In recent days, articles by two authors have appeared in the editions of "Il Sole 24ore" and "Il Corriere della Sera" who, despite placing themselves in completely different fields in terms of cultural background, professional experience and political affiliation, address, one with juridical arguments, the other with ethical arguments, the same theme, reaching conclusions marked by the same concerns. The theme is that of the relationship between the legal economy and the illegal economy and the increasingly present risks of an inexact demarcation between the two zones, a prelude to the expansion of the areas of overlap and therefore of assimilation.
The article in "Il Sole" by Guido Rossi (When corruption becomes "legality"), referring to two sentences of the American Federal Court, which would have definitively dropped any limitation on direct and indirect financing of large companies in favor of politics, aligns with the concerns of important American jurists, who have already written about the corruption of legality, as a form of systematic conditioning of the major economic/financial interests with respect to the political/institutional order established by the American Constitution.
The transition from the Government of People to the Government of Corporations would by now be inexorably underway and its spread to other economic systems could not be avoided, in a progressive contagion produced by the American model, if not by resolutely rejecting any ambiguity regarding the very principle of legality.
That is to say that corruption, exercised by major economic players against politicians and conveyed through public debt, must not become a source of law itself, as happened in the case of the federal sentences cited above, forever subordinating the general interests of citizens to other reasons, on pain of irrevocably undermining the very foundations of the rule of law at the basis of Western democracies.
It goes without saying that Rossi attributes these dangerous tendencies to the messy development of financial capitalism in recent years, which, by obtaining the progressive easing of the rules, has produced an inextricable union between financial economy, not only represented by the so-called shadow banking, and politics.
The article/letter in the "Corriere" (The risks of the illegal economy in the GDP) signed by Letizia Moratti, former Minister of Education, focuses on the forthcoming changes in the measurement of the GDP, with the inclusion in the calculation of the contribution illegal economic activities such as corruption, drug trafficking, prostitution, for an estimated benefit of one/two percentage points. This option was preferred to methods capable of considering social, environmental and cultural aspects of the quality of real life for this purpose, placing immediate objectives of mere quantitative growth of GDP before the theme of preserving morality in the economy.
Concretely, the contributions to the wealth of a country represented by education and training projects, attention to the artistic and cultural heritage, the promotion of sustainable welfare models (and everyone knows how much of these activities Italy today has an extreme need for), would go largely calculated through the economic value to be attributed to the so-called third sector, currently estimated at around 20 billion a year, equal to more than one percentage point of GDP.
Introducing the proceeds of the illegal economy is instead a choice which not only goes in the opposite direction to these innovative valuation models, but which could even encourage further illegal behaviour, extending the issue of calculating the economic value to increasingly heinous crimes, such as, for example, trafficking in migrants or trafficking in human organs. Also for Moratti, the ethical drift of speculative finance is the consequence of the ever wider liberalization that has taken place in US financial legislation.
Rossi's call for a careful study of the trends observed in the American legal system and Moratti's proposal for new policies to promote a positive economy in the Italian one are entirely acceptable.
Perhaps a few more ideas, however, are equally appropriate, regarding the deeper causes of the risks of contamination of the legal economy by the criminal economy. We are offered the opportunity by the recent and original work, supported by a weighty collection of data and statistical estimates, by the French economist Thomas Piketty entitled Le capital au XXIe siècle (Seuil, 2013), which is fueling a lively debate among economists.
A work that refers to the classic economic thought of Marx, Piketty's work introduces some important differentiations in the explanation of the dynamics and interdependencies between capital and income, highlighting the strong tendency towards the concentration of wealth that is generated by rents from real estate, land, financial. In essence, the "inherited" capital grows faster than the one accumulated with the savings produced by the income from work. Above all, financial income continues to fuel what Piketty calls patrimonial capitalism, producing growing distributional inequality and grafting a vicious circle between inequality and growth, due to the sharp increase in the ratio between capital and income, up to levels never experienced in two and a half centuries of the history of capitalism. It is as if the capital originating from financial income engulfs the income from work little by little, destroying the true sources of productive accumulation.
On a social level, this leads to the progressive impoverishment of the middle classes, which are more economically and socially dynamic over time, and, consequently, to a slowdown in economic development. In short, in the last few decades the process affirmed in the "glorious thirty years" of post-war reconstruction has been reversed during which the rapid industrialization process, together with coherent fiscal policies also in terms of taxation, had instead favored the strengthening of the middle classes, the consolidation of democracy and high economic growth in all Western states.
The policies to reverse this course are, for Piketty, those of restoring a system of access to knowledge and its diffusion at lower costs than the current ones, in order to promote greater social inclusion and the enhancement of human capital, but above all to weaken , with a progressive taxation, the mechanism of accumulation of patrimonial rents of a financial nature to slow down their insatiable voracity.
Even if Piketty does not deal directly with the issue of the relationship between patrimonial capital and the legal framework, his proposal for correcting current trends cannot fail to bring us back to the issue of legality, through the need to establish rules consistent with the Government of People rather than with the Government of Financial Corporations. His clear proposal in favor of political economy as a social science, as opposed to the excesses of the quantitative modeling of economists in vogue in recent decades and intellectually organic with the growth of financial income, implies that the interpretation to be given to economic phenomena and the consequent public interventions must be reformulated in a framework in which the reduction of the degree of concentration of wealth is seen as an essential step to restore more lasting and therefore more equitable conditions of development.
The theme of legality in its broadest meaning is therefore directly linked to the decrease in the degree of inequality, given that the level of conditioning of the current holders of economic power can only lead to an increasingly favorable context for those who already enjoy positions of privilege, favoring the corruption phenomena mentioned above.
The repeatedly mentioned request for reforms, around which even technical bodies such as central banks are now scrambling, but which obviously remain the exclusive prerogative of democratically elected governments, should consist in placing definitively at the center of the political and economic table the theme of investments in human capital (from the level of education to the functioning, with the appropriate protections and opportunities, of the labor market).
On closer inspection, this is also a real guarantee of long-term defense of legality from the worrying onslaught of economic crime, which is also probably the expression of an annuity model that shows increasingly large areas of contiguity - just think of the dimension of money laundering - with that ravenous financial income Piketty talks about.
Otherwise, all that remains is the cynical old saying that if you can't defeat your enemies, all you have to do is ally with them. But that would not really be the wish to make to Western democracies.
