“Plunder: When the Rule of Law is Illegal” by Ugo Mattei and Laura Nader presents a “narrative history of the imperial adventure rendered in historical and contemporary legal terms“ (Mattei and Nader: p 6) in order to illustrate the unfolding of the “rule of law” ideology in a pattern of continuity with the colonial experience.

Let’s clarify some of the key terms first. In the Introduction, the authors observe how “rule of law” possesses two basic meanings. On the one hand, it refers to the substantive content of a legal system that protects property rights and guarantees contractual obligations. “Rule of law”, however, equally refers to the specific formal features of a legal system which is “impersonal, abstract, and fair, because it is applied blindly to anyone in society” (Mattei and Nader: p 14).

These two meanings which make up the “rule of law ideology” are said to serve an illegal purpose whenever (1) they are used as cover-up rhetoric for the appropriation of resources; (2) they lend themselves to selective application, for the purpose of enforcing “double standards” in the imposition of restraints upon only some international or social constituencies; (3) they prevail over the value of peoples’ self-determination. Of course, this is just an approximate classification, which the authors advance in the Introduction, but which they do not recall later on in the book, as, at their core, all “illegal” uses of the rule of law share a common feature: that of favoring an unjust distribution of resources. This is, ultimately, what Mattei and Nader use as the benchmark for discerning what’s legal from what isn’t, as they deem this distinction to have blurred “in a world in which the rule of law is reduced to a dull rhetoric or to Orwellian double-speak” (Mattei and Nader: p 8)

Central to the understanding of the current uses of the “rule of law” ideology is the notion of “hegemony”, i.e. power imposed by a mixture of force and consent. In colonial times, vesting foreign domination in formal legal structure was necessary in order to lower local resistance and facilitate the extraction of resources needed to facilitate the economic development of colonial powers. Nowadays, hegemony still proceeds through the imposition of law which, however, only rarely occurs by force. More often, reforms needed to support the neo-colonial project are enacted in non-Western countries either through bargaining or through prestige.

In the former case, international institutions such as the IMF and the World Bank implement seemingly “universal” development recipes by requiring the enactment of particular legislation as a condition to issue their loans. In the latter case, instead, intellectual groups provide a coat of “scientific superiority” to Western “rule of law ideology”, thereby favoring its reception on a worldwide scale.

Mattei and Nader, however, find a fundamental flaw in both strategies. In fact, both tend to present particular reforms, involving extensive privatization and the opening up of national markets to international competition, as “technical matters”, divorcing law from the political soul which is needed to make it the actual embodiment of the will of those that are subject to it. As a consequence, Mattei and Nader argue, choices with an inherent neo-liberal political flavor end up being presented as a necessary path to growth and development, without regard to local social complexities that may justify alternative solutions. At their root, these seemingly a-distributive, a-political reforms ultimately affect the distribution of resources, by favoring their allocation to those that are more willing to pay for them:

the ‘willingness to pay’ for a given resource, the yardstick that economists use in order to see whether such a resource is actually in the hands of whoever values it most, is a function of the ‘capacity to pay’ which in turn depends on the amount of resources already available to each of the actors of the transaction. Consequently, the rich are systematically favored when policy is evaluated in terms of efficiency, which explains the enormous increase in the gap between the rich and the poor under neo-liberal globalization
Mattei and Nader: p 49

These strategies, that inevitably end up benefitting multinational corporate actors – those which have been called elsewhere “ipermercatores” – ultimately warrant the following observation:

The rule of law should lose appeal as much from being controlled by political power as by business interests. Nevertheless, only the first distortion, blamed on socialist legality and on other non-Western conceptions, is constructed as lack of the rule of law. The second distortion gets constructed by strong corporate actors as the way things should be, in the name of economic efficiency and market expansion and development.
Mattei and Nader: p. 98

In light of this, the question that Mattei and Nader seek to answer, by discussing a wealth of examples taken from colonial as well as more recent history, is whether it is possible to curb the opportunism inherent in the rule of law ideology “from within”, ie by severing only its “illegal” uses, or whether a more radical re-thinking of legality is needed.

