Economists From Italy

"Thanks to the large cultivated areas that still surround it, Milan could truly become the first metropolis where agriculture returns to being the lifeblood of the city and not just an extraneous presence. But we need pluralistic agriculture, promoted by pluralistic urban policies. We need a new belt of extensive agriculture that could redraw the city's perimeter and prevent any further expansion; but we also need “zero-kilometre agriculture” to give meaning to the thousands of small pockets of empty space that dot the large sprawling city of northern Milan. Finally, we need urban agriculture to multiply the amount of green and organic space on rooftops and along roadsides and to create opportunities for employment and environmental awareness everywhere."

"The international system of exhibitions, fairs, biennials and scientific events is now extremely dense and pervasive. And although every year new crowds of global tourists (Chinese, Russian and even Indian) arrive on the scene, it is very difficult to make headway in such a fiercely competitive environment. [...] Why should 29 million visitors come to Milan in the summer of 2015? To see an extraordinary exhibition on food (the materials for which could be consulted in real time on our iPhones while we travel to India or Brazil to study their food policies first-hand)? Or to visit the beauties of Milan (no doubt about that, but some doubt about our ability to compete with much more aggressive competitors in this regard)? This is no laughing matter: if we want the Milan Expo not to be a flop, it is crucial that Milan gradually becomes a global centre of attraction on the theme of food."

"(About ius soli and ius culturae) Does it make sense to make them feel stateless in our own country? Does it make sense to present them to our children as strangers? Does it make sense to teach them our laws, our social norms and our history in our schools, to impart our culture to them and then exclude them from all of this? Are we not running the risk of developing in them and in our children a feeling of learned helplessness, injustice and discrimination, which is a precursor to resentment, hatred and mistrust?"

"The fact is that a reduction in contributions increases the current deficit, but will automatically reduce future deficits due to the lower implicit debt associated with pension payments as these mature. We are not aware that this feature of our social security system has been highlighted in EU-level negotiations on the Stability Law."

"The blog is perhaps not the most appropriate tool for performing the true function of politics, which is to mediate between different interests and find a synthesis. It is more likely that the Internet will continue to be a tool for information and reporting. This is, however, a very important function."

"The monopoly of the United States and Europe in the selection process condemns the World Bank and the International Monetary Fund to being seen as mere extensions of the strategic interests of industrialised countries. The choice of who leads these institutions is too important to be entrusted to mechanisms that are opaque, undemocratic and increasingly unable to guarantee that the best candidate will prevail."

"The real problem we have in Italy today is one of fairness, not the financial sustainability of our pension system."

"We need a project that makes Milan a “world city” in terms of food production and marketing; a project that helps migrant communities to promote widespread food entrepreneurship and creates a network of spaces (such as the many abandoned farms within the municipal boundaries) where these different cultures can find logistical support."

"The National Social Security Institute (INPS) provides benefits on behalf of the state. So as long as the Italian state does not go bankrupt, let's say that the INPS goes bankrupt, and I assure you it will not, but the Italian state will always be there. If there is anything people should be concerned about, it is not the INPS accounts but the Italian state's accounts, the public debt."

"There are people who currently receive pensions or annuities, as in the case of politicians, which are completely unjustified in light of the contributions they have paid in the past. We have granted this privileged treatment to these people for many years. For those who receive very high benefits, should we not ask them to make a contribution that could in some way lighten the burden on the social security accounts? This would allow us to carry out some redistribution, for example, to help those people in the pre-retirement age group who are living in poverty, or we could allow greater flexibility in terms of retirement from the pension system. These are all measures that can be taken in this area. Linking contributions and benefits is the real underlying problem."

"Obviously, as the FMA, we have in our DNA attention to women, young women, and to work, because there is no discrimination and because there has been what was perhaps a word most used in the past: empowerment. So I felt I was on a mission in a certain sense, to bring my skills and "do my bit for Italy", which is perfectly in line with our FMA mission. And then it’s exciting to somehow bring Mary’s presence into a group that wants to work for rebirth."

"Many times I say to the Americans: "You're looking for someone and not something". In effect this "someone" benefits from the "something", from the traffic in drugs."

