Italian and Romanian Economical Similarities
By Laurent J. LaBrie
Other Articles in the series "The Italian Side of the Bridge"
One of the greatest plagues of the underdeveloped world is lack of productivity. In Italy, "taxes are as a rule still like those imposed by Spanish viceroys, haphazard, arbitrary and crushing for everybody, but especially punitive for those who show enterprise and produce things."(Barzini L, The Italians, New York: Bantam Books, 1964. p. 321) The Italian income tax rate in the 1990's was 51%. (Click here for article.) Taxes pose the same problem in Romania, as in most socialist countries. Income tax is above 50%. Sales tax is 19%.
Part of the problem is that only the honest pay the income tax. When I came to Romania, even so-called Christian agencies declared false salaries. Mine declared $10 per month and paid $200. We were one of the first ones to become honest. But, in 2003, when word came that the income tax rate was being raised again, the price of our honesty meant letting our last employee go. The heavy taxation is a great disincentive to enterprise and productivity and a great way to stimulate imports.
What Barzini wrote about southern Italian competitiveness in 1964 can be said of Romania four decades later. Southern Italian companies were "often beaten and humiliated by duller competitors, who ignore the fine points of the art of living." (p. 241)
Goods imported into Romania are usually of better quality and less expensive than those produced domestically. The used car market is much more prolific for foreign models. People would sooner buy a used Lancia in Germany than a Dacia made in Romania. (Lancia's are not among the makes with the best reputation. In 1987, my roommate's Lancia spontaneously combusted on the Autostrada between Venice and Trieste--the first time I knew someone who had that experience.)
This year, the fitness room in Curtea de Arges imported its weight training equipment from Bulgaria. Romanian manufacturers often freeze water in the center of their chickens to make them weigh more. Thus, the discerning Romanian consumer tends to avoid anything made in Romania.
This negative brand image even affects things of decent quality. Many clothing manufacturers in Curtea de Arges send their goods to England. There, they receive an English label and a large markup before returning for sale in Romania. Romanians do most of the work and the English get most of the money. The same phenomenon occurred in southern Italy.
"A part of every lira spent to improve the South goes to the North. From the North come the engineers, the specialists, the managers, the contractors, the skilled workers for many jobs. From the North comes practically all the machinery for new plants and installations, even the humble pump necessary to irrigate a tiny plot of land. From the North, finally, come almost all the consumer goods, shirts, shoes, clothes, furniture, radios, television sets, and motor scooters which southerners increasingly can afford. In fact, even if some of these things are now manufactured in the South, the fact is kept secret, as southern buyers think it is safer and more honourable to wear or consume things made in Milan."
Barzini wrote that the moral problem of the Mezzogiorno would continue long after the poverty is gone. "The malaise and the restlessness, the feeling of being the victims of historical injustice and the prey of other people's greed, the desire to revolt and break away from the centralized government of Rome would go on." (p. 248)
Romania has a similar problem. The populace recounts the history of being dominated by the Turks and having their wealth taken away. After the Turks were routed, the USSR took part of Moldova. (They seem to ignore the fact that they lost Moldova because they were allied with the Axis for much of World War II. After the War, the USSR took much of Romania's wealth also. Now, they feel under the shadow of the United States, having to do things that they wouldn't normally do, like favor a war in Iraq.
Ask the average Romania what the problem is in Romania and they will respond with a favorite proverb, "A fish spoils from the head first." Government corruption is indeed a problem. However, as it was in Italy and any other democracy, a government is corrupt because it draws its representatives from an unscrupulous populace.
The people of these countries need a life-changing encounter with the living God. Only He can give them the moral courage to take ownership of their problems and the wisdom and strength to work them out. Only He can change lives from selfish to selfless.
What Barzini wrote of the southern Italians is so true of the Romanians that I will just change the geography.
"Slowly, a few at a time, [Romanians] are reluctantly discovering the bewildering fact that only investments dictated by hated [Western] criteria can, in the long run, produce stable [Romanian] results, the psychologic, spectacular, and political effects required. They alone can, in the long run, really solve [Problema Romaniei]. The great majority of [Romanians], of course, have not yet discovered this dreary and disappointing truth."(p. 251)
A good part of the lack of productivity is caused by lack of technology but a large part is the priority the peoples place upon working efficiently. "The industrial revolution was not congenial to the inhabitants of the Mezzogiorno (southern Italy). They instinctively felt that the gains were not worth the sacrifice. They felt happier at other pursuits." (p. 241)
The same is even more true of the Romanians today. Most spend a large part of their paid workday socializing over coffee and cigarettes. As in most of Europe, Italian and Romanian laborers usually have a month of vacation, compared to two weeks in America.
In the years that the baby boomers entered into the workforce, Americans chose to invest in wealth and power, while the family suffered. When the European demographics hit that same potential, a decade later, they decided to reduce their workweek by 10%, trading world domination for family and recreation. Although each side may feel some regret for their choice, expressing anger or complaining is immature. This immaturity is clear in the anti-war protests so prevalent in France, Germany, and Italy.
Economic statistics: Ministry in Italy
Italians and Love
Flattery in the Italian Culture
Skepticism in Italian and Romanian Character
Italian and Romanian Economic Similarities
The Italians and Women
What Should We Expect for Italy?
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© 2003 Laurent J. LaBrie