Land of Woe and Wonder

By Spencer Davidson

The economy sags, the governement wobbles, but la vita is dolce

Completing his fifth month as Prime Minister of a nation noted for swinging-door governments (41 in 36 years), Giovanni Spadolini felt secure enough to confront 57.5 million fellow Italians with a sobering economic warning. The country is sliding into recession at an alarming rate he said in a televised speech a month ago. Unless inflation is brought under control, warned Spadolini, Italy could end up as a Mediterranean banana republic.

If the Prime Minister sought to scare his countrymen into mending their free-spending ways, his message was ill timed. It came just before the manifestation of a peculiarly Italian custom, tredicesima. That is a 13th-month salary, paid by law and tradition to workers at all levels every Christmastime. Some 21 million Italians received a total of $9.2 billion tredicesimas last week, and few would be so un-Italian as to save a lira of it. Instead, the windfall will go for pasta, parmigiano and panettone, and for spumante and sambuca to grace their holiday tables. Any lire left over will be spent on gifts and celebratory sprees.

As for gifts, expenditures on baubles and bangles this season appear to be particularly lavish. In Rome, such elegant shops as Gucci and Fendi are so crowded with Christmas shoppers that latecomers have been forced to queue up outside. Carla Fendi, one of five sisters who run the family's fashions, furs and luggage firm, predicts that sales will be up 20% over last December led by bestsellers "with the style and flair," like gold lace blouses $600 apiece. Gucci has leather jeans at $500 a pair, while Doney's cafe on the Via Veneto is finding buyers for a $100 wicker basket holding only a bottle of champagne, a toy dog and a small package of chocolates.

As for sprees, much of country is destined to spend the holidays on skis. Three million Italians are heading for the slopes this season. Inexpensive winter resorts report that reservations are running about the same as last year. But fashionable places like Cortina d'Ampezzo and Madonna di Campiglio show increases of as much as 22%. Less adventuresome spenders have plenty of high-priced entertainment to choose from. At Milan's La Scala opera house last week, for instance, the season's opener, Wagner's Lohengrin, was sold out at $160 a seat.

In other times of adversity, Italians have found that living well is the best revenge, and this Christmas they face no shortage of at woes. Inflation is spinning along at 19%. The budget deficit for fiscal 1981 is estimated at $42 billion, almost 41% higher than the previous year. Unemployment, by official figures at least, has reached 2 million. That represents a 25% jump since the last national binge, the monthlong vacation that shuts down the country each August.

Politically, Italy is, as ever, teetering on the brink of instability. Spadolini became Prime Minister last summer after Christian Democrat Arnaldo Forlani was forced out by a scandal involving the membership of high government officials in a mysterious Masonic lodge. So far, Spadolini seems to be faring reasonably well In a recent poll, 62% of those interviewed approved of the way he is handling his job, a high figure in a notoriously cynical electorate. But the jovial Prime Minister has a handicap. A member of the small center Republican Party, he is the first non-Christian Democrat to head a government in 36 years. Even a small crisis could bring down his fragile five-party coalition government and send Spadolini through those swinging doors.

A more unsettling danger is political terrorism, from both the Red Brigades of the left and the neo-Fascists of the right. Partly as a result of improving police intelligence, acts of violence tapered off this autumn, but there were still 753 incidents in the first ten months of the year. In a Shootout on a Rome street two weeks ago, two policemen were seriously wounded and a right-wing terrorist, Neo-Fascist Alessandro Alibrandi, was killed. Next day, in retaliation, a member of the national police was shot to death.

Actualy, most Italians do not seem concerned about whether the economy dips the government falls or the shootouts take place in the Prime Minister's Chigi Palace. Italy is a living paradox: the more its political and economic life deteriorates, the more its citizens seem to enjoy la dolce vita. As distress from terrorism or corruption grows, ordinary Italians are withdrawing into individualismo, which means ignoring the social structures and doing one's own thing, and familismo, or pulling back into family togetherness. Such universal disengagement does not shatter the nation. Instead, it keeps Italy functioning remarkably well. Explains Author Italo Calvino: "Italians know that they can count only on their own individual strength, that it is useless to expect anything from an authority whose institutions do not function."

Such an individualistic response may not be wise in the face of massive national problems, but it has been an antidote to bad times since Italy became a nation. Italians, who seem to have an expression for just about everything, have coined an especially apt one to describe the way life goes on while institutions flounder: malgrado, meaning in spite of.