""‘Greening the economy’ is likely to be as challenging: every year governments across the world subsidize fossil-fuels (coal, oil, gas) for an amount equivalent to Japan’s GDP, produce electricity by burning them, and authorize the chopping to ‘non-forest use’ of an area the size of Belgium"."

""Tackling ‘population aging’ - especially in high-income countries, where the median age is above 40 - requires: 1) acknowledging that most pension systems are financially unsustainable; and 2) reducing the resources allocated to the most sizeable share of the electorate - the elderly"."

""Future shocks could exceed the ‘ability to respond’ of governments, businesses and citizens"."

""In public policy, dependencies and unintended consequences matter. For example, ‘climate change’ and ‘population aging’ are key drivers of migration and cannot be ignored when designing immigration policies. Also, ‘deforestation’ not only leads to ‘global warming’, but also drives wild animals closer to humans - increasing the likelihood of viral infections, via ‘cross-species leaps’. As a result, most decisions cannot be taken in isolation: solving problems in one place is likely to create new ones, elsewhere. Also, well-intentioned policy choices can often provide perverse incentives - and obtain the opposite of their stated objectives. The phenomenon is known as the “cobra effect”: in India, during British rule, the authorities’ bounty on dead cobras resulted in a larger cobra population. In other words, policy making: 1) relies on a complex, interrelated context; and 2) can lead to unpredictable, non-linear outcomes"."

""Change is needed. In the absence of bold decisions, rising inequality will foster populism and nationalism, putting democracy at risk"."

""The question “state or markets?” is poorly posed. The dichotomy between “intervention - state - planning - equity” and “laissez faire - private sector - market - efficiency” stems from inappropriate consequential reasoning: the state can be inequitable and the market inefficient. Debates about primacy should end: state and market are complementary - not substitutes. Whenever governments and markets have worked well together, the results have been spectacular: ‘moon landing’ is the most quoted, quintessential example"."

""Complex problems are not solved (only) with money". Original quote: "I problemi complessi non si risolvono (solo) con i soldi"."

""Women are the (forgotten) half of the world's population, and their social inclusion would benefit everyone". Original quote: "Le donne costituiscono la metà (dimenticata) della popolazione mondiale, e la loro inclusione sociale porterebbe benefici a tutti"."

""We need to understand and resolve discontent, preventing valid social issues from falling into nationalism". Original quote: "Bisogna capire e risolvere lo scontento, evitando che valide istanze sociali cadano nel nazionalismo"."

""Almost as if it were a new religion, we need to start rewarding those who create added value and take up the responsibilities required by their role in the community". Original quote: "Quasi fosse una nuova religione, bisogna iniziare a premiare chi crea valore aggiunto, assumendosi le responsabilità richieste dal proprio ruolo nella collettività"."

""(...) throughout the Peninsula, informal and personal social ties are more important than formal and impersonal ones. When the community (Gemeinschaft, in German) counts more than society (Gesellschaft), family relationships - making up for the absence of the State - prevail over collective responsibilities, weakening civil society". Original quote: "(...) lungo tutta la Penisola, i legami sociali informali e personali sono più importanti di quelli formali e impersonali. Quando la comunità (Gemeinschaft, in tedesco) conta più della società (Gesellschaft), le relazioni familistiche – supplendo all’assenza dello Stato – prevalgono sulle responsabilità collettive, indebolendo la società civile"."

""[In Italy,] continuing to do 'what has always been done' is not convenient: living on rents and clinging to the past would equate to a slow suicide, because in the meanwhile risks would rise and the economy would get exposed to potential adverse shocks. If not challenged, the “I hope I get through” mentality will lead to shipwreck or irrelevance – which is the same". Original quote: "[In Italia,] continuare a fare ‘ciò che si è sempre fatto’ non conviene; vivere di rendita, aggrappati al passato, sarebbe un lento suicidio, perché nel frattempo i rischi aumentano e l’economia viene esposta a potenziali shock avversi. Se elevata a sistema, la mentalità dell’“io speriamo che me la cavo” porterà al naufragio o all’irrilevanza – che è lo stesso"."

""Largely unnoticed, megatrends transform the way we live and work. Preoccupied by our daily worries, we tend to overlook the irreversible forces that shape our life. In the past, the printing-press and the telephone forever changed human communication. Combustion and electricity revolutionized energy management. Going forward, the unfolding of similar ‘transformative, disruptive shifts’ will reshape society, business and the global economy"."

