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Dolce Far Niente
Defying the EU the Italian Way
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  • Greg Olsen

    Culture is not the problem with the Euro. The lack of synchronized business cycles (fiscal discipline is related but not entirely the issue there) and lack of free flow of labor. The only thing that flows freely in the Eurozone is capital. When a one-size-fits-all monetary policy doesn’t work for all the parties–too tight for some and too loose for others due to different business cycles–it creates positive feedback on the imbalances. Add to that the inability for labor to migrate–the US dollar works among sovereign states because Okies can pack up and move during a drought, blacks from the South to the industrial North, and now back to the non-unionized South–due to legal, language, the usual labor rigidities, and cultural barriers (here is where culture plays the larger role), and you have the current slow motion disaster on your hands. This does not mean that things aren’t changing.

    Every year I travel to Europe, more business is being conducted in English as it is becoming the lingua franca among Europeans. For example, in a meeting at one of my customers, a German bank, there were three Germans, on Italian, and Francophone Swiss in the room; English not German was the way to communicate. Language barriers are breaking down at least.

  • Boritz

    So why doesn’t Italy have a something comparable to Google?

    • Andrew Allison

      Couple of reasons. First, there’s little scope for entrepreneurialism due to regulation and employment issues, and, as TAI has pointed out several times, the EU thinks that bureaucrats can make innovation happen by hobbling competition.

    • Government Drone

      On top of the regulatory problems that Andrew Allison mentions, there’s also the matter of size. If I were to start some potentially big business in the US, even without thinking internationally, I already have a 300+ million person domestic market to work with & expand into. Italy has a population of around just 60 million, so my potential market there is just 1/5 the size, which justifies putting in proportionately less capital & effort to get things going. put in years of losses because Jeff Bezos was able to persuade investors to pay up for a huge infrastructure that would pay off in the US-sized market. A business in Italy, or pretty much any other European country, doesn’t have that big a domestic market.
      Italy also has the disadvantage that Italian isn’t spoken much outside the country; an Anglophone businessman who won’t/can’t learn another language has the US, UK, Canada, Australia, & to some extent India as places he can operate in without need of interpreters (though some language issues will remain). The Italian wishing to expand out of Italy will have to learn one or more foreign languages to get anywhere. For a language-intensive business like Google, that’s a significant factor.
      So even if the regulatory environment if Italy is identical to the US, it’s harder for an Italian to come up with the next Google.

  • Pete

    Excellent conclusion

  • Andrew Allison

    Just to be clear, Italy is defying the single-currency Eurogrooup, not the EU. The problem for the eurozone is clear, you can’t have a common currency without a common monetary policy. I don’t think anybody really expects Greece, Italy or, for that matter any Club Med country (including France) to voluntarily implement a responsible monetary policy. If it happens, it will happen because Germany and the financial markets decide to cut off their credit.

  • f1b0nacc1

    Reading this, I am reminded of Yossarian’s discussion with the old man in Catch-22

  • megapotamus

    Germany is only marginally superior to Italy or even Greece in its fiscal health. France is on the same road to ruin as is every Euro state you could mention. What is it? It is the siren song of Free Munny. Yes, it is socialism. It is, gimme gimme gimme. How does it work though? How does it enslave every mother’s son save only the overseers? Simple; everyone is bound because everyone, at some time or another, has taken that check. Has pocketed that subsidy, booked that fraudulent increase. We will stop fleecing our own neighborhood, they say, when everyone else stops fleecing us! That day, of course, never comes. Well, it comes when the checks bounce. Then there is the mighty cry in unison…. Where’s my check?!??! The answer, which no man has the courage to deliver, is that you are entitled to no check. And even if you were, the overhead of this enterprise called Italy or Ireland or the EU or the US has absorbed whatever you have poured in, drunk it and guess what? not been sated in the least. Will it be time, then, to crack open each others’ heads and feast on the goo inside? No, it is almost never such time. But that case will be difficult to make when you have based your society, economy, law, media, arts, politics and families on ‘altruism’, which means demanding largess from the next guy while avoiding those demands yourself. Once that takes up ALL your working day, fellow babies. ain’t no real work gets done. That day is here. Forward.

  • Fat_Man

    “Italy changes over time. Feudalism ended.”

    Italy was never feudal. It was always urban. Many of the city states, like Florence, Genoa, and Venice were republics. But, the point is not disproved.

  • David Hoffman

    Technocrats dream of reshaping cultures to fit their ideals. This doesn’t work unless they are willing and able to use totalitarian methods, and even then it isn’t entirely successful.

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