Federico Caffè: the man, the teaching, the
intellectual path
1. The man
Federico Caffè was generous, reserved and shy, humble yet proud. The
heightened awareness and wit that set him apart, well known to all those who were
familiar with him, led him not to isolate himself, but rather to look around himself, and
to share in others’ problems, which presented themselves in various guises: as
individual cases from students, colleagues, acquaintances, or even strangers; or as issues
that he perceived as common to groups of people from his perspective as a scholar;
outside the field of teaching and academic organisation, Caffè devoted his outstanding
analytical capabilities to the resolution of such issues. He was unusually accepting of
others' reasons, despite recognizing wrath as his deadly sin.
It was this aspect of his character, reinforced by his clear conviction as a scholar,
which led him to interpret his profession of public employee in the fullest and most
active manner, with working hours that he - euphemistically yet hinting at his social
interests – likened to those of a metalworker. Caffè's character is reflected in his works,
which were often of a seemingly subdued tone, yet exhibited a polished, scholarly, and
rich prose. The wealth of quotations, fruit of a vast culture and an unremitting drive for
new knowledge, was more than a habit, it was an act of humility and respect for the
reader, whom he believed should be protected from superficial claims unsupported by
others' meditations, ignorant rediscoveries, ephemeral and pointless introduction of
ideas, cultural trends, as well as from the alarmist tones and pressures of vested interest
groups.
His generosity led him to express, even in scientific works, deep sympathy for
the problems of the poor, the unemployed and, more broadly, of those to whom society
offers reduced opportunities, convinced of the fact that value judgements serve a useful
role in the accumulation of knowledge and that the scholar's necessary effort to be
objective consists in explicitly declaring his ideals, rather than introducing them
surreptitiously or repressing them.
2. The teaching
This backdrop of generosity and openness formed the premise behind his course
of Economic Policy, with continuous revision and enrichment, although the initial
outcome might have been to confound students, who had often been accustomed to
uncritically accept hypotheses and economic theories as objective truth.
His awareness of the subjective component of economic science, however, did
not translate into biased instruction. In fact, the fear of indoctrination was always so
strong in him that there were hardly any cases of him revealing his thoughts about
contemporary issues to his students.
Federico Caffè believed in university education for the masses, overseeing the
students' progress at all stages. If his ability as a “talent-scout” - which was one of the
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few things he allowed himself to be complacent of - made him appreciate the most
gifted, his awareness of being able to contribute to individual and social progress led
him to be helpful and considerate with others as well, especially with students from
more humble beginnings – and not only in didactic terms.
His teaching, however, was not limited to lecture halls, the narrow spaces of
Piazza Borghese and Via Ripetta, and later to those large, but still crowded spaces of
Via del Castro Laurenziano; his was a kind of permanent school, for various educational
levels, which made use of a great variety of instruments, some of which, such as the
translation of scientific works or production of essays for a wider audience, were meant
to broaden the range of scholars and readers of economics. If for Federico Caffè it
cannot be said that "the study of economics is an expression of love of one's country”, as
one of his mentors was fond of saying, it is certain that he enlighteningly thought that
introducing the general public to economic issues and tools was truly a "social service".
A particularly noteworthy example of his work outside academia are Caffè's very
successful educational activities at various trade union premises.
3. The intellectual path
Federico Caffè's first essay was written in 1942 and discussed the formation of
Risparmio spontaneo e forzato nel finanziamento della guerra (Spontaneous and forced
savings in financing war). It was thus born of the harsh problems of the time.
Subsequently, it was always concern towards contemporary problems – in particular
those of the reconstruction period – to which Caffè devoted his energies, both on a
professional level as an employee of the Central Bank and as an advisor of various
public organisations (The Economic Assembly Commission for the Constituent, Interministerial Committee for Reconstruction, Ministry of Finance, Ministry of Foreign
Trade), and on a personal level as an author of various papers and a voluntary assistant
to the chair of Economic and Financial Policy.
Awareness of concrete problems and open-mindedness to the most innovative
contributions brought him to foster Keynesian studies and become an advocate of these
new theories; this was in the early 1950's, a period in Italy where pre-Keynesian theories
were the accepted norm and anti-Keynesianism was a respected profession. La teoria
della maturità economica e la funzione degli investimenti pubblici (1954), (Theory of
economic maturity and the function of public investments) e Politiche degli interessi e
degli investimenti (1956), (Interest and investment policies), were the first fruits of these
studies.
