The fable of the bees

Reading through the weekend press, critics wax lyrical on the current political impasse to such an extent that one builds up a conscious awareness that politicians in Malta mired its once impeccable reputation of a serious financial domicile -with full respect to rule of law boasting top marks on good governance and a true democratic country.

Naturally, party apologists in their entirety feel angry and betrayed by the gang at Castille (lately unceremoniously resigned) yet they are not able to comprehend what went so wrong in a short period of Muscat’s interregnum.

There has been angry protests in Valletta since 26 November when two ministers and a chief of staff suddenly offered their unilateral resignations. The crowd bayed for justice carrying protest signs calling for Muscat to resign now and others less salubrious slogans concerning the effectiveness of police investigations into a journalist’s murder. Reflecting on these sudden outbursts of protests linked to the macabre assassination of Mrs Caruana Galizia (a journalist) who focused her pen to publish shocking facts in broad daylight hitting top politicians.

These in tandem with a select group of property magnates ruled the roost and created in her own words, a web of corruption and sleaze. Court evidence spilled the beans on the alleged machinations by a top businessman (very close to the gang in Castille) who masterminded and financed the plot to assassinate the journalist.

The 30 pieces of silver led to her murder by way of a powerful bomb placed inside her car and detonated by remote control. One may add to this shocking homicide, a number of other public scandals relating to concessions of prime land granted at fire sale prices in an surreal excuse to oil the wheels of commerce particularly in the luxury residential sector and other projects.

A private-public partnership secret deal involved paying millions annually to an unknown foreign operator was discovered promising to rehabilitate and run three major hospitals. No such embellishments were done while the Opposition has taken three ministers to court to account for the millions so squandered.

The coup de grace was four Panama companies commissioned from Nexia BT (the managing partner still enjoys full patronage from the justice ministry), a rare scoop by the slain journalist. She revealed two of these 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 action was taken by the prime minister in 2015 to demand the resignation of the two protagonists. The journalist was murdered in October 2017.

This long introduction needs to be read in the light of Malta running an economy which is the envy of all EU states. The property market in Malta has been fortified over the past decade and has never seen such grandiose projects in the pipeline. Such affluence came with a cost, since the ensuing 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 almost doubled since 2013. As a matter of fact, according to the Central Bank of Malta, between 2009 and 2013, house prices entered a phase of what is called ‘anemic growth’, only registering a 0.2 per cent increase per year.

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, respectively. During this period, the government successfully slashed poverty rates, with Family and Social Solidarity Minister Michael Falzon, often saying that the success last year was a result of successful policies, labelling the measures “prosperity with a purpose”.

Since 2012, being the last year of PN rule, the public debt then climaxed at 70.2 % of GDP whereas now with a modest surplus it receded to 45%. Unemployment is at its lowest rate among advanced economies. A seven-year plan costing euro700 million started last year in an extensive road widening project and building of complex flyover structures to ease the constantly increasing traffic.

A concerted effort has started to reduce low carbon emissions and introduce subsidized schemes for PV installations for public and private users. This has gradually improved the electricity mix. Obviously more needs to be done while sterling work was undertaken when a private consortium has teamed with the state to provide clean electricity.

Tourism has helped generate more wealth as almost a record braking 3 million tourists and 900,000 cruise liner visitors primed the trickle -down economy. Such bonanza has not escaped Muscat’s vision to continue increase welfare benefits and offer free childcare assistance-with pensions and minimum wages also improved in last year budget.

So one may ask what went so wrong in the isle of milk and honey? Clarity to the dilemma came instantly to mind when reading the seminal (yet controversial) book -The Fable of the Bees by Bernard Mandeville. He was an Anglo-Dutch philosopher, political economist and satirist.

The Fable’s overall influence on the fields of ethics and economics is, perhaps, one of the greatest and most provocative of all early-eighteenth century works.

In his General Theory, the famous economist Keynes, cited Mandeville as a source for his position in emphasizing the positive effects of consumption (aggregate demand). This stood in opposition to classical economics who held up production (aggregate supply) as the motor of economic growth.

Back to Malta, we mentioned the dichotomy -that while Muscat’s seven year regime enriched all corners of the population (particularly his close friends) yet this strategy was rated by the Opposition as corrupt. The fruits of ill-gotten gains. Equally disturbing, one reads in the Fable’s proposals that vices, such as vanity and greed, unscrupulously result in publically beneficial results. State propaganda helps create a false sense of a virtuous administration. With hindsight, it transpires instead, to be self-interested at their core and therefore vicious.

In this work, Mandeville gives his analysis of how private vices result in public benefits like expanded industry, employment and economic flourishing. A paradise where society flourished in many ways, but no trade 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 i.e., public benefit.

The desire to create in a purely virtuous society was based on a vain Utopia, when in fact it is the desire to improve one’s material condition in 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 behavior, 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 skillful politicians originally flatter the masses into believing that actions were honest when done in order to gratify selfish passions, and virtuous when in truth they were performed cloak and dagger to acquire private wealth.