A brief history of Maltese rent-seeking

During Nerik Mizzi’s funeral in 1950 two lines were formed: one before his family to give condolences and another one before Ġorġ Borg Olivier which included the top merchants and businessmen of the Islands. Naturally, they were asking for favours, most of which were acceded to up until the Nationalists controlled the government in 1971. Some of the families who own the biggest retail chains of today got land from the requests made during Mizzi’s funeral. Others, in the 1960s, got much, much more.

The history of rent-seeking in Malta has never been researched. What I know is from many years of research, and oral testimony of many people who preferred to share their information with me before leaving this world. When, as an undergraduate, I began studying Maltese economic history, rent-seeking and corruption came up inadvertently, but most of it in sporadic forms of data and information. My focus was elsewhere and I never took it seriously. Also, today, I am working on a series of unfinished papers and books, so there won’t be any time soon when I will take up this subject and study it rigorously. These blog posts may serve me as a dump for the crude data that I have on this subject if I would be tempted, many years on in the future, to re-open this subject more rigorously.

Rent-seeking was not only a hindrance to the economic development of the Islands, but it was also a hindrance to the intellectual and educational growth of society. Given that we never had any incentives to study this subject, we will always have problems in understanding the deep-rooted problems of our society which as of consequence hampers our ability to develop even further as a society.

We barely have critical work on the Maltese economy let alone critical work which addresses the history of corruption and rent-seeking in the Islands. The academics at the University of Malta aren’t incentivised to write and study critically on these subjects – they are only incentivised to write simplistic and acquiescent reports which serve their paymasters – mostly the government. Gordon Cordina, who today is Chairman of Bank of Valletta is an excellent example of this. An academic who made a career writing reports and papers which tell and say what the paymaster wants to hear eventually landed himself a top job. Today, in Malta, no economist is talking about the impending risk of the abolishment of tax-havens around the world, even though, the Democrats have since Obama, made it clear to be their long-term mission. No one wants to hear about risks.

But this is not the topic of today. Today, we speak briefly about how rent-seeking flourished ever since Borg-Oliver took the reigns of government in the 1960s. Not to say that Borg-Olivier introduced rent-seeking in the Islands – on the contrary. Rent-seeking has been in Malta for many years, but my knowledge goes so far. And for a very particular reason as well. The 1960s was the great rent-seeking boom.

With the excuse that Malta needed to develop itself quickly to create thousands of jobs, the Nationalist governments of the 1960s gave away a lot of public land to some of Malta’s top 40-elite families including the land where today sits the Dragonara Hotel owned by the Bianchi family and the land in Attard where Corinthia Hotel was formed owned by today’s hotel magnate Alfred Pisani. Many other lands were given away practically for free to many other families who built hotels, factories, and in one case even a shipyard, and the list is rather substantial. Many of these businesses are today still operational, but some of them have leases (99-year) that are closing soon and the government will have the possibility to renegotiate these deals. Of course, most of these negotiations are made behind closed doors.

The big land grab of the 1960s which also came with a myriad of tax incentives, left the elite with plenty of capital to slosh around. But most of this capital wasn’t invested in productive businesses, it was invested in the construction industry to build high-priced villas aimed for the British clientele, and a wide range of apartments which catered for all type of spenders such as high-priced apartments in Sliema to cheaper options in Buġibba. The Islands were flush with new construction projects and property prices were rising so fast as to create a serious affordable housing shortage which lead to streets-protests by young people.

Then the bubble popped. At the turn of the decade, the speculative bonanza in land and construction dried up. The economic development plans of the Nationalists failed to bring about a substantial change to the economy as immigration increased. The lessening of trade barriers in textile industries posed a risk to one of Malta’s emerging niches and Europe was also entering into severe economic difficulties. Bottom-line the property buyers dried up, and as high-priced properties could not be matched with the purchasing power of the locals, the property market got busted and the construction industry practically halved. In the early 1970s you would drive through streets looking at many abandoned construction projects still under construction.

Then came the crisis in Maltese banks which were overly leveraged in the property market. But maybe overly-leveraged would be a too diplomatic description since most of the investments of the local banks were actually in the property and constructions businesses, many of them in projects owned by the same bank-shareholders. There were significant economic risks to the run-down in the National Bank which as of today have not been properly studied. And few, today, are ready to admit that the National Bank failed because of the bust in the property market, and for obvious reasons. One of the biggest risks to local banks today is that they are heavily dependent on the local property market, but of course, it’s a very different market from that of the 1960s and 1970s. When faced with the National Bank crisis, Mintoff had very different ideas to today’s central banks and economists. Instead of bailing out shareholders and providing the bank with extra liquidity, Mintoff simply forced shareholders to hand over their shares to the government on the pretext that the bank was bankrupt and depositors interests needed to be protected. Mintoff punished share-holders and defended depositors.

