No political, decision-making and economic crisis is devoid of cultural and spiritual implications. Moreover, the traits of this new and so-called elite are superficiality; the absolute ignorance of the depth and complexity of problems; the true psychosis and obsession for “communication”, advertising and the often useless presence on the media.
Nevertheless some structural data can be noted in the shift from the First to the Second Republic: the new irrelevance of the Italian strategic position; the total lack of autonomy in the old areas where in the past Italy operated almost undisturbed, such as the Middle East; the aggressive behaviours of those whom it thought were allies and friends both in the Atlantic Alliance and in the European Union.
If, however, currencies do not find a temporary and rational balance and we operate only with fixed rates – as, indeed, happens also with the European single currency – the adjustments are always and only made with the reduction of the production base.
Italy celebrated the arrival of the Euro by passively and supinely accepting a Lira-Euro exchange rate that was influenced by the previous six months, when the Lira value had been too “high”, and it privatized its main assets at costs often not consistent with values.
Until the year 2000, the amount cashed from privatizations and securitizations totalled 178,019 billion liras, equal to 91 billion euros.
The first element of continuity between the First Republic and the current phase is the excessive and often irregular funding of the ruling class, that is not matched by an internal meritocratic selection not based on family, clan, political group or faction criteria.
As Ennio Flaiano argued, to frighten a group of Italians just shout the word “merit!”.
Hence, while in the past the political parties acquired resources from companies with regular “withdrawals”, later the large privatizations permitted a single, but much more significant flow of funding.
The Second Republic emerged on the basis of the large distribution of resources to politicians in the Enimont affair, as the First Republic had been based on ENI and its US dollar transactions.
What happened later? Once the great donations were over, the ruling class – as petty swindlers or minor felons – lived on wiles and stratagems, modest transactions and friendships on the fringes of legality.
Furthermore with the Euro you could easily get again into debt, while on the international markets the old Lira had been ending up like the Argentine Peso.
In is in 1986, however, that Italy came to rank fifth among the G6 countries, thus overtaking also Great Britain by 46 billion liras of additional GDP.
Since the early 1990s, however, Italy has been gradually losing ground vis-à-vis France (-21%), Germany (-29%), Great Britain (-11%), Japan (-27.7%) and the United States (-25.8%).
The other EU Member States used the Indian Summer of the 1990s to make structural reforms, while our politicians wasted time with their self-centred approach.
In 1987 Italy entered the EMS and its GDP rapidly rose from 617 billion to 1,201 billion US dollars in 1991, with the Lira revaluing by 15.2% against the US Dollar and devaluing by 8.6% against the German Mark.
From 1991 to 1995, however, the Lira devalued by 29.8% against the German Mark and by 32.2% against the US Dollar.
The lack of guidance, understanding and control of the economic system by the ruling class – that is already in a phase of “renewal” – is evident.
Trade and monetary wars? Certainly so. Political leaders who are incompetent and often ignorant? Even more certainly so.
By now, however, the ruins in Italy obstruct the passage.
Nevertheless the dismantling of Italy’s civil society, ruling class and companies began in those years and it is continuing relentlessly.
The destabilization of the political system led to the choice of ignorant Parliamentarians and government leaders, often unable to understand and even decide on the various issues at stake.
Furthermore, the crisis originated in the United States in 2007 – which is not yet over – definitively destroyed the Italian economic and political system.
Since then the Italian economy has shrunk by at least 10% and production has fallen down to the level typical of the previous ten years, while 15% of the industrial capacity has been destroyed.
Also the approximately 200 billion euros of bad debts of the national banking system are a consequence of the crisis.
Against this background, also the rigidity of the labour market and its excessive cost are looming large.
An engine only producing friction and attrition – in an international context where no one has any interest in helping or supporting a friend or an ally.
Another naive or incompetent trait of Italy’s current ruling class is the idea that there can still be political, financial and strategic “White Knights”.
Since the year 2000 Italy’s foreign policy has been a perfect example of masochism.
Between 2000 and 2013 we finally recorded the closing down of 120,000 factories and the loss of one million and 160,000 jobs.
