Going Beyond the Dogma of National Soveregnty
by Giorgio Napolitano

Dear Editor,

Now, on a daily basis, we face the crisis of the European project which represents the greatest political invention of the second half of the twentieth century, a project that unleashed so much energy and so many possibilities that it became a reference point, if not a model, far beyond the borders of Europe. What has ended up emerging is actually a crisis of the very political leadership that was supposed to give the process of European integration coherent expansion after the start of the new century. We face a historic dearth of leadership which brings to mind, by contrast, an earlier time when there was “a distinctly superior class of statesmen” who inspired and guided the Western democracies. Quoting the opinion of Tony Judt (who includes Luigi Einaudi in this group), you raised a question that is still unanswered: what made those individuals enter the political arena and succeed—circumstances or the culture of the time?

Considering Europe and Italy as they emerged from the tragedy of Nazi-fascism and the Second World War, we can see clearly what unavoidable and vitally important challenges spurred old and new political forces, as well as strong individuals who were morally and socially responsive, to assume responsibility in the context of new found liberty and reborn democracy. This made an extraordinary leap forward possible in their individual countries and in all Western Europe. The thrust of historic circumstances was decisive, but so was the cultural maturation that took place during the years between the Great Depression and the Second World War.

Rediscovering Luigi Einaudi

Thus the European project was born and the process of integration of the European Community got underway. The process moved forward with highs, lows, and more than a few moments of crisis and reached a turning point in the aftermath of the great transformation of 1989. Again “circumstances” and historic necessity operated as a powerful lever, but it is a fact that a European political class was ready to accept the challenge—a political class shaped by the Community experience and which drew from that experience a vision and institutional expertise. The Maastricht Treaty and the choice of the single currency came out of this.

In Europe in particular, we’ve now reached a third engagement with history: we now need to implant – at new depths – our integration process within the context of a critical phase of globalization. But this time, it’s true that Europe’s leaders are struggling to meet the challenge, especially in terms of the pressing crisis of the euro. They also seem blatantly inadequate due to a general cultural backwardness and an impoverished democratic political life. Together these factors have produced a ruinous fall back to petty and anachronistic attitudes and national prejudices.

In order to respond to these risks, it’s important to rediscover aspects of political culture that constitute a precious but still insufficiently explored resource. This must be done country by country, starting with us in Italy. Relevant (and greatly appreciated) are Reset’s reflections on the legacy and teachings of Luigi Einaudi (see Reset, no. 127). Dear editor, you and I have discussed this. Allow me now to limit myself to few modest considerations.

Particularly important for reformist forces is the necessity to find a new equilibrium for economic and social policies—an equilibrium between the unavoidable constraints of competition in a radically changed world and the values of justice and general well-being which were won as tangible rights and guarantees through the creation of welfare state systems in Italy and Europe. So, the example of Luigi Einaudi can suggest useful ideas and an impetus for understanding and confronting the challenges of a globalized market economy and for eliminating layers of corporatism and loose social assistance which still weigh heavily on our country. Of course, one can ask first how and why that strand of liberal thought encountered indifference and aroused opposition in the reformist sphere—and, more specifically, in the part of the left tied to labor—between the end of the 1940s and the 1950s when a new democratic political dialectic was taking shape in republican Italy. In fact, the terms of that dialectic were drastically affected by the ideological conflict derived mostly from an international context soon immersed in the cold war.

Bobbio and the Italian Communist Party (PCI)

Dogmatism and schematic thinking gained the upper hand over thinking inspired by liberal culture, although the latter did exist even in the PCI. It became difficult to distinguish among the truths of Einaudi’s “liberismo” [market liberalism] and, more generally, a liberal approach to ideas and politics in its varied manifestations. In 2009 I recalled that atmosphere and that incomprehension in my remembrance of Norberto Bobbio and his dialogue/duel with the PCI on the theme of liberty in the 1950s.

It would certainly be worth the trouble to reconstruct more carefully than has been done so far the debate in the Constituent Assembly and the contribution of Einaudi which moreover included important areas of general interest beyond “economic relations” (in Title III of the first part of the Constitution) and the still crucial Article 81. The interpretation provided by Guido Carli in Fifty Years of Italian Life is interesting and suggestive. According to Carli, “the economic part of the Constitution ended up being biased in favor of the two dominant cultures, Catholic and Marxist,” but concurrently, in 1946 and 1947, “De Gasperi and Einaudi created in a few months a sort of ‘economic constitution’ which they kept safely outside the discussions in the Constituent Assembly.” It involved a strategy “born and overseen by the Bank of Italy and the government,” aimed at stabilization, anchored in a vision of the “minimal state,” and open to international monetary rules and institutions.

