[giovakkino]

Berlusconi’s policies have been devastating to Italy. He has been prime minister for eight of the last ten years, during which time the Italian per-capita GDP has dropped 4 percent, the debt-to-GDP ratio has increased from 109 percent to 120 percent, and taxes have increased from 41.2 percent to 43.4 percent. Italy’s score in the Heritage Foundation’s Index of Economic Freedom has dropped from 63 to 60.3, and in the World Economic Forum Index of Competitiveness from 4.9 to 4.37. Berlusconi’s tenure has also been devastating for free-market ideas, which now are identified with corruption.
How can such a pro-business prime minister wreak havoc on the economy and on the idea of free markets? Because “pro-business” doesn’t necessarily mean “pro-market.” While the two agendas sometimes coincide—as in the case of protecting property rights—they’re often at odds. Market competition threatens established firms, which often use their political muscle to restrict new entries into their industry, strengthening their positions but putting customers at a disadvantage. A pro-market strategy, by contrast, aims to encourage the best business conditions for everyone. That’s in fact the opposite of what a real-estate tycoon wants: to keep competitors out and enhance the value of his own properties. By capturing (or more precisely, purchasing) the free-market flag in the same way one might acquire a business brand, Berlusconi likely has destroyed the appeal of the free-market ideal in Italy for a generation.
How, then, did Berlusconi get elected and reelected? He created an unlikely coalition between the business elite, which supports him for fear of the alternative, and the poor, who identify with him because he appeals to their aspirations. In a country where corruption and lack of meritocracy has all but killed the hope of intra-generational mobility, citizens chose to escape from reality and find consolation in dreams. Berlusconi adeptly fosters the illusion that he can turn everyone else into billionaires.