Mercantilism and Class Struggle: Italy in the International Economy, 1960-1990

The outbreak of the world-wide economic crisis in 2008 and its later worsening brought the topic of Italy’s ‘economic decline’ to the forefront of public debate The most common explanations of this decline revolve round the inability of Italian society to adapt to the new conditions caused by the advent of the ‘second wave of globalisation’ after the 1970s. Emphasis falls on the burden of public debt, the inadequacy of the reforms of Italy’s economic and social institutions (privatisation, flexibility in the labour market, market liberalisation and deregulation) and on the need for investment in education. Here, we adopt a different outlook, one which hinges on class interests and the conflict between them. The chapter covers the development of the Italian economy from 1945 to the 1990s, focusing in particular on the period starting with the crisis which put an end to the ‘economic miracle’ in 1963 and ends in 1992, when the lira left the European Monetary System. This was a period of sustained, and unprecedented, growth for the Italian economy, during which Italy caught up with other advanced industrial economies. At the same time, those were the years in which we can find the roots of the problems which have afflicted the Italian economy in the last two decades.