The problem with Mintoff, however, was that he did not end rent-seeking. He merely changed it. And with Malta’s economy booming to previously unimaginable highs, Mintoff had ample room to allow and manage rent-seeking as he deemed fit. Enter, the low-life rent-seeker. See, Mintoff, despite his genius had some very weird ideas. He reasoned that given Malta’s resources were throughout history mostly appropriated by the same 40-families, it was only fair to suddenly allow poor people to get a piece of the cake for free. This is not to say that people like Albert Mizzi didn’t do some rent-seeking under Mintoff’s time, Mizzi was after all Mintoff’s confidant. What Mintoff did was to merely transfer the rent-seeking regime to the working classes away from the grip of the 40-family elite. The result was a disaster and produced monsters like Tumas Fenech whose only claim to riches was his fraudulent and corrupt dealings in public government lands in the 1970s and the 1980s. Some could get away with a boathouse in Marsascala while others could do with large parcels of land for more effective business interests. The field was free for crooked low-lifes who supported Mintoff and his henchmen. One can not fail to mention Lorry Sant in this story. Sant was a long-time socialist militant and Labour Party activist who had honest and principled political ambitions. But when Sant was rejected by his party-comrades in 1977 in the leadership race, his self-pity and sense of rejection turned him into a vindictive and corrupt monster.

When the Nationalists came to power in 1987, the rent-seeking regime changed again. It was once again the turn of the rich and powerful to gobble up some pie. Eddie Fenech Adami, an incompetent village lawyer whose only name to fame is leading Malta into the EU, was surrounded by proposals of all sorts. The Gasan family had wanted the power station ever since Fenech Adami took power – only Joseph Muscat made their dream come true. Fenech Adami was also aware of most of the corruption happening around him especially Ninu Falzon’s, John Dalli’s Austin Gatt’s. Most of the corruption was covered up for the Party’s interests and the press back then was very docile to the Nationalists, even despite several smoking guns staring right through the corrupt. For example, we have known that John Dalli owned secret off-shore accounts in the British Virgin Islands, ever since he was involved in selling Mid-Med Bank to HSBC. The intelligent and smart minds around PN closed an eye to all these shenanigans, and life moved on because turning Malta into a modern country in the European Union was all that mattered. Under Gonzi, this rampant rent-seeking continued to large excesses until MaltaToday finally uncovered the oil scandal which happened under Austin Gatt’s own eyes. His undeclared bank account in Switzerland was never investigated either.

So what about Police Commissioner Rizzo? See, John Rizzo, although he would like us to believe that he is a very upright man, never intended to alienate his political superiors. The judges who were charged for bribery under his tenure were not a political liability to PN. Rizzo moved mostly when his masters moved him, and even when Rizzo moved against crime, it was only against that kind of crime that did not delve into the interests of powerful people. Who is Rizzo? Rizzo was a Labourite who changed his political allegiance on the day of the 1987 election result and commemorated his change of heart by beating up rowdy Labourites in the Cospicua police station.

One stark contrast in the way Rizzo operated was his war on drugs. Tonio Borg, the zealous Christian conservative had in anticipation of Malta’s membership with the EU started pressuring Rizzo to rile up the war against drugs. Throughout Rizzo’s war, the big boys in the drug trade were never arrested – it was only the street hustlers and the middle-guys who got busted. Some of the top criminal elements in the smuggling trade which were related to PN ministers made the intelligent move to take a step back and for some years, Malta had a severe shortage of drugs but especially of marijuana and high-quality heroin. The cocaine kept pouring in because the demand came from more established quarters. This situation kept going on until some of the street-hustlers linked to notable, corrupt, PN ministers complained to them their business had dried up. The pressure was made and in the Summer of 2012, a network of smugglers in the Freeport that were connected to the same PN ministers started bringing in a massive bonanza of new supply. Naturally, some of this money flowed into political donations to the PN – unofficially of course.

And this is also why it should be no surprise to anyone that even Joseph Muscat had a conscious and close proximity to criminals like Yorgen Fenech. The criminal underworld is by far more connected to our politicians than what we are allowed to believe. After all, one should also not be surprised why none of the alleged corrupt cases of the Nationalist governments was thoroughly investigated by the police commissioners which were appointed by Muscat. Police Commissioners under Muscat served as his lapdogs and Muscat’s policy on corruption was that of total tolerance. Remember that Mark Gaffarena, a rent-seeker par excellence who (diplomatically speaking) garnered his wealth in very dubious ways, was allowed to take a property in Valletta for free because, under Muscat, criminal and illegal activity by the government ministers was permitted and normalised. In fact, Michael Falzon, the Minister who signed away the property to Gaffarena is still a minister today as if what he did wasn’t a corrupt act.

And today? Well, there is no reflective thinking about these matters by the Government of today. We are being fed the lie that we should bury the sins of the past and move on. History shouldn’t serve its purpose and academics are too busy licking boots and being complacent to act as independent and free-thinking individuals. The only problem with this attitude is that you are burying the problem instead of addressing it.

One of my major arguments in my historiographic work is that Malta’s economic development was strictly and solely due to foreign direct investment. This means that the local elites, who traditionally where in cotton, imported most of the food and served the occupiers with services, had a very little role to play in the economic development of the islands. Practically, since the island had no resources at all other than limestone, lacked water and land, the only economic activity it could generate was by direct investment coming from abroad. The mono-crop economy by itself did not survive the test of time either. On the other hand, local elites were not entrepreneurial and as they ended up investing most of their capital in property and foreign stocks, as reported consistently with British Commission Reports in the late 19th century and early 20th century, the local elite never generated any productive value in the economy which created enough jobs and economic development. Ironically, and many miss the point in basic Maltese history, this is why the Mintoffian years were crucially significant in the history of economic development, first and foremost not for its socialism but the inflow of foreign capital.

