2023-04-22 11:50:56
The future governor of the Bank of Italy and the economist considered the material balance of fascism catastrophic. The damage caused by the conflict was estimated to be almost double the gross domestic product
On April 25, 1945, less than three months ago, a 34-year-old young man wrote a letter full of figures arranged in three vertical columns to a thirty-one-year-old colleague. Five days later the thirty-one-year-old replies with a letter full of figures arranged, however, in four vertical columns. The first was called Paolo Baffi, The second one Federico Caff. They were trying to measure the legacy that fascism and the war had left their generation.
Mustache was the older of the two. Thirty years later he would become governor of the Bank of Italy, then in 1979 he would have been forced to resign due to a series of false accusations built against him in the circles of P2 and the financier Michele Sindona. In his diary of the days when he left via Nazionale Baffi, now elderly, he would have noted: I cannot continue to identify myself with the system of institutions that affects me or allows me to be affected in this way.
The man to whom Baffi wrote in July 1945 had started working at the age of ten as a ticket seller in a cinema in time.news. Still working – an employee of the Banco di Roma – he had graduated in Economics and at the age of only 25 he was already teaching at the university in the capital. After 8 September Federico Caff was given to the bush as a partisan, to then become one of the major economists and masters of the ruling class in republican Italy, with students such as Mario Draghi, Ignazio Visco and many others. Until the night between 14 and 15 April 1987. That evening Caff leaves the Roman house between Monte Mario and Balduina, where he lived with his elderly brother, and disappears forever.
But all of this would come decades later. In July 1945 Mustache and Caff they were chosen members of a class of senior clerk in formation trying to emerge from the rubble. They knew they were: Baffi had just been appointed by the governor Luigi Einaudi as head of the research department of the Bank of Italy; Caff, himself from the Via Nazionale Study Service, was head of the cabinet of the Minister of Reconstruction Meuccio Ruini in the government of Ferruccio Parri. Their correspondence, preserved in the archives of the Bank of Italy and hitherto unpublished, together with a report prepared by Baffi himself on the damage left in the country by the Second World War. Not a simple academic exercise: the aid that the government could ask the United States depended in part on it.
When he writes to Caff, Mustache deeply pessimistic. It arrives at an estimate of devastation equal to three thousand billion lire, equal to almost double the gross domestic product which – according to estimates by the Bank of Italy and Istat – was 1,605 billion in Italy in 1945: the estimated war damages are worth 187 percent of GDP. The future governor writes to his colleague, with whom he strictly communicates with her. We arrive (with calculations, ndr) to three trillion, which represent not the total war destruction (which is higher because it includes everything that was destroyed but replaced with the war years’ production), but the cost that presumably will have to be incurred to bring national wealth back to its prewar level. And Baffi warns: It should be noted that this work will require a few decades, during which the country will suffer from the lack of the fruit of all that, destroyed, has not yet been rebuilt.
Mustache turns to Caff for compare the costs of the devastation of the Second World War to those of the First. And Caff doesn’t shy away: Various circumstances seem to legitimize the impression that the statistics on damages relating to the 1915/18 war were deliberately “inflated” for political purposes (he means: to raise the reparations requested at the Versailles Conference in 1919). Caff then reviews some studies and reports to conclude: A comparison between the data (…) would lead to the conclusion that the damages suffered by the country during the Second World War are about 5.3 times greater than those suffered during the war 1915/18. Then he goes to the top and adds curtly: Which seems too little. Back to top: Now, from the data you provided, there would be a ratio between damages and assets of 3/10 in the current conflict, against 1/10 in the past war. However, this is on the assumption that the damages amount to three trillion, a figure that I myself mentioned to you but which is more the result of an impression than an evaluation. In essence, the defeat would have cost a third of the assets existing at the beginning of 1942 in houses, factories, roads, railways and other tangible assets. Caff adds however that there is a very wide margin of uncertainty and gives an example: many vineyards are destroyed but, he explains, two very competent people indicate one at 250 lire and the other at 850 lire (converted and revalued, respectively about eleven and 37 euros) the cost of reinstatement for each screw.
The economist from time.news concludes by inviting his colleague to the ministry to talk about it and, after all, the two would soon meet again in the Economic Commission of the Constituent Assembly. But Baffi had already drawn up precise calculations, which he attaches to Caff and to the general manager of the Bank of Italy Niccol Introna in an eleven-page report (also unpublished). The economist estimates that the number of destroyed or damaged rooms, mostly civilian homes, reaches four million. He adds that about one eighth of the national building stock, an incidence similar to what is recorded today in the fighting areas of Ukraine. As for industry, the assumption that direct and indirect damages amount to 30% of invested capital while one tenth of agriculture was destroyed.
But on the means of transport that Baffi is surpassed: of the 4,165 steam locomotives of 1938, 2,081 remain, of the 1,316 electric locomotives, only 665, of the 128,000 wagons (wagons) 55,000. The telephone and electricity lines are torn up with damages for 200 billion lire: over seven billion euros, converted and revalued today. Merchant ships are largely lost and here Baffi underlines that buying them back in America, given the superior automation, would cost five times less than manufacturing them in Italy. As for the trucks, less than half of the hundred thousand that Italy had in 1942 remained. And, again, the future governor observes that manufacturing them in part in Italy would cost what today would be around 32 thousand euros each, while buying them all in the States United – where Fordism has already established itself – it would be five times cheaper.
But the tone is not pleased with so much acumen, ever. Mustache and Coffee they speak with sobriety and rigour in which desolation and a stubborn roll up of one’s sleeves are felt. They know that in addition to the moral, civil, political balance of fascism, also the catastrophic material one. I’m here to turn the page.
April 22, 2023 (change April 22, 2023 | 11:59 am)
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