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Competiotion as cooperation

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Pier Luigi Porta

 


Routes to recovery from the first major crisis of the third millennium.

Pier Luigi Porta

 

 

 

Economy as a theory of justice: distributive justice in the market economy.


Let us begin with a consideration of matters which concern Italy, but which also assume broader significance in an analysis of contemporary capitalism.
At the end of the year The Ministry of Labour and Social Welfare published the third Rapporto sulla Coesione Sociale (Report on Social Cohesion) (2012) which received considerable national press coverage. Together with the Annuario Statistico (Statistical Yearbook), which was published at around the same time by ISTAT (Italy's National Statistics Institute), the Report paints a realistic and worrying picture of the current situation, particularly in relation to poverty.
Indeed, the most negative fact concerns poverty and deprivation with their relative distributive aspects. It is evident that there is a "perceived" increase in their intensity which indicates widespread anxiety as well as the feeling that future prospects are few and far between. The Report shows how poverty continues to be most widespread in Southern Italy, especially among larger families, in particular those with three or more children who are still minors. The fact that poverty, low levels of education and poor professional profiles lead to exclusion from the labour market is also confirmed by this Report.
From a geographical point of view, poverty is more prevalent in urban areas with housing problems. Italy's Caritas also provides evidence of this in its latest 2012 Report on poverty and social exclusion. Italy's current welfare infrastructures are struggling to cope with this poverty explosion: the final part of the Caritas Report puts forward a series of proposals most of which are aimed at helping families who find themselves in serious difficulty.
SOUQ also makes its own contribution, in particular with its recent volume on the Sfide della felicità urbana (The challenges of urban happiness) which was published in mid December. This piece analyses (even on a global scale) the (wider-reaching) problems relating to different forms of hardship from various theoretical viewpoints. I would like to use the latter line of enquiry as an opportunity to reflect on the relational foundations of economic deprivation and on the conclusions which can be drawn from them.
Indeed, the problem of poverty is substantially a relational system problem. I feel that the significance of urban hardship would be a good starting point in the analysis of this matter. Marc Augé, an extremely renowned French anthropologist, claims that the urban dimension of hardship is assuming an increasingly universal dimension. This occurrence cannot simply be explained by the fact that the constant expansion of cities means that most of the world's population is now of an urban nature: it happens, above all, because "generalised urbanisation roughly corresponds to what we call globalisation to indicate the generalised spread of the market economy, economic and financial interdependence, the expansion of transportation networks and the development of electronic means of communication. It is what the author calls a "city-world".

In the field of economy the matters discussed here are at the centre of extremely heated debate, this is also the case in Italy, regarding the factors which are seen to be the cause of increasing inequality: whether or not it is, for instance, fuelled by globalisation. We are naturally dealing with debates which are of a similar nature throughout the world. Not more than ten years ago Robert Lucas, a Nobel Prize winner and renowned economist who has had an enormous influence on the prevailing trends of modern macroeconomics, claimed that: "Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion, the most poisonous, is to focus on questions of distribution....The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production"]. Claims like these have been prominent for quite some time and they have led many of my younger economist colleagues to indignantly abandon those poisonous temptresses which in the not too distant past had made important contributions regarding the very matter of distribution. . There came a time when, unexpectedly, and almost as if this was a major discovery, the idea that the theory of distribution may not even exist gained consensus: the only key aspect in the analysis of economic systems must be price formation. Once a "healthy" price formation system has been implemented the distribution problem (and with it naturally the entire "social question") is automatically resolved. Distribution variables, such as salaries and profits, are nothing if not prices. This observation together with others of this nature have served as the basis for an enormous shift from intellectual resources to the pure study of how competitive markets work. In this way we have toyed with the myth of the long awaited reconciliation between commutative justice and distributive justice which generations of troubled economists had tried in vain to achieve. Indeed in many cases (if we consider Ricardo and his great influence) they had described the distributive problem as being the real purpose of political economy. Naturally I do not mean to say that the study of how markets work is not something positive. It is purely a matter of measure and "balance": basically "balance", which in the economic world is constantly jeopardised by "shifts" brought about by political struggle, is required in the use of intellectual resources.

