Politics and Economics. An Essay on the Genesis of Economic Development
by Rocco Pezzimenti with an Afterword by Paolo Savona.
Città Nuova (Rome), 230 pp., $18.00, 2006.
“Despite the beliefs of numerous economists, a new idea is now taking hold, that to change our socio-political setting we must first change the country’s economic scenario, the latter being the structure supporting the superstructure—an interpretation shared, in a different yet mirrored manner, by Smith and Marx.” This is the most original concept expressed in an interesting essay by Rocco Pezzimenti on the genesis of economic development—available in English under the title Politics and Economics. An Essay on the Genesis of Economics Development and published by Gracewing Fowler Wright Books. The author opens by explaining the reasons that led him to use the expression “economic development” rather than “capitalism.” Especially for a book intended for audiences on both sides of the Atlantic, the term “capitalism” carries significant historical baggage and can convey ambiguity.
While in the United States the word “capitalism” is, generally speaking, considered a respected and positive term, it is not the same in Europe, and particularly in Italy. In Europe, “capitalism” implies the exploitation of people by the society’s economic elite. Having easier access to resources due to their historical social class and other reasons, these elites expropriate and reduce to poverty the great part of their countries, and had a particularly negative effect on the rise of small entrepreneurs. As the great German economist Wilhelm Röpke (the father of the so called “ordo liberalismus”) made clear, the same word “capitalism” (as a historical and not logical concept) may have different, and sometimes conflicting, meanings. In the Anglo-Saxon Countries—more so than on the Continent—the free market economy (as a logical and not historical concept) knew an organic growth. On the contrary, in Europe the industrial revolution was often the result of action made by little groups, organized and led by bankers more than entrepreneurs, who could rely on the significant help of the State. Its European usage reflected the fact that freedom of enterprise was limited to a little group of social privileged social group, and that “capitalism,” from the beginning, was a capitalism of monopoly. The situation was even worse in certain underdeveloped countries, where the control on the whole national sources was concentrated in the hands of foreign companies and corrupted elite of power.
However, to avoid any misunderstanding—as the term capitalism appears frequently throughout the essay—the author states that he uses this expression to highlight a complex phenomenon whose roots are far older than those so far taken into account. To this end, following the historical and doctrinal principles of authors such as Oscar Nuccio, Luciano Pellicani and Michael Novak in an original and critical manner, Pezzimenti believes it is necessary to reassess the history and assumptions of economics, and he suggests we let go of certain trite clichés. The most harmful, in his opinion, is that of the Marxist-inspired terms, “structure and superstructure”, which prevent a serious scientific discussion on the causes and nature of economic development. Pezzimenti writes: “from Smith onwards, economic analysis hinges on the relationship between natural and artificial society, or, if we prefer, on the relation between structure and superstructure.” While followers of Smith and the subscribers of classical liberalism believe that the Establishment (politics) represents the State’s “neutrality” towards economic life, the economist’s opponents (Marxists, primarily, but other schools as well) believe that the superstructure is intended to be a shelter of economic life. In both cases we are faced with an abstraction of the economic phenomenon, disconnected from real life and those who practice it. This analysis allows the author to start along a historical itinerary through which he demonstrates how the evolving stagesof economic development are marked by incessant interaction between the political-legal, moral-religious and entrepreneurial dimensions.
In particular, Pezzimenti highlights the role played by law and, in this regard, in the second chapter relating to the economics of the ancient world, he states that law has always influenced economic behavior. It is in fact in ancient Rome that, with the onset of private law, peace and widespread social consensus, the knowledge and application of economics was able to spread in a theretofore unparalleled manner. The author further believes that the moral-religious contribution to economic development first took hold with the advent of Christianity. To this end we wish to note that, for numerous generations of men who contributed to the establishment of Europe with their strenuous and unacknowledged labour, the new synthesis promoted by the Benedictine Order—expressed by the dictum Ora et labora—represented a renewal of the Christian synthesis of contemplation and action, culture and work. This idea remained deeply-seated in the cultural collective memory, as it effectively summarized the fundamental and intrinsic experience of growth through labour. At this point it is worth introducing the theme of “enterprise” intended as personal ability (or virtue) that enables the enhancement of one’s humanity and the establishment of an organised production structure of the present day that takes account of the uncertainties of an unknown future; in other words, an aptitude, subject to constraints, for managing production flows within a territory and for having them interact with the most important factor of production: human resources. The author’s beliefs coincide with those of American theologian Novak, according to whom man—made in God’s own image and likeness—contributes, together with the Creator, to the creative mission through man’s actions, which translate into work and free enterprise.
All things considered, in addition to identifying the competitive market as the most appropriate system for the rational allocation of scarce resources—as pointed out by Professor Paolo Savona, writer of the book’s Afterword—the author invites us to reflect on the possibility of knocking down the barriers that separate economic science from other social sciences, acknowledging that economics, as a human science, involves a series of analytical phenomena and elements that must first be identified by appropriate techniques but that then need to be interpreted and connected with law, psychology, anthropology and politics. In this way, economics becomes a sophisticated instrument introducing us to a new, more extensive dimension that cannot be limited to the positivist formalism of natural science but may be compared to the architectonic art of economics, having nothing to do with the homo oeconomicus anthropological archetype, but rather with the more concrete and complex homo agens.
Flavio Felice is Professor of Economical and Political Doctrines at the Pontifical Lateran University of Rome.