Capitalism has changed considerably over the last few decades and so has theItaly has undergone an extraordinary transformation. A country defeated in war and with widespread illiteracy has entered the ranks of Most industrialized states in the world. For a long time, the fundamental choices of the political class inspired by the market economy made it possible to distribute benefits to large segments of the population: from being linked to Europe to the opening of the markets, from the freedom of capital movements to the liberalisations, which increased competition and broadened the range of opportunities. In the meantime the country has changed a lot also because of these choices. The large industrial families who had benefited from an economy protected from foreign competition have almost disappeared, profoundly transforming Italian capitalism. Big industry has been delocalized, the working class has shrunk in size and political weight, the financial system has weakened, the state has lost its presence in the economy and above all its ability to direct.
Italy has suffered more than other countries from systemic changes because the transformation of its economic apparatus has always been ambiguous and incomplete. In the thirties, thanks to personalities like Beneduce, the economic system was organized on the balance between a strong state in the economy and the equally strong presence of entrepreneurial families historical.
After the Liberation, contrary to what happened in Germany and Japan, Italy was allowed to safeguard its public presence through theiri and to embark with the rest of the West on a path of opening up the economic system, maintaining thebalance between public and private. These choices ensured high growth and a strengthening of the working class, but also stronger social tensions than in other countries and higher inflation rates.
The turning point was between the seventies and eighties. While the other countries decidedly embarked on the path of liberalization, Italy struggled to make decisions, letting inflation grow and trying to contain social tensions by expanding the welfare. The result was the increase in real interest rates, which gave the first major boost to the increase in public debt, an issue that still conditions any economic policy decision. When Italy finally took the road of privatizations he did it with great difficulty and suffering, the design of the economic system that should have been configured remained incomplete. The liberalizations were partial and the institutional and regulatory system was not simplified, a fundamental condition for the correct functioning of a market economy.
In short, Italy has undergone the transformations that were taking place in the rest of the world without governing them. Not having defined a project that replaced the old order created by Bless has delegated to the European and international institutions the task of designing the architecture of the new system and of the institutions that regulate its functioning, adopting the solutions that seemed to be more internationally accepted without worrying about changing the fabric of rules and behaviors in which they inserted. For a sort of inferiority complex he actually made the rules imposed on us from the outside more severe and stringent, further plastering a system that was already moving with difficulty.
Italy suffers the financialization of the economy world without benefiting from it. An important part of the savings generated in our country fuels the growth of other economic systems. To restart the economy it is first of all necessary that the mass of savings accumulated by Italian families be channeled towards the production system. In an open economy this is not an easy task because savings go in search of better-paying jobs, which are often found abroad. For this you need large and sophisticated financial intermediaries: banks, insurance companies, pension funds, private equity funds, venture capital funds. We need institutions rooted in Italy, which know our country and its specificities and have strategies compatible with the particular Italian productive fabric made up of small and medium-sized enterprises. These institutions need to be incentivized, through appropriate fiscal instruments, to take the risk of investing in nascent businesses.
It is necessary that those who assume the business risk and that it is not prosecuted in case of bankruptcy. Italians have always had a natural vocation for doing business, but over time everything has been done to discourage them.
The stratification of laws, rules and regulations, often inconsistent, has made any entrepreneurial initiative very complex and expensive due to the need to resort to a group of specialists and the risks deriving from the non-compliance with certain rules. It is necessary simplify business life and entrepreneurs, bringing regulatory activity back to essential principles.
Every government that takes office promises new reforms that add up to the previous ones in an endless spiral, aggravated by the short duration of the executives. It is necessary to do quite the opposite. Lord Eldon, British chancellor, in a reply to the House of Lords on the issues raised by what several years later would become the Great Reform Act, declared in 1820: “Reforms, reforms, but don't you think things are bad enough already? ”. The ongoing reforms they create uncertainty and instability and mortify the entrepreneurial spirit.
The task of the state
La economic stagnation which has been dragging on for years, causing the progressive weakening of the Italian industrial fabric, and the heavy consequences of the Covid-19 pandemic, which is leading Europe and the rest of the world into a recession whose effects are still incalculable, lead many politicians and a part of public opinion to invoke the massive return of the state to the economy. But the claim to thus give a simple and immediate answer to problems that have deep structural roots risks aggravating the situation, preventing the removal of the heavy structural constraints that have been holding back our economic system for too long.
