Conversations with Tyler - Luigi Zingales on Italy, Google and Conglomeration, and Donald Trump (Live at Mason)

Episode Date: September 16, 2015

In the third event of this series, Tyler and Luigi Zingales discuss Italy, Donald Trump, Antonio Gramsci, Google and conglomeration, Luchino Visconti, Starbucks, and the surprisingly high productivity of Italian cafés. Read a full transcript enhanced with helpful links, or watch the full video.  Other ways to connect Follow us on Twitter and Instagram Follow Tyler on Twitter  Email us: [e-mail] Subscribe at our newsletter page to have the latest Conversations with Tyler news sent straight to your inbox. 

Conversations with Tyler is produced by the Mercatus Center at George Mason University, bridging the gap between academic ideas and real-world problems. Learn more at Mercadus.org. And for more conversations, including videos, transcripts, and upcoming dates, visit Conversationswithtyler.com. Luigi Zengalis, my conversant, is one of the best and best-known economists, both in the United States and in Europe. He's written three best-selling books.

the most recent of which just came out in Italian. It's called Europe or No. A capitalism for the people from three years ago is in my view perhaps the best book on the current American economy and what's wrong with it and what should be done. And with Ragu Rajan, he has an earlier book saving capitalism from the capitalists.

Luigi's contributions are far ranging. He's been at the Graduate School of Business of University of Chicago for now, I think, 27 years. He is a major contributor to to theory of the firm, politics, culture, governance. This is just a small sliver of the papers he has written in addition to the three books.

He is now the director of the Stigler Center at the University of Chicago. Most of all in recent times, Luigi has been known for his biting critique of what we all sometimes call crony capitalism. There's more I could say, but let's get to the dialogue. Now I think of a lot of your work is bringing the ideas of culture and governance into economics.

And there's a few major strands in your thought, and I want to explore a few of them. But since you're Italian, let's start with a question of Italy. If you look at the economic performance of Italy, the country is just coming out of a triple-dip recession, right? Unemployment's about 12%. By some measures I've seen per capita income is not higher than what it was 15 years ago,

and they're over 2 trillion euros in debt, some serious problems and a low birth rate. How do you see this playing itself out, and what is the end game? How pessimistic or optimistic are you? I think that you said correctly is not just the fact we're coming out from a triple recession, is the fact that Italy did not grow for the last 20 years.

And there are a lot of things that don't go well in Italy, but when I left it 27 years ago, a lot of things were not working, and Italy was growing. In fact, in the period of 1945 to 1995, Italy grew at a rate that was at least as good, if not better, than Europe and the United States, especially in terms of productivity. And since 1995, Italy stopped growing in terms of productivity.

And, of course, if you don't grow in terms of income per capita, and so and so forth. And the question of why, I think, is one of the most important question, not just for the future of Italy, but for the future of Europe, of Europe in general. And I, with a co-author, I tried to analyze the various theories,

because one theory which is very popular, particularly in Italy, is that it's all fault of the Euro. Because it is true that this sort of sudden stop happened roughly at the time. Italy joined the euro. I don't think there is any evidence that that's a case, in spite of the fact that it's a very strong correlation temporarily.

I think that the said reality is that the institutional deficit present in Italy are particularly severe as you approach the technological frontier. So if you have institutions don't work that are corrupt and etc., you can get by if the only thing you have to do is improve agriculture and produce t-shirts. And we've seen sort of Cambodia, not a great institution, but they produce great t-shirts, and it works.

Once you try to compete in the first league, you try to be at the frontier of the technology, you need to have a relatively non-corrupt government, a system where people pay tax, without too much tax evasion, but not too much taxes because otherwise they don't produce, and so on so forth. And Italy has failed, in my view, to do that.

And I think that the new government by Rensi is trying to do this. The Jew is still allowed whether it will succeed. When I hear other people speak about Italy, there's a certain tension as to how long these cultural effects last. So you read Robert Putnam. Things matter from hundreds of years ago. years ago. In some of your papers, it matters how many years a region had as an independent city state. It matters whether, I think, in the year 1000, whether you had a medieval bishop

in your city. So those are very durable cultural effects. But I think back to being in Italy in the 1980s, mid-1980s, when it passed the UK in terms of per capita income. It was, in a sense, then, at the European frontier and still growing. And now it's not so much later. and what feels like the same culture seems to be giving very different results. And how's the way we make sense of that? Two things. First of all, the distinction that Patnan makes

and a lot of people make about the north and the south. I think in some senses, disappearing in Italy, but in the worst direction, it's just all Italy is looking more like the south. So the northern people, and I come from the north, even if my grandfather came from the south, but I came from the north, and people in the north, when I go back home,

they still feel like very proud and they're much better than people in the south. And I say, you know, when you are in the Titanic being on the third deck or the first deck, doesn't make a huge difference. Yeah, you are on the third deck is better than the first because you just sink a little bit later, but you still sink.

And I think that there is this arrogance in the north that I don't think it's fully justified because many of the bad practices of the South have been imported in the north. So the mafia used to be only in Sicily. Today is present in Milan, is present in Venice, is present everywhere. So I think that when we are questioned

what is garden wars, I think there is this component. And the second is, the boom, what people did not fully realize, but the boom of Italy in 1980s, was a boom of a developing country that had a protected currency area. And this is, we were playing the catch-up nation within Europe. And while everybody else in Europe was moving in more advanced sort of production and

services, et cetera, they were leaving behind market space for us to capture the sort of less technological productions, and we did it with Gusto. And so it was a boom in the 80s, but was it boom in the wrong direction. Let's say we go back to 1860. Was Verity wrong? Say Italy had not become a single nation. There had been a north and a south or even half a dozen or more

nations competing against each other or more of a Swiss model. Was the nationalist model for Italy a mistake? This is a very hard question, but let me try to say that what I think was wrong is precipitating the unification without really a

national culture. There was a small elite that felt Italian, but the rest of the population did not felt Italian. And so a number of accidents, including

the heroism of the only Italian who actually was a military leader, Garibaldi, made unification possible against all odds. And it says, I'm sure that you asked people in 1858, what are the chances that within three decades Italy get unified, there would say one out a hundred, and within two years was

unified most of it. So it was really a chance. But then because this happened before there was like a national spirit, it turned out it was basically an agnization of the South by the North, in which the North imposed its laws to the South. And they were not good for the South. And one of the best Italian thinkers and most unknown is this guy, Vincenzo Cuoco, who was part of the Napolitan Revolution in 1799 and was actually convicted to death to participate in this revolution. This revolution for people who are not familiar with Italian history was a Jacobin revolution trying to imitate what they were doing in Paris in Naples.

