Three Thoughts on Italy
By Bryan Caplan
1. After ten more days of observation, I’ve grown a lot more optimistic about Italian living standards. Now I’d say that GDP per capita is overstated by 25% rather than 100%. If I’m right about this, Italy is a powerful counter-example to cultural theories of underdevelopment. In terms of work ethic and discipline, almost everyone admits that German culture far surpasses Italian culture. But their prosperity gap is quite modest.
2. By pure coincidence, I witnessed the 150th anniversary of Italian unification. But when you tour the enormous achievements of the Renaissance, it’s hard to believe that Italians couldn’t have prospered just as well or better under disunified Tiebout competition. Indeed, what better examples of the blessing of Tiebout competition are there than the final centuries of divided Italy?
3. Italian unification wasn’t nearly as awful for the world as German unification, but there’s a strong case against it. A divided Italy would probably have stayed out of World War I, saving over 1.2 million Italian lives. Without post-WWI angst, Mussolini probably wouldn’t have come to power, and Italy would have stayed out of World War II as well – and possibly joined with Britain and France to contain Hitler.