Now, such historical work, which I haven’t practiced for some years, is rather laborious to produce (right now, I’m working on different material). So, I’m going to stick to the present rather than get all convoluted with the past. The point here is that some things haven’t changed. Rent-seeking is still the rule of the game for local business and this hurts honest businesses and entrepreneurs who compete fairly. We are lead to believe that these rent-seekers are important, when in fact they aren’t, as most of the economic activity generated today is generated by foreign companies while the local rent-seeking apparatus bleeds the economy of its resources. Albert Mizzi made a killing off Tigne Point because he got it practically for free not because he paid a fair price for the real state. Similarly to Silvio Deobono who got the ITS property for a discounted price. This practice has been replicated in history many times over leaving the rest of the people without jobs and housing. No wonder the British Admiral had god-status in Malta, and was by far, much bigger in the imagery of the people than any other well-dressed Maltese. Today, the end result of this long-historical process of rent-seeking is visually apparent to everyone. The country is flush with horrible over-priced buildings and an infrastructure which is continually clogging the country with cars and traffic jams. Some contractors could even get away with knocking down the homes of people in the course of their works until the practice ended with the death of a woman in Hamrun. No wonder many members of parliament want to send their kids abroad, but they will not tell you this, of course.

The Labour Party was supposed to turn the tide on Malta’s rent-seeking apparatus but Joseph Muscat ended up being a fraud, after all because that’s what you would call a politician who would dupe his party and most of the country with his pseudo-benign intentions. Rent-seeking didn’t end under Muscat – it exploded literally with a dead journalist. And we, who supported him, are all to blame for this in many ways, but being self-pitiful has never been my way of life (despite my rare and sporadic, emotional outbursts which I may have had like any other human being), so I agree in trying to look forward and try and build a better country. Not many would agree with me, however, especially the Labour Party which is currently in denial over its responsibility for Malta’s state of affairs.

See, the rent-seeking economy is all about the greed and selfishness of a very small number of people who are abetted and aided by a bunch of political morons whose only talent in life is to scam their way into a political career. That’s right. There is no incentive to get into politics so most who do, do so because they are incompetent to provide a valuable service to anyone in real life. There are exceptions of course. Chris Fearne, for example, was a very successful surgeon before he entered politics. Others are or were criminal lawyers who legislate on laws that may often directly benefit their clients. Same with architects. This is why you don’t see engineers, scientists, historians, or mathematicians in politics – these kinds of people would not bother and they don’t need to get a €40,000 kickback from Yorgen Fenech covered as a property-deal commission to get by in life. Politics is an open outlet for corruption.

How about Keith Schembri going to prison? Isn’t that a good sign? Here’s the thing, however. Keith Schembri is the first high-profile figure in Maltese history to be investigated over corruption and thrown to prison and was only sent to prison thanks to Daphne Caruana Galizia’s work who had collected enough information about him that could potentially send him to many years in jail. It was unusual that for the first time one single journalist had made such a rupture in local journalism, so much so, that it lead to her assassination. The reality is that everything that is being unraveled today is owed to Daphne Caruana Galizia while the Labour Party refuses to acknowledge its part in setting up the stage for this macabre situation.

The political parties’ TV stations hold a very important key to the answers we seek from the rent-seeking apparatus, mainly because they are the front of this apparatus itself. Let’s start with the most important conditions. ONE TV is not the Labour Party – it is the OPM. Jason Micallef is simply the person who signs the cheques and cheerleads the gross maleficence of the station’s editorial line. Joseph Muscat created a system whereby the political propaganda is dictated by OPM which is then handed over to the parliamentary group the Party and its media. Everyone toes the line on the reply given which supposedly would be universal. Now, who dictates this line?

It is the people who would go to the Party Headquarters and donate substantial sums of money to the Party with the promise that they would be supported in their projects, government tenders and land deals. Look, this is not just with Labour. It’s the same with PN. What Joseph Muscat did was simply to copy PN’s playbook and adapting it to the extreme. Previously, PN had Żaren Vassallo. Labour has Joseph Portelli and the Zammit-Tabonas who all of them gave donations to the Party which exceed the legal-capping. Sandro Chetcuti was another donor. These people give money to the Party intending to get something back from the government with the Party fully aware of the intentions behind their gifts. Permits are mostly sought, but so is government-land and contracts. It is also why James Caterers and Silvio Debono got a 274-million Euro surprise contract from the government to expand its old people’s home.

And guess where this money goes? It doesn’t go to the Party either. It goes to ONE. Similar to how Silvio Debono used to subsidise the Stamperija. Why? Because party TV stations are not economically feasible. Who gets the top seat at Malta’s economic policy kitchen cabinet? It’s the guys who slosh their money away to the Parties and that is why we hear politicians speaking mostly of construction and tourism projects. It’s a very simple game if one gets it. But I’m not saying anything new, ain’t I, we all know the game is rigged and that’s how it rolls. But guess, what? This whole primitive operation is illegal from top-to-bottom and it only takes enough resources allocated meticulously to bring it all down by independent authorities. It is not only illegal due to corruption, bribery laws and political financing, but it also illegal because it often contributes to cutting some of that tax bill of the donor. What not to like? A political donation can cut down tax if booked creatively in the accounts with the potential reward of getting a nicely signed government permit for another project. Bargain.