And this revolution initially succeeded. And then a cardinal brought some troops from the south of a very simple peasant that massacre sort of this, the, the, the, the, uh, the, uh, the, uh, uh, the, uh, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the ancient regime. And then, of course, went back and forth with Murat, et cetera. But the interesting thing about this guy is that after he was convicted, uh, to death and then sort of, uh, got, uh, escaped, uh, wrote a history, about that revolution. And he's probably the only person who wrote an history of something that he lived in and gave an interpretation that is valid to this day.

And his interpretation is you can't export other models in different contexts. The Napolitans who tried to copy France are silly because they don't understand the social, cultural, economic context of France at that time was completely different than one of Naples. And here's this analogy, say, every place has its own clothes. And you are not going to put Finnish cloth to a Greek or Greek clothes to a Finnish, because you're going to either

sort of sweat to death or sort of be freezing. So why do you want to impose the same rules to everybody? And Italy tried to do this, and the result was that in the South, a complete rejection of the northern model, so much so that there was a revolt that we in history called bandits, but in reality was a liberation front that just lost, and when you lose, you're always on the wrong side,

and so it's called sort of bandits. But the north did not need this, the south had this revolt, and then they reach a compromise. There was a compromise, not unlike, I think, what happened in the southern United States. It was for the war, of both sides, in the sense that the north side agree with the big landowner of the South

that will leave them in power in exchange for consensus, and they will retain their power in exchange for an army that defends their land against the revolt of the people. And that led the South to underdevelopment for years. And so, very few people know that when Italy got unified, the Incaper capita of Sicily and the one of Emilia Romagna, around Bologna, were the same. And today is almost double the one of the Amelia Romagna versus Sicily. So it's a huge sort of gap. Now, why I insist so much on this?

Because I think there is an analogy that most people don't fully appreciate between the Italian unification and the Europeanification. Europe got unified roughly in the same way. There was a small elite that felt European. Most people don't really feel European, but a small elite feel European. They speak the same language, which happens to be English. Pretty soon, sort of England would be out of Europe,

but they feel part of the same nation. They talk, they go to the same meetings, et cetera, et cetera. And they're trying to force unification over sort of the desire of people. And the result, I think, is not working very well. And in the old days, you were sending sort of troops to maintain the South under order. Now you use the Central Bank or you use sort of a... But it's not that different.

At the end of the day, what I fear is a desertification of the southern part of Europe similar to what happened in the southern part of Italy. Like a de-industrialization. One of my favorite papers by you is your paper with Bruno Pellegrino. That's a great name for co-authoring a paper on Italy. And the way I read that paper is you're saying something like this. Italy right now doesn't have enough firms, which could be five or ten times larger than they currently are.

And the global economy over the last 20 years has put greater emphasis on scaling up. The 1980s were much less about scaling up. You could do better with small to medium-sized enterprises in the 1980s. But now everything's about scaling up. You have Apple, you have Google. kind of mega scale. So Italy more or less has stayed still. China has scaled up and in the new world we're scaling up is really what matters. Italy is left behind and that's the fundamental productivity

reason why even the Italian North hasn't in some ways done that well. Is that the way you think about it? Absolutely. But it's not just the airport of this wall. It's also the Starbucks. It says if there is one thing Italy is competitive on and it's better than everybody else is food. Okay. And the fact that the major chain of coffee is not Italian is really hurtful. And it says, I understand that Apple is an American product, okay? But when I arrived in this country 27 years ago, you're not really drinking coffee, you were drinking like a dark thing that tastes like, I don't say what, because we're online, okay?

So the cultural coffee did not exist here. And the culture of coffee and a cafe where you sort of sit and drink, etc., what Starbucks is, is an Italian or at most French culture. And why you were unable to export this? And this is my little explanation. If you go to an Italian coffee, by the way, the only country in the world where Starbucks has not arrived is Italy. Okay?

And so if you go to an Italian coffee shop, the productivity of the world. of the individual work in there is five times the one of Starbucks. They do coffee, cappuccino, one after the other, no question ask, they understand five orders contemporaneously. You come here to the United States, you first go to the cashier, you have to repeat five times what you want, then another repeat five times to the one producing it, and then five times

to the one delivering it. It's sort of, how can Starbucks compete? And the answer is very simple, because the bar, the Italian cafe, are one shop, one establishment thing. If you go to a cafe, you're gonna find that at the register, there is an old woman who is generally the owner. And she watches over everything.

Why? So you can't scale monitoring. Exactly, but why? Because the model they're doing allows people to steal whatever they want, because you take money here, you use coffee all over the place, you have no monitoring of how much coffee is consumed, how much revenue that I produce. If you don't have the lady checking you out throughout the day,

at the end of the day, there's zero revenues and all costs. Okay? In Starbucks, everything is computerized. So you know at the end of the day how many coffee you have to have and how much, how much revenue you have to have, how much coffee you have consumed. You can actually order coffee online automatically because everything is centralized in Seattle.

So you can scale it. So in the extreme agency problems of Italy, makes it difficult to scale firms. So either you have family firms in which you have all the employees that are part of the family, and it's not obvious that family does not steal, but still, less so.

At least you're stealing from themselves, right? Exactly, at least there is some redistribution internally. Or at the end of the day, you can scale these up. I think that's a huge problem. Here's an article from courts. Let me read you the headline. Maybe you saw it from a few months ago. The most common surnames of new entrepreneurs in Italy,

are Hu, H.U, Chen, and Singh. And if you look at Milan, you have to go through 20 names, and at number 20 is the Italian name Colombo for the most common or most frequent names of entrepreneurs. Is this sustainable culturally, or is this Italy's future, in essence, to be economically colonized the way parts of Southeast Asia have been by Chinese, Indian, Sikhs, whoever it may be,

maybe Germans. So one friend of mine was saying that the demise of the Italian firm family structure is the demise of the Italian family. In this says, when you used to have seven kids, one out of seven in the family was smart. You could find them, right? So you could transfer the family, the business within the family with a little bit of May talkers in selection.

