Posted: 15 Jul 2012 02:03 PM PDT
Ruling over Rome like a new Caesar, in the words of TIME Magazine, the unelected Mario Monti effectively runs Italy as a modern dictatorship of austerity.
Italy in Crisis, Part II:
‘Super Mario’ Monti and the Dictatorship of Austerity
The following is Part II of a two-part excerpt on ‘Italy in Crisis’. These excerpts are rough-draft, unedited samples of a chapter on the European debt crisis to be featured in my upcoming book, to be done by the end of the summer. The book covers the following: the origins, evolution, and effects of the global economic crisis; the acceleration of international imperialism; the elite global social engineering project of constructing a system of ‘global governance’; emerging resistance and revolutionary movements (and elite attempts to co-opt, control, or crush them), including the Arab Spring, European anti-austerity protests, the Spanish Indignados, the Chilean student movement, the Occupy movement, the Quebec ‘Maple Spring’, and the Mexican student movement, among others. This sample allows you to see the research that is going into this book, and if you would like to see the book come to completion, please consider making a generous donation to The People’s Book Project. With a fundraising goal of $2,500 the Project has raised $810, and just $1,690 to go!
In Part I of this series (The Decline of the Roman Democracy and Rise of the ‘Super Mario’ Technocracy), I examined the technocratic coup in Italy, which removed the democratically-elected Berlusconi and replaced him with an unelected technocrat, Mario Monti, an economist, Bilderberg member, former European Chairman of the Trilateral Commission, former European Commissioner for Competition, and a former adviser to Goldman Sachs International, who was also on the board of the Coca-Cola Company, and founded the European think tank, Bruegel. Mario Monti was installed by the European elites with one purpose: to punish the population of Italy through ‘fiscal austerity’ and ‘structural adjustment.’
The Technocracy of Austerity
Monti wasted no time in punishing the people of Italy for the crimes and excesses of Europe and the world’s elite. On December 2, 2011, Monti announced a 30 billion euro ($40.3 billion) package of austerity measures, which included “raising taxes and increasing the pension age.” Monti described the measures as “painful, but necessary.” He told a press conference that, “We have had to share the sacrifices, but we have made great efforts to share them fairly.” Monti, who is both Prime Minister and Economy Minister, said he had renounced his own salaries from those positions. Considering that he was – until taking those positions – an adviser to Coca-Cola and Goldman Sachs, among other prominent jobs, those salaries likely would not make much of a difference to Monti’s bank account, anyway. The Deputy Economy Minister Vittorio Grilli (who is still on the board of the Monti-founded think tank Bruegel), said that, “the package should ensure that Italy meet its target of a balanced budget by 2013.” The Welfare Minister Elsa Fornero broke down into tears as she announced an end to inflation indexing on many pension bands, which would essentially amount to “an effective income cut for many retired people.” Unions spoke out against the cuts, stating that they would “hit poorer workers and pensioners disproportionately hard.” Deputy Economy Minister Grilli said that 12-13 billion euros of the package would come from spending cuts, and the rest of the 30 billion euro package would come from tax increases. The minimum age for pensioners (that is, the retirement age) was set to be raised for both men and women to 66 by 2018, as well as providing “incentives” to keep people in the workforce until the age of 70.
The austerity package was passed by an undemocratic decree which Monti named the “Save Italy” decree, and while the union leaders denounced the package, the main business lobby in Italy, Confindustria, praised the package as vital “for the salvation of Italy and the euro.” As Elsa Fornero, the Minister for Welfare, began crying as she announced the austerity measures, she explained, “We know we are asking for sacrifices, but we hope they will be understood in the name of growth and to avoid collective impoverishment.” Of course, austerity is just that: “collective impoverishment.”
In response to the austerity package, Italy’s three largest labour unions began a week of strikes on December 12, with port, highway, and haulage workers stopping work for three hours on the 12th, while metalworkers, including employees of Fiat, put down their tools for eight hours. Printing press operators stopped working for a full shift, and most newspapers were expected to not publish the following day. Public transport strikes took place on December 15-16, and bank employees were set to stop work in the afternoon of December 16, while the public administration closed down for the entire day of December 19. Susanna Camusso, the head of the largest and most militant labour federation, CGIL, said, “We’re not giving up on the idea that the austerity package must be changed… It hurts workers, pensions and the country as a whole.” Mario Monti held a last-minute meeting with the union leaders to unsuccessfully attempt to stop the strikes that were set to begin the following day.