An anatomy of plunder frames a way to understand whether plunder can be cured by the rule of law. Can the path of development be changed by political practices compatible with legality, or can change happen only outside of the current legal order, by means of revolutionary transformations in the political space?
Mattei and Nader: p 24

Eventually, Mattei and Nader seem to lean towards the latter option, after criticizing, through the presentation of a wealth of actual cases both at the international and the US level, the current ideal of the “rule of law” as supporting a pattern of reactive institutions ill-suited to reverse the existing distribution of resources, which is too heavily skewed in favor of corporations and wealthy individuals. This kind of framework, they conclude, “does not compel powerful market actors to internalize their costs” (Mattei and Nader: p 212).

Instead, the authors favor a new paradigm of the rule of law, which they call the “people’s rule of law”. One that keeps into account the position of those at the other end of environmental or social externalities and who, ultimately, pay the price of one-directional corporate expansion. For this to be possible, Mattei and Nader seem to suggest a radical departure from the manner in which “rule of law” is presently translated into actual institutional arrangements (p 215).

When it comes to protecting private property and private initiative, they advocate greater sensibility towards social justice goals, ultimately justified by the observation that

in a world of scarce resources there is a limit to private accumulation to be respected, and the rich … cannot be rich beyond that limit without being responsible for the poor being poor. Trespassing over that substantive limit amounts to plunder, regardless of whether the rule of law, by protecting the bottom line and all externalized costs, enforces such disparities.
Mattei and Nader: p 216

In order to bring about a system where these alternative substantive priorities may find satisfactory implementation, Mattei and Nader seem to advocate a change in the dominant pattern of understanding legal institutions as “facilitators” of the market economy and efficiency, towards a more openly proactive attitude that may serve to confront externalities head-on.

A good starting point, they argue, can be found in those layers of the legal framework that have been spared by “imperial rule of law” ideology, ie “local laws”. By adhering more closely to what the people regard as notions of social justice, these often overlooked sets of rules serve to provide legal redress to needs that are currently overshadowed by “reactive” institutions typical of the imperial rule of law.

After all, it is only in this way, by offering a framework for balancing private and collective interests, that the “rule of law” may translate into a truly impartial and fair legal system, where “big interests and small interests are entitled to equal protection in the eyes of the law.” (Mattei and Nader: p 209).

The road to this visionary change, however, is not an easy one, and is recognized as having to overcome a whole range of discursive practices aimed at legitimizing the dominant conception of the “rule of law”:

If more widely recognized for what it is, plunder may become the target of public opinion and legal challenges. Lifting plunder from below the radar screen is a potential mobilizing force, although there is no guarantee without persistence, networking, imagination, and recognition of the difficulties inherent in deconstructing imperial rule of law, in some places still considered to be a social good.
Mattei and Nader: p 214

In this call for grassroots activism by Mattei and Nader, this book clearly represents an outstanding and successful attempt at unveiling many of the contradictions of the dominant conception of the “rule of law”, while advocating greater attention and respect for local institutional arrangements, rightfully seen as expressions of important ideas of social justice which should not be unquestioningly sacrificed on the altar of corporate efficiency.

Zeitgeist Addendum is a movie produced by Peter Joseph in 2008. It explains the truth about the international economic system. In a nutshell, at the base of our economy there is a big cheat. The documentary explains how the economic system works and why inflation and debts are neverending processes.

I have just posted the first part of the movie, all the rest of the documentary is in Youtube. The documentary is in English, but it has Italian subtitles.

Below I have embedded a four-part documentary entitled “Life+Debt“, which I have found on Livevideo.com: it is about the effect of IMF and World Bank policies in Jamaica. This movie is a great companion to understand the background behind the book “Plunder: When the Rule of Law is Illegal” (which I am currently reading).

To give you an idea of how IMF and World Bank loans work, imagine that you need a loan. Imagine further that there is only one person that can give you this loan (because, say, you’re really desperate for money), and that that person requires a detailed breakdown of all your current expenses and subsequently asks you, as a condition to issue the loan, that your future expenses fit more closely with another breakdown proposed by the lender (which, say, involves much less spending on food, health or education). In exchange for the money, in other words, you lose the freedom to do with it whatever you thought was best for yourself , and become forced to use it for what the lender thinks (or says to think) is best for you.

