governments to introduce piecemeal agrarian reforms, followed in 1950 by the Cassa per
il Mezzogiorno (Southern Development Fund). The aim was to create a class of
independent, prosperous peasant farmers with access to roads, irrigation works and a
clean water supply, but the Cassa was essentially a paternalistic technocratic organization
inspired by a universal model of large-scale development with little reference to the local
conditions and cultures of the peasantry.
This attempt, over three decades, to rescue the South from economic
underdevelopment largely failed. There was a mass exodus of adults of working age to
northern industry, and, especially after the creation of the EEC in 1957, also to other
countries in Europe. Agricultural jobs fell by 60 per cent, in spite of a doubling of
agricultural production due to improved technology and applied crop science. The
relative failure of the attempt to implant industry and enterprise emerges clearly from the
disparity between the increase in new industrial jobs: two million in the North as against
only 370,000 in the South. The relocation of millions of peasant migrants to the bleak
suburbs of the northern cities, where they competed for unskilled work in factories and
sweatshops, left the South severely drained of enterprise and easy prey to corruption and
organized crime. More significant still, however, was the corresponding scissorseffect in
relation to small businesses: while in the North during this quarter-century, artisan family
firms employing fewer than ten people rose by 25 per cent, in the South they fell by 20
per cent. While the number of employees in these small and medium manufacturing firms
rose by 70 per cent in the centre and North, in the South there was no increase at all,
clearly signalling the inability of the southern economy and its workforce to respond to
the market challenges of an unprecedented period of rising demand.
A particularly significant feature of this development was the absence of any large-
scale internal migration from the South to the ‘Third Italy’, compared with the massive
flow of almost three million unskilled southerners to the established factories of the
‘industrial triangle’ in the northwest by 1963. The recruits to the small and mediumsized
industries of the Third Italy came from urban hinterlands where, for generations,
extended peasant family farms had long had economic links with the towns through
piecework done at home and local seasonal employment. Generations of low and
discontinuous wages, compensated by the capacity to survive by collective effort and
coupled with comparable generations of flexible manual skills and human resources
management within the family productive unit, were the basis for a selfpropelling
advance into industrial forms of production. Such peasant families were already an
integral part of the ‘moral’ as well as the material economy of the town-dwellers with
whom they shared the industrial district, which thus avoided the additional external social
and administrative costs of taking in large numbers of migrants from other parts of Italy.
The strong local political cultures of these areas also supported the spread of the
micro-capitalism of the family enterprise though the micro-capitalists, for their part,
continued to vote, even at the height of the Cold War, for those who proclaimed
anticapitalist doctrines at election times. The economic strength of these industrial
districts lay in the flexibility which stemmed directly from the structural characteristics of
the family firm, which could set wages and conditions without reference to national
norms laid down by authority or in collective bargaining, and invest in new technology
from high rates of saving involving sacrifices of living standards. In the period of the
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