CGIL leader Camusso said that as a result of the austerity measures, “We see every risk of a social explosion.” CGIL, which represents six million members, half of whom are pensioners, stated that, “We are flexible in the face of the emergency but we are not willing to accept everything… You can’t ride roughshod over people.” With only 57% of Italians working, raising the retirement age, as dictated by the austerity package, would amount to “closing the door on the young unemployed,” warned Camusso, adding that Monti had done nothing for “young people and women who can’t find work, and when they do it is badly paid.”
In late December, the Italian Senate passed a vote of confidence on Mario Monti’s government when they approved the new austerity package. Monti commented: “Today this chamber concludes a rapid, responsible, complex job… on a decree that was passed in extreme emergency and that enables Italy to hold its head high as it faces the very serious European crisis.”
Prior to the European Summit held at the end of January 2012, Mario Monti was holding meetings with Angela Merkel, Nicolas Sarkozy, British Prime Minister David Cameron, and European Council President Herman Van Rompuy. Italy, wrote the Economist, “it seems fair to say, is back at the top table after being quietly shoved off under the leadership of Silvio Berlusconi.” Monti emphasized to Merkel, Sarkozy, and other leaders that the EU needs to not simply “enforce fiscal discipline,” but to stimulate growth. This would mean, according to Monti, “not only finding ways to lower interest rates, but encouraging liberalisation wherever possible.” Monti even suggested that Germany should “liberalize” (meaning: privatize) some of its services. Monti, in an interview with the Economist, stated that, “It is rather unusual for Italy to be at the forefront of pro-market initiatives,” but that he planned to undertake a major liberalization of Italy, saying: “I am convinced that it is also in Italy’s national interest.” Acknowledging that his government is “unelected,” Monti told the Economist that, “there was in Italy a hidden demand for a boring government which would try to tell the truth in non-political jargon.” Monti warned, however, that, “Austerity is not enough, even for budgetary discipline, if economic activity does not pick up a decent rate of growth… A lowering in interest rates does not depend only on Italy’s efforts but also, and essentially, on Europe’s ability to confront the crisis in a more decisive way.” Monti stated that Italy’s domestic political situation is getting problematic for the EU, with a growing appeal to ‘Euroscepticism,’ warning: “What I see now, week after week, in parliament is a widening of the spread of this attitude… The degree of impatience-cum-hostility to the EU, to Germany and to the ECB is mounting.”
Monti warned Merkel and other EU leaders that Italian sacrifices alone would not get Italy out of crisis, that Italy needed some form of outside support, without which, he warned: “a protest against Europe will develop in Italy, also against Germany, which is viewed as the ringleader of EU intolerance, and against the European Central Bank… I cannot have success with my policies if the EU’s policies don’t change.” In particular, he was referring to the need to bring down Italy’s interest rates, something that could likely only be achieved through the ECB purchasing large amounts of Italian bonds, which would increase “market confidence” in Italy and bring down interest rates. Otherwise, Monti lamented, the popular discontent of the people with the economic situation could push Italy to “flee into the arms of populists.” Spoken like a true unelected technocrat. Imagine that, a government which dares to serve the interests of the people over whom it rules! Not in the ‘New Europe.’
In late January, Philip Stephens, writing for the Financial Times, stated that, “Italy is back,” and that while Merkel “sits at the top of Europe’s power list,” and Sarkozy “can lay claim to be the continent’s most energetic leader,” it is Mario Monti who “is its most interesting.” Stephens declared that, “Mr. Monti’s fate may turn out to be Europe’s.” Barack Obama’s White House announced that in a future meeting between Obama and Monti, the two leaders would discuss “the comprehensive steps the Italian government is taking to restore market confidence and reinvigorate growth through structural reform, as well as the prospect of an expansion of Europe’s financial firewall.” Stephens translated this as: “Mr. Obama is behind Mr. Monti all the way – including when he puts pressure on Ms. Merkel.” Lamenting the Italy of Berlusconi, who was “shunned by his European Union peers,” though always embraced as a friend by Russia’s Putin, Stephens wrote that Monti, “a serious-minded academic with a serious plan, is different in every dimension.” He also noted that there was “a second Italian at the top table,” meaning Mario Draghi, the new President of the European Central Bank, “the other Mario,” who in terms of economic orthodoxy, “styles himself an honorary German.” Stephens wrote that Monti is so important because “it is in Italy that the euro’s long-term prospects will be decided,” as Italy is the euro-area’s third largest economy (after Germany and France), and if Italy “cannot chart a credible economic course, the euro does not have a future as a pan-European project.” While praising Monti’s austerity package, Stephens said that, “the real test will come in liberalizing the economy,” which “will not be easy,” but “the choices are unavoidable.”