It is now easy to see that things have been rapidly changing over the last few years.
It is, in fact, simple to understand just how serious the crisis we are experiencing actually is. There is an increased awareness that economic theory has not only failed to analyse the mechanisms involved in today's crisis but is actually responsible for creating these very mechanisms. This problem principally concerns the macroeconomy and certainly applies to the financial crisis which started in the United States with the added difficulty in Europe of the problems relating to the development and management of the European Monetary System, perhaps the greatest "masterpiece" of recent macroeconomics.
Following the spread of the crisis, a great American macroeconomist, the Nobel prize winner Joseph Stiglitz made an important contribution to one of the most influential scientific journals- entitled Re-thinking Macroeconomics- with a simple and efficient definition of macroeconomic models: they are "blinkers". For instance, we are guilty of dwelling on the great moderation of the Washington consensus and suchlike which have mistakenly led macroeconomists and policymakers to believe that they have already acquired exhaustive knowledge of political economy management. The crisis has forced everyone to seriously question this assumption and to analyse the mistakes made in an attempt to rebuild and reorganise macroeconomic policy.

However, rebuilding remains difficult. This is naturally a political problem in the noble sense of the word, inside which the economic side is extremely apparent: there are many aspects at play and their specific nature must be adequately examined without forgetting that it would be unrealistic to think that we can rely on miraculous technical solutions. The crisis is also, in the West and elsewhere, a crisis relating to our political systems and democracies. The way in which our systems deal with it will naturally depend on a host of different factors. At this point I do not intend to extend the matter to a political level, tout court or to the political situation as a whole. It will suffice to ensure in advance that, even when I prepare to focus on the economic element or rather political economics, I do not lose sight of the fact that it is generally admitted that this is a central element for politics. In order to better define the topic of this paper we will now put monetary policy to one side and focus our attention on fiscal policy.

In the current climate the difficulty with political economics stems from the fact that on a global level the phenomenon of increased inequality can no longer be ignored. Whilst economic convergence among countries seems to suggest that catching up predominates, the opposite is true when we look at what is happening within individual countries where we witness increasing inequality within the very systems which are undergoing the most rapid growth. It is this latter type of inequality which manifests itself in the most visible manner.
The traditional right-wing political standpoint highlights the positive aspect of inequality which it sees both as a source of gain and as something which encourages all economic agents to compete in order to improve their situation. It is however apparent that this line of reasoning is only true to a certain extent, beyond which the tables are turned and the degree of inequality becomes a source of insecurity and hinders the good use of resources. When the matter is approached from a left-wing standpoint, the typical reaction is to tax the rich and increase social expenditure. However, here too, it is apparent that a political approach of this nature has certain limitations such as discouraging people from working and encouraging them to live off unearned income. These are the (unwanted) consequences of a hypertrophic welfare and social security system. What is more, the State currently manages much more than half of income streams in economic systems and this makes it unacceptable to focus exclusively on increasing public expenditure.
Thus in Italy, for instance, right-wing commentators are the ones who not only put forward a more competitive climate but also propose the progressive dismantling (the more, the better) of the welfare system. The main reason why the current welfare system is deemed harmful is because it is characterised by a multitude of erga omnes disbursements. This (it is said) equates to the senseless transferral of resources for the benefit of high-earners and subsequently making them pay for this privilege through progressive tax. It would, however, be more reasonable to reduce tax progressivity, perhaps even doing away with it altogether, and to ask those who have the means to do so to pay for welfare services. In an ideal system, in which this policy proved successful, all earnings would increase probably so much so that everyone or almost everyone would be able to pay. The social State would in the end have a limited raison d'etre. This would allow us to go in the "healthy" direction of less State and more market and it would also act as an incentive for enterprise and work. The left wing, on the other hand, insists on taxing the rich, as a sort of social justice programme which "punishes" the wealthy categories and "rewards" the poor by using this revenue to redistribute wealth.
We are in fact dealing with problems and measures which have already been debated and implemented at length in Western capitalism. Since the end of the 19th century marginalist economists have dismissed the classic labour theory of value which Marx had transformed into a theory for the exploitation and demise of the capitalist system. However, the renewed enthusiasm for the success of the system was soon to be redimensioned by the harsh reality of trade wars and increased distributive inequality. Consequently, the political economy in the 20th century focused on market failure and devised solutions ranging from market regulation to the development of social protection networks. What is more, it was actually marginalist economy, and not socialism, which promoted the principle of progressive tax as a justice tool, a principle which is still today embraced by our Constitution.
There is currently debate and disagreement regarding the way out of the difficult situations which seem to limit the chances that both right and left-wing strategies have of being successful. This gives rise to what is called True Progressivism. Last October The Economist newspaper dedicated its front cover and a substantial feature to this matter. If we focus our attention on Italy, from the very beginning of 2013 the so-called Monti Agenda was devised and it boasted this very approach claiming to carry out a pioneering experiment in front of the entire world: indeed "real" progressivism is neither left-wing nor right-wing. In terms of its structural features, "real" progressivism claims that it does not necessarily intend to make the State smaller, but rather to attempt make it more efficient; it does not oppose the social state, but attempts to better and more incisively direct its activity by entering into the merits of specific social needs. It accepts the safeguarding of work and, at the same time, aims at market flexibilisation in general (more competition in order to defend the consumer) and in particular at labour market flexibilisation. In the current economic climate this approach overturns Keyensian solutions, without however becoming entrenched in rigid monetary standpoints. For instance, it is claimed that provisions of a restrictive nature (such as limiting public expenditure or increasing the tax burden) are actually much more likely to produce expansionary effects than provisions which are conventionally considered to be expansionary.
True Progressivism is, substantially, the practical implementation (undoubtedly slightly presumptuous) of what is theoretically known as Political Economics: a practical implementation which feels sure it can become the natural heir of the trust which is currently lacking in our traditional political (and even economical) systems. In this sense, it has been claimed that we are dealing with a sort of "depoliticised) democracy" This can easily be traced back to a rather robust analytical undercurrent which gained support in the wake of the typical expectations of the sixties which were often associated in economic terms with the so-called Cambridge School. It must, however, be said from the very outset that this association is only in part justifiable as the Cambridge School-heir to great economists amongst whom Keynes- has different sub groups within it which must be carefully distinguished (recently this has been demonstrated by Luigi Pasinetti). Indeed open forms of "positive heuristics" must be set apart from elements to be avoided, that is "negative heuristics": in this instance the use of Lakatosian terms seems appropriate.
Looking back at Italy at the end of 2012, in keeping with what we have just said, the Prime Minister Mario Monti assumed, over a significant period of time, the semblances of Bishop Vergérus in Bergman's famous (recently restored) film Fanny and Alexander. The Bishop systematically whips young Alexander in order to punish him for some unknown guilt and between one whipping and the next he stops to commend the boy's maturity: "I can see that you are intelligent and that you understand that I am only doing this for your own good". In the film Vergérus neither succeeds nor earns the affections of the boy: this is the real difference with Monti whose political experiment has become interesting for this very reason. It shows that restrictive lashings are understood (maybe even loved!) by people: they serve to create a sense of justice and social order and, as such, lay the foundations for "real" growth. The experiment sparked positive expectations and also seemed promising. I would perhaps add that: this is happening in a country like ours, where the Protests of 1968 spanned across twenty years and brought about increasing and disastrous political fragmentation, the fruit of a culture (in particular-but not only-left wing) with "critical" pretensions, but in reality lacking in constructive sense and riddled with an insuperable diffidence of the market economy. Since then the Italian system has no longer been able find credible common points. In this way a determined Vergèrus has proved to be convincing and has been somewhat successful in breaking the vicious cycle (although at a high price) that Italian politics has been caught up in.

