and social change would be firmly based on the assumption that change was triggered by class struggle. However, every interpretative pattern becomes obsolete: sociologists gradually neglected the dialectic struggle between capital and labour, and discovered the ones between genders, generations, and so on.
At the outbreak of the economic crisis, though, it was politics that forged a dichotomy that is persistently monopolizing the political debate: public vs. private employment.
Public employment was described as a stronghold of privilege: a paradise, sheltered from precariousness, where the crisis takes no toll and wages grow faster than inflation. Precisely because they are deemed to be more protected, though, public employees were more hardly hit by austerity measures, ranging from the increase in pension age for women to the solidarity contribution (i.e. personal income surtaxes). Lastly, this balon d’essai gained renewed emphasis during the negotiations on the labour market reform.One may doubt that this pattern actually succeeds in describing social dynamics, and, above all, in inspiring fair and farsighted policies. What is the point in lumping a commis d’état with a temporary teacher? Or wouldn’t personal income level be a much fairer criterion to detect who the privileged are, regardless of who their employer is? Answering to these questions becomes an even more urgent issue in a country such as Italy, where the wealth gap is increasing at a pace unheard elsewhere in Europe. A country that needs everything but to exacerbate a sad struggle among the poor.
towards a political Europe?
Should we assess the importance of the Paris meeting of the leaders of the European Left basing on the originality of their proposals, we would probably label it as a purely media event. Too often have project bonds, extended ECB mandate, tax on financial transactions been put forward in the intense negotiations over the last months.
However, the project of building a common platform shared by all European Socialists, in opposition to the way their conservative opponents are handling the crisis, deserves close attention. Hollande's sentence "Je ne serai pas seul" may have marked a genuine turning point. The Left is struggling to emerge from the ashes of the European social model and the global financial crisis united, in what resembles a EU-wide version of the gauche plurielle: a coalition of political forces, cemented by Hollande's "European dream", but well rooted in the XXth Century tradition and in Jacques Delors' vision.
It is impossible to predict whether or not this dream will revive the citizens' hopes. It is in any case a remarkable development that the debate on economic policy choices, which at the height of the crisis reflected the dialectic of conflicting national interests, tends now to stem from the traditional cleavage between Socialists and Conservatives. Could the reconstruction of a EU-wide political environment succeed in paving the way towards a political Europe, where constitutional engineering has failed?
The image is a detail of Fuori Centro (2003) by Francesca Tulli.