And what does ONE do with this money? It propagates the OPM’s propaganda which is entangled in this spiral of rent-seeking. Again, this is why one of the most popular figures on ONE is Robert Musumeci. Given that the construction industry, despite being one of the smallest industries in size amongst most other industries, is perceived to be so important. So, it is no coincidence that the guy who prostrates at his masters and showers praise over the dictator even when the crowd is knocking the door over the dictators-head is the same guy who designed Malta’s development regulations – Robert Musumeci. So, it’s one big racket, you say? And one big scam? Yes. The donors donate their money to the party and they have their economic policies shoved down the people’s throat with a televised broadcast. That’s how the game goes. The cheerleading presenter to all of this, is, of course, another fraud.

Indeed, if you corroborate the money trail of a political party TV station and corroborate it with official government land deals, permits and tenders, you may get surprisingly very interesting results. Naturally, that of a tangled web of illegal behaviour and corruption. And this shouldn’t only apply to ONE, but also Net TV. This is not about a bunch of individuals who made a couple of mistakes, but rather a self-perpetuating system where the sharks keep preying with impunity. Empty the water of the aquarium and let the sharks die. Start with the political-party TV stations because that’s where most of the answers lie. Better and healthier fish will come along later.

Words have little meaning when they come without any action. Failing to realise the real state of affairs of the country is the biggest relapse the Labour Party is making into old habits. We are being fed the lie that if we pass the Moneyval test and make some Venice Commission reforms, everything will be all right and business will be fine. The reality is that the historical problems of our society will remain. Unless rent-seeking is addressed structurally we will preserve our economic, social and civil problems.

One of the current problems afflicting the book industry right now is the same problem afflicting all of Maltese society: jungle rules. The rampant disregard to the law and to good governance by many public officials is outstanding not because it happens in the first place; we all know that greed can make people act in a very destructive manner, but because it is being allowed to be perpetuated by the same government which supposedly is cleaning out the house.

Allow me to be brief and spare you with the details which may only be relevant to our industry. The Malta Book Festival, previously the Malta Book Fair, has been held at the Mediterranean Conference Centre for more than thirty years. Since 2013 we re-branded the event and made it bigger hitting consistent record sales year after year. As the Festival grew over the years we started taking more space at the MCC to add more capacity until we practically started booking most of the MCC, including Republic Hall in 2019. Then we were suddenly told that we were not able to book Republic Hall anymore because the Malta Tourism Authority had front-run our booking for an event they are sponsoring which will host the Cirque de Soleil circus.

I was flabbergasted. It was just right after the end of the Festival in 2019 that I received the news. Eventually, the pandemic arrived and Cirque de Soleil went bankrupt. MCC contacted us and told us that Republic Hall was available once again. In 2021, we then received the news the Cirque de Soleil show was to go ahead anyway and that we were not able to make use of Republic Hall any longer. I protested against this with the Minister of Tourism Clayton Bartolo and the Prime Minister himself and all I got from the government was the request to help myself by changing the dates and location of the Malta Book Festival. So, practically, the book industry is expected to take a bigger hit in sales by further changing the arrangements of its event for the sake of a foreign circus subsidised by our own government.

The Minister of Tourism has just recently released a document outlying the importance of promoting indigenous culture as part of MTA’s new strategy. Despite the fanfare to launch this document, the Minister and MTA are doing exactly the opposite of what this document says – they are subsidising a foreign circus at the expense of a local culture industry. And the expense is on our side is at least €100,000 less in book sales and a long-term negative impact on our brand. Great way to help small businesses. So, it’s not just about the money. And we don’t accept bribes either just to make it clear.

But there is also a very obvious reason why we are being front-run like this without any consideration to our industry and to the families who depend on it. The Cirque de Soleil show at Republic Hall is a corrupt contract handed over to 365 Entertainment Group by MTA official, and ex-Konrad Mizzi canvassar, Lionel Gerada. Gerada, who is a convicted fraudster, was given authority by the disgraced Konrad Mizzi to allocate MTA events funds and 365 Entertainment is amongst MTA’s favourite recipients. 365 Entertainment Group has been allocated a substantial, but yet undisclosed amount of funds to organise the Cirque de Soleil circus, but the government-suibsidised payment to Cirque de Soleil is undoubtedly in clear breach of EU-State Aid rules especially given the context. Gerada has also committed perjury when testifying with the Public Accounts Committee saying he has no connections to 365 Entertainment Group when he was caught representing them and dining with its owners in the Netherlands. And guess what? 365 Entertainment is one of those companies which last year promoted Malta as a safe-party destination to British tourists and directly contributed to the re-emergence of the virus pandemic in the country.

Why do I say it is a corrupt contract? Because a contract effected with the provision of funds by a convicted fraudster and public official who is associated with the same company he is giving the funds to, is simply nothing else but a corrupt contract. These are jungle rules. A corrupt contract will subsidise a show by a foreign and bankrupt company at the expense of a local cultural industry of national importance. You would expect people to resign over this scandal in ordinary European States, but this is not an ordinary European State. And, despite all of this, the government expects us to remain silent, complacent, and at best help ourselves by taking on bigger hits in sales by changing our arrangements. I’m not sorry. The older I get the less intolerant I become of corrupt bullies and infantile behaviour by supposedly-grown men. In our jungle rules, corrupt idiots are being allowed to bully their way around in the country, wreaking havoc on society and our businesses indiscriminately. It is my job and my duty to defend the interests of the local book industry and I will keep doing so as long as the law allows me to.

