In 2017, Italian economic growth – estimated at around 1,5 percent – will beat expectations. It is the consequence not only of a favorable macroeconomic situation, but also of a courageous path of reforms. However, the economic recovery reflects strong disparities between an Italy that is growing (mainly medium-large manufacturing companies, especially in the centre-north) and one which is still struggling (mainly small service companies, above all in the centre-south) . To fill the gap, it is necessary to continue with coherence and determination on the path of change. But, for this to happen, five political taboos must first be broken down.
The first taboo is that of failure. The efficiency of the markets derives from the continuous reallocation of the factors of production (capital and labour). The implicit assumption is that relatively inefficient firms are pushed out of the market because consumers do not buy their products. Beyond the formal norms, therefore, it is essential that there are no political obstacles to this process. Just as in the labor market the greater flexibility on the way out is the precondition for the vitality of entry, in the factor market the possibility of failure is essential for the creation of new businesses.
The second and closely related taboo is that of the status quo. One cannot think of capturing the (social) benefits of competition without accepting its (private, for less competitive firms) cost, i.e. without accepting the full contestability of the factors. It follows that a privatization policy is essential (think of local public services), because public ownership effectively makes companies unscalable.
The third taboo concerns the very nature of competition. Competition not only produces greater efficiency in production processes: it is a powerful driver of economic and social development mainly because it generates innovation. Innovation, in turn, postulates the ability for companies to offer new products, but also to experiment with new organizational solutions. All of this is incompatible with the claim to plaster the industrial organization within the canons of the past: examples are the convergence between different services (as in the case of telecommunications and audiovisual products) but also the evolution of the nature of businesses (for example opening up to joint-stock companies in the production of professional services).
The fourth taboo is a consequence of what has been said above: in a competitive context, the professional career of the employed changes, and the social safety nets must take on a different form. The goal is no longer to protect jobs, but workers during transition phases. The steps taken in recent years towards a modern system of active employment policies go in this direction, but the road is still long and full of obstacles.
The fifth taboo is the most difficult to break, because it does not concern a specific policy or a general principle, but the very foundation of our economic system. Productivity can only grow in an open economy. Politics should play a crucial role in defining the rules of the game, not intervene on the results, trying to pull them in one direction or another. The fifth taboo to break down is, then, the fatal presumption of knowing what is best. There is no growth in which politicians and bureaucrats want to rob consumers of the last word on which businesses should live and thrive, and which products should be consumed.
Each of these prejudices slaps the country's potential to create income and wealth. Removing them has a political cost: only a ruling class that has the courage to take charge of them (as has been done in part) will be able to discover that it is not a sacrifice, but an investment.
