The Economics of Post-Unification Southern Italy
By: Tom Frascella May 2016
Starting about forty years ago Italian historians began to revisit the traditional accounts of “Unification” and revise it. For the revisionists much of the traditional Italian histories taught Italians in school were found to be largely propaganda designed to encourage nationalism and sanitize the historical events that occurred. Italy certainly is not unique in this. But out of this “revisionist” movement has slowly emerged a recognition in some quarters that southern Italy has been treated and depicted throughout the unification process in a most unfair and denigrated light, by both political actions and words.
The fact that almost ten million people of southern Italian origin had left Italy between 1850 and 1930, five times the number as from the rest of Italy combined, states volumes that something was very wrong. This sense of wrong is made more pointed by the fact that southern Italy had overwhelming embraced/supported both unification and the Piedmont King from the beginning of the Second war of Unification. In many traditional histories this massive migration, the largest in European history, is often blamed on the fundamental deficiencies of the southern Italian people. The revisionist present a different explanation. So what happened in the southern part of Italy after the Bourbon regime collapsed that forced so many to flee?
As a starting point in this discussion I should say that the traditional view of the southern Italian, even when trying to be sympathetic to the southern plight, can be found in the words of a Cardinal/Papal Nuncio to the U.S. In a speech in which he described the plight of Italian immigrants, He said that they were faced in their homeland with only two choices/reaction to a life of unbearable systemic poverty, one, a life as a brigand/outlaw or immigration seeking opportunity denied them in Italy in adopted foreign lands.
Curiously to me revisionists look at the above and say no it was not a choice of one “or” the other but rather a choice of Brigand “and” immigration. In a sense even now not able to abandon a generations long prejudice toward the southern Italian culture and people.
I actually don’t accept either depiction and find they are both equally deficient as descriptive of the events and character of the people, especially as they reflect on our Lucanian ancestors.
First, as I have repeatedly tried to point out in my articles to date, they did not become brigands/outlaws in any common sense of those words. They were a people that had by 1860 a one hundred year history of challenging and at times revolting against Bourbon authority. Their political actions, made at great sacrifice were a consistent attempt to secure constitutionally guaranteed Civil Rights. Many were in the 1750’s thru 1830’s a part of what became known as the Carbonari movement which originated in southern Italy and spread to the rest of Europe and the American colonies. After the 1830’s this movement became known as the young Italia movement, led by Italian political philosopher and politician Mazzini. Southern Italians including Lucanians embraced republican principles and were the only part of Italy to successfully and independently revolt against the Bourbons in August 1860. When Lucanians saw that the best avenue to firmly securing their civil rights were to join in Garibaldi’s campaign, they joined voluntarily in that southern campaign. Further, on promises by Garibaldi and other Piedmont agents of those constitutional guarantees they voted overwhelmingly in October 1860 to unify with Piedmont to help form a “new” Italy.
When in the course of time those promises were not delivered by the “new” regime they “became” what they had always been, staunch and resolute advocates for equality, freedom and constitutional civil rights. However, the new Piedmont regime, as had the Bourbons labelled them “brigands/outlaws. There was no public recognition that their crime was to be “advocates of civil rights” promised and denied. Winners in war get to attach labels in history. If the colonists had lost the American Revolution no one would have ever heard of the Declaration of Independence or discussed the dignity and unalienable nature of certain civil rights.
So I would say that our Civil Rights activist ancestors did not “become” so much as “remained” what they had been for a hundred years outlaws for freedom. It was then in the suppression of their liberties that they were forced to become, not immigrants but political refugees. I should be clear they were political refugees whether forced into hiding in the mountains of Basilicata or in exile in other nations of Europe as well as North and South America. It was only when all hope of success of obtaining their civil rights in their homeland was gone, that they immigrated to where there were constitutional guarantees of civil rights already in place. Failing to adequately acknowledge that our southern Italian ancestors were political civil rights advocates and not common criminals has long been used unfairly to divert attention from their cause and diminish their character as part of the design of the Regime. If you repeat a lie enough, in this case for 150 years, it sounds like the truth. Especially if the voices of dissent are silenced.
