"RIGHT" AND "LEFT" WITHOUT POLITICS
By Gianfranco La Grassa*
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1.When the crisis broke out in 1929, the most famous of crises - and not only for economists but also for artists and above all for movie-producers - the "official" explanation by the "scientists" of the dominating traditional movement (neo-classic e.g. Pigou, pupil and successor of Marshall at King's College, Cambridge) was tied to the "imperfections" of the labour "factor" in the market (in reality: the work force as merchandise) due to the presence of the trade unions. In a few words, salaries were kept above the marginal productivity of that factor (decreasing in proportion to the increase in employment of the work force ) and consequently a part of that force was kept unemployed in order to re-establish the balance. Salaries should have been reduced to restore the profitability of the investments of the entrepreneurs. (those that require the factor in question).
The "practical" solution devised to combat the crisis during the new deal was different, with the reabsorbing of a part of the unemployed, thanks to public spending ( in infrastructures and other things) and this solution found its theoretical "consecration" in the works of Keynes who, in making macroeconomic considerations (aggregate quantities) claimed that the principal cause of the crisis was to be found in a lack of overall demand due to an excess of saving (a relative excess compared to the demand for investments that were insufficient due to low profitability and not duly stimulated, not even with the reduction of interest on loans) in highly developed countries (capitalist) with a consistent previous accumulation of the capital "factor". It was therefore justifiable for the State to intervene with its request (public spending) to make up for the insufficiency of that coming from the "private sector" And such spending had to result in a budgetary deficit (with the possible increase, at least temporarily, in public debt) otherwise perhaps the expenditure of the State would only have substituted that of private enterprise with further reduction of fiscal imposition.
In reality, not even the public expenditure was sufficient to avoid , (only a few years later in 1936-37) the relapse of the economy into a state of weakness, and it seemed to have entered into a situation of tendential stagnation, from which it "brilliantly" emerged during the Second World War, not so much because of the State expenditure (demand) oriented towards the stepping up of the production of arms (a purely economic explanation) but rather for the creation of a planning center (the USA) for the capitalist pole (the "Western" sphere called the "free world") while the other pole just as inappropriately called "socialist" was controlled by the Ussr (except for the emerging of a strong element of "disturbance" from the 1960's onwards; China, one of the weakening factors of this pole with all that followed at the end of the 1980's).
After the Second World War, in the capitalist pole regulated (dominated) by the USA , Keynesianism was instrumental in furthering the "social" State but exclusively in the countries of the area subject to the predominance of the USA. The social democracies in particular abandoned Marxism and turned to the new version of social policy that wanted to diminish the biggest and most evident inequalities of private wealth. There were several explanations for this fact. Some claim that it was due to the fear that the "virus" coming from the Ussr and from the "socialist" camp would spread in the "West" (including Japan as well); a thesis which proved rather weak, since on one hand, there were strong communist parties only in Italy and in France and on the other hand as early as the end of the 1950's and especially in the 60's "socialism" showed extensive signs of meager desirability on the part of "Western" populations, where moreover the Marxist error of attributing a revolutionary capability to the (working) Class became more evident. A capability that in reality was absent (except in the first phases of industrialization during the transition from the condition of peasants to that of factory workers). Finally, we know well today that as early as 1969 the Pci (the Italian communist party) started its change of camp.
Another explanation, more convincing, was the tendency of capitalism to create in any case a market of mass consumerism for itself. Otherwise it wouldn't even have been able to achieve the surplus value (surplus work) created in production by the work force, sold like merchandise and put to work there. In fact all the pauperist (and sub-consumerist) tendencies of Marxism which predicted the collapse of the system or, in any case, the impossibility of its further development, proved at that stage to be decrepit.
However, if it is reasonable to affirm that capitalism is able to raise the standard of living of greater portions of the population ( and Marx never denied it, though I will not dwell now on commentaries on this subject, which anyway is obsolete nowadays) - and if, in the capitalist development, the "class" is diminishing in favor of the so-called middle class - it is more difficult to refute the thesis of their tendential anarchy following the fierce competition between the various companies ( including those that are oligopolistic, as the triggering off of the " third industrial revolution" had the occasion to demonstrate). It is indispensable to go beyond the mere economic point of view and to reason at the level of the (strategic) conflict between powers and of the formation of areas controlled by them, in which a hierarchy is established between various countries with the ( partially controlling) predominance of one of them (e.g. the USA in the capitalist camp or pole).
In any case, it is not on this occasion that I am interested in retracing the story of those years nor of the substantial failure, or at least impasse , of the purely economic theories derived from the more or less well interpreted Keynesianism ( in its version above all typical of European social democracies) that in the end was ousted with the return of the predominance of liberalism, still today in my opinion not effectively opposed by the Keynesian movements (that dominated in the Universities and in the economic policies of the capitalist States for at least three decades and more); in spite of the conviction of some people that in recent times the crisis of neo-liberalism has begun.
