Introduction
Italian literature has recently seen a resurgence of economic themes. Between 2010 and 2015, novels revolving around, or significantly touching on industry, finance or economic affairs more generally, either won or reached the shortlist of the most popular literary awards.Footnote 1 This tendency might be part of a larger phenomenon occurring in Italian letters, that of a renewed interest in realism as a literary genre (Antonello and Mussgnug Reference Antonello and Mussgnug2009; Bertoni Reference Bertoni2007; Wu Ming Reference Wu2009; Donnarumma, Policastro and Taviani Reference Donnarumma, Policastro and Taviani2008; Palumbo Mosca Reference Palumbo Mosca2014). Literary critic Raffaello Palumbo Mosca, among others, has pointed out that many contemporary Italian writers have gradually moved away from a postmodern conception of literature, in which the focus is on semiotic processes and linguistic conventions, and have increasingly embraced a more traditional representation of reality. This transition, coupled with a renewed aspiration for civic engagement, has resulted in the emergence of new literary forms, such as ‘docu-fiction’ and ‘auto-fiction’, in which facts and fiction are blended in unusual ways (Palumbo Reference Palumbo Mosca2011). Although the works discussed in this paper are not included in Palumbo’s review – nor in the book that builds on it (Palumbo Mosca Reference Palumbo Mosca2014) – they certainly fit his discussion.
Not only have literary juries shown a marked inclination to shortlist books of the kind, but the publishing industry has ridden the wave by increasing the visibility of books that address the post-2008 economic crisis, whatever their perspective on the topic. Pamphlets and political economy popularisations from nearly every political standpoint have flooded the market. Some titles are worth mentioning for the clear intent that transpires from them. From Economisti che sbagliano (Why Economists Got It Wrong, Alessandro Roncaglia, 2010), to Finanzcapitalismo (Finance-capitalism, Luciano Gallino, 2011), Crescere insieme: Per un’economia più giusta (Growing Together: for a Fairer Economy Bernardo Bortolotti, 2013), and Il tramonto dell’euro (The Sunset of the Euro, Alberto Bagnai, Reference Bagnai2012), the economics profession seems to be the main accused. With the advent of the crisis, philosopher Emanuele Severino resumed publishing books on capitalism, 15 years after Il declino del capitalismo (1993). Between 2008 and 2012, he published L’etica del capitalismo e lo spirito della tecnica (2008), Democrazia, tecnica, capitalismo (2009), and Capitalismo senza futuro (2012), all reaffirming in different ways the thesis of the historical and therefore transient nature of capitalism. The Laterza publishing house started issuing a series of pamphlets characterised by a title that reproduces a typical catchphrase of contemporary journalistic discourse accompanied by the exclamation ‘falso!’ (‘false!’). Journalist Federico Rampini has contributed to the series with Non ci possiamo più permettere uno stato sociale (We Can No Longer Afford a Welfare State, 2012). Luciano Canfora is proposing: È l’Europa che ce lo chiede (It’s Europe that’s Asking Us, 2012), Innocenzo Cipolletta has perhaps chosen the boldest title of all, In Italia paghiamo troppe tasse (In Italy we Paytoo Much in Taxes, 2014). Even humour has been affected by the salience of today’s economic discourse. In 2008, blogger and journalist Guia Soncini published a jokey collection of personal anecdotes that, taken together, convey the idea that half of humanity is composed of self-interested, utility-maximising – and therefore detestable – men; hence the title of her book, Elementi di capitalismo amoroso (Elements of Loving Capitalism, 2008). Clearly, the major economic events of the past few years are influencing the Italian literary industry in a significant way.
In 2011, Edoardo Nesi won the most prestigious Italian literary award, the Premio Strega, for his autobiographical ‘docu-fiction’ Storia della mia gente: La rabbia e l’amore della mia vita da industriale di provincia (2010).Footnote 2 The award turned Nesi into a public intellectual. He has since become a regular contributor to Corriere della Sera, and with his following book, Le nostre vite senza ieri (2012), he has abandoned the narrative form in favour of a sentimental chronicle that emphasises his civic engagement. After four years as a member of the Prato provincial government, in 2013 he was elected a member of the Italian parliament.
