missed opportunity of April 30, 2008
by Francesco Giavazzi http://www.corriere.it/
one fifteen years in this newspaper I am fighting for the market, liberalization, to a less intrusive state. I support the benefits of competition and openness to trade, not an ideological choice, but because I think that open markets and competition are the tool to unlock a country where social mobility has stalled and the future of young people is increasingly determined by their wealth, not by their commitment and their capabilities. In the meantime, some things have happened in the world. The globalization of markets has allowed half a billion people out of poverty: the 1990 families in extreme poverty were in the world, one in three, and today less than one in five. (continued. ..)
But with globalization have widened inequality, especially in rich countries and it does not matter that the reason they are not Chinese imports, but new technologies that reward those who studied and penalize the unskilled labor. (In the U.S. the hourly wage of a worker who left school at age 16 in 1972 was, at today's prices, $ 15, 11 in 2006. What a graduate have increased 24 to $ 30 per hour) . As already observed three years ago and Massimo Gaggi Edoardo Narduzzi ("The end of the middle class') in the West is gone the traditional middle class, that for half a century was the glue of the political system in its place arose a society in which those who have poor education is distressed and looking for someone to protect him. And the market is not always a good account of himself. In the United States has stumbled in a couple of injuries.
In 2002, the fraud of the directors of Enron, Tyco and WorldCom. Today the crisis triggered by mortgage subprime: if they were not promptly intervened central banks, namely the rule, the market is likely to fall. Sometimes a market even exists, as in the case of energy: gas prices and supplies - 80% of energy used in Italy-are determined by a cartel dominated by Russia. Think to open that market to competition is an illusion a bit 'childish, at least until we have built a dozen gas terminals and it will take, if all goes well, a couple of decades. China does not allow the value of its currency is determined by the market. To maintain an undervalued exchange rate accumulated an extraordinary amount of euro and dollars. China's growth continues to depend on industry and exports. In words, the Communist Party is said to concern the increasing inequality, but then does almost nothing to correct the pull and push domestic demand, mainly services, primarily health care. More and more open markets frighten voters. In the election campaign American both Obama and Hillary Clinton speak with accents and critics of globalization are careful attacking public subsidies that make the rich U.S. farmers at the expense of the rest of the world, such as Egyptian cotton farmers.
In France, Sarkozy in words (not always) predicts the market, but try to open an airline and request a slot for a flight Linate-Charles De Gaulle: you will get it, but at 6 am. The majority of Italians voted for a candidate, Silvio Berlusconi, who has pledged to save - with public money - a company that loses a million euro a day: I have not seen anyone pull out because our taxes are used to keep Standing firm decoction for years. (Instead, I saw the taxi drivers Romans celebrate the new mayor of the city two years ago, he expressed sympathy for the violent protest by taxi drivers against the liberalization of Bersani). In short, the world seems to go in a different direction from that desired by those who, like me, wants less state and more market. People do not seem to care: in fact, reward those who promise "protection" by the wind of competition. What we did not understand where did we go wrong? Some believe that the problem arises from the incorrect approach of "competition" and "market".
Competition rules means: in the absence of rules does not mean that the market will produce a society better than that in which we live if we were entrusted to a benevolent state. In order for the market, globalization must become popular, "govern." And 'certainly true, but also a bit' Enlightenment. I see anti-globalists who occupy the squares, but I do not see why people who experience the Doha Round is not a step. The decision of EU heads of state to remove competition from the essential principles established by the new European treaty has gone unnoticed. Well, I do not think that people might claim more rules: protection-seeking and that some politicians promise-is that tariffs and immigration restrictions, not antitrust. It seems to me that liberals should put a more modest task: to explain to them that the alternative to the market, merit, competition is a society in which privileges are handed down from generation to generation, the fortunate and the bullies live quietly, but who is born poor will remain, regardless of his commitment and his ability. Convince them that the way to defend their standard of living is to ask good schools, not duties.
The "economic miracle" Italian '50s and '60s was the result of the single European market (and far-sightedness of leaders of the Christian Democrats at the end of the war realized the importance of immediately enter in the EEC). The fall of trade barriers and extending the application to enable our companies to expand the factories and reach a size that determined its success. The growth of those tumultuous years created opportunities for all. I have no data, but I think if someone then asked Italians what he thought of trade, most would respond favorably. The Europe of that time is Brazil, India, China of today, but most now regard them as threats, not opportunities. I think that Italy is in a "cul de sac." For a decade we have been growing: Ten years ago, our per capita income was similar to France and Germany, 27% higher than in Spain, 3% more than in Britain.
In recent years we have lost ten points in France and Germany, we were joined by Spain and again passed from Great Britain. When a country is not growing opportunities disappear, and each is held close to that: while the market, merit, competition-factors whose absence is the source of the non-growth scare. The concerned citizens seeking protection, someone promises and the country is screwed. (The comparison, I know, was vexed, but the story of the decline of Argentina-a country that was the beginning of '900-rich as France begins, with Peron, that's right). The attempt to convince the left that market, merit and competition are the tools to unlock Italy-I must admit - has failed. With the left Prodi lost a historic opportunity: for the company to unlock it also offered protection. But who is protected? Not who fear globalization - which in fact has been done to protect the League-but the union, or rather its leaders. I fear it will be some term to fix this error.
The new partners of the "free" (as claimed for some time Franco Debenedetti) today are the 'protection': the wrong diagnosis, but were able to capture and better understand the anguish of the left of many citizens. And yet the answer to the 'global mobility' can not be the freezing of the mobility in the home. A company is not only unjust frozen: the illusion of protection, in fact wasting its resources better and perishes. And 'maybe they can afford a luxury that the United States for Italy would be suicide.
