Open Review of Management, Banking and Finance

«They say things are happening at the border, but nobody knows which border» (Mark Strand)

Crisis of politics and economic process. The case of Italy.

by Francesco Capriglione

Abstract: The results of the Italian political elections occurred on March 2018 have shown insecure majorities in the Parliament, with consequent difficulties in the formation of a national government. Therefore, it is likely that implementation of economic development programs will be significantly more challenging as well as the solution of certain endemic Italian ills (such as unemployment, social inequality, poverty). Such circumstance clearly preludes to the decline of politics, occurring, albeit in different ways, in many States of the EU. It seems that the conditions now permit a change in the evolutionary processes of the economics (also due to the “financialization” of the systems), previously characterized by a bi-univocal relationship with the politics. Economics has acquired a peculiar role in definition of the organizational models through which the political power operates, even if, within the European Union, the bureaucratic-regulatory dimension is still prevailing, according to the traditional intergovernmental pattern. Therefore, a new path for the Europe seems depending on a rearrangement of the relationship between politics and the economy.

 

Summary: 1. Political programs and economic reality…. 2. follows… the decline of the EU politics. – 3. The «Italian case».

1. A climate of ‘lack of truth’ has featured the recent Italian election campaign, made of promises that have been formulated without an adequate knowledge of economic reality aimed of changes that – from different voices and in different ways – were announced within a logic of captanda benevolentia, then proved successful.

The launch of different political programs – that traditionally characterize the game of parties in the dispute that inflames the competition between different ideological views – has been evolved in an «upward race», as has been noted by the specialized press. In fact there have been mentioned programs of economic growth, founded on the introduction of remedies that should guarantee the removal of endemic malaise of our Country, from the unemployment (specifically the young one) to the strong inequalities that, recently, determine social tension and unacceptable life conditions for large layers of population at the margins of poverty.

As a result these promises have attracted a general, easy consensus from the electorate that has confused the wishful thinking announced before the elections with a realistic perspective of concrete achievements. In this light, politics and economics after the electoral process need – as it is well-known – to confront in a logic of compromise, necessary to arrange forms of government; in this way, it is evident a perspective of agreement between opposite interests, considered essential in an institutional context in which it seems difficult to reach a united democracy. In addition, there can be seen the margins of a relationship in which the fideism on politics is intended to an inevitable reshaping, with respect to a deficiency to pursue achievements at the level of economics. Once again, the success of politics reveals an inextricable dependency from the capacity to realize, on the concrete level, a wise mix between «wealth, organization and labor»; objective which it is aimed to offer an effective solution to the instances deriving from the social structure and from the market forces.

Honestly, the recent events – connected to the outcomes of a voting system that prevents a swift and clear identification of ‘winners’ and ‘losers’ – show uncertainties and difficulties in the organization of politics and, in particular, on the definition of programs designed by the opposite political parties during the electoral campaign; then the belief that, currently, the related processes are in a critical phase, because it arises the possibility that the commitments undertaken remain unexecuted or, in any case, subject to limitations directed to alter the original formulation.

The promise of change – that has influenced significantly the choices of Italians – could also be vanished on the wall of misunderstanding and the lack of availability to «social compromise» able to accommodate the expectations of those, in good faith, believed in suitable transformations to address the distortions caused from a progressive decay of politics. There is a generalized sense of incompetence of politics to overcome the limit of a formalism that has provoked the separation from the real structure of Country; there can be seen the preludes of its decline, that replace the «empty» and irrational «inconsistency» to its traditional adherence to absolute truth.