From an ideological point of view, Storia della mia gente and Le nostre vite senza ieri are in many ways a dissonant note in the Italian literary landscape. They fall within the tradition of ‘industrial literature’ (Bricco Reference Bricco2010), but present the innovative point of view of a business owner. They drastically condemn phenomena such as the ‘precariat’, which is a keystone of contemporary left-wing social criticism, but do not entirely buy into the arguments against labour market reforms that are usually associated with the political left. On the contrary, Nesi laments the lost pre-eminence of the Italian manufacturing industry, and evokes with regret the (not always worker-friendly) policies that accompanied its thriving past. Ironically, the uniqueness of Storia della mia gente has deceived Corriere della Sera pundit Pierluigi Battista, who has included Nesi in an article on how politically engaged Italian writers have always allegedly leaned in favour of the working class and chastised the middle class; clearly an oversight on the part of the journalist (Battista Reference Battista2011).
In this paper, I examine Edoardo Nesi’s views on the Prato industrial crisis as they appear in Storia della mia gente and Le nostre vite senza ieri. By focusing on the city of Prato, Nesi is able to give his account a far-reaching representativeness. The reason for this is that Prato is home to a major industrial district (Becattini Reference Becattini1997), a type of industrial organisation that has been widespread in Italy, is generally thought to have been crucial to the economic growth of the country, and has eventually attracted considerable scholarly interest even from abroad (Sforzi Reference Sforzi1990; Brusco and Paba Reference Brusco and Paba1997; Becattini Reference Becattini1998; De Cecco Reference De Cecco2013). After thriving for decades on the production of textiles, in the early 2000s the Prato district experienced a downturn that resulted in the closure of a large number of factories, or in their takeover by members of the local Chinese community (see the third section of this article).
Giacomo Becattini famously defined the industrial district ‘as a socio-territorial entity which is characterised by the active presence of both a community of people and a population of firms in one naturally and historically bounded area’. As a result, Becattini adds, ‘[i]n the district, unlike in other environments, such as manufacturing towns, community and firms tend to merge’ (Becattini Reference Becattini1990, 38). This definition of the industrial district is key to understanding why Nesi’s discourse may seem powerful and fascinating to many. If it is true that in the context of industrial districts the life of the local community merges with that of the firms, a discussion about that context will inevitably border on issues such as citizenry, culture, and identity. From a rhetorical point of view, this opens an opportunity to supplement a normally dry economic discourse with an emotionally laden evocation of tradition, personal stories, and interpersonal bonds, which is what one finds in Nesi’s books. However, the account of the Italian industrial decline that lies behind that rhetoric is not persuasive and looks suspiciously self-serving.
Nesi depicts the decline of the Prato textile district as an exemplar of Italy’s economic decline. Using an elegiac tone, he relates the crisis of the Prato district to two events that occurred at the turn of the twenty-first century, namely Italy’s adoption of the euro and China’s entry into the World Trade Organization. The decision of Italian authorities to join the European Monetary Union and open the country to the global market appears in Nesi’s books as a betrayal of domestic industry. His literary work opens a window on how economic subjects circulate in the cultural sphere, possibly reaching an audience that is unfamiliar with an economic way of thinking. In this respect, it lends itself to being used as a case study in the public engagement with political economy. For this reason, the focus of my analysis is essentially on the economic arguments articulated in the books and on the messages that transpire from them, rather than on their literary merits.
The paper is divided as follows: the first section presents Edoardo Nesi’s diagnosis of the Prato textile district crisis; sections two and three contain an assessment of Nesi’s case against the euro and globalisation respectively. The fourth section presents a discussion, and the conclusion some final remarks.
Edoardo Nesi’s diagnosis of the Prato textile district crisis
After publishing six novels, and co-translating the first foreign-language edition of David Foster Wallace’s cult novel Infinite Jest, Edoardo Nesi enjoyed his first remarkable success in Italy in 2010, with the publication of Storia della mia gente. In his following book, Le nostre vite senza ieri, Nesi pushed the semi-fictional style of Storia della mia gente to extremes. Le nostre vite does not even have a proper plot, nor does it have any fictional characters that might awake a reader’s curiosity and interest. Instead, the attractiveness of the book lies in its heated discussion of the crisis of the Italian manufacturing industry as a whole. The book is more of a succession of anecdotes and reflections than anything else, and it is certainly not an essay on the state of the manufacturing industry. However, it so closely follows the theme and feel of Storia della mia gente that its interest lies primarily in what the narrating voice, a former businessman, has to say about the matters discussed.
Storia della mia gente blends the story of the macroeconomic events that led to the decline of the Prato industrial district with the author’s biography. These two story arcs meet at the point in which the narrator sells the family company, a moment so crucial that it appears at the beginning of the book. Perhaps because the author was directly involved in the business, the entire narrative appears as a way to put that painful sale experience in a wider perspective. Le nostre vite senza ieri expands on the topics of the previous work and reconsiders some of its implications. It is composed of a succession of chapters, each echoing some literary form – journal entry, poème en prose, short essay, memoir, and so on. Nesi’s experiments with style reflect his multifaceted identity as a fiction writer, entrepreneur, local politician, and public intellectual.
