Luigi Zingales on Italy, Google and Conglomeration, and Donald Trump | Conversations with Tyler
In a riveting discussion, Luigi Zingales and Tyler Cowen explore a variety of topics including Italy’s economic and political landscape, the influence of Antonio Gramsci, the role of Google and conglomerates, and the similarities between Donald Trump and Silvio Berlusconi.
They also delve into the high productivity of Italian cafés and the impact of Starbucks on the Italian coffee culture.
Italy’s Debt Future
Italy will not be able to sustain its current level of debt.
The combination of low fertility, lack of productivity growth, and illegal immigration will make demography the primary consideration for Italy’s future.
If innovation were just throwing money at it, Greece would be the most innovative country in the world. I think money is a necessary condition, but all the time it’s not sufficient and sometimes it’s also counterproductive. – Luigi Zingales
Political Climate Similarities
There are striking similarities between the political climates in Italy and the United States, particularly in relation to financial mobility and taxation.
In both places, it’s challenging to increase taxes as people can easily relocate to other areas with lower tax rates.
Trump and Berlusconi Comparison
Donald Trump and Silvio Berlusconi share similarities as wealthy businessmen who have successfully portrayed themselves as friends of the people.
Their success lies in their ability to communicate at a level that resonates with the general public, fostering a sense of identification and aspiration.
Corruption and Political Influence
The United States may be more corrupt than it realizes, with Berlusconi serving as a mirror reflecting this corruption.
Berlusconi’s integrated approach to politics, where he employed his own employees in his party and government, is a more transparent version of the revolving door between lobbying and government roles in the U.S.
The perfect world is a world in which you take the best things from Italy and the best things from the United States. – Luigi Zingales
Business Firms and Hierarchy
Companies like Amazon and Netflix may be pushing too far in the direction of incentives over insurance, creating harsh work environments that may not be sustainable in the long term.
Ideal World: Italy and the U.S.
The ideal world would combine the best aspects of Italy and the United States.
The family-oriented approach of Italian firms is admirable, but the benefits of the more cutthroat, incentive-driven approach of American companies are also recognized.
Impact of Economic Downturns on Italian Family Businesses
When family businesses in Italy fail, the owners often commit suicide, sometimes leaving their life insurance to pay their employees’ salaries.
This highlights the deep personal investment and sense of responsibility these owners feel towards their employees.
Immigration and Assimilation
Refugees are often the most talented and entrepreneurial people and welcoming them is both a moral obligation and an economic opportunity.
However, it’s also important to select immigrants who are more likely to assimilate into the host culture.