""Thinking about the future gives vertigo. It takes courage to look ahead. The ancient Greeks - when they sought to know - consulted the oracle at Delphi. Religion and magic help manage anxiety, but a dispassionate analysis of data and probabilities may actually provide useful guidance"."

""The state needs to enable the markets, but - contrary to the dreams of planners and technocrats - development cannot be ‘state-managed’. For the business environment to lead to innovation, the state needs to protect ‘public goods’ such as: 1) competition; and more broadly 2) the entrepreneurial spirit. Policymakers must achieve a practical, dynamic balance in the state-market mix"."

""When designed and implemented correctly, ‘conditional financing’ can: 1) steer resources towards the strategic objectives; 2) avoid speculative capture, by ensuring the productive use of public resources; and 3) push the private sector towards inclusive, sustainable growth"."

""The state must set the framework for the markets to function (...) but in the long run, innovation needs a competitive private sector"."

""By nature, ‘complex systems’ grow or decay at exponential rates. As suggested by the butterfly-effect in chaos theory, a negligible change in an ‘original state’ can lead to a radically different ‘resulting state’. In other words, a minor event might have large, unpredictable effects - depending on its: a) position in network (i.e.: initial conditions); b) degree of connectivity (i.e.: ease of interaction); and c) size of the impact"."

""From Athens’ ‘Thirty Tyrants’ to the rise of Hitler, democracy always failed “from inside”. The shift towards authoritarianism was favored by: 1) rapidly changing contexts; 2) inept rulers; and 3) weak institutions"."

""Enlightened, quantum policymaking has an important role to play. Yet, ‘classical physics’ still shapes our way of learning. Cause-effect, linear thinking should be abandoned. To better understand our complex world, we must say “Bye” to Newton"."

""In an era of complexity, quantum thinking is needed – particularly in central banking"."

""We need to learn how to manage ‘non-linear feedback loops’, ‘quantum jumps’, and the unpredictable consequences any event can bring about"."

""The future is not a straight-line-projection of the past. Yet, most people - even scientists - think in linear, cause-effect patterns. The real world works differently: events follow discontinuous random walks, not predictable trends. At best, we can only assess the ‘likelihood of forthcoming events’. A rule-based approach is often misleading; to forecast future developments, we need probabilistic - rather than deterministic – thinking"."

""Every day, 1) ‘simple systems’ become complex: for example, a village becomes part of a city; and 2) ‘complex systems’ become more complex: for instance, financial markets embrace machine learning. Often, an increase in complexity leads to unintended consequences"."

"(...) aumentare agli opportunisti il costo della non vaccinazione; come glielo aumenti agli opportunisti, qual è la logica, devo dire geniale del green pass? Tu dici "o ti vaccini", no non mi vaccino – benissimo, "o guarisci", e va be' se non lo ha preso... "e allora ti fai i tamponi". I tamponi sono un costo psichico – il fatto di infilare dentro al naso, fino al cervello, i cotton fioc lunghi – è un costo psichico, e un costo monetario - 50 euro, due volte 60 euro - più il costo organizzativo! Tu gli aumenti il costo; aumentandogli il costo, tu lo spingi a ridurre lo zoccolo (...)"

"Il green pass è una patente, è una patente di libertà, che è nelle mani di chi è guarito dal covid o ha fatto i tamponi o, ancor meglio, ha fatto il vaccino. (...) se non hai la patente non puoi, non potrai lavorare, non potrai accedere ai luoghi di socializzazione."

"Sraffa’s criticisms of the concept of capital also amount – at least in principle –to a deadly blow to the foundations of the so-called ‘neo-classical synthesis’. Combining Keynes’ thesis on the possibility of fighting unemployment by adopting adequate fiscal and monetary policies with the marginalist tradition of simultaneous determination of equilibrium quantities and prices as a method to study any economic problem, this approach has in the last few decades come to constitute the dominant doctrine in textbooks the whole world over. It is only thanks to increasing specialisation in the various fields of economics, often invoked as the inevitable response to otherwise insoluble difficulties, that the theoreticians of general equilibrium are able to construct their models without considering the problem of relations with the real world that economists are supposed to be interpreting, and that the macroeconomists can pretend that their ‘one commodity models’ constitute an acceptable tool for analysis. For those who believe that the true task facing economists, hard as it may be, is to seek to interpret the world they live in, Sraffa’s ‘cultural revolution’ still marks out a path for research that may not (as yet) have yielded all it was hoped to, but is certainly worth pursuing."

