ABSTRACT
Actually, the government leaders at the time (the Historical Right [Destra Storica] as they came to be called) were well aware of the need to fill this structural gap. By financing this process of infrastructural and institutional strengthening, first through deficit spending and subsequently through heavy taxation on consumption goods and landed property, they established the essential foundations for a successful development policy. The most penetrating quantitative studies on that period of Italian economic history also find evidence of acceleration towards industrialisation between the second half of the 1870s and the first half of the 1880s, followed by significant increases in consumption and investments (see Baffigi 2013). But this positive trend was destined to come to a halt in the second half of the 1980s, as a result of both a serious financial crisis caused by property speculation and the implementation of a self-defeating protectionist tariff in 1887. In the context of the history of ideas, it is important to note that those first signs of economic vitality, although they were subsequently frustrated, had been understood in essentially the right way by some economists who accordingly shaped their respective theories on growth and cycle. This cultural liveliness is well exemplified by the debate that arose among several economic journals, and in particular: L’Industria (founded in 1887), the Giornale degli Economisti (especially after 1890) and La Riforma Sociale founded in 1894. Three economists stood out in the debate that arose in Italy on the issue of economic development, namely Antonio De Viti de Marco, Maffeo Pantaleoni and Francesco Saverio Nitti. Each of them adopted his own perspective on economic growth. In the works by De Viti de Marco (who was of Southern origin) we find one of the first theoretical formulations of the economic dualism between the Northern and Southern regions. In Pantaleoni’s theories emerged an idea of development based on a system of free market relations, which needed to be safeguarded as a top priority. Finally, Nitti’s approach was based on the belief that economic growth at that time in general, and in Italy in particular, should in fact find benefit in social conflict as a further stimulus for the modernisation of firms as well as public intervention in the economy.
