Anyone in Italy hoping to retire three years earlier will have to take out a bank loan, guaranteed by the state and conveyed by INPS, the Italian public pension system. We spoke with Christian Marazzi, the economist and researcher of financial capitalism, author of books such as Capital and Affects: The Politics of the Language Economy.
What do you think of the Renzi government’s proposal?
They seem to be dreaming. I must say that such a thing has never been proposed, let alone applied elsewhere. For the moment, let’s take it as just an idea. We are in the bio-economy in the sense of deriving financial value from life. What the Italian government is proposing is the securitization of social rights. Its logic is similar to that of the financial strategist that led to the subprime mortgage disaster. It wants to involve the banks and give another nice boost to the privatization of parts of the state welfare system.
What might the results be?
A securitization in the wake of what we’ve already experienced and which, moreover, is a recurring practice: These securitized debt instruments are sure to be differentiated within them, as regards the risk of return and repayment. Securitization may be necessary to allow the banks to cope with the difficulties of making profitable debt securities in a period of virtually zero interest rates, if not negative. It is possible that banks will try to increase the volume of pension advances, freeing budgets through securitization.
Undersecretary to the Prime Minister Tommaso Nannicini claims that this is not a penalty but a repayment installment, and it will vary depending on the category of workers involved and not fall to their heirs.
That’s the thought, because otherwise he would not have proposed it. It seems clear that the credit and debt that will be flexible enough and will allow someone to anticipate retirement will burden beneficiaries. They will have to pay out well, even in 20 years, but the retiree will have to return it. With pensions at the levels that they are, I wonder if this is not an incitement to work illegally. They are still sums which calculated over a period of one year may be important for a person who has a low pension.
Is this another step toward replacing salaried workers with indebted individuals in the European welfare states?
This is what I mean by the bio-economy. The bio-economy revolves around an individual in debt and is the form of governance of the society through debt generalization. I see a strong parallel between the young people who go into debt to study in the U.S. and the elderly who go into debt to be able to stop working in Italy. Now our life cycle begins with active debt and ends with debt. Social rights that developed over the 20th century from the struggles of the workers movement are turning into financial stocks. From real estate, the credit to consumption or to social security, the logic is always the same: to anticipate in order to mortgage the future.
How would you rate the social security policy from the Fornero reform to today?
It consists of buffer measures to keep up with a disaster created by the experiment of the caretaker Monti government which commissioned Italy with the Fiscal Compact. You have to understand that the pension system cannot be reformed in terms of Fornero and cannot be covered with the financialization. The welfare state is very articulated, and to fix it with these gimmicks sometimes denotes creativity but more often than not leads to improvised alchemy and is a dangerous concern. It’s always the same story: in a political situation at risk of Brexit and the explosion of the E.U., we continue to respond to calls for the right of national sovereignty with measures that do nothing but reinforce nationalistic ways out of problems that are structural and in fact affect all of Europe.
What should the government do?
Seek the establishment of a mutual system of intervention in terms of redistribution and monetization of rents in Europe. Those born after 1980 will have retired or will have to work up to 75 years. What will result from the financialization of social security? This is also a European problem: The accumulation of contribution gaps due to job insecurity concerns both Italy and even Switzerland where I live. It has a margin of tolerability that does not go beyond 2020. The financing of the pension system will prove to be increasingly problematic. Because precarious employment is by definition the opposite of wage labor on the basis of which our welfare states were built. The more wage labor erodes, the more it erodes the funding of the welfare state. The financing of the entire system of social security and, in particular, the pension is an unavoidable problem.
What is the solution for you?
An unconditional basic income allows you to fill these gaps and avoid leading to exclusion from the social protection system. This is the meaning of the referendum that was held in Switzerland. The problem can no longer be postponed. We have entered a phase in which the reform of the social security system should be truly European in scope. At the national level it is practically impossible to carry out reforms in a positive way, but only in terms of repression or simply the cutting and dismantling of the welfare state.
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