Ideas matter. Since when the Enlightenment made us aware of the influence of philosophies in planning actions, it is ideas, in their dialectical opposition and in the pluralism of interests, that influence behaviour: the Century of Revolutions (British, American, French) is generated by the political thought of the moderns; Marx inspired syndicalism, Marxism-Leninism; Nietzsche nihilism and art; Smith, Keynes, Hayek, Friedman economic policies.
As men of action we must contribute to the argument that develops common thought in society, with the strength of each one. Thanks to Professor Franco Gallo, in the recent essay “The future is not a dead end”, published by Sellerio, is to reflect his professional experience as a tax scholar in general policy principles, with intense cultural sensitivity. We discussed it in the recent presentation of the volume at Luiss-Guido Carli with P. Baratta, A. Laterza, F. Locatelli, B. Tabacci, T. Treu, G. Visentini and the author of the book.
Gallo argues for the compression of citizens' social rights as a result of globalization: it is the thesis that gives system to the reflections. In globality, the rules of the market dominate which reduce, if not eliminate, the sovereignty of the national law in shaping social rights. Europe has not defended itself from the primacy of the market, thus contributing to making social rights a secondary objective. In this context of domination of the market, the strengthening of the more traditional interpretation of the right to property, rather than in constitutional protection, can be explained it should be read as a functional right to social values.
It follows the verification of the scope of the constitutional principle of ability to pay against the property, to which the jurisprudence of the Constitutional Court has not recognized the absolute value of dogma. Lastly, the difficult balance between social rights and constraints on the balance of the state budget, recently strengthened in implementation of community programs, is discussed. Thus the insensitivity of the EU legal system to social values comes to the fore which, beyond the affirmations of principle advanced in the Treaties, remain conditioned by market constraints: budget balance.
I note that in this discussion i social rights are understood as benefits configured by the state administration, according to the approach started with the New Deal; consolidated in the Atlantic countries in the Keynesian philosophy of the welfare state, the mixed economy, the social market economy in Germany (Muller-Armanck and Ludwig Erhald). But this is not the only technique for organizing individual well-being.
It is not so much the progress of economies in globalization that has thrown the experiences of the New Deal into crisis, as their very crystallization in expensive bureaucratic apparatuses, incapable of adapting to the evolution of things: we remember the revolt in California against the hypertrophic taxman; we also recall the hyper-regulation of air transport, which has become anachronistic, and the success of deregulation (re-regulation) due to the drastic reduction of prices. On the ideas of Hayek, of the Monte Pellegrino society, of Friedman, the policies of Thatcher and Reagan for the minimum state are promoted (“government is the problem”), taken up by the socialist movements themselves, by the British Labor Party.
The state does not necessarily have to organize itself socially to satisfy the individual right to well-being; it is also satisfied, and better, in the organization of the market economy. The market technique can be adequate, if not superior; various expedients correct the unavoidable inequalities of wealth, such as the negative tax, citizenship income, the disbursement of money that leaves the parent the freedom to choose the educational path or the individual to choose their health insurance.
However, two main misunderstandings have deviated the practice of the market from the theoretical intentions of its philosophy. We understand the criticisms of those who today attribute the sacrifice of social rights to the market and, even earlier, of the impoverishment of the middle classesfor wage compression. The market was understood as a situation given in nature, not as a creature of national law, to be extended into the international or global sphere: it happened in the USA, in London, but due to the weight of Anglo-Saxon law in the global context, the idea prevailed in Western culture and has conditioned its economies, albeit with varying degrees of intensity in the most protected European sectors.
The so-called deregulation has spread to the point of also influencing the interventions of the market authorities who have opted for decidedly restrictive interpretations of their mission, allowing elusive phenomena, which greater rigor would have circumscribed (eg monetary funds). Instead, the market is the creation of law. To increase revenues, the firm is ready to prevaricate and tends towards monopoly as its natural condition; the monopoly transfigures the market through the collusion of powers which, less constrained by competition, acquire the strength to overflow into politics. It is not enough to guarantee freedom of enterprise and consumption, ownership and transparency.
