The Egg of Berlusconi

TRANSLATOR'S NOTE

The title "The Eggof Berlusconi" refers to the popular Italian saying "L'uovo di Colombo" (Columbus's egg) which has no direct translation in English and originates from the following anecdote: "After discovering America, some Spanish noblemen said it was not such a great discovery after all, since in order to make it, one simply had to think of reaching the Indies by following a different route; Columbus then took an egg and asked them to place it upright on one of its ends. Nobody succeeded. Columbus himself then took the egg, broke off a small piece of the shell on one end, and placed it upright. When everybody shouted that this was too easy a solution, he smiled and said: 'Somebody just had to think of it'"(1). The English equivalent of this expression is roughly: "It's as plain as a pikestaff".

FOREWORD OF "THE EGG OF BERLUSCONI"

   Creating economic growth! This is the great imperative of our times. Millions of billions of Italian lire. And we need more and more of them, since people's needs increase constantly. We must become increasingly capable as competition from other countries is growing. To whom should this task be entrusted? Who is capable of struggling against thousands of competitive factors? The answer is self-evident: this person is the private entrepreneur. This is presently "The Egg of Berlusconi": in order to create wealth and solidarity in any country, its management should be entrusted to a real entrepreneur that is, a business operator who has proved his value in the field. And most importantly the enterprise method must be strictly adhered to.
   Certainly, it would be nice if government had the use of some magic way of achieving the results expected. Do we need this or that ? Here is a nice new regulation and everything will soon be alright! Does the country need to increase tax revenues? No problem, here is a nice new tax! Unfortunately, life is not so easy. Unfortunately we know that laws & regulations are violated more often than not and we also know that Italy has four million workers that were hired illegally (see the 1996 CENSIS(2) report). It is therefore wrong and counter-productive to harbour illusions in our search for job creation, believing in the sole usefulness of legislative instruments. Because by following this way alone, not only shall we fail to obtain the results hoped for, but we will also create a monstrous legal system, consisting of a multitude of laws & regulations (already more than 200.000) from which the ordinary citizen cannot extricate himself.
   Here we reach our conclusion, then: laws are important but they are not everything. Specifically when examining the present Italian situation, we can identify five characteristics of sound government. They are: "Promoting common values" (that is, the ability to lead society by spreading moral and cultural values), "Promoting laws and regulations of parliament" (i.e. government of the body politic through laws, regulations and institutions), "Profit" (that is the possibility of obtaining and producing social improvement to the advantage of the community and benefiting the citizens), "Publicity" (that is the principle by which advertising must not be for the sole benefit of consumer goods producers, on the contrary, publicity should be a main function of the authorities and religious organizations, in order to compensate for the overbearing ways of the former), and "Professional standards" (in other words the ability to perform tasks on the basis of human capabilities originating from specialized branches of learning). In practice, by blending these five elements, it will be possible to govern much more effectively than following the present methods.
   In short then, creating employment through the enterprise method, means using the tools we have just seen (i.e. the five "factors") and many others so widely tested in the business world, but totally unknown in government and in public administration. This of course means privatization. But not only. It also means setting up a new way of working together and renewed motivation for public employees, giving them a clear function of social solidarity, measurable only through our enterprise methods.
   We also need to remove some false kinds of moralizing. Respect for ethics does not mean disregard for business and profitability. The morality of economics lies on the contrary in the concept of just compensation, i.e. in the relationship between work accomplished and the advantage gained. For instance, the entrepreneur who has complied with 200.000 Italian laws and regulations, has paid his employees and suppliers on time, has given good service to his customers and has paid the revenue administration, in taxes, up to 70% of his earnings, should not be asked for more. More than this. The social value of business concerns should also be recognized, through simplification of bureaucracy and encouragement. This is so especially for solidarity reasons: more companies mean more employees, more wealth creation means more tax revenue for carrying out the state's responsibilities.
   But some people oppose private investment and business incentives, claiming that no presents should be made to rich entrepreneurs . However, those who agree with these beliefs oppose the very concept of solidarity, which means a proportional ratio between expenditure and revenue by government . If we do not promote job creation to achieve income, how can social solidarity consisting of expenditure alone survive? In short, profitability (which is very different from money) results in solidarity, since it stems from and concludes in a combination that is beneficial to everyone: to the strongest and to the least privileged. There will be no solidarity until the two necessary terms of the problem, revenue on one side and expenditure on the other, can balance each other out (or combine) in mutual harmony.
   To achieve this, the ability to achieve the concrete objectives typical of the private entrepreneur, is exactly what is needed. This ability is essential because, at the end of their term, government will be asked the following questions: "How many jobs did you create? How many companies have set up to Italy? By how much has the public deficit been reduced?" And there is no way out of this. Social solidarity can really be achieved only by facing the facts of life, in other words a degree of profitability is being maintained.

