1997

 

Biblioteca della libertà, XXXII (1997), January-February, n. 138
pp. 112, Lit. 20,000

 

ù Frey, Bruno S. Art, Money and Liberty • pp. 3-14

The first part of this paper is devoted to the analysis of the relationship between art and money (the market). Section I deals with the proposition that "money destroys art", section II with the conception that "good artists are not interested in money", and section III with the conviction that "investment in art is financially highly profitable". The second part deals with art policy, and in particular with the proposition that "government must support the arts" (section IV); the introduction of a system of art vouchers is proposed. The paper ends by drawing some conclusions.

ù Curzon Price, Victoria. A Common Currency for a Common Market
• pp. 15-24

Since monetary and exchange rate policies no longer have substantial real effects, it really does not matter whether we have a single European currency or several national ones. What we do need, though, is a stable currency. Replacing a set of politically subservient central banks with a reasonably independent one should be seen as an improvement in this respect. Let us now hope that the same institutional arrangement that has produced a fairly stable DM can also be made to work for the Euro. There are one big advantage and one big drawback for the EMU: the advantage is the preservation of the single market, which would otherwise be threatened by the fear of competitive devaluation, while the disadvantage is the danger – however distant in time – of a "fortress Europe".

ù Watrin, Christian. The Reasons of Money and the Reasons of Politics
• pp. 25-39

One might ask whether the European Union and its predecessors of the forties and fifties have really served their purpose, furthering economic co-operation, which is seen, in turn, as a device to protect peace among European nations. Or are there reasons why, contrary to the declared purpose of the EU, it could become a source of conflict and disintegration? The central thesis of this essay is that the European Union, as it stands now, could increase economic and political conflict instead of furthering peace and prosperity. The author demonstrates that it is not the slowing down of the integration process provoked by the so-called Euroskeptics, but the policy of the EU itself which, for a variety of reasons, triggers undesired results incompatible with the liberal European community idea.

ù Bonanate, Luigi. Universalism and Democracy • pp. 41-52

After highlighting how, from a universalist point of view, the diffusion of democracy is to be regarded as a good (and underscoring the backwardness of political studies on the subject in the process), the author asks whether it is actually easy to spread democracy worldwide. It would only appear to be possible if states were prepared to recognise that their traditionally inviolable sovereignty is now much reduced and eroded. This would cease to be a danger in world in which democratic principles were shared universalistically, and would ultimately turn into a factor of safety and peace.

ù Vitale, Alessandro. From Soviet State to Russian Mafia • pp. 53-67

The commonly held theses which see the post-Soviet mafia as a product of the market economy and the "absence of state" are false. The root causes of the phenomenon originate with the planned economy, the nomenclature system, the state centralisation and systematic organisation of political parasitism which were so rife in the Soviet period. Using the analytical tool of the logical contraposition of "economic means" and "political means" of acquiring wealth, it is possible to grasp the origins of the phenomenon, which is bound up in the recent processes of "nomenclature privatisation" and the emergence of organic links between the political sphere and criminal interest. The hypertrophy of the state has been the real source of mafia-type structures, as is demonstrated by the regularity with which they form and are consolidated wherever the market economy is paralysed and political relations prevail.

ù Deaglio, Mario and Russo, Giuseppe. Saving, a Virtue that’s Becoming Harder and Harder • pp. 69-82

For the last 14 years, the Centro Einaudi in conjunction with the Banca Nazionale del Lavoro has been systematically exploring the savings of Italian families on the basis of a sample opinion poll by Doxa. The overall results of the study are statistically representative of those Italian breadwinners in possession of a bank account or some form of post office saving. In the following pages, we present a selection of the most significant results in terms of the structural characteristics, preferences, choices and expectations of Italian savers and how they have changed over the years.