The content of these two books is built around a stylised contrast between a beautiful past and an ugly present that encompasses at once the author’s personal life and Italian industrial history. Storia della mia gente begins as a collection of youth memories that, taken together, give the impression of a personal and collective golden age. The narrator evokes his days as a summer school student at some of the best American colleges, the discovery of his literary passions and concomitant disengagement from his business studies, and his enthusiastic business trips in luxury cars running at full speed on German motorways. All of this comes to the reader as an evocation of the material well-being of the entire Italian upper-middle class between the 1980s and the early 1990s. Conversely, the second part of the book focuses on the years that followed the author’s sale of his family business in 2004, and on the steady decline of the Prato textile industry taken to symbolise the downturn of the entire Italian manufacturing sector. In place of the euphoric pages that characterise the first part of the book, the reader is presented with a series of disheartening episodes, such as a vivid narration of the miserable working conditions of Chinese workers in the author’s former factory; a demonstration of unemployed artisans and employees demanding government support for their businesses; and a number of diatribes against policymakers and opinion leaders blamed for giving political and intellectual support to the policies that allegedly led to the present state of affairs. It is in the context of these attacks that Nesi articulates his twofold economic contention: namely, a critique of the conditions that Italy allegedly underwent to take part in the European Monetary Union, and a rejection of the international agreements that have exposed Italian manufacturers to the competition of developing countries. As the old lira is bemoaned because of the competitive devaluations it made possible, the disappointing state of labour is seen as an outcome of granting free movement of labour, capital, and goods between China – and by extension all the developing countries taking part in the free exchange agreements – and the West.
Nesi’s case against the euro
In more than one passage, Nesi criticises the adoption of the European common currency on the grounds that, by doing so, the Italian government would lose the opportunity of using currency devaluation to boost the country’s industrial competitiveness. For example, in one passage of Storia della mia gente, Nesi writes:
Italy […] an aggressive and rapacious industrial system set in the heart of the Mediterranean basin, willing to devaluate the lira anytime it proved convenient and indifferent to the sheer astronomical girth of its public debt, because it had nearly all been financed on the domestic market and was therefore, as time would show, if necessary, perfectly taxable. (Nesi, Reference Nesi2013, 142)
The idea of increasing Italy’s export capacity by devaluating the lira is reiterated in Le nostre vite senza ieri. In the chapter ‘Quasi sette miliardi’ (‘Almost seven billion’) Nesi reintroduces the protagonist of his first successful novel, L’età dell’oro (2004), in order to construct a fantasy of wealth and success reminiscent of the old times. The scene in question shows the accountant of a textile firm communicating to the exuberant owner, Ivo Barrocciai, that the company would make a profit of almost seven billion lira at the end of the fiscal year. The climax of this scene is worth quoting in full:
Only after having been given the last digit of the small change, did [Ivo Barrocciai] realise that he had just been told that in that year he would have earned almost seven billion. [...] As if he had won an Oscar, Ivo thought it was time to thank all those who had helped him, and the first thought was Giuliano Amato, who in 1992 had to devalue the lira and let it fluctuate – in fact, plummet – for three years straight against the Deutchmark.Footnote 3 (Nesi Reference Nesi2012, 26)
Aversion to the euro is not new in Nesi’s writings. In L’età dell’oro (2004), one anti-euro rant by the protagonist Ivo Barrocciai is given a large and prominent space. Although the tone of the speech must be contextualised as the raving of a man afflicted with an incurable illness, its content clearly deviates from the novel’s specific situation, and closely relates to what is found in Nesi’s succeeding less fictional works. In L’età dell’oro the euro is presented as bad, not only because it puts a stop to the devaluation policies of old, but because it also humiliates a whole generation of industrialists by presenting them with an opportunity – that of investing in extra-European markets – that they can do little about:
How foolish of us, how stupid to always sit and complain rather than exploit the great opportunities. And while every single day we would lose more orders and market shares, we felt really stupid and dull and unintelligent and cowardly – real pieces of shit – for avoiding running into incredible debts in order to open a firm in China. And we would rather think, more simply, that perhaps we had never been that good to begin with, that the whole Made in Italy story was just a fairytale, that we Italians had earned money as long as it was easy, but when the going had got tough we hadn’t got going, and the Golden Age was over … (Nesi Reference Nesi2004, 177)
To be fair, Nesi never allows himself to suggest that Italy should exit the eurozone. The reason he gives, however, is not one of merit, but one of opportunity. In other words, Nesi never questions the idea that the Italian economy would perform better without the euro, he simply acknowledges that going back is at this point unfeasible (Nesi Reference Nesi2013, 140–141; Nesi Reference Nesi2012, 92).