However, naturally - outwith the particular current situation of crisis - this studied combination of tools and ingredients, which is based on a carefully devised set of technicalities, cannot lead to solutions. The Monti Agenda has been fondly described as a "Soulless Beauty" It is pointless to deny that it has attractive qualities: but there is something missing and it is at the heart of the matter. What is in fact now needed is a renewed conception of the market which is capable of coping with the multitude of tasks that are expected of it. Besides this, we must also consider that we are part of a system which imposes forms of close proximity such as economic agents. This, in turn, brings about an increase in the weight and importance of public goods. Michael Sandel, the author of a popular text called Justice, which re-analyses the concept of the public good and discusses a number of examples of those which cannot be purchased, What money can't buy. This gives rise to a view, based on the market, but on a "classic" view of the market which is at the centre of contemporary civil economy.

 

The economy in pursuit of public happiness in the age of public goods


The point or area which I would now like to focus on is the relational and anthropological foundations of the economy and the market. It is here that we find the root of problems which need to be tackled in order to carry out a realistic analysis of the inherent tensions in the modern day capitalist society. These involve the meaning and effects of economic growth, social and economic inequality, invasive forms of virtual reality, dissatisfaction with human relations, work and entrepreneurship and the world of relations surrounding them.

So just how is the market economy formed? Why is it formed? According to a well studied and elaborate concept, it is founded on the need to overcome the limitations which characterise a community. This requirement is fuelled by the need to generalise economic relations and therefore depersonalise them. Community life is in itself based on incidences of exclusion even though the historic development of societies makes cases of inclusion unavoidable.
In advanced economies the market is somewhat predictable and has become an almost mechanical fact.. This makes it difficult for us to see it as a process of inclusion . A similar reflection perhaps comes more naturally if we think of the formation of a modern State. Generally speaking, the process which forms a modern State is not only depicted as the generally accepted view of one collective entity obtaining the monopoly of power and authority (that is the State), but also as a process of separation between political and religious authorities, or rather (it is often said) as a process involving the secularisation or laicisation of society, a specific form of an underlying process of inclusion. More specifically modern democracy, as an archetype of the modern State, needs every citizen to be absolutely convinced about the having to accept the decisions made by the majority even when he/she is not of the same opinion.
It is nevertheless increasingly apparent (especially when democracies are experiencing times of crisis) that the particular synthesis which a democracy represents, when compared with those opposed to the autonomy of the individual, on the one hand, and social order on the other, actually leaves the problem of the ethos of democracy completely open. That is to say, a core of founding principles upon which the system can be based and justified. Every historic form of State and also democratic State (claimed the great legal philosopher Böckenförde), has its own ethos - that is, a core of founding principles - which it is based on. It is here that we find the frequently mentioned paradox through which the modern State (and the democratic State as an advanced form of the modern State) is unable to guarantee the premises it is based on. Each and every instance of ethical pluralism is actually based on the assumption of the acceptance of a core of contents without which it loses its foundation and justification. There is, basically, a sort of internal force which sustains the growth of an inclusive process; in addition to this there is also a limitation which can never be removed from the process itself.
Luigino Bruni, in a practical little book entitled The Ethos of the Market, calls the "internal force" we are referring to immunitas, a sort of "escape route", distinguishing it from what he describes as the tragic fragility of the communitas.
Processes of this nature have indeed taken place in the past especially, and above all, in the field of economic relations. It is perhaps for this reason that we tend to think less about them. We are however dealing with transformations of a rather general nature, which reach far beyond the field of economics, as the founding principle of modernity itself originates from them. The opportunity to trade with foreign citizens, and therefore the birth of the market economy, was made possible through contract law and has long since been the result of a gradual evolution. Indeed, modern society uses contracts, which put contracting parties on an equal footing and prevent processes of exclusion, to create "artificial" equality among people who no longer identify with each other through reciprocal status (hierarchies), but also through goods which are no longer given but traded.
This view is also shared by Niklas Luhmann who believes that "the legal system (and in particular contract law) serves as society's immune system." It is here that a problem similar to the above-mentioned one originates in the political sphere. How far can the depersonalisation method go towards detaching the concept of exchange from specific contexts? Is a total immunisation to interpersonal relations justifiable, sustainable or even thinkable? Anthropological economists such as Marcel Mauss, Alain Caillé or Karl Polanyi have made significant contributions to the study of these types of transitions. In the meanwhile, a significant branch of study into reciprocal economy and interpersonal relations is emerging on an international level.
It is thus now clear that the search for the foundations of the market economy gives rise to an anthropological dimension. Modernity, in theory, does not deny this although in the past it has refined research along these lines and then, almost paradoxically, concluded by denying its legitimacy. We are dealing with a process which needs to be explained in order to dissipate the contradictory aura which (actually only apparently) pervades it. It is indeed a rather well-known fact that today's political economy has done its best to remove the anthropological aspect of ethos which was considered not only to be dangerously misleading but also as a source of extrascientific digression when the epistemological context assumed a heavily positivist position. The move towards pure abstraction was initiated by focusing on the idealisation (which still has a rather humorous side to it if we consider its latinisation) of the homo oeconomicus, a rather hideous albeit admittedly virtual being.
As a matter of fact, the theme of munus (both an obligation and a gift) was already dealt with by Aristotle (384-322 B. C.), in the introduction to the concept of commutative justice in the fifth book of Nicomachean Ethics. It is seen as an element which is at the root of human relations and more specifically at the root of a vast array of those relations which we nowadays define as "economic" (whilst at that time they were actually only considered in terms of "ethics"). It reveals the ambiguity of munus (which is the root of different terms such as com-munitas or im-munitas) within the concept of a close relation between ethics and economy.

A realistic system for the historicisation of modern political economy could by defined in the following three phases. The first phase is characterised by an in-depth study, from medieval times to modern ones, into the anthropological dimension which is centred on the discussion of ethos. This is followed by a second phase, between the 18 and 19 hundreds, which represents a period in which political economy almost completely isolates itself from the matter at hand. The third and final stage, which brings us up to the present day, represents the current revival of the discipline's openness to ethics with the addition of the abundant blossoming of contributions and above all with an ample vocation for transdisciplinary contamination. Within this framework the experience of the Neapolitan tradition of civil economy in the 18th century which traditionally constitutes the basis for Adam Smith's teaching assumes particular meaning and importance. Adam Smith builds all of his economy on the anthropological foundation based on which man is not yet the rational animal which neo-Aristolelian Scholastic philosophy spoke about: on the contrary, the individual who represents the human race is, first and foremost, someone who is capable of empathising, or rather someone who is capable of putting himself in another's shoes and this characteristic distinguishes mankind from other species of animals. According to Smith, without this basis we would not be able to understand one of the main aspects of human society, that is the beginning and development of exchange processes. It is indeed here, in Smith's eyes, that we find the ethos of the market.
Nevertheless, there is no doubt that Smith neglects to highlight certain forms of sociality, especially in The Wealth of nations. The ones omitted are those which are so characteristic of the Neapolitan school and are expressed in terms of goodwill, fraternity, public faith together with all those elements which use the market and exchange as a tool of mutual assistance which can lead to reciprocity, altruism, we-rationality and suchlike. It is, however, easy to somewhat underestimate the potential for sociality which permeates Smith's work. It is worth mentioning that this work runs parallel to the work Genovesi began on the civil economy. Indeed, it is important to point out that Smith's invisible hand does not hold water without empathy and fellow-feeling.