 

Biblioteca della libertà, XXXII (1997), March-April, n. 139
pp. 124, Lit. 20,000

 

ù Deaglio, Mario. Italy / An avoidable decline • pp. 3-16

Comparative analysis of the recent evolution of its economic, institutional and demographic structure leads to the conclusion that Italy has slumped almost to the bottom of the list of advanced countries, and can now be defined as a country in decline. The various aspects of this decline can be grouped together under five broad categories: the weakness of the conjunctural results of the economy in the course of the Nineties, the economic-political credibility gap (especially at an international level), the weakness of economic institutions in taking and implementing decisions, the culture lag (confirmed by a number of indicators) and the demographic crisis with birth and fertility rates among the lowest in the world. These weaknesses are set off by a great many promising signs of vitality, especially evident in the economic fabric, but these are not enough in themselves. Any strategy to make Italy survive in a global market economic system has to eliminate the structural weaknesses mentioned above. And action has to be taken immediately.

ù Ames, Bruce N. Health, risk and politics / The Myth of Zero Risk
• pp. 17-23

The EPA’s regulatory efforts to reduce already minor human exposure to synthetic chemicals, such as pesticide residues, erroneously regarded as an important cause of cancer, are proving hugely expensive – some 2,000 dollars per American family per year – in so far as they attempt to eliminate only minuscule concentrations. The author argues that such efforts have their own health costs since are a diversion from the more important major task of improving health by increasing knowledge and public understanding of how lifestyle (proper diet especially) affects health. As the world cannot be risk-free and resources are limited, society must set its own priorities, identifying the most dangerous risks in order to save lives. Such policy choices should therefore be based on hard scientific knowledge as opposed to mere ‘folklore’, as sometimes appears to be the case.

ù Centi, Jean-Pierre. Health, risk and politics / The Costs of Regulation and the Cost of the Market • pp. 25-34

In recent years people have become acutely aware of the damage being done to health by synthetic industrial chemicals – as if they were a source of cancer for human beings. It was environmentalists who triggered this fear by having questionable scientific findings propagated by the media. On the basis of the argument that we have the right to live in a risk-free world, they put forward the precautionary principle, which citizens support by activating a demand for government regulation. This produces over-government and, what is even worse, effects – namely, increased risk – that are the exact opposite of its goal. To escape this vicious circle, we have to abandon the idea that a bad regulation should be replaced by a better one, to limit government intervention by placing our trust in the morality of markets and property rights and, lastly, to achieve a sort of flexible federalism based on competitive local governments.

ù Kuran, Timur. The Economic Doctrine of Islamism: An Alternative Vision
• pp. 35-67

This essay goes beyond Islamic thinking itself to explore the spread of Islamist economic interpretations and practices. Its ultimate objective is to offer a set of responses to the challenges of Islamism. After analysing the economic effects, actual and potential, of Islamism, the author proposes three policy prescriptions. First, he suggests we identify and disseminate the flaws in the Islamist agenda; secondly, he shows that Islamist leaders tend to overestimate their popular support; thirdly, he warns us to pay close attention to Islamist views on social problems. Many Islamist complaints, some socio-economic, about modernity stem from genuine policy failures. Recent developments in many parts of the Islamic world are nonetheless encouraging, and the situation now seems to be growing ripe for a broad attempt to protect liberties, economic freedom included.

ù Fossati, Fabio. The Italian Reasons for ‘Neo-Third Worldism’
• pp. 69-83

‘Neo-Third Worldism’ is an offshoot of 1989. This internationalist political culture has, by and large, the same values as before – namely, Manicheism, moralism, conspiracy hunting and snobbery – but differences have arisen in the system of beliefs. In economics, capitalism was considered to be the source of all evil; today neo-liberalism is believed to be responsible for poverty in the Third World. In politics, ‘Neo-Third Worldists’ do not fight formal democracy any more, but object to decision-making centralism in the so-called delegative democracies. In the cultural sphere, no significant changes are detectable with national self-determination being defended only when third countries (Palestine, Bosnia) are attacked. Western-style countries (Israel, Croatia) are ignored. Military intervention is legitimised only when it consists of aggressions against Third World Countries (Iraq versus Kuwait), but if the West intends to intervene, pacifism is the only exit.

