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Class struggle in times of pandemic

Italian capitalism in the middle of the Coronavirus storm: Part II

by Marco

In my previous article, I tried to establish to what extent the Italian healthcare system could be held responsible for the particularly tragic features of the Italian outcome. This part will be focused on describing how the dimension of power has played out in determining the content and timing of the lockdown measures.

How the situation played out in Lombardy

Although such measures were established by the national government, I will focus on Lombardy, primarily because it was the worst-hit region. But also since it is the region producing more than 20% of the Italian GDP and thus where the strongest economic interests were at stake. The fact that Lombardy was both the region of outbreak and the “economic engine” of the country combined, without any doubt, to determine the final content of the solutions adopted.

The first case in Italy was identified on the 21st February, in the small municipality of Codogno. Immediately on the next day, the government declared Codogno and some surrounding municipalities as “red area”, namely a territory where nobody was allowed neither to enter nor to leave.

Shortly after, a second outbreak took place in the area of Bergamo, but this time the national and regional governments behaved hesitantly and no “red area” was established. This despite alarming signals coming from the territory.

There is little doubt that the economic importance of the area, crowded with important industries, played a decisive role in favouring inaction by public authorities. Although it is still a mystery whether this was for macroeconomic considerations, or because of direct lobbying by the concerned businesses. Some news reports have shown that politicians and decision-makers, especially at the local level, were contacted by companies who asked to do whatever it took to avoid the lockdown and continue business as usual.

However, with the virus spreading rapidly, lockdown measures started becoming increasingly likely. Therefore inaction could not last forever. It was at this moment that part of the powerful Nothern-Italian industrialist class started actively to mobilize. They strongly pressured against both the national and local governments, and tried to mobilize public opinion against a possible lockdown.

The main employers’ association, Confindustria, was for sure - a main actor of the anti-lockdown campaign, especially through its local branches Confindustria Lombardy and Confindustria Bergamo. The president of Confindustria Lombardy was publicly whining about the lockdown even when it only involved the limited area around Codogno during the first days. He argued that Italy was “self-isolating” and that the competitiveness of the local companies would be harmed also by a bad image abroad. He launched a very unambiguous message: "health is a concern, but no lockdown would be acceptable."

Many local politicians followed the lead of the industrialist class. In this respect, the case of Bergamo, the worst-hit area even within Lombardy, is particularly informative. The municipality of Bergamo, together with the local entrepreneurial associations for retail enterprises, even promoted a video launching the hashtag #bergamononsiferma (“Bergamo does not stop”). This encouraged people to continue living their lives as usual, to go shopping and have nice walks in the crowded streets of the city. The local branch of Confindustria also produced a video aimed at international investors and provided guarantees on the fact that businesses will "run as usual".

Meanwhile, restrictive measures started escalating. But it was only on the 11th March, that the government introduced eventually restrictions on the freedom of movement valid for the whole country. Even at this late date, however, the lockdown of industrial activities was not in sight.

Nevertheless, the mood even of local politicians was starting to change and, seeing the tragedy looming, several in the anti-lockdown front radically switched side. Even previously dismissive mayors, like the mayors of Bergamo and of Milan, started to take stances in favor of social distancing measures, although the attitude towards lockdown of economic activities was always rather ambiguous.

During the second week of March, unrest started mounting among workers. For the first time in years, spontaneous strikes started began to spread across workplaces, especially factories, demanding either for safety at work or for closing down for the duration of the emergency period.

On their side, the three largest union confederations were initially reluctant on the lockdown of workplaces and preferred to conclude agreements aimed at improving “safety”. Nevertheless, the implementation of the bargained arrangements was, in most cases, either sluggish or absent; and many companies did not comply with the minimum safety requirements. Therefore, especially in Lombardy, unions rapidly changed their position and started to demand of the regional government to lockdown all nonessential activities.

National unions, government and employers’ association continued engaging in tripartite bargaining on how to implement safety norms and, above all, on which economic activities should be subject to a hypothetical lockdown. It took until the 22nd of March to decide for the lockdown of all “non-essential economic activities”, by when Lombardy was already in the middle of the worst Covid 19 outbreak in Europe.

Even so, Confindustria managed to exert influence to water down the decrees. This was achieved by pushing for generous criteria defining “essential economic activities”, and by obtaining the possibility to deviate from the lockdown prescriptions. In practice, this has meant that many companies could “self-assess” their status as conducting “essential activities”, by using very lax criteria.

More specifically, the decree allowed companies to apply to the local governmental bureaus (prefetture) for exemption from the lockdown regulation or for postponing the day of closure.

An important example is Tenaris Dalmine, a large factory producing metal pipes and employing 1.300 workers, two of whom died from coronavirus, while several others were hospitalized in acute care. Besides providing insufficient disinfection materials, the company pushed to keep the production of non-essential commodities running, and the self-assessment opportunity provided by the government made this possible. Since the factory is highly unionized, workers managed to obtain some victories and to limit the scope of production. But the loopholes in the governmental decrees did not help.