The "anthropological and relational foundations" of the economy and the market are of extreme importance. But what use is this attention to ethos, to use a macroeconomic term, when the real problems lie with defending consumer interests against "industrial" lobbies who are broadly speaking, privileged agitators? If we are to promote the market in a courageous and decisive manner without paying too much attention to vested interests, then strong measures must be taken. This (we have attempted to conclude) is the only ethos which counts.
This is the commendable but insufficient thinking behind "real" progressivism. It is indeed, important to thwart that sort of illusion. Let us take our experience as Europeans as an example. It is a well-known fact that the Treaty of Lisbon, which recently came into force, is based on the concept of the "social market economy". This was devised and discussed in the post-war period by the Freiburg School, more precisely Walter Eucken's Soziale Marktwirtschaft, and contains suggestions and recommendations for a more efficient Europe, a Europe of rights, values, freedom, solidarity and safety with a whole range of implementation tools and objectives. Many of these recommendations were reaffirmed and further examined in May 2012 in the so-called Monty Report on the single market. This document is also deemed to be of great importance for its strategic analysis of the scope and role of European integration as a whole. If, however, these efficiency perspectives were (for instance) to lead us, in the commercial distribution sector, to support the entry of distribution giants in Europe, the enormous malls which flank America's highways, then I believe it would be incredibly difficult to consider these efficiency gains as authentic examples of progress capable of deploying their effects whilst respecting the civil climate, territory and human geography of the places interested. We also have to consider the need for an adequate conception of the use of public goods, in this case territory.
Recently the discerning factor has been that of the relational context in which the processes we have defined as ones of immunisation are to be found. This must be mentioned, not to diminish or outright deny the validity of these processes but, more precisely to define their effect. Contracts, laws etc., are only abstractions until they are contextualised. In a more general sense, we must not forget that by constantly setting down absolute norms "the society of rights" we live in (that is what it has been called) has segregated vast sections of society actually putting them at the service of a series of "representative individuals", with a conception and procedure which is often a far cry away from meeting people's real relational needs. Among the features of this society, for instance, there is the widespread conception which views childhood, illness and old age simply as costs and burdens for society and considers family life to be nothing more than a limitation of an individual's potential. Robert butler, a well known American psychologist who recently passed away, effectively defined the condition of human and existential inferiority among the elderly in a rapidly ageing society in his book Why Survive?. A shrewd psychopedagogy has for some time, on the other hand, spoken out against and highlighted the negative repercussions of the problem of a lost childhood. It is by no means pointless or harmful to place emphasis on children's rights. However, it is important not to allow them to be transformed into easy markers of progress going so far as to make them the subject of precocious and pervasive immunisation. What is really needed is a different type of relationality based on the cultivation of values such as respect and understanding which many (especially sociologists and economists) cannot even contemplate let alone express. This very fact can be explained by an exasperated culture of immunisation.

 

Challenges to the rationality of self-interest.