Mario Monti, upon unveiling his “liberalization” plans in late January, stated: “Italy’s economy has been slowed down for decades by three constraints: insufficient competition; an inadequate infrastructure; and complicated administrative procedures.” Thus, Monti passed a decree opening the occupation of taxi drivers up to “competition,” prompting taxi drivers to block central streets in Rome. As liberalization brings in higher petrol prices (which were previously under more control), truck drivers and agricultural workers set up barricades in Sicily. One Italian paper (owned by the Berlusconi family) headlined: “Half of Italy is ready to wage war on the government.” Once decrees are issued, they go into effect immediately, but require parliamentary approval within two months. Monti’s liberalization decrees of January (following the austerity decrees of December) also targeted the gas and electricity markets, as well as the insurance sector and public services. Next in Monti’s target: the labour market. One analyst at Roubini Global Economics told the Financial Times: “Although structural reforms are necessary to boost long-term growth, they will take several years to bear fruit and, in a period of economic contraction and government retrenchment, will have an adverse effect on short-term output, deepening the recession which will last through 2013.”
In his first interview since resigning as Prime Minister, Berlusconi told the Financial Times in early February that he was “stepping aside” from frontline Italian politics and had no intention of running for prime minister again. Berlusconi gave his “strongest endorsement to date of the technocratic government led by Mario Monto,” specifically in “its intention to implement labour market reforms opposed by trade unions.” Berlusconi declared: “I have now stepped aside, even in my party.” He explained that he resigned the previous November because he had been attacked “by an obsessive campaign by the national and foreign media that blamed me personally and the government for the high spread of Italian state bonds and the crisis on the stock market.” Thus, he contended: “After having evaluated the causes of the crisis, which did not rest in Italy but in Europe and the euro, I believed that if I had stayed in government I would have damaged Italy as we would have had more terrible media campaigns… With a sense of responsibility, though having a majority in both houses of parliament… I stepped aside and with elegance.” One can always rely upon a politician to sing their own praises, especially if they are undeserving. He did suggest, however, that he would consider running for parliament, quipping: “I still have strong popular backing, almost twice as much as my colleagues Merkel and Sarkozy… In opinion polls, I personally have 36 per cent support. If I walk out in the street I stop the traffic. I am a public danger and I cannot go out to do the shopping.” Berlusconi concluded:
Martin Wolf, perhaps the most influential financial columnist in the world, writing for the Financial Times in January of 2012, asked if the two Marios – nicknamed by the media as the “Super-Marios” – will be able to “save the eurozone?” Wolf wrote that they “bring sophisticated pragmatism to the table,” and hoped that they would “shift policy in a more productive direction.” Wolf referred to the ECB’s new long-term refinancing operation announced in December of 2011, which is essentially a bank bailout with a three-year yield at the ECB’s average interest rate (which stands at 1% currently). When the ECB began this new program, roughly 523 banks took 489 billion euros, described by Wolf as “a bold and cunning move by Mr. Draghi and probably the most he could get away with right now.” Wolf also referred to Monti’s willingness to argue that the creditor countries “do more to lower his country’s borrowing costs,” or interest rates, warning in the Financial Times against a “powerful backlash” among voters in the EU periphery states. Wolf wrote that, “Mr. Monti is in a strong position to make this argument,” as Monti “is a well-respected official with staunchly pro-European views and a strong sympathy for German attitudes to competition and fiscal and monetary stability.” Wolf explained that, “Draghi and Monti are addressing two interlinked fragilities: the vulnerability of the banking system and the unsustainable terms on which weaker countries can now borrow.” While praising the “Super-Marios,” Martin Wolf said that they alone could not save the eurozone, whose problems run very deep, and where even the ‘solutions’ to the crises felt by various EU states can make larger, structural reforms even more challenging. As Wolf correctly noted: “In Italy’s case, for example, the combination of high interest rates and vulnerable banks with fiscal austerity is likely to lead to a lengthy and deep recession and so to a rise in cyclical fiscal deficits [debt incurred during and because of the economic crisis at the time] as the structural deficit falls [the debt acquired by spending more than what is brought in through revenue].” Naturally, though, this simply means that the overall debt will increase. Wolf wrote, ultimately, that if “break-up [of the euro] is ruled out, one must choose reforms, however painful.” This is because, according to Wolf, “the costs of failure are so large that the possibility of domestic and eurozone reform must be kept alive.” On this, the “Super-Marios” can be leaders.