La presence of the state in the economy it poses complex problems and requires structures that in Italy have been dismantled in recent decades. When Beneduce, in the XNUMXs, was charged with defining the methods of state intervention to counter the effects of the Great Depression, he suggested the creation of a specific institution that would allow for a clear separation and for a limited period of interventions of a private nature
from those typical of public administration. The effectiveness of the instrument, the public economic body, meant that other countries such as France decided to adopt it. The IRI, created to save companies and creditor banks from collapse, had the limited purpose of financially restoring collapsing companies and then putting them back on the market. The attribution of ownership to the Treasury, through the public domain, guaranteed that the companies were managed to protect the state assets and the authoritarian nature of the regime ensured the uniqueness of the chain of command and the designation of pure technicians at the top.
After the war, however, IRI became a permanent institution and new public economic entities were added to it with very different purposes than that of restoring companies and then dismissing them. And with the progressive decline of the political primacy of the Christian Democrats, what remained of the unity of command was also lost and the party-based division of offices in companies began. From that moment on, the appointment of public management took place no longer as a function of an industrial design, but with the aim of each party to broaden its sphere of influence. Even more than corruption and mismanagement, it was theparty invasion to decree the end of the system of state holdings, and it is precisely this, especially in the vacuum of governance and rules, that makes the enlargement of the public sphere risky today. The State is still very active in strategic sectors through controlled or wholly owned groups such as Enel, Eni, Fincantieri, Leonardo (formerly Finmeccanica), Poste, Rai, Rfi, Saipem, Snam, Terna, Trenitalia.
Not to mention the plethora of investee companies by local and territorial entities which, with the exception of some large multiutilities listed on the Stock Exchange, represent an area of inefficiency and clientelism.
In an open economy they are needed innovative businesses that have adequate scale to compete, organized efficiently. Although in some countries basic research and technological development in highly publicly controlled activities such as defense and aerospace have played a driving role for theprivate initiative, the State by its nature is not able to translate innovation into entrepreneurial initiatives in the same way as private individuals. The state does not have the ability to govern the process of creative destruction, which is the essence of capitalism.
The processes that regulate the functioning of the State do not contemplate therisk taking. Innovation, on the other hand, requires that the entrepreneur be able to venture onto slippery terrain, with even serious consequences. It is the system of rules and public infrastructures that create the conditions for innovation. The State plays an essential role in promoting investment, not only in infrastructure and services, but also in research, schools and universities. In all of this Italy is lacking. Over time, the public administration has been impoverished in terms of professionalism, burdened with rules that hinder its functioning, humiliated in its duties. To create the infrastructure and rules that allow private initiative to express itself at its best, a program of streamlining of central and local administration and simplification of procedures is needed.
The tumultuous growth of the internet and the web is an example of how a series of innovations and processes often made available free of charge by public entities, but promoted and developed by dynamic private entrepreneurs, have produced the conditions for a radical transformation of the economy and of our own way of life on a global scale. The idea of opening Internet to commercial uses, unleashing the creative potential of the American economic system to foster the growth of new businesses, was a policy decision by the Clinton administration. To allow the diffusion of the Great Web, the USA has decided, with a form of regulatory exceptionalism, to exempt the Internet from the rules applied to other sectors.
Il regulatory framework, for those who were preparing to operate on the web, was defined with the Telecommunication Act of 1996, which liberalized broadband services. Likewise, internet operators have been protected from the risk of libel and slander lawsuits. Section 230 of the Communication Decency Act indemnifies website owners from prosecution for user-generated content. To avoid the consequences of copyright infringement for providers, the Digital Millennium Copyright Act was approved by the US Senate on 8 October 1998, which limits the liability of platform managers in matters of copyright.
And another law, theInternet Tax Freedom Act, exempts the same providers from paying local taxes. It is an example of how the State, through a system of rules, can create incentives or disincentives to development, favoring innovation and entrepreneurship, and how it can break down the limits to the freedom of private initiative in an unexplored field.
The rules in a modern state are numerous and complex and entail significant burdens for complying with them. A state that wants to encourage innovation will have to carry out selected pruning operations. Only by following this path will he be able to ensure that young businesses grow and bear fruit.