The Muslim businessman is not just focused on the profit of his business, but he should increase the wealth of his community as well . Wage discrimination is not permitted, the brotherhood and friendship are considered the most important values on the job. Ribà means “increase”, “growth” and it can be considered as our interest rate. Once upon time, all monotheistic religions prohibited every kind of Ribà. Every interest rate on consumption, production or commercial borrowing , either private or public, low or high was, and is still, completely prohibited by the Muslim religion. Anyway, the prohibition of interest rate in the Muslim countries was a common rule to other religions in the past. In the Jewish Torah and in the Bible it was not allowed to lend money asking to pay an interest rate. So, the Muslim countries continue following a religion rule that was a precept of the Catholic and Jewish religion as well. Though the interest rate is not allowed, the Muslim communities carried out contracts that included an increase of the price paying by instalments. The first Muslim bank was born in Egypt in the 1963. Savers and clients were the stockholders of the bank and a director board called Shari’a Board looked out for the management of the bank. So far the Muslim banks are 250, Muslim banking desk in Western banks are 200, Sukuk (Muslim securities) are 18 and shares compatible to Sharia are 300. The reasons why the Muslim finance has grown considerably are three: (i) the economic underdevelopment of the Muslim countries and consequently the need of having financial structure and products focusing on the local community; (ii) the failure of socialistic economy and communistic ideology; (iii) the importance of the ethical values and social responsibility in the Muslim finance has influenced many companies that are trying to be more responsible towards their stakeholders. All these three factors have been important in order to explain the success of the Muslim finance. Furthermore, the Muslim man has to take care of his business and the community’s wealth as well. Thus, the wealth of a good Muslim man is rigorously linked to that of his community and he always has to remember to give something to charity after paying his zakàh (income tax). In fact, the profit is not the only goal of a Muslim entrepreneur, he has to be responsible towards his stakeholders and follow ethical values by running his business. Unfortunately, the corruption and the lack of a corporate social responsibility is spread out in the Muslim business world as well.

The Muslim banking system is organized in a slightly different way. Muslim savers have two possibilities of investing their money: (i) safe saving accounts and (ii) profit-sharing bank accounts. In the latter one, clients can either gain or lose their savings in case of profit or loss of the bank. Moreover, all contracts are based on the project results. Meaning that investors can obtain a gain just in case the bank finances good investments. The risk for profit-sharing bank account is that clients do not have any control and authority on the bank’s investment. In case of loss of the bank, they lose all their savings.

Moreover, Muslim banks issue bond called Sukuk. Unlike our bonds, the gain of a sukuk is linked to the profit of a project. While, the bond gain depends on his future cash flow, the Sukuk ‘s holder has an ownership right of a product issued with the Sukuk. Thus, Sukuk’s issue is very similar to a securitization process. In fact, the bank or a financial institution creates a Special purpose vehicle, which is a legal entity (subsidiary company) that receives assets (money) and, as a consequence, it issues new Sukuk notes. All money collected finance bank’s projects. Hence, holders of the issued Sukuk become the pro rata owners of investments. So, western bonds and Sukuk do not show big differences, a part from the fact that the latter has a gain depending on the bank investment.

In conclusion, Muslim banks should not finance projects concerning the production of alcoholic beverage, swine breeding, illegal weapons trade, night club management and so on. Anyway, it is the Shari’a board of the bank that has to define which investment to finance. As a matter of fact, they should evaluate every business in order to take a right decision.

I would like to point out that the development of the Muslim finance, such as Sukuk, could become a good tool so as to finance public projects in other countries. For example, Italy could issue Sukuk in order to attract new investors in Muslim countries with great amount of savings and, as a consequence, acquire money for our public investments. Secondly, Muslim financial tools could help our companies to reinforce their partnership with Muslim businesses, increasing profits of both.

