Romano Prodi recently posted an editorial in Messaggero which describes our days as a geological era away from the beginning of the pandemic. He claims that State intervention to support businesses and the economy, in previous decades almost universally lambasted, particularly by Brussels, is now not only justified, but clamored for. Everyone is asking for it, the leaders of the European Union, the governments of the strongest countries that are part of it, such as Germany and France, up to Trump, who has now passed without any levees to an ideology of the Super Keynesian type.
Naturally, Italy cannot but be affected by this climate. State intervention seems necessary to us. First, for support our failed businesses; second, for prevent the jewelry, which still remain, are taken from us by foreign predators. The State should therefore take positions as a minority shareholder to safeguard the national economic consistency.
TWO PROBLEMS
Prodi's positions are acceptable; however, there are still some knots to untie. The first is Which companies to focus on?, since you can't help them all. The second is who has the power to decide within these companies.
To safeguard its independence from foreign predators should be sufficient a golden share, but the problem is: do they remain businesses or do they become public agencies, withdrawn from the market and inserted into a framework of administered prices? Is there, or not, an entrepreneur?
In this case I don't mean the entrepreneur as a Schumpeterian hero, but as the one who decides the allocation of resources at the highest corporate level: what to produce, where - we remember the law which required public companies to allocate 60% of their investments to South? – with what resources and what human capital, on which markets to aim and from which eventually to withdraw. Does the entrepreneur stay the same or should he negotiate his conduct with the state or even be replaced by public authorities?
At the beginning of the Nineties, at the end of the first Republic, one wondered if Eni, forced by laws of Parliament to save the mining activities of Egam and the so-called "smoking ruins of Italian chemistry", had not been transformed from company leader in a development agency; in the purest Soviet style, in fact, the company was dispossessed of decisive powers.
THE NEW DEAL EXAMPLE
Considering the action of the state, it is not possible to avoid the reference to New Deal by Franklin Delano Roosevelt; few remember that, parallel to the great government interventions on the rules of the economy and on environmental transformations (as in the case of Tennessee Valley Authority), the major American private companies carried out the most profound organizational reform since the origins of big business, that is the transition from a centralized structure – based on business functions – to a decentralized one – based on divisions (defined by product or geographical area).
Il New Deal, ultimately, while defining a legislative framework for the guarantee and protection of the public company and widespread shareholding, left all their prerogatives to private companies and their decision-making and operational autonomy.
By virtue of the organizational transformation of those years, which implied a vast involvement of management in corporate governance, General Motors became the first American company. It proved to be a difficult transition, accomplished by a gray manager, Alfred Sloan, a passage that Henry Ford, in his egocentrism, failed to accomplish, so much so that at the outbreak of the Second World War the market proportions between Ford and General Motors had literally reversed compared to the beginning of the 60s (at the time Ford had 20% of the market and General Motors 1940%; in XNUMX it was exactly the contrary).
Ultimately, the problems posed by Prodi are entirely real. However, the question remains unresolved if we will an economy populated by businesses or public agencies.