2. We have already said several times how, from the outbreak four years ago of the worst crisis since the end of the Second World War, the financial aspect in particular has been accentuated; Much continuous attention has been given to the crisis of the stock exchange, the spread and so on. However, in particular, as far as Italy is concerned they have exaggerated without restraint on the Public Debt ( and on the annual deficit which is one of the causes). If we don't balance this - insufficient attention has been given, however, to the proportions according to which the securities of the Debt are in the hands of foreign "institutions" or Italian "money savers" ( but who are they? Some are strongly tied and subordinated to the previous institutions) - we will end up in bad trouble. I believe that those who affirm this know they are saying it to frighten the population and to have various political measures passed - not simple economic measures - that ratify our subordination to the dominating strategic centers ( i.e. the last resort decision makers) on the other side of the Atlantic. However, there is also the profound incomprehension of the "technicians" (intellectually very limited) concerning the determining elements of the politics (of power or otherwise) in the various countries.
Meanwhile, let us recall that undoubtedly our Public Debt increased at an accelerated rate after (not immediately after, but a delay is normal) the so-called " historical compromise" (between the Christian democrats and the communists, especially from 1976), when in fact the public sector (clerical staff) was widened in all fields (including the media), to grant the requests of the ex- communist ex- opposition. For such a phenomenon a very partial explanation was given: it was to satisfy the appetites of a number of parties which by then were hooked up to the wagon of power (in the open or masked, as in the case of the Pci and the trade union) in the running and governing of the country. However, there was not only this. Also in the making , from the end of the 1960's and above all in the 70's, there was a profound, even if still empirically not very visible mutation in the balance of power between the two world poles; which provoked changes in strategy on the part of the USA (controversial changes strongly challenged even inside the country between the various dominant groups) involving a series of openings towards sectors still considered communist, even tied to the Ussr ( but in reality that was already no longer the case.)
In particular, this concerned our country, with the Pci (Italian communist party) whose gradual inversion of political position can be followed starting from the condemnation of the Soviet intervention in Czechoslovakia (1968), and from the rise of Berlinguer, one of the main critics of that intervention, vice - secretary in '69 and secretary in '72; with the support of his sectors on the "left" who played the double role on one hand of moderate filo-Maoists, because China weakened the pole led by the Ussr, the antagonist power to the USA, and on the other hand of filo-occidentals who supported the "Prague Spring" and then the Polish movement of Solidarnosc. We will dedicate other articles in the future to those events without which one cannot explain the 1970's (so- called "years of lead") nor the reasons why the events of 1968 - in reality a completely different phenomenon in our country compared to others - lasted so much longer in Italy, a decisive field in a battle, also between Intelligence Services ( with hidden interventions by some of those Euro-orientals and the "response" from the other side), which in the end led "Western communism" (ultimately Italian) into the camp of the USA and gave support to the sectors that in the "socialist " camp (in reality not at all socialist, nevertheless antagonist to the Atlantic camp) brought about the collapse at the end of the 1980's and all that followed.
We would like to recall in the meantime that Italy's Public Debt is to a large extent the effect of that battle field that was Italy, with its" Euro-communism" in the fight of the USA - with the support of the Italian industrial parasites - for victory over the antagonist. The Debt is the fruit of the occupation of important sectors, above all in the public sphere, by the new henchmen of the USA and by the parasites mentioned above.
From these sectors the twenty-year manoeuvres began that ended with the operation called "clean hands" (a "guided" judicial operation). There were two principal opponents to these long (and secret) proceedings (still today not well known): Moro, the most lucid and informed (for example, about the facts behind the scenes concerning the events in Chile, crucial at that time) who was eliminated in 1978; a decisive year for other "events" as well. The other was Craxi, more hot-blooded, removed precisely by means of the "clean hands" in a way not so traumatic. Andreotti, patient and astute accepted in silence to let the storm pass over (a trial that lasted ten years and finished with acquittal) and he has never revealed what he probably knows, like Cossiga who on the other hand has said a lot, mixing, however, things that are true with others that are false.
