by Piero Formica FOUNDER at INTERNATIONAL ENTREPRENEURSHIP ACADEMY
"The clay – said Lao Tzu, one of the most famous philosophers of ancient China – is needed to model a vase. But its use depends on the internal void that you can create." Many centuries later, in the medieval Germany, Eckhart von Hochheim (c. 1260 - c. 1328), commonly known as Meister Eckhart, traced a similarity between man and "a vase that grows larger as one fills it and which will never be full". For several decades now, policy makers have competed with each other to fill the vase with provisions of laws and economic policy measures, and, if already filled, to make it larger. An operation that has required persistent injections of public spending in turn powered by the tightening of taxation.
In countries with a social order which depends on relations of political patronage and, therefore, with a high rate of cronyism, public spending lubricates the gears of the system of relations between politicians, who produce it through taxes, duties and debt, and beneficiaries of that spending in exchange for votes, cash payments, promises of economic advantages, gifts and favours of various nature. That system leads to unequal treatment of citizens and increases the availability of assets under the command of political clients – which negatively affects the allocation of resources. An uneven playing field for citizens and economic operators brings about a deterioration of economic growth while income is redistributed in favour of the players in the system of relations. Inequality of treatment results in a growing income disparity.
It also happens that policy makers bet on the preference of voters for largesse of transfer payments granted by public spending compared to their aversion to the escalation of taxes. Over time, those payments have resulted in privileges and corruption that have dramatically affected the quality of government expenditure. This has locked long-term investments in education, research and infrastructure into a downward spiral and, by contrast, has set in motion an upward spiral of current expenses. The future has been sacrificed to the present.
Evidences from the data of the International Monetary Fund show that the policy makers of the most advanced countries respond perfectly to Master Eckhart's dictum. The clay of public spending – now at around 45 per cent of GDP compared to 15-20 per cent of the Fifties – has lead to a vase of ever-bigger dimension. Among these countries, the Italian vase has expanded at a cost of an effective tax rate that has doubled, to 54 per cent, compared to 1960.
A steadily growing number and increasingly elaborate government measures hinder the entrepreneurialism of the knowledge society that to succeed requires open spaces sufficiently independent from State interference. Few politicians in these years of Grand Transformation have understood the message of the new entrepreneurship. Among the few, Mary McAleese launched a strong message during her presidency of the Republic of Ireland, from 1997 to 2011. "Today – wrote the President – an educated, self-confident, and achieving generation can see the power of its own genius at work in its own land as a culture of entrepreneurship transforms Ireland’s fortunes, creating a new future for our children and an economic success story of remarkable proportions”.
"All things are full of gods," said Thales (640/625-547 BC), a Greek pre-Socratic philosopher of Miletus. The things of today are all full of those deities who have the name of policy makers – those who hold the power to influence or determine policies and practices at an international, national, regional, or local level. To make room for the nascent entrepreneurship, we must empty the vases of Lao-Tzu and Meister Eckhart. This email address is being protected from spambots. You need JavaScript enabled to view it.
