Letter from Italy
charles castaldi is a former National Public Radio reporter and producer.
Published October 19, 2015.
Milan. In 1965, when my parents relocated the family from Italy to the United States, our first stop was the New York World’s Fair. It was a futuristic paradise constructed on 650 acres of former marshland in the Borough of Queens. A giant stainless steel model of the earth, called the Unisphere, welcomed us. It had orbit rings around it to celebrate both the Space Age and the Atomic Age.
The theme was "Peace Through Understanding," which roughly translated as prosperity through American products. Computers, an elevated monorail, sleek modernistic buildings, vehicles of tomorrow. Soon I'd be flying to school with my jetpack, vacationing on Mars, and relying on a robot to do my chores.
Fifty years later, I'm back in Italy, and my first destination is the 2015 Milan Expo, as this year's World's Fair is called. Times have most definitely changed. The signature structure at the entrance mimics rolling hills from the center of Italy and is entirely clad in wood. Called Pavilion Zero, it addresses Expo's theme, "Feeding the Planet, Energy for Life." The interior includes a reconstruction of a wood-paneled ancient library where memory drawers hold the history of food production.
Walking through the fantastically elegant structure – Milan is the home of Italian design, after all – one quickly realizes that the futuristic promises from New York are but a distant memory. Steel is out, while wood and fabric are in as the architectural materials of choice.
No futuristic transportation here. Be prepared to walk a mile to reach the far end of Expo, along what is essentially a covered fairway with pavilions from 145 countries running alongside. There are gardens and vegetable plots galore, small countries celebrating their coffee, their cocoa, their natural wonders. The theme of food and sustainability gazes back on a lost past of grand scale and still grander dreams of technology as savior.
Halfway down the fairway, after marveling at the way the Israelis used a vertical garden of wheat and corn (and some crops I didn't recognize) as one wall of their exhibit, I come to the Eataly pavilion, which is composed of 20 restaurants from all the regions of Italy in a space that dwarfs many national pavilions.
Eataly, the brainchild of Oscar Farinetti, an entrepreneur from Turin who was an early promoter of the slow-food movement, is what the Expo is really about: how to aggregate small producers to make them economically competitive – and how to use the Italian brand to market high-end-niche products. Farinetti is certainly a living advertisement for the concept; he has opened 29 fabulously successful megastores on four continents, with at least two more on the way.
Nitpickers question how truly slow-foodish the whole thing is: is this a model for helping small artisanal producers thrive or one for making a boatload of money? Farinetti, who exudes optimism, thinks he can do both. And, I suspect, the hungry mobs that descend each day on Eataly outposts in New York, Istanbul, Turin, San Paulo, Tokyo and parts soon to be announced are inclined to agree.
Expo also embodies the rising optimism palpable in at least some regions of Italy, which finally seem to be surfacing from almost a decade of stagnation, punishing unemployment and Berlin-mandated austerity. Expo might even contribute to the turnaround, stimulating innovation and productivity long after its six-month run. It's (extremely optimistic) promoters project that the fair will generate somewhere around $75 billion in demand for the regional economy over the next decade, after accounting for all the multiplier effects.
Reality check: this being Italy, it was touch-and-go whether Expo would be ready to open on time. This being Milan, it did. Still, a number of officials in charge of construction have been arrested on charges of – what else? – corruption.
Going Home Again
A short train ride later, I'm in the center of Milan, and it doesn't take long walking the streets to get the sense that this is a city on the way up. Literally. The landmark monuments – the 32-story Pirelli building and, of course, the Duomo (the fifth-largest church in the world) – are now dwarfed by skyscrapers built in the past decade and designed by architectural luminaries like Cesare Pelli and Arata Isozaki.
Equally striking, the older buildings, like the iconic Duomo, are no longer the soot-stained dirty grey of my childhood; they've been scrubbed to reveal a palette of off-white-and-cream limestone and marble. The Galleria Vittorio Emanuele, which leads to Piazza del Duomo, has been fully restored and is trafficked by multitudes ogling the structure and the high-end stores inside. In fact, much of Milan's center now teems with tourists, many of whom seem intent on feeding their high-end-shopping joneses.
