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Europe, Italy, Politics

Inequality and corruption threaten democracy

By Guido Rossi*

The widespread perception that corruption has permeated the entire political, economic and social development of Italy in ways more serious than ever before, seems to have two obvious causes. The first is that it is a consequence of the decline of the existing order and the Italian political institutions; the second is that it constitutes a symptom of not only the Italian, but whole European economic system that has conditioned our society from the 1980s. And in this system the markets are the value of reference and money the measure of all things. The underlying ideology of these economic policies and this erroneous concept of freedom has meant that schools, hospitals and even prisons can be privatised for profit. And if this is so, why for the same reason, should we not privatise public office too?

This system has created two consequences that go hand in hand: inequalities, which have been documented in an unparalleled fashion in the much-discussed recent book by Thomas Piketty, Capital in the Twenty-First Century and corruption, both in the public and in the private spheres; both with a contention that is vast and varied. In a recent long essay in the London Review of Books with the troublesome title The Italian Disaster [Perry Anderson] concludes that Italy is not an anomaly in Europe, but rather a sort of distilled example, and shows that the manipulation by the executive against the legislative powers and the general decline and crisis of the political classes have caused a silent democratic deficit, fuelled by an almost total lack of independent media and an increase in corruption.

European sleaze

The impressive panorama covers all countries. The fresco begins Helmut Kohl, the unchallenged German Chancellor of 16 years who received two million German marks in black funds, refusing to disclose the names of donors for fear that favours he had received in exchange would emerge. In France, Jacques Chirac, President for twelve years, who at the end of his term and the immunity that went with it, was accused of abuse of office, embezzlement and conflict of interest. Again in Germany, the government of Chancellor Gerhard Schröder guaranteed a loan of one million Euros to  Gazprom to build a pipeline in the Baltic Sea, a few weeks before Schröder, his mandate ended, became advisor to the Russian energy giant at a much greater financial reward than had received to govern the country.

Other cases could be listed: in particular those which have affected the UK and Prime Minister Tony Blair, with his , and others, more well-known, involving Spain and Greece.

As regards Italy, the facts meticulously reported by the London Review of Books and deliberately ignored by our own media, are not surprising . It is important then to once again reiterate that inequalities, due to the abnormal concentration of wealth in a few hands and the various forms of corruption, are inextricably linked, forming the principle and most serious consequence of the now inevitable link between politics and economics.

It is no coincidence that this combination, in contemporary ideologies, become inextricable, to the point that the same political institutions in the various forms of government – and I emphasise this strongly, I do not speak here of the anti-democratic or oligarchic system of dictatorships, but I refer to the various democratic regimes, despite the diverse and complex nuances that the modern world presents – will themselves become the cause and effect of inequality and corruption.

US corruption

A typical case as is occurring in the United States of America, where the Constitution, created to fight corruption based on the English experience, sought to ensure that federal government was “dependent on the people alone” according to the famous words James Madison.

The denunciation pursued since 2011 by Lawrence Lessig, in his book Republic, Lost: How Money Corrupts Congress – And a Plan to Stop It brings a just, but disturbing emphasis onto two aspects of corruption. The first concerns the so-called “gift economy”, where money is not the basis for the exchange in corruption, but favours and relationships, reports and information, which is often unfortunately, especially in our country, not considered corruption, but just recognition of the social, economic, political or institutional importance of those who receive them. The second consists of an institutional conflict that threatens American democracy, in the opinion of the great philosopher Ronald Dworkin who recently passed away, and followed by President Obama himself.

With the decisions of the Supreme Court Citizens United v. Federal Election Commission in January 2010 and the recent McCutcheon v. Federal Election Commission on April 2, 2014, the constitutional right to fund candidates and election campaigns without limits on the amounts of money spent was recognised. Consequently, according to Lessig, money is not an issue in American politics, but it has become the problem of American politics and the root of all other evils, poisoning public confidence in government and democracy, which has become a sort of charade.

Virus destroying democracies

Thus emerges a virus that is destroying democracies, causing the three branches of government to confront each other in an unsuccessful effort to combat public corruption, which even when it is detected results in no penalty, as if to confirm a further and even worse aspect of the link between politics and the economy. Neither the bankers nor the corrupt politicians are usually punished with imprisonment because both are, according to the American expression, “too big for jail”.

This particular malaise is reflected in another obvious flaw of the institutions of the State, the most important, that which more than any other should also tackle inequalities: justice. And so it is, that a new means of discipline by economic globalization takes place through the privatisation of justice.

Sanctions against international corruption by big globalised corporations are imposed by the payment of large sums of money, through agreements with the executive and independent agencies (DOJ, SEC) with a negotiated and privatised justice, according to the perverse ideology in vogue. Thus the suppression of corruption of large corporations is defined outside of the courts, through internal collaboration and self-declaration of guilt on the part of the companies, which, in order to avoid criminal justice, dangerous in every respect, including with regards reputation, prefer to plead guilty and cooperate using complex systems of internal investigations to verify the existence of illegal activities.

Justice by Deals

We are facing a kind of repetition of the classic work of Latin playwright Terence “Héautontimorouménos”, in which, according to a well-known verse of Baudelaire, one declares oneself both victim and perpetrator  (“Et la victime et le bourreau”). Everything passes under the name “Justice by Deals“. On the other hand, as in the Italian system, the procedure of plea bargaining avoids criminal prosecution, but this does not make the culprit less guilty. The nuances of the case may change, but the basic philosophy is the same.

Public and private corruption, victims of the ideology of deregulation, have instead led to a series of laws in contradiction with their ideological principle, legalising many of the most varied forms of dependence on public and private corruption, so that the paradox continues to be what was already highlighted when Tacitus wrote, “corruptissima re publica plurimae leges.” Corruption and inequality, that characterize this period of great crisis of democracies, retain many aspects of apparent legality that go unpunished.

This means that it is not enough to pass some half-baked piece of legislation to overcome the contradictory nature of the structures which economic globalization has swept through modern democracies. The fight against inequality and corruption, public and private, illegal or evasive, must now be considered the main objective for the survival of society that the sound ideas of the past had, before they were disregarded, delivered through the protection of the rights of citizens.

Il Sole 24 Ore/Micromega

Translation by Tom Gill

* Guido Rossi spent his career as a financial regulator and business law expert, overseeing major banking acquisitions and working for a time for ABN Amro bank. He is a former chairman of Telecom Italia, and between May 2011 and October 2012 he was the ‘ethical watchdog’ of Consob, Italy’s securities and exchange commission.

About revoltingeurope

Writer on Europe's Left, trade union and social movements @tomgilltweets or @revoltingeurope

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