   Are we sure there is nothing to be changed in our way of seeing the facts? Maybe there is something. Our activities usually defined as public, political, or administrative and which are consequently dealt with in our laws and regulations, or military or similar orders, are actually slightly different from how we see them. This is due to their strong business content. Creating jobs, setting up new companies, collecting taxes in the proper way, attracting capital investment from abroad and preventing Italian funds from fleeing the system, are basically business activities. In these matters in fact entrepreneurial strength alone is not enough to gain cooperation. Adequate remuneration must be offered. Mercantile compensation i.e. a price (deriving from the Latin "mercede"(3) and "cum mercede"(4) that which is commercial or agreed by the parties). When any country lowers its official discount rate, this suggests an implied contract and encourages commercial activity. It is like saying "please invest, I will charge you less for borrowing money". When an oriental country promulgates a law according to which the capital invested in local companies is exempted from tax, it actually proposes the following implied agreement: "come to us and your life will be easier". And another country promptly reacts by offering the same kind of advantage. Others follow this example, and competition is born. It is really a trade war, similar to what we see in supermarkets. Money is made by giving opportunities, not by imposing levies from the top. The ability we now need is just that of the trader. Give advantages in order to obtain benefits. Lose money in one field in order to make money in a different one. Mix the advantages and disadvantages in order to obtain, in the end, a favourable result.
   The conclusion is self-evident. We cannot disregard this commercial view because any mistaken assessment could be fatal for Italy. When in our country, we continue to increase the tax burden and we spread rumors about property taxes, reducing sales turnover, company expropriations and thousands of other restrictions on business, we are actually suggesting this type of implied contract: "come to us and we shall take a share of your capital". "Please come and we shall harass you". The effect is immediate. There is a flight of capital and it is turned to other uses in other countries. Is this what we want? Certainly not! In this case, we must change our method without wasting any more time.
   Our big problem is the proliferation of laws and the rise in authoritarian regulations. And the solution is not "more coercion" or "more repression" (as we are now trying to implement in the fiscal field) but it is a different method of managing public welfare though a general consensus. The social contract devised by Rousseau (and shared by most contemporary scholars) is achieved through freedom, not through coercion. And who, if not the entrepreneur, is a great expert in negotiating with the general public? Is it maybe the bureaucrat or the professional politician? Not only that. The profit motive is a useful tool, a real incentive to taking action, moving the whole universe. God has not given us an army of policemen to save us. But He has given us man's instinct for gain. And the entrepreneur is a great mediator, creating the interaction between profitability and millions of people, producing benefits for the whole community. This ability to make a profit, in exchange for other gain and creating new wealth in the end, is just a particular kind of active solidarity, which the country so badly needs.
   The application of this principle will lead us to a real Copernican revolution, with huge benefits for the community because the enterprise method works like a vaccine. When inoculated in small quantities in a certain body, a transformation process occurs, making our body stronger. In the same way Fininvest(5) succeeded in performing the same task as RAI(6) , with neither fees nor privileges, the same can happen in all other fields ranging from health services to public transportation and administration services.

