Markets, Productivity, and Happiness in a Historical Perspective

Conflicting designs within common values. The Christian Democratic Party and the Italian economic policy debate in the 1960s

Nerozzi Sebastiano, Catholic University of the Sacred Heart
Pavarin Alessandro, Catholic University of the Sacred Heart

At the beginning of the 1960s, the prominent leaders of the Christian Democratic Party shared the same set of values and objectives. Their efforts were directed towards the creation of an original mixed economy system that, moving away from both laissez-faire and socialist planning, would allow the country to accelerate modernization and foster convergence between the South and the Northern part of the country, within a framework of social, political and macroeconomic stability. The inflationary flare-up of 1963-'64 posed the dilemma of choosing between the ambitious objectives of development and reduction of territorial imbalances and the shorter-term objectives linked to the management of the cycle. This paper analyzes the policy views embraced by the major political groups within the Christian Democratic party. In doing so, we shall rely both on the primary and secondary literature widely at disposal and draw on such primary sources as Parliamentary Acts and Party Congresses. From our inquiry, a growing divergence emerges between the views and policy proposals put forward by the different groups contending the leadership of the party. An ambitious reform agenda pushed technocrats such as Pasquale Saraceno and a political leader like Amintore Fanfani to call for a central role of public-owned enterprises as an active and powerful economic and social policy tool. Echoes of the post-Ricardian approach can be found in the positions expressed by the party's left wings such as La Base and the syndicalist Forze Nuove, who asked for a much broader workers' participation in economic planning and strongly opposed income policy. The latter was instead supported by the Minister of the Treasury of that period, Emilio Colombo, who, in harmony with Bank of Italy's Governor Guido Carli, gave priority to anti-inflationary policy and opposed economic planning. The exponents of “Popular Centrism” were always cautious if not critical of the extensive use of public firms coupled with planning policy; they also supported income policy aimed at containing wage pressures. Heterogeneous opinions were expressed by the so-called “Dorotei” group, and, later, by other two important groups: the “Morotei” and the “Nuove Cronache” group led by the former Premier Amintore Fanfani. Under the suggestions of his political advisor Nino Andreatta, the premier Aldo Moro enacted an expansionary Keynesian policy in order to counteract the effect of the credit and monetary restrictions enacted by the Bank of Italy. Despite Moro's efforts to keep the Party united and foster the formulation of a common policy agenda, the challenges posed by economic cycle and conflicts during the 1960s provoked a growing dissent within the Party and weakened its ability to guide the country in quite perilous times.

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Keywords: Italian economic policy, Christian Democratic Party, planning

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