When you're down to one or two kids, the chances is one is an idiot. And it's pretty large. And so the result is that you can't really transfer the business within the family. And so that's the biggest problem of Italy is actually fertility in my view. Because we don't have enough kids. And if you don't have enough kids, you don't have enough people to transfer. You don't have enough young people to be dynamic. So the Italian culture has a lot of defects, but the entrepreneurship culture was there,

has been there. And it still is there. But we don't have enough young people. And now, what the Chinese are doing are taking over mostly, sort of the bars, the restaurants, the small things initially, because those are the easy one to enter. And there are many and they're very dynamic.

And so I think that that's exactly the Italian problem. So paint a picture for me here of the end game. 30 years from now, typical Italian family has 1.3 kids, debt to GDP, ratio, at least as reported at about 130%, second highest in the Eurozone after Greece, productivity problems. 30 years from now, what do you predict? What are we going to see?

You know, it's difficult to predict, especially the future, right? I think that my view is, one thing I can predict fairly confidently is that we are not going to pay the debt. so there will be some form of external redistribution no unfortunately we missed the right moment there was a moment in which 50% of the dead was owned by foreigners and the Germans made sure that we bought it all back that was part of the system and now I think is 70% owned by Italian so it's mostly redistribution

but I think that it's very hard to imagine that we can sustain this level of that. I think that the combination between lack of fertility, lack of productivity growth, and not particularly law for immigration, makes sort of demography being the number one consideration. And I've said this like 10 years ago. And of course, nobody wants to talk about these things, but it's inevitable. Let me try giving you an optimistic case for Italy, and you tell me if you buy it or not. If you look at debt to income for Italy, it does look horrible, it is horrible. But if you look at debt to wealth of the Eurozone nations, the ratio of wealth to income in Italy is quite high, as you know.

A very high percentage of Italian families simply own their houses outright. Private debt is pretty low, right? Traditionally, a lot of the banks have been in okay shape. So it could be when you think about Italian debt relative to wealth, it's only an extraction or a political economy problem. Who is going to pay? Who is going to pick up the bill on the table of the restaurant? Of course, all the Italians are waiting. But when the time comes and things are truly desperate,

Italy has often done best in desperate times, and the wealth is there to pay off the debt. Everyone's simply playing a postponing game. True or false? I think it's false. The only thing that I agree is that the Italians give the best in the worst times. I think that that's definitely the case.

However, I'm surprised that you don't think that are significant that way cost of taxation. and with distribution. And especially within a more mobile world, this is becoming very serious. You mentioned correctly houses, though that's the only stuff that cannot run away. People run away, financial capital runs away,

houses don't run away. So first of all, Italians are taxed very little on houses today, and the first decision decision that Rensi has made is to detax houses completely. Yes, I know. Okay? So it's going completely in the wrong direction. Okay?

Why? Because it's extremely unpopular. Of course. If 70% of people own houses, then it's hard to tax houses. And honestly, if you were to do a wealth tax on houses, the value of houses would go down because people are very illiquid and so would go down. Now, how can you tax a lot other stuff? Labor leaves.

I'm an example of that. And unfortunately, there is an increasing number of people living. When I left Italy, very few people were leaving at that time. Today, it's hard to find people of the younger generation not leaving. It's really sort of a major migration that, by the way, decrease the human capital. Because now who are leaving, Italy is in the business of exporting high human capital people and importing low human capital people. So it's not a good trade, okay?

And as long as you are in the European Union, even financial mobility is like saying, unfortunately, I always choose the wrong places because I live in Illinois. Illinois is not that different from Italy. Chicago. So, in fact, I always say that the thing that makes me feel at home in Illinois is Chicago politics.

And so if you try to fix the Illinois budget and et cetera, it's very hard to increase taxes, because people move to Indiana or Michigan or Wisconsin in a second. Right? So we can discuss how big is the Laffer curve at the national level, but at a state level is very elastic. And it used to be that in Italy was not a case, but what the European Union has done is to basically eliminate this bias.

And people, I grew up in Veneto, which is not far from Austria and Slovenia, people move to Austin, Slovenia, anytime. And why do you want to stay in Italy where you're taxed more, things work less well, et cetera, et cetera? So the elasticity is very large. And so if you try to catch up in that game, I think that you're going to lose. Let's try the United States for a while.

A lot of us have been very struck by a piece you wrote in 2011. I think it was for City Journal. And this was a piece about Donald Trump. And you basically said in this piece, Donald Trump is for real or could be for real, we should be very grateful that he has decided not to run for president. This is 2011, not 2015. Now, you're Italian, a quarter-Sicilian, I'm told, and you've lived here now, not here, you've lived in Illinois for 27 years. But what is it you see about us that we don't?

You know, you're kind of Toakville of Italy. a lot of your papers are on the United States. What's the insight into us that you get and we lack? Let me start with the analogy between Trump and Belosconi, because I think that they are very similar in every dimension. In a sense, they're both extremely good salesmen. They're both extremely wealthy and not afraid to show off their wealth. They're both obsessed with women.

They're both obsessed with air, or lack of, here for Berlusconi. They both profess themselves as free marketeers, but they both made their money in businesses that are the ultimate opposite of free markets. And this is real estate and gambling versus real estate and TV that is basically a regulated utility in Italy. These are sort of, you make money by having the right connection with government. And so that's their version of free market.

They're both extremely good, and this is the success of Belosconi and the success of Trump, in portraying themselves as friend of the people. Why? In part is because they speak at a very low level. So people identify with them and they are happy to identify because even somebody that is so sort of crass like Bellusconi can become rich. Maybe I can make it too. So that's a self-identification is very important.

But the most important thing that, and this is coming to my advantage, having seen what Belisconi represented for Italy, I became much more concern about what the United States are becoming. So my favorite line is that the great contribution of Belosconi to humankind is that made things transparent. So Belosconi is the integration. version of the U.S. Congress. In what sense?

In the U.S. Congress, you have people that were lobbies before, they become congressmen, and then they go back to lobby. But at least until they're congressmen or secretary of treasurer, et cetera, they are not an employee of somebody. Now, they're beholden to somebody because they come there, they go there, but at the moment there is a little bit of appearance of separation.