When the credit ratings agency Standard & Poor’s downgraded Italy’s debt in January by two notches to BBB, “with a warning of more to come,” Mario Monti stated that he “agrees with almost everything in S&P’s analysis,” and “jokes that he could almost have written it himself.” He told the Financial Times that, “If I ever dictated anything, it must have been what S&P had to say about domestic Italian economic policy,” and then laughed. As a result of the downgrade, Italy had the lowest credit rating of any eurozone country which did not receive a bailout, apart from Cyprus. Why was Monti so pleased with the downgrade? He quoted the report to the interviewer from the Financial Times, going through the risk factors associated with Italy, but adding: “Nevertheless, we have not changed our political risk score for Italy. We believe that the weakening policy environment at European level is to a certain degree offset by a strong domestic Italian capacity.” In other words: “Mr. Monti’s 60 days in office have been enough to convince the agency that his government is on a path of reform that could return the country to growth and shrink its debt levels, but that European Union mismanagement of the eurozone debt crisis is dragging down struggling countries, including Italy.” Mr. Monti stated, “I think I’m the only one in Europe not to have criticized the rating agencies.”
In discussing how his government came into existence, as in, not through democratic means, Monti told the Financial Times that he agreed that he could be helping to bring a “revolution,” referring to the number and extent of measures he intended to pass before democratic elections take place. He explained that if Italy’s borrowing costs (interest rates) fall, “the political parties will not dare stop the experiment [in technocracy] before it has to stop… And in my view the political parties will not dare go back to the acrimonious, superficial and tough confrontation that animated parliament. The image and style of public debate has changed.” He added: “If and when success comes, you will find us not really taking credit… My ambition is that Italy becomes a boring country, in relative terms. It is really in the hands of Europe.”
In February of 2012, Mario Monti gave an interview with PBS Newshour in which he continued to heap praise upon austerity measures, saying that because Greece’s debt had been so high, “it would have been hard – let’s face realities – to have a soft landing from those excesses of deficit without a recession.” He added, “I think there is a valid point if we say that Europe needed to be put under a safe place as regards the public finances of each member state.” Monti thanked “German and other pressures” for pushing countries in that direction of austerity. And now, he claimed, “the time has come to focus more energies on how collectively we can achieve more growth in Europe.” Growth, of course, simply means growth of profits for big banks and multinational corporations.
Super Mario’s ‘Structural Adjustment’: The Meaning of “Growth”
When Europe’s political and financial elite discuss “growth” in the current context as an added “solution” on top of austerity, what they really mean is to implement major structural changes: to liberalize the economy, privatize all assets, state subsidies, services, industries, and resources. This will allow corporations and banks to come in and purchase all of these assets and industries, and since this process takes place in the midst of a deep crisis, they are able to take control of all the assets for very cheap prices. This is called “foreign direct investment.”
The major corporations of Europe, of North America, and elsewhere, will be able to control directly a much larger share of the economy. Their purchases provide short-term funds for the state, thus increasing short-term revenue. However, since state industries are privatized and sold for pennies on the dollar, they are actually losing long-term revenue, but that isn’t mentioned. Markets respond to the short-term, not the long-term, and of course, we want to have our world and its social, political, and economic stability determined by forces that theoretically do not look more than a couple months ahead. The process of liberalization and privatization is also sold on the prospect of “creating jobs,” because the theory goes that corporations will enter the market with the ability to invest and thus, create jobs for workers. The reality is that the corporations buy up the industries, and generally shut them down to relocate elsewhere for cheaper labour. This means mass firings. This also means that unions and labour rights in general have to be dismantled and people have to be kept in line, under control.
Austerity measures are aimed at redistributing wealth from the mass of society to the very top percentiles, which is achieved through increased taxation, mass firing of public sector workers, cuts to social spending, health care, welfare, education and other areas. This, quite predictably, creates a massive social crisis. Many austerity packages – such as Monti’s in Italy – also include efforts to undermine labour and unions. This prepares the work force for the period and programs of “growth,” in which workers will be forced to submit to exploitative working conditions with no collective bargaining rights, or else the industries will simply fire them all, close up shop, and go elsewhere. This is why we hear all the Eurocrats and politicians in Europe and elsewhere explain that austerity and growth are not mutually exclusive, that they can and should co-exist together. Indeed, from the view of the ‘effects’ of these policies, a joint program of “austerity” and “growth” makes perfect sense: commit social genocide (through fiscal austerity), and exploit, plunder, and profit from the spoils of economic war (growth through structural adjustments).
