Abstract
The title of this volume immediately reminds an Italian readership of an excellent school result: nine out of ten. The disappointment of discovering that it is being used about the conspicuous proportion of Italians who have become impoverished over the past decade is not lessened by the description of a European setting which, albeit with certain exceptions, reflects growing economic and social inequalities and political/economic incompetence verging on the pathological.
Right from Chapter 1, readers of Nine out of Ten are taken through the complex web of developments and decisions that caused and prolonged the political and social economic crisis enveloping a large number of EU Member States.
Major events sometimes erupt and succeed one another without interruption (the speculative bubble in the United States, the knock-on effect in some European countries, the stock market collapse, the stand-off between the French-German axis and the rest of Europe). At such times it becomes ever harder to discern the import and seriousness of certain policy decisions (for example Chancellor Merkel’s refusal to agree a modicum of relief for Greece in order to prevent speculation on the euro). So it then becomes necessary to reckon with mounting economic and social insecurity without really knowing who is to blame. Nine out of Ten helps us not only to gain an overview of the events, but also to grasp their import and intricacy, thanks to the historical overview accompanied by a critical analysis of the crisis and by concrete proposals for recovery and growth.
The book starts out on the basis of a few vital requirements, addressed from various points of view in four chapters: the need to limit financial speculation; the need to rediscover a key, participatory role for citizens, civil society and social movements in Italy and Europe; and the need to rediscover a policy capable of promoting growth that is sustainable from an environmental and social point of view.
These requirements result from contrasts that have seen conflicts between finance – both anonymous (the so-called ‘markets’) and specific (small numbers of the super-rich have speculated and become wealthy) – and a real economy, whose role has declined in size, profits and scale since the Maastricht Treaty was signed. Over and above this fundamental opposition there is fragmentary European policy-making (democratic deficit; lack of fiscal integration; absence of European public policies; slow decision-making) in addition to a poorly balanced European economic scene, where a weak periphery services an ever stronger centre (first and foremost Germany). At the same time there is the collision between an ever richer, more powerful minority and a broad swathe of the European population who are living in growing social and economic insecurity (e.g. poorly skilled workers, young people, women and older workers).
Whereas Chapter 1 focuses on the stakeholders, Member States and European institutions, that are totally subservient to laissez-faire liberalism, Chapter 2 delves deeper into the case of Italy. Italy has a lost decade, if not two decades, behind it: its GDP growth has been trivial by comparison with other large European countries; its labour productivity – contrary to all reasonable expectations – has fallen by an average of 0.5 percent per year. Italy’s decline has been exacerbated by its small-scale, fragmented structures of production, by an outdated industrial production system, and by excessive appeals for financial returns so as to obtain liquidity, thereby bolstering speculation and profits shared by just a few people. The absence of any extremely innovative industry has prevented the development of high labour productivity, forcing businesses to try and stay afloat by cutting labour costs, thus inflicting another body blow on already-low real wages.
Italy's difficult situation has furthermore been worsened by insecurity on the labour market, and by a form of flexibility that was unhealthy from the outset: it caused a proliferation of jobs that were temporary, badly paid and unproductive. Those who have been trapped in the segmented labour market have primarily been the young, who have then been hardest hit when the brunt of the crisis bore down on Italian firms. Added to all of this came the scourge of the illegal, parasitical economy that is spreading at the expense of the community and feeding criminality.
The impossibility of managing monetary policy nationally, in combination with the weakness of the production structure, has led over the past decade to a worsening of Italy’s balance of trade with other countries. The balance of trade veers towards imports, while exports are flagging, leaving the way open, among others, for a strong and productive Germany which makes the most of its production capacity by boosting its exports to the European periphery. While this type of capitalism has shown its limitations, we cannot ignore the fact that political groups have also been playing a key role in ensuring that this system physically and ideologically corrupts the political and economic scenario in Italy and Europe.
In Chapter 3, the author demonstrates how Italy’s centre-right and centre-left political groups have been totally consistent in not putting liberalism up for discussion and in promoting a monochrome policy. While the Italian economy grew feebly under the centre-left governments (Prodi, D’Alema and Amato), it most certainly stopped growing under Berlusconi’s right-wing governments. Inflation eroded the purchasing power of incomes, while public spending cuts reduced the percentage of GDP intended for state expenditure by five percentage points compared with ten years previously. The victims are all well-known: universities, health care, welfare, pensions, local authorities and public transport.
The weak redistribution policies that should have been able to narrow the gap between ‘losers and winners’ have been dismantled, for example by abolishing death duties or the countless tax evasion amnesties, making the burden of inequality fall on families. Neither the centre-left, nor even the centre-right groups spoke out vehemently enough against the powerful leaders of companies, finance or major estate agents. The Monti government, with its complement of ‘technical experts’, appears to be riding along with the same ideas and solutions, only raising slightly the taxes on financial profits, laying down regressive value-added tax measures and reforming the labour market.
The consequences have been appalling and alarming: Italy’s economic and social structure has become ever more pyramid-shaped, with a very narrow peak (the 10 percent of wealthy people) owning 45 percent of the wealth, and an ever-broader base (the 50 percent of poor families) dividing up and sharing out the remaining crumbs (the 10 percent of total wealth).
After these pages on the trends and the description of the destruction brought about by the crisis, not just to the economy but also to social cohesion and the environment, Chapter 4 puts forward proposals for a positive recovery in Italy and in Europe as a whole. The main aspects are not merely the fruit of the author’s own thoughts but also derive from ongoing exchanges with economists, civil society and social movements that the author has promoted and in which he has taken part.
Among the solutions proposed, the alternatives to the recovery now being imposed by politicians include a reshaping of the financial system, control over the economy, democratic practice, income taxes, the elimination of tax havens, the splitting of investment banks from commercial ones, the feeding of pension funds into public finance pots, the creation of a European rating agency that has no conflicts of interest, or else more efficient redistribution. There will, in addition, be moves to ensure minimum incomes, the establishment of stable employment, and greater involvement of the social partners who play a fundamental role in safeguarding workers’ rights and reducing the inequalities between them. The author goes into more detail for Italy, listing other possible alternative types of expenditure that may promote growth and at the same time foster cohesion and social entitlements while supporting environmental sustainability.
The return to certain arguments in the structure of the text is germane to the author’s goal of revealing and demystifying the omnipotence and omnipresence of unrestrained liberal ideas and finance. A few further details on the effects and likelihood of poverty and social, not just crisis-driven economic, exclusion might have made Italy’s and Europe’s current scenario more hard-hitting and human, but also more dramatic.
This, therefore, is a well-timed publication that issues a warning and makes various proposals just a few days ahead of the fresh negotiations on labour reform. It provides a detailed account of the facts, many hints for further reading, and a number of topics that cause us to reflect not just about economic facts alone. Readers are led to reflect on major issues which put the overriding structures and thoughts up for debate. Two of these would seem especially notable: the first is how to combat the liberal thinking that, with the connivance of politicians and the media, has taken capital so far away from labour. Indeed, the financialization of profits has ended up by marginalizing the role of the real economy and reducing the economic and social value of labour in the case of nine out of ten persons. The second issue is how, ultimately, the common good can be rediscovered and protected through the democratic participation of all citizens, whether or not they are organized, living in Italy and in Europe.
Finally, the best possible approach would indeed seem to be upholding a policy of dialogue and change that no longer uses sentences such as ‘the austerity measures will return trust to the markets’, but instead ‘the austerity measures will reduce the inequalities between citizens and will, with them, establish the prerequisites for stimulating fair and lasting growth’.
Translation from the Italian by Janet Altman