The Malta Independent 25 May 2020, Monday

Lessons from the fable of the bees

George M Mangion Tuesday, 3 March 2020, 13:04 Last update: about 4 months ago

Reading through the weekend press, there was a considerable amount of comment regarding the current emptying of shelves in all the supermarkets by shoppers buying essential foods. 

This panic is possibly about a potential scarcity of supplies following the corona virus scare in Italy. This sudden - and unprecedented - wave of shoppers has caught the authorities by surprise and already many are complaining that face-masks are sold out.

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The latent measures taken by the Health Ministry to install thermal scanners at the airport were considered as being too little, too late.  Two days later, a similar screening mechanism was brought into use for all passengers arriving by sea but no screening of merchandise.  

Not unexpectedly, local stevedores stopped handling imports until proper precautions were put in place. Naturally, Party apologists in their entirety feel angry and betrayed, saying that such scaremongering was the menace of a hidden hand aimed at sabotaging the nation. This comes only 10 weeks since the collective resignation on 26th November of two senior Ministers and a Chief of Staff. 

These officials offered their unilateral resignations amid speculation that they are privy to the machinations at Castille in a nefarious plot to assassinate a journalist who heavily criticised corruption. A crowd of civil society activists bayed for justice, carrying protest signs calling for ex-Prime Minister Joseph Muscat to resign immediately.  (He resigned on 12th January without giving any solid reason other than that he paid a high price to assist in solving the journalist's murder).  

His replacement, Dr Abela - a young lawyer with no Cabinet experience - calmed down these outbursts of protests linked to the macabre assassination of Mrs Caruana Galizia by calling for the resignation of the usual suspects.  

A special court inquiry into her murder has begun revealing shocking news about the web of intrigue at Castille, particularly as it spilt the beans on the alleged machinations by a top businessman and shareholder in Electrogas (very close to the gang in Castille) who masterminded and financed the plot to assassinate the journalist.  

The 30 pieces of gold led to her murder by way of a powerful bomb placed inside her car and detonated by remote control. One can add to this shocking homicide a number of public scandals that are also percolating in the minds of the Opposition, who keep reminding voters about concessions of prime land granted at fire-sale prices in an attempt to oil the wheels of commerce - particularly in the luxury residential sector and other projects.  

A public-private partnership named 'Vitals' has been paid €240m in the past four years pursuant to a 30-year contract to rehabilitate and run three major hospitals.  No such embellishments were carried out, while the Opposition has taken three Ministers to court to account for the millions of euros so squandered.

The coup de grace was four Panamanian companies commissioned in 2014 from Nexia BT (the managing partner still enjoys full patronage from the Justice Ministry). This was a potent scoop announced by the slain journalist. 

She revealed that two of these Panamanian structures belong to the Chief of Staff and Dr Mizzi - then Health Minister.  More court evidence shows that the Prime Minister was fully aware of these secret Panama companies before these were made public by the said journalist.  No exertion was made on the part of the Prime Minister to demand their resignation. The journalist was murdered in October 2017. 

This long introduction needs to be read in the light of Malta running an economy that is currently the envy of all EU states. The property market in Malta has also been transformed over the past decade and has never seen such grandiose projects in the pipeline. Such affluence came at a cost, however, because the effect of gentrification resulted in a hike in rents and an acute shortage of construction workers. In fact, the positive transformation under the Muscat government has accelerated GDP growth - which has almost doubled since 2013. 

Thanks to the brinkmanship of Muscat and his team, the economy has turned the tables, with house prices increasing by seven per cent per annum and unemployment at its lowest level among advanced economies.  

A seven-year plan costing €700 million was launched last year in an extensive road-widening project and the building of complex flyover structures to ease the unremittingly growing amount of traffic. So one could ask what is wrong in this land of milk and honey? Perhaps history repeats itself and human nature tends to score its own goals.

I found reading the seminal (yet controversial) book - The Fable of the Bees by Bernard Mandeville - a good pointer for elucidating the paradox that Malta has just experienced. Mandeville was an Anglo-Dutch philosopher, political economist and satirist and the Fable's overall influence in the fields of ethics and economics is, perhaps, one of the greatest and most provocative of all early 18th-century works.  

In his General Theory, the famous economist Keynes cited Mandeville as a source for his position in emphasising the positive effects of consumption (aggregate demand). This stood in opposition to classical economists who believed that production (aggregate supply) was the motor of economic growth.  Back to Malta, we face a dichotomy that, while Muscat's seven-year regime enriched all corners of the population - with particular emphasis on soldiers of steel - this strategy was rated by the Opposition as corrupt: the fruits of ill-gotten gains. Equally disturbing, as one reads in the Fable's proposals that vices, such as vanity and greed, unscrupulously result in publicly beneficial results.  State propaganda helps create a false sense of a virtuous administration.  With hindsight, it transpires that these on the contrary turn out to be self-interested at their core and therefore vicious.  In this work, Mandeville's analysis shows private vices result in public benefits like expanded industry, employment and economic flourishing.

This is a paradise state, where society flourished in many ways, yet no trade/project was without dishonesty. Mandeville thought the discontent over moral corruptness, or the private vice of society, was either hypocritical or incoherent, as such vice served an indispensable role in the economy by stimulating trade, industry and upward economic improvement, ie public benefit. He opines that a desire to create a purely virtuous society is based on a vain Utopia when, in fact, it is the desire to improve one's material condition through acts of self-indulgence that lies at the heart of economic productivity. 

Mandeville's paradox alleged, unapologetically, the tendency of men to hide vices behind socially acceptable forms of behaviour, thereby appearing virtuous.

For Mandeville, this was incorrect and preposterous: society could be prosperous and based on private vices, or poor and based on private virtues - but not both.  

The poem teaches us a lesson in Malta, that skilful politicians originally flatter the masses into believing that actions are honest - yet only executed in order to gratify selfish passions, and virtuous when, in truth, they were carried out in cloak-and-dagger fashion to acquire private wealth. 

 

The writer is a partner in audit and business advisory firm  PKF Malta

 


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