Charles Payne

Fascism should rightly be called Corporatism, as it is the merger of corporate and government power.
-Benito Mussolini

On Friday Italy approved additional reforms as it continues to hurry and reinvent itself into a nation that can once again be economically self-sufficient.  Some of the measures are copies of the same inside-the-box thinking that attempts to generate employment movement and score political points.  More railway lines for the south, public housing, and new schools buy the votes of the poor while making their plight much deeper.  Sure, it sounds good, and who could be against new housing and schools?   But the notion this is going to be an elixir is a lie that should stop.  Western nations have a lot of schools and enviable housing. 

It is tougher curriculums and reversing waning work ethics that Italy and the rest of the West outside Germany must figure out. 

Other than the usual in-case-of-emergency-break-glass measure, Italy is finally taking the axe to antiquated policies that have stifled competition and innovation for decades.   Mario Monti, the technocrat that once stopped the merger of GE and Honeywell, has seen the free market light.  He is ditching the guild system which has made everyday life extremely expensive.   Babysitters have guilds, and taxi drivers have guilds, and notaries have guilds; in all, 28 industries have guilds.  These guilds limit membership, training and progress.  This makes supply always more limited than demand and means big money for tasks that in America cost pocket change.  In defense of this system, the head of the notary guild said only 17% of the industry are blood relatives, and it costs so much more than American services, but there is no robo-scandal. 

People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or some contrivance to raise prices."
-Adam Smith

Guilds in general were a central constant during medieval times in Europe and Adam Smith railed against how badly it harmed economic progress.   In fact, economic scholars agree it was the 1,385 guilds that destroyed Italy's economy in the seventeen century.  By the end of the eighteenth century, guilds had been abolished.   Then came Benito Mussolini.  "Il Duce" decided on a scheme that hinted at Marxism in the sense of controlling production, but in this case, it controlled the companies that created production.  It was formed from the word fasces, which meant bundle and was represented by the Roman symbol of an axe surrounded by a ring of rods. 


Charles Payne

Charles V. Payne is a regular contributor to the Fox Business and Fox News Networks. He is also the Chief Executive Officer and Principle Analyst of Wall Street Strategies, Inc. (WSSI), founded in 1991 which provides subscription analytical services to both individual and institutional investors.