ù Einaudi, Luigi. The Fiscal Question, the Federal Question • pp. 85-105

The ‘classic pages’ we have chosen for this issue are three of Einaudi’s parliamentary speeches. The first was made in 1922 on the occasion of Mussolini’s request for full powers in tributary and administrative reform, the second and third in 1946 to the Constituent Assembly. The problem of taxation is the central issue in the first speech, but also plays an important role in the other two. As a true liberal, Einaudi felt that a tax system subjected solely to the will of the majority could not be regarded as just. His speeches to the Constituent Assembly offer much food for thought in these times of hotchpotch institutional reform. Einaudi is clearly inspired by an evolutionary vision of institutions, their birth and their reform. He was strongly in favour of a federal-style system but realised the need to take into account, on the one hand, the history of Italy, which had not come into being as a federal nation, and, on the other, the possibility that the regions would not work. Hence he believed that powers should be attributed progressively, bearing in mind how those already granted has been utilised.

 

Biblioteca della libertà, XXXII (1997), May-August, n. 140
pp. 118, Lit. 20,000

 

ù Becker, Gary S. Human capital and redistribution / Human Capital, the Family and the State • pp. 3-7

The twentieth century may be defined as the era of human capital in the sense that the primary factor of any country’s standard of living is its capacity to develop and use the competences, knowledge, health and customs of its inhabitants. Education and training not only foster growth and efficiency, but also reduce inequality and the negative consequences of deprived backgrounds. To understand what human capital is and how it is formed, we have to return to the family: that is, to those who tend to children and use all the resources at their disposal to provide them with education and training. In the advanced countries of the West, families have changed and are now growing smaller and less stable. This is due, in part, to basic tendencies in the modern economy, and, in part, to artificial incentives created by the modern welfare state. These incentives can be modified without damage – on the contrary, with huge benefits – for modern social and economic life. By way of an example, the author cites possible adjustments in terms of assistance to unmarried mothers, social welfare, services for children and education.

ù Posner, Richard A. Human capital and redistribution / Why Not to Worry about the Ageing of the Population • pp. 9-25

The ageing of the population in the advanced countries is a cause for growing concern, especially when it comes to sustaining social security, health and welfare costs. In actual fact, there are reasons for believing that the alarm is largely a false one. All the most common arguments on the issue – i.e., the exponential growth of spending for the elderly, the battle between the generations over the funding of welfare, the undue electoral clout of the elderly – are confutable. Many real problems may be solved – at least in part – by introducing adequate legislation. Nevertheless, the elderly will continue to require assistance and that assistance will imply costs. Moreover, changes to public social security systems could alter the identity of the people who sustain costs, but by no means eliminate the costs themselves. It is necessary, at all events, to maintain a sense of proportion. Overall, the progress in medicine which has raised life expectancy, prolonged middle age and retarded old age is enormously useful. Against that, the burden of assistance to the aged is, in all likelihood, nothing more than a slight hitch.

ù Marsonet, Michele. Human capital and redistribution / The Question of Consensus • pp. 27-37

The idea that social harmony must be predicated in consensus is both dangerous and misleading. The essential problem of our time is, rather, to create political and social institutions that enable people to live together peacefully and productively, notwithstanding uneliminable disagreements over theoretical and practical issues. The social model of the team whose members work together towards a common purpose is unrealistic. A more adequate one is that of a classical capitalism, in which both competition and rivalry ultimately benefit the community. Of course the "scientific community" is also an excellent example, although we again have to avoid painting too idealised a picture. Setting out from these premisses, it is possible to conclude that even in the field of distributive justice, aprioristic rationalism ought to be abandoned. What really matters is a shift of attention from the distribution to the production of goods. In fact, the economic context in which goods are distributed makes a crucial difference, and any theory of distributive justice which does not take this into account will prove impotent in practice.

ù Winiecki, Jan. Eastern Europe: The Legacy of Communism and the Weight of History • pp. 39-55

In order to assess the success or failure of the shift towards economic freedom in eastern Europe, while maintaining a sense of proportion, the author focuses on the basic differences which generate resistance to change. The fact that the liberalisation of the economy proceeds faster than the rebuilding of institutions raises the transaction costs. Yet this does not prevent change – it only makes it more expensive. If, however, we consider the combined effect of the formal and informal constraints which constitute the moral order, the prospects become cloudier. During communism, moral rules were subject to very strong pressure, the effects of which are perceivable across society. In politics, this translates into the success of the former communist parties, which promise a return to the "good old days", while conserving capitalism in the shops. Nonetheless, certain factors – the markets role in transition, first and foremost – induce cautious optimism about the outcome of the transition process in the majority of eastern and, above all, central European countries.

