The uncritical exaltation of the combination of neoliberalism and globalization that dominated academic thought and guided the choices of international economic and monetary authorities in the last decades of the last century is increasingly questioned above all from within those same authorities . The growth estimates which, not only in Italy, are always revised downwards, after the years of recession and the economic and financial crisis, are producing a critical reflection that is perhaps still not adequate enough but certainly appreciable.
In a recent interview, Carlo Cottarelli – who, having stopped his role as Italian responsible for the spending review, is now executive director of the International Monetary Fund – speaking on the state of health of the economy, clearly states that in Europe there is a problem of insufficient demand and there is no public investment plan at the continental level. The inadequacy of the results, far from those hoped for, of Quantitative Easing, wanted and reaffirmed by Mario Draghi's ECB - according to the IMF economist - is due, on the one hand, to not having combined it with expansionary national policies and on the other to the excessive regulation of banks, with the various "Basel" ones, and the continuous request for more capital to disburse more credit which determines a permanent variability and uncertainty of scenarios and policies to be adopted. Low interest rates, which make it difficult to raise capital, are compounded by excessive regulation that often changes too quickly. The same interview also criticizes the ways in which globalization has so far been imposed, which if it has been too fast in Europe causing the Old Continent to lose production and wealth also due to a too rigid labor market, in the United States, with a less rigid labor market, has caused an impoverishment and a reduction of the middle class which has always been the driving force of consumption. Therefore, a globalization which, if its foundations are not questioned, is questioned for the ways in which it was achieved: the speed and lack of homogeneity of the different economies.
Another cardinal principle which inspired the economic choices and which is fully internal to the scheme of neoliberal globalization is that of austerity. In this case we are witnessing today a critique, albeit still weak and timid, of what had become an untouchable postulate. Actually already in 2013, Olivier Blanchard, then chief economist and director of the IMF's economic research department, had entitled his research "Revisional errors of growth and fiscal multipliers". Data in hand explained how the multipliers implicit in the forecasts, ie the ratio between the reduction of the public deficit and economic growth, were wrong because they were underestimated by about one unit. Which means that each deficit cut has compressed growth by more (one and a half times more) than expected. A major forecast error with worrying consequences. The error was somehow "justified" by the fact that the multipliers had been calculated before the crisis and therefore had not taken into consideration the extraordinary factors linked to it (interest rates close to zero, unused resources, consumption linked to present and not to future ones). However, acknowledging the error did not result in a trend reversal, as would have been desirable, and austerity continued to be made an absolute priority which is still difficult to question even today. So much so that Blanchard now pays for his position also in terms of an important international recognition such as the Nobel Prize. All predictions gave the French favorite but, at the last moment, with a decisive change, the Nobel was awarded to the British Hart and the Finnish Holmström for having developed, as stated in the motivation, "the theory of contracts, an exhaustive scheme to analyze many different issues of contract architecture, such as performance-based compensation for top managers, deductions and co-payments in insurance, and the privatization of public sector assets”. Any comment is superfluous! After all, a request to rethink austerity policies comes from the President of the United States Barack Obama who, a few months ago, presenting his budget for 2016 as a turning point was able to state, addressing not only the Americans but the world whole and above all to Europe which is "time to think about growth, to go back to spending for families and for investments".
The damages that the rapid spread of globalization that we have known has produced, accentuated by austerity policies, therefore require a profound and radical rethinking. A real turning point that is underway and has not yet been completed, but which is certainly destined to be beneficial and which paves the way for today's research. The strongest indictment against globalization has been launched several times against the economy, politics and institutions by the authoritative chair of Pope Francis. The economic policies that need to be put in place to promote economic recovery must have other priorities than in the past. I have to ensure employment growth especially among young people, they have to promote a sustainable model.
Obama himself, addressing his successor a few days ago, affirmed that “capitalism forged by a few and irresponsible towards the majority constitutes a threat to everyone” on the contrary “the perfecting of our union requires much longer times. To fully rebuild confidence in an economy where hard-working Americans can lead the way, we need to address four major structural challenges: boosting productivity, curbing rising inequality, ensuring that anyone who wants to find a job, and building a resilient economy, ready for future growth”. Objectives that globalization and austerity policies have not only not helped to achieve but on the contrary have dangerously distanced.
