IDENTITY AND GLOBAL CRISIS

For years I have been involved in an over 35 football championship. It is a way of rediscovering old friends, spending time together, brought together by the same objective: to burn a little fat by having fun together, without getting hurt and without making complete fools of ourselves. It involves the right degree of competitiveness, without overdoing it. The tournament is organised in a serious manner, with proper referees and the occasional spectator who has nothing better to do. Two years ago the organisers, bored by the fact that the teams were always the same, decided to mix things up a little. Instead of allowing the teams to form thanks to the initiative of individuals, they gathered together all those enrolling in the tournament and then decided the teams by drawing the names out of a hat. The result was that there were violent arguments within the teams, divided changing rooms and bad-tempered matches. The following year the number of people enrolling in the tournament had halved.
We are more willing to help others and to allow others to helps us, indeed we are happy to do so, when we can choose who we wish to share these experiences with. We are even willing to lose if we can do so with our friends. It is a choice of identity and common values at the same time. In some cases we cannot choose (we do not choose our parents, the country we were born in, our year of birth or even the people in the same class) but we can nevertheless give more or less weight to these identities. The fact is that we can belong to different communities and have different identities at the same time, to be taken on and exploited according to what we are doing. We may belong to the class born in 1960 or form 1B, or we may be fans of Torino football club. We can be from the Po valley, Italy or Europe, according to which values we wish to share. We need only look at the personal pages of Facebook to see how much people care about informing other users that they belong to various groups in the social network, religious or political or related to personalities that they love and identify with. The vote was once a secret to be shared with only a few close friends. Today many include it in their Facebook site. The web allows us to better define our identity in the global context.
One of the effects of the crisis underway is to reduce the scale and the dimensions of what we define as our identity. Whereas the crisis is global, identity becomes increasingly local. While greater coordination at international level is necessary in order to combat the recession, public opinion at national level pushes in the opposite direction. It asks for protection against everything outside the community which they identify with, a community represented by the individual village, city or nation. The sign of this contradiction is the verbal acrobatics of European leaders. At international forums Gordon Brown appeals against protectionism, while in London he coins the phrase "British jobs for British workers" quickly picked up on by Lincolnshire workers who protested against the arrival of Italian labourers. The contrast between what is declared by European leaders during international meetings and what they say to the general public in their own countries has never been so strident. Today there is a “total disconnect” between what is said at home and what is said outside.
The British case strikes us because the British national identity has historically been shaped by the assimilation and integration of different cultures, starting with the former colonies of the Empire. When British Petroleum opened its first plants in Persia (today's Iran) in the last century, it constructed the houses of managers and workers in the architectural style of New Delhi to make them feel at home, as if this was a district of London. Today the roles have been inverted. The British identity is reasserted against a French oil company, Total, guilty of having sub-contracted to an Italian firm using Italian workers. After the opening up of the European Union to the east, the United Kingdom was one of the few countries to open its frontiers, accepting, it is estimated, 80,000 Polish workers, including many of the plumbers who make the French lose sleep. As the Guardian wrote when commenting on the protests all over the country against the  landing of 300, and I emphasise 300, Italian workers, "whereas finance has become global, politics has become local". It is indeed the crisis that increasingly reduces the scale of public debates and the community with which one identifies.
When the world economy was growing at a rate of 5-6 per cent a year, many asked themselves whether globalisation would suffocate national and local identities, suppressing traditions and violating the system of local values. Now that the world has stopped racing – indeed it is going backwards – as for the first time since the Second  World War the world will see a negative GDP in 2009, one wonders  whether these worries were not excessive. At all events we now have the opposite problem: how to manage a global crisis given the reinforcement of local identities, which reassert themselves in contrast to everything outside them.
Can these different local identities be conciliated with a global identity that supports the delegation of powers to supranational organisations, coordinating countries, such as the G20, in the management of the crisis? And given that in order to identify with a community it is necessary to feel that one is treated fairly within this community, what rules and national and international institutions should be changed in order to promote a sense of belonging to communities larger than the town in which one lives?
The worst and most dangerous lesson to be learnt from this crisis is that it is a by-product of globalisation and hence to avoid new crises it is necessary to make our communities even more closed. One contribution of the Festival will be to reflect on the causes leading to the crisis, on the responsibilities for the depression – not so much in terms of people, but rather as regards institutions and rules. It will help to understand why economists, with rare exceptions, failed to forecast it, why many bankers were able to carry on undisturbed and why politicians reacted so late to the deterioration of macroeconomic conditions. We need to understand what we must do in order to avoid a crisis of this kind happening again and to be able to come out of this one more united than before. Thus we will be better able to manage the many common resources that there are on our planet, recalling however that our children will never agree to return to the small antiquated world of our youth.


Tito Boeri
Scientific Coordinator of the Festival of Economics