19 January 2015

Let’s not be beastly to the southern Italians


A recurrent debate among historians is the question: can history teach us lessons relevant to the present and future? Generally, history does not repeat itself by turning full circle, though it may move elliptically. Economic history, however, may be a special case in that it travels in recognisable cycles – boom, recession, depression, recovery – making the history of an economy a useful guide to its future development.

This hypothesis is dependent on the accuracy of the historical record. It is easy to make the assumption that since economic history is based on hard facts, on statistical records, to an extent that political history is not, it is probably a more reliable discipline. For recent periods, that is largely true, but politically motivated falsification of more remote economic history can produce hugely misleading interpretations of contemporary situations.

Today, economists trying to analyse the Eurozone crisis are being misled by a myth fabricated by black propaganda as long ago as the 19th century and perpetuated even now. This myth is the massive misrepresentation of the economic history of Italy, arguably the most vulnerable economy in the Eurozone. Granted, its citizens have large savings and commendably little private debt. Yes, it is the eighth largest economy in the world in nominal GDP and the third largest in the Eurozone, but its GDP is still 9 per cent below pre-recession level and the economy is contracting. Italy is the country most likely to sink the euro.

So critical is this issue that economists analysing the prospects for this sun-drenched basket case are keenly examining every aspect – historical, political and social – of that country. They are working with seriously flawed data.

Ambrose Evans-Pritchard is an informed and challenging commentator. You do not have to agree with him on everything to acknowledge his writing makes for compulsive reading. Addressing the Italian crisis recently, he wrote: “The Mezzogiorno is sliding from depression towards social collapse. The Bourbons made a better fist of it.” This was not the first time he had referred to the former Kingdom of the Two Sicilies in appraising the condition of southern Italy. In 2011, in the context of  “the perma-divide between Italy’s North and South”, he wrote: “A full 140 years after the Two Sicilies were gobbled up into Cavour’s lira zone, convergence has not occurred. The Bourbons might have done better.”

Those references to the former reigning dynasty of the Two Sicilies are ambiguous. If they are to be taken literally, then kudos to Evans-Pritchard for seeing through the black legend of Bourbon rule, perpetuated by their usurpers. If, on the other hand, he is using the Neapolitan Bourbons as a benchmark of incompetence, then he has succumbed to the delusion that has prevented an accurate presentation of Italian economic history for a century and a half: the myth of the endemically “backward” South and the “enterprising” North.

Here are the facts regarding the supposedly comatose Kingdom of the Two Sicilies before its violent conquest by Piedmont in 1860, encouraged by the British Liberal government of Palmerston. At the Paris International Exhibition in 1856 the Bourbon kingdom received the prize for the third industrially developed country in Europe (first in Italy). It developed the first railways in Italy, the first gas lighting system (and the first experimental electric lighting), the first electric telegraph and the largest engineering industry. The kingdom had the third greatest merchant fleet in the world and the biggest naval industry in Italy.

In social policy the Two Sicilies created the first municipal housing, had the highest percentage of doctors per capita in Italy, the lowest infant mortality rate and the first free health care, with the highest number of orphanages and old people’s homes.

Its public finances were by far the healthiest in the peninsula. The Two Sicilies treasury, at the fall of the kingdom, held 443.2 million gold-lire, contrasted with Piedmont-Sardinia which held only 27 million. The Two Sicilies national debt was just 411 million lire, Piedmont’s was over 1 billion. The Bourbons consistently levied the lowest taxes in Italy. Their state revenue was quoted at 12 per cent on the Paris stock exchange, with the low discount rate of 5 per cent.

After the Piedmontese victory and forcible incorporation of the Two Sicilies into Italy, all the gold reserves were taken to Turin and the machinery was stripped out of the factories and taken north to fuel industrialisation there. The population, so far from welcoming “liberation”, fought fiercely for seven years, during which whole towns were razed, civilians massacred and a gulag of concentration camps set up. Emigration from the south was a post-unification phenomenon.

The south of Italy is not a region of backwardness but an economy ravaged by military conquerors whose heirs have not ceased to marginalize and denigrate southerners. That is the reason for Evans-Pritchard’s “perma-divide”. It must be taken into consideration in any modern assessment of Italy’s economy and social structure. It also raises the disturbing question: if we have fallen for the misrepresentations of the ‘Risorgimento’ myth, under how many other delusions are we labouring elsewhere?

Gerald Warner is a political commentator and writer.