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The Postwar Italian Economy: Achievements, Problems, and Prospects

Published online by Cambridge University Press:  18 July 2011

George H. Hildebrand
George H. Hildebrand
Affiliation:
University of CaliforniaLos Angeles
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Extract

WITHIN the past year, the Italian government has revealed a ten-year program, known as the Vanoni Plan, for the development of the Italian economy. By the investment of $56 billion, the government hopes to conquer the problem of chronic unemployment and to revitalize the laggard southern regionof the country. The plan is a bold and imaginative one, replete with government controls, and probably too optimistic. Nonetheless, it has forcefully drawn international attention to Italy's basic economic problems. Hence it is opportune to examine those problems against the perspective of what has been attained by the Italian economy in the past ten years.

Compared with northwest Europe, Italy has always been economically poor. Capital is much scarcer and the endowment of natural resources is much less favorable. Deposits of coal and metallic minerals are negligible or lacking, though natural gas production is growing and petroleum has recently been discovered. Arable land is poor in average quality. Only 1.78 hectares areavailable per person engaged in agriculture, one-third less than in France, while total arableland is one-quarter below France although the population of Italy is 10 per cent larger (47.1 million in 1951).

Type
Research Article
Information
World Politics , Volume 8 , Issue 1 , October 1955 , pp. 46 - 70
Copyright
Copyright © Trustees of Princeton University 1955

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References

1 To save space, footnote references to general sources have been eliminated. These include: Annuario Statistico Italiano (various issues); the annual Relazioni(reports) of the Ministers of the Treasury and Budget; and Rassegna di Statistiche del Lavoro (various issues). On request, the author will be glad to provide detailed documentation.

This study is part of a larger investigation of the Italian economy, centering on wages and unemployment and initiated during residence in Italy in 1952–1953.The author acknowledges with appreciationfellowships awarded him by the Guggenheim Foundationand the Italian-American Fulbright Commission, whichmade the inquiry possible.

excess of live births over deaths declined only from 10.5 to 8.1 per thousand, leaving Italy ahead ofFrance and the United Kingdom, though well behind Holland and the United States.

2 The “active” population excludes those searching for a first job, though these persons would be included in a measure of the “labor force.” The percentage of the Italian population in active status has fallen steadily, from 53.2 per cent in 1871 to 41.7 per cent in 1951, in good part because of difficulties in increasing employment opportunities.

3 A careful history of state policy toward the South can be found in Cenzato, Giuseppe and Guidotti, Salvatore, “Il problema industriale del Mezzogiorno,” in Ministero per la Costituente, Rapporto della Commissione Economica, Rome, 1947, IIGoogle Scholar: Industria, part I, pp. 361–417. Telling comparisons between North and South Italy can be found in Giuseppe Di Nardi, “The Program for the Economic Development of Southern Italy,” Roma, Banco di, Review of the Economic Conditions of Italy, VI, No. 2 (March 1952), pp. 99–109Google Scholar; United Nations, Department of Economic Affairs, Economic Survey of Europe in 1953, Including a Study of Economic Development in Southern Europe, Geneva, 1954, pp. 124ff.Google Scholar

4 The government estimates the following detailed losses: 3.0 million dwelling rooms destroyed or seriously damaged, and another 3.8 million partly damaged; 87.4 per cent of the gross tonnage ofthe prewar merchant marine sunk or captured; one-quarter of all railway mileage and 60 per cent of all motive power destroyed or damaged; damage to industrial plant and equipment equal to 20 per cent of prewarvalue; capital losses in agriculture, commerce, and public property amounting to 1,450 billion lire (1949 prices).

5 Based upon estimates of net national income (current prices) developed by the Central Institute of Statistics for 1901–1951, and deflated for price changes by Colin Clark, “The Development of the Italian Economy,” in Lavoro, Banca Nazionale del, Quarterly Review, VII, No. 30 (September 1954), p. 126.Google Scholar

6 See, for example, Economic Cooperation Administration, Italy Country Study, Washington, D.C., 1949, pp. 2–3Google Scholar; United Nations, Department of Economic Affairs, Economic Survey of Europe in 1949, Geneva, 1950, pp. 70–71Google Scholar; Economic Survey of Europe in 1950, Geneva, 1951, pp. 140–43; Economic Survey of Europe Since the War:A Review of Problems and Prospects, Geneva, 1953, pp. 75–77.

7 There is, of course, a persistently large reserve of unemployed (at least 1.7 million), as well as perhaps 1.0 million persons engaged in agriculture who could be withdrawnwithout loss of agricultural product. However, by reason of location and lack of technical training, these persons are not an immediately or fully effective reserve of human productive capacity. Also, there is a serious shortage of complementary capital requisite to their employment in productive uses.

8 Net national income per capita in Italy in 1954 was one-fifth of that in the United States ($365 vss. $1,847). Lira conversion rate: 625 = $1.oo.

10 According to the New York Times (June 2, 1955), the IBRD has just granted a $70 million loan to the Cassa per il Mezzogiorno, to finance a land reclamation project near Catania in eastern Sicily, and electric power development and private industrial enterprises throughout the South.

11 In addition to the base rate, the wage includes a cost-of-living bonus, a family allowance (for married workers), a bread allowance scaled to the physical effort required on the job, a readjustment allowance to provide for a modest restorationof skill differentials, and eight separate social security contributions of which the employer pays the entire amount. Other supplements are also assessed against the employer for holiday pay and similar benefits.

12 Extensive readjustments in differentials were undertaken in 1954, to reverse the leveling process.

13 According to the Ministry of Labor,59 per cent of all industrial labor averaged more than forty hours a week in 1948. In 1953 the average had risen to 72.4 percent.

14 Confederazione Generale dell'Industria Italiana, Annuario di Statistiche del Lavoro, 1949, Rome, 1949, pp. 96–97.Google Scholar The figure for 1938 is from a separate series, prepared by “Confindustria” (Confederazione Generale).

15 A companion inquiry concerning poverty, consisting of some fifteen volumes published in1954, was undertaken by the Commission on Poverty and Its Alleviation.

16 La Disoccupazione in Italia, Rome, 1953, I, part I, pp. 38–39, 96–97. The discrepancy is even larger for the category of unemployed who were formerly employed: 608,500 (ISTAT) and 1,033,673 (Ministry of Labor).

17 G. Ruffolo, “The Parliamentary Inquiry into Unemployment in Italy,” in Lavoro, Banca Nazionale del, Quarterly Review, VI, No. 24 (January-March 1953), p. 66.Google Scholar

18 However, the rate of unemployment in the South is much higher if the Ministryof Labor figures are applied to the ISTAT regional labor force totals (10.3 per cent in the South, 6.5 per cent in the North). If the ISTAT unemployment estimates are used, however, the difference vanishes (6.3 and 6.6 per cent respectively). More significant, in the South 35.9 per cent of the 1951 regional population participated in the labor force (estimated by ISTAT), as against a participation rate of 45.8 per cent in the North. This suggests that a considerable amount of concealed unemployment may exist in the South, composed of persons who do not attempt to find work because of restricted opportunities.