Belosconi did not even care about the appearance, okay? Everything was integrated, his own employee, so he ran a party with his own employee. He created the party. It was a fantastic, from a strategic point of view, in three months he created the party. And he was sending his ad-agent guy being the party leaders all over the place. The same people became then his member of parliament, the other way, his personal lawyer, his personal something else, and so on, they became sort of a member of parliament, ministries. So you had the means of telecommunication

that was the employee of Berlusconi deciding on rules on telecommunication that affected Bellusconi. So are you saying that we here are more corrupt than we think? And that Berlusconi is a kind of mirror on us and you have better access to that mirror and so through that mirror you understand America

and it's crony capitalism in some ways better than we do? Yes. Okay. One thing that strikes me about the literature on corruption and rent-seeking and political influence is what is sometimes here called the Tulloch paradox. Gordon Tulloch worked in this building. And Tulloch raised the question of, given how much is it stake in politics? In the U.S., it's about 40% of GDP. In Europe, it may be above 50% of GDP.

Tulloch was actually surprised in a way relative to that, how little was spent on lobbying. So for him, there's some kind of structural barrier story. But what's your take on the Talek paradox? Why aren't we even more corrupt yet, given what percent of GDP in this country is allocated through mechanisms of a mix of force and democratic, whatever you want to call it, rather than voluntary exchange? Yeah, first of all, let me spend the war to praise God on Talaka. They saw he pass away recently, and I'm even more sorry that he wasn't celebrated the way

he deserved to be celebrated. In my view, he was an extremely insightful economist who made the point of there is not enough money in politics in 1972, if I'm not mistaken. A long time ago, yes. A long time ago. At a time where there was much less money in politics. So first of all, he got clearly the derivative right, because from 1972 to today, the amount of money in politics exploded.

So I think he was very far-sighted in understanding this. The second is, in my view, the number of the money. The reason why we don't see enough money is twofold. Number one, there is ideology. So you can't really pay everybody, but people have some preferences, especially when they're not paid a lot, for some position.

And so that decreases the power of money. But the most important fact is that some people find it very easy to collect the money, which are vested interests. They organize because there's more. This is Manco Olson. They organize much faster. They can collect the money faster.

In the public at large, find it difficult to collect the money. So the paradox of Talog, the way I like to describe the Gordon Talok paradox is the following. Imagine you have some lottery tickets, in which unlike most lottery, which the state gets most of it, is pure sort of actuarially fair. So you know that you are gonna buy, let's say, $5 trillion.

dollar is the payoff and you start to sell the tickets. You know that by buying all the tickets, for sure, you're going to get $5 trillion. So it seems that why the collective amount of tickets doesn't sell for $5 trillion. Sure. And that's basically what Talak is saying, is saying why, if we are purely cynical and we try to buy all the votes, if you buy all the votes in Congress and for president, you get to allocate a lot of goodies. So that value, the value of the votes collected,

it should be at least the value of the rents you get on all the goodies you allocate, which we can discuss how much it is, but it's on the order of trillions of dollars, okay? So the point is that the public at large is not able to coordinate and beat very much for those votes. So those votes sell cheap. Why they sell cheap?

Because the party are not well organized. Now, since the time of Gordon-Talogue to today, people got more and more organized and so the price is going up but there is way to go if we don't do something there is way to go and spend more so I think that Godot Talak was absolutely right but the interesting thing is that God on Taluk implicitly because the type of game he designed for this is a game in which there is a benefit for society to put some limits sure and I actually enjoy in my book to pick a little bit on Robert Barrow because Robert Barrow defends restrictions in basketball and baseball, but not

in everywhere else in the United States. So I don't understand why. In the United States, the only thing that is really non-competitive is sport. In Europe, the only thing that is really competitive is sport. In Italy, soccer, you are the first division, the second division, you are promoted or demoted, according to performance, you don't buy your way into the NFL or the major league, et cetera. Here you buy the franchising once you're in, no matter how sort of incompetent you are, you stay there, which is completely an American.

I'm very struck by your early work on business firms and hierarchy. Some of this is written with Ragu. And the idea of introducing or reintroducing ideas of culture and governance and high, hierarchy into the business firm. And I wonder sometimes how much is this an Italian perspective. I'm sure you know Luigi Barzini's analysis of the multiplicity of masks in Italy. And sometimes the outsiders who think it's so freewheeling overlook these significant elements of hierarchy. Now the question I want to ask you is these recent New York Times articles about Amazon

and how Amazon either treated or allegedly treated its employees the woman took off a day to give birth to a child. The next day she was expected to come back in, all kinds of demands. People supposedly left the company crying. A lot of hierarchy pay was pretty good. But given your analysis of the business firm and hierarchy, what's your take on this whole Amazon story?

You think Amazon, those people are heroes, or this is inhumane, or we have the balance wrong? What do you say? I think that probably we're going a bit too much in a certain direction. And this is take also Netflix. Apparently Netflix is sort of as this credo that

we are a team, not a family. And like a team, we sort of set aside everybody who sort of is not up to being a first team. And it works very well to motivate people. It's also quite

sort of hard for many other people to work. And it says there is always the trade-off between incentive as some form of insurance. And if you eliminate every insurance, you have all incentives, the incentives are great, but people are not particularly happy. So you need to find the right trade-off.

Maybe it's how we get these scalable firms in the U.S. that Italy is somewhat lacking, by being harsher in some ways. I think that I always said that the perfect world is a ward in which you take the best things from Italy and the best things from the United States. My dream would be to live in Italy walk in the States.

The commuting is a bit complicated. But I think that you're absolutely right. I think that I come from a region in Italy where there are a lot of family firms. And what is extremely moving and depressing in this moment is in these firms, when they go bankrupt, the owners commit suicide. There is a pretty large number of suicide today,

because unfortunately the business is not doing well. And sometimes they leave their life insurance. to pay the salary of the employees. And then they commit suicide. That's a completely autotron of you of the firm, like really a family. And now, which one is better depends on a lot of things. And it says depends on how much is important

to transfer knowledge within the family. So Italian firms are specialized, or used to be specialized, in craftmanship that is hard to, to teach unless you have a dedicated person transferring this. That's the reason why there were family firms, because you have the parents transferred to the kids. So a lot of the education in Italy is done in the family.

One of the best things about Italians, for example, is that they sit down at dinner. Why is so important? I thought that this was everybody sit down at dinner with a family. I realized in America a lot of people don't sit down at dinner. Actually, when I grew up, I sit down. at lunch at dinner. Today is difficult because most people are not around at lunch, but there

is a tradition of spending some time around the dinner table. And that's a place where you socialize, you learn, you transfer human capital from the older generation to the younger generation. I think that this is one thing that is lacking in the United States that they can learn from Italy. Now you've written on conglomerates. One of the recent business stories is that Google will turn itself into a kind of conglomerate. The parent firm will be called alphabet. Google will be one division. Will this matter?