Another way of approaching the problem of the principles of economic behaviour is to ask ourselves if the contrast between State and market still makes sense. Indeed, the consideration of economy, happiness and interpersonal relations is actually aimed at dealing with this age-old dilemma.
This problem is immediately brought to the fore if we consider the innate relationship (although it has long been underestimated) between economy and ethics. The Scholastic conception of economics and politics pivots on the concept of the public good and public goods. Salvatore Settis, Paolo Pileri and Elena Granata can be distinguished from other authors for recently having placed huge emphasis on the theme of the public good and public goods. They have taken territorial and cultural problems as a starting point and traced them back to their intellectual roots which are to be found in Scholastic philosophy. At this point it is important to note that we are dealing with an approach which by no means peters out in Medieval times. On the contrary, its fruitful legacy can be found in the conceptions of civil life spanning from Humanism to the Enlightenment to the present day.
From this standpoint Adam Smith is interesting. To this day, the liberal capitalist depiction of the economy represented by his invisible hand is the fruit of a complete and arbitrary obliteration of the author's moral philosophy. In homage to this positivist vision, namely the separation of science from ethics, Smith's moral philosophy has long been considered as nothing more than a youthful mistake. Indeed, it was believed that through time he would have seen the error of his ways and that he would subsequently have turned his focus to a scientific discipline. It must now be said that, from a historical and intellectual point of view, namely the history of ideas, this liberal capitalist interpretation of Smith is today considered to be completely outdated. This, however, does not take away from the fact that it took root for two long centuries and its consequences have not yet been completely dissipated.
To mention just one of many examples of this in Italy, the 1776 Wealth of Nations in which Smith found his maturity was promptly translated into Italian at the time and subsequently published in numerous editions. On the other hand, Smith's moral philosophy, which is summed up in The Theory of moral sentiments in 1759 (a work which was published in several editions while the author was living and which Smith worked on until he died) was only fully translated in very recent years.
It was two centuries before Smith's work could be adequately understood and this is the product of a mammoth "historiographical revision" which has been carried out over the last 30 to 40 years. The main result of this recently conducted "historioghraphical revision" (as it has been called) of Smith's works certainly leads to a better understanding of his conception of value, competitiveness and the market. In particular, the market is analysed in the light of "moral sentiments" which encourage exchange and are mediated through the founding principle of morality in Smith: it resides in sympathy, that is in the ability, which is unique mankind, to put oneself in another's shoes.
In this way the market is studied and considered as the main form of mutual assistance that human societies know: and it is from here that the principle of the division of labour assumes its importance with Smith. The more advanced mankind (unlike other species of animal) is the less self-sufficient its members are and, consequently, they can only live by way of reciprocal "assistance". Therefore, the market is by no means characterised by struggle: it is, first and foremost, characterised by cooperation. In the same way. it is apparent that a fruitful relationship is now blossoming between the fields of economy and ethics. This was inherited from the so-called civil economy which in turn had its origins in the Italian Enlightenment- a relationship which is no longer limited to a mechanical deterministic vision of self-interested behaviour, on the one hand (today the most widespread) and the demon of the totalitarian, Leviathan state which engulfs the entire economy, on the other hand.

In recent years the challenge to the economic paradigm of acting out of pure self-interest has been enhanced and further examined, and the very concept of economic rationality has been subjected to increasingly binding and accurate criticism and revision. On the one hand, this has occurred with the development of the so-called economic cognitivism and experimental economy and, on the other hand, with a vast system of processes which are associated with the theory of social choice. A whole series of contributions stem from these different branches of study. For the most part, they rediscover authentically interdisciplinary relations between economy, psychology and evolutionary biology on the one hand, and economy and philosophy, more precisely, economy and ethics, on the other hand. We are dealing with rapidly changing fields of study which are difficult for us to outline here in a satisfactory manner.
In current debate happiness and freedom are appropriate key terms which efficiently represent two fundamental opposing concepts. In recent studies happiness and freedom, which have been completely overlooked by the approach associated with the paradigm of scientific neutrality, are viewed as the cornerstones of cognitive economy on the one hand, and of the theory of social choice on the other. Today these two orientations are not only competing at the frontier of contemporary political economy but they also constitute the most important means of bringing the plurality which drives mankind's behaviour back into economy, thus overcoming the exclusive vision of self-interest. We could say that Daniel Kahneman, on the one hand, and Amartya Sen, on the other - two well-known authors- are currently the forerunners of the two standpoints which the future of political economy may depend on. This is especially true in terms of their ability to express a plausible and sustainable interpretation of some of today's most pertinent economic problems.
The work of one of the key players of the "Cambridge School" of economic thought runs parallel to this and Luigi Pasinetti is one of his most important heirs. In particular, Pasinetti's conception of economic dynamics is a scientific construction which is based on a specific analysis of macroeconomic compatibilities together with an important "separation theorem" which separates institutions from the "natural system" Pasinetti's conception opens political economy-built both on a theoretical system which was at the same time classical and Keynesien - to the study of society and institutions.