From a rhetorical point of view, Nesi’s stance against the euro employs some commonplace perceptions – ‘the euro made everyone worse off’, or ‘Italy’s debt problem is exasperated by its eurozone membership’ – to support a disputable policy such as currency devaluation, which has many undesirable implications. From the perspective of a system of small businesses producing the same product for three generations without putting too much effort in marketing or innovation,Footnote 4 the end of an era in which accommodating governments would lower the purchasing power of consumers in order to save the income of a few endangered producers makes perfect sense. However, from a consumer’s perspective, the same reasoning may come across very differently. It may sound like a regret that inefficient producers can no longer thrive at the expense of consumers – clearly a more distasteful proposition. The quotation below shows that Nesi does acknowledge that the market power enjoyed by firms such as his own in the 1980s was due in part to a tolerant attitude by foreign partners:
He then thanked his German clients, who had never asked him to return a single mark of that purely financial gain that Barrocciai Textiles had collected through the devaluation of the lira, and he wondered if it wasn’t for the memory of the Weimar catastrophe still fresh in their collective consciousness and of tragic events that can hit a nation – obviously not Italy, he thought – when its currency incessantly loses value.Footnote 5 (Nesi Reference Nesi2012, 26–27)
However, Nesi fails to mention the implication that the thriving of businesses like his own required the relative impoverishment of fixed-income earners who would see their purchasing power decline in proportion to the devaluation of the currency.
Interestingly, that the Italian system of industrial districts could no longer rely on such policies was known as early as in the early 1990s – a decade before China’s entry into the WTO. For example, Carlo Trigilia pointed out at the time that:
During the 1980s, a number of the exogenous variables that previously operated in the interests of small firms in Italy underwent change. Macro-economic policies pursued at national level were modified, with important repercussions on exchange rates and credit. In particular, Italy’s entry into the European Monetary System (EMS) put an end to the policy of gradual lira devaluation that had propped up Italian exports throughout the 1970s.Footnote 6 (Trigilia Reference Trigilia1992, 39)
In other words, warnings that the traditional way of doing business could not last long because the upcoming international context would render it unsustainable were not missing. In fact, they were quite clearly expressed. In the early 1990s, the international district system – the most widespread industrial model in Italy – was predicted to evolve into what Sengenberger and Pyke (Reference Sengenberger and Pyke1992) metaphorically called either a ‘high road’ or ‘low road’ of development. While the former would result from investments in product and process innovations – e.g., by employing skilled labour and producing goods of high added value – the latter meant cutting costs in order to keep the product competitive without incurring the risks that come with investing in innovation. Recent surveys have found that low-tech firms that have successfully survived the end of the competitive devaluations era have taken the former course of action, i.e. they have sought product differentiation in order to avoid pure cost competition and in some cases have profoundly restructured the business (Bugamelli, Schivardi and Zizza Reference Bugamelli, Schivardi and Zizza2010, 123; Buono Reference Buono2014, 34).
In contrast to those recommendations, Nesi’s books convey the idea that globalisation – understood in the narrow sense of ‘competition from developing countries’ – is simply unfair, and government should protect domestic industries. Because the Prato textile district of old is now largely in the hands of Chinese producers, China emerges in Nesi’s books as the embodiment of unfair industrial competition.
Nesi’s case against globalisation
Both Storia della mia gente and L’età dell’oro contain a section in which the decline of the Prato industrial area correlates with the settlement of Chinese communities (see Nesi Reference Nesi2004, 41–48 and Reference Nesi2013, 101–114). In the chapter ‘Immediately’ of Storia della mia gente, Nesi contrasts the degraded environment of a Prato Chinese sweatshop with the values reflected in Italian labour laws and regulations (Nesi Reference Nesi2013, 101–114). The conditions of decay and misery in which the Chinese workers operate and live – the factory is also their lodging – are juxtaposed to many descriptions of the working environment of the past, one in which employers and employees acted jointly in what Nesi describes as ‘perfect little working models of the most exciting dream of capitalism, that exceedingly rare phenomenon that makes capitalism something verging on morality, whereby the most skilful and ambitious workers who decide to go into business for themselves had a good chance of succeeding …’ (Nesi Reference Nesi2013, 20).Footnote 7
Indeed, the Prato district was known for its relatively generous wages and benefits, as well as for a degree of social mobility uncommon in other districts (Brusco and Paba Reference Brusco and Paba1997, 309). Therefore, between the 1970s and the early 1990s, Prato might well have looked as Nesi depicts it:
[A] system of production that is insanely fragmented but incredibly efficient, made up of hundreds of microcompanies, many of them family-run, each of them working in an intermediate phase of the production and supply chain, each with its own name, its corporate pride, and its profitable balance sheet. (Nesi Reference Nesi2013, 20)
However, it is hard to believe, following Nesi’s train of thought, that heaven turned into hell in the span of twenty years.