And if so, how? So I think it's not a bad idea for Google to separate the money-making machine from the rest. Why? Because when you don't see how much transfer takes place, you tend to overdo it. So I think it's the first step to do this separation so that you see from an accounting point of view

who is making money and who is sort of investing money or wasting money depending on the point of view. Won't it lower innovation by imposing more accountability or you think it's the opposite? I think that if innovation were just throwing money at it, Greece would be the most innovative country in the world, right? So I think that money is a necessary condition, but sometimes it's not ugly.

all the time is not sufficient, and sometimes it's also counterproductive. I heard some young entrepreneurs saying, look, you don't wanna get too much money early on because it distracted, doesn't keep you focus, et cetera. So I think it's very important to find where to invest the money. This is why markets are so important, because we're not that good at it.

I admit, I teach entrepreneurship, but if I were that good at picking the right investments, I would be multi-billionaire, not and it's a difficult business to do. That's where the market is useful. And so my fear is that Google, especially because the governance of Google, resemble more the governors of Italian companies rather than the one of sort of American companies. There's not sort of a lot of floating voting stock. The power is concentrating there and as few people. And as long as these few people are at the top of their game and they're smart and they are in the right sector at

right time, great, but as we all know, people age, world change, and there will be a time in which they're not up to the game, and they need to be replaced. And at that time, the temptation for them to waste a lot of money would be pretty strong. I'm going to try an exercise here. I know I'm the interviewer, but I have a somewhat speculative bent as well. So you've worked in a lot of different areas, and I'm going to try to give my account of what I see is the underlying unities in your thought. So you have these papers, many more a true stack would be higher.

And there's a lot of breadth there, but I think it is tied together. And I'll tell you how I see it is tied together and you respond to that. Okay. That sounds fantastic. There's maybe two or three ways of thinking about what you've done. So a lot of your main papers, they're about corporations or politics.

So I read you it's taking some core areas of economics and then pretty consistently suggesting that culture really matters and governance really matters, and doing that consistently for businesses and government. There's another way I think of what you're doing. This is maybe more Italian.

So take the Italian Marxist Antonio Gramsci, who wrote about hegemony and power and control. To me, you read like someone who read Gramsci at an early age, was quite struck by it, maybe didn't agree with it, but you're taking all of his questions and re-asking them about control and hierarchy, but with real economics and with something like scientific method. So in both ways, you're quite this Italian thinker.

You know, I have the same. All thinkers are regional thinkers. You just have to figure out what the region is. So you're redoing Gramsci with economics, or you're redoing economics with culture and governance. And then there's this other Gramscian dimension to your thought, That just as he thought, he once said, you know, in the medium of the intellect, I am a pessimist. But when it comes to the medium of the will, I am an optimist.

And there's this seesawing back and forth of the extreme pessimism and extreme optimism. And I see that in your work, too. You're an Italian who came to the U.S. with such high hopes. In many ways, you love it, but in other ways you're deeply disappointed. and you keep on seeing the unities between U.S. and Italy corporations and government and the practical pessimism

of this state of affairs, and yet you're propelled to do something about it by writing, speaking, being a public figure, and so on. That would be like my two-minute version of who you are, what you do. And what do you say to that? It's fantastic. I wish I thought about it. Seriously, I think that it's very true.

By the way, the only thing that you probably miss is that this tension between the north and the south, and is also Gramsci, is called Blockostorico, is the block that rule Italy for a long time, was this alliance between the northern elite and the southern elite, was exactly Gramsci. So I think that, you know, it's intellectual tradition also of Chicago. Stiegler, when he sort of invented regulatory capture,

was borrowing from Marx. It's sort of right-wing Marxism, right? You told me you're a quarter Sicilian. What's the part of your thought? That's quarter Sicilian. I have a huge sense of pride, which is not typical of my region. It's typical of Sicilian. My grandfather was a military, but in his life he did three duels.

We won them all. That was part of the culture of Sicily at the time. And what is interesting is a very interesting mechanism. If you are in the military and you are challenged to a duel, if you did it, you are punish. If you did not do it, you are demorted. Which is the right way to think. You don't want to encourage something like this,

but you don't want to encourage people to be coward. So I thought it was a brilliant system. And so I think I have this element that goes back to my Sicilian roots. Another Gramscian question, Also an Italian question. In Europe, you're European, it seems to many of us, there's some kind of line. And Gramsci asked, what's the difference between East and West?

And where in Europe would you draw that line? And what, from culture, what from governance, all the different areas of your research? What determines that line? And why is, say, Macedonia in the situation it is right now, and Southern France is not. It seems to have something to do with that line. It's very interesting,

because when I go to Istanbul, I find it part of Europe in every sense. It's part of my word. I don't know whether I belong to Europe or not. It's all relative. But Byzant is so similar to Venice that is impressive. And so I feel completely at home in Istanbul. It's a bit Venice, a bit Rome.

So how can you be sort of feel different? I've never been to Macedonia. But definitely, when you go to Moscow, you feel it's a different world. So it's interesting because my notion of culture is probably more Mediterranean than East West. So I feel fairly at home in the Mediterranean. And I went actually to Iran before the Obama reached the deal,

because I'm an Italian citizen. So I could go to Iran without any problem. And I was moved by how. European, if you want, the Persian culture is very much linked to all the tradition in the Mediterranean. So I don't feel

it so much east. And by the way, Iranian people are super lovely people and they're not anti-American. In fact, you find more anti-American in France than you find in Iran. They haven't seen us for so long, right? I'm going to try an exercise I did with Jeff Sachs.

I'm going to toss out a few terms people's names, whatever, and just ask you, overrated or underrated. Okay? First one, campaign finance regulation. Overrated or underrated? Actually, paradoxically, overrated in the sense that capture takes a lot more subtle ways

than just campaign financing. So it is an important consideration, but even if tomorrow we could fix that, I don't think it would have fixed the capture problem. So overrated, okay. Angela Merkel. Overrated or underrated? I think it's probably underrated.

I'm impressed by her ability to, number one, run Europe for the interests of Germans in a very effective way. You should be impressed. She's elected by German people. She has no European constituency. And so she does a job as a politician extremely well. Now, doesn't correspond to the interest of the rest of the Europeans, but that's a different.