The great contemporary city does not live by expensive baubles alone. Outside the center, companies that include Pirelli and Prada have transformed gritty industrial buildings into museums and cultural centers. At the Prada museum, created by Miuccia Prada, whose Milanese fashion empire has made her the richest woman in Italy, the guards are all young, dressed in elegant eponymous uniforms – and, most astonishingly, all seem to be art-history majors who can talk knowledgeably about the nearby splendors.
Italian tourism has been on the rebound for a couple of years now, and is expected to keep growing briskly in spite of the Eurozone's doldrums, bringing in close to $50 billion this year. More generally, the growth of service businesses is giving Italians hope that dwindling employment in heavy industry like autos and rubber can be offset by office and shop jobs. Florence, Rome and Venice are still the most popular tourist destinations. But Milan, especially with the arrival of the Expo, is giving them a run.
Friends From all the Wrong Places
But Italy has also become a destination of a very different sort. The Italy I left as a kid, a country of net emigration, is now a magnet for immigrants. The phenomenon has roiled Italian society and stands in stark contrast to the optimism generated by Expo and the signs of renewed growth.
I went to Catholic University of the Sacred Heart to speak to Prof. Laura Zanfrini, a leading immigration expert. "Unlike the U.S. and Canada, here in Europe you're taught that, if you're Italian or German, it is because you have it in the blood," she explained. "We have a very ethnic conception of what it means to be a nation. Given this, I find it a bit of a miracle that in the last few years we've been able to absorb five million immigrants.
Most of these immigrants, who now make up eight percent of the Italian population, have settled in the North, where the jobs are. In this respect, Italy is two countries: the North of the post-World War II boom, where the economy grew at an average of more than five percent until the '70s, and the South, which remains an agrarian society dogged by corruption, organized crime and dependence on state subsidies. Most emigration to the United States came out of the South well into the 20th century. And it continued internally, with Southerners heading to the North after World War II.
Over the years, Rome has vacillated between discouraging immigration and protecting immigrant rights. But the quotas associated with the former are essentially meaningless, since enforcement is so difficult. Italy has asked other European countries to bear more of the burden. The appeal, though, has largely fallen on deaf ears on a continent preoccupied with high unemployment, tight budgets and Greece's ongoing agonies. And it has largely fallen to Italy to accept – and rescue at sea when necessary – untold numbers of migrants who sail from Libya in overcrowded or unseaworthy craft.
"Some of the slack has been taken up at the local level, regardless of ideology, but that reflects the Italian phenomenon of generally strong local government," Zanfrini says. And volunteer organizations like Caritas, an umbrella group for Catholic charities, "have stepped in where public assistance was lacking."
Ironically, immigration may prove part of the solution to another looming social problem. Italy is on a demographic death spiral: Italians, along with the Germans and Japanese, are now the oldest people on earth. Life expectancy for retirees keeps rising, even as reproduction remains stuck far below the rate needed to offset aging.
Throw in youth unemployment (above 40 percent), which means few new workers paying into pension plans, and you have the makings of a serious Social Security crisis in the not-too-distant future. That is, unless immigrants can help take up the slack.
"Here in Milan we have a foreign child for every three or four Italians born," Zanfrini says. "We have this idea that the immigrants will come and do the work that Italians don't want to do, which is discriminatory."
That may be right, but there's good reason to believe that young Italians are reluctant to do the heavy lifting. The universities are packed with students aiming for professions, but those jobs are hard to come by. In the meantime, the fashion industry is struggling to find Italians willing to cobble shoes or tailor clothes. Immigrants gladly take those jobs – if they are permitted to do so.
I leave Catholic University and head across town to the central train station, just a few blocks from where I grew up. The building's Fascist-era architecture seems as imposing as it did as when I was a child. But as I approach, I'm distracted by the sight of hundreds of immigrants hanging out on the steps. Others sleep in corners, under trees and on the lawn.
Inside, in sections of the station that have been cordoned off, entire families are gathered on mats. A plexiglass bubble that had housed a Victoria's Secret store is now filled with immigrants slumped in rows of folding chairs and staring vacantly into space. Under a portico, volunteers are providing free meals to the hungry. Here, it's mostly Eritreans, with some Syrians recognizable by the women completely covered by chadors.