ù Colombatto, Enrico. Free Market Economies, Rule of Law and Public Intervention • pp. 57-68

This paper analyses the main features of a free-market system in which uncertainty may be reduced but not eliminated, and government intervention is legitimate only when it derives from a clear principal-agent link between policy-makers and a vast majority of the population. More specifically, the system requires a tight constitutional framework so that incumbent policy-makers can be removed whenever they engage in rent-seeking activities and violate the principal-agent contract. The paper explains why government agents usually manage to acquire power as well as authority. As a consequence, free-market principles are violated and individual property rights are transferred to an extent which goes beyond the level some individuals are prepared to accept. Although governments still draw their legitimacy from the people, the principal-agent link is weakened and a free-market model is replaced by a mixed economy. Constitutional engineering may help to slow down the involuntary transfer of power from individuals to governments but cannot stop it.

ù Russo, Giuseppe. Measuring economic freedom / Italy’s Position
• pp. 69-80

This essay presents the main conclusions of the Economic Freedom of the World 1997 report which, as of this year, Centro Einaudi will help to compile as official Italian collaborator of the Economic Freedom Network in conjunction with the Young Entrepreneurs Group of the Turin Employers’ Association. Every year the report is accompanied by a study on a specific aspect of economic freedom in Italy (for 1997, The Other Fiscal Freedom, published here). In presenting the Economic Freedom Index to Italian readers, the author attaches special attention to the composition of the index itself and the positions of EU countries, Italy in particular. He specifically analyses the areas in which the degree of economic freedom in Italy is relatively high and those in which it is unsatisfactory, as well as the way in which it has evolved since 1975.

ù Ronca, Giovanni. Measuring economic freedom / The Other Fiscal Freedom • pp. 81-96

This study presents the conclusions of a survey – to be repeated every year on a specific aspect of economic freedom in Italy – promoted by the Centro Einaudi and the Young Entrepreneurs Group of Turin, to coincide with the publication of the Economic Freedom of the World 1997 report. Fiscal freedom can be measured not only in terms of average tax levels, calculated as percentage tax pressure on GDP, currently more than 44%. Over and above the amount of taxes paid, the other dimension of fiscal freedom concerns when and how they are collected. Setting out from an analysis of the international income tax panorama, the author seeks to quantify the effective weight of the Italian tax system on firms, including in his calculations all the implicit extra burdens induced by the complexity of fiscal mechanisms. Finally, he uses a simulation to try to quantify the tangible effects of a reduction in the costs of meeting administrative obligations.

 

Biblioteca della libertà, XXXII (1997), September-October, n. 141
pp. 118, Lit. 20,000

 

ù Focus on Italy. The Constitutional Reform • pp. 3-68

After ten years of aborted attempts, in the last few months the Italian Parliament has, for the first time since the war, buckled down to the task of discussing a bill for the reform of the second section of the country’s Constitution, the part devoted to its political system (the same Parliament having voted to exclude the first part on citizens’ rights and duties from its review). The parliamentary debate centres round the bill drawn up by a special Bicameral Commission, which began work on the task a year ago. Once passed by the Chamber of Deputies and the Senate, the final document will go to a national referendum. The essays we publish analyse the Bicameral Commission’s document and suggest some of the amendments Parliament might make to it. The contributions by Giorgio Brosio (Meagre Decentralisation, No Federalism), Giuseppe de Vergottini (Federalism and Political Culture) and Michele Salvati (How Many Reforms?) are chiefly concerned with the question of form of government. They criticise the lack of courage of the choices made to date and point out how regional authorities are not ensured effective financial and spending autonomy. Their recommendation is that the Senate be transformed into a "Chamber of autonomies". Giuseppe Vegas (The Unmentionable Market) discusses the different outlines of the economic Constitution with reference to the contents of the Community treaties signed by Italy. Giuliano Urbani (The Political System) and Valerio Zanone (The Second Constitutional Covenant) analyse the Bicameral Commission’s choices from the point of view of the Italian political system. Urbani shows how the present party system is loathe to become effectively bipolar, while Zanone stresses that the reform process now in progress responds, first and foremost, to the need for mutual legitimisation of the former Fascist and Communist parties. Giorgio Rebuffa (Weak Reform and Referendum Risk) warns that the hesitation and ambiguity of the proposed reform – vis-à-vis form of government and guarantee institutions, in particular – might cause it to be rejected in the scheduled referendum, especially in the northern Italian regions. Franco Pizzetti (The Question of Method), finally, outlines the approach which the Commission has followed to date, showing how it has prevented opinion and specialists alike from entering into contact with the Commission; which is why citizens perceive the entire reform process as being remote and incomprehensible.