The influx of Chinese immigrants in Prato and their settlement in the local industrial context has been the subject of numerous studies (Ceccagno Reference Ceccagno2003; Fladrich Reference Fladrich2012; Johanson Reference Johanson, Smythe and French2009; Quintieri Reference Quintieri2006). A review of the literature suggests at least three things. First, the phenomenon is today in such an advanced state that there is no way to set it back; the reason for this is that ethnic businesses benefit local territories and domestic partners in a way that both domestic producers and local politicians would find hard to remove.Footnote 8 Second, ethnic businesses revive the dynamism and flexibility that made the fortunes of the small-medium Italian firms of old. Although in some cases this means employing workers in insalubrious environments and at substandard hourly wages, the majority of the Prato immigration stories are those of small-scale entrepreneurship, networking, and self-employment, not corporate-like exploitation (Fladrich Reference Fladrich2012; Fladrich Reference Fladrich2009; Dei Ottati Reference Dei Ottati2009; Kwong and Sanderson Reference Kwong and Sanderson2014). Third, and most importantly, ethnic businesses thrive in Prato because the existing industrial environment has not evolved for decades and has therefore remained a good fit for unskilled labour and adventurous business people. Gabi Dei Ottati has summarised this situation as follows:
The economic environment of the district, with its many small firms specialising in the various phases of the processes of production much like those already known from their place of origin constituted an altogether favourable context of arrival for these immigrants – not only because the productive structure of the districts was not much different from that of the areas they come from, but more importantly because it provided them with opportunities to make good use of the economic and socio-cultural resources at their disposal. For they did in fact possess a modicum of professional skill (the ability to sew, or to iron, for example) and entrepreneurial skill (the ability to manage their relatives’ work, or to conduct commercial exchanges), but above all, they had easy access at very favourable conditions to the labour and finance required to start up autonomous businesses, thanks to their family and community relationships. (Dei Ottati Reference Dei Ottati2009, 32)
Recently, a Bank of Italy report on the innovation gap of the Italian industrial system has pointed out that the weakness of Italian small-medium manufacturing firms can be traced back precisely to their size, a characteristic that entails (1) easier access to bond financing over equity financing, and (2) a family-centered managerial structure (Bugamelli et al. Reference Bugamelli, Cannari, Lotti and Magri2012). Despite important exceptions, debt capitalisation and family governance are known to discourage risk-taking and thus hinder innovation (Bugamelli et al. Reference Bugamelli, Cannari, Lotti and Magri2012, 14–15).Footnote 9
All of the above means that the self-contained world of family businesses interacting in a relatively stable market (that Nesi recalls with nostalgia) is causally connected to the failure story of Storia della mia gente. The ‘exogenous challenge’ that surfaced in the mid-1980s required industrial reorganisation at all levels, from labour relations to institutional arrangements. On the contrary, from 1992 to 2001, the influx of Chinese labour to Italy more than tripled (Ceccagno Reference Ceccagno2003, 196), a figure that reveals what choice was made to face the challenges of the changing market. Instead of trying to adapt to change by pursuing a ‘high road’ of development (Sengenberger and Pyke Reference Sengenberger and Pyke1992, 11), many businesses relied on reducing costs through the employment of cheap immigrant labour (see also Dei Ottati Reference Dei Ottati2009; Bugamelli et al. Reference Bugamelli, Cannari, Lotti and Magri2012). One unintended consequence of this choice is that the Prato district ended up attracting immigrants from the Zhejiang province, which Dei Ottati describes as
one of China’s most developed provinces thanks to the entrepreneurial spirit and propensity for commerce of its inhabitants who, from the 1980s, piloted an economic growth founded on small family businesses specialising in the manufacture of various light industry products such as garments, buttons, and shoes. (Dei Ottati Reference Dei Ottati2009, 31)
In other words, the immigrant community found the technological and organisational context of the Prato district an ideal place to start up businesses; ironically, it also played a key role in creating the only salient innovation expressed by that district in years – Pronto Moda. The bottom line is that because of decades spent working with the techniques, management, and investment levels that Nesi celebrates in the first chapters of Storia della mia gente, by the 1990s the Prato district was ready to absorb an immigrant community capable and willing to do the same job at a lower cost. Of course, labour conditions such as those described in the chapter ‘Immediately’ do look ugly, but they are neither specific to the textile sector nor to the immigrant economy itself. Poor labour conditions are ubiquitous in Italy: for years the country has registered the largest number of fatal work accidents in Europe (Eurostat 2013). Furthermore, these figures have started dwindling in recent years – coinciding with the establishment of immigrant businesses in certain sectors – showing that Italian labour safety issues have little, if anything, to do with the advent of Chinese immigrant businesses (Povoledo Reference Povoledo2009).