But the other thing that I'm impressed is how she handled the immigrant crisis. And we're creating a positive feeling toward Germany that was absent in Europe. And taking, I think, the right approach. We want refugees, because refugees are the best people. Not only is a moral obligation to save people that escape extermination, is also an economic consideration. These are the most talented, the most entrepreneurial, the most dynamic people in the world. We want to have them.

But given your work on the persistence of culture, can Germany and Merkel absorb 800,000 Syrians a year for two or three years? Do you think so? I think that's an excellent question. I think that this is something that is not discussed enough about immigration, is the process of assimilation. And I think that it's important to try to get. that immigrants that are more similar so that they assimilate faster, precisely to avoid those fracture that we've seen in the French bernier, in the suburbs of Paris and so on and so forth. So I think that probably 800,000 people are what, like is less than 1% of Germany.

But it's close to 1%. Yeah, it's close to 1%. I think in a year would be a lot. But depends on how fast they are in learning Germans. But they already have a pretty good Turkish population that is not perfectly integrated, but they made them win the World Cup. So I think they're pretty eye up

in the sort of national respect and prestige. Pope Francis, overrated or underrated? I have to say, I love Pope Francis. I think it's hard to say it's underrated because everybody loves him, but not being a Catholic, I didn't raise Catholic, but I'm not a practicing Catholic by any stretch of the imagination. And I've been known to be an anti-clerical all my life.

And I've been an anti-clerical because I really thought that the problem of Italy was that the church was there. And once I was actually was discussing with a cardinal in Chicago, they said, no, no, the problem is the other way around. It's the problem the Vatican is the Vatican is in Italy. And I thought he was joking, but when they elected Pope Francis, I realized it was true. First of all, Pope Francis was elected basically

by Northern and Southern American Carliners who were sick and tire of the Italian mafia in the church. And they were second tire of why, because they ended up being sued here in the States and losing money in the States for responsibilities of the Vatican, and the Vatican did not chip in one dime. Not only that was wasting money with this IOR, Institute of Operal Religious,

there was a money laundering organization. Okay, this is something that should dedicate it to charity was a money-longed organization. And Pope Francis is changing all this. And my only hope is that it's not killed. Because I think that the chances of him being killed is not zero. And but he's fantastic.

So Italy should elect someone from Argentina. I wouldn't go as far as that. I think, look, I don't think Argentina is the monopoly of good leader like, and actually the tradition is not that in that direction. I'm just saying, Paul Francis is a fantastic leader, and I wish Italy had a leader like that. A related question from some of your research.

Is Christianity good for economic growth? And if we look at those border areas of Africa, doesn't matter much for their future economies if they go Christian or Muslim. If I look at the data, I think that Muslim religion is not generally associated with good attitudes for capitalism. OK?

And Muslim traders very well around the world, right? Sure. I'm not saying that you can't be successful as being Muslim. What I'm saying, and I don't think that is necessarily the Muslim religion per se is the association of the way religion has been sort of practice and diffuse in countries that are mostly Muslim. But I might be wrong on that, because I think Weber

was wrong on the fact on saying that. that Catholicism is such a disaster. I think that in a Catholic country caught up fairly well. I think that some of the Protestant ethics is useful in the system, but I don't think is necessarily the major cause of retardation in development. So I think is something you want to think about,

but I don't think is the major cause of underdevelopment around the world. Chino Visconti, the Italian film director, overrated or underrated? Underrated. I think it's fantastic. I think that the best movie ever is the leopard done by him. And what's the social science lesson in this movie?

This story is a very sad story, but it's a very true story. It's a story of the northern troops arriving in Sicily and liberate in Sicily, and the nobility there saying we should change to remain the same. And so this ability of Italy, which, by the way, I think, has absorbed from the Catholic Church who survived that long, is to change, not to change, to appear to change, to leave everything unchanged. And it's really a desperation, but the movie is wonderful. There is a Claudia Cardinala out of this world, and Bart Lancaster and Alendelon, really a fantastic thing. And I show it to my wife, she thinks he's slow, because last three hour and a half. It's not something that generally you have in Hollywood movies,

but the quality of the scenes. And the quality also the silences is out of this world. I once saw it on a big screen at American Film Institute. That was quite a help. Classic case where the movie was not worse than the book, you might say. I think exactly one of the few cases. I never read a book first and then saw a movie that I thought that the movie was the same level of the book.

I don't agree. I think they are the same level, which for me is the only case I can mention. Beppe Grillo, is he actually funny? Yes. He is funny. So if I understood Italian, I would laugh. Yeah, there's some foul jokes, but most sort of comedians have. I think that certainly more funny than Trump. Is he funnier than you? Definitely.

No, look, there is one thing you have to realize about a great law. First of all, he has a sort of degree in accounting, okay, which first of all is not normal for a comedian. Accountant, as general, not that funny. But second, makes him more qualified than most people to actually, certainly most comedians, to read income statement and balance sheets. And he started, before he even was a politician, he started, being kind of a agitator in Sherald's meeting, and go into Sherald's meeting with one share

and started to ask questions and pose sort of problems in Italian corporate governance, and was very successful, at least at raising the level of awareness. So in that sense, he did something very, very valuable. No co-authors, no colleagues, but who's the most underrated living economist? Ooh, this is a very, very difficult question. Who is the most?

I would have said Gordon Talok, I did not just pass away. I think that, I think he was really underrated for what he did. Around here, we'll grant you that. How would you say your opinions have changed in the last seven to ten years? An awful lot has happened in the world. The EU has not turned out the way a lot of people thought. There's a lot more opposition to migration. We've had a financial crisis.

We may be on the verge, possibly, of another global recession because of China. Italy possibly or probably hasn't turned things around. So over the course of the last 10 years, how have your views changed? I don't mean on particulars, but at the conceptual level. I think that I got much more interested in monetary problems. And this is, ironically, when I started, I started studying. the economics because I grew up in a country with a double-digit inflation, so I thought that that was a big problem.

But then, by the time I became an economist, inflation was not an issue, and I thought that was not particularly interested. Now all this issue of deflation, how to fight deflation, is deflation a problem? I think that are topics that 10 years ago I would be completely ignorant about, and now I'm fascinated by it. Now you think they're very important. You find it striking that the world's three main currencies, all have interest rates, is zero.

