Monti's statements on the sustainability future of the system sanitary have aroused considerable controversy on the part of trade unions and political forces: it was largely predictable.
In reality, the premier's outing comes second to Mario's more well-known comment Draghi on European welfare, which he branded as "exceeded” the social safety net we all enjoy.
Inevitably, these positions have been supported by some political and social forces, which have reproached the "liberal technocracy" with the intention of subjugating the rights to the thirst for profit of the financial markets, banks and insurance companies.
As often happens, however, the reality is much more complex, and the sustainability of welfare is not an ideology but a concrete problem, which politics will sooner or later have to face.
La demography, from this point of view, plays a primary role. Until now, in the financial management of welfare, not enough account has been taken of the aging trend of the population, caused by the decrease in birth rates. The fundamental prediction of the economist Robert Malthus – that is, that with the increase in per capita income there would be more children – turned out to be wrong, since, on the contrary, the more income increases, the more the birth rate decreases, helping to overturn the social pyramid, which narrows at the base (corresponding to the lowest age groups), and widens at the top, indicating that the share of elderly people out of the total population is increasing more and more.
It might seem strange that, with the increase in wealth, families tend to have fewer children, but in reality the economic mechanisms that regulate the behavior of individuals help to understand this bizarre trend: the more one works, the more the woman emancipates herself and enters to be part of the economic cycle of production-accumulation, plus the time to devote to childcare involves giving up working time and, therefore, income. Net of the cyclical consequences on the birth rate of an economic crisis (today we have fewer children mainly because we cannot support them), the mechanism that regulates births is precisely this, and in poor countries it is overturned: the less you earn, the more the incentive to proliferate (also for cultural and social reasons) grows.
Children often even become a sort of investment, since from an early age they contribute to the unity and survival of the family, for example by working in the fields or in the mines. Malthus, on the other hand, was convinced that the only brake on the birth rate was the limited natural resources (water, food, land), and that having reached a limit point in the availability of resources, the birth rate would have slowed down spontaneously. On the contrary, we continue to see an increase in births in the third world, while in the relatively wealthy West there are fewer and fewer children around.
How does all this reflect on public finances? As the population ages, costs grow, and if Governments - for short-term political advantages - do not "invent" mechanisms to support welfare, a breaking point is reached beyond which financing health care and pensions becomes impossible: with the lengthening of average life and the decrease birth rate, health care (which is enjoyed above all in old age) and pensions will have to be "paid" by those who work, who will transfer wealth to those who have retired. But if – by virtue of the declining birth rate – fewer and fewer people are working, the only solution to keep universal welfare alive is indebted public coffers: it is politically inconvenient or simply impossible to increase the contributions and taxes payable by workers.
Today, however, we are at a turning point. The obligation contracted by the European countries of put a stop to the accumulation of public debt makes the path followed so far unfeasible, and it is mandatory to identify sources of healthcare funding other than debt (or additional taxes), when revenues are no longer sufficient. In this sense, in the field of social security, the introduction of the method contributory in the calculation of pensions it represents a point of no return, but the problem of financing health care remains given that, once the pension dilemma has been resolved, the decline in the birth rate automatically uncovers the health care chapter. In conclusion, the blanket is too short and getting warm will become more and more difficult.
It is precisely in this sense that the declarations of the two national Marios should be read. And ideology has very little to do with it: if the "welfare state" inherited from William's thought Beveridge is unsustainable in the long run, alternative sources of financing will have to be found.
The historic (and often ideological) Italian contrast between public and private presents a harmful side effect: it hides the focal point of the problem, namely that precisely in order to maintain a level of public assistance that is truly usable for all (the so-called essential levels of assistance), private financing will be inevitable in the future. In the professional world we are already gearing up, proposing private insurance instruments that guarantee adequate complementary health treatments, in anticipation of a tendential reduction in the public offer. In the area of pensions, Raffaele Zenti has already illustrated on FIRSTonline the opportunity to consider, starting today, the use of supplementary pensions (for those who can afford to save a portion of their earnings), given that the introduction of the contributory method which cannot be postponed will result in very low pension premiums for future generations.
In some countries, declining birth rates are already affecting the functioning of the financial markets: in Great Britain, for example, many private pension funds are repositioning their portfolios on government bonds, today advantageous in terms of returns compared to equity markets, and less volatile. A recent study by the Financial Times, moreover, has revealed how the decline in the birth rate is historically associated with a reduction in share prices, precisely because the need to stabilize future receipts (in anticipation of the retirement of the "baby boomers“) prompts managers to steer towards the stability of fixed income securities. It is no coincidence that there is talk of an end to the "golden age" of equity which, having reached its apex between the 80s and 90s, may never return to the glories of the past.
The picture that is emerging is quite evident as well as unavoidable, and if the presence of the State in welfare can only decrease in the future, it will be the mechanisms and guarantors of the market that will have to ensure the effective usability of constitutional rightsespecially in the health sector. Between politics and finance, there is still a long way to go, as the case of American healthcare demonstrates.
