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Italy’s Draghi lays it down: We have forgotten that collective sacrifices are necessary


Born in Cape Town, Natale Labia lives in Milan, Italy, and writes on the economy and finance. Partner of private equity firm Lionhead Capital Partners. MBA from Università Bocconi. Supports Juventus.

'We must ask ourselves, do we want peace or do we want to relax with the air conditioning on all summer? Faced with these two things, what do we prefer?' This was the typically pithy and direct statement by Italian Prime Minister Mario Draghi at a recent media conference when asked about how Italy and Europe would cope without Russian gas.

Needless to say the comment caused a maelstrom of online and offline polemic, ridicule and memes. Taking the comment rather too literally, former Prime Minister Giuseppe Conte said it was confusing as it implied that by switching off air conditioners, Italians would be ensuring peace in Ukraine.

Italian Prime Minister Mario Draghi, however, was (characteristically) spot-on. Ten years ago, at the height of the Eurozone crisis, the then president of the European Central Bank coined an iconic phrase by declaring he would do “whatever it takes to preserve the euro”. Once again, he has distilled what is at stake.

Clarifying the comment a few days later in an interview with the Italian daily Corriere della Sera, he reiterated that “I wanted to send two messages I think are important. The first is symbolic: peace is worth making sacrifices for. The second, more factual: the sacrifice, in this case, is contained, equal to a few degrees of temperature, more or less. Peace is the most important thing, regardless of the sacrifice, but in this case the sacrifice is also small.”

As an economist, Draghi sees that there is an inherent trade-off and societies need to decide what they value most. This has become an unfashionable conundrum to put to voters, but it is an inescapable reality and applies to all societies and countries.

If we agree that democracy, the rule of law, freedom and peace are good things, then the question is simply whether the public is willing to make individual sacrifices in pursuit of the collective good. Economist Robert Putnam recognised that some societies can deal with these questions better than others. Largely what determines a society’s ability to make individual sacrifices for the common benefit of everyone is contingent on something he called “social capital”.

This concept is defined as “the collective value of the networks of relationships among people who live and work in a particular society, enabling that society to function effectively”. Benefits flow from trust and cooperation between individuals. Different societies, therefore, have differing amounts of social capital.

First, cohesive societies tend to have more social capital and therefore respond to these questions of sacrifice better than diverse and fragmented ones. Countries, such as South Africa, which are riven with ethnic tensions, class structures and socioeconomic cleavages are more prone to fragment. Why should we be asked to make sacrifices if there is no trust that a rival faction of society will do the same, or indeed if another strata of society is simply so much better off that they will not have to feel the pain of the sacrifice?

Second, geography and proximity matter. Poles are all too aware of Russia’s threat and the desperation on their doorstep. A quick conversation with one of the millions of Ukrainian refugees makes it all too clear.

Those further away are probably less concerned. The problem is out of sight and out of mind. For those in KwaZulu-Natal, the suffering unleashed by floods is tragically evident and they are more willing to bear any necessary sacrifices than perhaps those far away in the dry comfort of their own homes.

Third, maybe some societies have reached such a degree of prosperity, along with physical and psychological impenetrability, that the concept of individual sacrifice for the collective good is a foreign notion. These have attained that final and ultimate privilege of not having to care.

Perhaps, then, this is a kind of post-economics economy where the wealthiest and most cosseted societies on earth – for example, the Austin, Texas, of Elon Musk – are just too detached from any reality to care about anything apart from who is buying Twitter for $40-billion or the price of some arcane cryptocurrency.

American political scientist, economist and writer Francis Fukuyama created much talk in the 1990s with his book The End of History and the Last Man. Maybe, rather, some parts of the world have reached the end of economics  and society itself. Perhaps that was the actual impact of the 1990s.

The world  – South Africa included – forgot that peace and prosperity came at a cost. We thought that crossing the democratic Rubicon was enough, but forgot about the sacrifices needed to sustain it.

Kwame Nkrumah, Ghana’s first president, promised, “Seek ye first the political kingdom and all else shall be added unto you.” Sadly, that is not the case.

This brings me to a final point. Leadership matters, alongside social capital, when it comes to pain-sharing. Merely blaming Russian President Vladimir Putin for energy price increases is not enough to create social cohesion; nor are empty words and promises about rebuilding KwaZulu-Natal.

As Stephen Grootes has written, the statement of President Cyril Ramaphosa that there will be no corruption and theft of funds earmarked for rebuilding KZN was met with widespread mockery and ridicule.

Why should we expect anything other, when that is all we have witnessed in centuries of duplicitous and extractive South African governments? Trust in leadership is not only essential. It is a prerequisite for society to make the collective sacrifices necessary for survival and indeed prosperity. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.


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