Will Grillo's Dubious Affiliations Send the EU Back Into a Sterile Debate?
By Staff News & Analysis - March 08, 2013

Platform … Comedian Beppe Grillo, the surprise, true winner of Italy's inconclusive February 24-25 elections, has a secret card up his sleeve: an economic 'guru' with close ties to Nobel laureate Joseph Stiglitz. For his economics policies the Genoese comedian turns to Mauro Gallegati, an economics professor at the Polytechnic University of the Marche region who has taught at Cambridge and Columbia University and has worked with Stiglitz. – Gazetta Del Sud

Dominant Social Theme: When austerity ends, social justice will emerge.

Free-Market Analysis: Just yesterday we pointed out that the Italian elections further deepened the grave that Southern Europe is preparing for the EU and for the euro. But a feedbacker pointed out that the winner in Italy's recent election, Beppe Grillo, was a disciple of the socialist economist, Joseph Stiglitz – and this is worthy of a comment in itself.

In fact, this has specific ramifications because it means that Grillo – whose voice echoes those of other socialists throughout Southern Europe – will shove the sociopolitical conversation back toward a familiar mode. It is one in which socialists battle neo-liberals for the "spoils" of regulatory democracy.

What the EU and the Southern PIGS need is a good regulatory cleansing. But in Italy, Grillo seems to want to recast the argument along lines in which austerity in the form of higher taxes and fewer government benefits is to be confronted by an alternative policy of worker rights and higher taxes aimed at the rich. Here's more from the article (paragraphing ours):

Gallegati is an expert in welfare policy with extensive international experience. Along with a few others, Gallegati was picked to set up a 'task force to help the newly elected in parliament.' The task force's job will be to educate the Five Star representatives on policy.

Aside from this task, Gallegati is also putting the finishing touches to a journal article – written together with Stiglitz – on how to redistribute income and which will form the basis of the Five Star Movement's policy platform in parliament: 'Hit the richest with taxes.' In Gallegati's view, the rich are those, for example, with private planes. Also part of the M5S platform is a reform to the labor market which protects the workers and not necessarily a worker's work place. 'It's a completely different approach from that' currently being followed, Gallegati says. '

'We have to invent totally new professions, placing bets on culture and tourism, otherwise who will pay today's unprotected workers when they retire?' asks the economist. 'To my children I always say: 'when I die put my body in the refrigerator so you can keep collecting my pension',' Gallegati jokes.

Stiglitz, who won the Nobel prize in economics in 2001 while a member of Columbia University's faculty, will not work directly on the M5S platform, Gallegati says, 'but he will give us a hand. As will one of his closest collaborators, Bruce Greenwald, the guru of gurus on Wall Street.'

So now another sterile debate is in the making. On the one hand will be Grillo's platform, aimed at the "rich." On the other hand will be EU "austerity," aimed at the "people."

In both Greece and Spain the arguments have not been so clear cut – and even more free-market oriented. In Greece, the government and politicians have been attacked – and rightfully so – for corruption and for betraying their countrymen by implementing EU policies. In Spain, with 50 percent of the youth workforce unemployed, the narrative has also concerned the failure of government.

In fact, the problems of the EU DO concern government failure, not only on a national level but an international level. Is Grillo going to change all this? This is what it sounds like he has in mind doing. The solution to Europe's problems is less regulation, lower taxes and overall, a reduction of bureaucracy. But this is not what Grillo apparently had in mind.

Identifying with Stiglitz, Grillo will apparently promote various socialist nostrums once again, and redirect the argument from where it has been (about the corruption of the EU enterprise) back into the old, sterile socialist channels.

This is a recipe for futility. European socialism is inherently insupportable. It is difficult to tell, fully, what the currents are that are swirling in the background when it comes Grillo. But if he is successful in realigning the current debate, then the anger and frustration in Europe will escalate markedly.

After Thoughts

A debate between "workers" and "fat cats" will surely avoid the real issue, which is that Europe needs to be freer not more politicized. If this is NOT addressed, the result will surely be increased social chaos and further authoritarianism. Cui bono?