Tariq Ali: Why the world needs Silvio Berlusconi

The use of Italy as a yardstick to measure the politics, history, religion and culture of Western Europe has a long pedigree. For over a century and a half now, Italy has pioneered ideologies that have dominated Europe in one form or another. Garibaldi's radical nationalism, which unveiled a path that led directly to the unification of Italy, was greatly admired by Abraham Lincoln. Mussolini's fascism, a populist mechanism devised to beat back the challenge of the Russian Revolution, won the open support of Winston Churchill. The resistance to that fascism was led by Italian Communism, whose most original theoretician, Antonio Gramsci, left behind a set of allegorical prison notebooks. These were to become the rocks that provided the Italian left with strong foundations.

In another realm, the protection rackets pioneered in Naples and Palermo were trans- ferred to Chicago and New York and widely mimicked elsewhere, the most recent successes being registered in Moscow and St Petersburg. Then came Bettino Craxi (the real godfather of New Labour), who destroyed the Italian Socialist Party by jettisoning every political principle it had once stood for and transforming a lively, democratic party into an instrument for personal gain. Craxi did become Prime Minister, but had to flee the country once the magistrates were on his trail. He died in his Tunisian exile. And on another register, Umberto Bossi and his Northern League have given regionalism a bad name by linking it to the crudest forms of xenophobia and demagogy. "Garibaldi," he claims, "did not unite Italy. He divided Africa."

And this brings us rather neatly to the figure of the much-derided Silvio Berlusconi, the crooner-turned-politician who is currently the supreme leader of the Italian Republic. Portrayed by his enemies as a vain and corrupt monster and by his supporters as the new saviour of the nation, Berlusconi is the clearest reflection yet of the Americanisation of European politics. Firm government can only be a government of the firm. And Fininvest is clearly in charge.

In Italy Berlusconi has found himself at the heart of a new dispute over conflict of interest. As this row centres on il calcio (football), you will realise the extent to which the Italians have taken it to heart – and just how Berlusconi is up to his neck in it. The crisis has come about because the Italian football league has asked the state broadcaster RAI for more money to show weekly football highlights. Berlusconi owns the Serie A club AC Milan, so he has a personal interest; as leader of the Italian parliamentary majority he controls RAI, which objects to the price asked; as owner of the largest commercial broadcaster, Mediaset, he would benefit from any TV rights dropped by RAI. The dispute is now so bad that the start of the football season has been delayed by two weeks. And guess who's now been called on to mediate in the crisis?

Until now, football has done Berlusconi proud. He has used the kudos of the national sport to promote his political career, and he has also been able to bask in the success of his top club. Now, the place where politics meets capitalism has become trickier to navigate.

By coincidence, I was in Turin the week after Berlusconi's electoral triumph nearly two years ago. Reports in the Italian press suggested that while the French and German governments were maintaining a certain reserve, Tony Blair was the first European leader to ring Berlusconi and congratulate him on his victory. A few weeks before the Italian elections, The Economist, that normally sober organ of transatlantic capitalism, published an unflattering cover portrait of the Italian magnate beneath the headline, "This Man is Not Fit to Run Italy". Leaving aside Berlusconi's alleged business links to the mafia, his conflicts of interest and his shady business practices, there was the additional fact that fascists are part of his coalition.

Remember the EU boycott of Austria? Well, what about Italy? And yet Blair's instincts could not be faulted. He knows that Berlusconi is going to "reform" Italy just as Thatcher "reformed" Britain, cutting taxes and changing the labour laws. Until now none of these "reforms" has been pushed through, for unlike Britain and America, the workers' movement in Europe has not suffered a crushing defeat. In Italy, France and Germany the unions have collaborated with centre-left governments, but prevented them from going all the way. When they did – as in the case of Jospin's privatisations in France – their supporters stayed at home on election day.

European capitalists may believe that this hinders competition with the deregulated US and Britain, but in Italy the situation is clear. A clash will take place. Neither side can be sure of victory, and it is this reality that makes Berlusconi nervous. The public-sector workers in Italy are unlikely to surrender without a struggle. Earlier in the year a strike brought the country to a halt as more than a million marched in Rome. The government denounced the use of the street as "a threat to Italian democracy", but there is a growing disaffection with democracy.

The failure of the centre-left to deliver anything substantially different from its centre-right rivals helps explain why New Labour enjoys the fulsome support of the leading organ of big business, the Financial Times; unpredictable but uniform support from the Murdoch empire, total support from the Express group, and a BBC now packed with its own placemen. No previous Labour government has possessed anything like this level of media protection.

The reason for this treatment is two-fold. On the one hand, the Conservative Party is far more crippled by a combination of Europhobia and class "drop" than it has been in the past century – it is not a credible alternative. More importantly, why should capital in general, or newspaper magnates in particular, object to the policies of this government? Apart from individual aversions to the EU, there is no good reason. Yet the rot has gone deep. Public enthusiasm for the New Labour project has declined considerably. Trades unions are popular again.

In the last century capitalism was on the defensive and social democracy was on the offensive. That situation has now been reversed. With the disappearance of a global enemy, capital can now concentrate on the "enemy within" and all the concessions it was forced to concede can be clawed back. In other words social and democratic rights will have to be fought for once again against the might of a triumphal capitalism. That's why the three Bs – Bush, Blair and Berlusconi – may well end up uniting the rest of the world.