In 2010, when Europe was going through austerity and lost the social contract it had upheld ever since the end of the Second World War, when UK university tuition fees were increased and during the hype of Occupy Wall Street, Slavoj Zizek made his most important discourse ever. He extolled the Leninist virtues of taking power amongst a large crowd of young, angry, left-wing kids who saw ahead of them a bleak future of economic recession with no political leadership. The Socialist Workers Party which had organised the festival, lost its credibility with a rape scandal and most of the young people who attended that 2010 debate, eventually, joined Ken Loach’s political movement which debated the way forward for the left. Then, they ended up joining the Labour Party, helped Jeremy Corbyn get elected and became Labour front-liners. It was obvious by then to the young left-wing idealists that the only possible way to change the world was to take power and power was transferred through the vote.

Enter Satoshi

You had to be fucking crazy to buy Bitcoin at 100 Dollars. I had friends back then who were mining it in their bedrooms. It sounded like an experimental game by a bunch of highly-intelligent computer nerds who were building their own financial eco-system. Give me a break. I had too much interesting stuff to read back then to get remotely interested in an article describing a peer-to-peer financial eco-system which was being used to buy illegal stuff on the internet. Back then this kind of stuff was all over the place and we used peer-to-peer software to share our files and music with each other. There were so many experiments, so many new things coming up that Bitcoin was just one of the many. But then many things started happening. Young people were suddenly finding it difficult to buy homes. The cost of education was rising fast and many traditional industries were shedding jobs. Many of the new jobs that were being created seemed to be low-paid – the Gig Economy – they called it. Today, I read with astonishment stories of nurses and academics who have to do sex-work to get-by.

For me it was always obvious that traditional Keynesian economics did no longer make sense in today’s conditions, so I never really understood why economists kept harping about deflation. Does the correlation between employment figures and the rise of prices actually mean anything at all since the 1970s petro-crisis? Why do we keep deluding ourselves we are living in a deflationary world when the quality of life and purchasing power of young people is drastically less than their parents? Does it actually make sense to keep discussing traditional economic principles on inflation when your purchasing power is eaten away by housing and you can’t save for your retirement? I’m sorry, but the argument on the transfer of wealth from the boomers to the millennials does not provide any consolation. Boomers didn’t need their parents wealth to achieve a financially prosperous life.

Apparently, the only hope of the bureaucrats of Europe is China. The Chinese are supposedly going to buy so much stuff from us that we are going to pay off our debts. Economic recovery will surely ensue. Europe’s next UNESCO cultural heritage nominee is going to be a Louis Vuitton hand-bag (maybe they already did it, who knows?). But then, Bitcoin bottomed at around 3000 Dollars and then started climbing up. So, like the sheep, that I am, I read the white-paper only because many other people were taking it very seriously, and after reading the white-paper, I realised that Satoshi really had something going on there.

The Return of the Jedi

Trump in power. Bernie out of the game. Corbyn humiliated. Merkel as the aging complacent conservative who does deals with dictators while the European house is in shambles. Macron as the young-shining light of Europe? Maybe, but really nothing is changing. Except that our energy is getting slightly cleaner and a bit better. Ok. But other than that? How has your life changed for the better? What did the European leaders do for us? Much of this rhetoric can be applied elsewhere, especially the US. People would like to live better lives and see a better world for their children and no one is giving it to them. So, suddenly, people are finding ways to change the world by themselves outside the traditional spheres of power and Bitcoin is one of them. No, it is not going to solve the world’s problems, but it is and it has, transferred wealth from the rich to the poor. If you are not paying attention, then I’m sorry, but I am not going to bother to source the references and do the research for you. It’s too late and there has been too many drinks passing around to do that. Hedge funds are a dying breed and have been closing down while retail investors have been beating Wall Street ever since the pandemic begun. Now, central banks are fretting and getting worried that they are losing control of the financial system. They hate Bitcoin and don’t want young kids dictating stock valuations while they squeeze out hedge funds from their shorts.

They say that quantative easing creates bank reserves and doesn’t cause inflation nor does it affect market valuations. Sure. That’s why the stock market bubble is solely being pumped by the retail trader in one’s bedroom. I’m not so sure. Maybe the correlation between the money-supply and the stock-market does actually make sense and has some interesting significance to what’s going on in the economy. Our debt keeps growing, public expenditure keeps sky-rocketing and yet economic growth is subdued. These are not the consequences of the pandemic – we’ve been going through this ever since the financial crash of 2007 and if anything the pandemic has just exacerbated the cycle of stagnant economic growth.

With no political leadership to look up to, and nothing new in the economic horizon, Bitcoin just keeps making more sense. If we don’t have the opportunity to be involved in a political movement which actually aspires and aims to change the world, we have no choice but to change the world ourselves. We can start with the financial system itself which actually serves, as of today and first and foremost as a casino for those who already own assets ( and those who do, generally own lots of them). Bitcoin can serve as a decentralised financial system which can be rather difficult to control and transfer some of that wealth back to those who have no assets. Our parents had the opportunity to own interest on their savings through bonds. The advent of crypto-exchanges which provide lending services and interest payments against crypto-currency is a total game-changer in the world of finance. Theoretically, crypto-currency, is actually and really making banks obsolete. I really did not see this coming when Bitcoin was 100 Dollars. And neither did I see coming the young nerds defending their favourite companies by buying their stocks and squeezing out hedge funds’ shorts. If only the big book-publishing bosses (mostly, old and white men) stopped ingratiating with Amazon and took a dose of courage from the young kids today, we’d have a better book industry.