ù Jordan, Jerry L. Labour markets, employment policies / Why the Government Can’t Create Employment • pp. 69-76

The widely held idea that the government ought to create jobs is without economic foundation. What the government can and must do is to foster the creation of wealth. What are commonly defined as employment policies are, more often than not, policies designed to preserve existing jobs, ultimately locking resources in non-efficient or non-optimal uses. The State’s job is to ensure and protect property rights and economic freedoms, an essential condition for entrepreneurial energies to be unfurled to the full. It is also necessary for the central bank to concentrate exclusively on curbing inflation. This is the only way to prevent the destruction of wealth provoked by currency devaluation and thus ensure certain prospects for enterprises.

ù Garello, Jacques. Labour markets, employment policies / Europe’s Difficulties and How to Get Out of Them • pp. 77-87

In the years following the fall of the Berlin Wall, the "European model" ousted the "American model" but, alas, betrayed a series of limits due to excessive State interference in the economy. This led, inter alia, to the hypertrophy of welfare systems and the virtual abolition of a labour market in the strict sense of the term – with all the unemployment that this entailed. There are three ways out of the conundrum, each very different from the other: 1) so-called European social harmonisation, which is pure Utopia; 2) the across-the-board adoption of the British model, with a return to flexibility and weakening of the unions; 3) the eastward expansion of the Union, hence a transcontinental labour market. Looking to the future, however, the globalisation of the labour market and the ensuing disappearance of paid work as we have known it to date appear inevitable.

ù Lilley, Peter. Labour markets, employment policies / The British Approach to Unemployment • pp. 89-95

The ongoing problem of unemployment in developed countries is caused by the declining relative earning power of the lowest skilled, brought on, in turn, by worldwide developments in technology and trade. To stand in the way of progress would be to deprive society as a whole of enormous benefits, besides, in all likelihood, falling to help the lowest paid anyway. To cure the symptoms by preventing wages from adjusting to changes in supply and demand would merely exclude the unskilled, more or less permanently, from the labour market. Any long term strategy to tackle the phenomenon has to have three aims: 1) the liberalisation of the labour market; 2) the implementation of a benefit system encouraging people to take available jobs by making benefit conditional on actively job-seeking; 3) reform of the education and training systems.

ù Cubeddu, Raimondo. Individual Freedom in the Age of Globalisation
• pp. 97-105

The process of globalisation brings to an end the merging of political space (i.e., within which democratic sovereignty is exercised) and economic space (i.e., politically controlled and guided national markets). The prime victim of this process is the modern national State. It is thus vital to reformulate the relationship between individual freedom and non-violent political institutions. If the conception of the State as a "necessary evil" now appears unsustainable, still less so is democratic liberalism’s view of it as a tool for expanding individual and social freedom. If we wish to maintain the right to choose the model of life best suited to the maintaining of individual freedom, we have to relinquish the State as we have known it to date. But we also have to acknowledge the fact that we do not know – neither in practice nor, arguably, in theory – how to replace it.

 

Biblioteca della libertà, XXXII (1997), November-December, n. 142
pp. 128, Lit. 20,000

 

ù Schwartz, Pedro. Huxley and Orwell Were Wrong: Telecommunications, Autonomy and Freedom • pp. 3-14

The new telecommunications and information technologies are overwhelmingly favourable to the extension of individual autonomy and political freedom. With the reduction of information interchange and processing costs brought about by technological innovation, the individual faces a new era of all-encompassing opportunity. History may be kinder to humanity than Huxley and Orwell feared. Instead of changing us all into couch potatoes, the new technologies have already empowered a sizeable minority of us to know more about our own selves and the world, and to create work that others can value. Instead of playing into the hands of authority, they have reduced State sovereignty, increased democratic control and, above all, expanded the spontaneous order of the Open Society.

