Ignazio Visco: Stefano Fenoaltea and the Bank of Italy
Introductory remarks by Mr Ignazio Visco, Governor of the Bank of Italy, to "Economics, History
and Economic History in Stefano Fenoaltea's Cliometrics", Associazione per la storia economica
and Fondazione Luigi Einaudi di Torino Symposium in honor of Stefano Fenoaltea, online
workshop, 12 November 2021.
* * *
I wish to praise the Associazione per la Storia Economica and Fondazione Luigi Einaudi for the
organisation of this symposium in honour of Stefano Fenoaltea, who passed away suddenly a
year ago. And I thank the organisers, Alberto Baffigi and Giovanni Vecchi, for inviting me to deliver
the opening address today, which I give with pleasure but also with great sadness. As Governor
of the Bank of Italy, I will reminisce on the ties that linked Stefano to the Bank for several
decades. However, I would first like to offer some succinct memories of my personal relations
with Stefano, which date back to several decades ago.
Stefano had a significant impact on my own early career, as he was instrumental in my going to
Philadelphia in 1972 to pursue a PhD in economics at the University of Pennsylvania. I had just
won a Bank of Italy scholarship, but I was late in applying to different graduate programs in the
US. Federico Caffè, my professor and thesis adviser in Rome, suggested checking with Stefano,
then a young assistant professor at Penn, while also applying to Chicago. I do not know how
Caffè, and other Italian economics professors of the time, knew about Stefano and his
whereabouts in that period, as Stefano had mostly grown up and studied in the US, eventually
obtaining a PhD in economic history at Harvard. However, it was already obvious that Caffè
thought very highly of his work and Stefano, in turn, showed great respect for the older professor.
He was extremely kind in providing me with all the necessary information for my application, and
making sure that my reference letters were properly compiled and addressed (all this through
letter exchanges and notwithstanding the inefficiencies of the Italian postal service, at a time
when making overseas telephone calls was rather costly).
Eventually, I was accepted to both graduate schools and chose Philly over Chicago not only for
the more favourable (in theory) weather prospects, the Keynesian vs monetarist touch, the
econometrics taught by Larry Klein, but also, in fact I would say especially, due to the quality
assurance and encouragement provided by Stefano.
So, newly married, having just arrived with my wife at Penn in late July, I immediately called
Stefano, who very kindly invited us over for dinner. Once there, he launched into a lecture about
the requirements of the school, the need to work hard, indeed very hard, as the completion of a
PhD there would be extremely demanding, about thinking twice before deciding that my wife
should stay in the US with me while I was so heavily involved in completing my education, etc. All
this in a gentlemanlike manner, but, I would say, not as pleasant as I might have hoped. In the
end it all worked out for the best, but we still remember, and in later years we also discussed this
with Stefano himself, the feeling of slight uneasiness we felt upon leaving his house.
Well, Stefano was indeed special, an extremely gentle and reserved person - I read Deirdre
McCloskey describing him as "aristocratic" in her moving obituary - and yet at the same time a
very harsh and demanding one. Once you got to know him, you discovered a genuine treasure.
The problem was that this process was not quick, nor easy. And his character, his statements
and answers were crucial for the way he chose to pursue his US academic career. He was
always recognised as a stellar researcher, but his attitude as a cooperative and helpful faculty
member was at times questionable and questioned, to say the least.
I did not interact much with him as a scholar, not even during my time at Penn, even though we
exchanged papers and books over the years. Our interests did indeed seem a bit distanced,
without much overlap. He seemed to pay little attention to the macroeconomic, monetary and
policy issues I have mostly been working on over the years. For my part, I found his
methodological work very insightful but did not have the time, or perhaps the patience, to follow
him in his extremely detailed reconstructions of possible "estimates" of measures of economic
activity, and possibly of well-being, essential to ensure the high quality historical studies that he
considered necessary, and worth being involved with.
However, I remember his contributions in the 1970s rather well, having read them both at Penn
and in Rome, attending some of his seminars and discussions on railroads and real value
added, slavery and causality. And he engaged, alla pari, with giants of his field such as Robert
Fogel and Douglass North. Indeed, he used his extreme fluency in economic theory, and
especially with the neoclassical tools of the field, to provide substantial new insights, correct
misinterpretations and suggest new perspectives.
