Walker - 1967 - A geography of Italy

esulted, naturally enough, in a marked rise in wages, probably of the order of
25% ; and since the cost of living was rising more slowly the increased wages
represented a very real improvement in living standards for thousands of workers.
In the large-scale efficient sectors increased labour costs could be partially
offset by increased productivity; this was very much more difficult in those
sectors composed o f small concerns or in those employing unskilled labour. Although
the basic causes of sltimps and booms are notoriously difi&cult to identify,
it seems likely that the rise in labour costs in those activities where productivity
could not be raised proportionately, notably the building trade, contributed substantially
to the recession of 1963. Even so the boom lasted long enough to efifea
a revolution in the pattern o f incomes, and despite the recession, Italian labour
has come to expect rewards comparable with those obtainable elsewhere in
western Europe. This tendency has been reinforced by the experiences of emigrant
workers.
Capital
As might be expected in a country where the living standards o f a large section of
the population (particularly in agriculture) are still low, the savings available
provide only a modest total for industrial investment. Furthermore those with
fimds available tend to put them into bank deposits, government securities,
small businesses, land and property rather than into industry, which is regarded
as a risky investment. Thus the stock market plays a much less important rôle
than in Britain and industry has to rely on the banks for much of its finance.^
The state too is active in promoting industrial investment either directly or indirectly
through IR I, which incidentally controls three important banks. In the
early years o f Italy’s post-war recovery she received massive financial support
from America; in happier days she has been able to avail herself o f international
sources o f credit and, apart from working arrangements between foreign and
Italian firms (Renault and Alfa Romeo, B M C and Innocent!), her industries have
attracted sizeable foreign investments of a more permanent character, notably in
oil, chemicals, calculating machinery, photographic products, and textile fibres,
both natural and man-made.^ The United States, Federal Germany, Britain and
Switzerland have the largest stake. Conversely Italy has invested considerable
sums abroad notably in car plants in South America and in oil ventures in Africa
and the Middle East. The peculiar structure of Italian industry results in the
concentration o f a very large proportion o f total investment in a very few firms.
The iron and steel industry
PART IV : ECON OM IC GEOGRAPHY
The expansion o f her iron and steel industry is often quoted as an indication of
Italy’s successful industrialization in recent years; between 1953 and 1963 her
^The restriction of credit and the calling in of loans by the banks in 1963 caused serious
embarrassment, particularly in the building industry.
* Recent examples are Shell’s investment in Montecatini, and the acquisition of a controlling
interest by G E C in Olivetti, by Gevaert in Ferrania and by S K F in R IV .
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