In the ‘Third World’ over the past three decades, these policies were imposed by the IMF, World Bank, Western imperial powers, and Western banks and corporations. With the primary engine being the International Monetary Fund (IMF), countries in Latin America, Africa, and Asia, which were in the midst of a major debt crisis in the 1980s, were forced to sign what were called ‘Structural Adjustment Programs’ (SAPs) with the IMF and World Bank if they wanted to get any loans or aid from Western banks or institutions. The SAPs would be a set of conditions that the countries would have to adhere to if they were to get a loan, and the conditions included a mix of ‘fiscal austerity’ and ‘structural adjustment’: devalue the currency to make it cheaper to invest in the country (but which creates inflation and increases the costs of food, fuel, and other commodities, hurting the poor and middle classes); cut social spending to reduce the deficit (but which saw the destruction of education, health care, welfare and social programs, as well as mass firings from the public sector); trade liberalization, to allow for foreign countries and corporations to more easily invest in the country, and thus, bring in revenue (which meant dismantling all tariffs, trade barriers, price controls, state subsidies, and resulted in the easy exploitation and cheap purchase of the country’s wealth by foreign corporations and banks); and privatization, meant to encourage investment and allow for the market to make state-owned industries and asset more “efficient” (but which resulted in mass firings, closing of entire industries, mass corruption, and total control of the economy being handed to foreign banks and corporations).
The result of SAPs – the combination of “austerity” and “growth” – over three decades has been devastating: poverty has rapidly accelerated and expanded; wealth becomes heavily polarized, with a tiny minority owning the economy, and everyone else with next to nothing; the small elite become increasingly dependent upon and integrated with a global elite (based primarily in the West), and disassociated from their fellow citizens; mortality rates go up as health care and social services are dismantled or made incredibly expensive at a time of deepening poverty in which more people need the services more than ever before; social unrest and repression become rampant, as the people rise up against ‘Structural Adjustment,’ the state resorts to increasingly authoritarian and brutal measures to control or crush resistance to the programs and to protect the dominance of the tiny minority, locally and internationally.
This, essentially, is the fate of Europe and the rest of the industrialized world. Europe, simply being the most integrated region of the world (a trend which is accelerating everywhere in the world), is experiencing the brunt of this crisis before the rest of the industrialized nations of the world. So when politicians and financial elites say that Europe needs “growth” in conjunction with austerity, and this will lead to “recovery”, remember what “growth” means: exploitation, plundering, and profits. When you remember this, everything the politicians and pundits have been saying for years, suddenly makes sense.
When asked if he felt that there was a danger of “a backlash” in Italy against what people “may see as EU imposed changes to their way of life that are very, very painful,” Monti replied that, “there was such a risk of backlash,” but he explained: “I try to avoid that backlash by always presenting the necessary sacrifices that Italians have to go through not as an imposition from Brussels or Germany or the European Central Bank, but rather as a necessary step that Italians have to undertaking — to undertake also at the suggestion of Europe, but basically for their own interests, for the interests of ourselves and of future generations of Italians. This is precisely meant to avoid backlashes.” Interesting statement: saying that austerity is for the interests of Italians and “future generations” is done not to speak truth, but “to avoid backlashes” against the EU Monti emphasized that, “it is very, very important” to ensure that the single currency, “which was meant to be the culminating point of the European construction,” does not become, “through psychological negative effects, a factor of disintegration of Europe.”
In an interview with the Wall Street Journal in early February, Mario Monti publicly outlined his strategy for “growth” in Europe, which he proposed privately to other European governments the previous month, pushing Europe beyond austerity and suggesting “tougher European rules aimed at prying open member states’ national industries,” of course to “encourage economic growth and competition in the euro zone.” Monti explained that if this is not done, “Europe will not be a nice place to live in five years from now if we haven’t solved the problem of how to grow… We have to say what growth will look like in a fiscally compacted union.” His proposal “would speed up the process by which European authorities sanction nations that violate the tenets of the EU’s single market.” For Monti and other technocrats like himself, this “growth” does not include government spending. Since Italy is supposed to knock off 30 billion euros ($39.8 billion) – 2% of its GDP – from its public debt “every year for decades,” this means, explained Monti, that “any thought of budget-stimulated growth ideas will have to go away.” Instead, Monti suggested that the European Union “should back single markets more forcefully to support economic growth,” which instead of having Berlin sign off on the EU spending its way to prosperity, would mean “to push Germany to liberalize its own economy,” which, claimed Monti, “would have a trickle-down effect.”
