F. Barca, Intervento alla Conferenza in onore di Sebastiano Brusco

Intervento alla Conference on Clusters, Industrial Districts and Firms: The Challenge of Globalization, Modena, 12 - 13 settembre 2003
Facoltà di Economia "Marco Biagi", 2003

TRASCRIZIONE di Federica Rossi
I will take this fantastic opportunity to say a very few things, that amazingly relate to what has been presented. I had a chance to read Chuck before, but I listened very carefully to your presentation.
I will, as I said, hide behind Sebastiano’s shakes. I refer to three shakes, finance, political economy and politics. They are not all victories but we can turn some of these experiences into learning more about how to shake reality. Finance is probably the hardest of all so it is better to get rid of it pretty quickly.
It is probably the weak point of the Italian experience. It is quite amazing, listening to your presentation of how much that side of the story has been lacking here. Not that rural banks, Casse di Risparmio, didn’t play a role: they did, but it was a passive role. Some of us call it “benign neglect” by the financial system towards banking, which was - some of us suggested - a result of compromise between catholic de Gasperi and communist Togliatti after the war. We’ll come back to Palmiro Togliatti. But certainly [finance] is the lacking point, especially for the south. Finance has been the “in spite of” of the success of Italian districts.
I will say just a few words because I’ll read from Francesco Pigliaru, for those foreigners of you who have not had the fantastic chance of going through his note, which is available in the Modena site, about Sebastiano’s experience at the Banco di Sardegna. He was, towards the end of his life, President of the bank and it was an extraordinary experience for him. Francesco writes: ”Sebastiano was convinced that his task was to have a local bank both independent and efficient. Independent from the point of view of managing”, i.e. not controlled by an external partner, i.e. [not] a big bank, because those big banks did not embody local knowledge. Reasonably, he thought, this kind of knowledge does not belong to them. At the same time, Francesco writes “he was aware and he became even more aware, during his experience, that local banks are very often captive of local interest. Of devious local interest. They can become extremely inefficient and have lack of transparency”. But he did it his way – sorry this a free translation of what Francesco meant - and he went for the best, for the first best and the coalition for development that he wanted to bring about was a local bank that was both independent and efficient. Pressure of those devious local interests and the pressure of the Bank of Italy made the project fail. The Bank of Italy did not give enough time for him to go through the transition that he had devised and the local interests gave a very good opportunity to the Bank of Italy not to do it by interfering daily with his work of him and the work of the team that he brought there.
Now a very simple lesson to be learnt from it. We are, in all of the south, exactly where Sebastiano left us. We have not made one step forward. The strengthening of the district in the south, which you refer to, Chuck - Sergio Paba and Sebastiano would say “the return of the districts”, considering the enormous amount of work that they did on proving that they were there after the war and somehow disappeared and they came back to life when the opportunity was given to them - and the effects of the policy shift in favor of the issue of putting the emphasis on the provision of collective goods, these changes have taken place and they have been successful, less successful, more successful, whatever: you can at least discuss about them. But nothing has taken place on the banking side. It is about time that we do something about it. That is all that I have to say on the point.
Political economy. Sebastiano was there – actually, almost at the same time. It was about then that he took the role of President of The Bank of Sardegna. He was there in ‘98 and I felt that it was very close to the experience that we were doing in shaking our tree, that [political economy] was his tree. When we were trying to find, as far as territorial pacts were concerned and the policy of the south was concerned, a way in between the bureaucratic mud of the budget ministry and the Jacobean management of Knell. At the time Sebastiano gave us first many ideas, disruptive, brutal [ideas], and then he told us, after the summer of ’98, that we should do nothing about them. It was pretty shocking advice that he gave me. He said: fine, this amounts to say what we might have wanted to do had we had a chance to do it before. One of these things was to give much less money to territorial pacts than it was actually given. The strong lesson was: put less money on the table, much less money, to provoke. You are buying the time to convince them that they can do something. Why so much money? But then, he said, don’t do anything about it, there is such confusion around. There is such uncertainty around that if any change is introduced it will kill what ever is there.