Modern civil economy (given that name by Genovesi) is therefore based on a conception which, although centred around the competitive market, sees this essentially as a process of continual discovery and of mutual assistance between the participants and the process itself, rather than the ultimate aim or balance of a system. This concept has important ramifications, for instance, when it comes to the concept of work. It places much more emphasis on creativity and the ability to plan (that is production) than on hard work and physical exertion or disutility in the economic sense of the word. Work entails acting and not just doing. Collective aims and the production of public goods are also part of the planning process. In wider terms, civil competition is seen as being non-profit, not in the sense that there is no economic profit, but rather in the sense that the profit is the necessary by-product of working well. Whereas the for-profit concept (if we can call it that) sees every economic activity as being instrumental in profit making. In civil economy the production of a good or service (whether it be private or public, from transport, to school, to healthcare and so on) is primarily made or provided in order develop the intrinsic purpose of the service in the best possible way. As well as reintroducing the dimension of the public good into the economy, this system also provides suggestions aimed at contrasting the growing financialisation of the economy and the marked drift of the system towards what has been called irresponsible enterprise
It is here that clarifications of terminology often prove necessary. This is because many expressions, including some important ones, become more and more distorted through use. Perhaps computers or the shortcomings of schools or families are to be blamed: it is difficult to say. Thus non-profit becomes no-profit, almost as if it referred to the refusal of profit, whilst the original term implies quite the opposite, that is to say the presence of profit; the term social market economy is now difficult to use when communicating with the public at large as in one of his television appearances Berlusconi used it with a self-congratulatory connotation which completely distorted its meaning. A concept which I have not used here but which is very closely related to cooperation, that is corporatism, remains notoriously difficult to use because it is still, to this day, distorted and tarnished by the meaning it assumed during the Fascist era.

Final considerations.