Tocqueville thinks that the democracy has a shining face. It allows to find a new successor thanks to the vote system instead of using weapons. Secondly, it protects the civil and human rights of the citizens. But, a democratic system has a dark face as well. Though many wars and battles have been fought in the past in order to establish the democracy in many countries, it distrusts the talent and proclaims the mediocrity. Tocqueville explained that the democracy is based on the quantity, and not on the quality of the system. The democracy transforms the judicial equality into a tool that imposes an egalitarianism on the society. The dark face is hidden by the fact that it guarantees all people to have the same rights from the birth. However, it damages the society because it flattens the talent, knowledge and culture in favor of the equality.

The same thought is outlined by Andrew Keen in his book “The cult of the amateur”.

The revolution of the Web 2.0 is killing our culture and destroying our economy.
Andrew Keen

We are the consumers of the mainstream culture. The larger use of the Web allows a democratization of the society. Keen points out that the revolution of the Web 2.0 has caused an impoverishment of culture and the unreliability of news. The person of the year 2006 for the Time was: YOU. In the digital era the amateur has the power of taking part in building Wikipedia, of saying his or her opinion on blogs and of giving reviews of books and comments of facts. It does not matter who is behind the PC, everyone with a Internet connection has such power.

Lemann of the New Yorker wrote that society creates the authority for the production and distribution of knowledge, news and ideas. Why do they do so? Because when an article is written by an author of the Economist or Financial Times, we are aware that such article has been subject to a proper research and  reviewed by a team of journalists. But, today we can read news, opinions on blogs, and web sites. Nobody is able to guarantee the reliability. In other words, the lack of filters creates an ocean of mud where false and improper news find their raison d’être. It is easy for misinformation and rumors to proliferate in cyberspace. For instance, Wikipedia attracts more users than the Encyclopedia Brittanica (which relies upon experts and scholars). For Keen, the web 2.0 distrusts the talent and proclaims the mediocrity.

Furthermore, Keen criticizes the print on demand and the vanity press such as Lulu, but at the same time he praises projects such as the Citizedium. Moreover, Keen explains that the free online press allowing to be updated and read articles is damaging the newspapers all over the world. This is why Rupert Murdoch has stated that the Sunday Times is going to be paid for its online content. It is still unclear whether the site will charge a fee for each article or a subscription system. However, what is clear is that the Sunday Times plan can be a solution for protecting the even weaker newspapers.

Below is a guest post kindly written for EconSquare by Jim Stanford, economist with the Canadian Auto Workers, economics columnist for the Globe and Mail newspaper, and author of Economics for Everyone (Pluto Books, 2008, www.economicsforeveryone.com):

Workers face a dual threat from the global financial crisis. First, we are exposed to the immediate economic and social costs of the recession itself: lost jobs, lost incomes, lost homes, and in many cases lost lives. Second, and more permanently, this moment could actually lead to structural changes that further damage workers and their organizations. Far from conceding that there was anything wrong with the recipe they have forced down our throats, employers and pro-business governments will seize on the fear, confusion, and divisions caused by the crisis to push for still more market-oriented measures.

Indeed, the Canadian author and anti-globalization activist Naomi Klein explains in her latest book, The Shock Doctrine, that ruling elites regularly take advantage of moments of widespread fear and confusion, arising at moments of economic, social, or even natural disasters, to force painful changes that they were preparing for years – but that the masses of people would not tolerate under “normal” circumstances. The present global economic crisis will surely provide another test case for shock doctrine strategies. The best way to inoculate ourselves against shock doctrine is to push back with our own analysis: our own explanation of what happened, why it happened, what can be done to both insulate working and poor people from its effects, and how to prevent it from happening again.

In my view, economic literacy and political-economy training must be a core element of the organizing and movement-building efforts of trade unions and other progressive forces. We have to equip our supporters to identify the true culprits, resist false solutions, and fight confidently for better alternatives, and learning more about economics – from a worker’s perspective – is a crucial part of those preparations.

In short, the labor and left movements need their own “story line” about the economic crisis, its causes, and consequences. We need to prepare our members and supporters to reject claims that workers, unions, and public programs are somehow responsible for the meltdown of private finance. Of course, working and poor people are the victims of this crisis, not its cause, and tightening our belts will do nothing to solve it. That’s why it’s so important to explain exactly what did cause this crisis – the same factors that will cause the next one, too, if we don’t change the rules of the game. It wasn’t a random, negative event. It was the predictable, preventable outcome of running the world economy in a particular way, according to a particular set of rules. And unless and until the rules of the game are changed, we will continue to experience chaos like this every few years. (In fact, thanks to globalization and the lightning-quick technology of the financial sector, the crises are coming faster than ever – and deeper, too.)