In this article I will make a number of references to a “revisionist” southern author Pino Aprile and his narrative titled “Terroni”. The book takes its title from the derogatory term often used by northern and central Italians in denigrating southern Italians. Its closest English equivalent is “dirtball”. However, while the English translation may connote the negative social and moral aspect of the term in English it fails to register the racial aspect that attaches in Italian as well. If you have not had an opportunity to read this book it is offered in English translation. Mr. Aprile is a modern Italian of southern origin. He is passionate in his writing and the passion comes across through the book’s content selection. While Mr. Aprile’s focus is on the “Southern Question” as it has primarily affected Italy it is enlightening to read the many commentaries/reviews that can be found online. Most American and Italian reviewers often mention that the events and politics he visits are entirely new to them. That these historical events have been hidden for view and in bringing them to light a new perspective is gained.
Photograph of Pino Aprile
In the last article I attempted to look at the actions taken by the Piedmont regime from the time its King and army arrived in the Kingdom of the Two Sicilies, thru to the Bourbon surrender at Gaeta and concluding with the convening of the First Parliament of the “Unified” Italy. Those actions discussed were concerned with both military and political actions connected with the formation of the “new” Italy.
But as we all know the world runs on more than military might and politics. Military might and politics need to be well oiled by money. In this article I would like to make an attempt to discuss some of the economic/fiscal actions taken by the Piedmont regime during the same time period, November 1860-February 1861. To quote Jerry Mc Quire, “Show me the money”.
All Hail the King
The takeover of the Kingdom of the Two Sicilies by the Piedmont regime whether properly authorized by popular Plebiscite or not resulted in the coronation of Victor Emmanuel II as King of southern Italy in November of 1860. As the new monarch King Victor Emmanuel immediately came into control over the substantial assets left behind by the retreating Bourbon monarchy. In terms of liquid/hard currency assets, the abandoned treasury of the south was estimated at several times the value of the Piedmont Treasury. Despite this vast fortune the treasury assets once in the hands of Piedmont did not inure to the benefit of the general population of southern Italy its region of origin. Instead they were lifted whole and transported to the Piedmont treasury of Turin.
Subsequently, a substantial decline in the standard of living for most of southern Italy happened very quickly following the formal unification of northern and southern Italy in February 1861. This was the result of not just the looting of the Neapolitan treasury. There were in fact many poorly thought out decisions made early on by the Piedmont regime regarding the economics of southern Italy, the perception of political character/equality of the newly added territory and the Piedmont timetable of priorities for further expansion of the unification process.
Many modern revisionist writers consider that the conquest of the south of Italy was more critical and of greater priority, to the financial solvency of the Piedmont’s ambitions than to the unification of Italy as a whole. Piedmont realized early on in their quest for expansion and unification that it did not have the requisite financial resources necessary to press its agenda. In Pino Aprile’s book “Terroni” at page 95 he writes;
“How many times have we read that in the South, with only one third of the entire nation’s population, there was twice the amount of money in circulation than in the rest of Italy put together?
The impoverishment of the South, in order to increase the wealth of the North, was the reason for the Unification of Italy, not the consequence. This was the practical reason. The Idealistic aspect of Unification was the romantic one. Both the realists and the romantics won.
We either go to war or face bankruptcy wrote the Pro-Cavour representative Pier Carlo Boggio in 1859 in his booklet, “Fra um mese. Piedmont is lost,” He concluded after analyzing the nation’s budget. A newspaper of the time, “Armonia” reported, “their finances will never be restored”: Angela Pellicciari reminds us of this episode in her work L’altro Risorgimento. Once the Unification had been completed, all of the funds were united as well (although one account was empty, while the other was full). The North repaid its debts in this manner, with the funds from the South. The Kingdom of the Two Sicilies contributed sixty per cent of the money. Lombardy contributed a little over one percent and Piedmont contributed four per cent.”