In Berlin the wall opposite the entrance to the Humboldt Universität still bears Feuerbach's most famous theory regarding Karl Marx.
.Die Philosophen haben die Welt nur verschieden interpretiert, es kommt aber darauf an, sie zu verändern
(philosophers have only interpreted the world: the point is to change it)
In substance, Arthur Kleinman, touches once more on this subject during his marvellous, thorough and stimulating lesson on social suffering in Milan which appeared in a recent volume of SOUQ-Saggiatore Sfide della felicità urbana (The challenges of urban happiness) mentioned at the beginning of this article. "We must participate in the world,- writes Kleinman- not just to illuminate the problems, but to guide toward solutions. That is the direction in which our world is going, and it is where the university is going, and I believe that the theories I outlined above are the kinds of ideas that can help us in making an impact on real world problems. So how can we implement the theories we have mentioned?". At this stage of our discussion we must attempt to answer this very question.
I feel that in the final part of his lesson, when referring to the problem of care, Kleinman expressed his conclusion in an extremely efficient manner. Thus, at this juncture, one of the reasons why we really must draw on his ideas once again is because civil economy is none other than a caregiving approach. The aim of this concept is not to share what remains amongst ourselves but rather to work towards the creation of a world which does not yet exist, but which is part of our hopes and expectations. After all, the conception of the explanations offered by civil economy are not dissimilar to what we find in one of the best examples of economy of the twentieth century. What I am referring to here is the business theory championed some one hundred years ago by Joseph Schumpeter which pivoted on planning ability, creativity and risk.
Kleinman goes on to say that "Anthropologists, as well as psychologists, sociologists, psychiatrists, physicians, public health experts, lawyers, engineers, have a moral responsibility to go beyond mere understanding". I would now, however, like to focus my attention on a topic which is inherent to my field of specialisation, that is the idea of care and attention. ... I am suggesting that care produces a type of behaviour, an attitude towards the world which goes beyond illness and infirmity. It is actually the moral basis which should be used to deal with social problems with a view to finding the innovative solutions I have already mentioned. I define care as the attention paid to the needs of children, the elderly and the infirm. What I am suggesting is that the fundamentally important study of social suffering should be driven forward by a form of anthropology which deals with matters which reach far beyond statistics and individual cases and which is capable of recounting real-life stories of moral resilience, resistance and experience. These stories will serve to recount human aspirations and that quality which best defines mankind: hope. What we need if we are to understand how social suffering manifests itself in cases of chronic illness is a type of anthropology which is neither based on ethical relativism nor limited to social criticism. An anthropologist can associate himself with epistemological relativism or even with ontological relativism but none of us can afford to associate ourselves with ethical relativism. There comes a time when we must take a stance as, if we do not, this would make our discipline inhuman, non human and irrelevant for mankind. The form of anthropology I hope for must make a new moral agreement with society, one which can serve as a basis for a new way of understanding social policies and social change. In the past anthropology was not involved in the drafting of policies and programmes. If we take the concept of care beyond the realm of healthcare and extend it to social life in general, then it can be interpreted as an appropriate emotion, a value and a means of facing up to some of these social problems. Care not only becomes the moral equivalent of political, economic and social reform but also the moral basis for humanising policies and programmes".
It goes without saying that there are numerous structural aspects involved in the problem of inequality and deprivation. The Commission on the Social Determinants of Health by the WHO highlights these in its Report on the topic of Health Equity with a programme which sets itself extremely precise and immediate objectives: Closing the Gap in a Generation.
"The Commission - as is written in the Report - takes a holistic view of social determinants of health. The poor health of the poor, the social gradient in health within countries, and the marked health inequities between countries are caused by the unequal distribution of power, income, goods, and services, globally and nationally, the consequent unfairness in the immediate, visible circumstances of peoples lives - their access to health care, schools, and education, their conditions of work and leisure, their homes, communities, towns, or cities - and their chances of leading a flourishing life. This unequal distribution of health-damaging experiences is not in any sense a ‘natural' phenomenon but is the result of a toxic combination of poor social policies and programmes, unfair economic arrangements, and bad politics. Together, the structural determinants and conditions of daily life constitute the social determinants of health and are responsible for a major part of health inequities between and within countries".