Discussion
Interestingly, the seeds of the district’s failure are revealed by Nesi’s own enthusiastic descriptions of how it worked:
Try to imagine a product that for 30 years never needs to be changed. Imagine a company that only manufactures that product and whose one problem, if it has any problem at all, is that it can’t keep up with the demand of a market that is so strong and vast that the threat of competition is not worth worrying about. […] Zero expense for research and development, trade fairs, advertising, or fashion consultants. […] Laugh till your belly aches at the idea of having to hire an outside executive to take over the work that you’re perfectly capable of doing yourself. […] But the best thing about it, the truly fantastic thing, is that you didn’t have to be a genius to rise to the top, because the system worked so well that even dimwits made money, as long as they were willing to work; even idiots could make money, as long as they dedicated every minute of their days to their work. (Nesi Reference Nesi2013, 19–20)
Despite its emphatic tone, the above depiction actually portrays an alarming industrial scenario. A product that does not need rethinking for 30 years is likely a product that is hedged from competition. The state of affairs evoked in the above passage is suspiciously close to protectionism, which means that the enthusiasm Nesi projects onto his memories is tainted with regret for lost privilege. Moreover, a sentence such as ‘[z]ero expense for research and development, trade fairs, advertising, or fashion consultants’ should be nothing to boast about: a firm that can afford to economise on marketing and Research and Development is likely a firm whose customers do not have many alternatives to choose from. The thriving of such a firm may be a sign that better or cheaper products are not admitted to the market in which the firm operates. A third-generation business owner such as Nesi, incessantly reminding the reader how much more interested he has always been in becoming a writer rather than a creative and innovative manager, might well look back on the above scenario with nostalgia. However, from a political-economic point of view, that temporary market power scenario, as history would shortly show, was neither ‘beautiful’ nor ‘stunning’. It was the outcome of the social and historical context in which that industrial scenario emerged.
In the early 1960s, as a result of the ‘economic miracle’, Italy achieved full employment for the first and only time in its history (Rossi and Toniolo Reference Rossi and Toniolo1996, 442). However, Italian society had a hard time adjusting to the economic reality created by a largely unanticipated economic growth. To quote the incisive synthesis of Nicola Rossi and Gianni Toniolo:
Italian capitalists, unprepared as they were to face full employment, were slow to adjust to its most immediate political and industrial relations consequences. Trade unions gained wider consensus and stronger bargaining positions […], but were not culturally and ideologically equipped to use their newly acquired power to foster growth rather than to push for drastic immediate changes in income distribution.’ (Rossi and Toniolo Reference Rossi and Toniolo1996, 443).
In such a conflictual situation, attempts at implementing institutional reforms that would help the transition process and prepare the country for future challenges proved difficult (La Malfa Reference La Malfa1962). In 1964, an attempted coup by sections of the armed forces put an end to the reformist agenda. Between 1960 and 1970, the number of strike hours recorded was more than 170 per cent higher than the preceding decade. In 1969, the Piazza Fontana terror attack and its aftermath would disclose the full extent of the tensions that had grown within Italian society.