Without understanding how this downturn emerged from features and forces that are “hard-wired” into the DNA of deregulated, financialized capitalism, people will be tempted to see the crisis as a “random,” negative event – an unfortunate but unavoidable challenge that everyone in society must help to overcome. At best, this leads to the conclusion that we just need to hunker down and wait out the crisis, hoping that the financial bubble eventually reinflates and things get better. At worst it underpins a willingness to accept the sacrifices and concessions that are being demanded by employers and governments – accepting the false logic that “we’re all in this together.”

In the coming tough years, therefore, the labor movement will naturally fight hard to protect workers against lay-offs, cutbacks, concessions, and the many other consequences of the recession. And all progressive forces will campaign in the political arena against regressive shifts in social and economic policies, and cutbacks in public programs, that we know will be imposed by deficit-laden governments. A crucial part of arming ourselves for those battles is ensuring that our members and supporters understand why this crisis occurred, and why it will happen again, unless we change the whole set of neoliberal economic and social policies we’ve been living under for the last three decades.

This recession was not a random event. It wasn’t inevitable. In fact, it was both predictable and preventable. It was produced by the mechanisms of private profit (especially as practiced in the financial, or “paper”, economy); irresponsible credit practices; and a profound failure of government regulation. Those same three key ingredients (greed, loose credit, and lack of oversight) will cause the next conflagration, if our only response to the collapse of this bubble is to sit back and hope that it re-inflates – as the screws are tightened on working people all the while. By building a stronger understanding of how capitalism actually works, through more extensive economic literacy and political-economy training initiatives in our own ranks, our movements can better resist the attacks that are coming, and be ready to fight for the fundamental change in direction that we all need.

In line with previous posts on the financialization of the economy, and on the doubtful usefulness of this aspect for productive purposes, I am now reporting on a curious episode involving the sale of Argentinian bonds, as an example of a financial operation that basically benefitted only the investment bank that managed the deal, to the detriment of all other unsuspecting investors that were involved in this unfortunate venture. This example is reported in Ugo Mattei and Laura Nader’s book “Plunder: Where the Rule of Law is Illegal”. This post builds on that report, by adding additional background information.

In 1992, Argentina issued a “debt consolidation” bond, which took the name of BOCONs. A “debt consolidation” bond, in a nutshell, is a financial instrument which serves to give a defined legal regime to pre-existing, heterogenous  liabilities incurred by a State. The reasons behind the issuance of BOCONs are exposed in Alberto Ramos’ paper: “Government Expenditure Arrears: Securitization and Other Solutions” in the following terms:

During the 1980s, the Argentine government, and Social Security System especially, experienced difficulties in meeting current obligations, in an environment of very high inflation. Consequently, the government accumulated considerable arrears to suppliers and, in particular, did not recognize the legal right of pensioners to indexation of their payments to inflation. In 1991, a series of lawsuits against the Argentine government for its failure to index pensions to inflation were successfully concluded. These binding legal decisions left the Argentine Social Security System alone with a liability of around 5 percent of GDP and no current resources to comply with them. At the time, it would have been impossible to settle all these claims in cash concurrently, while repudiation was not an option due to the court rulings [printing more currency would have also made the very problem behind the accumulation of arrears, ie inflation, worse]. Faced with stringent budget constraints, the government decided to settle a very small amount in cash and to issue bearer Consolidation Bonds-BOCONs- with a maturity of 10 years to pensioners and 16 years to suppliers.

One characteristic of BOCONs was the difficulty in estimating their worth. In fact, no payments, either for capital or interest, were to be made for a period of six years. However, interest payments would be added to the principal during this time. As interests would start to be paid out after the first six years, the principal would then begin decreasing as well. This complex structure made it very difficult to determine the present value of such an asset. So difficult that, besides those creditors whom the bond was issued by the Argentinian government, the secondary market was not flourishing.

