Avvenire - 02/02/2010

The economist: when problems are temporary, businesses cannot socialize losses. Firing workers is the easiest way to cut costs, but it´s not the only way

Bruni: against the crisis, businesses that are more responsible

By Marco Girardo
Published on Avvenire on 2/02/2010

Today, defending work means "reaffirming the personalistic principle", reaffirming that "at the heart of every economic systems rests the person and work". Even in the crisis in which "technology becomes pervasive and capital always more inmaterial", so much so that it sanctions the domination of techno-finance over the real economy. This is why Luigino Bruni, professor of Political Economy at the University of Bicocca at Milano, finds words to defend the message given by Benedict XVI in the Angeles to be "perfectly in line with the concreteness of his teaching" and "important in the crisis phase which we are now going through".

The Pope gave encouragement to "do everything possible to safeguard and increase employment". Why, as an economist, do you see this appeal as being in line with Benedict XVI´s thought?

Because all of his writings are marked by the personalistic principle. And it goes for work, too. Human capital is the first kind of capital. In both ontological terms and ethical ones, it even comes before economic capital. Today, this primacy ought to be defended more than ever.

The Pope went into details. He cited two concrete cases, "two difficult realities" in Italy: Termini and Portovesme. Are you surprised by this concreteness?

Benedict XVI often gives details from everyday life. You live and you die in everyday choices, ones that deal with society and family but also with work. It´s fundamental to bring this concept back to the center of the discussion, even Ecclesial discussion.

There is nothing more concrete than the answer a business gives when faced with an unproductive site. It will say that, in order to survive, it´s necessary to close the site or, perhaps, to move it somewhere else. Is this is only possible answer?

You have to distinguish between economic crises and structural crises.

Let´s start from the first.

If problems are linked to a temporary crisis, the business shouldn´t respond by ordering a close. Laying people off is the simplest way to reduce costs, but it´s not the only way, and above all, it´s not ethical.

For what reasons?

Because, if at the end of the previous year, the businesses had profits and was able to distribute dividends, it did this thanks to the work of its employees. Not thanks to the machines or to finance. But to work. That is why, during a phase when a business goes in red, the business cannot remedy the situation by getting rid of workers. Doing so means privatizing profits and socializing losses. Therefore, the business should take on the cost of the work, which is temporarily unproductive, but which until yesterday was the reason it earned and which tomorrow will make it earn again.

And what if the crisis is structural?

The situation is different. If a business produces typewriters when people are using computers, it doesn´t have many alternatives. It would be unjust to give all the responsibility to the business, asking it to undergo losses over a long period of time. Because that would destroy wealth and, therefore, work.

Is this the case with the businessess indirectly cited by the Pope?

It is the case, for example, of the businesses which are currently undergoing strong competition with Asian countries. This will be the economic challenge of the coming years.

How?

A financial breakdown was avoided. But businesses won´t hire like before. They´ll reach a maximum of 70% of their pre-crisis work force. Unemployment will be a serious problem for years.

Who needs to take action in this case? The state?

As a first response, yes, but it´s not enough. Social sharing is needed in order to overcome the dualistic vision that characterized the current economic paradigm and which contributed to starting the crisis. This vision contemplates a free market to make money and an assistencial state to pay the social costs. It´s a model which is based on large businesses that employ workers, pay taxes and, therefore, finance welfare.

So civil economy is a sort of economical "third way"?

Communitarian vision goes beyond the dualism. It will become significant if it´s able to grow and not produce only 2% of the GDP. The time has arrived for civil economy to create more jobs, and politics plays a fundamental role in this.

In what way?

Studying the system that helps cooperatives and associations, and worrying not only about treating the person but also the environment, culture, prevention, tourism. Really, a new social pact ought to be thought up, because civil economy does not only have the function of redistributing resources but also that of creating work. A change in paradigm will be our way out of the crisis. Starting from work.

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