Italy at the crossroads - government crises and political corruption linger as voters face important elections March 27, 1994

National Review, April 4, 1994 by Radek Sikorski

THE BEAUTY and splendor of the modern city may be ascribed to the abuses of the government, to the influence of superstition," wrote Edward Gibbon in a postscript to The Decline and Fall of the Roman Empire in 1787. He was comparing the Rome of his era to the ancient city, but not much has changed since then. At my hotel, the venerable Raphael, Bettino Craxi was holding court in the tea rooms, albeit to a diminishing crowd of ever-seedier followers: Craxi has been implicated in the vast bribery scandal which has unfolded here over the past two years, the scandal that has brought Italy's entire political class into disrepute.

Yet Rome looks prosperous, and the north of the country even more so. Why did rich, successful Italians put up with poor governments for so long? Curiously, Italian corruption turns out to have been a side-effect of the Cold War. Everyone knew that both the Christian Democrats and the Socialists-the dominant political forces in Italy since the Second World War-- were corrupt and incompetent, but they prevented the unthinkable: a victory of the Italian Communist Party. An extreme form of proportional representation, combined with a fear of Communism, kept the same corrupt government coalitions in power year in and year out. Italy's political dilemma since the war was once summed up by Indro Montanelli, the respected editor of the Milan daily/ Giornale: "Hold your nose and vote for the Christian Democrats."

It was not always a happy compromise. With the same people always in charge, political and economic crises were merely pretexts to borrow ever more money to finance the ever-growing state. Italy has run some of the highest deficits in the industrialized world and has accumulated one of the highest public debts. (Public spending still accounts for an incredible 57 per cent of GDP.) At the same time, tax evasion became a national sport. Nobody could pay all the two hundred taxes on the books, so everybody broke the law. As fewer people paid honestly, the state needed more arbitrary powers in order to squeeze any money out of citizens at all. The state became large, weak, and arbitrary at the same time. The fearsome Guardia di Finanza (Fiscal Police) could at any time arrest you for the nonpayment of your pet tax or your fur-coat tax. The fact that, despite its government, Italy became the fifth largest industrial power is surely the eighth wonder of the world.

All along, contrary to the stereotype, most patriotic Italians wanted to be well governed. Their chance came from an unexpected quarter. In January 1992, one Luca Magni, a 33-yearold proprietor of an 18-man cleaning company, won a contract to clean an old-people's home in Milan. When its manager, a Socialist Party nominee called Mario Chiesa, demanded the customary 10 per cent kickback, Magni paid a part, but then changed his mind and went to the police. He chanced upon an ambitious young prosecutor, Antonio di Pietro. Magni's subsequent meeting with Chiesa was bugged and, to ensure the largest political impact, broadcast live to every police car in Milan. When arrested, Chiesa pointed to others, who pointed to others, who pointed to others. Eventually, the whole postwar Italian establishment was brought down in dishonor. When the parliament dissolved to make way for the forthcoming elections-which are taking place under a reformed electoral law--half of its members, including several former prime ministers, were under investigation for corruption.

For many months it looked as if the only possible beneficiary of the old regime's collapse could be the renamed Communist Party, the PDS (Democratic Party of the Left). A visit to its Rome headquarters is something of a shock: a large bronze hammer-andsickle in the lobby brought me up sharply. (One wonders whether the media would be equally indulgent if the post-fascist MSI dared to sport a swastika.) The rest of the building-- the old filing cabinets, the murky corridors, the smoke-filled rooms--oozes the atmosphere of an old-fashioned trade-union headquarters. The PDS has adopted a studiously moderate stance. Its manifestoes, though still heavy with post-Marxist jargon, mention approvingly such bourgeois concepts as "privatization" and pledge to continue the caretaker government's deficit-cutting program. This blend of electoral promises and new-found pragmatism has served the party well in recent local elections. By the will of the people, the PDS's banner flutters over Rome's town hall on the Capitoline Hill, overlooking the Roman Forum. But the PDS is still a hostage of its past ideology and of its working-class electorate. Achille Occhetto, the party's leader, stated in a recent speech that the PDS is "proud" of its Communist roots. Its solution to Italy's economic ills is interventionist, statist, and Keynesian.

Its success in the elections on March 27 would have been assured had it not been for the dramatic entry into the electoral contest of the media magnate Silvio Berlusconi. After only two months' existence, the Freedom Alliance which his new party, Forza Italia (Let's go, Italy), has forged with the separatist Northern League and the post-fascist National Alliance commands about half of the votes, compared to the PDS alliance's share of about 34 per cent. For the first time Italians have the choice between two distinct programs. Forza Italia's, as expounded by its economic spokesman and possible future finance minister, Professor Antonio Martino (a biographer of Milton Friedman and a NATIONAL REVIEW subscriber), could not be clearer. Driving public spending permanently below 40 per cent of GDP, reducing the income tax to a standard rate of 30 per cent (the poor would get generous allowances), offering school and health-care vouchers, farming out taxes to the provinces-- the measures, if adopted, would go beyond Margaret Thatcher's British revolution.