This, until the case came to a famous investment bank, Morgan Stanley. Morgan Stanley suggested the establishment of an offshore trust. The trust would serve as a vehicle to swap the BOCONs unfavorable cash flow with a steady one. In fact, payments from BOCONs would flow into the trust (this, I am guessing, because the trust would be the legal holder of such bonds) and, through the latter, be transferred to Morgan Stanley in exchange for a steady interest rate.

“Dressing” BOCONs this way allowed the investment bank to make an otherwise unattractive investment look attractive, as this repackaged bond would

pay interest immediately, … appear not to have a fluctuating principal, and seemed very safe, backed as [it was] by Morgan Stanley, who would disclose (if at all) only in very tiny obfuscatory print , that [it was] in fact [a] highly complicated and risky derivative[].
Mattei and Nader, Plunder: When the Rule of Law is Illegal, 41-42

Investors were then made to purchase a “unit” of this offshore trust, the value of which, however, was still linked to the value of the underlying bonds. With subsequent decreases in bond value, investors were left with an asset worth very little, while the investment bank was able to maximize its profits in terms of fees from the immediate sale of such instrument, in a very sophisticated variant of the good old motto “pump and dump”.

Hence, besides the lack of a genuine productive motivation in all of this financial machinery (as, basically, the bank’s earnings effected a “zero sum game”, by extracting wealth from investors, while creating none), a broader point can be made, regarding the need for Argentina to issue this bond in the first place, as – arguably – a bond with a value too difficult to determine creates as much uncertainty as it purportedly eliminates. If anything, by “selling” the bond as a promising asset from an expanding economy, it just becomes an excuse to inflate market expectations, offering an extra profit opportunity for big financial players, like investment banks.

Whenever exams approach, I always find myself something “better” to do. This time, it was a lazy afternoon in Oxford and I, instead of preparing for my exams (which I eventually passed), went browsing through the shelves of a local bookshop. Sifting through the economics section, I saw a range of titles, from “The Economic Naturalist” to “Economics for Everyone: A Short Guide to the Economics of Capitalism.” Attracted by the dimension of the latter book (how unusual, I thought: an economics textbook in pocket size!), I picked it up, started browsing it and decided to buy it.

Of all the books I have bought for myself over the years, this is definitely one of the most useful ones I have read. Rather than being one of those books that try to present economics as a universal science, capable of explaining everything from a few absolute truths (like – judging only from the title – the other book that picked up my attention on the bookshop’s shelf likely promised to do), “Economics for Everyone” showed me a side of economics I had never experimented. All of the economics courses I took as an undergrad focused on neoclassical economics. The problem, however, is that I was never told that neoclassical economics is just one possible explanation of economic phenomena. “Economics for Everyone” made me understand this.

From the very beginning, Jim Stanford (a New School graduate and trade union economist) approaches the subject in a critical manner, emphasising the fact that economics should be a more democratic subject of study, where the visions of all segments of society ought to be meaningful for the purpose of seeking solutions to everyday problems. Economics is not just the sacred knowledge of a caste of economic gurus. Instead, Stanford advocates a more grassroots approach to economics and a more critical stance vis-à-vis capitalism, as – may I add – capitalism is there to try and make our lives more prosperous, not vice versa: if it doesn’t work, we must have the courage to challenge it, and advocate its reform.

Content-wise, the book presents an incredibly accessible overview of macroeconomic topics. In particular, it starts from presenting a basic “closed” economy featuring just workers and firms, and later goes on adding players to this picture, such as governments, the environment, the financial sector and foreign trade. In so doing, however, Stanford puts his education as a heterodox economics to good use, bring to bear on the various problems a wealth of different perspectives: Keynesian, Marxist and feminist, to name those I was able explicitly to recognise myself. I was very much impressed by the novelty of this book, particularly as I was reading it side-by-side with “Plunder: When the Rule of Law is Illegal” by Ugo Mattei and Laura Nader, where a sharp criticism is made of modern day “technological mentality” when it comes to economic problems and policy. In other words, economic problems, and the related “treatments”, are presented as a “technological” issue, meaning one that we must delegate to “experts”, but which we may not really have a saying on.