Monti was undertaking various programs of “liberalization” in Italy, such as liberalizing major professions and sectors, such as pharmacies, taxis, and notaries. To handle Italy’s “unemployment” issue, which is significant to say the least, Monti was seeking to “introduce new measures aimed at making it easier for companies to hire and fire workers,” which, he said, “will increase the overall flexibility of the labor market,” meaning that it will allow for cheaper and more easily-exploited labour by corporations. Monti even stated that the changes he was making in the labour market were aimed at “reducing the segmentation of Italy’s labor market between those who are protected, sometimes hyper-protected, and those, particularly the young, who can’t really get into the labor market.” So, instead of having various work forces that are “protected” (or “hyper-protected” in Monti’s words), it would be better to simply bring everyone down to the same level to allow for “flexibility,” or in other words, easy exploitative capacity. For “Super Mario,” no protection is better than any protection when it comes to workers. Imagine if there were politicians who thought the same thing about bankers.
While Europe agreed to a ‘Fiscal Compact’ to ensure austerity, Monti felt that the EU should add to this a growth pact, and felt that the supranational and undemocratic European Union should have “an efficient mechanism to swiftly sanction countries that don’t open up their economies to competition,” meaning exploitation and plundering. Thus, the previous month, Monti submitted a proposal “aimed at giving the European Commission – the EU’s governing body – greater power over sanctioning member states.” This proposal, which had not been reported prior to this interview, “could speed up the process by years, by making it easier for the commission to impose rulings rather than having to take member states to court, as it often does now.” When asked what this has to do with growth, Monti replied: “A lot, because if you give more teeth to the commission to remove national obstacles to the functioning of the single market, we’ll create a large level playing field, which the business community always insists is a key component of growth.” Well that answers that: it will lead to “growth” because the business community says so. Thank you, Prime Minister.
Monti acknowledged that this creates obvious concerns, especially with countries like the U.K. and France which would likely oppose the proposal for fear of its encroachment on their sovereignty, and the existence of a “democratic deficit” which will continue “as member states gradually hand over more of their fiscal and economic policies to the central oversight of European institutions.” But for this, Monti has a solution: “Much of the reconciliation between more centralized governance and the scope for democracy will be resolved through an even stronger role of the European Parliament,” which is, in effect, utterly useless.
The Most Important Man in Europe?
In late February, Time Magazine published an article reporting on an interview they conducted with Monti in which they referred to him as “the most important man in Europe.” The article described Monti as “the tough taskmaster Italy so desperately needs,” though he “has the aura of a gentlemanly grandfather.” Time reported that Monti was “fixing a deadlocked democracy,” no doubt by ruling as an unelected technocrat, “and charging forward with greater European integration,” in a “wholesale overhaul of Italian society.” Monti told Time, “I believe that reforms will not really take hold if they do not gradually come into the culture of the people.” Time declared that for the problem of Italy’s partisan politics, “the solution was Monti.” Monti said that the request to rule came “at such a severe time of crisis for Italy that I could not refuse.” Thus, declared Time Magazine: “Today he reigns over Rome like a new Caesar.” In effect, “the democratic process has been suspended to allow an unelected technocrat to implement policies that elected politicians could not.” Monti himself refers to this as a “temporary mutual disarmament” of the left and right, a technocratic euphemism for “dictatorship of austerity.”
The publication praised Monti’s austerity package in December, his liberalization program in January, and his new plan to overhaul the labour market; then lamented that Monti is taking on “entrenched interest groups,” such as taxi drivers (no joke, the article referred to taxi drivers as “entrenched interest groups”), who staged strikes in Rome and other Italian cities, and pharmacists who were threatening to do the same thing, or truckers that blocked roadways in protest of a fuel-tax hike. The president of a national taxi union stated, “In Italy, the economy was more based on rules that used to be applied to create wealth for the general public… I don’t understand why suddenly the only solution is to get rid of the rules.” He added: “Monti has always lived in the salons… He really doesn’t know the problems of ordinary people.” To this, Monti replied, “Maybe they’re right,” but he felt this was an advantage: “Italy has piled up huge public debt because the successive governments were too close to the life of ordinary citizens, too willing to please the requests of everybody, thereby acting against the interests of future generations.” Monti earned a reputation – and the nickname “Super Mario” – back when he was an EU Commissioner, where he came into conflict with some major global corporations, such as blocking a merger between GE and Honeywell, which prompted the then-CEO of GE, Jack Welch, to refer to Monti as “cold-blooded.” Monti acknowledged that as he is more successful in pushing “reforms,” the effects of those reforms would put pressure on the political parties to abandon him, and make it more difficult for him to continue his programs before he leaves office in 2013. “The point,” explained Monti, “is how to keep this pressure even once the most visible elements of emergency hopefully are over.” This would largely be left to accelerating the process of European integration: “I think there is a genuine wish on the part of the EU and Germany and France to again play an active game with Italy for a relaunch of European integration… I think we will be seeing an acceleration of the good news.” Apparently, accelerating the integration and institutionalization of an undemocratic, technocratic, supranational structure is “good news.”