I still recollect how interesting, and unconventional to say the least, I found his paper on real value
added and the measurement of industrial production published in 1976 in the NBER Annals of
Economic and Social Measurement. It triggered a debate with Christopher Sims who, arguably,
did not quite grasp Stefano's main point: that in the context Stefano was interested in, an
appropriate measure of real value added should reflect changes in relative prices, and not just
the physical flows of goods and services.
Stefano returned to this issue over time, most recently in the fascinating second chapter of his
last book Reconstructing the Past (Fondazione Luigi Einaudi, 2020), where he discussed "le
regole dell'arte", the rules of the trade he recommends we follow in "reconstructing economic
growth". I refer in particular to section 2.4 where he sets out his Rule 4: "Deflate all current-price
values with the same deflator!" It is a deep, not easy chapter to read, even if written in his usual
crystal-clear English, where the neo-classical theory of his craft seems to me to come to terms
with the legacy of the classical economists.
I also remember reading his considerations on the minor role of railroads in the Italian post unity
decades and their factual importance for growth in the United States (helping to properly interpret
Fogel's "provocative", as he defined it, major contribution). Indeed his insufficiently quoted 1973
paper on the methodology of counterfactual analysis in the Journal of European Economic
History is a true masterpiece.
Obviously, other will say much more, and much more effectively, on his contributions to
economics and economic history: the symposium's program is rich and well-focused on
Fenoaltea's main topics of study. However, before briefly talking about what he did with and for
the Bank of Italy, I would like to make one final consideration. Stefano Fenoaltea was, as I said,
very demanding as a scholar, indeed a first-class economist and "data scientist", even if he
would have certainly objected to my use of both terms. Both economic theory and proper
measurement were prerequisites, in his view, to approaching economic history with sufficient
confidence. And at times, though gifted with an exquisite, entertaining and amusing personality,
he could be harsh in his judgments and appear rude in his statements.
I suppose that this was his way of giving value to what he considered to be absolutely necessary
in carrying out research that would stand the test of time and of new ideas. He was indeed a very
logical, sophisticated thinker, a true, uncompromising, researcher. But as an academic, and a
teacher, for a long time, at least during the time of his US peregrinations, he appeared to me to
be rather unsettled, senza pace. So, I was indeed very surprised to discover how good and how
appreciated a teacher and student adviser he ended up being in his second academic life in Italy,
in Brescia and in Rome.
It was indeed somewhat of a surprise, although I should probably have expected it, for me also to
find that he had written a thoughtful, clear, acute textbook of lectures in political economy,
complete with exercises and very thought-provoking problem sets. Unpublished in paper form, it
is easy to find it on the web (Lezioni di economia politica). The tools of the art, the approach, are
obviously neo-classical, but the way they are used, the awareness of their strengths and
weaknesses, is an original and thoughtful contribution in itself. Take, for example, the
fundamental idea that the study of economics cannot do without ethics. He emphasises this idea
in the concluding paragraph, in the 2001 edition, where he argues that such an important point
had been clear for some decades, but often forgotten. Translating from Italian, these are his
lines:
Only a few biased ideologues could argue that the market made ethics absolutely
irrelevant; rather, economics teaches us what can be done by appealing to interests
rather than ethics, thus preserving the use of ethics for cases in which they are
indispensable. If we want to save oil, for example, it is useless to appeal to the
conscience of citizens, it is enough to increase the price of petrol and diesel; if we want
to protect the environment from petty pollution by the public we can only educate
citizens to be conscientious.
The memory of Stefano's long engagement and fruitful collaboration, and friendship, with the
Bank of Italy and its researchers is also vivid. Starting from the late 1980s Stefano Fenoaltea
actively participated in the work on the research project that Carlo Azeglio Ciampi promoted for
the centenary of the Institute in 1993, with Pierluigi Ciocca as a mentor and Franco Cotula as
Head of the newly created Historical Research Office. These studies were published in the
Historical Series of the Bank of Italy and can now all be accessed online on the Bank's website.
Over the years Stefano was heavily involved in the reconstruction of value added data, especially
on industrial production and eventually also at the territorial level, for several benchmark years,
starting from the crucial 1911 that would cause a good deal of controversy among Italian
economic historians. His works were published as chapters of our Historical series books, two of
them edited by Guido Rey, the former President of the Italian national statistical institute. He was
also a substantial contributor to the Bank's Historical Research Papers (now the Economic
History Working Papers).