We need to combine this structural dimension, which is typically associated with public social policy measures, with the will and motivation which drive us to plan and intervene/take action. Even from an economic standpoint- which is capable of dragging systems out of the doldrums of crisis, depression and stagnation- the way forward is to demonstrate renewed faith in the future reintroduce the will to believe in the future. This approach must be further reaching than the purely individualistic economic system which still characterises much of our society and hinders civil virtues. The economist Amartya Sen has strongly defended this standpoint in many of his works especially a few years ago in his book entitled Development as Freedom. At the beginning of the year he illustrated this topic in a speech he gave on happiness in Rome at the 2013 Science festival which, this year, dedicated numerous contributions to the central theme of happiness.
The above-mentioned work of Paolo Pileri and Elena Granata also defends the theme of shared common civil values. The authors illustrate this matter extremely well, especially in terms of territory in Italy, in their book entitled Amor Loci. This work depicts civil culture as being the basis for a sense of identity which keeps a Country together. If this does not prove to be the case we will continue, in the paradigmatic case of Italian territory, to passionately sing our great world famous lieder for instance Chisto è o' paese d' ‘o sole, chisto è ‘o paese d' ‘o mare (This is the land of the sun, this is the land of the sea), without however realising that the sun and the sea in question no longer exist and that they are the victims of an appropriating mentality towards the present and closed-mindedness towards the future. We are in fact dealing with a much broader matter which does not just touch on a false accumulation of wealth based on environmental dilapidation. Indeed, the main focus is on our relationship with our neighbour. We must somehow reintroduce nostrum into our discussions in a more ample time frame. "Short-sightedness and the fall of the civil man", authors tell us, are today the most obvious signs of a need for public spiritedness which has been gradually abandoned by much of economic thought over the last two centuries. The well known economist Tommaso Padoa Schioppa, the author of La veduta corta (The Short View) has gone to great lengths to rediscover this concept. Indeed, The concept of caregiving is not foreign to the field of economy. The deeper nature of market competition involves caregiving and this makes it both a cooperative matter and a joint action. It goes without saying that when the key players in the market and in the political world no longer have the moral energy or the civil enthusiasm to look to the future together or to put forward important proposals which encourage the common growth of citizens, then they end up looking "next door" in an attempt to beat the competition. In this context the competitor is viewed as a rival and an enemy and this process provokes challenges, arenas of conflict and military battles. However, in economy this is the opposite of competition just as in politics it would be the opposite of democracy.

 

Bibliographical references


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By the same authors:  DISTRIBUTIVE JUSTICE VS. COMMUTATIVE JUSTICE 


 
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Center for urban suffering

The study centre wishes to study the phenomenon of urban suffering, in other words the suffering that is specific to the great metropolises. Urban Suffering is a category that describes the meeting of individual suffering with the social fabric that they inhabit. The description, the understanding and the transformation of the psychological and social dynamics that develop from the meeting of ...

Who we are

The Urban Suffering Studies Center - SOUQ - arises from Milan, a place of complexity and economic and social contradictions belonged to global world.Tightly linked to Casa della Carità Foundation, which provides assistance and care to unserved populations in Milan (such as immigrants legal and illegal, homeless, vulnerable minorities), the Urban Suffering Studies Center puts attention on ...

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Centro studi Souq Management commitee: Laura Arduini, Virginio Colmegna (presidente), Silvia Landra, Simona Sambati, Benedetto Saraceno ; Scientific commitee: Mario Agostinelli, Angelo Barbato, Maurizio Bonati, Adolfo Ceretti, Giacomo Costa, Ota de Leonardis,  Giulio Ernesti, Sergio Escobar, Luca Formenton, Francesco Maisto, Ambrogio Manenti, Claudia Mazzucato, Daniela ...
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