   It is widely believed that politics should not suffer from contamination from the business sector. However, most of our evils stem just from this strange belief. The reason is clear. If the state and the politicians are not able to do good business how can they successfully conduct all the financial activities (worth hundreds of thousands of billions of lire) a good politician must perform? They cannot. It is clear that some false moralisms need to be contradicted. Business must be conducted, in order to create jobs & wealth: the important thing is that business operations are lawful and fairly achieved.
   This is not all. Many people criticize the consumer society, leading to an ephemeral and useless lifestyle through its overpowering advertising. But these people do not realize that consumer goods producers do nothing but their duty: they create excellent products, at more and more competitive prices and they try to market them through all the legal channels placed at their disposal by modern technology.
   Branded consumer goods are not the problem. Our troubles originate from the inertia of all other moral authorities, such as the Italian state, our public organizations, the church itself and other religious groups. In fact, while consumer goods producers have been improving their research and communications skills by using all available means, our recognized moral groups have remained anchored to older methods, leaving it to companies to take over the whole advertising arena.
   In practice criticism of the consumer society needs to be revised, because it is presently walking on its head. We must not repress producers' advertising activity at all; all we need is to persuade non-business activities to use the communications methods now at everyone's service. If traditional advertisements were not 100% of the total, but they were balanced by an equivalent or near to equivalent amount of messages with a moral and cultural content, the ethical problem of criticizing the consumer society would be solved immediately.
   The evidence for what has just been said is in front of us all. Anything that is deprived of advertising disappears. The famous detergents of the 50s disappeared as they were not advertising. This is what is happening to non-commercial organizations and more in general due to our moral sensitivity. The lack of appropriate religious communication contributed to the birth of many widespread heresies: magicians, fortune tellers, and religious sects leading their followers sometimes even to mass-suicide.
   Advertising only consumer goods, without balancing this activity with messages supporting moral, civil and cultural values, leads to spreading the belief that the only important thing in life is consumer values, thus creating a single life style. In the year 2000 we shall have cities with tens of millions of inhabitants. Just like countries or nations. This is a typical example of the side effects of advertising. All the films, messages and stereotypes are strongly represented in our cities. Do we think this is of no consequence? We are wrong: migration towards the metropolis is one of the many effects of the present mass-communication set of values.
   The same applies to the Catholic Church and to the party grouping together its components. Here centrifugal forces have done a lot of advertising. The centripetal ones have not. The results are clear. The party is split into a thousand splinter groups and has spread everywhere, from the right to the left. In this field too some culturally and morally incomprehensible features occur: Catholic newspapers supporting ideas contrary to the faith, ministers and nuns sympathizing with anti-clerical positions, communists declaring they are fervent Catholics. The conclusion is clear: reducing one's own communication leads either to disappearance or to cultural adulteration.
   Promoting the image of the Italian state through advertising is by no means an optional operation that can be neglected. There are countless episodes demonstrating this. For instance, many remember the lottery during the night of the 1997 Epiphany(7) the machine used to draw the numbers failed to work properly and the winnings had to be revoked. Well, in the three following months the sale of lottery tickets fell by up to 53%, thus showing the importance of communication by advertising in this field too.
   Messages of civil, moral and cultural commitment on one hand, and commercial ones on the other hand, were like two persons of equal height until fifty years ago. Now, the latter has become a giant, while the former turned into a dwarf. We must therefore take action to balance this situation. However, the working method should not be to cut the legs of the tallest in order to bring it down to the level of the smaller. On the contrary, a tonic cure should be prescribed to the dwarf in order to bring him to the same height of the giant.
   This is a great innovation, where culture and moral vision must be spread, without denying freedom and without falling into the ideological indoctrination that is typical of totalitarian countries. In this case too neither the bureaucrats nor party officials nor professional politicians can be of help. For this innovation we need a great mediator: a true private entrepreneur.
   We make considerable efforts in accepting an advertisement for its value in promoting public and religious activities. But this is logical. When facing institutions such as property ownership, with over 3.000 years of history, companies have a much shorter history. Everything happened too fast. Just to make a few small examples, in 1911 Rockefeller's Standard Oil Trust was split into 14 smaller companies by the U.S. Supreme Court, who feared its growth. However as early as 1940 each one of these corporations was 4 times larger than the mother company. And today their importance is even stronger, enormously so. Only 20 years ago there were no commercial television networks and video recorders were rare and very expensive. Today the situation is reversed. Everything has changed, but the old cultural vision still remains. For instance, during the advertising campaign for the placing of the Mediaset(8) shares, the Corriere della Sera(9) published a short article in which this type of advertisement was ironically considered. The author wrote of securities advertised as being trivial products. But this type of comment is the same as saying that advertising belongs exclusively to soap bars. But who ever assigned this exclusive characteristic? Nobody. Practically, this way of thinking is a relic of the culture of the past century: what is of the state and its administration is noble; privatecompanies are vile; advertisement is a creature of such companies and is therefore vile. A salesman too is an inferior figure. Profit too is a negative thing. Nobody thinks of describing a salesman as the person who helps two business activities meet. Nor of describing profit as a guarantee for employment. Is all this right? Certainly not. We are far away from the nineteenth century and it is high time we realized it.