The recent voting results have marked an important rise of a new political party, the Five Star Movement that aims to replace some consolidated pillars of representative democracy, included the principle of prohibition of imperative mandate, with practices of participation “from the bottom”, founded on the control of elected through the instruments offered by the web. Further, the uncertain parliamentary balances emerged from the vote of the 4th of March – with the related difficulty in the arrangement of a majority of government – place this political subject towards a difficult dilemma: to accept the recourse to the method of mediation – pillar of the parliamentary system – alternatively to exclude every form of material and equal collaboration with traditional political parties, and in particular with those more sensitive to maintain the balances of public finance and to respect the European constraints. In the first case, the recognition of interlocutor position with the other political forces could determine a gradual process of approval of the Five Star Movement with regard to political parties; in the second scenario, this political subject would end to renounce to the possibility to realize its project of change of the Italian society, leaving disappointed especially the expectations of the Centre-south electorate. The recent (and sharing) reference to the centrality of Parliament in the settlement speech of new president of the Chamber of Deputies – which like other members of Five Star Movement had always expressed his confidence towards forms of direct democracy alternative to the traditional representative channels – seems to confirm this widespread contradiction.

2. The decline of politics, although in different ways, affects many countries of the ‘western world’. In literature, usually, the reasons for this phenomenon are found out in the tensions that have been created by the globalization as well as, more in general, by the inability to manage both events and requests arising from it.[1] In other words, in front of the economic changes, in the relationship between politics and technocracy, the former would have increasingly weakened and consequently the running of society would have been left to the latter. This would have created forms of malfeasance by some market forces, that – in excluding political action – would have played a primary role in making decisions aimed at fostering the use of their own potential, consequently damaging those who do not have access to their mechanisms.

These views – although based on some true elements – are related to an idea of politics which is different from its typical structure, namely a framework in which the State governs its citizens.[2]

Historically, in the legal and philosophical debate, politics has been seen as the body having the highest power, being its essence the absolute sovereignty.[3] Accordingly, its limits are just the ones that it sets for itself,[4] since it is free to choose its own purposes (which are identified in light of the social body’s safety and productive capability).

Moreover, such a feature of politics does not exclude the need to rationally justify the exercise of tasks exteriorizing in a dominion of the man over the man; as a consequence, those who lead a social community must set their interventions on the basis of the collective needs.[5] It follows that the rulers must be able to fully assess the effects of their own action (that interferes in the private sphere) and, in particular, to comprehend whether, and to which extent, its recipients can bear its impact. Differently – beside the configurability of a hypothesis of State’s arbitrary action – the outcome is just a ‘dominion’ that is in contrast with the criteria of the «social contract» which, as known, is the basis for the modern models of civil society refoundation.[6]

In this premise – and coming to the recent events – it is clear how, due to the increasingly fast evolution of the economic processes in the last decades (and the financialization of the systems) the past two-way relationship between economics itself and politics has changed. Economics has, therefore, acquired a peculiar relevance in defining the organizational models aimed at providing the political power with factual concreteness; this has also consequences on the essence of democracy, which is considered to be proactive of a political constitution that allows for an organization scheme aimed at guaranteeing the widest and safest participation of citizens in making the decisions concerning the community.[7]

It is worth noting that politics has not been able to adequately interpret the relevance of the mentioned systemic changes and has also shown its own inability to govern the innovative phenomena brought about by globalisation. Hence, it has not managed to channel through appropriate regulatory mechanisms the economic change and its degenerative aspects, such as the crisis that in the last decade devastated many Countries, dragging their populations in terrible life conditions. Politics has substantially given up its institutional function; it has not been able to perform its main task of designing the development of the civil society through the adoption of rules aimed at assuring the congruity of the evolutionary processes.

This lack of intervention has caused a recessive trend of politics that has ended up being a sort of self-harm: the EU institutions have performed an inadequate action which has been almost only the imposition of austerity measures that in turn have shown the deep weakness of the solidarity mechanisms, social cohesion and reduction of inequalities.[8] The result has been a number of strong protests which underscore a deep disillusion of the European people with regard to the possibility to realise the European project.[9] All this has taken place in a systemic context in which new negative factors have shown the limited tendency of the European executive power to foster the necessary boost for the development (article 15 of TFEU); this objective is assigned to an inefficient comitological mechanism, which has been defined as a «retaggio di un equilibrio istituzionale anacronisticamente sbilanciato in senso intergovernativo».[10]

