Civil Economy

Luigino Bruni, Stefano Zamagni

• Publisher: Agenda Publishing
• Year: 2016
• ISBN:
  9781911116264
• Topic: Economía
• Subtopic: Teoría económica

Global financial capitalism has eroded the moral economy on which all economic exchanges ultimately depend. The principles of reciprocity, responsibility and redistribution, which for centuries defined the market place, have been increasingly pushed aside by a growth model that places the pursuit of profit above all else.

Luigino Bruni and Stefano Zamagni draw on a rich Italian tradition of civic humanism to advocate a more well-mannered type of economic market – a civil economy – one that places well-being, virtue and the common good alongside more familiar economic goals. They provide a succinct introduction to the civil economy approach and outline the thought and ideas of some of its pioneers and main representatives. The many different fields of application of the civil economy, from the determination of gross domestic product to the management of common goods, from welfare to the organization of production and consumption, are considered.

Unlike many post-growth or degrowth movements, rather than seek to replace the market, civil economy seeks to find solutions to social problems within the market, while maximizing human values and minimizing government intervention. It is a distinct and valuable approach, and one that offers individuals, corporations and governments a framework for a humane and socially accountable, yet productive and competitive, system of markets.

Part IHistory

1What is civil economy?

[A]t a severe crisis, when lives in multitudes and wealth in masses are at stake, the political economists are helpless –practically mute: no demonstrable solution of the difficulty can be given by them, such as may convince or calm the opposing parties.

–John Ruskin, Unto This Last, 1860

We need to begin anew to criticize the capitalism we have created in the past three decades, a period that coincides with the era of globalization and common goods. The beginning of the 1980s marked the close of an energetic time of reflection on economic and political systems. The late 1970s ended (primarily in Europe) an era of just under three centuries characterized by the Industrial Revolution, and an era characterized by schools of thought critical of this new form of production and life, which has been called “capitalism” since Karl Marx’s time. With globalization and the collapse of state socialism, the economy as it manifests itself in present history became a fact of nature, the deep structure of which was no longer discussed. That is not to say that there are no contemporary economists, politicians, or philosophers who criticize our form of capitalism –one need only consider Amartya Sen, Muhammad Yunus or Serge Latouche –but these criticisms as a whole have not yet produced a different narrative of our time. Important innovations have been proposed in both theory and practice, but without either individually or collectively having the strength of thought to narrate a non-capitalist market economy. Sen’s capabilities, Yunus’s social business, Joseph Stiglitz’s and Thomas Piketty’s criticisms of inequality, Vandava Shiva’s “earth-centred economy” and Latouche’s degrowth all differ among themselves, but even if we were able to systematically arrange them in such a way as to make them coherently coexist (not an easy task), we still would not have created an alternative market economy to the current form of capitalism. In truth, we would have to say that we are far from it. We are like the baby in its mother’s womb, so immersed in the liquid that nourishes it that it cannot think that a world beyond might exist; to become aware of the existence of another larger, more marvellous world it must first leave the world that nurtures and sustains it.

Although the tone of this opening paragraph might lead some to think that we are about to define the civil economy as the true alternative to this form of capitalism, in reality the civil economy is not that alternate system, neither in thought nor practice. It is, however, a laboratory of thought and practice in which we can attempt to imagine it. It is an inclusive and open process in which there is room for all not content with today’s financial capitalism and who, within a few broad cultural coordinates, seek a deeper understanding that can give rise to more radical and penetrating questions against our current system than those currently posed from within it –perhaps from the perspective of a child born today in the Congo, or in Europe twenty years from now. These children have the right to ask challenging questions about our growth model and our lifestyles. Our non-questioning attitude of today is making their lives harder, at times changing them for the worse and at times for the better, but without them having a say in things. As part of her ethical task a scholar, and certainly a researcher in the civil economy, can ask the questions distant and future children might pose. To ask them correctly she must know the contemporary debates, but she must also study history and the classics because there are many questions from the past that we today have set aside, questions that are now even more pressing. Of course, not all of the past is useful today, and neither are all past questions relevant for understanding and improving the present, but there is a living past that constitutes the roots of our present, and if carefully heard and deciphered, it can help us formulate questions that are less short-sighted and less narrowly focused only on today’s interests and fashions.

The civil economy can inspire new thought that is capable of deep questions. It presents a different story about the market, an alternative path to a market economy than the one presented by the dominant system that shapes our world and minds today. In this study we will begin with the central questions of the civil economy tradition and use them to look at the present and future world, ourselves, our companies, our market, our relationships, and our way of life. The ancient world has passed; it is no longer capable of offering us grand narratives able to make us dream, to awaken us in the morning with the enthusiasm to recount and build a history. Writing about the civil economy is then an exercise in the common good, an exercise in what Antonio Rosmini, the nineteenth-century Italian priest and philosopher, described as “intellectual charity”; it is the highest form of charity in an age that suffers from a lack of engaged thought, stories and dreams. And when we lack history, stories and dreams (including the foundational dreams of entrepreneurs) our imaginary is filled with things that end up extinguishing our will to live –and with it the will to go into business, which is an expression of the human passion of a well-rounded life.

