«Inequalities are rooted in the system»

Article as analysis
Stefano Zamagni, Italian economist and President of the Pontifical Academy of Social Sciences, explains in an interview why a new beginning with the civil economy can no longer be postponed.

global: Professor Zamagni, already in July last year “Sustainable Development Outlook 2020” predicted that as many as 100 million people would fall into poverty, while an Oxfam report said that inequality would grow simultaneously in all countries around the world. Is this the fault of Covid-19, the “inequality virus”?

Stefano Zamagni: The pandemic has exacerbated inequality, but it is not the cause. Today’s inequalities are structural in nature, in other words, they are rooted in the system. They are not attributable to bad behaviour on the part of individuals and social groups, but are bound up with the manner in which the rules governing economic, financial and political institutions have been written. These rules date back to the year 1944, when the leading western industrialised nations met at Bretton Woods. As early as the 1970s we saw the negative spin-offs of these rules – and here I think of tax havens. Then came others. The matter of patenting goods that are not private but public goods was not addressed at all, and we are now witnessing the catastrophic consequences during the present pandemic. The rules contain incentives for companies to pollute the environment and destroy rainforests for the sake of profit.

A paradigm shift is needed, given the widening gap between the rich and the new “multi-dimensional poor”. We were also reminded of this by the international congress titled “The Economy of Francesco”, planned for 19 to 21 November 2020 in Assisi, then held virtually with young people all around the world.

Exactly. Let me start by emphasising that the concepts of “poverty” and “inequality” are not synonymous. Being equal does not mean leading the same life as others, but being able to decide not to be the same as others. If we wish to achieve true equality and hence diversity, it is absolutely indispensable to give up the current economic paradigm that is premised on the maxim “homo homini lupus” (Man is wolf to man). It shows us how to increase wealth, but not how to redistribute it, and therefore cannot solve the major problems of our societies. This can be done instead by adopting the idea of the civil economy, which is premised on the assumption that every human being is by nature a friend of another human being (“homo homini natura amicus”). If I start by assuming that others are potential friends, I will shape my relationships (including economic ones) differently, without maximising overall benefit, but striving instead for the common good.

Where are we as regards the acceptance of this economic model in civil society and in the business world?

I believe that we have reason for optimism – primarily because, paradoxically, the first to grasp its meaning are the entrepreneurs themselves, growing numbers of whom are being negatively impacted by the current market economy system. Let us take recent months, for example, during which the pandemic has considerably enriched giants like as Google and Amazon. These corporations have boosted their profits by hundreds of billions of dollars. For other enterprises, in contrast, the pandemic-related economic restrictions have meant enormous losses. The fact that we live in a system that enriches some or impoverishes others is becoming ever clearer and is unacceptable even to the world of business.

You mentioned that the paradigms of both the political economy and the civil economy have their origin in Europe: can the latter economy also function in other geographical contexts such as South America and in other poor countries of the world?

Certainly, for the civil economy rests on anthropological bases and principles guiding the organisation of economic activity that are also present in the global South. To take a concrete example – in Africa there is the word “Ubuntu”, which has no translation in European languages and refers to the faculty of expressing mutual solidarity with others. This reciprocity is critical to the civil economy paradigm, which is also becoming the subject of academic research in Latin America. Things are in motion, even if it will take time to shake off the heritage of cultural colonialism which, both in practice and in research, has imposed the “homo oeconomicus” paradigm on cultures to which the maximisation of self-interest is an alien concept.

Civil economy – a new beginning

The recurring economic crises of recent years have clearly revealed the urgency of considering a new economic and development model that is more inclusive, geared towards the common good and concerned with human happiness. The civil economy strives to pave the way for restoring a typically human dimension to economic activity, as emphasised by the economist Luigino Bruni, promoter and co-founder of the School of Civil Economy. It is incumbent on the State, the market and civil society to give concepts such as reciprocity and respect for the person a central place in economic activity, in labour market and social policies, technology as well as in political institutions. What this means in concrete terms is putting the focus, when taking every decision, on its implications for the workers involved, the environment, remuneration and the use of land.

The cornerstones of the civil economy are also crucial to the 2030 Agenda, which was adopted by the United Nations General Assembly in 2015. Its 17 Sustainable Development Goals underline the urgency of a change of course and call for a stronger shared commitment to protecting health, education, work, environment and collective well-being. This appeal is addressed to everyone – to governments, public bodies as well as private organisations. Every individual person is also invited to play an active part in shaping the transition, in which sustainability and equal rights are key factors for the development of the planet.