Yeah, it is striking. And I am torn because there is a part of me that say that this zero interest rate policy is a redistribution in the wrong direction. It's taking away from the people with a bank deposit and give it to sort of the guys who can easily engage in speculation, et cetera. So from a sort of moral point of view, I think the redistribution goes in the wrong direction. On the other hand, I sort of have seen the European, the Eurozone fall slowly into deflation for a sort of six months last year where in the deflation range. And this maybe is my Italian heart bleeding, but when you have a huge amount of debt and you start to have a deflation, Ivan Fisher was right. The debt deflation spiral is pretty terrible.

And that's probably the worst possible outcome. And I think that generals are famous to be prepared to fight the last war, and so are economists and central bankers. So the ECB has been set up to fight inflation. And so it's completely non-prepared to think in those terms. In fact, I will raise this challenge, because when the European leaders talk, they say that, Our objective is an inflation below but close to 2%.

And I look for a statement of this type. If you look in the sort of web page of the ACB, they say that they want inflation below 2%. So there's no closer, below 2%, where inflation is measured as the harmonics price index at the European level. And then they want every individual CPR. of every country below but close to 2%.

Now, if you have an average, and every term must be below 2, even with close to 2, the average must be below 2, probably by a lot. And so, I think that the ECB has been designed, basically, to have deflation. And I don't think they're mentally prepared to how to deal in this situation.

And I think that that's a big issue. I'm also struck by some of your work on behavioral economics. I like very much the paper where you take some investors and instead of showing them if this Conte's the leopard, you show them a horror movie and you see what happens to the risk premium. But there's another paper I want to ask you about. It's about impatience and procrastination. That is, it's often the case the same people

who are very impatient and procrastinate. And you give the example of people who are very impatient, We're very impatient to get a check. They'll even settle for a much smaller sum of money to get the check now. But then they get the check, and they don't cash it or spend it or do anything with it. They get it, and then they procrastinate.

What's the underlying view or model of human behavior that causes impatience and procrastination to go together? Oh, you're setting me for a very low standard, right? A model that I don't think I have a model that includes everything. And this is part of a larger experiment, which at some extent is still undergoing, where with a colleague of Northwestern, we sort of study an entire cohort of MBA students at Chicago,

550 people. And many experiments that are done around the world are done with undergrad, and most of them are the poorest undergrad, because they're the one that sort of desperately need money, so are generally art major, so not really representative of business people. And so a lot of people. And so a lot of people in economics dismiss some of these results

because they say, oh, these are the weird guys. They're not the one that will run big cooperation, blah, blah, blah. So we started with a sample that hopefully will run big cooperation, statistically as run big cooperation. And what we find in many of the deviations that behavioral economics find are present in our sample. And so the particular experiment that Tyler is talking about is at the end of a bunch of games that

on an amount of money that was going from zero to $300. So some people were winning sort of a significant amount of money, $300. We offer them to delay the delivery by two weeks. And with the values interest rate, in some cases, at 10% over two weeks. So 10% over $300 is both percentage-wise huge, but even sort of $30, it's sort of not trivial.

At least for me, maybe for my students, is more important. But so these guys really give up receiving $30 over two weeks to get the check in the mail that day. However, this is the only clever thing we've done in that particular study, is we follow when they cash that check. And on average was two weeks, but 10% never cash it. They lost it.

So they are so eager to get that stuff. But then, and I think that if I had to give a sense, is the salience of this. So honestly, these people, everybody should have accepted delay payment because we check, 90% of them were not maxed out in their credit card. So what it means receiving a gift in cash, actually a check is not even a gift in check

today over two weeks. Once you know you have received it, we think we were fairly credible as a faculty promising. So I think the credibility. issue was not a major, if you know you've won $300, you can go and spend it today on your credit card and get the check two weeks from now. The fact that you want to have it now, I think is an interesting aspect about saliency. And the fact that once you have it, you relax and you forgot to check it, to cash it, is,

I think, pretty interesting by itself. Speaking of procrastination and impatience, what's your view on the future of the European Union? seems to me it cannot fully integrate, because unlike with North and South Italy, there you actually have a fully integrated electorate, right? You have a single set of elections where you choose a national leader, and everyone more or less accepts it. It's very hard for me to see that for Europe. So I suppose my expectation will be that the ties become weaker and weaker. Schengen falls away. There's not a fiscal union. The euro becomes a bit more like a currency board. National central banks keep certain kinds of liabilities,

but what's your prediction for, say, 20 years from now, European integration, more of it, less of it, and what's the underlying model? So quoting Gramsci, let's first give sort of a, the pessimistic rational view is that there would be a break up between the Northern Europe and the Southern Europe. The wishful thinking, or not the wishful thinking is too bad, is the optimism of well,

the desire to make it change. And that's what I think every sensible human being should be working for is to try to actually make the European project a democratic process. So you're doing like to vote somebody that can decide something because we elect a parliament that is not the real power to appoint a prime minister to appoint somebody

and nobody really respond to the European people. Of course. So I think that in, in general, of democracy is what is most needed, and hopefully all the tension will emerge. If you want to be optimistic, like I want to be, the United States did not have an easy route. And this is at the beginning, there was a lot of tension,

and there was a civil war. So, in order to, hopefully, in Europe, we're already for the civil war, too, in the last century. So we don't want any more of that, but the fact that the process is not linear, I think it's inevitable. The fact that there are tensions and bumps is inevitable. The important thing is at least you see the right direction,

and this is what sometimes I'm not so sure that everybody sees. And I think the right direction is more democracy. Last question before we open up to the crowd. You're now director of the Stigler Center at Chicago, and you've studied organizations for your whole career. Given what you've learned, we're here, of course, at the Mercatus Center hosting this event, but how will this shape what you will do

with the Stigler Center as an economist? So I think that the first thing is spent time in hiring the best possible people. I think that one thing that works well in university is that we spend a huge amount of time selecting faculty. It's a lot of what we do is listening to seminar, reading papers, refereeing papers, selecting the next generation. And what I've learned in various organizations

is the best, most successful organization, and the one that spend a huge amount of time sort of selecting the good people, because it's very costly to fire. You don't want to fire unless you have to. And once you get the right people in place, organization wouldn't say, run themselves, but almost. And if you don't have the right people in place,

you spend a lot of time fixing the hiring mistakes. There's now a little bit of time for questions. Please, questions, not statements, go up to the mic, we will alternate how we call on you. How many minutes are left? Ten minutes? Okay. First, if you make a long statement, I'll just cut you off.

