Can Berlusconi save Italy?

[pigro]

Damiano's post presents an interesting conundrum for many of us on here ... I found my self broadly agreeing with every individual point he made, but after I got to the end of the post, my head was filled with a horrible preminition of Italy as yet another grey, dull, market driven economy with no room left for slow paced small concerns whose workers actually have time & skills to perform their role on a human level, safe in the knowledge that if they work to a decent standard, they are likely to have job security, job satisfaction and a living wage.

I mean, I want a cheap bank account without the stupidly high overheads, but OTOH I appreciate going into my branch and seeing staff there who can deal with me individually and who still have a lunch break ,as opposed to calling a call centre in Albania or somewhere to query a transaction.

I want to have the local plumber, electrician etc. mobile numbers programmed into my phone and for them to recognise me by name when I call - I shiver at the thought of calling a 'green number' from the pagine gialle and being connected to some anonymous guy who hits me with a call out charge on arrival and then spends time on the meter acquainting himself with the pipe runs of a house he's never seen before and does a half arsed repair (cos he'll never see it again).

I want the local bar to remain friendly and busy and to be run by the same family through the generations - the thought of it being re-themed every 5 years and starting quiz nights, karaoke and happy hours in order to maximise footfall at quiet times is anathema to me.

I'm sure most of you know where I'm coming from - many of the quaint, oldy worldy things we love about being in Italy (because they remind us of how things were & how we think they still should be) are the very same things that are holding back its economic progress.

However, if these matters were addressed systematically throughout society, Italy would be left as another pale imitation of American corporate culture, and the personal glue holding society together would start to weaken over time, just as it has in the UK and other countries who have bought too deeply into consumer culture ... and if we're honest, aren't many of us fleeing to Italy precisely to avoid living in such societies?

I don't have the answers I'm afraid, but they are important questions ... economic progress/prosperity vs. state protectionism and preservation of an archaic and corrupt system which tacitly preserves the traditional societal structure.

You'd normally think there was a 'happy medium' for progress but my view is that shaking up the economy sufficiently to actually initiate permanent cultural change creates a runaway train (with institutional investors & speculators as the only brakeman) that can't really be stopped once it's picked up sufficient momentum.

In short, I'm a bit of a NIMBY when it comes to the kind of economic reform that would really be required to address the big problems with Italian industry.

I don't suppose it's a solution but an observation nonetheless - there are simply far too many people in the world. They are consuming too much of the finite resources, and requiring too big a public infrastructure to support their needs.

Think water, oil, forest, staple food crops; think siting of new conurbations on flood plains, earthquake zones, consider the placement of new golf courses all over the arid parts of the med/middle east/north africa ...

population & it's associated infrastructure need to be pegged back over time to sustainable levels, in a model where people can return to a more "cottage industry" type lifestyle (living mainly in places which are geographically conducive to settlement; working close to where they live; supporting & sustaining their local communities by theiur physical and economic presence; replacing commuting time with time spent growing some of what they eat in their own ground etc. etc.). That doesn't mean going back to mud huts & barter based economy, you can easily deploy a high tech/finance/service teleconomy to a decentralised model these days if the political will is there and companies are suitably incentivised.

I know this is more "pie in the sky" than "blue sky" thinking - it wouldn't work convincingly unless it was implemented globally (tell that to China/India...) and I have no idea how you would ethically reduce populations by the amount required to make this work (well, I do, but this post is out of control already!)

Anyway, the point for me is that what I just described above (with the partial exception of the teleconomy bit) is not dissimilar to the lifestyle that I see my own Italian neighbours actually leading today, hence my selfish choice to locate there.

I'm not saying that all of Italy has that rosy glow - far from it, I understand that I live in a fairly affluent area and that there is real deprivation, poverty etc. in the big cities and in the south.

I guess all I'm saying (in my long winded way) is that the baby mustn't be thrown out with the bathwater when the economic/political change that we all know is required eventually comes.

[NickZ]

Originally Posted by damiano

Italys net average disposable income per capita is half the UKs ($19k as opposed to $37k) and Italy are 19th out of 20 (behind both Greece and Turkey) in terms of income after tax for the top industrialiased nations on the planet. That is pretty damning reading when we all know that prices are going through the roof and the cost of living is now not much lower than the UK.