In the Constituent Assembly, what the Catholic and Marxist conceptions had in common was, in Carli’s words, “the non-recognition of the market.” And yet, even in the first years of the republic, the government’s activity was characterized by dismantling autarchy, liberalizing trade, and, ultimately, positioning Italy within the process of the European integration.

With the 1957 Treaty of Rome and the birth of the Common Market, Italy acknowledged and adopted the fundamentals of a market economy, the principle of the free movement of goods, people, services, and capital, and the rules of competition. What are still today denounced as omissions or as downright impediments in the section on “economic relations” in the Republican Constitution were overcome in the melting pot of European construction and the development of community law. Little by little, the left—first the socialist left and then the communist left—has come to identify with the undertaking and development of European construction.

Still, the role and limits of state intervention in the economy remained the greatest divergence between, on the one hand, liberal positions (specifically “Einaudian” positions) and, on the other hand, the positions of the Marxist left (as well as the positions that dominated the Christian Democratic Party’s governing). During the Assembly’s discussion of the text that would become Article 41 of the Constitution, Einaudi distanced himself with stinging irony from allusions to “planning” and “programs” and recourse to phrases with ambiguous meaning, such as “social utility.” At the same time, he was eloquent and very resolute in bringing up the problem of monopolies, the necessity to impede their formation or to subject them to controls. But more generally, beyond the debate in the Constituent Assembly, he claimed for the “liberisti” not only an anti-protectionist position, but also the clear conviction that the state must take “very prudent steps toward intervening in economic matters” for fear that intervention might promote corruption in society (see Paolo Silvestri’s analysis in the chapter devoted to “Liberalism and ‘Liberismo’” in his book on Einaudi). Einaudi went so far as to claim, “’Liberismo’ isn’t an economic doctrine but a moral thesis.”

To the contrary, starting in the 1950s, the Italian state undeniably intervened in economic life with ever less “prudence” or sense of limits. First (and for a prolonged period), this entailed direct involvement in production, including state ownership (although through the most flexible type of state holding companies). Then came a growing use of public funding, and increasingly frequent use of current-account public spending motivated by political-electoral demands and interests with the consequent accumulation of a terrifying stock of public debt.

Now that the great and irremissible achievement that was the creation of the euro is being strongly undermined by the sovereign debt crisis in a number of states, including Italy, we can no longer avoid engaging in a profound and careful reduction and selection of public spending as well as in a corresponding process of de-bureaucratization and reorganization of public institutions and of their modus operandi. This cannot avoid having an impact on the parasitic degeneration of “Italian-style welfare,” recreating the purpose, objectives, and limits of social policy and reshaping them in accordance with an age of global competition and the challenges that this age imposes on Italy.

On the one hand, and more than ever, it’s necessary to come to terms with the reality of the market and the role (which is widely recognized) that belongs to private enterprise and initiative. They require liberty, freedom from the bonds that constrict competitiveness. On the other hand, other essential aspects of a liberal vision, such as that of Luigi Einaudi’s, must be stressed. Along with the value of the free market, Einaudi’s vision presupposes the value of “reducing inequalities in starting points or ending points”; he considered the convergence of the two to be possible. Francesco Forte clearly demonstrated this aspect of Einaudi’s thinking at the May 13, 2008 conference sponsored by the Bank of Italy. And Forte also clearly defined how (in a quite modern sense) “a principle of liberty as responsibility” emerged in Einaudi’s thinking.

The variety of positions held by men from Einaudi’s school of thought—including eminent liberal socialists and socialist liberals—attests to the richness of this liberal’s work. If this is so, it should seem neither wrong nor arduous to rediscover ideas and methods aimed at a revision, an adjustment to a new general context, a programmatic platform, and a government of reformists.

The “rediscovery” that I’m speaking about should be part of the renewed effort to make Italian and European politics morally and culturally adept. I made the necessity of this, dear editor, the starting point of my letter. At present, we can reflect on Italy only in the context of Europe. Likewise we must return to considering Einaudi as a great precursor and proponent of a vision of the federal union of Europe that we must relaunch today, aiming with Einaudian courage at the most rigorous transcendence of the dogma and limits of national sovereignty.

(Translation by Joanne Barkan)