The long march in the mountains

Do you know how revolutions were made back then? Mao Tse-tung lived in the mountains and had to march armies through mountains and rivers. Lenin and the Bolsheviks lived for many years in shabby apartments in Europe, struggling to survive on donations while writing pamphlets of communist insurrection. Eventually they all had to fight or die. As of now, today, politics seems more civilised. People are becoming ever more aware of the power of the vote and when the vote fails alternatives are being sought. Usually, we are not very quick to realise about the historic changes we go through. It’s like when the city you live in is changing block by block and you only become aware of the change when the whole sky-line has become completely different from what it used to be.

I don’t think we live in a deflationary world and I don’t even think the word itself makes sense in the current economic context we live in. We live in a very rapidly-changing world, for good or for worse and many economic concepts of the past are no longer applicable. Bread and eggs aren’t getting cheaper either. Seriously. I’ll start believing I live in a deflationary environment when people buying stuff at the supermarket don’t actually need to check their exact quantities in fear of exceeding their budget for possibly defaulting on their credit card.

Let’s get this straight – no one ever said capitalism wasn’t productive. Back in the bleak days of the Victorian era, Marx was astonished at the riches that capitalism could produce only to be dismayed by how, despite these riches, most people lived in poverty and grueling conditions. The great change came after the Second-World War with the new social contract. Now, as we lose that contract, we are desperately looking for a new world and a new paradigm. It’s going to be a very long march.

In the short-story “The Writing of the God” by Borges, God writes a magical formula to ward off a big calamity which would befall humanity in the future. The formula is stored secretly in perpetuity and would eventually be accessed by a chosen one.

Maltese political parties don’t need this magical formula. They have TV stations to ward off big calamities. Highly-calibrated machines oiled by construction money which will constantly pump a tirade of bollocks to their viewers presented as news, information and political commentary. If you want a political career, you don’t need principles, back-bone, education, and some real life-experiences which provide you with enough wisdom to lead the people’s interest in parliament – you can just go and shill yourself on your party’s TV station pretending to give a damn, and eventually you will get an advantage over the ones whose physical appearance disqualifies them from being TV presenters by the station’s board-rooms. Lovin Malta objects. They have filed a constitutional case arguing TV stations go against impartiality rules as prescribed in the constitution article 119.

Chris Peregin, the young stalwart who launched a successful online news portal while the traditional media houses were running into big financial challenges, has picked up a gargantuan fight against party-TV stations, namely ONE and NET which are owned by the Labour Party and the Nationalist Party respectively.

I’m compelled to write about this because I have authored various Maltese laws on free speech and have been vociferous on this cause for some time. Some of my friends want to know what I think about all of this, so, now they may know.

First of all, sorry Chris, but fat chance party TV-stations will close down or stop serving as propaganda machines. The Constitution is not a Godly-secret magical-formula – it is a malleable document and political parties will get together to change it if it transpires that it may not serve their interests. So even if the case is won, I don’t see any way party TV-stations would ever start being impartial. In addition, political parties will retain their right to free speech even if their speech is impartially-bullocks and they will fight for their right to propagate it in any way possible.

But, and this is a big but, the case does put a dent into the political status quo which currently incentivises corruption and outright nepotism. The problem with party TV-stations is not an issue about free-speech and convoluting the issue on these grounds will make us miss the woods for the trees.

Chris is right in arguing that ONE and NET incentivise corruption in politics because they are bankrupt and depend on construction money. The only way Karl Stagno-Navarra gets to go on ONE to ingratiate with corrupt politicians and defend their antics is because someone like Sandro Chetcuti is willing to go to the Labour Party headquarters and hand over wads of cash. Of course, the Sandro Chetcutis who do this are only doing so because they want something in return from the Government.

So, the more bankrupt ONE and NET are, the more entangled will the political parties become with the corrupt construction industry. Things took a slippery slope when the Panama scandal broke out. ONE turned into a festival of corruption-apologetics where corruption and grave political misconduct were justified on a daily basis and cheered on by the likes of Karl Stagno Navarra to the amusement of die-hard Party supporters. Thanks to ONE, there can never be a bad Labourite politician. Even during the November-December political-crisis of 2019, top ONE executives like Jason Micallef had no shame in allowing these apologetics to continue still. And guess who was a main fixture at ONE during those trying times, when the good men and women of Labour were screaming and hitting at Joseph Muscat to resign immediately – the darling of the construction industry Robert Musumeci who wrote a construction policy so friendly to the industry that it allowed it to destroy people’s homes with impunity. Of course, Musumeci made money out of the self-serving fabricated rules he himself helped create.

Imagine Mintoff coming back to life just to see all the PN-rejects conglomerating on ONE to defend the corruption of their fellow Labour political masters. Houston we have a problem – things really look messed up. Apparently, the new Deputy-Leader of the Labour Party, Daniel Micallef, is very happy about this situation. Let’s show them. We’re here to stay, he said. What’s staying Daniel? All the corrupt Nationalists who joined Labour because they saw in Joseph Muscat a corrupt master who could give them what Gonzi didn’t?

It’s about time we realise that party TV-stations are a serious and structural problem in our political status quo. No, I’m not saying that the party should not do propaganda. I’m neither saying that a party should not have its own TV station. But clearly, the situation is gravely messed up and if you are proud of this situation you may as well be totally dumb. It is clearly not in the interest of the Labour Party nor of the Government nor of the general public to have a publicly-funded party TV station which is compromised by corrupt money. Something here has to give. Otherwise, we’ll keep celebrating the trash-fest ONE has become with all its PN rejects lining up to its studio to show their faces and make sure their ingratiation is delivered and broadcasted wide and clear for the assurance of their new political masters.