With regard to the European context, I have already argued that such an operational inadequacy of the EU political leaders has given room to the increasingly relevant substitute role of the technocrats].[11] In this regard, we have seen the ECB’s adoption of a number of measures (non-conventional operations, among which the so-called quantitave easing) that – along with the interventions of two temporary mechanisms (such as EFSM and EFSF) – have managed to stabilise the markets by solving extremely serious situations; nevertheless, the dysfunctions of a system no longer related to politics and characterised by differences have not been eliminated. Therefore, there are still economic imbalances between the EU member states, due to a sort of transfer of powers from the so-called «institutional triangle»[12] – which was the form of the European structure before the adoption of the Lisbon Treaty][13] – to ‘techno structures’ which have gained a very significant function.[14]

In addition to the above mentioned difficult relationships within the EU there are also the burdensome implications arising from Germany’s prevaricating tendencies, UK’s withdrawal from the Union, France’s conduct aimed at gaining a leading position in each sector (politics, economy, culture, defence), Italy’s substantial social immobilism. These are the reasons for an increasingly widespread populism which is divided between national-sovereignist positions and ideas advocating direct democracy, both oriented to manifest opposition against the so-called «Europe of bankers», immigration, and the euro.

Accordingly, it is clear how the Union is paying the limits of a systemic context still characterised by the prevailing burecrautic-regulatory approach that so far has accompanied the traditional intergovernmental paradigm. Therefore, the possible start of a EU innovative constituent project depends on the overcoming of such obstacles; obviously, this outcome will not be reached if the relationship between politics and economics will not be reshaped. Indeed, only by giving back to the former its decision-making role – aimed at counterbalancing the necessary guarantees for the economic development with the values characterising its function – it will be possible to restart a dialectical relationship with the latter, which will have to aim at facing inequalities, increasing widespread economic well-being and fighting against obscurantism.

3. Moving to the peculiarity of the Italian case, the recent reality after elections is spreading the belief that the discrepancies of a politics in crisis cannot be easily solved without the benefit of an adequate sense of responsibility, that cannot be disconnected from the aim to soften unsuitable programs launched during the electoral campaign. It is necessary to translate the interventions, put in place so far, from the mere proposition of an aggressive criticism to the constructive volunteer, that allows to realize at least the numerous ‘promises’ that have characterized the choices of electorate. It seems inevitable that the winner parties agree to change their programmes and turn down from populist positions previously announced; in particular, it is referred to the need to stop the denial of hospitality (that it has always been considered one of the main prerogatives of our Country), to the ambiguities linked to relations with the European Union, to the disputes that have affected the relationships between political parties. In general terms, it cannot be neglected to consider that the unresolved delays of Italy in the process of modern technology are attributed to lack of attitude to the humus disciplinare necessary to adopt timely adequate measures of sustainable development. In the same way it is worth mentioning the burden determined to the growth of our Country as a consequence of the negative actions of a bureaucracy (that block and make difficult every initiative), nonetheless the low attitude to the rules, element that characterizes a system in which «the information is considered from the majority of mangers a necessary harm», as rightly observed.[15] It is evident the ambivalence affecting our Country that demonstrated, on one hand, to be proactive during the crisis, capable to identify the right solution, facing sacrifices and renunciations, but on the other hand reluctant to abandon the attitude of individualism, slyness, superficiality, deficiencies that are translated in factors obstructing the typical functions of politics.

At time of globalized economy that emerges, in idiosyncratic terms, as new paradigm of regulation of the relationships, the politics will have to overcome the huge uncertainties that raise with regard to the need to search adequate systems of checks and balances that aim to ensure the necessary dialogue towards a common enhancement of democracy and free market. This is a challenge that should be faced by the political parties in view of governability of recent technology developments – digitalization, cybernation, etc. – directed to change radically the forms of public intervention in the economy. In this light, the choices made in this sector affect significantly on the solution of problem of the young unemployment; being the same choices related to the job market.

The search for stability of system, to be achieved under the twofold political and economic scope, cannot disregard from a change of political behavior; it is desirable an action that, in benefiting of utilities provided by economy, is founded on the affirmation of values that are pillars of our Constitutional Chart, such as solidarity, rationality and honesty of agere.