4) lack of inbound investment (how many foreign businesses site their factories here)
5) The absence of any economy of scale

Those numbers are so tainted I can't imagine using them for any reason other then political.

What's a tax? Is a users fee a tax?

Service levels? If you live in a country that provides less services and you need to buy these with "after" tax dollors are you better off?

Hidden taxes? If you rent and the council tax is buried in the rent are you paying tax? Or rent?

List of countries by GDP (nominal) per capita - Wikipedia, the free encyclopedia

Why not use per capita GDP?

Why would anybody put a plant in the Euro zone? Stick it in Vietnam. With the engineers in India.

Economies of scale? Stick it in China and let them pump out the copies.

It's 2008. The problem is guys like Berlusconis think like you. Italy needs to be small and nimble. Economies of scale just mean running on the treadmill trying to stay ahead of the cheap labour provided by the far east. It's at best a dead end road.

Italy needs to be creative. It needs to protect it's IP.

You can start a factory to copy almost anything virutally overnight. Soon enough Germany is going to find out how well the Chinese can make things. High end Japanese [and UK,US] companies are already feeling the pain from China.


ICI is smoke and mirrors. 40% of Italians already were off the rolls by Prodi's 100 Euro change. Many of the others would have stopped paying ICI when the second 100 Euros kicked in this year.

[pigro]

actually, if oil costs keep rising (and it's looking like they probably will) then the cost of transporting components/materials to far east manufacturers and shipping finished goods the other may actually make it more economic for the west to start investing again in more local manufacturing. Not sure at what price per barrel the tipping point would be, but something to consider ... would certainly be a shot in the arm to western economies facing recession?

[NickZ]

The other way I bet. If you start with Aussie Iron ore and other materials. Why ship the raw materials and waste to the West? Better to do all the work close to source and ship finished goods instead.

I'm still wondering at what point the Saudis etc refuse to ship crude oil. Build their own refineries and sell only finished goods.

[pigro]

don't panic about the Saudi's holding us to ransom - I also read the other day that some bright sparks have cracked the practicalities of recycle old PCB's (printed circuit boards and other toxic plastics) to recover industrial fuel oil from them ...
Romanian and Turkish scientists turn circuit boards into oil | The Register

... mind you, it doesn't say where the fuel required to sustain the pressure/heat for the process will come from and of course the process would only be viable with crude oil at or above current prices.

On second thoughts, do panic!

[bosco]

Originally Posted by damiano

Italys net average disposable income per capita is half the UKs ($19k as opposed to $37k) and Italy are 19th out of 20 (behind both Greece and Turkey) in terms of income after tax for the top industrialiased nations on the planet.

Could we have a source for this please? I've tried to Google for it without success. And I'd like to look at the original figures and the assumptions behind them.

[adriatica]

bosco

i think you will find most of these listed on the eurostat sites but they do take a bit of finding... they are commonly reported figures both on newspapers and television here ... so i don't think there is much doubt about them as a reported fact here in Italy anyway... however as with all stats there are various ways of looking at them and a million different ways to add them up

EUROPA - Eurostat - Home page

its also somewhat predictive because italy is very slow with supplying figures so they are often computed on the past ...as are all but even further from the past in the case of Italy.. below is supposed to be the key facts and figures for the europe zone...

EUROPA - Key facts and figures about Europe and the Europeans - Quality of life - How wealthy are Europeans?

anyway maybe you can wade your way through this lot and find an answer...

however i find pigros worries and conclusions far more interesting and i guess in a sense find his worries and concerns more in line with my thinking over economies... and ways of life...

i believe though that balance is and can be achieved and that if you make local produce, local artisans and local commerce a profitable way of life for the young that rural local life will continue... because the way things are now i see most of what we appreciate about the Italian life going out the window with an older generation that is dying out... because the young see no future... not talking about very young...people with children and a wish to have a family home where they were brought up and to be able to carry on with their small farm whilst holding down a job...or to run their parents bar or shop and make a living are just not able to and are having to move away for work...

