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Poised on the brink of national
bankruptcy, economic chaos
and política/ anarchy, Ita/y i s
sick. Her disease i s ínf/ation,
and the months ahead are críti–
ca/ índeed.
by
Ray Kosanke
F
OUR YEARS
ago when Antonio
started school. the corn o il his
mother used in he r daily
cooking cost 500 lira per lite r.
equivalen! to about 824: a quart.
Today the same liter costs 1.600 lira
- $2.64. The gasoline Antonio's
father puts into his sma ll Fiat now
costs him the equivalent of over
$1.85 per U. S. gallon.
Many average workers in Ita ly.
like Antonio's father, are spending
approximately 80% of their incomes
merely to feed and clothe their fam–
ilies. These are very difficult times
indeed for the ltalian working class.
INFLATION
PUTS
DEMOCRACY
TO
~HE
TEST
According to Italy's Central Sta–
tistical Institute, consumer prices in–
creased 19.3% during the twelve–
month period ending in July. The
increase for July alone was 2.4%
which, if continued for the next
twelve months, would mean an an–
nual rate of 28.8%.
Economists, in an effort to estí–
mate a "danger rate for democ–
racy," have concluded that 20% is
approximately the limit. Beyond
this point, inflation becomes an
alarming political threat because it
simply imposes too great a strain on
the steady but deliberate give-and–
take nature of the democratic pro–
cess. Various sectors of the econ–
omy. instead of working together as
in normal times. become rivals. each
demanding greater material pros–
perity for themselves a t the expense
of other groups.
The End of a Miracle
The economic "miracle'' that An–
tonio's parents and grandparents
enjoyed in Italy after World War 11
was based oo two major factors: a
large base of low-cost labor within
!taly and the availability of low cos t
raw materials such as eructe oí! and
iron ore from abroad. (ltaly must
import 99% of its oil - the basis for
80% of its total energy supply.)
During this post-war boom. there
was little gu idance - from the gov–
ernmen t or from the indust rialists
themselves - to plan or coordinate
economic growth. Pan of the reason
is that ltalians had just come out
from under 20 years of Fascism and
distrusted government to the point
that those in power were content to
make as few decisions as possible.
What has resulted is a hodge-podge
of development that favors sorne
sectors of the economy while ne–
glecting other critica! areas. When –
ever the government did intervene,
it was often to subsidize sorne an–
cient and failing industry - wasting
government reserves and credit and
continuing to tie up workers who
could have been retrained for other
industries. Such actions hindered
ltaly's competit iveness in the ínter-
national market, beginning the now
grievous balance of payments prob–
lem.
At the same time, according to
economic analysts. growing indus–
tries, which should have been able
to retrain workers from failing in–
dustries. were swamped by a large
migration of workers from the
farms. Th roughout the decade of
the 1960's. sorne 200.000 people a
year left their farmlands primarily
in ltaly's impoverished south and
moved to the industrial north. But
mechanization of farming. which
had allowed the same sort of migra–
tion in Britain, Germany and the
United States during the previous
hundred years. did not keep pace
with the flight of farm labor. As a
result. ltaly became a net importer
of food. Meat imports a re oow sec–
ond only to petroleum in Italy's
deepening balance of payments gap
- now running at the astOnishing
rate of one billion dollars a month .
A System Fallin g Apart
A day of reckoning has been on
the horizon for several years. but
oow the spira ling price of o il in the
wake of the oi l embargo has has–
tened its coming.
Many observers in lta ly point
10
an economic crisis in !963 as an
ignored warning of what was later
to come. Many of the problems now
confronting ltaly first became star–
tlingly evident then: a poor banking
and financia! infrastructure. in–
adequate public services (postal.
hospital, school , railroad) and to top
it off, an increasingly parasitic spi–
derweb of governmental bureau–
cracy that consumes more and more
time, manpower and money while
doing less and less.
For Antonio, his family and their
countrymen, this means a society
that is not only uncomfortable. but
increasingly dangerous. As Piero Sa–
navio wrote in the
Jnternational
Herald-Tribune
earlier this year:
Italy's health service is fa ll ing
apart : hospitals have no bandages,
medi cines; t he kidney-machi ne cen–
ters a re closing for lack of blood
PLAIN TRUTH October-November 1974