   Advertising is the visual and final part of major research efforts. The entrepreneur does not simply create a product, he constantly studies his consumers' desires. Identifies them, and in this way makes a product exactly similar to the one required by his consumers. He informs them through advertising and they adhere to it with full satisfaction. This is a fine form of spontaneous solidarity, where entrepreneurs are great mediators. The company is in fact the broker for the benefit (not only material, but also moral) of the masses. In this solidarity relationship one applies the geometrical principle according to which a straight line is identified by two points. And they represent the profit of both recipient and the producer. Harmony (seen as straightforwardness) is obtained when these two points meet.
   A straight line, therefore, requires the two extreme points consisting the profit of both recipients and of producers, but it also requires countless intermediate points. One of these is advertising. Another is the ability of the entrepreneur to create, to cause an interaction and to mediate. There follow all other related activities of managers, of staff and the suppliers interacting for the creation of satisfaction and wealth. The moral (and solidarity) aspects of these points lies in the equitability existing between the values relating to various different services (what lawyers call the "synallagma"). This relationship is strengthened when the performance of the parties is of equivalent value, without any disproportionality.
   Practically speaking, an entrepreneur is like a great statesman. His nation consists of millions of consumers. For multinational companies (such as Esso(10), Coca-Cola, Palmolive, Unilever), they are similar to nations composed of hundreds of millions of consumers all over the world, with huge financial statements, even larger than those of many countries. These entrepreneurs do not rule with the bayonet or by force in general, but they live thanks to a mutual support relationship: a real non-verbal solidarity contract.
   Government administration looks down at advertising. This occurs just because it is a self-starter. Even in administrative law manuals, the G.A. is referred to as acting in a situation of administrative supremacy. A group of officials decides. There is only one point and the straight line cannot be drawn. Should the G.A. have to advertise, it would be strongly embarrassed. How could it communicate that credits granted by Italian citizens are settled after 8 years? Or ask for capital investment in Italy so it can be squeezed by a national property tax? How can it explain that most of the G.A.'s losses are never reimbursed? The moral. Forcing the G.A. to advertise means bringing it to reason with the method of the non-verbal solidarity contract: seeking the joint satisfaction of its desires and of those of the recipients. To follow the straight line, look for the synallagma, abandoning the large disparity existing today.
   Advertising is often considered a vile and useless thing. On the contrary, in order to realize the social importance of advertising, we must try to imagine a supermarket where all products are in the same packing, all gray, with hundreds of instructions written in small type and without titles. What chaos when the straight line joining the two points is missing! We would need hours to do the shopping. Not only that, we would need real specialists to help in guiding consumers through this great, confused uniformity. Is it a paradox? Not so much! What has been said represents exactly an area where advertising is totally lacking. This area is Government Administration. Just think of what happens in the taxation field. Not only is advertising lacking, but that straight line, that search for consumers' desires and needs is missing too. In short, the program lying at the root of advertising is missing. The result is before our eyes and is what happens when the two points are missing. Incomprehensible laws. Irrational forms to be filled out. All kinds of difficulties.
   The state and the church often believe that entrepreneurial activities are mean and unworthy of them. But this may simply be a sin of pride, harming just those who commit it. I do not claim I have discovered new laws but wish to suggest some ideas I have developed in the course of my experience. Two words about the author and the path that has lead him to write and publish this book.
   It all started in 1971 when, at 23 years of age, I started work, although I was still registered at the faculty of law. It was not the classical moonlighting activity of a student. This was a real job, at middle management level, absorbing my whole time. I worked in the sales department of a large company in consumer goods distribution, where I closely observed some important business activities. Production, through to suppliers. Distribution through the different subsidiaries. Consumer trends and habits over the years. Marketing, advertising & promotion in my company and in the large industrial groups involved in consumer goods.
   Then occurrred some episodes, which adequately showed me how great motivation can turn a lazy person into a very efficient student. They showed me how the creation of a business can constitute a multiplier for energies and achieve results. This real life experience played an essential role in my beliefs. It has (and still does) lead me to believe that, when applying the enterprise method to other fields differing from it, a lot can be obtained. In some presently depressed countries, maybe many things could change through this method. But let us proceed in order.
   At the end of 1978, for reasons that I cannot fully explain even today, I decided to graduate, and to aim at working in the legal profession. In little more than a year (though working eight or more hours a day), I succeeded in taking seven exams (eleven when counting the two-year courses) and in preparing my graduation thesis. Even today, I wonder how I managed to do it. And my parents too wondered when they saw all these exams passed one by one (two of which I took in the same day).
   But the merit was not mine. It was the energy of enthusiasm. Not only that. It was the strength of the method I had acquired in about ten years of work and training. A systematic training made up of different experiences. The method was more or less the following. Do you have to manage a large store? Well. Follow a training course. But then go and check the real problems. Open the boxes at the goods receipt bay. Lay the goods on the shelves. Check on the fast and the slow selling products. Once you have done that, and after having "come alive" through different experiences, start with the marketing plans, product assortments, the "ordering mix", and so on. Then think about your priorities. Priorities and more priorities. Never start a difficult task if you have not gone through the easy ones before.
   But first of all came my father's teachings. A man who did not talk much, but with a great personality. I have never met a person more careful and accurate. It is incredible to find out how many things can be obtained, by simply placing the concepts in order. I owe my graduation to this method and these teachings. And many of my present beliefs.
   In 1981, at thirty-three, I started working in the legal profession. As a trainee, of course. And there I was struck by the abyss between Government Administration and business. An abyss in time frames, in methods. In everything. The thing that left me totally awestruck was the legitimate impunity of Government Administration. In practice frequently (not always, thank God) the state does not pay damages. It does not pay them even when the TAR (Regional Administrative Court) has recognized the faults of Government Administration! This fact led me to write and publish my book "La tutela del profitto"(11) (Pirola, 1985). A work devoted to the profit element from the legal &economic standpoint. (see Il Sole 24 Ore (12) 2/7/1985).
   In 1990 I started devoting some time to politics, in the so-called White Whales arena, the old Christian Democrat Party(13) , and I dealt with cultural issues. My favorite piece was "marketing" in politics. I organized a marketing and social communication course for party followers (see the Corriere della Sera, January 27, 1990). But politics is not for me. And, after all, to change things you need membership cards and votes rather than intentions and principles. I am not saying that with contempt. This is a mere fact that we must acknowledge.
   I then closed this parenthesis. Also because I very much enjoy my profession as a lawyer, as well as working realities. In my mind, the idea of contractual socialism and of social marketing started to emerge. A kind of marketing able to contribute in some way to improving things. Is it impossible? Maybe! But to trying to think about social problems has always been a challenge for me. So I started a new book (a draft) where I summarized my experience as a lawyer and as a marketing specialist. By then they were live experiences. Collected in over twenty years of work. Is it too little? Certainly. Compared to many other works this is nothing. But they are quite unpretentious remarks.
   Then the Berlusconi(14) phenomenon started. And here we come to the present period. I looked at Forza Italia's(15) principles with a mixture of interest and disappointment. Interest, because there were many ideas that I always supported. Disappointment just because I had been in a sense overtaken as to the right to the originality of my ideas. In short, the Cavaliere(16) had been faster than I was. And he did it to such an extent that I was compelled to change the title, and to choose "The Egg of Berlusconi" instead.
   But after all, I should not feel beaten, since these are not complex considerations. You need motivation to get things to go properly. When this motivation is lacking (for instance in Government Administration), there you find the bigger inefficiencies. All in all "The Egg of Berlusconi" is exactly this. Everybody knows about common sense principles. Everybody applies them to himself. But who knows according to which diabolic principle these ideas are disregarded when we enter the wide ocean of Government Administration. And on this we must concentrate if we want to change for the better.