This is for our guest to answer. First question, yes. Thank you very much for coming. My name is David Willey. I'm a research assistant with the Mercatus Center. Part of our research is looking at the connection between the financial services industry and small business creation and as you know on a number of measures, you know, small business creation is down, innovation seems to be down in the U.S. What in your view is the connection,

if any, between the financial services industry and the problems in that industry and the decline in innovation, the decline of new business creation in the U.S.? Thank you. So I think that the role that the financial sector has in promoting new businesses, innovation, and so small business is crucial. And that's much of a... The first book with Guadou was dedicated precisely to celebrate this role. Now, do they succeed always so well?

And the answer is no, because there are some frictions. Ironically, there was a period, I don't think we're there anymore, but it was a period in which venture capitalists were so much flattered with money that they had to sort of deshaw this money sufficiently fast that they had to shell it out in big pieces so they were only financing more advanced companies because they couldn't find the time to actually shell it out in small pieces at the time. So it's very important that you have capital in the right people to do that.

If I were to point out the major problem to financial innovation today in the United States are not the financial system. In other countries I would think of the financial system, in Italy, clearly the financial system in the United States is not, is more sort of a patent policy and other form of bias to entry. One story that I tell in my book that really motivated me to write the book is when I got approached by some students that were trying to start a company, and the first thing that they had devised was basically a lobbying plan. And I said if the first thing, part of the business plan is the lobbying plan,

and then were the problem in America. Over here, question. Frank Mannheim School of Government Policy and International Affairs right here. I wonder if you have taken a look or compared the environmental regulatory policies in Europe with those in the United States, which are in quite a bit of debate right now, and what your thoughts about the comparisons might be. I'm sorry to disappointed you, but I have not looked at that. I think that your idea is extremely good to make the comparison, to see also which lobbies

are winning the game. Because my bet is that the differences in regulation are driven entirely by who are the most influential groups across the board. So I was talking to Saferra in Italy, they were saying in regulation. of how much, what it's called, not copper, what you give on the vineyard to, there is a, yeah, copper base stuff that you put on the vineyard to prevent some diseases. There is some regulation, there is only one exemption in Europe and is, for the plant now escapes the name, would you make the beer because the Germans wanted to make sure that you could produce,

sort of enough of that to produce the beer. So, regulation, unfortunately, not just in the United States, but also in Europe, is driven by this special interest. So I think it would be a very nice comparison to do. Next question. Thank you. My name is Alexander Scouris from the Atlas Network. I'm from Greece. So that's what I'm about to ask you about. Please don't laugh. I know that you have been following what's going on in Greece and in other European countries as well very closely. The question is very simple. Given the new agreement that the European

Union signed with Greece. Is there anything or any under conditions you would see something good coming out of it? And the second part, what can Greece can do in order to get out of the crisis if we forget about that negotiation, which we must assume that it's going to take place sometime soon? Yeah. So the big hope is that eventually there will be some debt forgiveness in some form that is not called that forgiveness, but is delay of payment to infinity that is tantamount to get for business.

This is why politics is so hard because as an economist, you call a spade a spade, and if you sort of forgive in present value, is that forgiveness, but in politics is very different. So I think that that's the hope. And the big fear that I have is the political backlash. We have seen with the rise of Syriza,

now Syriza has been sort of tamed and made part of the European elite. All of a sudden, all the newspapers in Europe are celebrating our greatest Cyprus, the same guy that until yesterday was sort of a communist revolutionary, a dangerous, now is sort of part of the European team. Why? Because a sign on the dotted line

whatever they told him to sign. So my frustration is I agree with a lot of the reforms that the European Union is imposing on Greece. I think that longer term would probably benefit Greece. But I am a democratic at heart. And I think that the reforms, you should own them. This should not be imposed on you. And I think that inevitably, the northern... countries are trying to do with Greece what the Northern Italy did with Southern Italy.

They're trying to not to fix Greece, but to minimize the problem for Europe. So nobody really in Brussels except maybe the Greek representative care about Greece and Greek people. They care about stability in the EU and getting that problem of their agenda. exactly like in Turing, people did not care about people in Sicily. They care that the revolt would be sedated. And they did whatever it takes to sedate their revolt, including, by the way, aligned with the mafia. One of the reason why the mafia is alive and well

is because it was a method of control of Sicily that the Northern Army used very effectively. And the long-term costs are huge. Now, I'm not saying that the European Union is helping the Greek mafia, but I wouldn't sort of exclude it. I wouldn't exclude it. Also because the people that best can negotiate with the European Union in Greece are part of the Greek elite.

The people who speak English, travel abroad, are part of the very elite that run the country up to now into the grounds. corrupt, crony, and every negative thing that you want to say. And why do you expect these guys all of a sudden to change just because they're blessed by the European Union? I don't think that's a case. So I think that I thought that the so-called bailout of Greece in 2010 was a disaster, was really a bailout of French and German banks.

sort of covered with the pretense of helping Greece. And I think that since then, we're not recover from that mistake. So I think that that's a really sour spot in the European history, and something that will weigh very heavily in the future. We have time for just a final. Very quick question and quick answer. Next, please. Hi, my name is Stephen Jones.

I'm an M.A. fellow at Mercatus, and I do have a quick question, which is in your little vignette at the beginning, you noted that the cafe shop workers are so unbelievably productive. And I'm just wondering why you would want somebody to be that productive in a cafe. Is it because Italians value coffee that more or maybe labor regulations or something else entirely? So we come back full circle to Italy. Luigi.

You actually raise an excellent point. My wife was American walking to an auto grill in Italy, and she's amazed by the fact that a guy. speaks perfect English. She said much better than yours. And sort of, she discovered that this guy has a university degree and in English literature and he was serving coffee at the auto-grey. I think that that's pretty depressing. I think that that's maybe the reason why Italian cafe is so good is because sort of there are no other opportunities. Actually, I have this line, again, comparing the United States and

Italy, I noticed that in Italy, on average, like the personal assistance are great, are really fantastic, and managers are not that good. And so I said, wait a minute, why is that the case? Oh, obvious, because the market doesn't work. If you don't sort out the market, you can have some very tired of people doing jobs that generally don't require the talent, and you have, unfortunately, non-target people doing jobs that require a lot of talent. So my My favorite line that did not make me very popular in Italy. Italy is the country with the best secretaries and the worst managers. On that, three announcements to close.

First, big round of thanks for Luigi. Next, September 24th is Dany Roderick. And finally, Luigi will be outside signing books. He has three books. Any book you bring, he will sign. Luigi, thank you again. A great honor and pleasure to have you.