{"id":67466,"date":"2019-06-18T14:12:11","date_gmt":"2019-06-18T14:12:11","guid":{"rendered":"https:\/\/www.fondazionepirelli.org\/?p=67466"},"modified":"2019-08-30T14:31:40","modified_gmt":"2019-08-30T14:31:40","slug":"a-producers-pact-and-a-serious-rereading-of-keynes-against-the-governments-public-welfare-spending","status":"publish","type":"post","link":"https:\/\/www.fondazionepirelli.org\/en\/corporate-culture\/blog\/a-producers-pact-and-a-serious-rereading-of-keynes-against-the-governments-public-welfare-spending\/","title":{"rendered":"A producers\u2019 pact and a serious rereading of Keynes against the government\u2019s public welfare spending"},"content":{"rendered":"

A producers\u2019 pact for the competitiveness of companies and work, against the government\u2019s public spending, basic income, early pensions at \u201cquota 100\u201d, amnesties, perverse fantasies about dangerous anti-euro \u201cmini-BOTs\u201d and promises of general tax cuts. On the eve of a summer full of social tensions and difficult political games, starting with those with the EU, those who work daily to build wealth and well-being for the whole country express ever deeper unease at political decisions that reward a culture of welfare rather than production and work<\/strong>.<\/p>\n

The picture of contemporary Italy sees squares full of striking metal workers (joint Fiom Cgil, Fim Cisl and Uilm demonstrations, the likes of which have not been seen since 2011) against the absence of government industrial policies. Meetings of entrepreneurs, from Milan to Treviso, from Bologna to Naples, from Pavia to Venice, agitated by very clear demands: clear choices from government and parliament to restart investments, support innovation and export, and favour job creation<\/strong>, especially for new generations. The sharp judgement of the young Confindustria<\/strong> entrepreneurs, gathered at their annual conference in Rapallo: \u201cPatience has run out,\u201d to use the rough words of their president, Alessio Rossi<\/strong>.<\/p>\n

There are the producers<\/strong>, the entrepreneurs who still invest, innovate and export, believing in the qualities of the country, despite everything (as the Istat data on relocation proves: 700 companies left Italy between 2015 and 2017, just 3.3% of mid-sized and large companies, compared to 13.4% between 2001 and 2006), enabling Italy to sustain ever-difficult international competition. Then there are the workers<\/strong>, who prove to have a great sense of responsibility, sincere attachment to their activities and commitment to change a state of stagnation and of crisis.<\/p>\n

They are the cornerstones of a \u201csocial pact\u201d that links manufacturing, science, culture and the ability to \u201cdo and do well\u201d<\/strong>. This deserves the attention of a government that is seriously interested in Italy\u2019s destiny and not the demagogy of the \u201cpeople\u201d, to populism that conceals strange ideas of conflict with Europe and of \u201cunhappy decline\u201d. Vincenzo Boccia<\/strong>, president of Confindustria, argues: \u201cIf you want to create jobs, you need to reduce taxes and contributions on wages, introduce a tax reduction and a deduction on productivity bonuses, agree a great inclusion plan for young people,\u201d starting \u201cwith manufacturing.\u201d Annamaria Furlan<\/strong>, general secretary of the Cisl, agrees: \u201cInvolving companies and trade unions in a social pact for a new development model that aims to reduce the tax wedge and raise wages, encourage investments, introduce economic democracy in Italy with equity stakes for employees.\u201d For her too, this is underpinned by \u201cthe excellence and quality of the manufacturing system\u201d.<\/p>\n

The basic idea: taxation that\u2019s favourable to income and development<\/strong>. Carlo Bonomi<\/strong>, president of Assolombarda, summarises it well: \u201cBefore the flat tax, we have other structural problems that have been unresolved for twenty years. One of these is productivity, which I don\u2019t believe can be improved by talking about flat tax. If we want to put more money in people\u2019s pockets, we cut the tax wedge to benefit workers. I\u2019m not asking anything for business, there are resources. Let\u2019s take the \u20ac80 Renzi bonus, what\u2019s left over from the quota 100 and basic income and put everything towards a tax wedge cut which only benefits employees. More money in more people\u2019s pockets.\u201d<\/p>\n