The political climate of the time, coupled with an economy growing at around 6 per cent, prompted government and social partners to pursue a policy of appeasement. Both sides received their share. Large-scale industries such as the automotive, chemical, and steel industries, assisted by the government, became concentrated in the hands of a few groups, in the form of what is today commonly called ‘crony capitalism’. Small to medium companies were granted fiscal and legal advantages together with a series of protections, such as import restrictions and – after the oil crises – competitive currency devaluation (Brusco and Paba Reference Brusco and Paba1997). Labour’s share included a series of regulations that constrained work organisation and the wage system. In particular, a Worker’s Charter approved in 1970 strengthened the bargaining power of workers and introduced tight restrictions on the hiring and firing processes. Wherever such constrains did not apply, as was the case in small firms, local authorities would step in with significant redistributive policies. As Trigilia notes:
[T]he point to stress is that in small business areas in the past a relation between politics and the economy was generally created at a local level. It was based mainly on redistribution. A kind of division of labour between business, unions and local government developed. Business was free to respond flexibly to market opportunities. Union and local government bodies concentrated their energies on compensation for labour flexibility. […] The regional governments joined this mechanism in the 1970s basically to provide backing for the redistributional action of the local authorities, and the local regulative framework. (Trigilia Reference Trigilia1992, 43)
All this means that in the fragile democracy of a country that had gone through 20 years of Fascism and a two-year civil war, government used public expenditure as an instrument for mitigating social conflicts and gaining political consensus. As a result, between 1950 and 1975, social transfer expenditures as a percentage of GDP rose from 9.3 to 19.6 per cent, making Italy the third largest spender among Western industrial countries on welfare programmes in proportion to GDP (Kohl Reference Kohl1981, 318). The growth in public expenditure would continue in the following decades, planting a time-bomb in the state budget with the introduction of an earnings-based pension scheme for public and private employees that would eventually take nearly 20 years (1995–2012) to reform.Footnote 10
After more than a decade of tumultuous convergence growth fuelled by, among other things, a high elasticity of labour supply, full employment and ideological/political conflicts brought the economy to a standstill. Italy continued to grow until the 1990s; however, ossified industrial relations, extravagant public spending, and stagnant productivity contributed to making the country dramatically ill-prepared to face the challenge of globalisation.
The industrial system Nesi praises as reflecting ‘what at the time were the rules of the free market’ (Nesi Reference Nesi2013, 138) was far from reflecting a textbook free-market system. It rather reflects a self-serving notion of the free market – a notion that is given a positive connotation when used to describe the opportunities of the Prato textile district of old, but a negative one when it allows for easier imports of cheaper consumer goods. A market is free when it has no entry barriers and is therefore open to innovation and creative destruction. None of this is evoked in Nesi’s words, which, on the contrary, depict ‘a perfect, closed world, protected by barriers and nuclear warheads, by customs policies and tariffs’ (Nesi Reference Nesi2013, 137).
To be fair, in the chapter ‘We can’t take it anymore’ Nesi does indeed address the problem of competitiveness. Reflecting upon the worries voiced by fellow citizens during a protest march about the impending fate of the Prato district, Nesi writes:
It strikes me as unnecessary to respond sincerely to their straightforward question, but still I can’t bring myself to tell them that it’s our fault, too, that we thought we could go on indefinitely doing the same work our fathers did as if it were an established and inviolable right, that we were kidding ourselves if we thought that we could go on in the third millennium selling the same fabrics they used to produce, made out of the same raw materials and the same yarns, weaving them on the same looms, dyeing them the same colours, finishing them the way our fathers had finished them, selling them to the usual customers in the usual markets. (Nesi Reference Nesi2013, 158)
However, Nesi’s use of the pronoun ‘we’ in this paragraph is misleading. In the context of the book, it sounds like a generalisation involving most, if not all, Italian businesses such as his own, but the reality is more nuanced and not all have something to feel sorry about. Some businesses have countered low-wage competition by engaging in product innovation, a choice that proved felicitous without requiring significant financial exposure (Buono Reference Buono2014). Commenting on the results of a 2007 Bank of Italy survey of about 40 Italian firms, mostly in the manufacturing sector, Bugamelli et al. (Reference Bugamelli, Schivardi and Zizza2010) write:
Entrepreneurs are generally very clear that given the growing role of low-wage countries in the world trade, competition based on production costs is rapidly becoming unsustainable […]. All the firms that were surviving or even prospering in the globalized economy offered products that had a certain degree of differentiation and thus escaped pure cost competition […]
In the traditional sectors of clothing and shoes, in particular, Bugamelli et al. 2010 find that
[t]he success stories entailed a shift of the business focus away from production toward brand creation and product design while maintaining a coordinating role in production, which was mostly outsourced, often abroad. […] The prototypes of successful firms suggest that competitive strength is built outside the factory by workers not directly involved in the production process. (Bugamelli et al. 2010 Reference Bugamelli, Schivardi and Zizza2010, 123).
