Luigi Zingales: belief

Transcript context

…This is a very hard question, but let me try to say that what I think was wrong is precipitating the unification without really a national culture. There was a small elite that felt Italian, but the rest of the population did not feel Italian. A number of accidents, including the errors of the only Italian who actually was a military leader, Garibaldi, made unification possible against all odds. I’m sure that if you ask people in 1858, “What are the chances of within three decades Italy gets unified?” they will say, “1 out of 100.” Within two years, it unified — most of it. It was really a chance, but then, because this happened before there was a national spirit, it turned out it was basically an annexation of the South by North, in which the North imposed its laws to the South, and they were not good for the South. One of the best Italian thinkers and most unknown, is this guy Vincenzo Cuoco, who was part of the Neapolitan revolution in 1799, and was actually convicted to death to participate in this revolution. This revolution, for people who are not familiar with Italian history, was a Jacobin revolution trying to imitate what they were doing in Paris and in Naples. This revolution initially succeeded, and then a cardinal brought some troops from the South of very simple peasants that massacred the Neapolitan elite and brought back the Ancien Régime. Then it, of course, went back and forth with Murat, et cetera. The interesting thing about this guy is that after he was convicted to death and then escaped, he wrote a history about that revolution. He’s probably the only person who wrote a history of something that he lived in and gave an interpretation that is valid to this day. His interpretation is you can’t export other models in different contexts. The Neapolitans who tried to copy France are silly, because they don’t understand the social, cultural, economic context of France at that time was completely different than one of Naples. He has this analogy say, “Every place has its own clothes.” You’re not going to put Finnish clothes to a Greek or Greek clothes to a Finnish, because you’re either going to sweat to death or be freezing. Why do you want to impose the same rules to everybody? Italy tried to do this, and the result was that in the South, a complete rejection of the Northern model. So much so that there was a revolt that we in history call bandits, but in reality was the liberation front that just lost. When you lose, you’re always on the wrong side, and so these are called bandits. The North did not need this. The South had this revolt, and then they reached a compromise. There was a compromise not unlike, I think, what happened in the South of the United States. called bandits. The North did not need this. The South had this revolt, and then they reached a compromise. There was a compromise not unlike, I think, what happened in the South of the United States. It was for the worst of both sides, in the sense that North side agreed with the big landowners of the South that we’ll leave them in power in exchange for consensus, and they will retain their power in exchange for an army that defends their land against the revolt of the people. That led the South to underdevelopment for years. Very few people know that when Italy got unified, the income per capita of Sicily and the one of Emilia‑Romagna around Bologna were the same. Today, it is almost double the one of Emilia‑Romagna versus Sicily. It’s a huge sort of gap. Now, why I insist so much on this, because I think there is an analogy that most people don’t fully appreciate between the Italian unification and the European unification. Europe got unified roughly in the same way. There was a small elite that felt European. Most people don’t really feel European, but a small elite feel European. They speak the same language, which happens to be English. Pretty soon, England would be out of Europe, but they feel part of the same nation. They talk, they go to the same meetings, et cetera. They’re trying to force unification over the desire of the people. The result, I think, is not working very well. In the old days, you were sending troops to maintain the South and the order. Now, you use the Central Bank, but it’s not that different. At the end of the day, what I fear is a desertification of the Southern part of Europe similar to what happened in the Southern part of Italy. Like in the Industrialization. One of my favorite papers by you is your paper with Bruno Pellegrino. It’s a great name for coauthoring a paper on Italy. The way I read that paper is you’re saying something like this: Italy, right now, doesn’t have enough firms which could be 5 or 10 times larger than they currently are. The global economy, over the last 20 years, has put greater emphasis on scaling up. The 1980s were much less about scaling up. You could do better with small- to medium‑sized enterprises in the 1980s. Now everything is about scaling up. You have Apple, you have Google. Kind of mega‑scale. Italy, more or less, has stayed still. China has scaled up. In the new world where scaling up is really what matters, Italy is left behind. That’s the fundamental productivity reason why even the Italian North hasn’t, in some ways, done that well. Is that the way you think about it?…

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