In front of the station, dueling groups of demonstrators are lined up on either side of a police cordon. On one side, the signs read "benvenuti" (welcome), on the other, "basta" (enough) or variations on the theme. Eventually, this current scrum of immigrants will be taken to relocation centers in other parts of the city. But the numbers overwhelm the capacity to house them. Given the rest of the EU's stance of malign neglect, Italy (along with Greece) must bear the brunt of this seemingly endless wave of the tired and poor yearning to breathe free.
Where the Other Half Lives
Heading north from Milan, travelers pass through the region known as Brianza, one of the most prosperous in Italy. A century ago, silk production and agriculture were the economic mainstays. Today, the economy runs the gamut from furniture to textiles, machine tools, plastics and a smattering of high tech. Just a few miles north of Monza, home of the famed Formula One circuit, the auto-parts maker Dell'Orto SpA typifies the sort of medium-sized businesses so important to the Italian economy.
Andrea Dell'Orto is vice president of the company, which his grandfather founded in 1933. "2009 was the toughest moment for us," he recalls. "We lost 40 percent of our sales. But since 2013, things have turned around. Even during the crisis," he said, referring to the Great Recession, "we never stopped innovating and even hiring. Today we make parts for both high-volume customers and for high-end-niche customers." (His clients include Fiat, BMW, GM, Ferrari, Audi and Aston Martin.) As in the food and fashion industries, high-end-niche seems to be the mantra when talk turns to Italy's economic recovery.
Dell'Orto says it was not easy, but his firm has adapted to the dynamic of globalization. "The companies with the best performance are the ones that are open to international markets," he says. He now has divisions in China and India.
Further north, on the shores of Lake Como, sits Lecco, a small city with a farmers' market known to Milanese connoisseurs who have frequented it for generations. Dozens of local cheeses are available, all still made on a small scale. It's the Eataly-Expo concept in the flesh. And the flesh seems healthy.
The day I was there was one of the final days of campaigning in regional elections. Walking through the crowd of shoppers, surrounded by a small entourage, was Matteo Salvini, the head of the Lega Nord, a right-wing party founded in 1991 on a platform of greater autonomy for Italy's regions. It grew out of the Lega Lombarda (Lombardy League), which essentially espoused secession of the wealthy Lombardy region, in which Milan is situated, from the rest of Italy. But in particular it expressed the Northerners' wish to decouple from the South and its corrupt, handout-seeking ways.
The Lega, as it commonly known, was an important ally for then-Prime Minister Silvio Berlusconi. But now the party has reinvented itself as the Italian equivalent of Marine Le Pen's right-wing-populist National Front in France, staking its future on an anti-immigration platform and a rejection of the European Union and the euro.
Salvini tells me: "We want an immigration system like the one you have in the U.S. Quotas, laws against entering illegally, the ability to ship out those that do so. That's all we're asking for."
Well, not quite all. "We have enough immigrants as it is," he continues. "If more boats arrive, we should give them food and water, but not let them land." And when it comes to Muslim immigrants, Salvini says their culture is "incompatible" with Italy's – a view widely held not just in Italy, but in much of Europe.
Salvini isn't your traditional Italian politician. He trolls the crowd in shorts and polo shirt, glad-handing and taking selfies with admirers. An ex-journalist, he knows how to create sound bites that are both controversial and effective. Given the warm reception he gets in the market and the way the immigration debate is heading, Salvini's prospects as a major player in Italian politics seem bright. The elections gave the Lega leadership of the Veneto and Ligurian regions, and the party made serious inroads elsewhere.
Italy has had 61 governments since the end of World War II. But most were merely iterations of the Christian Democrats, a center-right party whose extended rule started with the generous assistance of the United States and was thereafter supported by a CIA-organized campaign to ensure that the Communists, who had emerged as a force to be reckoned with after the war, would not win national elections.
Berlusconi represented the first definite break from clubhouse politics-as-usual, not only in his personal excesses but also because he came to power (in 1994) with a party he founded, Forza Italia. Even though Berlusconi was new to politics, his vast wealth and ownership of much of the Italian media made him a force to be reckoned with.