   In a recent televised interview, Gad Lerner(17) asked Berlusconi: "Cavaliere, why on earth should an entrepreneur rather than a politician be at the helm of our government?" I do not recall Berlusconi's words, but I perfectly remember I would have given anything to be allowed to answer that question. Certainly, because the ordeal of our political system stems just from the problem raised by the journalist from "La Stampa"daily newspaper. Let us analyze it.
   The politicians propose: "let's recreate the center", "let's revamp the right", and so on. Newspapers are full of articles about this kind of discussion. They are endless discussions. The entrepreneur tends, on the other hand, to approach the problem differently. He asks himself: "what will the market want?" "which product will appeal more to Italian consumers?" "what do we really need?".
   To follow the typical methods of a business concern means, therefore, to have politics originating from the roots and not the opposite. Is it such a simple thing? Certainly, this is exactly the reason why this principle is called Columbus's egg, I mean Berlusconi's . This is (according to the writer, of course) an obvious fact: state management by men and methods tested in the business arena and used to worrying about matters an entrepreneur is trained to deal with: consumer satisfaction
   For our part we shall try to deal with the subject we have defined as "The Egg of Berlusconi", objectively and in doing so we shall go well beyond the Forza Italia leader's line. Some concepts such as "active solidarity", or "social marketing" and "contractual socialism" have never been dealt with by Berlusconi. But there is a factual language that cannot fail to relate to the leader of Forza Italia because the Cavaliere was the first to create a political program tailored on the business enterprise model. He has dealt with the subject in a simple and energetic way. The problem, in any case, is not "Berlusconi, yes" or "Berlusconi, no". It is just the method, i.e. a new approach to political thinking.

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