This book is an introduction to the civil economy, its history and ideas, presenting the thought of a few of its chief protagonists as well as other economists and social scientists whom we consider exemplary proponents, either implicitly or explicitly, of this vision of the economy; they include Antonio Genovesi, Giacinto Dragonetti, Achille Loria, Amintore Fanfani, John Ruskin and Giorgio Fuà. This is but a partial, idiosyncratic and incomplete list of the “classic” people of the civil economy. A more objective and complete list would certainly need to include Antonio Rosmini, Luigi Sturzo, Luigi Einaudi and Giuseppe Toniolo, and in the twentieth century Paolo Sylos Labini, Federico Caffè, François Perroux and Giacomo Becattini, authors who we will cite only occasionally but who are very present in our perspective. Perhaps the list should not contain writers such as Ruskin and Loria, whom we include not only for a certain intellectual affinity, but to indicate that the civil economy should not remain exclusively Italian or Catholic.

The first step in approaching the civil economy is to imagine it as a symphony. It should not be thought of as either a systematic scientific treatise or a fresco to observe and consider as a complete and final work. A symphony, although based on a score written centuries ago, lives anew while it is performed, with an essential role for the musicians, conductor, and audience. It is an “experiential good”, the value of which emerges only while the experience happens. This is also the case for the civil economy, which lives in the harmony of many notes and instruments both old and new. For it to be understood, it cannot be reduced to a single movement, or to the individual parts for solo violin or piano, though they are there. It is clear then that to say “civil economy” is to say many things at the same time, all coessential, different and alive.

It is a tradition of thought and writings that had its golden age in the Kingdom of Naples in the second half of the eighteenth century, roughly between the time of the philosopher Giambattista Vico (d. 1744) and the Parthenopean Republic (1799). It was a tradition with roots in the civilization of the medieval towns, its monasteries, its arts and trades, and in the Franciscan and Dominican traditions, as well as roots that went back to the areté/virtus, polis/civitas and eudaimonia/felicitas publica traditions of the Greek and Roman worlds.

This ancient and noble Italian and European tradition suffered an initial rift at the time of the Bourbon Restoration (1814–30), and then again with the Risorgimento, when writers and philosophers saw all that had come before as ancien régime, as an expression of feudalism. The rift was not the death of the tradition, but it did sink into the depths of our culture. It re-emerged from time to time, giving life to important economic and social phenomena (such as cooperative movements, industrial districts and the Olivetti experience) and inspiring intellectuals and economists, a few of whom we will befriend later. The authors we place under the broad umbrella of the civil economy differ widely among themselves (liberals, cooperationists, socialists); this is not to force their thought, much less make them a means to an end unbeknownst to them, but to make the civil economy a pluralistic and culturally “biodiversified” space that goes beyond ideological barriers inside and outside academia. No one author, either of yesterday or today, completely exhausts it; no single vision of the world fully expresses it; no one experience dominates it.

The civil economy, then, is an approach to the market and the economy in Europe –particularly the Europe of Latin and communal origins –that is not founded on the cornerstone of the individual and his freedom from the community. Differing from the political economy tradition, the civil economy is a relational and social economy, and “catholic” in the etymological sense (as we will see later with Fanfani).

The civil economy, an ancient, living tree –like a centuries-old olive tree –that is still capable of flowering and bearing fruit, also provides a way of critically evaluating our own time to improve it. To this end it impacts upon policy, labour, finance, banks and businesses. Today we lack many things because we lack a grand narrative of our roots and thus of our future. Innovations do not happen without roots and trees –let us not forget that “innovation” is used in botany for new sprouts. Europe, having lost contact with its humanist roots and the civil economy tree, is no longer innovating. Ultimately, the civil economy is a grand narrative on the vocation and destiny of our past, present and future. This vocation and destiny are at the centre of the thoughts and actions of the authors of this book.

Recounting and living a different history

The civil economy is an inclusive, biodiverse process. As we have said, it is not simply another name for the non-profit economy or third sector, as it involves and addresses the entire economy, which it judges either civil or uncivil. Rather, for reasons we will partially see, it is set in opposition to the idea that a separation exists between the for-profit and the non-profit economies, a separation characteristic of the humanism of Protestant-originated political economy. It is a way of seeing the market, primarily its cooperative nature.

Cooperation –or mutual assistance to use Antonio Genovesi’s terminology –is indeed a noted and even a dominant characteristic of the civil economy’s idea of the market. However, it would be a mistake to think that understanding the market in terms of cooperation is a prerogative of the civil economy alone. We all know –even the (better) economists both past and present –that communities flourish when they are capable of cooperating. Had we never begun to cooperate (i.e. act together) a common life would never have begun, and we would have remained evolutionarily blocked in a pre-human stage. But as often happens with the great words of humanity, cooperation is at once one and many, often ambivalent, and its most relevant forms are those that are less obvious. Every time people act together to achieve a common and mutually advantageous outcome, we are talking about cooperation.