The market must be regulated with sophisticated private law and adequate judicial protection; it must be imposed on the company with the authority of public law; it must be weighted according to sectors: work and social relations find the imbalance of the contractors so accentuated as to justify gradual interventions of collective bargaining. Above all, and this is the second misunderstanding, finance has also been understood as an activity capable of being left to the natural freedom of the market. It would be so if it did not have the potential to generate money, which only in radical conceptions would also be entrusted to private transactions, removed from the political sovereignty of the state.
Finance, the bank, with credit create, transmit, spread purchasing power, that is money. With the suppression of constraints and bulkheads, including international ones (capital movements), which forced it to serve investment in the real economy, from an instrument of exchange in the real economy finance has also become, and above all, an instrument of speculation: of moving wealth, not of creating new wealth. Scholars who have investigated the events explain the recent crisis of 2008 mainly in the innovations that occurred in the US legal system following the deregulation of finance:
– the universal bank, now financed on the interbank market rather than with deposits;
– integrated products;
– their securitization;
– derivatives.
The system generates a useless and costly private bureaucracy in finance; the market degenerates into oligarchy. We recall: the monarchy, the aristocracy, the republic and their degeneration into tyranny, oligarchy, democracy (populism). For the economist global financial hypertrophy has created inequality in our countries, by compressing wages and therefore demand; for the historian of society, he spread the rebellion of the middle classes and the electoral movements in democratic countries (A. Tooze).
What to do? The crisis of the mixed (social) economy was irreversible. But the replacement of the market without adequate rules has started processes of consolidation and concentration which, capable of reducing competition, frustrate the market itself, which is competition. The inconsistency of the stricter European regulation of competition in the global dimension of the phenomenon explains the proposed modifications, which reveal the acknowledgment of the oligopolistic orientation of the organization of the world economy. To remedy this, we are forced to review the rules, first of all at an international level to escape the nationalistic temptations of the US administration (even the WTO is in a state of brain death).
But it is the role of finance that needs to be drastically rethought, as the candidate Trump now of the opposite orientation said. American finance generated the crisis, but emerged victorious. Not only the Federal Reserve has mastered the crisis as lender of last resort to the dollar's role in the world economy; US universal banks have primacy over the global financial system. But the victory may prove ephemeral: according to authoritative commentators, the reasons for the crisis are still present. More generally, from the perspective of distributive justice, exponents of political thought denounce not only current events but the aggravation of the alleged distortions in the formation and distribution of wealth.
From the opposite perspective, it may also be that from the radical market philosophy there are gradually appropriate forces that do not assume inequalities as a disvalue; who perhaps are not sorry to see in globalization an understanding between oligarchs, albeit of different kinds. If we read Stiglitz (People, Power, and Profits) we see this degeneration in the America of Republican Government (for me with anguish).
Europe was born as an economic treaty; in the monetary and financial union it is reaching the federal level; moves towards political union. But the pursuit of the values set out in the first articles of the Treaty, in other parts, in the Convention on Human Rights, are the responsibility of the States, yes under the control of the European Council, however not empowered to substitute interventions: it can sanction, up to the 'exclusion. Social rights are entrusted to the States, also with the financial support of the Community; even if this were to expand with the possible extension of the common budget. Like Gallo, I don't see this as a limit to the development of the Union, as over-integration could backfire, developing in Brexit-minded nations.
In this context, what can we say about Italy, which is Gallo's concern. The alternative to Europe, Ugo La Malfa reminded us, is the autarchy of the African countries on the shores of the Mediterranean; our conditions do not allow us to look at brexit england. Italy must be managed in Europe. However, our impact on European politics is much less than Italy's weight in terms of population and economy. The answer to F. Gallo is to do better in our dimensions, since there is so much sovereignty that remains available; instead of closing ourselves in a corporate conservatism, where each body defends its own standing, with the result of waste in the management of the country: even the austerity policy becomes an opportunity to force us not to waste resources that we are unable to allocate to investment costs.
Let's go back to the power of ideas. Reflections are welcome individual that we are carrying out. On the other hand we suffer from poor intellectual processing collective of the events that surround us. Research costs money and few resources are allocated to it: in universities, foundations, research institutions of political and social representations, in the press and journalism that one would like to advance. This state of things can only be reflected by accentuating the contingency in the management of the country's politics.