Stanford, just like Ugo Mattei and Laura Nader, offers a very strong and credible voice against the “technological” use of knowledge in economics, in favor of a more participatory and democratic approach in suggesting policy conclusions vis-à-vis the problems of the modern world. I highly recommend this book!

Title: “Economics for Everyone: A Short Guide to the Economics of Capitalism”
Author: Jim Stanford
Publisher: Pluto Press
Year: 2008

Available on amazon.com ($), amazon.co.uk (£) and deastore.com (€)

Italy has unequal retirement ages for men (65) and women (60). The outlook, however, is that the female retirement age will be brought to the level of that of men, in order to avoid “reverse discrimination”. Would it really discriminate against men to have women retire earlier than them, however?
In particular, in the Italian society, women are still performing much of the housework. While not computed in GDP statistics, housework is, however, an important type of service as part of the process of maintaining and regenerating the workforce. Working women face a tough work-life balance in many countries, and especially in Italy, where they are still subject to many subtle forms of discrimination, particularly as regards career advancement. Additionally, all too often do women return from the workplace, just to be faced with additional work at home. In light of this, while they are only held to work until the age of 60, at present it seems to me as though their (shorter) working life consists of a much lower share of leisure time, compared to that of men, due to the unequal burden of housework.
In order for there to be true equality, therefore, I believe that, if we want to raise retirement age, the load of housework (in a broad sense, including the efforts to raise offspring, for instance) should be more evenly spread. This, however, is both a cultural battle, that has to be won, first of all, within the four walls of the house vis-à-vis their partners, as well as a challenge to the system as whole (and the government in particular), that will have to try and provide – on its part – an increased number of services, to relieve the pressure on working women, if it is to treat them as men when it comes to retirement age.

I want to describe Silicon Valley as the navel of the world where the latest technology and the most intelligent engineers create products that change our lives significantly. The world is changing and Friedman in his book describes it as flat because of the outsourcing, IT, downloading and uploading process. The world is flat!

Alvin Toffler forecasted that in 2000 two thirds of the American population could work at home linking to their own companies through web cameras and Internet and that the urban city centers got empty because companies could spread out their branches. However, this  forecast was completely wrong. In fact, these forecasts do not bear in mind the social aspect of the Information Technology revolution. Companies can outsource services and production, can manage everything is tangible by adopting distance working. But, they cannot manage the human resources by distance working. They need to be physically in the company in order to communicate.

“Communication is the only task that managers cannot delegate.”

Roberto Goizueta

Furthermore, India and China are growing because of the lowest production costs, but Silicon Valley is the exception to the rule. Meaning that when companies and managers of the Net Economy are looking for a place where set up their headquarters or branches they chooses the navel of the world. Something wrong? No, at all. Just the area of Silicon Valley could take part in the G10 because of its GDP. It has the environment, people and the culture for being the right place for these companies. They do not think that the key factor to be successful is just the policy of low costs. As a matter of fact, Silicon Valley, Boston, Seattle, Denver are the most expensive areas in US but they have excellent universities and good life conditions. Once upon time, the industrial revolution depended on the proximity to the sea, rivers, train stations or raw materials. Today, the success of the business depends on finding out the excellent human resources. So, companies go there, in the Silicon Valley, Boston, and Denver where the most prestigious colleges provide the human resources they need.

Moreover, the interaction between colleges, research centers and companies is extremely strong.  These universities have professors who are at the same time managers. They teach courses like Supply Chain Management , which are not in the books yet. Students study real cases, analyse companies’ strategy providing new solutions. Companies are subject to the judgment of students.

The university of Stanford is completely private and it does not receive any funds from the government. In fact, Bill Gates, and other managers donate millions of dollars so as to build research centers and infrastructures where the future leaders of the economy and business grow.

“ if you had success in your life is your credit, but you have to give something back to the society that contributed to your success”.

In conclusion, excellent universities provide human resources, companies take to risk to invest in new projects, the culture of entrepreneurship and an easy bureaucracy  allow Silicon valley to be the navel of the world.