When Mario Monti went to visit Wall Street on the seventh floor of the New York Stock Exchange (to visit his actual ‘constituents’), he received a long, standing ovation when he entered the room with an audience of 200 people. Charlie Himmelberg, a managing director at Goldman Sachs, commented that, “It’s been impressive how quickly the sentiment has changed on Italy.” Blaise Antin, the head of sovereign research at TCW said, “It is a good thing Monti visits investors… But plenty will ultimately depend on the Italian parliament” in the tough choices ahead. Monti told the crowd of Wall Street financiers that, “What’s important is that this improved governance of the euro zone is almost there and the euro zone crisis is almost overcome, I believe.” Monti later reflected at a new conference in New York that he was “warmly greeted by the financial community” on Wall Street. No doubt.
Super Mario Wages War on Workers
After making the rounds in interviews, state visits, meeting Obama, and visiting his constituents at Wall Street, Mario Monti went back to Italy in late February to push forward on his “labour reforms” to undermine and destroy unions and workers’ rights. By March, the effects were being felt among Italians. Monti went to great pains to denounce what he described as Italy’s “two-tier labour market,” dividing generations and leaving the young out to dry. The New York Times wasted no time in supporting Monti’s calls to dismantle this system. Framing the discourse around the generational divide, in which “older workers came of age with guaranteed jobs and ironclad contracts granting generous pensions and full benefits,” the younger Italians, “the best-educated in the country’s history… are lucky to find temporary work, which offers few benefits or stability.” Thus, one of Monti’s “solutions” was to “make it easier for companies to hire and fire.”
Very typical of the neoliberal economic discourse, is to draw conclusions based upon these facts alone: older workers have benefits, younger workers have few opportunities; thus, older workers are destroying future generations with their “entitlements.” Solution: dismantle entitlements and benefits so all can work on an “equal playing field.” The discourse divides workers and people against each other, meanwhile, there is no mention of the fact that the reason why the youth have so few job opportunities has more to do with the lack of state and business investment, the deregulation and privatization of industries over the 1990s (while Mario Draghi was head of the Treasury), the effects of the euro (creating an economic hierarchy between the Northern nations of the EU and the Southern states), or the very obvious fact that Italy is in a severe crisis because its corrupt government colluded with global banks and suffered under the institutions and rules of the EU, which promote elite interests and undermine democracy and self-determination. No, mentioning the massive – and elite-driven – causes for the crisis Italy faces, and the unemployment issues which are symptomatic of that crisis, is too inconvenient for the New York Times. Instead, it is simply easier and more acceptable in the popular discourse to pit workers against each other, in an effort to undermine them all, collectively.
An economist at Bocconi University, of which Mario Monti was president until he became Prime Minister of Italy, supported this discourse for Italy, arguing: “Reforming contracts, unemployment benefits and salary levels would permit labor productivity to rise, which would in turn permit the country to grow… It’s a central theme for improving a country like Italy.” Undertaking all of these labour “reforms,” in actuality, would allow for youth to enter the job market to a certain degree, as it would mean that other “hyper-protected” workers no longer have protection, and all of Italy’s workforce is left vulnerable to exploitation. Thus, youth could be hired as extremely cheap labour, since for them, some work – even horrible work with little pay – is better than nothing at all. If workers who had protections attempt to organize and salvage various labour rights, companies can simply fire them and hire cheap, young workers with no benefits as replacements. This is called “youth opportunity.” This is how sweatshops became so popular in the ‘developing’ world over the past several decades, which were also brought about through fiscal austerity and structural adjustment: undermine labour/worker rights for easy exploitation, and if they attempt to organize, strike, or obtain rights, foreign corporations can fire them all and hire cheaper labour, close their factories and outsource elsewhere, or ship in cheaper immigrant labour forces. This has the effect of bringing the standards and conditions of the entire work force, and indeed, the global labour market, down to a more easily exploitative position: equality of exploitation (what economists and bankers call “labour flexibility”).
