Does Italy need an entrepreneurial state or a better state?

For some years, especially in Italy, for objective reasons due to the relative decline of our industrial, education and research systems, demographic ageing, the increase in poverty and inequalities above all to the detriment of the younger generations, the needs of strengthening of public intervention. Today it it is made very urgent by the health catastrophe and economy linked to the coronavirus pandemic. 

However, many voices inexplicably request the reconstitution of the entrepreneurial state, in the historical Italian experience represented by Iri, Eni and autonomous public bodies, notoriously liquidated in 1992 with the privatization of the vast majority of controlled companies, however remaining in the hands of the Treasury in the form of a Spa, our best and most competitive industries still today, including ENI.

An American economist with a decent but not sensational scientific profile has even been called to Italy as a consultant to Prime Minister Conte, precisely because she supports the re-enactment of the experience of Entrepreneurial status in Italy, and specifically of the IRI model, considering this a condition for the necessary injection of innovation into the Italian industrial system.

The most authoritative political opinion expressed these days is that of Romano Prodi, having chaired the IRI between 1982 and 1989 and in 1993-94, as well as subsequently the Council of Ministers; having therefore been responsible and author of a significant part of the privatizations.

Today, faced with Italy's decline, the weakening of the European project and the catastrophe generated by the pandemic, Prodi regrets the long absence of a national industrial policy; stigmatizes the decennial domination of a "neoliberal" culture and action and directs towards a State Plan, which contrasts the force of speculative finance, of private monopolies, and puts Italy in line with the action of large European countries which, like France and Germany defend their national interests with public capital and reshoring operations. 

The State Plan mentioned by Prodi, one of the best representatives of our national and European ruling class, is well articulated and complex: it insists on the importance of building and public works, underlines the centrality of research and training for the relaunch of industry, calls for synergy between the various sectors of the economy and for the implementation of a coordination and innovation program with public resources (from credit to equity investments) for an essential leap in quality of our dominant small and medium-sized enterprise.

And it also looks to a new strategic mission of the large public company. It's not about redoing the IRI, which he considers anachronistic, but to set up a public structure delegated not to manage companies but to supervise their management: either by giving this function to Cassa depositi e prestiti, or by setting up a task force at ministerial level.  

Among the political forces in government, proposals are emerging ranging from the "nationalisations" of the 5 Stars, up to now only announced, to the “Be careful” proposed by the deputy secretary of the Pd Andrea Orlando, who would have the task of supervising the boards of directors of any capitalized companies.  

"State entrepreneur or not", which remain the alternative hypotheses, hovers over the debate and the government choices of these days, the establishment of an ad hoc structure for public industry (a sort of new ministry of state holdings which is presumed to be protected from contaminations known in the past). 

Fortunately, such a structure has not yet figured in the interviews and statements of the Minister of the Economy, rightly committed to presenting the difficulties and potential of all Italian entrepreneurship at the moment and to keeping the ranks of a difficult balance of governance which does not help the ongoing negotiations within the EU to tackle the recession.  

The fact is that in the cases mentioned, as between the government forces, the choice under discussion almost always responds to one view hostile to private enterprise before the need to regenerate the Italian economic-industrial system; therefore it runs the risk not only of weakening it, but even of weakening the few large industries and financial structures which, solidly in the hands of the State, and without political superstructures of direction and coordination, constitute its greatest strengths today. 

In order for the State to exercise its intrinsic role of coordination, guidance and direct or indirect intervention in every sector, the quality of policies continues to be fundamental, including industrial policy – ​​today there is not even the Ministry of Industry- and the quality and efficiency of public administration. Even the current ones clearly demonstrate this difficulty in managing the health emergency and in the provision of economic aid to businesses and jobs suffocated by the lockdown.

It is indisputable that in the face of the seriousness of the catastrophe generated by a still unknown virus, the maximum intelligence of public action is urgently needed, which, to be such, must necessarily be based on the maximum sharing possible and divest yourself of any particularistic approach or from ideological nostalgia. For this some stakes must be set in memory and in historical awareness.

The first is that the IRI whose topicality is proposed again today is not the original one conceived by Alberto Beneduce on a blank mandate from Mussolini and then became the protagonist of Italian post-war reconstruction. AND' rather that of Pasquale Saraceno (moreover, from no document does it appear that he participated in Beneduce's first meeting with Mussolini), to his own great pain, witness in the 70s-90s of the subordination of the Institute, even if not of all its enterprises, to particular interests in those decades exercised by party currents but also by public and private companies themselves. 

Beneduce's IRI was born in 1933 as a financial institution, autonomous from the State, having to carry out a radical credit reform based on the bailout of the Bank of Italy, on the public control of the big banks, on the specialization of industrial credit and on the creation of a modern financial market based on the issuance of low-yield government-guaranteed bonds. 

With regard to industry, IRI could even be defined as a privatization body, having reorganized and resold to private individuals even in the years of autarky the vast majority of large, medium and small enterprises that ended up in the hands of the State following the bankruptcy of the mixed banks who owned or controlled all or part of the share capital. IRI retained control of large companies of strategic sectors, for the reprivatization of which there was not enough capital on the market. 

The proposal under discussion today is exactly the opposite: expand state presence and control on industrial capital. The second firm point is that during fascism and in the years of reconstruction, IRI was not subjected to the control of any political body, even escaping the several times attempted placement within the Ministry of Corporations.

The fourth fixed point is that in the formulation of the Statute of 1948, Beneduce having already died in 1944, Donato Menichella who had supported him throughout the Institute's history as director, fought to ensure that IRI maintained its character as a financial institution, so that it did not expand to other sectors and did not transform itself into an instrument of government development policies, in particular southern ones. 

Menichella opposed the redefinition of IRI's duties in 1956 and the birth of the Ministry of State Investments, which were instead supported by Pasquale Saraceno, based on a less liberal view, secular and pragmatic, or on the basis of a project of economic and social renewal with strong utopian connotations of a Christian imprint. 

According to Saraceno, with its birth in 1933, IRI would have represented the most significant moment in the history of industrial capitalism, revealing for the entire past period the historical weakness of private industrialists and indicating the superiority of public industry for the future. Saraceno went so far as to backdate the birth of the state shareholding system to the end of the 800th century, at the time of establishment of mixed banks, as destined to fail with the share packages of a large part of the Italian companies in hand. 

At the same time, in his opinion, the system of state holdings would have been able to combine business efficiency with management economy, leaving companies autonomous in entrepreneurial action, but entrusting the definition and financing of social purposes to the State. The most serious protagonists of the current debate know these facts well.

They know that the system of state holdings has fallen under the ax of the debt produced internally and of the Italian public debt; that the privatizations may also have been done hastily or inopportunely in various cases, but that any errors are not ascribable so much to hyperliberal forcing, but rather to the urgency of the formation of the European Union and compliance with the membership rules. 

The ideological opposition to private enterprise, the removal of fundamental historical traits and the re-proposition of formulas exposed for substantial reasons to the risk of bankruptcy are therefore neither realistic nor useful.

°°°°The author is Senior Professor of Contemporary History at the La Sapienza University of Rome