The Neapolitan School

Antonio Genovesi

The earliest school of economic principles, which develops the theoretical and practical implications of the Civil Enlightenment in Italy, is the Neapolitan school.

Genovesi, the first incumbent to a Chair of political economy in the world, taught “economia civile”, from 1753, at the University of Naples and he was universally rec­ognized as the leading figure of the Italian School. To him our discipline was, in fact, “economia civile”, with the special approach to which historians of economic thought are returning today. His Lezioni di economia civile (1765-67 [2013]) remain his main work.

To Genovesi an idea of well-being is fundamental to explain the functioning of civil economy with its frame of relationships created by informal norms and conventions. That includes reciprocity, mutual friendship, confidence and trust. Thus the idea of civil economy exhibits perfect continuity with respect to the humanist civic ideal. In Genovesi’s system there are three levels of agency in society: the individual, civil society and the state, whereas, for example, in Hobbes civil society and the state are not dis­tinct but coincident. This tripartite scheme is, among other sources, reminiscent of Montesquieu’s insistence on the significance of the corps intermediates: Montesquieu had a very large influence on the Italian Enlightenment.

The presence of a strong civil society is for Genovesi a precondition for economic development. That is why it remains all important to increase and support civil virtues, and particularly (especially echoing Paolo Mattia Doria) reciprocal trust. Genovesi is distinctly Aristotelian on happiness as eudaimonia, while his attachment to the idea of spontaneous order clearly echoes Vico. He appreciates the advantages of luxury, he thinks highly of free trade, and he perfectly understands the whole hidden work of the dispersed knowledge, which would later be named “invisible hand” particularly (but not only) in the Scottish Enlightenment. It is no doubt true - Genovesi writes (1765-67 [2013], I: ch. 17, s. xii) - that “people endeavouring to enrich aim only at their own self inter­est”, but “it is no less true that enriching they promote the public advantage by enriching the whole nation”. Little wonder that the economic discipline, in the Italian tradition, would later (1845) be called by Ludovico Bianchini “scienza del ben vivere sociale”, or the science of “good social living”, a label which would probably be deemed appropriate for Smith as well, though clearly much less so for Ricardo or Marx, who only had an indirect interest into public happiness as such. It must be added, however, that Bianchini himself did not realize all the implications of Genovesi’s approach. It is only nowadays that we come to realize all that in full, in a new scientific climate leading to a generalized historiographic revision of the sources of the economic thought of the Enlightenment. That happens also outside Italy although each branch of the Enlightenment has its own Sonderweg (exceptionalism). For the French Enlightenment, for example, the work on Boisguilbert (1646-1714) was especially significant along parallel lines with the case of Italy, although with differences owing in particular to the influence of Port Royal in France with Blaise Pascal (1623-1662), Pierre Nicole (1625-1695), Jean Domat (1625­1696) and others.

Since 1724 the Kingdom of Naples had acquired some degree of independence under the Bourbon rule and the decades following that event were an era of new hopes for a civil and enlightened government. Genovesi was in fact, together with his direct sponsor Bartolomeo Intieri (1678-1757), one of a group of thinkers who tried to understand the failures of the old regime and to find new routes to economic and social development. Ten years older than Smith, he parallels the latter’s experience in the transition from philosophy to the economic discipline. Genovesi himself described the transition as a passage from metafisico to mercatante, from metaphysicist to merchant (see Bellamy, 1987).

Genovesi was convinced that culture, philosophy and science must serve the improve­ment of society and produce public happiness. As we have seen above, the Italian Enlightenment puts the emphasis on linking together ethics, institutions and the common weal. Thus Genovesi’s Discorso sopra il vero fine delle lettere e delle scienze (1753 [1962]) - the opening lecture of his Chair - has been considered the manifesto of the Italian Enlightenment. It is here that he expresses most clearly his ideas on develop­ment, philosophy and the economic science. The purpose of letters and sciences is to improve the well-being, the happiness, of the people.

In his anthropology, Genovesi distinctly shuns reducing human motivations to self­interest. In his Diceosιna (1766 [1973]), he argues that some passions express self-love (“forza concentriva”), but others reflect “love of the species” (“forza espansiva”). Genovesi accepts the Newtonian idea that any phenomenon (human, social and physi­cal) can be explained as an “equilibrium” between two opposite forces, the attractive and the repulsive.

In chapter 10 of the Lezioni (Genovesi 1765-67 [2013]) Genovesi argues that solitary men are wild, cruel, unforgiving, since in solitude there is no room for the diffusive force of the human heart, and only the concentrative force works, which makes men hypo­chondriac and brutal. In other words Genovesi’s thought is based on “sociality”, that is, the desire for relationships with our fellows, coming from a natural (or “ontological”) character of the human being. Sociality is “an indelible feature of our nature”.