This is a pathway of hope that shows several difficulties and various obstacles … to this pathway we cannot, we must not give up.

Author

Francesco Capriglione is Full professor of law and ecoomics, Università degli Studi Guglielmo Marconi, Roma.

[1] See Severino, Il tramonto della politica, Milano 2017.

[2] See Dewey, Problems of Men, New York, 1946.

[3] See Bodin, Les Six Livres de la République, published in 1576, where it is claimed that a cohesive and orderly society is based on the unified exercise of the power by the State. Also in the publication by Hobbes, Leviathan or The Matter, Form and Power of a Common Wealth Ecclesiastical and Civil, published in 1651, the issues of legitimacy and the structure of the State are dealt with in the context of the primary function of politics.

[4] See Montesquieu, De l’esprit des lois, XI, 6, where it is presented the well-known theory of the separation of powers, moving from the consideration that power has no limits that it cannot derogate itself.

[5] See Saint-Simon, L’organisateur, published in 1820 where the author talks about the case of a society made up of ‘collaborators’, giving politics the task of intervening in order to create the conditions to bring economic well-being within the society, which in turn will be used as a parameter to assess its quality.

[6] See Rousseau, Du contrat social, published in 1762, where the author suggests the creation of a society based on a fair deal aimed at making people the sovereign body, exercising the legislative power and only subjects to themselves.

[7] See Bobbio, Quale socialismo, Torino, 1976, p. 42.

[8] See Capriglione – Ibrido, La Brexit tra finanza e politica, Milano Assago, 2017, p. 93; see also Balaguer Callejón – Azpitarte Sánchez – Guillén López – Sánchez Barrilao, El impacto de la crisis económica en las instituciones de la Unión Europea y de los Estados miembros, Pamplona, 2015.

[9] See Poiares Maduro, A New Governance for the European Union and the Euro: Democracy and Justice, in RSCAS Policy Papers, 2012; Capriglione – Troisi, L’ordinamento finanziario dell’UE dopo la Crisi, Milano Assago, 2014, p. 121.

[10] See Savino, La comitologia dopo Lisbona: alla ricerca dell’equilibrio perduto, Giornale di diritto amministrativo, 2011, p. 1041.

[11] See CAPRIGLIONE – SACCO GINEVRI, Politics and Finance in the European Union. The Reasons for a difficult encounter, Wolter Kluver, London, 2015, passim, particularly p. 111.

[12] See Dieckmann, The Announcement Effect of the Efsf, Afa 2013, San Diego Meetings Paper, available at http://www.ssrn.com/abstract=2022750.

[13] The reference concerns the legal framework of the decision power in the EU that is based on an «institutional triangle», providing a codecision process under which the Commission makes the legislative proposals, while the Council and Parliament are meant to approve such proposals. For an analysis of the EU system before the adoption of the Lisbon Treaty see Weiler, Il sistema comunitario europeo: struttura giuridica e processo politico, Bologna, 1985; Shawj, Law of the European Union, 2000; Pocar, Commentario breve ai trattati della Comunità e dell’Unione europea, Padova, 2001; Tizzano, Trattati dell’Unione e della Comunità, Milano, 2004; Mengozzi, Istituzioni di diritto comunitario e dell’Unione europea, Padova, 2006.

[14] See Capriglione, Mercato Regole democrazia. L’Uem tra euroscetticismo e identità nazionali, Milano Assago, 2013, chapter V.

[15] See the editorial «Il saluto di Ferruccio de Bortoli ai lettori del Corriere della Sera», published in Corriere della sera of 30 April 2015, available at www. corriere.it/cronache/15_aprile_30/saluto-lettori-direttore-de-bortoli). A detailed analysis of cultural and cognitive limits of current time – which is characterized for a wide incompetence and disinformation that seem to prevail on the traditional consolidated knowledge – is found in the well-known seminal work of Nichols, La conoscenza e i suoi nemici, italian translation edited by LUISS University Press, 2018.

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