by Fulvio Marcandelli |
Professor Sergio Noto, lecturer in Economic History at the Department of Economic Sciences at the University of Verona, offers us a different interpretation of the current economic situation.University of Verona, columnist for Corriere Veneto and blogger for Fatto Quotidiano, offers us a different interpretation of the particular economic moment we are going through. We are all familiar with the current situation in the electronics sector: a shortage of raw materials, skyrocketing prices, product allocation by suppliers, a surge in demand, regulatory measures to support companies in drawing up their balance sheets, support measures by central banks, etc. But are we sure we can interpret the current economic situation as a whole? But are we sure we are interpreting the events we are witnessing correctly? Should we "ride the wave" or pause for a moment to reflect on the immediate future, trying to interpret it with an eye to what has happened in the past?
Read thefull article in issue 11 of Elettronica AV
The world's economies find themselves overwhelmed by the effects of the pandemic, which are still difficult to interpret, in an unusual and totally unexpected scenario, with shortages of raw materials, in all sectors, causing supply problems for many companies. What are your thoughts on this? Are these the effects of a globalisation that has got out of control? Are there any historical precedents for the current situation?
This is a very complex question to which it is not easy to give an answer that is not too general; we are unfortunately suffering the sum of the consequences of the previous economic crisis and the pandemic. In order to get out of this situation and resume the growth trend, many observers agree on the need to radically change the economic behaviours that have been held until now. These behavioural patterns will necessarily have to be changed if we are to get going again once this crisis is over, and those who are unable to adapt will lose a lot of ground. As far as globalisation is concerned, it can be said that it has never really been "under control" and what is happening to raw materials today is an effect of a radical change in the way they are distributed, similar to the upheaval of economies that occurred in the 1500s, when "American" gold came onto the European markets.
Supply costs have soared due to a lack of supply (but transport also plays its part). Should we fear a resurgence of inflation? How will the banks behave? Will there be anti-inflationary measures?
Prices will certainly tend to rise, and central banks will take steps to limit the explosion of inflation. However, from my point of view, a "moderately low inflation" below 5% could also be healthy, because it would lead to the exit from the market of those unprofitable activities, which have taken advantage of particularly low interest rates to establish themselves, without having real content and valid fundamentals.
Many companies came out of the subprime crisis with broken bones, partly because there was no institutionalised bank support. How do you judge the banks' behaviour in this situation?
What we hope for in the future is an intervention by central governments to make the world of business and the production system as independent as possible from the banking system, which should play a less significant role and be at the service of the economic system and business development; governments should intervene to increase the solidity of banks, but also to reduce the quantity of financial instruments circulating, which are increasingly sophisticated and harbingers of uncontrollable risks that can generate problems and instability, penalising investment. The book by Mariana Mazzuccato(editor's note: "the value of everything") is interesting in this regard, as it shows how the growth of financial instruments, although important, brings very little benefit to overall GDP in the long term. The study of historical series also serves to understand these phenomena. If the financial system is not regulated seriously and rigidly by world politics, we will pay the price with instability and uncertainty.
To what extent will our companies, which are rich in inventiveness but poor in capital, be affected by technologies linked to 'electric motors'? Will they fall prey to unscrupulous foreign investors? If so, with what consequences?
The problem is serious: our companies unfortunately invest too little in research and development and this will push us further and further out of the market, making Italian companies easy prey for unscrupulous investors. We are lagging behind and we should make a qualitative leap forward, but few are willing to take the risk. Let's hope that future 'extraordinary' funding, which is much talked about at the moment, can be directed in this direction, with the collaboration of banks and politicians, who must be far-sighted in financing research and technology.
From a historical point of view, don't you think that the social and economic context in which we find ourselves, the overwhelming technological evolution, the globalisation of markets, escape the best known theorisations of economic thought, overwhelming any residual form of ethics, suffocated by an exasperated competition in the search for profit 'at all costs'?
Honestly, I have always observed that the 'next day' profit-oriented business logic has always been short-lived, while ethical behaviour has always, over time, yielded excellent results and profits. The adventurers who were only interested in profit, with the logic of relocation, exploitation contracts, etc., are now in their twilight years. The path of development today is based on ethical assumptions; look at Apple, for example, perhaps the largest company in the world, which has acted with foresight, certainly without regard to short-term profit. Let me conclude with a digression: in the Gospel it is written: "Seek the Kingdom of Heaven, and the rest will be given to you in abundance", i.e. "think about pursuing something good, about creating businesses that generate real value, and the rest (profit) will come of itself". Of course it takes ethical and virtuous behaviour at all levels with an entrepreneurial vision that is not exclusively profit-driven. Profits are important, but alone they lead 'up against a wall'.
Read thefull article in issue 11 of Elettronica AV