More precisely, Genovesi argues that what is really typical of man as an animal species is “reciprocal assistance”. He does heed the natural law tradition, as he maintains (Genovesi 1765-67 [2013]: ch. 1) that each person has a natural right to the benefits of reciprocal assistance and a corresponding duty to provide them to others. In agree­ment with the Italian civic tradition, Genovesi understands economic relations, such as exchange and production, as relations of reciprocal assistance: in an economic system, each agent is helping others to satisfy their wants. On this conception of the economy, engagement in economic relations is turned into an exercise of virtue based on reciprocal trust, which is both virtuous and rational: this, as an idea of rationality, is quite differ­ent from the idea surviving in latter-day rational choice theory. The difference is mainly due to an emphasis on sociality and we-thinking. Social relations, in other words, cannot be explained by instrumental rationality; for they are not just means by which, or con­straints within which, we pursue self-interest.

Finally, Genovesi puts forward a theory of spontaneous order, which can be summa­rized in the following steps: (1) human beings naturally look for their interest; (2) their true interest is happiness; (3) happiness means eudaimonia, full self-realization by means of virtue, that is, the promotion of the happiness of others - he accepts as a universal law that it is impossible to make our happiness without granting the happiness of others; and (4) if all people act with a view to happiness, they will be virtuous and public happiness will result and increase.

These and similar concepts are echoed in other economic works belonging to the Neapolitan school in the latter half of the eighteenth century. One of the best examples is afforded by Gaetano Filangieri (1753-1788), who gives an effective idea of the relation­ship of commerce and wealth and develops Genovesi’s own emphasis on trust or “fede pubblica”.

Ferdinando Galiani

Parallel to Genovesi, though considerably younger, Ferdinando Galiani is the other out­standing economist of the Neapolitan school. The problem of monetary reform is one of the main issues, together with laissez-faire and free markets (particularly free market of staple food, the so-called problem of “annona”, the Latin and Italian word for provi­sions), in the economy by the mid-eighteenth century. The author who best illustrates the case among the Neapolitans at the time is Galiani. His main works are Della moneta (Money, 1751, see Galiani 1975), on one side, and the Dialogues sur le commerce des bleds (Dialogues on Grain Trade) published in French in 1770, on the other. Although Galiani does include a passing mention in Della moneta to the “cunning of reason”, as the work of a superior hand (or providence), his main interests turn distinctly more technical.

Galiani’s early treatise Della moneta is quite often quoted by historians of econom­ics as a forerunner of the marginal utility theory of value, although both labour cost and utility are extant in his analysis on the foundations of value (see Pasinetti 1984). Galiani is outstanding in putting forward the solution to the famous paradox of value (or “water-diamond paradox”), by giving a rigorous form to the argument based on a combination of utility with scarcity (or rarity), an argument which is so often resorted to in the writings of the Italians, at least since Bernardo Davanzati’s Lezione delle monete (Discourse upon Coins) of 1588. Hutchison (1988) offers a rigorous reconstruction of the utility-cum-scarcity approach to value before Smith.

The craving for value theory among economists of many generations, together with the use of the French language in the Dialogues, has had the effect of making Galiani a much better known author compared with Genovesi. Galiani had many connections in Paris, where he lived, and his Dialogues were elegantly put in French by his close friends, among whom were Louise d’Epinay and, in particular, Denis Diderot. Concerning Della moneta, it was Galiani’s main purpose to establish a natural value for money, a value which would not be subject to artificial influences and manipulations. That also corresponded with the main purpose of the monetary reforms of the time, designed to get rid of (or at least limit) all forms of “ideal” or “imaginary” money, quite often used as “account money” in current transactions. The metallist philosophy lurks behind the monetary reforms. What is at stake, along with the practical question of the widespread “monetary disorder”, so often talked about at the time, is the proper scientific standing of the new science of political economy as such. Indeed, the two principles of metallism and cartalism (in Knapp’s language, notoriously retrieved by Schumpeter) are both present in Galiani: which has given rise to a number of disputes about the real meaning of his monetary theory (see, in particular, Cesarano 2012; Costabile 2016).

Unlike Genovesi, Galiani was not an academic. He was a learned intellectual who entered public administration and ended up (as just hinted) spending a number of years (1759-69) in Paris as the Secretary to the Embassy of the King of Naples. That was during the 1760s when Paris was the cultural capital of the world and the physiocratic school, or the economistes (as they were called), was at the height of its success. The Dialogues, for example, discuss the hot issue of free trade of grains. Galiani offers an example of his opportunistic character by changing sides (with respect to previous treatments) and by producing a scathing onslaught on the physiocratic doctrine, with his criticism of free trade in the Dialogues. Also, in his first treatise of 1751, Galiani was to a large extent the sort of pragmatic economist who does not abide by any principle of sorts. He is thereby much less impressive, compared with Genovesi, as a social philosopher and reformer. At the same time he is more effective and brilliant in style and his works are full of insights and they have in general conquered a wider readership and larger space in any syllabus of history of economic thought. It should be noted, however, that some authors have pointed out that Galiani’s method is not reducible to mere pragmatism, but it is reminis­cent of Montesquieu’s methods applied to economic matters (see Faccarello 1994, 1998).