Letter from London


Dear Friends of Istituto Acton,

Not to worry, we haven’t moved the office to the home of our namesake;  I am writing from London rather than Rome this month, following the last of our Poverty and Development conferences on the theme “From Aid to Enterprise: Economic Liberty and Solutions to Poverty” on December 1.  I’ve already written a couple of short Acton PowerBlog posts you can read here and here, so I won’t repeat what I wrote in those.  Instead, I’ll take this opportunity to talk a bit about the euro crisis that was raised intermittently during the conference and will be the subject of much news over the next several weeks.

But first some general impressions from my trip that I believe are relevant to explain the mess Europe is in.  One of the first things I noticed on arriving in the United Kingdom is how unlike Italy it is at an everyday economic level.  There are usually helpful staff members who are easy to find in the airports, train stations, hotels, shops, etc., they don’t seem to mind being asked questions and they respond as if they work in the places you find them.  A far cry from the first impressions made on arrival in Italy, where you’re likely to have to seek out assistance and your questions will often result in a look of annoyance and an utterly confusing “answer” which means you’ll have to ask several other people, if you can find them, and sort through the conflicting information you’ve received.  In terms of an inter-personal exchange of useful information (rather than idle, time-consuming chatter), things just work better and more professionally in London than in Rome.

I realize that some may be tempted to give a standard Protestant vs. Catholic, northern vs. southern European explanation to all this, despite the presence of many immigrants in the UK who come from South Asia and Africa.  If religion and culture are the predominant factors of economic growth, the newly-formed government headed by Mario Monti has no chance to convince investors that Italy is open for business.  If, as is more likely, Italy’s problems are due to its extremely burdensome levels of taxation and regulation, incredibly inefficient government and completely resistant to sensible reform trade unions, there’s hope because policies are much easier to change than religions and cultures.  But it will still take Italy a lot of time to win the necessary confidence from investors who are very well aware of the long-standing obstacles to growth and prosperity and therefore reluctant to provide the funding it needs.  Contrary to all the conspiracy theories about global finance, capital generally goes to where it will be used most productively, and right now, that ain’t Italy.

Of course this is a lesson that many countries inside and outside of Europe need to learn as well, and there are competing theories about how development takes place, as Marcela Escobari explained at our London event.  As European leaders discuss how the eurozone can survive the sovereign debt crisis, they need to do a much better job of explaining what is required of themselves and their citizens.  The politicians need to kick the habit of issuing meaningless, obscure communiqués which convince no one that any significant change will take place, only delaying the inevitable and probably making it harder to worse once the day of reckoning comes.  Real debate is needed, and for our Italian readers, one place to go for a serious analysis of reform plans is http://www.chicago-blog.it/, run by Oscar Giannino and our friends at Istituto Bruno Leoni.  That being said, I often wonder if the people of eurozone countries will accept far-reaching reforms, given the protests that have already taken place and are sure to continue.  Despite the vast amounts of human capital to be found, decades of morally- and spiritually-draining welfare-state policies may well have turned Europeans into a flock of sheep without a shepherd.

If religion and culture are not the main determinants of national prosperity, their absence or perversion can certainly prevent it.  Yes, London works much better than Rome, but as we saw during last summer’s riots in the UK, all is not well in Britain either.  In his piece “Barbarians on the Thames,” Theodore Dalrymple shows how superficial analysis of the riots has neglected the failure of leadership among the political class as an underlying cause.  The same can be said of religious leaders, who fail in their obligations to fight against injustice and poverty if they neglect or deprecate the role of private property, hard work, thrift and other “bourgeois” virtues.  It should be no surprise that people addicted to government entitlements over the course of generations are unwilling to get off the dole if no one tells them it is personally and socially destructive to remain on it.  It should go without saying that this applies as much, if not more, to upper- and middle-class beneficiaries of “crony capitalism” as it does to those in the underclass.

This being Advent, and as we approach the feast of the Nativity of Our Lord, I don’t want to sound like Dickens’s Ebenezer Scrooge on my return from London.  I mentioned earlier that if Italy’s problems are due to the wrong policy choices, hope still exists, but this is true only in limited sense, because the real meaning of hope extends well beyond what economics or politics can offer.  On two occasions over the weekend of December 2-4, Pope Benedict encouraged Christians to seek opportunities in Advent for silence, meditation and even self-denial, as difficult as they are to find amongst all the parties, shopping and travelling, because it is so easy to lose sight of Christ in our busy lives.  (In my opinion, and to save some face among the Italians, I think an understated Advent season followed by a more joyous Christmas season that extends to the feast of the Epiphany on January 6 is one area where Italy is more advanced than the US and the UK.  “Christmas contains too much joy for one day,” the Pope once said.)  As much as we at Acton see the good in commercial activity, we also know that without a moral and spiritual core, human beings can become corrupted and closed in on themselves.

Things like truth and the good are diffusive, and there’s no question that what Benedict preaches would also have positive social effects, especially in these times of economic hardship and uncertainty.  It could well be that with all the economic growth the world has seen over the last several decades, we’ve come to take it for granted and we cannot easily get used to living with less material goods, no matter how recent their arrival in our lives.  Perhaps the current crisis will have done us some good if we can manage to re-learn not only what such growth requires from us but also remind us that all we do in the economy and the marketplace needs to be done in the service of God and neighbor if it is going to provide any spiritual benefits as well.

As our next newsletter will be published after the holidays, I take this chance to wish you a holy Advent, a merry Christmas and a happy New Year, and everyone at Istituto Acton hopes that you and your loved ones are able to share in Christ’s message of peace and joy, wherever you may be.

Kishore Jayabalan

Director