The faults of economists behind the health crisis

INTERVIEW

Well-being does not only come from wealth, the pandemic has confirmed it - For Stefano Zamagni, professor of economics at the University of Bologna, the economic paradigm must be revised to include the concepts of environmental and social sustainability alongside economic sustainability

The faults of economists behind the health crisis
Stefano Zamagni.

The faults of economists behind the health crisis

Stefano Zamagni.

Professor Zamagni, recently said that the pandemic is one of the faults of economists. Because?

Never before is the connection between environmental imbalances and phenomena such as the pandemic clearer than ever. For example, the polluted air in which we live has a direct impact on the health of our lung alveoli and on the way in which diseases such as coronavirus are transmitted from animals to humans. The unhealthy air, however, derives from pollution and deforestation, caused in turn by the current economic paradigm, which has huge flaws.

Meaning?

The political economy, the one taught at university, says that resources are scarce and must be optimized through the price mechanism. To limit the environmental damage caused by industry, economists invented taxes for the polluter. But this does not eliminate toxic gases nor does it regrow forests. Furthermore, it is not ethical because and how to say that whoever is rich can do whatever he wants. In other words, we try to evade the limitation of some resources by chasing infinite growth. It's an illusion.

Where to start to change this situation?

The model of political economy was born in the late eighteenth century in Scotland with Adam Smith and was imposed on a cultural level thanks to English economic supremacy in the nineteenth century. But it is not the only one. There is also that of the civil economy, born in Italy in 1754 with the first chair of economics in the world, wanted by Federico II.

What differences are there?

Both are in favour of the market economy. For the civil economy, however, man is not moved only by selfish interests and the market serves to establish Aristotelian civil friendship, that is, the one that unites people through common attitudes and values. The political economy maximizes GDP as the sum of incomes: if the community grows it benefits, even if someone remains with empty hands. The civil economy instead pursues the common good, which is obtained by multiplying the well-being of individuals. If one of the terms is zero, the product becomes zero. Since man's well-being is given by material, civil and spiritual (not necessarily religious) well-being, the economic management of a society must be coordinated with political and ethical management. If economic interests govern political interests like today we get wasted.

Can you better explain the common good?

Everyone knows the difference between private goods, managed by the market, and public (like roads, artistic goods, security), managed by the state. Common goods are those whose management must be entrusted to the community, and I would put the environment first. It has been a well-known concept for some time: sustainability was invented over 300 years ago in Germany by Hans Carl von Carlowitz, who introduced the lasting exploitation of forests so as not to leave future generations without wood and therefore without the possibility of heating or exploiting the mining industry. Switzerland has also known this concept, for example in the management of alpine pastures, as well as England before the arrival of the fences.

Are there any countries that still follow the principles of the civil economy?

Yes, unfortunately always at the local level, never nationally. I have already mentioned Switzerland. When I speak in Trentino people understand me immediately, because fields and ski slopes are managed by the mountain community. But in addition countries like Great Britain and the USA are moving.

What does it take to initiate a radical paradigm shift?

The solutions are already known (for example the circular economy) but individuals are not enough, the structures must be changed so that the market, the State and civil society work together to establish priorities, find resources, and decide what their management is optimal. The pandemic is an opportunity to learn but our selfishness is tough. Perhaps it will take another crisis for the economic paradigm to be radically changed.

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