In addition to the Bourbon Treasury being confiscated for Piedmont’s use there quickly arose at the highest levels of the Piedmont government the attitude that the territories and people of the south were a subjugated and inferior domain. Piedmont constitutional law was imposed throughout the south without vote or discussion. This lead to a number of major issues impacting the culture and structure of southern economy including the confiscation of monastic lands. Monastic lands had been seized in northern Italy by fiat in 1859. As this was the law in the north it became the law of the south by extension. Piedmont officials as administrator were then inserted at the highest levels of southern administration to oversee the implementation of this and other northern based laws.
These inserted Piedmont administrators were wholly unfamiliar with the culture and organization of traditional southern society. They acted under assumption that what was good for the north would be good for the south as well. They made a number of assumptions that resulted in a lack of proper planning, understanding and implementation of rules and regulations by the new administration. When as might be expected there was a failure of successful implementation, the failure was blamed on the southern people’s inferiority rather than on the poor judgement of the administration.
Each successive bad decision would only layer the misery and decline of southern Italian culture and society. It also hastened an attitude in the north that the southern Italian character was what inherently stifled progress not their grand looting. The rapidity at which the Piedmont regime implemented wholesale change in their own best interest without regard for the overall prosperity of the nation, especially the south, is staggering in its scope and effect. Below is a partial list of policy decisions that had devastating detrimental impact on the south. They were:
1. Confiscation of the Bourbon Treasury in Naples.
2. Confiscation of Monastic land holdings in southern Italy.
3. Removal of protective tariffs on certain southern manufactured products, mining and agricultural produce.
4. Greatly Increased and disproportionately imposed taxes and collection
5. Encouragement of administrative corruption and non-regional administrators.
6. Implementation of Piedmont law in the south regardless of appropriateness or impact.
Ignorance of how the economics of the south worked, what was necessary for the southern economy of the south, or the nation as a whole to prosper did not appear to be of great concern to the new powers in control. Their focus was on consolidation of power and expansion of their political influence and territorial gain. In part I think southern Italy was a victim of its previous success not its failures. Based upon the unrivalled wealth of the pre-war Kingdom of the Two Sicilies, as compared to other regions of Italy at the time, King Victor and Cavour viewed southern Italy initially as a limitless cash cow. A money pit to be drawn on for their ambitions without regard to the impact on the citizens of the south.
There may have been some historic rational for the Piedmont perception of the pre-war strength of the southern economy. Prior to the Napoleonic Wars southern Italy was in fact the wealthiest of all of the Italian States. Even after Napoleon Bonaparte invaded Italy and forced the Bourbons into exile on Sicily both Sicily and the mainland under French control were rich and prosperous regions.
But that the prosperity was in fact built upon delicate balances within the economy was not well understood by the new lords of the realm. As previously stated it is well documented that the abject poverty that southern Italy was reduced to after unification, forced millions of southern Italians to immigrate in the early 20th century.
It is less acknowledged that the declining economics of the south also forced reactionary sentiment to quickly grow toward renewed rebellion as early as 1861. For the earliest of the San Fele/Lucanian immigrants to the U.S. it was the reactionary rebellion that commences in 1861 that is central to their story.
I have found in contemporary writings on the subject that much of the modern discourse is focused on the raided treasury. This is an important event that needs to be discussed. It is not that the treasury was raided or that much of it was used to eliminate Piedmont’s pre-war debt. What is important is that this was done without consent and how little of the funds earmarked for nation building found their way back toward positive purposes in the south. Toward this point I think the confiscation of the Treasury and its immediate use has to be looked at jointly with another priority. That priority for Piedmont was maintaining French and English political support. Understanding this is critical to understanding the nature and one of the actual causes of the southern decline.
The Cost of English and French Support
When the Bourbons’ were forced into exile in Sicily by Napoleon they had been able to leave Naples with much of the Kingdom’s treasury still in their possession, the English fleet saw to that. That treasury, the British knew, was essential to the continued viability of the Bourbon Monarchy in exile on Sicily. On Sicily with the abundant treasury in place the Bourbons could purchase and support a military to protect order for their regime on the island.
The almost twenty year French occupation of the mainland, especially Naples, saw a substantial amount of the transportable wealth left behind in the region removed by the puppet regimes of Napoleon. However, life in the rural south continued pretty much as it had during the pre-Napoleonic period.
