Courtesy Reuters

The Economic Reconstruction of Italy

AT the peak of Nazi power in 1941, when the Axis governments were still entertaining well-founded hopes of victory, five leading Italian economists published, in Italy, a postwar economic program for that country. It is a prophetic document. Its conclusions, stating clearly some of the fundamental issues confronting the nation, may well serve to introduce a discussion of the problems of Italy's economic reconstruction.

The main reasons for the deepening economic malady which had overtaken Italy during the last 15 years, said these five economists, were two: (1) disregard of international trade as a chief source of economic strength for Italy; (2) the policy of self-sufficiency which had led to the development of costly and unprofitable enterprises and to the suppression of undertakings which did not fit into a preconceived framework of power and privilege.

Italy had been forced to wear the heavy garment of total control, they boldly continued. Fresh energies had been kept from poaching upon the private hunting grounds of big vested interests. They cited the Fascist law which regulated the establishment of new industrial plants as a typical illustration of how the protection of an alleged public interest is transformed into the furtherance of monopolistic privileges. That law allowed no publicity for the proceedings of the committee which passed upon applications for permission to open new factories. Obviously the public interest could be protected solely through the most careful scrutiny of the committee's deliberations. And the law required the committee to give no reason and present no documentary evidence to justify whatever decision was reached.

Economists throughout the world will agree, they continued, that the complex economic structure of a modern industrial society does require a large measure of state intervention. The decisive question is what type of public economic control shall be imposed. Is it to be the judicial type, which places in the hands of independent public servants the enforcement of clearly defined standards of private conduct? Or is it to be the political type, with decisions made following

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