Commentary
30 years of Berlusconomy, four governments of Italian decline
If we look at the history of the Italian economy in the Berlusconi era, we cannot fail to notice that it has been synonymous with decline.
In commenting on the passing of Berlusconi the man, we cannot fail to ponder what he represented for the Italian economy and society. The former cruise ship crooner-turned-real estate speculator understood that private television was the business of the future, generating profits and serving as a great manipulator of minds, changing the social and cultural landscape forever.
He wasted no time in using his skills as a charmer, honed at the piano bar on cruise ships, to make friends with politicians and break RAI’s television monopoly. He already had ambitions of political power — after all, he enlisted in P2 — but he found a way to make his own way up.
When the Tangentopoli corruption investigation came along, a whole system collapsed and he deftly exploited his little world of real estate and TV to climb the rungs of power, the real kind. And that was what he built his reign on — rather different from the narrative he tacked on top of it.
If we look at the history of the Italian economy in the Berlusconi era, we cannot fail to notice that it has been synonymous with decline (a term that was the object of debate for some time, but the aforementioned decline has proven chronic to such an extent that today it has moved out of the range of reasonable debate).
For those who don’t remember, 1992 was the annus horribilis of recent Italian history, economic and not only. A currency crisis that took us out of the European Monetary System, resulting in one of the most painful budgets of the postwar period, which Giuliano Amato took the blame for (after he passed a sudden tax on Italians’ bank deposits in the middle of the night, before there could be any reaction). The Mafia had reared its ugly head, assassinating Falcone and Borsellino; Mario Chiesa from the Italian Socialist Party (PSI) got arrested for corruption (and was memorably called a “rogue” figure by party leader Craxi, in a futile attempt at distance); and various tragedies unfolded, right down to the episode when the same Craxi got pelted with coins by an angry crowd in front of the Hotel Raphael in Rome.
The economy was put back on track, but the political system was in freefall, and, amidst the turbulence, the Knight’s “company-party” and Umberto Bossi’s free-range Lega emerged. With Christian Democracy dissolved and the PSI liquefied, the bourgeoisie and the “productive” middle classes of the North thus opted for what was “new” out of what was being offered to them: a mix of liberalism and interventionism a la Lombardy, dressed up as “American-style” modernism.
In the face of this challenge, the left, still in the throes of post-1989 woes, was more interested in preserving its ideological purity (although the notorious “Comrade G,” imprisoned for funneling bribes and kickbacks into the coffers of the PCI and PDS, showed just how “outside the system” the parties really were) and contented itself with resisting. And Berlusconi’s message landed, with the slogan “if he made himself rich, he will make the country rich.”
His first stint in power was short-lived due to the disloyalty of the “popular” Bossi (according to some, the Lega was a “rib” of the left back then, going by the embrace between Bossi and Massimo d’Alema after the Berlusconi government fell). Replacing him was Lamberto Dini from the Bank of Italy, with the support of the left; who was then replaced by Romano Prodi, the Professor from Bologna who was “to take Italy into Europe,” who fell after conflicts among his own coalition.
In that five year span after Berlusconi first lost power, the center-left failed to show a change of pace, nor was it able to legislate on the issue of “conflicts of interest,” so the tycoon from Arcore was able to take back the government, together with the post-fascists and the Lega, and finally get to do whatever he pleased.
The economy did not shift one iota from its downward trajectory. The medium-large businesses continued to move outside the country, the medium-small businesses continued to invest little or nothing, with little innovation and little production of new wealth. Berlusconi’s second term couldn’t keep up his momentum, and Prodi won the next elections, but fell due to inter-coalition conflicts after just two years. Those were the long years of globalization, the dotcom economy, offshoring. “Mr. B.”’s three “Is” – impresa, internet, inglese (business, Internet, English) – seem hopelessly naïve to us today, but it was the state-of-the-art telemarketing pitch from Arcore.
Berlusconi’s time in power changed the country, in terms of the ways of consumption – mass distribution, lavish “modern” spending, going into debt for purchases – as well as in tastes and fashions, as the descent into vulgarity mirrored that of the public institutions.
When “the Knight” won the elections again for the third time, in 2008, he had no idea that the crisis was looming, triggered by speculation. The country he governed, pandering to industrialists large and small, a rentier bourgeoisie and a middle class living above its means, was a country with a fragile economy, growing debt – he was a “liberal” who actually increased government spending – and widening wealth gaps. Thus, the crisis of the euro and the “spread” brought him down: the industrialist from Arcore lost the favor of the great powers, setting the stage for his sunset and a new two-year belt-tightening period.
The PD, however, failed to make its mark; the left did not understand what was happening. The five years that followed showed the PD succumbing head over feet to the neoliberalism of austerity, while on the right the Berlusconi and Lega base remained compact, rooted in its local territories and its ways. But the country’s social body was falling apart, more and more disconnected, attracted by the siren call of the M5S.
The lesson of Berlusconi’s “liberalism” lies in this drift. It was a liberalism that failed to “liberate” the country’s best energies, failed to foster innovation or reduce the bureaucratic elephantiasis of the state, leading only to increased inequality and gaps and ultimately ending up pandering to sovereignism and protectionist closure against the “failures” of the globalization it itself had touted. It left behind a poorer country, economically, culturally and socially, in which the classes that had supported the man from Arcore are now small-minded enough to support the post-fascist right in order to maintain those privileges that had been guaranteed to them for 25 years.
In the end, those who gained the most from the so-called “Berlusconi era” were the man himself and the narrowing class that relied on him. It’s hard to envy such a legacy.
Originally published at https://ilmanifesto.it/trentanni-di-berlusconomy-quattro-governi-di-declino-italiano on