When the Bourbons came back in power they had substantial resources with which to rebuild their nation. This was critical to the Bourbons push to replace the Murat regime a vestige of Napoleon.
In addition the Bourbons knew that much of the Kingdom’s wealth was derived from the mining of sulfur in Sicily and southern agriculture. In diplomatic negotiations to restore the Bourbons they leveraged these resources for continued British protection and support. This meant that during the mid- 1820’s thru mid-1830’s that England paid bargain rates for the lion’s share of the sulfur output and Italy’s olive oil production. These reduced rates did reduce the revenue to the Bourbon regime and slowed the growth of the southern economy and treasury.
The Bourbon treasury began to grow rapidly again only when the Bourbon regime felt militarily secure enough to free itself from British protection. At that point in the mid 1830’s the Bourbon’s began to remove the sulfur market restraints imposed by England’s most favored nation trade arrangement.
England recognized that losing their most favored trading status would have inflationary impact on their own manufacturing production at home.
England responded to the Bourbon’s move toward open market trade first, by political threat and then by political action. They began to publicly paint the Bourbon regime as oppressive and to encourage a takeover of the south by a more economically friendly regime. It found that ally in Piedmont. England’s “help” for the Piedmont cause was based on concern for preservation of its most favored nation trading partnership specifically sulfur production in Sicily not any sense of civil rights or national union.
Sulfur was a vital strategic resource and mining in Sicily accounted for 95% of the world’s production. Low mineral prices and control of sulfur production meant greater manufacturing profits for England.
The Effect of Confiscation of the Treasury Coupled with Bargain Mineral Export
When Piedmont and King Victor came to power in November 1860 they removed almost all of the Neapolitan Treasury taking it to Turin. This vast treasure was removed by Piedmont and used primarily in four ways, First, to pay off war debt, Second, to bribe parties, both national and international who could further the Piedmont nationalist agenda, Third, to bolster the regime’s northern territories’ economy and Fourth, to increase the size of the Piedmont army. Just how large a treasury the Piedmont regime confiscated and removed north is open to speculation however some authors have attempted to put numbers to the act and to describe the extent of the pillage. In Aprile’s book he cites the following figures;
“Naples was like an enormous jewelry box: King Francis left everything behind when he fled to Gaeta. He left the kingdom’s gold, works of art, museums filled with treasures, millions of ducts from his own personal estate, and his wife’s dowry (when the savoy family was forces into exile in 1946, eighteen trains left for Switzerland carrying only their hand luggage…) Angela Pellicciari reported on the declaration of the representative Boggio,… “Vast, fabulous, quantities of money disappeared with the same ease and rapidity that they were stolen from the Bourbon funds.
So what happened to that mountain of gold, and how big was it really? Francesco Saverio Nitti, who had access to the documents, counted 443 million gold-lira (of the 664 of all the rest of Italy put together). This was nearly half of Piedmont’s frightening debt…If one then proceeds to add thee 33 million ducats from the Bourbon king’s personal account, we reach 476 gold ducats.” Pages 117 & 118 “Terroni”.
In today’s terms approximately 270 billion euros. The description of the asset loss to the south goes on;
“But let us keep in mind that the wealth that was plundered from public institutions, homes, churches, palaces (that amount, today, is known by God and the thieves themselves). But most of all, the gold in circulation has not been calculated. What is this exactly? The other states emitted paper money, whose value was guaranteed by the accumulated reserves of gold. The reserves served to cover the cost of those amounts in circulation that went out of circulation, were used for other purposes, or lost. How much did this other quantity come to? Some speak of double the amount of the famous one hundred million gold ducats of the reserve. Only half would then be converted when the currency changed to lira. We are speaking of another trillion euros”. Terroni page 118.