Look. I’m just bringing up the PN-rejects as an example. The problem here is twofold: a non-commercially viable entity which depends on corrupt money for its existence and thus compromises its political owners, and secondly, the fact that both ONE and NET have no compunction in using their arsenal to further incentivise corruption by defending their corrupt politicians.

But ONE is also reflective of the state of the Labour Party itself. By now, all the failed PN rejects have joined in and have become regular fixtures on ONE: Jeffrey Pullicino Orlando, Ian Castaldi Paris, Robert Musumeci, Jean-Claude Micallef and more. No surprises here why Musumeci was so adamant to defend Joseph Muscat during the Nov-Dec crisis. These people have no principles – they are opportunists and morally corrupt and Labour is having too much of them. ONE gives them a platform.

Meanwhile, as ONE sucks all the money from the Labour Party’s coffers, I can’t get party top-brass to continue investing in the Party Library and archives, an investment which was cut-off as soon as Gino Cauchi stopped being Party CEO. My lament is finally recorded but it is only one of the many deficits of Labour Party. Too much attention, energy and money is wasted to keep ONE running while the Party is left abandoned only to be wrecked and invaded by the PN rejects looking for some silver.

Clearly, the situation needs change. If political parties are immature enough to refuse change, there’s nothing wrong in forcing change from without. So, although I don’t agree with Chris’ view on the case he instituted, I still bid him Godspeed and good luck. If the case doesn’t serve its purpose, it will at least threaten an institution which is actually harmful to our society.

After reading Magistrate’s Rachelle Montebello’s sentence on Pia Zammit vs It-Torċa, I have some remarks to make.

The Court found It-Torċa’s editor, Victor Vella, not guilty of libel for a front-page story implying that Pia Żammit, an actress, was a Nazi sympathiser. The implication was made with a picture of her wearing a Nazi-uniform on the front-page of the newspaper and an ensuing article complaining that the actress was making a light-hearted and funny gesture with a Nazi-uniform without mentioning the fact that the actress was wearing the uniform specifically for a play.

Basically, what the magistrate concluded was that the newspaper made a legitimate value-judgement instead of publishing an explicit defamatory statement which is conveyed as a state of fact.

Now, the magistrate may have some very good reasons why the Media and Defamation Act may have not been able to provide the tools for a guilty judgement. The judgment may also be advantageous to the press in general. After all, the advantages of having a liberal-libel regime greatly offsets the disadvantages of having a tight-legal regime which can easily find its defendants guilty. So, in actual fact, and admittedly, the magistrate may have, unwittingly, made a favour to the media in general.

However, there are problems with the magistrate’s sentence and I would not have interpreted the case like her. The judge considered It-Torċa’s piece as a value-judgment and an honest opinion in contrast to a state of fact. The problem with this distinction here is that It-Torċa had clearly implied, even explicitly I would say, despite the editor’s acrobatic manner of delivering it, that the author is a Nazi. Therefore, the newspaper tried to sell the fact that the actress is a Nazi. After all, it is also a state of fact that It-Torċa made reference to an actress as a Nazi without alluding to her acting role. And surely, this was not an honest opinion given that the author knew very well that the actress was wearing the Nazi-uniform for a play, while deliberately not mentioning this fact. It is a deceitful opinion with the intention to deceive and libel on misconstrued facts. I can make many value-judgements which can be relative to the case of affairs, context, philosophies and ideas too. Back in my university-days, when I published the fictional-story, “Li Tkisser Sewwi”, the Nationalists were accusing me and the author of promoting pedophilia. We didn’t sue. We told them to fuck off, but you get my point.

One may debate the distinction between values and facts, but value-free judgments are also hard to come by, and values may be attributable to state of facts with clear implications. The value of being a Nazi comes with a proven and commonly-known criteria of beliefs which have direct and real impacts on society. But, and maybe, the problem here is neither with the law nor with the magistrate, but the entity which is abusing the law’s emphasis on objectivity by circumventing it with not so much ambiguous implications. It’s like stealth libel or what is recently called “fake news”.

The context of the medium should also be considered. It-Torċa is not a newspaper or journal: it is PR-machine for the bad elements of government masquerading as the General Workers’ Union’s independent newspaper. It’s more of a cesspit of fascist diatribes and authoritarian threats than a newspaper. Apart from defending on a consistent basis corrupt government ministers, It-Torċa has, also, on a consistent basis, defamed and libeled artists, journalists and activists in the most vindictive manner possible and many of these people aren’t even public persons. To add insult to injury, It-Torċa, is fully subsidised by the government. Government bank-rolled the Union in 2013 by renting its premises in Paola while the Union supports its press with its resources and personnel. Add up the government-sponsored adverts and you end up with a PR machine which is fully-subsidised by the government.

