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13. Power and Economics in Italy: From the Social Conflicts of the 1970s to the Euro-Crisis

Author : Piero Bini

Published in: Power in Economic Thought

Publisher: Springer International Publishing

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Abstract

Bini analyses the multifaceted issue of power in relation to the major economic events occurring and studies performed in Italy from 1970 to 2014. Dividing this time span into three sub-periods, he explores the relative emergent powers for each of them: the power of the workers in the 1970s, of the Italian Central Bank in the 1980s and of the Maastricht rules from the 1990s. The chapter seeks to ascertain how it is that the manifestations of power in Italy very often failed to activate adequate economic counter-powers, thereby generating asymmetric processes of change, unfavourable to growth. The author also explores the Italian economists’ contributions to analysis of the issue of power from the point of view of economic theory and economic policy.

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previous chapter Keynes and Eucken on Capitalism and Power

Among the various criticisms to this position, see in particular Stigler (1954).

That these were the questions we chose to raise and, indeed, the very way we chose to formulate them may be seen as bearing out the increasing influence exerted by the work by Michel Foucault (2008) on the subject of the reciprocal influence between power and the economic sphere.

It is beyond the scope of this relatively concise chapter to provide detailed information on the Italian economists of the period. Those interested in a more exhaustive review of this argument are referred to Bini (2013).

See, for instance, Spaventa (1974). For a broad outline of Sraffa’s contribution, see Roncaglia (2005: 435–466).

See, for instance, Izzo et al. (1973).

In particular, the need to involve the public enterprise system was vigorously argued by Graziani (1969).

We refer here to economists such as Domenico Mario Nuti, Claudio Napoleoni, Guido Carandini and indeed many more. For various internal developments in the Marxist debate in Italy at the time, see Gattei (1981).

Among these scholars we may mention Pierangelo Garegnani, Andrea Ginzburg, Ferdinando Vianello and Sebastiano Brusco.

Cf. Graziani (1981).

On this issue, see, for instance, Pivetti (1974) and (1976).

See Takata (1995), p. 157.

Cf. for example, the analysis carried out by Ciocca (2007).

This assessment is also confirmed by a close collaborator of Craxi in that period, Gianni De Michelis (2005), p. 175.

Cf. Alesina (1988).

See De Cecco (1989), p. 229.

For the Italian debate on this issue, see, for instance, Cesarano (1980).

For instance, see Arcelli, Di Giorgio (1991). A general overview on this topic is in Asso (2004).

The Treasury Minister who promoted the “divorce” was Beniamino Andreatta, an economist by profession. He was an outstanding figure in Italy’s economic policy in the 1980s. On Andreatta, see Sandonà (2017).

See, for instance, Jossa, Panico (1988), Masciandaro, Ristuccia (1988), Arcelli (1992), Nardozzi (1993).

See Graziani (2001), pp. 190–192.

Cf. Nardozzi (1992).

Cf. Vaciago (1992).

There was no lack of criticism of, or indeed of different points of view towards, this plan to reorient the Italian economy. Cf. for example, De Cecco (1992), Kregel (1993), Fratianni and Spinelli (2001), Sartor (2005).

Cf. in this connection Banca d’Italia 1983 Annual Report, Final Considerations, p. 15.

Cf. for example, Banca d’Italia 1982 Annual Report, Final Considerations, p. 35.

See the contributions published in journals by Monti (1981a, b) and the comment on them made by Paolazzi (1993).

A summary can be found in Bruni, Monti (1992). However, the authors themselves were not entirely convinced of the effectiveness of this approach, recommending that the budget constraint be stated in the Constitution.

In this approach the greater political cost of the deficit corresponds to the current value of the taxes which the policymaker will have to levy in the future to pay off the public debt thus generated. Discount of future taxes is achieved employing a discount rate equal to the intertemporal preference rate of the policymaker. The value assumed by this rate reflects the extent and promptness attributed by the latter to the capacity of public expenditure to satisfy his need for political consensus in the electoral competition.

The same weaknesses emerge from the broader analysis conducted by Grilli et al. (1991). On the issue of Italy as a “weak state” from 1960s onward see also Della Sala (1997), p. 19.

This expression is by Guarino (1988), p. 272.

Cf. Rossi (2007), p. 57.

Cf. Ciocca (2007), p. 307.

According to Bank of Italy data—cited by Somogyi (2005)—public primary expenditure rose from 37% of the GDP in 1980 to 43% in 1989.

Cf. Giannola and Marani (1990).

Cf. In this connection the observations by De Felice F. (1996), p. 86 ff.

According to this principle, in the presence of free international movements of capital flows, monetary autonomy or, alternatively, exchange-rate management is precluded for the economic policy authorities.

Such as the weakness of Italy’s productive specialisation model, or the small average size of the firms or again Italy’s difficulty in exploiting the advantages of the technological revolution. The list could go on.

In this line of discussion reference is often made to the law of Kaldor-Verdoorn, according to which growth in productivity is driven by aggregate demand.

For a review of this issue cf. Pacella et al. (2013).

On the issue of public administration reform, see the critical comments by Schlitzer (2015).

The argument regarding the shift of power from the European institutions to Berlin has recently been analysed by Brunnermeier et al. (ed.) (2016).

As is well known, there are many orientations in the field of Keynesianism, from the mainstream neo-Keynesians to the heterodox post-Keynesians. Many discussions of a Keynesian nature are hosted in Keynesblog.

See, as a general reference, Cesaratto and Pivetti (2012).

On certain limits to this approach, cf. Bowles et al. (1999).

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Title: Power and Economics in Italy: From the Social Conflicts of the 1970s to the Euro-Crisis
Author: Piero Bini
Publisher: Springer International Publishing
Book: Power in Economic Thought
Print ISBN: 978-3-319-94038-0

Electronic ISBN: 978-3-319-94039-7

Copyright Year: 2018
DOI: https://doi.org/10.1007/978-3-319-94039-7_13