In addition to this impressive looting of the existing tangible treasury funds the need to keep England as close ally meant that British mineral interests on Sicily, ownership, mining and export had to continue to be protected not “nationalized” as the Bourbons had begun to do. Along with the significant reduction in revenue to Italy that this favored trading status allowed, there was as a continued consequence a profound social and negative humanitarian consequence to the people of rural Sicily, themselves. To more fully visit the consequences that the trade preference created please see my article from December 2013 titled Fire, Brimstone and the Devil’s Treasure with its description of the Carusi miners. Many young Sicilians, children as young as eight, were reduced to virtual slavery in order to supply the sulfur production needs of Great Britain at cut rate bargain. In effect the natural wealth and blood of the south was traded for the expansionist ambitions of the north.
Confiscation of Monastic Landholdings, Cancelling Protective Wheat Tariffs
Land filtered from Monastic control by the Piedmont takeover eventually fell into the hands of the wealthier elite of the south, including many very corrupt politicians. Obviously land confiscation and subsequent sale of over 1,000 large monastic estates had great financial benefit to the Piedmont State. Again this windfall revenue had little if any gain that came back to the south.
“With the mere sale of the state and ecclesiastic properties (which were requisitioned) from the former Bourbon kingdom, the New Italy deposited 600 million lira (another 500 million euros) that went straight to the north. The country was unified from the North to the South, and not the other way around:”
In addition the entire banking system of the Kingdom of Sicily came under siege as if it was a foreign entity not a part of a unified country’s monetary system.
The Bank of Naples was prohibited from expanding to the rest of Italy while the banks of Turin were allowed to open branches in the South. One could ask the Bank of Naples to convert paper money to gold, while the same operation was prohibited at the national Bank of Turin, who was allowed to keep its gold ingots while taking those of Naples.”
By simply printing more currency notes the northern banks could demand and deplete the gold reserves of the Bank of Naples.
“When the Bank of Italy came into being the net exchange value of bank stock therefore was 20,000 shares conceded to the south and 280,000 shares to the rest of Italy.” Terroni page 121.
Once land ownership passed into the hands of the politically connected the traditional relationship with those rural poor who depended on communal farms changed. The peasant class went from communal land working and shared benefit, to sharecropping for wealthy absentee landlords. It was possible for sharecropping to be profitable only if the margin of profit for the crop was maintained. Piedmont eliminated the protective tariffs on wheat greatly reducing the cost of imported wheat and all but eliminating profitability for the lowest rung on the agricultural ladder in the south.
It is interesting that as previously noted in past articles southern Italy came into wheat production as a major crop relatively late in the second half of the 1830’s. It actually was planted and forests cut down as a result of the loss of the previous cash crop of the south. To understand the delicate economics of southern agriculture one has to realize that up until the 1830’s southern Italy was the largest producer of olive oil in the world. The center of olive oil production, distribution and trading was in the region of southern Italy just above Bari. Olive oil was a commodity greatly prized and traded in the emerging industrial world of early 19th century Europe. Prized of course for its traditional uses but just as importantly as a lubricant. As the industrial world reached the 1840’s and beyond other sources for lubricants were found effective and cheaper to produce. First scientist learned how to produce oil from vegetable matter and then eventually natural oil from the ground. As a result the market slumped and the wealthy landowners began to destroy the olive orchards, some hundreds of years in production, and converted to wheat production. However as northern Europe began to experience a global warming and increased wheat production, wheat prices plummeted as well. The Bourbons imposed protective tariffs in order to keep the landowners and smaller farmers solvent. Piedmont removed the protective tariffs, reducing the cost of wheat and drastically reducing profitability.
In the south where farmland is at a premium and the rocky farming conditions which were ideal for olive groves made wheat production labor intensive. The result was a cycle of increasing debt for tenant farmers/sharecroppers and erosive land husbandry as a result of poor profitability.
Following this disaster farmers and landowners in the south sought still maintained a resilient character and attitude. Many landowners especially along the coast converted to citrus fruit growing. Again initially what was a possible solution was eventually frustrated by import export relationships created by the north. Cycle after cycle of frustrated effort was all that greeted the southern farmers.