Thus the people survive, indeed flourish, in spite of a vast gap between them and their ineffective governments. They survive in spite of a welfare system out of control, schools and social services in disarray, flagrant corruption and a bureaucracy so swollen and inept that it is mocked as lacci e laccioli, shackles and snares. A letter arrived two weeks ago at the home of one Giuseppe Baggio in Bassano Del Grappa. Baggio had mailed it to his mother from a military prison camp 37 years ago. Many Italians were surprised: the letter had actually arrived.

To get what they really require, Italians have learned to bypass the bureaucracy. One way to do this is by means of a raccomandazione, a good word put in by a well-placed politician for a job or a favor. Another is by using clientelismo, or finding friends of any type with leverage. A company in Parma, for instance, wasted months trying to obtain a telex machine from the Post and Telecommunications Ministry. Finally the firm turned to a local politician. Two months after the telex was installed a letter came from the ministry in Rome: "We are sorry, but we cannot approve your application."

Malgrado also allows Italians to joke about life's little insults. Strikes, work stoppages and high absenteeism are commonplace in industrial life. When workers do show up, many are marginally productive. Money-losing Alfa Romeo, according to one joke, intends to compete with Japanese auto imports with one scientific breakthrough and one miraculous innovation. The scientific breakthrough is an engine that runs on water. The miracle is that assembly-line workers will actually work.

Even if their country does not function efficiently, Italians are living surprisingly well, as the Christmas celebrations demonstrate. Italy imports more French champagne than any other nation in Western Europe and is second only to France in purchases of Scotch whisky. Italians also lead the Continent in ownership of vacation homes. Automobile sales may be down elsewhere, but in Italy so far this year they are up. Only one out of 167 Italians owned a car 30 years ago. Today the figure is one out of four, and the result is some of the world's most spectacular traffic jams. Notes Author Enzo Biagi in his book II Buon Paese (The Good Country): "The Italian lives in insecurity, spends with desperation, wants to have a good time because he expects the worst."

Such contradictions between the image of imminent collapse and the reality of good living puzzle outsiders. Asked for an explanation by students at the University for Foreigners in Perugia, a professor of Italian history said: "In Germany, do you have a St. Francis of Assisi? Do you have a St. Januarius of Naples? You must understand: Italy is the land of miracles." Others prefer less mystical explanations. Insists Banker Silvano Bambagioni: "The Italians are like a polar bear at the North Pole. They have learned to survive in a difficult environment."

Perhaps the most cogent explanation was delivered by the late Ugo La Malfa, Spadolini's predecessor as Republican Party leader. "Italy," insisted La Malfa, "really comprises two nations, the nation of profit and the nation of loss. The nation of loss is made up of the huge corporations, mostly state-owned, that are shackled by political pressures, union regulations and bureaucratic regulation to the point that they cannot show a profit. The nation of profit is the medium-size, privately owned firms and those below, on down to cottage industry, where individual initiative and motivation have full play. It is that level that has saved the Italian economy." And, La Malfa might have added, underwritten the good life.

The nation of loss is indeed in poor shape. Government-subsidized industries--steel, cement, autos, shipbuilding, airlines--are losing money at the rate of $5 million a day, partly from inefficiency, partly from political pressures. The vast Montedison petrochemical complex, for example, could save an estimated $180 million annually by firing 9,000 redundant workers among its 114,000 employees. But union leaders will not agree, and politicians who made raccomandaziones for those workers in the first place do not want to get involved.

The drain on the economy from such losses would be considerably worse were it not for the nation of profit. Small business everywhere is surprisingly strong. In the Tuscan city of Prato (pop. 160,000), for instance, the profits of family-owned textile businesses amounted to $1.5 billion last year, or about as much as Montedison and the rest of the chemical industry lost. Prato has 15,000 "factories," of which 13,000 employ ten people or fewer. The yellow stucco houses present strange sights: family wash hanging out of the upstairs windows, while lower floors are filled with spindles, looms and dye vats.

The line between employer and employee is hazy in Prato, and the town's artisans easily cross it. Twin brothers Enrico and Franco Rosati resigned from a family business in 1967 and founded their own company to produce carded wool. The twins' $24,000 investment has blossomed into annual sales of $40 million. Francesco and Rosa Palmieri moved north from Sicily 35 years ago and became itinerant clothing peddlers. Now they and their four children, with their spouses, own and work at a family firm whose sales have soared in ten years from $10,000 to $500,000.