Over the last twenty years and until his untimely death, while engaged in the project for the
reconstruction of regional statistics, Stefano further developed his fruitful collaboration with the
Bank of Italy, in a more organic way and on an even closer basis. He joined the Scientific
Committee of the Historical Research Papers, contributed to the planning of the Seminars in
Economic History and reviewed many studies. He was a regular point of reference for (often
scientifically severe) confrontation and exchanges of ideas, for reflections on the economic
history of the country, on the methodologies of analysis, on the interpretation of the results. He
also contributed with his constructive criticism to the success of another major historical
economic research project carried out in the Bank under the direction of Professor Gianni
Toniolo for the 150th anniversary of Italy's Unification. Furthermore, he significantly helped to
foster the development of the relationships between economists and economic historians of the
Bank and the Italian and international academia.
As I said, during his long-lasting collaboration with the Bank, our Economic History Working
Papers were a primary tool Stefano chose for disseminating the preliminary results of his works
of statistical reconstructions as well as other contributions. Over the last decade he continued on
almost a daily basis to frequent the offices of the Economic History Division where he had a
workstation at his disposal. It is also, therefore, on the Bank's premises, that he developed and
matured the thoughts related to the latest scientific production collected in his last work,
Reconstructing the Past, which I previously mentioned. In this book he once again advanced his
strong criticism of the interpretation that ascribed the economic acceleration observed during the
Giolitti era to a take-off, a big spurt, mostly determined by domestic developments. He fought for
an alternative interpretation until his very last writings, against his "neo-gerschenkronian"
opponents, as he labelled them.
He thoroughly revised the foundations upon which the different interpretations of Italian growth in
the fifty-year post-Unification period rest (finally saying, in a 2017 paper, "it turns out we were all
egregiously in error"). He then wrote pages defined as "scripta senectutis" ("Spleen: The Failures
of the Cliometric School", Banca d'Italia, Economic History Working Papers, 44, March 2019,
and Annals of the Fondazione Luigi Einaudi, 55/2, 2019). There he proceeded to denounce some
aspects of failure for economic historians (a methodological critique that probably not a single
"new economic history" scholar can avoid having to deal with), and that Stefano wanted to exhibit
as a Lutheran reformation for cliometricians, writing: "... and to a church door I nail these theses:
that we cliometricians have failed as economists, that we have failed as historians, that we have
failed as economic historians".
Clearly, this is too harsh a statement, certainly with reference to his own contributions. And there
is much more, in this "Spleen" paper on the failures of the cliometrics school, about the
methodological needs of the discipline, of economic history as well as economics at large, that
those few lines suggest. Indeed, this seems to be the proper complement of his other
methodological piece on counterfactual analysis written at the start of his career, which I
mentioned before. This, notwithstanding the excessive harshness of his choice of words (which
we also find in his latest book, and about which I remember often complaining to Stefano himself,
who never objected much, but rather continued in the way he knew would also catch the
attention of his readers).
Stefano always refrained from claiming that there were absolute truths out there to be
discovered, but instead emphasised the importance of cultivating the art of doubt. As he often
mentioned how important his classical education had been to him, it therefore seems appropriate
to me now to recall the final verses of a well-known poem by Eugenio Montale, "Non chiederci la
parola", "Don't Ask Us for the Word"), a poem also dear to Federico Caffè: "Non domandarci la
formula che mondi possa aprirti, / sì qualche storta sillaba e secca come un ramo. / Codesto
solo oggi possiamo dirti, / ciò che non siamo, ciò che non vogliamo." (in Valeriu Raut's English
translation: "Don't ask us for the phrase that can open worlds, / just a few gnarled syllables, dry
like a branch. / This, today, is all that we can tell you: / what we are not, what we do not want.").
To conclude, I believe that, for many reasons, Stefano Fenoaltea's tireless scientific commitment
could not fail to be in tune with the research activity at the Bank of Italy, where the importance of
historical research, statistical reconstructions, methodological rigour in the use and interpretation
of historical sources have always been recognised, even though, perhaps, not always practiced
to the extent Stefano would have wished and required. It is indeed my belief that a good, dare I
say profound, knowledge of economic history should always provide a solid background for the
activity of economists confronted with the responsibilities of central banking. We will, then, keep
reading his books and papers, recommending that they be read and commented, and look
forward to further analysis of his contributions. And we will always be grateful to him for his
legacy to the Bank.