ù Contributions. The Liberal Age • pp. 15-65

This section presents ten critiques on Valerio Zanone’s L’Età liberale, published last autumn, and a riposte in which the author specifies and defines his thesis. Zanone’s book addresses the problem of the future of freedom, hence of liberalism, in a world whose ineluctable horizons are capitalism and democracy. Luigi Marco Bassani suggests that a liberalism that has made peace with the democracy is also a liberalism which enters into conflict with market freedom precisely because democracy is often used against capitalism. Girolamo Cotroneo, instead, argues that it is only in liberal democracy that the traditional antithesis between freedom and justice is satisfactorily – and, arguably, in the only way possible – solved. According to Emilio Papa, if we want to avoid ending up on the "losing side", we must be on our guard not only against the danger of seeing a repeat of past experiences of "State arrogance" and the liberty-destroying planning of collectivist systems, but also of the indifferentism of new forms of capitalism. Carlo Scognamiglio argues that, after democracy and the market, science is the third distinctive component of western societies, vital in so far as it offers us the hope of a better future. Pier Giuseppe Monateri, on the other hand, is of the opinion that we have to take stock of the fact that liberalism is "contaminated"; all we can do at this point, he says, is to "disseminate" its last surviving parts. Three of the contributions deal specifically with the problem of the relationship between justice and the law. Vincenzo Ferrari recalls that, even in this era of continuous globalisation, the problem of rules is still topical; liberal policy has to programme not only the methods but also, by any measure, the contents of such rules without confiding over much in pacific self-regulation. Fulvio Gianaria argues that impatience with normative constraints is counterpoised by an unfulfilled demand for justice on the part of citizens seemingly prepared to repudiate democratic methods to obtain moral responses from a judge (Providence) destined to be the arbiter of all particularisms. Mario Montorzi, finally, asserts the need to for an active system of liberal guarantees designed to benefit the individual vis-à-vis not only the State, but also the numerous intermediate corporative formations which are increasingly invading, occupying and qualifying post-industrial societies. Two contributions view Zanone’s book through the lens of the political history of liberalism in Italy. Giancarlo Lunati highlights the difficulties which the lack of an overall design causes when it comes to translating liberal ideas into organised movements. Aldo Bello concludes that the Italy of today and of the future desperately needs a genuinely liberal culture capable of influencing the rootedness and identity of those collective ideals which, left to their own devices, would risk triggering forms of illiberal democracy.

ù Vincieri, Paolo. Nicola Matteucci, a Liberal Today • pp. 67-79

This paper is a critical interpretation of the works of Nicola Matteucci, a political philosopher whose work has always centred on an interest in and interpretation of history. Hence his pluralistic conception of political life and the State. The author reconstructs Matteucci’s intellectual biography: from his juvenile studies on Antonio Gramsci and the Geneva Enlightenment school to his work on constitutionalism and the liberal State, his monographs on Machiavelli and Tocqueville and his essay on Hayek. The ultimate message of his lengthy research is that history affords a margin of possibility such as to render "human projects" worthwhile. The State, he seems to claim, should be conceived in the light of a moral which is centred not on the universal but the individual, while we should see the State-builder as resembling a good architect, without attributing artificial significance to politics. On the contrary, we ought to conceive of it as a iurisdictio.

ù Davico, Luca. University Diplomas and the Job Market • pp. 81-94

This essay presents the conclusions of a survey on university diplomas in Piedmont. University diplomas – recently introduced in Italy – represent a tangible opportunity for permanently combining the world of training with that of production. Comparing the opinions of people (from universities and enterprises and new diploma holders) who have followed such courses, it emerges, however, that today many university diplomas receive little recognition on the labour market, partly because their qualifications often have an over-theoretical base. Despite that, two thirds of new diploma holders hold down jobs. Firms continue to show a great deal of interest for university diplomas, especially those envisaging vocational training courses combining theory and practice, hence capable of producing technicians and middle managers.