In addition, since much of the farmland of the south had previously been held by monasteries, or as communal fiefs the social benefits from redistribution frequently were lost with the land. Monks who had traditionally provided benefits to rural communities by supplying educators, physicians, mediators and other socially supportive efforts were now unable to support themselves or their charitable, necessary works in the communities. When the monks were displaced it created a vacuum within the communities that Piedmont and the local “new” southern administrators choose not to fill with responsive agents, teachers, physicians etc. As an example in the “new” unified Italy’s disproportionate allocation of assets is the following;
“ that out of the 458 million lira in state funds for improvements… that less than three were invested in the South, in the thirty-five years up to 1897.” Terroni Page 122. The rest went to the north and central parts of Italy. Distribution of funds for schools showed a similar disproportionate favoring of central and northern Italy over southern Italy despite the fact that the tax rate for educational funding was imposed at a higher rate in the south than the north. Illiteracy, which had not been any more or less significant in the south began to grow measurably as resources for education were diverted northward.
Disproportionally Higher Taxes in the South, Collection at the Site of Production
Increasing taxes on a declining economic situation seldom results in economic stimulation. We all know that the southern part of Italy was and remains the poorest region of Italy do in large part to it receiving little support for advancement. That systemic poverty is often cited as the major factor in the 20th century exodus of close to eight million Italians. But by saying the poverty is systemic it is usually interpreted as the inherent fault of the southern Italian. As you can see from the above the game was rigged. Not only from the aspect of resources diverted but in tax burden assessed. The continual disproportionate taxation of the south from unification forward got one Lucanian legislature Ettore Ciccotti in 1904 to ask “that Lucania be abandoned by the State so that it might take care of itself”. Taxation on land was “calibrated upon the characteristics and needs of the North, so that the richest provinces of Lombardy and Veneto were taxed by 8.8% while the poorest in Calabria and Sicily were taxed by at least twice that amount”.
In other words, “In the first decades after Unification, the disproportion between the North and South in terms of expenses was… balanced by the fact that the less one invested in the South, the higher the taxes would be.” Terroni page 124.
Piedmont in addition to disproportionately increasing the overall tax burden on raw materials, manufactured goods and agricultural products interestingly placed the responsibility for collection of State taxes on the production or finished product point of entry to the market in the south. The social problem created by this might not appear obvious at first. However, this requirement had devastating results in the south especially during the first decade after unification. It created a situation where the production managers were forced to become tax collectors to their vendors. Proceeding to collect taxes in this manner resulted in a number of social, legal and technical issues for all concerned. It placed a social wedge between production managers and producers. It tended to be inefficient and unreliable. Further the process resulted in suspicion by the government of cheating, or withholding revenue by those obligated to collect taxes and labor’s suspicion of collusion with the government by those obligated as well. Essentially, a no win situation with everyone believing they are being cheated. This at a time when civil law was suspended in favor of martial law an mere accusation was enough to result in execution.
The Effect of Imposing Non-Regional Administrators
As is stated in “Terroni” page 124;
“It is thanks to the passing of numerous laws like the ones previously mentioned that from 1860 to 1998, the state spends two hundred times more in Lombardy, three hundred times more in Reggio Emilia, and four hundred times more in the Veneto region than in Campania. To ask how could such a system develop, well it was no accident that “In the first three decades after Unification, the vast majority of elected hailed from the North, Mario Meriggi, professor of modern history, in his work Breve Storia Dell’Italia Settentrionale. In this manner the government allotted its subsidies”.
“So for the first twenty years of the Unification, the subsidies were concentrated in the North, Massimo D’Azeglio once said “these chambers represent Italy as much as I represent the Great Sultan of Turkey”.
Of course the people of the south objected to the disproportionate treatment. However, to whom could they complain? Their officials and administrators many from the north or in their employ were unsympathetic at best or profiting from the misery at worse. They could appeal to the law again northern controlled and during the initial years more military and summary in effect than civil.
There is nothing in the record of events in the 1860’s in Italy that suggests that Piedmont doubted for a moment that their action like those cited above would lead to civil unrest in southern Italy. Where they miscalculated briefly was the resolution of southern people to object with any means available and what it would take to quell that revolt.
© San Felese Society of New Jersey