This post describes the corrupted system that the Italian nation established in its early years. This system can be defined as an early example of unfettered crony capitalism that has plagued the nation since then.
Crony capitalismi is an economic system that is characterized by close, mutually advantageous relationships between business leaders and government officials.
Before we get into the discussion, let me introduce the subject. First, it is good to remember the point of looking back.
We cannot change the past. But we can learn from it. To understand the present and help build a better future.
As an introduction to our discussion, let’s see what the late author Andrea Camilleri had to say,
Post-unification political landscape
Post-unification Italy’s political and administrative landscape is marked by widespread corruption and collusion between the northern ruling class and the central government. A series of episodes and scandals have emerged, painting a bleak picture of the institutions and economic practices of the time, which will have profound implications for the country’s future.
Corruption and Collusion
In 1850, a representative revealed to the House the disappearance of sixty million from the treasury without revealing where they ended up. Also, the discovery of Curletti, head of Cavour’s secret service, and his accusations of corruption against Farini, Scialoja, and other northern politicians highlight the rampant corruption between the northern ruling class and the government.
- Corrupt and speculative practices were also spreading in the South. Public investments, such as the construction of railways, enriched the Northern elites while the South remained economically disadvantaged.
- The scandal linked to the tobacco Board’s concession revealed a tangle of interests between banks and politicians, with clear signs of corruption. Despite investigations and evidence of favoritism, the authorities took no significant action, and the concession remained.
Indifference and Inaction
Despite press reports and testimonies of corruption, public indifference, and institutional inaction perpetuated the problem. Revelations of crimes and collusions were often ignored or forgotten, highlighting the severe moral conditions of Italian society at the time.
The history of post-unification Italy is marked by widespread corruption and unfair economic practices, with severe consequences for the country’s development. These scandals and corruption of the past are the prelude to the endemic problems that still afflict the Italian nation today, highlighting the need for severe institutional reform and greater morality in the ruling class.
Piedmontese Bureaucracy and Crony Capitalism
From the book Il piemontesismo e la burocrazia in italia dopo l’unita’ by Enrico Faganano, we read the following.
In 1866, the new Italy was in absolute disorder, and the State seemed irremediably at the mercy of corruption. In that same year, in the essay 𝐷𝑖 𝑐ℎ𝑖 𝑒̀ 𝑙𝑎 𝑐𝑜𝑙𝑝𝑎? Pasquale Villari described the political situation of the time. The Neapolitan intellectual wrote, among other things, the following.
But why were so many mistakes made? Whose fault is it? The fault lies with the system that has governed us until now. It is the cliques, the parassites, Piedmonteseism, and the men who have always held the stick in their hand, always to the country’s detriment. Now, it is finally clear where they have led us. But to this answer, one must add: How come Italy has allowed itself to be governed by such men for so long? The Government was supported by the deputies and elected by the people, and the last elections were held without pressure from the Ministry. Yes, but our multitudes are ignorant and let themselves be led by the nose by troublemakers. Public opinion has no direction, and we lack men.
Villari’s statement could be republished today (without changing a single comma) and would still be very current.
The figure on the right shows an example of the economic and power connections between the government and industrialists of the North. The latter were often also part of the government.
The picture that emerges is genuinely bleak, but it is only in this context that one can understand the fight carried out by the government against the Banco di Napoli that we talked about in the post The Tale of Two Banks. This fight was based exclusively on the need to guarantee supremacy in the Italian economy to the Banca Nazionale, linked to the men in power.
An episode involving the Turin Institute helps us understand how things were going at the time. Its advisors decided to cancel the 16.5 million credit granted to Ansaldo as a sign of gratitude towards its director, Carlo Bombrini, who had led the bank out of the crisis and was also at the helm of the metalworking company.
This is even though this decision determined the loss of a significant sum for the structure they managed while at the same time producing an unjustified profit for the Genoese company that was capable of altering the balance in the sector, especially since the crisis had not been overcome, after a few years, it returned even more seriously.
Scandals and Corruption in the Railway Sector
The first major scandal in post-unification Italy concerned public works to be done in the South but involved Tuscan bankers and non-Southern politicians. The contract for the Southern railways replaced pre-existing companies with companies linked to individuals from the North close to the central government.
From the book La Storia dell’Italia Unita by Enrico Fagnano, we read the following,
At the time of the annexation, the specifications for the expansion of the Kingdom of the Two Sicilies’ network had already been signed with the company of the French Armando Bayard, who had carried out all the works in the sector in the south and with the company of the Apulian Emanuele Melisurgo, who had also begun his activity on the Adriatic side and had almost completed the first 130 kilometers.
The projects included two lines:
- One that went from Brindisi to Pescara.
- One that went from Reggio Calabria to the border of the Papal States. The latter would have used the already existing section from Naples almost to Salerno, finally connecting to the line to Rome, which was being completed on papal territory.
The new railways would have been built using the same methods used for the previous ones and, therefore, would have had a limited impact on public finances. The companies involved would have received an advance to start the work. Still, to continue, they would have committed their capital, which would then have been recovered, obviously with the profits, thanks to a multi-year concession for the economic exploitation of the work completed.