Even the Catholic Church has become involved in such smaller-scale businesses. The "worker priests" who once brought religion to the factory floor have been superseded by "manager priests," who supervise parish-owned companies founded to provide employment in depressed areas. Father Corrado Catani, for instance, heads a blue-jeans factory that turns out 45,000 pairs of jeans a day, including the bestselling "Jesus Jeans," as one label is called.

The most amazing sector of the nation of profit, however, is Italy's underground economy, which never shows up on official statistics. It is a result of the scala mobile, the official wage scale that moves up or down with cost of living indices. Most moves have been up, of course, particularly after the three powerful national labor unions won drastically higher revisions in the wage scale in 1975. Employers responded by taking advantage of a section of the labor law that exempts companies with fewer than 20 workers not only from automatic wage increases but also from compliance with regulations on benefits, safety rules and social security. Suddenly, larger companies were chopped into smaller ones. In many cases, workers defied their unions and helped with the chopping. They did so, explains Vito Scalio, a Christian Democratic member of parliament and onetime union leader, because workers believe that the unions are out of date. Says Scalio: "They still insist on representing a proletariat that wants to grow out of the proletariat class and become entrepreneurs."

One result of such industrial miniaturization was a 30% reduction in labor costs. Another has been a patchwork of local boomlets. In desperately poor Naples, back-alley businesses have grown so fast that Mayor Maurizio Valenzi can brag: "Naples exports 5 million pairs of gloves a year, yet we do not have a single glove factory." In the village of Paganico Sabino (pop. 450), a farming hamlet 50 miles northwest of Rome, the women sit together in the sun, gossiping and knitting while their men work the fields. The knitting needles fly purely for profit; the women are working for Armani, Missoni, Fiorucci and other top designers. Once a fortnight, a designer's representative collects completed knitwear and drops off a new supply of wool--and crisp lira notes. No talk about working conditions, tax deductions or social security.

Such activities show up nowhere in official economic surveys, but they are substantial. At least a million people are employed in unreported businesses. A million others hold two jobs, one of them also unreported. An additional 300,000 Italians are self-employed. About 15% of the labor force, as a result, does not officially exist--and neither do its revenues. In the view of some economists, Italy's gross national product, estimated at $393 billion in 1980, has been understated by as much as 30%.

This strange new version of il piccolo e bello (small is beautiful), has forced social scientists to do some rethinking. Explains University of Rome Sociologist Franco Ferrarotti: "In the '60s we predicted that the Italian family was disappearing. We were absolutely wrong." Familismo, a term coined by Florence Sociologist Arnaldo Nesti, has proved to be far stronger than national unity. Says Luigi Barzini in his classic 1964 study The Italians: "Italy has never been as good as the sum of all her people. The people not only defeated their rulers but also managed to invent splendid and melodramatic ways of making each humble or ignoble hour as bearable and satisfying as possible. This is the reason why their manners, food, houses, cities, love of life are so delightful."

Beneficial they may be under the circumstances, but individualismo and malgrado also contain built-in hazards. Italy imports 80% of its energy requirements, but it is the only major Western European nation that does not have a formal energy policy. Eighteen million Italians receive some sort of state pension; bureaucrats are still processing 263,000 pension applications dating back to World War II. Pension funds are already $16.5 billion in the red, and that figure could triple by 1983.

The educational system is similarly afflicted. Italy's once elite secondary schools are now accessible to anyone through open enrollment. The intention is laudable; the result is a soaring student population. The University of Rome, up from 16,000 students to 160,000 in only a few years, is producing graduates who are bitter because they cannot find work. Says Sociologist Ferrarotti: "We used to have 3 million illiterates. Now we have 1.5 million unemployed intellectuals."

To many sociologists, political scientists and other students of Italy's endemic woes, the solutions lie in tempering individualism with heightened civic responsibility. What Author Calvino calls "a national character that makes living sweeter and more pleasant" must be wedded to a sense of urgency on every Italian's part to become involved, to correct deficiencies. That may seem a difficult order for a nation with a history of running from problems instead effacing them. But if Italy functions as happily as it does with malgrado, how much better might it become without "in spite of "?

--By Spencer Davidson. Reported by Barry Kalb and Wilton Wynn/Rome

With reporting by Barry Kalb, Wilton Wynn/Rome

This file is automatically generated by a robot program, so viewer discretion is required.