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Trust and lawfulness: keys to development

Trust. It’s a crucial part of both personal and professional relationships. Without trust, there can be no markets, even though good rules, controls and sanctions help markets to thrive and to grow. So we need mutual reliability and the proper authorities to enforce it and safeguard it.

One of the many festivals that drive Italy’s desire for knowledge, understanding and debate (not counting the mundane, formulaic debate of the all-too-many talk shows on TV) is the “Festival della Fiducia” (Festival of Trust). The brainchild of Alessandro De Lisi, this event is organised in mid-September in Como, Cernobbio and Brienno in city squares and abandoned factories by the anti-mafia group Centro Studi Sociali Contro Le Mafie, by the labour union CISL, and by a series of “civic sector” associations and with the support of businesses and of banks such as Banca Popolare Etica. The goal of the event is clear: To achieve a new cohesiveness between business, politics, banking and society, we need trust in the future, in business and in the territory; cooperation among the leaders of the community, optimism and intelligence.

In other words, optimism in the economy, in harmony with all of the brightest ideas in the economic and civic debate, from the words of Pope Francis to the thoughts of great economist such as Amartya Sen, Joseph Stiglitz and Jean-Paul Fitoussi (authors of a fascinating study into new indicators for measuring social wellbeing beyond just GDP) and of great Italian thinkers such as Federico Caffè and Edmondo Berselli (and the wealth of ideas in their wonderful books).

All of which makes the “Festival of Trust” an invaluable initiative, an event at which people from all realms of society – from businessmen and politicians to journalists, lawmakers, experts and all who drive the various social movements – can come together for open debate in a setting that is anything but formal. Lawfulness is another key (to come out of a careful assessment of the work of Assolombarda). Lawfulness in the broadest possible sense. Lawfulness as a frame around clear laws establishing both rights and duties and which avoid the excesses of laws and of bureaucracy that only serves to slow entrepreneurial dynamism (with business being key to creating stable jobs and wealth) and around an efficient, effective legal system (because it is essential for good businesspeople to be protected against fraud and other illegal or unfair practices, contracts and agreements). Lawfulness as a rejection of the organised crime that is ruining markets and polluting the economy through violence and intimidation (as can be seen in the reaction of businesses in Lombardy and the rest of northern Italy against the growth of crime in the area).

And so lawfulness as good culture of enterprise and as an essential condition for balanced, sustainable growth. Rules and clear relationships within a system of values that rewards merit and individual skill, social responsibility, respect for the environment and all of the various stakeholders, while not forgetting the legitimate interests and goals of the given business itself. A society such as this, a meeting point for government and the social partners, is possible. Helpful ideas in this direction can be found on the pages of Economie de la confiance, by Éloi Laurent, who writes, “Companies fraught with corruption, nepotism and tax fraud are not, as is too easily believed, companies with high levels of distrust. More often than not, they are communities in which the networks of interpersonal relationships take the place of trust in the authorities.”

And this is the point: Trust is an essential component of relationships and of the marketplace, but without the authorities (or policymakers in touch with the interests of the general public), there can be no control over the markets or strategy for reform, only individualist responses to the crisis in relations and in growth which cannot lead to stable change. In other words, high-quality growth takes trust, but trust alone is not enough. Lawfulness is also key.