With Mario Monti’s resignation as Prime Minister, effective as soon as the 2013 budget is approved (expected this week), Italy may be beginning a new chapter in socio-economic mismanagement and despair. Most regrettably, that has essentially been the norm in recent decades.
During 2011, Italy was the eleventh largest economy on Earth, right between France and Mexico (CIA World Factbook), as well as the fourth largest economy in Europe. Italy is also a founding member and a pillar of the European Union. So, the fate of such a country is of great importance to the rest of the planet.
In many respects, the extremely sad and worrisome present condition of Italy can happen (and it does) to almost anyone, to different degrees. Hence, its troublesome situation is much closer to us than what we might think.
Mario Monti is the latest victim of a decrepit, worn-out, highly ineffective political system. Unfortunately, highly ineffective political systems are in abundant supply, almost everywhere we look.
The entire so-called democratic world has been abducted by their own political parties. Virtually, there are no exceptions to this rule. Those political parties, in turn, are essentially run by a relatively small team of individuals, with strong vested interests behind them. To complicate things further, those relatively small groups are not as powerful as common perception lets on… those small groups are entangled within their own conflict of interest web. The end result is endless dithering and bickering in a fundamentally ineffective political system in which, for practical purposes, strong and virtuous leadership is utterly absent. What the world needs are Global Society Strategists.
Perverse incentives are at the bottom of this most regrettable situation. Over 150 years ago, the illustrious Alexis de Tocqueville very wisely warned: “The American Republic will endure, until politicians realize they can bribe the people with their own money”. Understandably, that maxim is applicable to any country, anywhere, anytime. For more on this subject, read our article: Contemporary Political Systems and their Multiple Limitations.
The world’s contemporary political system has not experienced any significant improvement since the dawn of the US, over 235 years ago. What used to be, at that time, a truly innovative and avant garde sociopolitical system has been essentially stagnant during this period, while the rest of society has made substantial strides towards a new world order. Corporations, institutions and many professionals have been effectively preparing themselves for new challenges and opportunities.
The world’s socio-political system still insists in trying to solve new global challenges with old recipes and domestic ways of facing problems. No wonder the relatively high dysfunctionality is facing both the European debt crisis and the US fiscal cliff, for example. In the EU’s case, old and dysfunctional notions of nationality, among other things, stand heavily in the way of proper, lasting solutions. All over the world, with virtually no exceptions, political parties have abducted the control of nations. Even worse, not even those political parties have full control of things, since along the decades, they have basically abdicated leadership in trying to keep an impossible balance among so many vested and conflicting interests. The end result is ineffectiveness and disarray. More detail in our World Debt Bomb article for Business Excellence Magazine.
From this perspective, Italy is only a conspicuous example, an extreme one, of how things can deteriorate and become a big farce, within a so-called democratic system. Legality has been honored in Italy, yet results are deplorable. The rest of the world, although not in such an extreme situation (with relatively few exceptions, like Syria, and Venezuela, among others) is not significantly better off. The relatively few bright spots that still fortunately exist (like Singapore, the Nordic states, among others) owe more of their virtuous exceptional status to a favorable set of circumstances and spontaneous honorable management of their leaders than to a deliberate constitutional design with appropriate incentives and checks and balances.
There are plenty of signals around us pointing to the need of a substantial upgrade to our socio-economic systems. The task is so formidable, however, that most unfortunately, there is not much room for well founded optimism in the short and medium term.