But at the same time Sebastiano had his own idea. And that is very interesting, theoretically - if I can still say something on that side of the story now being covered with fruits from trees. This is the endogenous part of the story. The territorial pacts’ story is: let’s try to see whether we can make the local actors precipitating the awareness that they should think about producing collective goods. But he was also thinking about the exogenous story, which is much closer to the Taiwan hypothesis. He was thinking: let’s not leave exogenous intervention to mono-firms. Why can’t we think about existing districts in the north east coming down into the south and provoking that, by their own experience, I mean their own interests, I mean their interests, you know the way it works. He produced a proposal that you know, I am sure. By any chance, if this proposal, these 5 pages, are not in your site, I will transmit them to you via web, I found them in my files, they had disappeared away because nothing was done of that summer. And he proposed a particular program contract for districts, you know about it because it has been discussed, and I just quote from his notes – there was the official proposal which Sebastiano wrote, the bureaucratic proposal, and then there were some little italics: “Please if by any chance you actually do that, you should make sure that the firms of the districts that are moving into the south attracted by this purposely defined incentive, they move into a very small localized area so they can have a dialogue with a privileged actor in the area. They can take stronger commitment. They can have an influence” this is back to his old ideas “on the level of wages”. I mean, he was always [saying that] this was not just about collective goods, this was also about wages, wage level. “And possibly [they can have an influence] on the infrastructure to be produced, on the collective goods to be produced in the area”.
Now what happened to the endogenous and exogenous. Well, the endogenous went forward even thanks to the awareness that we were able to build at the time. There were other people there: Carlo Trigilia was there, Gianfranco Viesti was there. Even if we did nothing but the way in which we decided to monitor the process. And, if I must say, the only thing that is not appropriate is [the extent to which] this was a very monitored process. If there is a novelty, it is that that policy is being evaluated, is being monitored, and the very fact that we know now that it can happen, comes out of the evaluation which was carried. It has been carried in universities, it has been carried everywhere but it has been carried as part of the process. Territorial pacts are not the only tool of political economy that is being analyzed and evaluated because there are many others that are taking place. True enough, I agree with you. Evaluation has not gone as far as telling us: “ok, it can happen”. From the point of view of policy makers this was quite relevant at the time when the common idea was it can’t happen. Not just in the academics, but in the political economy world where the idea was “let’s take the money out”. So the urgency of making sure to ourselves and to the collectivity that it can happen was enormous. The research has been conducted in six months because we wanted to have facts. [We wanted it] to be put on the ground that it can happen.
Now the second question comes as the second phase, it has to be, why can’t we replicate it. We go around making mistakes at this, we will carry on making mistakes anyway, but in the same extent as we made mistakes five years ago. For example, is it true that when less money was available things went better, or anything like that. Some elements are in the analysis he refereed to but not enough. Two things: first of all, I like your word, Chuck, “brutal way”, it has to be done in a brutal way. It can be done more brutally now because the little kid has proved to be alive. When he was about to be decreed dead it is hard to be brutal, if you sort of like it. Now we know that it is alive so we can treat it in a much tougher way. We can be brutal, we should be brutal and I say that my department - for a second I take my former responsibility - is happy to finance what ever research, consider financing researches that can be brutal enough and different enough and distant enough and enemy enough to treat the thing in the way that it has to be treated but, and I come to the end of my second point, when will we do that? Unfortunately you will, some of you will find an enormous amount of noise. Noise is always there. But this noise will be particularly loud, there will be noise, noise, noise and you will find it extremely difficult to do research. This noise that been certainly increased by those politicians, and you mentioned one, who, not understanding the role of this instrument, and thinking at the end of the game that it was nothing but the good old money from Rome to buy votes multiplied by three - the number of territorial pacts in two months, from sixty to two hundred and fifty - just about killing it by overflowing with cash. And by signaling that it was just the old Cassa del Mezzogiorno, the old central government way to give money to all. Eighty-five percent of the territorial south is covered territorial pacts, does this sound reasonable to you? So you find lots of noise.