He advocated free markets, à la Reagan and Thatcher. The economy did well for a while during his reign, but eventually growth sputtered under the burden of increased debt and government mismanagement.
Throughout his tenure, Berlusconi was enveloped in scandal, whether for corruption, conflict of interest or sexual improprieties. Eventually, he was found guilty of soliciting sex from an underage prostitute and then trying to cover it up. He was banned for life from holding office, but Forza Italia was resurrected during the last regional elections. It appears that Berlusconi, a Mussolini look-alike known for Trump-like faux pas, will be around a bit longer – a reality that bewilders outsiders and even some Italians.
One only has to look at the current government's composition to see how much things have changed since Berlusconi's stumble from office. Women, a scarce species in previous governments, now occupy half the cabinet positions. By the same token, the average age of cabinet members in a political system not known for speedy promotions is now just 47.
The prime minister, Matteo Renzi, is the former mayor of Florence and, at age 40, is the youngest man to have ever led Italy. His politics are sometimes described as center-left, but he often refers to Bill Clinton as his post-ideological model.
He came into office at the beginning of 2014 vowing to turn the calcified Italian political system on its head. Indeed, he moved quickly to change until-then-sacrosanct labor laws, giving employers more flexibility to hire and fire. This put him at loggerheads with the labor unions, but he managed to pass the reforms and his standing in the polls went up.
Renzi sold off luxury cars that had been routine perks of state officials, a signal that, in his Rome, bureaucrats really are supposed to be the servants of the people. More important, he is pressing for constitutional changes that he said were needed to make the political system more representative.
The changes would also increase the power of the executive, which has drawn heavy criticism from the left wing of his own party. Still, Renzi's standing among Italians of all political stripes has only improved. He has also staked out a middle ground on Greek debt, advocating relief while managing to maintain cordial relations with the dark princess of austerity, German Chancellor Angela Merkel. For once, it isn't only Italians who seem uncharacteristically positive about their prime minister; even political leaders of the EU seem to be taking Renzi seriously.
Words From a Nobelist
I take the ferry to the other side of Lake Como, where Joseph Stiglitz, the Nobel Prize-winning economist, is at the Rockefeller Center in Bellagio, working on a book on inequality.
Before coming to Bellagio, Stiglitz spent some time in Trento at an economics festival attended by Renzi. The prime minister's criticism of Chancellor Merkel's emphasis on austerity impressed Stiglitz, who is an outspoken opponent of Germany's hard line on Greece. "The Europeans don't want to recognize that they put together" a fiscal-austerity program in 2010 that was badly conceived, he believes. "So they are insisting you have to stick to the program," he said, "as if by reaffirming it they're getting the Greeks to agree that that program makes sense."
When asked about Italy's prospects, Stiglitz sips from a glass half empty. The prospect of a serious recovery is very bleak, he says. "Italy's trading partners in the Eurozone are growing weakly, domestic demand is not going to grow very strongly, and the outside source of demand, China, is also not growing very strongly."
Make that glass just plain empty: "I think that Italy, and Europe as a whole, is going for a lost decade," Stiglitz says. The real question, he adds, is whether "it is going to be a lost quarter-century."
When I explain what I saw at Expo and the emphasis on high-end-niche markets, even Stiglitz brightens a bit. "The strategy they have had of very highly tailored goods, this is an important difference between China and Italy," he says. "Over the long run, it makes a lot of sense because the mass production of cheap goods" in Europe cannot compete against China.
I mention Dell'Orto, which is manufacturing precision parts just a few miles to the south. "Italy is finding niches in the world of globalization where you have high-end engineering, high training, lots of tacit knowledge," Stiglitz says. "If they can survive this patch, they could come out in good shape."
* * *
Italians certainly don't lack survival skills; surviving in style is a well-honed tradition, something quite evident in Milan and its surroundings. The problem is that Italy's success depends in large part on the kindness – or at least the exercise of enlightened self-interest – on the part of Northern Europeans. And thus far, there's little reason to believe that Northern Europe will come through.
related topics: Demographics, Policy & Regulation, Workforce