Monti declared: “We have to get away from a dual labor market where some are overly protected, while others totally lack protection and benefits when unemployed.” Thus, he said, “equity and growth” would be the “watchwords” of his government. Since “growth” means profits, plunder, and exploitation, “equity” is a logical addition to this: equity in exploitation. The New York Times, reporting on a 33-year old graduate without job opportunities, said she would “welcome” such changes, as she, “like so many in her generation, feels thwarted, overly reliant on her parents and uncertain of her future.” Amazingly, in the same article, it was acknowledged that the two-tier labour system was not created by “entitlements,” but rather as a result of policies the government undertook nearly a decade previous (in facilitating Italy’s entry into the euro-zone), in which the state made it easier for Italian corporations “to hire younger workers on a range of temporary contracts and internships,” while many of the early-retirement benefits for older workers were put in place during the mass privatizations (undertaken by Mario Draghi), in order to facilitate the reduction of staff “and cutting costs in the period before Italy joined the euro zone.” The article then went on to blame the unions, claiming that “younger Italians have come to see them as part of the problem.”
One must actually pause in appreciation of the intellectual gymnastics displayed by the New York Times in publishing an article which quietly acknowledges that the causes of Italy’s two-tiered labour and employment issues were the result of demands and policies put in place in order to join the single-currency, yet still concluded that the main problem was “overly-protected workers,” and thus, that the solutions lie in undermining labour and workers’ rights. The article even acknowledged that the government’s policies of making it easy for Italian corporations to exploit youth labour were designed “to make the market more flexible,” yet does not question the logic in Monti’s program of solving the crisis brought on by this “flexibility” by implementing measures to make it “more flexible.” The Monti-logic, which the New York Times readily endorses, is to look at policies that didn’t work (in terms of what people were ‘told’ they were meant to achieve), and then to advance and accelerate those same policies in the hopes that it will have the opposite effect as to that which it has always had before. Einstein once said that the definition of insanity is doing the same thing over again, expecting different results. If we actually apply that definition, almost the entire discipline of economics – and most especially neoliberal economics – is absolutely insane. Either that, or they simply use coded rhetoric which sounds like one thing, means another, and is done so to promote a global social, political, and economic agenda which would otherwise be impossible to publicly justify: preserving and accumulating for a tiny minority, and exploiting and punishing the vast majority.
Right on cue, the effects of the economic crisis over the previous year, exacerbated by Monti’s labour reforms and austerity package, was being felt across Italy. In Naples, one of Europe’s poorest cities, by late March it was reported that child labour had returned, as “thousands of children are leaving school to help their families make ends meet,” an increasing trend in the country, in which children work in the black market or “are recruited for sinister purposes by the mafia.” The most common job for child workers is as a “shop assistant,” earning less than a euro an hour. This trend had been developing in Italy over a number of years, as one local government report in the Campania region revealed that between 2005 and 2009, more than 54,000 children left school to join the work force, with 38% of them under the age of 13. The deputy mayor of Naples, located in the Campania region, commented: “Of course, we were the poorest region in Italy. But we haven’t seen a situation like this since the end of the Second World War… At age 10, these kids are already working 12 hours a day, which is a clear breach of their right to development.” The succession of financial reforms put in place by the Italian government since 2008 introduced drastic cuts, and in June of 2010, the Campania region had to end its minimum welfare program, “plunging more than 130,000 families into poverty.” Children from poor families face three options: struggle to stay in school, drop out to work in the black economy, or “join the ranks of the Camorra, the Neopolitan mafia.” Since the beginning of the crisis, support for youth and their families has been cut by 87%, and roughly 20,000 educators in the Campania region had not been paid for two years. Perhaps this is what Mario Monti means by “labour flexibility.”
In late March, reported the Economist, as Mario Monti was engaged in talks with employers and unions, trying to get them to accept labour-market reforms, “when it became clear that unanimity was impossible, Mr. Monti declared the talks over and said his government would press ahead regardless.” It is quite appropriate, one must acknowledge, that for a government which was created through undemocratic means, it should only continue to act and rule undemocratically as well. Such is the path Mario Monti has taken with Italy. On March 16, the Italian parliament’s three largest parties endorsed Monti’s reforms, on the warning from President Napolitano that, “failure to agree would have serious consequences.” The main problem for Monti came from the largest union federation, the CGIL, an historic ally of the Democratic Party (PD), which had endorsed Monti and his austerity packages, leading one senior leader in the PD to suggest that the party leader, Pier Luigi Bersani, “could face a backbench revolt or a party split.”
The Wall Street Journal naturally congratulated Monti, in an article entitled, “Monti pulls a Thatcher,” for showing “politica