Italy's hopelessness - voters' demand for political reforms

National Review, April 12, 1993 by Antonio Martino

Let's not indulge in understatements: if Italy manages to survive its present crisis, chances are that God is Italian. The present mess makes all previous ones look like minor disturbances. During a meeting in Liechtenstein a couple of years ago, George Urban asked me to say something about Italy's organized crime. I responded that I thought organized politics did far more damage than organized crime. George replied: "How can you tell them apart?" Little did we know.

In the past several months the media have dedicated most of their coverage to indictments for political kickbacks, bribery, and corruption. So far 112 out of the 945 Deputies and Senators have been charged with corruption, and three ministers have resigned in response to accusations. Many have been charged on more than one count--the treasurer of the DC (Christian Democrats) leading the group with 19 different indictments, followed by Bettino Craxi, the former Socialist prime minister, with 8 or 9 (it's hard to keep track). Nearly all political parties are involved, although to a very different extent: Socialists, Christian Democrats, and ex-Communists are accused of multi-million-dollar misappropriations and, in some cases, of outright fraud; whereas the leaders of the tiny Republican and Liberal parties are accused of minor violations involving small contributions. Nor are politicians the only targets of the indictment orgy: top managers of major corporations, both private (like FIAT's number-three manager) and public (like the CEO of ENI, the state energy giant) are currently in jail.

The public has reacted to the scandals with outrage. Never before in the history of a country that has always regarded politicians with casual contempt has the political class been so despised. A few weeks ago, when the then-minister of finance, who had not yet been charged with anything, was on a flight from Rome to Turin, the person seated next to him stood up and started shouting that he didn't want to sit next to a thief, and other passengers cheered wildly.

For someone like myself, who has always regarded politicians as a modem version of the bubonic plague, all this should be comforting. It isn't. The reasons for not rejoicing are twofold. First, the judiciary is openly abusing its powers in order to conduct what it considers a just crusade against the "political system." Its methods are unacceptable. People are kept in jail for months with no valid evidence of guilt in order to extort a confession. Usually the accused learn from newspapers that they are under investigation long before charges are formally brought. And, given the unbelievable sluggishness of our judiciary procedures, it may take ten or twenty years for the innocent to be acquitted--too late for restoring their honor. Wholesale lynching is too high a price to pay for a political cleanup.

In addition, the widespread disaffection of the electorate is making the country even less governable than usual. In the next few years, barring a miracle, we'll look back with nostalgia at the good old days when chaos was bearable, if not outright agreeable.

This leads me to the second issue. The reaction of Italian public opinion confirms the late Harry G. Johnson's remark: "society wastes much effort-- and considerable moral indignation-- in attacking the symptoms rather than the causes of its macroeconomic diseases." A large majority of Italians of all parties are convinced that the country's problems are owing to partitocrazia (rule by political parties) and can be fixed by a change in the electoral system, moving from proportional representation to a majoritarian, single-constituency system. Once again they fault the midwife for the baby. The abuse of politics is not a peculiarly Italian phenomenon; it exists under many different skies. No electoral system is immune from criticism nowadays--whether in England, in France, or in the United States. The reason for the criticism is painfully simple: people blame the electoral system for the excessive intrusion of politics into their lives. And indeed it is excessive: nothing can justify the government's taking more than 50 per cent of people's income. But the details of the electoral system are not what caused this usurpation.

Corruption, too, in its present forms, results from the size of the public sector. Nobody would be so foolish as to spend $1,000 of his own money in order to get a bribe of $100. One can have corruption of this sort only if the person who pays the $1,000 is different from the one who pockets the $100, and is not aware that the only purpose of the $1,000 disbursement is to allow the other person to get the $100. These circumstances are highly unlikely among private contractors; they can only exist where government is involved.

Hypnotized by the scandals and by the discussions of electoral reforms, Italians do not seem to notice that their country is going bankrupt. The annual deficit exceeds the sum of the deficits of the other 11 EC countries, amounting to 10.6 per cent of GDP. Total public debt outstanding has reached the impressive figure of 1,600,000,000,000,000 lire ($1,600 trillion)-106 per cent of GDP or two and a half times the foreign debt of all Latin American countries taken together. Taxation is skyrocketing: Italy is second only to France in the G7 group of industrialized countries in terms of tax revenue as a percentage of GDP. The present government (if you forgive the exaggeration) has introduced 17 new taxes in 5 months. In 1960 total public-sector revenue amounted to 31 per cent of GDP; in 1980 34.6 per cent; in 1991 45 per cent. Should the economy in fact enter a recession in 1993, as some expect, it will be a bloody mess. A sharp reduction in savings, while the deficit remains unchanged or even grows, would push real interest rates up further, thereby contributing an additional recessionary impulse. Though I doubt that this is going to happen (the sharp devaluation of the lira is producing an exported recovery), the financial problem remains acute.