italy has just had the most repressive two years of tax on small business and artisans ever ... and many have not survived not only the levels of taxation but the complication of all the new forms and declarations... the paperwork... hopefully this is about to change as in a political sense leaving out leaders ...the party now in charge is much more representative of the small business sector and Italy basically survives off these as a nation... the party before has always been more to do with employed workers via the unions and their strategies have in the past favoured that area...

if one thing has now come out of this vote and this new political scene...its the move of the workers away from the party political concept to the regional federalist concept... and if anything held or holds italy back as much as crime and corruption its the old values of extreme communism/marxism... which finally seems to be defeated both from within the left and in the country in general ...although weeding it out of the local political system will take a lot longer

which is really why i have faith in the future of Italy and that it can follow a path which will allow pigros vision to sit side by side with local wealth because Italys wealth is in its production of Italian brands from high tech gadgets to hams... and that places like france say have been running their economies on the concept of local life and anti globalisation for a fair while now .. taking the bits they want and protecting themselves against those they don't ... despite european free trade ..

just read though the above and its a bit of a rambling post ... even more than usual... sometimes its a problem for me as you might have noticed from the past.. however will click the submit button anyway as i dont think i have insulted anyone ... and there are some vague points within though not very well presented....

[pigro]

Originally Posted by adriatica

just read though the above and its a bit of a rambling post ... even more than usual...

perhaps we (you & I) should start a competition :-)

[bosco]

Originally Posted by adriatica

bosco

i think you will find most of these listed on the eurostat sites but they do take a bit of finding... they are commonly reported figures both on newspapers and television here ... so i don't think there is much doubt about them as a reported fact here in Italy anyway.

Thanks very much indeed for trying, Adriatica. But the source of the original claim (which I only record ever seeing in Berlusconi election material) is not in Eurostat. Turkey would not in any case normally appear in EU statistics.

The only disposable income table I can find in Eurostat dates from 2003, and puts Italy as having the second HIGHEST disposable income per private household in the whole of the European Union, exceeded only by Germany and just exceeding the UK. (Luxembourg is not in the table, though that country usually ranks very high on such measures.)
EUROPA - Eurostat - Eurostat: Document Details sw3d

Of course, 'by household' is not 'per capita'. But the disparity with the original claim is interesting.

As an aside, the position of Greece in the table is rather higher than I would have expected - but those who know Greece will suspect that a relative lack of public expenditure on roads, transport , the national health service and other infrastructure might go some way to explain this. Countries like Sweden, with admirable public health, life expectancy and public services, and with what some might regard as a high quality of life, always appear very low down indeed on comparative measures of disposable income.

We take our political choice (or have it thrust upon us).

[nigelaxis]

The fix is actually easier to then its made out to be. Afterall, Italy can draw on the experience of other EU nations and adopt the policies that seem to be working the best.

Personally I would:
1) Adopt the British system of law. Things happen faster and you are accountable. This would stick lots of people in jail and make an example not o do it again.
2) Adopt UK employment law. Again, not perfect, but a big step forward. Free labour would be ruled out and so would these endless contracts that never arrive.
It would also benifit the employer as you could sack people for not doing their job.
Nepetism would also become a sackable offense.
3) Business - Streamline the system and make it as easy as possible to set one up. This is where new jobs and emerging companies come from.
4) Encourage foreign companies - Italy puts up barriers to entry against foreign companies (as it would be competition for the ruling class - I have personally seen it happen and it cost Italy 150 new jobs on that single occaission).
5) Forze Italia should sack Berlusconi - When a man is more powerful then his party then the system is rotten. An easy way to introduce this is to limit the number of terms that a person could be in power.
6) Reduce Taxes - This is really easy.....a) come down hard on the perks of governmental employees and place all claims in the public domain. People can be charged for unjust claims. Allow claims to be reviewed historically. b) Reduce the number of public employees - Use another country as reference and state 'We cannot have more public employees then UK/France/?

The situation is hard as all this is under the control of the Italian Ruling/Political class. So instead of directing the effort at the source of the problem, the people should be directing pressure on the EU to intervene. Surely the EU must have some laws on abuse of power? It can't all be about the curve in bananas!