And that brings me to politics now, how can I avoid it? How can I avoid it being here? How can I avoid it being what I am and what I have always been and what can I avoid with Sebastiano? And how not to go back to Brusco-Pezzini? In the Brusco-Pezzini paper, which for me has been a leading way to understand the policy of the main party of the left and more, Mario Pezzini and Sebastiano tried to understand what was the politics of the communist party, the main party of the left, on the small firms and districts. They understand fantastically well that after the war, you know the story, but I will remind you, that there are two reasons why the communist party, Palmiro Togliatti, decides to have a policy for the SMEs, which was uncommon for communist parties. There are two reasons: one, they say, is averting the danger of any “future convergence” - amazing words, think about today - between the economy’s commanding heights and the petite bourgeois. That is the first reason. To take care of the issue, to do politics about it. The second was to combat monopolies. There was the awareness that Italy was a country with lack of competition at the top. It is quite amazing to me, I mean, I knew about it but I took it a couple of days ago. Monopolies were a pathological component of Italy’s retarded capitalist development rather than its fruit. The task of the left was above all to overcome the blocked development and more. Small businesses are small because they have not yet grown. This is not Sebastiano, this is [Togliatti]. Some small companies will successfully grow and come to compete with large firms in a competitive market. The presence and growth of small firms will counteract monopolistic trends. Now, take the picture that Togliatti had, the fantastic research on the structure of Italian capitalism in 1945, the constitutional assembly of this country. Take the top five families running, take the Italian capitalists, today they are the same.
They are both issues, on the political side and the economic side. Now let’s be careful, let’s go through it very carefully. Sebastiano and Mario are very aware that this is very important, but also they say, look, something happens after this early position. [The left] don’t understand about the districts, so they can’ revise this original position, understanding that SMEs are not districts, this is a SMEs story these are not districts, they are not even aware of it. And Sebastiano said something much more important. Although Modena, Firenze (as far as the red areas) or Vicenza and Treviso (as far as the white areas), although at a local level they become aware somehow of the need of producing collective goods as a way to do politics for these districts - and we heard Modena’s mayor just reminding us of how aware they have been for years, how much Emilia-Romagna [are aware], actually they are right here- the national politics of the left never becomes aware. How could it, if it is still is holding the same view of the SMEs, in 1945 a very advanced view, in the 1970’s a very backward view. So it does never enter the brain of the leading political group of the left.
This is very bad for Italian development and very bad for the left. I think, as I said in other universities, that we are still there. Worst. The policy, that is my experience, for the south, the process administration policy. The transfer of policy from automatic incentives, or whatever big infrastructure, to the provision of collective goods through the partnership of local actors, has taken place, and this has been ostensibly criticized by a large part of the leading group of the left. Not all of it, but a large part of it. And the proposals that have been advanced is incentives automatic incentives, vouchers.
And this leaves us simply in Togliatti’s mistake. But what I claim and what I’d like you to think about, I might be wrong, is that at the moment we have done one step backwards, so we are at a pre-Togliatti stage. In the left some of leading group of the left has looked for an alliance with the establishment, with the commanding heights, with a monopolistic block, opening the way and legitimizing some of the newcomers as presenting themselves as the only ones who can break the alliance between Milan, Turin, Mediobanca and the left who has been in power. You know this last phrase, you have heard it. It has a mistake behind it, that’s what I claim. Second it has not provided to SMEs’ and to districts an alternative to bourgeoisie-ism (?).
Not at the local level, things go on, they have been going on for fifty years in a fantastic way, but as a national policy the issue is not how to devise a policy for providing which local collective goods, and how. This is my story, not Sebastiano’s, but this is a lesson that I derived quite straightforwardly from his teaching. I am sorry for this seven minutes on politics but I have not read any and there won’t be any reports on politics. I hope that, in the dinners and in the corridors and aftermath of this conference, there might be some of you wanting to challenge what I say or to think about it, because you can’t disconnect political economy from politics.

[Ultimo aggiornamento: 10/09/2012 10:24:37]