A hospital, a religious liturgy, a school lesson, a company, a government action and abducting someone are all forms of cooperation, but these are all very different from each other. From this we can derive an initial conclusion: not all forms of cooperation are good. Although some increase the advantages of those involved, they diminish the common good, as those outside are harmed. To distinguish between good and bad forms of cooperation it is first of all necessary to look at the effects they intentionally produce on those outside of them.

Over the course of history, political and economic theories divide into two great families: those that start from the hypothesis that human beings are not naturally capable of cooperating, and those that claim that persons are cooperative by nature. The main representative of the latter tradition is Aristotle: humans are political animals, capable of dialogue with others, of friendship or philia, and cooperation for the good of the polis. The most radical proponent of the unsociable animal is the English philosopher, Thomas Hobbes (1588–1679): “It is true, that certain living creatures, as Bees, and Ants, live sociably one with another … therefore some man may perhaps desire to know, why Man-kind cannot do the same” (Leviathan, II.XVII). A large part of modern political and social philosophy works within this antisocial tradition, while the ancients and medievals (including Thomas Aquinas) were generally of Aristotle’s view. We can also say that the principal question of modern political and economic theory has been how cooperative outcomes can emerge from human beings who are not capable of intentional cooperation because they are dominated by selfish or egocentric interests.

Many (not all) social contract theories are the response of modern political philosophy to that question: egoistic, rational individuals understand that it is in their interest to give life to a civil society by means of an artificial social contract. The natural human is uncivil, thus civil society is artificial. The response of modern economic science to that same question is instead represented by the various theories of the “invisible hand”, in which the total good (“the wealth of nations”) does not happen by the intentional and natural cooperative action of social animals, but by the interplay of the private interests of egoistic individuals separated among themselves. Underlying these two responses we find the same anthropological hypothesis: the human being is “warped wood” that, without needing to be straightened, produces good “cities” if she is capable of giving life to artificial institutions (the social contract and the market) that transform self-interested passions into collective advantage or well-being.

A different market

It is at this point that a mystery of the market reveals itself. When we open a mainstream textbook on economics, we find that no joint action between the “cooperating” individuals is required for market cooperation. When we enter a shop to buy bread, the encounter between the buyer and the seller is neither described nor lived as an act of intentional cooperation: each one seeks his own interest and fulfils the requisite compensation (money for bread, bread for money) only as a means to obtaining a benefit. And yet that exchange improves the condition of both, thanks to a form of cooperation that requires no joint action. The total good then becomes the sum of private interests of reciprocally immune individuals who cooperate without meeting, touching or looking at each other.¹

According to mainstream economic theory, it is rather within the company that we find intentional or strong cooperation, with the company being a network of joint cooperative actions towards goals that are in large part common. So, when I buy a ticket from Rome to Malaga, there is no form of intentional cooperation between me and the airline; there are only separate and parallel interests of flight and profit. Between the crew members of that flight, however, there must be strong, explicit and intentional cooperation. Consequently, while (almost) no economist would write a theory of the market based on a virtue ethic, conversely with the theory of firms and organizations, there are by now many business ethics based on the virtue ethics of Aristotle and Aquinas. The division of labour in markets and the broader society is a large scale involuntary, implicit cooperation; the division of labour within the company is instead cooperation in the strong sense of a voluntary, joint act. The capitalism of Anglo-Saxon and Protestant origins has given rise to a dichotomous economic theory, which is a version of the Lutheran and Augustinian “two kingdoms” doctrine. In markets there is implicit, weak and non-intentional cooperation; in the firm, and generally in organizations, we find instead explicit, strong and intentional cooperation: two forms of cooperation, two “cities”, profoundly and naturally different from each other.

However, this is not the only possible type of cooperation in markets. The civil economy views the economy and the market differently. Here the distinction between ad intra (within the firm) and ad extra (in the market) cooperation was never prevalent, at least not until recent times. The civil economy tradition understands the whole of the economy and society as a matter of cooperation and reciprocity. The family company (still ninety per cent of the private sector in Italy), cooperatives and Adriano Olivetti can all be explained by taking seriously the cooperative and communal nature of the economy. This is why the European cooperative movement has been the most typical expression of the European market economy. For example, the Italian industrial districts of Prato (spun goods), Fermo (shoes) and Carpi (knitted goods) are entire communities that turned economic without ceasing to be communities. Thus while American capitalism has the anonymous market as its model and seeks to merchandise the firm, which is increasingly seen as a nexus of contracts, as a commodity or as a market with internal suppliers and clients, the European model has instead sought to “communitize” the market, taking the mutualistic and communal economy as its model, exporting it from the firm to the whole of civil life (that is, cooperation in credit and consumption). In so doing the latter takes on the costs and benefits of such an operation: an economy more full of humanity and love of life, but also of the wounds that are an inevitable part of human encounters.

The American model and its economic theory has now colonized the furthermost parts of the European economy and its economic tradition. This was partly because Europe’s communal and cooperative tradition has not always worked as well as it could on the cultural and practical levels, and it did not develop in every region. Moreover, ...

Table of contents

• Preface
• Part I – History
• Part II – Ideas
• Epilogue
• References
• Further reading