3. Well, do we perhaps distinguish right and left based on the decisive relevance attributed to Public Debt? No, they compete with each other as if they were both liberalists. And in fact, if we give such a poor meaning to neoliberalism (I think Hayek would "turn over in his grave" as we say in these cases), they are both liberalist. The left is considered statist only because it opposes the reduction of the Debt through drastic cuts in spending in the public service sector; and neither does it intend to give up the opportunity to carry out certain "operations" for which it needs adequate funds available to the public treasury and to those that draw from it. We are told that the left camp behaves this way mostly for electoral reasons. There is no doubt that after forty years, or nearly, of politics made possible by that means- but I repeat, above all to bring about the change of camp of the "communists"- has caused the formation of considerably heavy incrustations from "excess of public employment" in the most varied sectors, including the key elements of the social State: pensions and health care. And now , reducing expenditure in such sectors in that way would without doubt give rise to social unrest and to the rapid weakening of the left. The same left is therefore in favor of an increase in income tax and the introduction of a tax on "estates" (even on those not very considerable), etc. By so doing it is leaving itself open to easy criticism, because spending power is undoubtedly diminishing and consequently also the demand in a moment of crisis, the production sectors are put in difficulty and in fact this also dries up the source of the taxes (the income), as is well demonstrated by the increase in the Public Debt during the term of this government of "technicians" that in reality reacts with remarkable incoherence to the contradictory stimuli of the incapacitated majority that sustains it.
The right fakes an attitude of true "liberalism": lower taxes ( in an attempt to regain favor, from the electorate, from the so-called autonomous work sector, from small businesses etc.) and the cutting back on employees in the public sector. But with much incongruence, because one of its components does not even want to eliminate the provinces, and protests for the cuts to funding of the Regions, the municipalities etc. Above all, it is in a state of total chaos after Berlusconi was obliged to step aside; perhaps only temporarily and then to return in a new capacity, but it's not clear yet which one. On the other hand, his adversary is the left that for twenty years has been thriving on anti-Berlusconism and is led by inept and dull executors of orders that come from "afar".
The only points that both sides seem to agree on sufficiently, at least "in principle", are the liberalizations and the consequent privatizations. Liberalization is passed off as a means of increasing competition in the presumed "free market" with the lowering of prices, a phenomenon never seen (perhaps in the 1800's) except in sectors of new products just launched, certainly not in services and consumer goods that are widely distributed and a long time in use. Privatization has found good supporters in particular on the left. A typical example is the case of Telecom, sold by the Government of D'Alema (1999) to the private businessmen Gnutti and Colaninno, with the absence of Mario Draghi (at that time general director of Finances) from the reunion in which he should have exercised the golden share, sufficient to block the sale of the public enterprise; a merit that could "perhaps" have been a reason for his nomination as vice-president at Goldman Sachs in 2002 (it is good to recall certain facts). As for the Banca d'Italia and the European Bank, no need to mention them. I think the sequel to his career is known. In fact, the plans of privatization of public enterprise were partially hampered by Berlusconi, when he was forced to enter into politics to avoid being damaged economically. Today I have the impression that he would also follow the trend.
In any case, I repeat, the Public Debt for the reasons already mentioned, serves as an excuse and a shield for the decisions that risk destroying our main assets. It is not altogether clear what the strategic choices are - that do not seem unanimous and decisive yet - concerning our country. Certainly the international leaders, the United States, are not interested in the appropriation of our productive sectors; and neither do they have, I believe, any particular intention to take over strategic enterprises (Eni and Finmeccanica heading the list). More than anything else, an economic and social falling apart such as the one this country is facing is useful to complete the subordination. It will not be a land of conquest but of complex manoeuvres on an international level (in given areas close to us). At any rate, they are deceiving us and telling a pack of lies.
The crisis is real and not financial; it is particularly serious in Italy - for the political shortcomings and for the subordination that we are subjected to. But it is in any case a widespread phenomenon, also concerning countries now on the rise, since a crisis is never generalized impoverishment, but only effects the majority due to the minority getting richer. On the other hand, neither is the Public Debt the specific cause of the graveness that the crisis in Italy has assumed.
The decisive aspect of the crisis is political, and concerns the end of that hierarchy that came to being in the "western" camp at the end of the Second World War; it was this international situation that for a few decades guaranteed a relative control in the advanced capitalist system. They are shifting the balance of power in the world; and we will continue to deal with this, to avoid among other things the misunderstanding that arises from the (correct) indication of a relative decline of the USA, which does not mean, however, an unstoppable and by now determined process. (far from it!). The economic crisis in Italy is not due either to "bad" financiers (internal and international) or to the Public Debt. It too is mainly political. And not because Germany wants to dominate us as politicians and journalists try to make us believe, some of whom don't want to deny the political nature of the crisis but try all the same to turn our attention away from the effective subordination imposed on us by the USA ( in particular today, under Obama).
We must start again from this understanding ; and attempting to counter the lies that are told about the heavy 1970's, the beginning of the era that was by far the worst of all in the story of Italy, of which the hundred and fiftieth anniversary of Unity was hypocritically celebrated last year; and with the very man at the helm who was the best "friend" that the United States have ever had in this country. (15th August 2012)
*Italian writer. Author of, among other books, "Capitalism Today" and "Oltre l'orizzonte" ("Beyond the horizon"), 2011 . Professor of Economics at the University of Pisa and Venice until 1996.
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