Sunday, 27 June 2010

The Sorrows of Young Businessmen



[Edoardo Montenegro, Turin] - Ordinary laws are needed to improve the ease of doing business in Italy.

According to the World Bank, Italy ranks 78th within the OECD for the ease of doing business (1). If you want to start a business in the food industry, you apparently have to deal with 20 different offices to comply with a stunning 71 procedures (2).

To tackle the problem, the Italian Government aims to reform Article 41 of the Constitution (3): "You are not supposed to untie the Gordian Knot, but to cut it with a sword" explained Giulio Tremonti, the Italian Minister of Finance (4). Renato Brunetta, Minister of Public Administration, was more explicit: "Why should we keep on defending an old fetish?" (5). Referring to "common good", "planning" and "controls", Article 41 would be a 'soviet' inheritance (6).

Yet the first paragraph of Article 41 seems unequivocal: "Private economic enterprise is free". Does it sound communist?

To begin with, between 1948 to 1969 Article 41 did not prevent Italian businesses from growing steadily in a context of low wages and self-financing. As explained by Fabrizio Barca, an oppressive regulation developed owing to the lack of specific market reforms (7), rather than to constitutional limits.

Secondly, the worst scores highlighted for Italy by the World Bank refer to "paying taxes" and "enforcing contracts" (8). Reflecting over the same results, Mario Draghi recently outlined four priorities: reducing the time of justice, cutting the tax burden, fighting the black market, investing on innovation (9).

Last but not least, how can you forget common good, planning and controls? The world financial crisis, climate change and the history of Mafia are evidence of the contrary.

The Italian Constitution is stout. As Stefano Rodotà warned: the heavier is the attack, the stonger is the self-defense (10).

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(1) The World Bank, "Doing Business 2010. Measuring business regulations", doingbusiness.org.

(2) Dino Pesole, "La nuova Carta per l'economia", Il Sole 24 Ore, June 18th 2010, page 6.

(3) "Private economic enterprise is free. / It may not be carried out against the common good or in a way that may harm public security, liberty, or human dignity. / The law determines appropriate planning and controls so that public and private economic activities may be directed and coordinated towards social ends." (Italian Constitution, Article 3, 1948).

(4) Aldo Cazzullo, "'Una manovra per la stabilità. Fedele al governo Berlusconi'", interview with Giulio Tremonti, corriere.it, May 31st 2010.

(5) Renato Brunetta, "'Cambiare l'articolo 41 ci farà ricchi'", Libero, June 20th 2010, page 1.

(6) Agostino Giovagnoli, "Articolo 41 e libertà d'impresa", repubblica.it, June 19th 2010. Mr Giovagnoli, Professor in History at Università Cattolica di Milano, actually shows how these references reflect instead the catholic roots of Italian Constitution: "This article, indeed, is by no means 'soviet', while it matches a bright formulation of free enterprise with two catholic values: the defense of human being and the search of common good."

(7) Fabrizio Barca, "Compromesso senza riforme nel capitalismo italiano" (Storia del capitalismo italiano. Dal dopoguerra a oggi), Rome, Donzelli, 1997, page 57.

(8) The World Bank, "Doing Business 2010. Measuring business regulations", doingbusiness.org.

(9) Mario Draghi, "Più innovazione e meno regole per favorire la concorrenza", Il Messaggero, June 19th 2010, page 1. Mario Draghi is the Governor of the Bank of Italy.

(10) Stefano Rodotà, "La Carta svuotata", repubblica.it, June 21st 2010.

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