Business associations and trade unions are worried: Italy\u2019s economy is still not growing in 2019 (more or less zero growth, a fraction up, a fraction down) and industrial production is down (-0.7% on an annual basis), with alarming slowdowns in the key automotive and chemistry sectors. Investments have also slowed, due to the lack of business confidence in the Italian political situation<\/strong>, the disputes between the government and the EU (we are an exporting country and our most dynamic and competitive companies are strongly connected with the great European \u201cvalue chains\u201d) and around international trade tensions aggravated by the reckless policies of the sovereignists (from Trump to Putin, to the Italian leaders). In short, \u201cRed Alert\u201d for the economy, to use an effective title from Il Sole24Ore <\/em>(15 June).<\/p>\n

And the government? It hazards a vague \u201cgrowth decree\u201d<\/strong>, with a cut in the tax wedge but only from 2023, announces flat tax, insists on \u201cmini-BOTs\u201d (which are \u201cuseless or dangerous\u201d for 6 out of 10 Italians, according to Ipsos research published by the Corriere della Sera <\/em>on 15 June) and promises a minimum wage of 9 euros per hour for all workers (with an increase in costs for companies, which Istat has already quantified as 4.3 billion euros). Disorderly ideas, tools to \u201cbuy consensus\u201d for a short time, a long way from a far-sighted development policy. The \u201cproducers\u201d have good reason to protest.<\/p>\n

Meanwhile, public debt continues to increase<\/strong>: in April, it was 14.8 billion more than in March, reaching a total of 2,373.3 billion, well over 130% of GDP. Consob Chairman, Paolo Savona<\/strong>, ventures to forecast that a public debt of 200% of GDP is sustainable. Producers\u2019 concerns are growing.<\/p>\n

In these conditions, it\u2019s worth rereading John Maynard Keynes, the most original and innovative economist of the twentieth century<\/strong>, concerning these very issues of public debt, competitiveness and economic policies for development. This can be done by taking advantage of the republication of his texts, starting with the \u201cGeneral Theory of Employment, Interest and Money\u201d<\/strong>, in Mondadori\u2019s prestigious Meridiani series, edited by Giorgio La Malfa, with collaboration from Giovanni Farese. \u201cDo sovereignists want to fix the economy? First let\u2019s reread a bit of Keynes,\u201d was La Stampa<\/em>\u2019s effective headline for a good review by Domenico Siniscalco (1 June).<\/p>\n

Neither protectionism nor free market paradigms, but a responsible synergy between the state and the market. At the heart of Keynes\u2019s theories<\/strong>, there are the ideas on \u201cincome policies\u201d (a positive circuit of productivity, wages and corporate profits) and on the role of economic policy and public interventions, to achieve goals that the market can\u2019t independently: work, well-being, safety. For Keynes, it\u2019s not a question of overburdening the state with debts or indulging in welfare policies (as certain superficial and instrumental readings have affirmed in recent years), but of balancing budgets and stimulating investments that increase demand and employment. To borrow a succinct summary from Pierluigi Ciocca<\/strong>, former director of the Bank of Italy\u2019s Research Department (Il Sole24Ore<\/em>, 14 April): \u201cAiming to balance the public budget, with less waste, consumption, transfers, tax evasion and more investments. This is the Keynesian way, to return to growth with the urgency imposed by the recession.\u201d<\/p>\n

It is a serious lesson, of good economic policy, without illusionism, magical thinking or demagogy. A lesson that is still valid today.<\/p>\n","protected":false},"excerpt":{"rendered":"

A producers\u2019 pact for the competitiveness of companies and work, against the government\u2019s public spending, basic income, early pensions at \u201cquota 100\u201d, amnesties, perverse fantasies about dangerous anti-euro \u201cmini-BOTs\u201d and promises of general tax cuts. On the eve of a summer full of social tensions and difficult political games, starting with those with the EU, […]<\/p>\n","protected":false},"author":1,"featured_media":67465,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55,56],"tags":[],"class_list":["post-67466","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-corporate-culture"],"acf":[],"yoast_head":"\nA producers\u2019 pact and a serious rereading of Keynes against the government\u2019s public welfare spending - Fondazione Pirelli<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fondazionepirelli.org\/en\/corporate-culture\/blog\/a-producers-pact-and-a-serious-rereading-of-keynes-against-the-governments-public-welfare-spending\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A producers\u2019 pact and a serious rereading of Keynes against the government\u2019s public welfare spending - Fondazione Pirelli\" \/>\n<meta property=\"og:description\" content=\"A producers\u2019 pact for the competitiveness of companies and work, against the government\u2019s public spending, basic income, early pensions at \u201cquota 100\u201d, amnesties, perverse fantasies about dangerous anti-euro \u201cmini-BOTs\u201d and promises of general tax cuts. 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