I write this with sadness, of course, because I had a very good relationship with Union Press. I used to sell my stuff to It-Torċa during my years as a free-lance writer. I was also a regular client at their printing press and also brought them many other clients. I was good money for them and I used to be happy with that knowing I am supporting a workers’ press. All of this changed when Labour entered office in 2013 and editors, Union officials, and people like me who actually brought value at the Union and its press moved on to government-jobs. We were not replaced with younger stalwarts, (Sandro Mangion made a brief stint and left soon after), but with Labour Party and government cronies without any values and principles who were ready to publish anything they were fed. Victor Vella, the current editor is one of these mercenaries. He is the kind of person who will prostrate in front of the powerful-all-to-be because that’s the only thing he knows. At L-Orizzont, Josef Caruana had already degenerated into a fascist-punk bullying other journalists for covering government-corruption. I don’t think the Union Press will change its ways either because its editors today don’t know any better and Union leaders also don’t have the will to use their means of communication in the interests of their members and workers in general. Artists, journalists and writers have always been associated with workers in their daily-economic struggles and the Union should strive to fight for their interests too.

It always better to err on the side of caution, so once again the magistrate may have done the media a favour by delivering this verdict. On the other hand, I’m also convinced the law does provide the necessary tools to define the matter of this case as libelous. It is an untruth to describe an artist as the character he or she is trying to portray. Imagine an author writing a first-person fictional account of a guy who kills the Prime Minister. In his role as servant to the ultimate master, Victor Vella would probably launch a tirade on how an author is planning to kill the Prime Minister. Is that libelous? Maybe not. Is taking the artist’s work literally and implying it as a state of fact libelous? Is a man a pedophile for playing the act of a pedophile in a play? I think that may be more libelous than not.

Everything we have done at the National Book Council since 2013 has gravitated around one single and main objective: to boost the revenue streams of the publishing industry stakeholders, giving priority to publishers and authors.

In order to achieve this, we had to develop a roadmap which first of all involved rebuilding the entity itself. From a starting budget of €50,000 a year and one employee, we developed to a team of seven employees and an annual budget of €1 million a year, excluding salaries and capital expenditure.

The most obvious and immediate challenge was to renovate the annual book fair, which we rebranded into the Malta Book Festival. This was an outstanding success, as year after year the Festival went on to consistently hit all-time record sales.

Meanwhile, we started building a legal framework on par with EU standards, which was also meant to increase revenue streams. We introduced Public Lending Rights at our public libraries, and we are currently lobbying the University of Malta to adopt the same legal framework to introduce a PLR scheme at its Melitensia section. We are positive that an agreement will be found with the University of Malta and that they will comply with EU law under our direction.

Having built the entity’s financial and adminitrative foundations, we then started a legal process to reform the book industry and bring it into line with EU standards. We introduced a legal notice to formally regulate the National Book Council. This was only the start, as in 2018 we initiated a very long consultation process with our stakeholders meant to implement the necessary legal reforms.

After lengthy consultations with publishers, in 2019, the National Book Council convened the first ever National Congress of Authors, where more than 150 authors had showed their support to the bills being proposed. It is the first time in our history that book industry stakeholders mediated between each other to find a common ground and adopt a coherent policy on their legal and financial affairs.

This process was concluded in August 2020, when two bills have been drawn up and published: a bill which which would give the National Book Council the autonomy it deserves, and the copyright reform bill which will transpose the EU Copyright Directive on the Digital Single Market. The former bill is a consolidation of the already existing legal notice, while the latter will introduce new legal rights for publishers, authors and also press publishers.

Simultaneously, we drew up a legal notice, which has been approved by the Ministry of Finance, to introduce tax incentives for publishers and authors. This financial reform will give publishers a 100% tax break on all royalties paid to authors, while simultaneously make authors’ royalty payments tax free. The long-term plan is to eventually create a publishing tax-free industry, which would not only alleviate the local industry, but hopefully also attract foreign publishers to set up house in Malta and bring in foreign direct investment into our industry and our country.

As of now, the new post-Muscat government administration has refused to acknowledge the parliamentary bills. It is surprising how the government has taken this position notwithstanding the huge support of the industry’s stakeholders. The government should be reminded that it is the National Book Council’s legal obligation to adopt such positions publicly and push for the Government to act.

Additionally, the Ministry of Economy is not only ignoring the National Book Council’s position and requests (through which we represent the publishing industry stakeholders), but it is also forging ahead to arbitrarily impose the transposition of the EU Copyright Directive without our consultation.

Our position on this matter is clear. The Ministry for the Economy, with its politically appointed copyright board, does not have the legitimacy nor the expertise to arbitrarily impose any legal reforms on the publishing industry.

Instead, what should happen for the sake of the industry and the arts industry in general is very clear: the copyright board should be disbanded and the National Book Council should take the lead in transposing the EU Copyright Directive.

This is the only way to create the appropriate structures for the Directive to be implemented through our bureaucratic system.

It would be wise to avoid an approach similar to the conservative government in the UK where the art industries are treated with an unrealistic and detached approach. The government should be aware that the publishing industry is not only providing a net contribution to the economy, but it is crucial for the educational, intellectual and cultural development of our society.

Allowing legal reforms to be implemented by bureaucrats who have no expertise in the field will spell disaster not only for our industry, but ultimately for our society.

I sincerely hope the government comes to term with the necessity of taking the matter at hand with the serious approach it deserves.

We have made our demands in a diplomatic and amicable manner, so the government has no excuses or claims of being under fire by our industry. It is actually us who are currently under fire, without the government’s support and with no recognition whatsoever during the hardest-ever economic crisis in our industry’s history.

https://www.maltatoday.com.mt/comment/blogs/105385/reforming_the_book_industry_during_the_hardestever_economic_crisis_in_history#.X46_bNAzaDI