These findings do not refer to isolated occurrences in the minds of a few imaginative entrepreneurs. As far back as in the early 1990s, it was already clear that managerial and political efforts should have been channelled towards what Sengenberger and Pyke, speaking of district-delimited co-operating firms, termed ‘constructive competition’. In addition to raising labour standards, this meant increasing the use of technology, and specialising in activities not directly involving production, such as brand establishment, domestic and foreign sales networking, and market research (Sengenberger and Pyke Reference Sengenberger and Pyke1992, 12–16). What did not appear as obvious back then was the inevitable drop in production workers, which may have stemmed as much from the rigidity of the labour market as from the changed conditions of production and trade.
Conclusion
Nesi’s loaded rhetoric exploits the emotional impact of the post-2008 recession to blame the Prato district crisis on the euro and globalisation. In doing so, Nesi also suggests that the crisis of Italian small-medium manufacturing firms as a whole is essentially due to factors that business owners, such as himself, could not control.
However, the above discussion shows that knowledge of the risks brought about by the adoption of the euro and the easing of global trade was available even in the years of the so-called second economic boom, i.e. between the 1980s and early 1990s. Storia della mia gente and Le nostre vite senza ieri do not address why Nesi and his fellow Prato industrialists did not preemptively act in anticipation of prospective competition; only in a couple of passages does Nesi give a hint that they may not have been up to the task. The nostalgic tone of Storia della mia gente and the spirit of national solidarity that emerges from Le nostre vite senza ieri downplay the responsibilities of business owners who neglected to prepare for the challenges that – as the economic literature shows – were long predicted. Regrettably, a time in which Italy squandered its hard-won prosperity is today increasingly being evoked in political discourse with nostalgia and undertones of longing. The arguments of Nesi’s J’accuse have become an integral part of public discussion, and are reflected in the platforms of populist political parties, such as the Five-Star Movement and the Northern League.Footnote 11 Despite the political differences that distinguish the recently-born movement led by comic actor Beppe Grillo and the long-time governing force Lega Nord, prominent members of both parties have several times voiced their stance against the euro – especially after the 2011 sovereign debt crisis, during which the then Prime Minister Silvio Berlusconi resigned in favor of Mario Monti. Following the austerity measures undertaken by the Monti government to restore public finance, the euro came to be seen by the extreme wings of the political spectrum as a burden on the Italian economy, and a symbol of a new German imperialism. In late 2014, the Five-Star Movement submitted a petition to the Court of Cassation to hold a referendum on the adoption of a new currency (F.Q. 2014). Earlier that year, Lega Nord leader Matteo Salvini and the party’s economic advisor Claudio Borghi participated as keynote speakers in a rally called ‘Basta Euro’. The web page dedicated to that event contains a downloadable e-pamphlet entitled Basta euro: Come uscire dall’incubo (Enough of the euro: how to get out of the nightmare), edited by Claudio Borghi (Reference Borghi2014). The booklet is a textbook example of how to oversimplify a highly complex matter using metaphorical language and brightly coloured illustrations in order to reach the widest possible audience. In line with Nesi’s views on globalisation, both the Five-Star Movement and the Northern League have expressed concerns about free-trade agreements. For example, both parties have recently been involved in a campaign against the Transatlantic Trade and Investment Partnership (TTIP), making it appear as a conspiracy of multi-national corporations against European environmental and labour protections (Il blog delle stelle 2016), or as a threat to Italian small-medium firms (Salvini Reference Salvini2015). Although it is true that the TTIP might negatively affect some sectors of the European economy (European Parliament 2015), it should be noted that, contrary to popular belief, all the relevant documentation about the ongoing negotiations is available online, which means the treaty should be called anything but a ‘conspiracy’ (Morganti Reference Morganti2016).
As a former business owner turned popular writer, Edoardo Nesi was certainly in a position to clarify and popularise the intricate political-economic questions behind the downturn of Italian manufacturing firms. It is a shame he chose not to question his own performance as an industrialist, or venture beyond a story of personal and collective vindication.
Acknowledgments
Support for this research was provided by the International Centre for Economic Research (ICER), Turin, Italy. The author would like to thank Tatjana Marjanović and two anonymous reviewers for their helpful criticism and comments on an earlier draft of this paper.
Notes on contributor
Stefano Adamo is an assistant professor of Italian culture at the University of Banja Luka in Bosnia and Herzegovina. His main research interests are the analysis of ideology, cultural beliefs, and the rhetoric of public discourse, which he studies from the perspective of the cultural diffusion of economic ideas. He has published in peer-reviewed journals of intellectual history, interdisciplinary studies, and literary studies, such as The International Journal of Interdisciplinary Social Sciences, Strumenti Critici, and Il pensiero economico italiano. He is currently working on a book on the response of Italian writers to the global financial crisis, covering the years 2008–2014.