"Indeed, a full understanding of Sraffa’s contributions can be difficult, since these must be viewed as a complex whole, as part of an extremely ambitious cultural project: ‘to shunt the car of economic science’ in a direction opposite to that –the subjective theory of value –chosen by Jevons, one of the leading early exponents of the marginalist approach. Thus, with his writings Sraffa contributes to exposing the weak points in the theories of the leading exponents of the marginalist approach, from Alfred Marshall and Arthur Cecil Pigou to Friedrich von Hayek, and of their present-day followers, and at the same time re-proposes the classical approach of Adam Smith and David Ricardo (and also, in certain respects, of Karl Marx). The work of reconstructing the classical approach is also coherent with elements of the Keynesian contribution. This connection is possibly the most important issue in the current debate concerning the road to be followed in going on with the work started by Sraffa."

"My thesis, paradoxically, and a little provocatively, but nonetheless genuinely, is simply this : PROBABILITY DOES NOT EXIST.The abandonment of superstitious beliefs about the existence of Phlogiston, the Cosmic Ether, Absolute Space and Time, ... , or Fairies and Witches, was an essential step along the road to scientific thinking. Probability, too, if regarded as something endowed with some kind of objective existence, is no less a misleading misconception, an illusory attempt to exteriorize or materialize our true probabilistic beliefs."

"Probabilistic reasoning—always to be understood as subjective—merely stems from our being uncertain about something."

"Perhaps the most influential theorist in England today is Nicholas Kaldor (Hungary), and undoubtedly the most original is Piero Sraffa (Italy)."

"In economic theory the conclusions are sometimes less interesting than the route by which they are reached."

"There are two things in Sraffa. One of them is very close to Keynes and that's the part that the Sraffians ignore and that is, Sraffa wrote a criticism of Hayek's capital theory book in 1932, and it's in that criticism that Sraffa developed this theory of spot and forward markets, and it's that theory which Keynes latched onto in his spot-forward market analysis. So there's a very good connection between Sraffa and the spot-forward markets. The other thing which they've latched onto, what was really anti-Keynesian, is The Production of Commodities by Means of Commodities. It has nothing to do with real world or with economics - it's an attack to show that the neoclassical system doesn't work. There are lots of ways of showing that it doesn't work, but basically the way Sraffa shows it doesn't work is by assuming that there's no substitutability between labour and capital. It's a fixed-coefficient system. So what? You know, the old neoclassicists would have said that wages were inflexible. It's the same thing. Real wages are inflexible in the Sraffian system. What does it prove? I don't think it proves anything."

"The gap between countries that embrace innovation and those that hesitate, Draghi explained, will widen significantly in the coming years, which is why Europe is now facing a moment of truth: over the last twenty years, we have gone from being a continent that welcomed new technologies, narrowing the gap with the United States, to one that has progressively placed barriers to innovation and its adoption. We have already seen this in the first phase of the digital revolution, when European productivity growth fell to about half the US rate, with almost all of the divergence coming from the technology sector. Now this pattern is repeating itself with the artificial intelligence revolution. Last year, the United States produced 40 major fundamental models, China 15, and the European Union only three. The same pattern can be observed in many other frontier technologies, from biotechnology to advanced materials to nuclear fusion. [...] Economic history indicates that mass unemployment is not the most likely outcome. Previous technological revolutions suggest this."

"(Italian language) L'appello a non vaccinarsi è un appello a morire sostanzialmente - non ti vaccini, ti ammali, muori - oppure fai morire - non ti vaccini, ti ammali, contagi lui lei muore -, questo è."

"... "the Continent's traditional social contract" - perhaps its major contribution to contemporary civilization - "is obsolete" and must be dismantled."

"The signals from the monetary analysis confirm the picture of subdued underlying price pressures in the euro area over the medium term."

"The crisis has not been overcome, but there are many encouraging signs. The economy is recovering in many countries, the imbalances in European trade are declining and the budget deficits in the monetary union are falling."