Meanwhile, our politicians think they can grant bonuses or tax exemptions for obvious electoral reasons. What a great idea!
Bonuses are always too expensive, but tax exemptions are a scam: if there is no similar reduction in public spending, the tax favours granted to a group are paid by another one.
Not to mention public debt, which is approaching 140% of GDP.
There is no point in our politicians resorting to American experts – just to be fashionable – who recommend the sale of public debt securities only to Italians (as in Japan) and the usual “political stability”.
Let us not cherish illusions. Italian investors have not enough money to absorb the whole stock of securities issued, but political stability is impossible, owing to the old and new mass poverty existing in Italy.
Hence, on the one side there is the ruling classes’ old strategy of selectively buying votes with favours and support; on the other, it is impossible to keep this pace of electoral spending – even in the short term.
The typical Keynesianism of ignorant or too wise guys.
Furthermore, at a time when the ruling class is structurally weak, we witness an increase of non-transparent mechanisms and the strengthening of the lobby groups, who often draw up laws and influence the debate.
By now, instead of the old political parties, there is an intricacy of balances and power relations that are hardly perceived by voters, but which are now essential to pay for electoral campaigns and create the “image” of candidates.
Moreover, in Italy we are currently faced with a society of rentiers, namely those whose money come from investment rather than work: for the Italian Statistical Institute (ISTAT), the “wealthy” are the “employees” (12.2 million people) and the “silver pensioners” (5.2 million people). Finally there is a “ruling class” with a 70% higher income than the national average, made up of 4.6 million people.
Scarcely productive work, much widespread income from investment rather than work, no market and too much State.
However, the lower middle class and the working class are over. The working class is now fragmented into the wide – and apparently varied – population with temporary, low and insecure income.
The middle class – Italy’s historic axis – is now composed almost exclusively of retirees, while the old “bourgeoisie” is polarized between the new rich and the future poor.
Just think of how much political ideology is vanishing, while the social classes that have built the modern world disappear and the politicians live their short time of glory by adapting to the most predictable and antiquated fashions and myths of mass communication.
Another essential aspect to note is the vertical drop of the school quality and the loss of value and quality of university degrees – another factor for which the current ruling class shall be held liable.
Hence all the old so-called “social elevators” – education, the now proletarized professions, crafts and specialized activities – do no longer work.
With this ruling class, the “foam” of the 1968 movement has come to power.
Indeed, while the 1968-styled Marxism wanted the “proletarianization” – so that the new poor would make the “revolution” – today we witness impoverishment and proletarianization without any revolt or rebellion.
Paradoxes of history.
It is worth recalling that since 2012 over 800 entrepreneurs have committed suicide – a case out of four in Italy’s former rich North-East region.
Hence there are two possible options: either the current ruling classes work for the King of Prussia – but they still have to be elected here – or it is real inability, as well as lack of culture and experience.
The issue does not lie in singing the praises of small and sometimes unlikely economic growth in the last year. The indicator of severe material deprivation has grown by 0.4%, while the unemployment rate has decreased very slightly at national level (to 11.7% from the 11.9% of 2015), but it has increased by two tenths in Southern and island regions, thus reaching 19.6%.
In the future we will probably not have a “Mexican” Italy, with a small share of advanced industry, a mass of illegal economic activities and an old network of legal firms which, however, survive with underpaid labor force, deprived of any protection.
Conversely Italy is likely to become a fully deindustrialized nation, with its neighbouring countries taking over the best companies, and a large mass of population surviving on illegal economy or on the service sector.
It is but a short step from decline to poverty.
And Italy will make this step as its ruling class is unable to control the “value chains” of large German or US productions in the North-East region, nor it knows how to effectively manage the non-tariff protection of the luxury goods it sells well in the world. It does not know the current monetary and geopolitical schemes and plots underway and finally it is unable to create such a training system as to allow the evolution and technological upgrading we need in a world characterized by fierce global competition.
Hence what can we do to avoid Italy’s evident decline? First and foremost we need to talk about it and later imagine the programme of a new ruling class.
It is difficult, but not impossible.