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The Bocconi University Coup

The story that (extreme) left and most right-wingers are now telling about the new Monti government is that a coup is taking place in Italy. The “obscure powers” of international finance, thanks to the the centre – left Democratic Party and to President Napolitano, through heavy speculation against the Italian debt, have succeeded in driving out the Berlusconi government, a government legitimized by popular vote, and have parachuted Mario Monti with his clique of bankers and former Bocconi University graduates into power. In fact, looking at the economists in the Monti government, there seems to be very little of free-market culture there. Let’s look at the names:

  • Elsa Fornero, Minister of Labor, is an expert in pensions. She is a former student of Prof. Onorato Castellino, an expert himself of saving and pensions. Both are (were) very far from ultra-liberist economist, and Ms Fornero is a Professor in Turin, not Bocconi.
  • Fabrizio Barca, Minister for Territorial Cohesion, for long at the Treasury, is a leftist who has produced interesting work on the Mezzogiorno.
  • Piero Giarda, Minister for Relations with Parliament, is a Professor of Public Finance at the Catholic University in Milan, previously Undersecretary with the governments of Amato, Prodi, D’Alema and Dini, and a skilled negotiator with a Catholic backround
  • As Mario Monti is concerned, a former student at the Leo XIII College of Gesuites in Milan, he is very far from the stereotype of the Bocconi / liberist . For sure, in his capacity of EU  Commissioner he fought monopolies quite hard  (MicroSoft, for example) but on may issues, such as fiscal policy, he has always opposed the conservative idea of introducing balanced-budget rules in the constitution, preferring the UK type of “golden rule”, i.e. limits to current spending net of revenues, that exempt public  investments.

These economists are quite close to what has come to be known as the “Catholic Church’s Social Doctrine” or “Social Market Economics” (which nobody knows exactly what it is), much more than the free-market  orthodoxy! As for the appointment of the CEO of Banca Intesa, Mr. Passera, a former Manager of Olivetti and of the Italian Posts, at the Ministry for Development, this is a serious political mistake by Monti, which exposes the new government to the criticism of being the puppy of financial strongholds. Incidentally, it is not clear what Mr. Passera understands about economic development. His statements in favor of large infrastructure projects, highways and high speed trains, while very little free-market in nature, do not bode well.

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