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lunedì, 21 agosto, 2017 9:23

Italy: Requiem time already?

Italian Flag in RomeAbout one month ago, we assisted to the release of a pretty bleak and pessimistic article by the University of Tokyo and London School of Economics professor Roberto Orsi (read the article), in which he (correctly) pointed out why, if nothing changes (in Economics slang: ceteris paribus), Italy will be certainly doomed to failure and decline, suffering from a long-lasting recession and the pernicious strings attached to it (i.e. the rise of unemployment, the multiplication of companies closing down, a progressive “thirdworldisation”). The ultimate cause of this mess has to be found in the absolute decline of the quality of those forming our political class, i.e. an entire generation of politicians which was able to transform a fastly developing country into a comatose nation, whose human and industrial excellence continues to be drained, with 400.000 people emigrating on an annual basis (among which 80% have a degree) and 32.000 companies disappeared since the beginning of the actual crisis (equal to the 15% of our manufacturing industry. Yes, 15%!).

To make a long story short – thousands of gloomy statistics could be adduced – one should simply refer to the last edition of the World Economic Forum’s “Global Competitiveness Report” (available at: http://www.weforum.org/reports/global-competitiveness-report-2013-2014), and particularly to page 227 , which provides us a thorough and detailed list of the Italian “competitive tragedy” (see below). Reading those numbers, I can’t escape to ask myself how Italy can still be considered one of the top-ten economies in the world, if it scores well below the top ten in (almost) every category. Indeed, looking at the world GDP rankings (http://databank.worldbank.org/data/download/GDP.pdf), and taking into account the severe recession which is haunting the country (8 percentage points of GDP destroyed since the beginning of the crisis), Italy risks to be rapidly outpaced by a series of countries in the upcoming decade.

global competitiveness

GDP per capita italy diversion

The current scenario also shows us how all the Italian political “debate” is nothing more than empty rhetorics. To be honest, and to state the extreme, Italy’s political class – Right and Left, Centre and the so-called “anti-political” forces, no exclusions – has acted in a completely unconstitutional way, at least since the beginning of the crisis, but probably even long before. In fact, why, in a country whose Constitution’s opening article states that “Italy is a Democratic Republic, founded on work”, we have assisted to an increase in the real-term fiscal pressure from a 31,4% in 1980 to a (staggeringly high, considering the dimensions of the country and its current situation) 45,1% in October 2013? Why Italian companies are the most vexated in the entire Eurozone (with an incredible tax level of 68,1%, meaning that, even in normal conditions, they work “for the State” until the end of July), thus preventing them to escape from the current crisis and increasing the odds of pervasive bankruptcies and the consequent rise of unemployment (which is, actually, the exact opposite of an incentive to widen the total workforce)?

Article 1 continues by stating that “sovereignty belongs to the people and is exercised by the people in the forms and within the limits of the Constitution”. These sacrosanct and respected words notwithstanding, the last two governments holding the reins of power (i.e. the Montian and the current one) weren’t democratically elected, and, to be honest and frank, so far they have not completed any of the reforms for which they were appointed. The Letta government, for example, was originally created with the mission of changing the electoral law, cut the public expenditure and implement some of the reforms the former Monti government had been unable (or unwilling) to carry out. Now, one would expect that in a state of absolute necessity, as the present one, a reform of the electoral law would have been a matter of weeks, if not days. However, six months after the beginning of the Letta premiership, no major changes have been obtained, and the original purpose of the executive has been lost amidst the proclaims, counter-proclaims and rhetorical turnabouts of the two main parties, the new (and probably not last) chapter of the “Berlusconian Saga”, a new round of scandals, and so on and so forth. The biggest problem is that, in the context of the present work, I just took into consideration the first article of a Constitution made of 139 articles and 18 “Transitory and Final Provisions”. If I took into account the whole text, the list of distortions would have been so long to make it clear why, when we talk about the state of Italy, we can’t avoid speaking about the Italian State.

So far, I have talked about well-known problems. Let’s now try to address the possible solutions. How can Italy escape the present crisis? The first solution which comes into my mind is a literal one: thousands of young people are escaping the country, generating the “brain drain” phenomenon in the form of a geographical exodus towards more open and forward-looking countries. Needless to say, this is not a real solution, since it leads to a further impoverishment of the country both in a cultural and economic sense. Again, what should we think of a political and institutional establishment which enables (and somehow encourages) such a massive emigration? If a young person feels ready to leave behind his/her family, friends, culture and homeland, i.e. the most important things he/she has, it means that we are facing an unprecedented cultural crisis.

Secondly, we should bet again on entrepreneurship, going back to our roots after years of hetero-generated policies which pushed Italian’s economy towards a series of managerial decisions which have nothing to do with our economic structure (see under  the voice: “Austerity”). We shouldn’t forget that our welfare is mostly dependent on our grandparents’ generation, which was indeed an entrepreneurial one and produced the 60s’ Boom thanks to which we are now discussing of “decline”. However, as we have seen, Italy is not exactly the best country ever to start a company. Even if one could bypass the strangling tax net (which, theoretically, and I underline theoretically, should be the lowest one in Europe as to push forward some sort of recovery), unfortunately Italian youngsters lack of the entrepreneurial mindset needed to perform such a task. Without opening the “crisis of the School” chapter, which could easily transform into an endless book, I would just point out that just a small minority of the Italian high-school students are taught about economic and legal subjects (which, due to the present issues, should be at the top of the agenda, at least to provide students the instruments to understand what is going on), being them absorbed in an environment supplying lots of notions, but very few practical skills. An environment which was good for the previous generations, living in a “practical world” and coming from “practical families”, but not so suited for the current one, which masters erudition and specialization but lacks of expertise. Furthermore, the young have scarce chances of gaining seats in the political arena, due to the Senate’s 40 years age block and to the caracteristics of the political élite. Again, theoretically (and I underline theoretically, needless to say), one should put a mandate limit (ex. two mandates), expired which a politician could not be elected anymore, apart in extraordinary cases of popular approval, and just once, as to increase the flexibility of the political system and lead the main parties to form the younger generations, in order to permit them to serve in the public arena. This would put constraints on the reluctancy of the political class to leave their privileges, while fostering at the same time the maturation of the young. Obviously, these latter should be educated accordingly, thus insisting on a renaissance of responsibility-taking in a generation usually acting “alla meno” and avoiding commitments, and this type of system would not forcely prevent corruption and nepotism. However, since corruption and nepotism would be present anyways, at least it would force the political class to spontaneously renovate itself. Despite this, the only ones able to make these changes are clearly those less stimulated to do it, so this solution will be left to Utopia and science fiction texts.

Finally, and this the worst type of solution, the one we should keep avoiding, there is often the possibility of a rise of violence, of public revolts and, to be extreme, of military coups, which are hypotheses not totally foreign from our culture, as the Italian history clearly shows. This violent scenario would be the extreme response to a (probable) increase in poverty and unemployment, to a persistent rise in taxation without any resulting benefit, to a Nirvana-like void of reforms. Make your own evaluations…

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