In general, union sources point to extensive abuse of "self-assessment", by companies where production is non-essential by any reasonable criteria. It was estimated that, in one day and in Lombardy only, 12.000 requests for derogating from the lockdown rules were submitted by companies; and, overall, over 110.000 factories in Northern Italy used the self-assessment allowed by the government decree to keep their production running. This resulted in the hardly surprising fact, that only 34% of the total production halted during the lockdown, while 55.7% of workers have remained active.

Despite insufficient safety measures and leaky legislation, the use of the general strike tactic, remained little more than a shadow and striking activity was patchwork according to sector and company size. Metalworkers, one of the most conflicted categories on this issue, undertook a one-day strike on the 25th of March, but little followed later.

Once again, unions seem to have been kept restrained under the flag of “responsibility”, a well-known word they learned during the last economic crisis. Despite this, unionization really made a difference. This is seen since the most unionized factories were also those managing to strike the best agreements, while the scarcely unionized workplaces, especially small and medium-sized companies, sank in indifference.

When the numbers of the new coronavirus cases kept increasing in the order of thousands even 20 days after the “economic lockdown”, we had to face the sad truth that the failure in closing workplaces has likely led to rather disappointing results - as compared to what could have been expected.

The thousands of deaths in the region do not seem to have changed the mind of the president of Confindustria Lombardy. Even recently he expressed the view that open workplaces could not have been a major reason for the rapid spreading of the virus. This reasoning became shamefully embarrassing when he argued that the cause of the high number of cases in Lombardy, could have been the “extensive presence of animals in (local) farms”.

At the time of writing, the anti-lockdown front is starting to hold its head up high again. This time comprising of a coalition of Confindustria, some regional governments and local politicians. Taking advantage of the reduction in the numbers of new cases and deaths (which remain nonetheless high), local and regional politicians have suddenly changed sides, to avoid taking responsibility for the economic drawbacks of the lockdown.

The result is that now the regional government of Lombardy exerts pressures for opening as soon as possible, backed by the local Confindustria and other regional governments. Considering that the region (and the country at broad) is only at the beginning of the “flattening the curve phase”, this worries many other regions. Since another uncontrolled outbreak in Lombardy would mean a potential outbreak in regions less equipped to deal with the situation.

It is still not clear how this arm-wrestling between the regional and the national governments will end. Nevertheless, without wide workers’ mobilization it will be very difficult this time to hold the pro-lockdown front compact.

Broader Lessons from Lombardy

What does this story tell us? As I mentioned in the introduction to the previous article, crisis periods push societal contradictions to the surface and make some otherwise ambiguous phenomena visible. From the account given here something is clear: trade unions have a long way to go to regain their traditional influence within the Italian political scenario.

Nowadays tensions seem to involve regions and the government, with unions playing only a secondary role. This points to the fact that labor as an organized force is not taken into consideration in the general strategies of political actors, at least when it comes to go beyond the rituals of tripartite consultations.

Rank and file workers have proven to be way more responsive than their national union cadres, who often played the role of firefighters preventing the unrest spreading. In this respect, the fact that strikes were mostly spontaneous, also tells something about how unions seem to have been caught in the logic of “compromise at all costs”, that has featured their actions over the years.

This is however a general observation, which is mostly truth for national unions, while at the company level the picture is more complex. There are few doubts that strong unionization has been a major anchor for workers, who managed to strike better deals and to access welfare instruments of employment security.

This is to be expected, considering that union representatives are mostly workers themselves who face the same risks as their colleagues. In small and medium-sized companies, however, the asymmetry of power between employers and employees could rarely be balanced by unions, due to the scarce unionization of these economic realities.

An insufficiently confident national leadership is nevertheless not enough to explain the rather mild reaction of national unions. A major problem lies in the other side of the coin: fear of unemployment. For many workers, the Corona-crisis meant that companies were not able to pay their salaries, while some others lost their employment permanently due to company bankruptcy. Unions are thus undeniably caught in a double trap with little room for compromise solutions, and this clearly affects their bargaining power.

According to a study, currently 21 million people are living in a situation of financial strain, 10 million of whom without any source of income. Such data weaken considerably the argument for furthering lockdown measures, and depict a dramatic reality of an inadequate welfare state.

Nevertheless, one should also consider what has already been pointed out here, namely that, if the lockdown measures would have been implemented earlier and respected thoroughly, the “flattening of the curve” would have been quicker and risks of reopening would have been dramatically lower.

The social toll of the Corona-crisis is going to hit the country as a hurricane, and the government seems to be determined to share the faith of the political class wiped out by the 2008 economic crisis. In the next article, I will try to contextualize how the conditions of Italian capitalism may affect the coronavirus recovery plan and how they interact with the international context.

This is the second in a series of three articles written about how COVID-19 is affecting Italy. These articles have been written for theleftberlin.com.

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