Caffè's interest in concrete problems had now found a solid analytical foundation
which served as a premise for the guide to action. Things had not come full circle yet
however; as in the transition from political economics to economic policy, which,
according to his master Gustavo Del Vecchio, constituted successive stages of a unified
economic science, the analysis of the foundations of public intervention needed to be
strengthened and its application criteria needed to be specified.
Caffè was one of the two main proponents – along with Siro Lombardini - of the
study of welfare economics, which offered him a means to discern the virtues and
failures of the market at the most abstract level, for the furtherment of the public
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agenda, which he loved to define as the logic of economic policy (Vecchi e nuovi
indirizzi nelle indagini sull' economia del benessere) (1954), (Old and new addresses in
investigations on welfare economics).
The analysis of coherence rules and the techniques necessary to create a unified
design of government policy is the last logical step of Federico Caffè's intellectual path,
which began with perceiving and analysing concrete problems. This step began in 196061 as a direct and natural consequence of his studies in welfare economics, which led
him to edit for didactic purposes, the Italian issue of Scienza e benessere nella politica
economica (Science and welfare in economic policy) by F. Zeuthen and in so doing
come into contact with the intellectual environment and programming experience of the
countries of Central and Northern Europe, of which there had already been significant
echoes in Ferdinando Di Fenizio's L’industria.
From the early 1960's 200 scientific publications – on top of countless publicistic
articles – follow in quick succession, reflecting the strong interconnection between
Caffè's theoretical and empirical interests already mentioned.
Practical problems – sometimes of dramatic urgency – were the object of his
ongoing attention. He always viewed these from an academic's perspective who, to
discover the causes, placed them in a historical context, and to resolve them he
suggested relying on the wide range of economic policy tools advanced by past and
present economists, albeit cautioning to differentiate carefully solutions which have
been “amply experimented and very often ineffective” and to avoid being swayed by
fashionable ideas and deceptive appearances.
Year after year, historical studies on economic theory grow more numerous in
searching, on one hand, for the roots, both near and distant, of dominant liberalistic
attitudes, and on the other, for hypotheses, political and analytical tools, as theoretical
frames of reference capable of providing a means of formulating an alternative
economic policy plan, with the belief that “an exhaustive exploration of the box of ideas
can be useful not only to comprehend that it is anything but empty, but also to avoid
filling it with illusory new ideas or imitative junk.”
His later years are of rudely revisiting the ideas of fundamental stability,
efficiency and equity of the free market, expressed, as he says, with a formal rigour
which conceals the analytical impoverishment and assumes essentially the status of a
slogan, “repetition providing assurance,” with the hope of obscuring the difference
between ideal capitalism and real capitalism.
His refusal of neoliberal stances – which in Italy brought him to lead the “meagre
remains” of an army for years, as witnessed by Giacomo Becattini – was founded on the
observation that, not the excess of public intervention nor assistance, but their
defectiveness or the incomplete actuation of unitary plans – not unrealistic nor
intellectualistic – of governmental action should be considered responsible of less than
brilliant results on the economic and social plane.
His refusal of an anachronistic return to the market – result of the confusion
between “sunset” and “not reached fullness of a new day” – were two constant
references of Caffè: the first to the thoughts of Sidgwick and Pigou and to the already
consolidated corpus of welfare economics; the second to the works of Keynes and first
generation Keynesians.
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With Keynes Caffè shared not only the theoretical frame of reference and the
guidelines to public intervention on the matter of employment, but also more generally
the position of heterodox developed in the “cittadella”, from which he accepts the great
majority of its body of economic doctrine. With Keynes he still shares the social
“philosophy”, the views on the role of the economist, and not least the intimate
conviction that “ideas in the long run prevail over vested interests”. It is this belief
which, beyond other substantial aspects of his teaching, he tried to transmit – sometimes
succeeding painfully – to his pupils. Thereby the topic remains the responsibilities and
rights of man which, for Federico Caffè, had been the focus of every cultural and
practical interest.
The “struggle to attenuate the multiple forms of marginalisation of human
beings”, is not fruit of partisan ideas, but stems from the attention directed towards the
improvement of man, every man who, amongst all else, brought him to sustain the idea
of a universal welfare state, not solely for the poor, but as a tool for the well-being of all.
In one work dedicated to economic programming in Italy he cites – without
remotely surprising anyone acquainted even minimally with his world view – a passage
from Three decades of economic and political chronicles: << The man, to be assumed
as the central reference point of economic programming is what Luigi Einaudi presents
us in pages which should be reread: “The man – he wrote – as a sum of spiritual and
moral energies, as a force which opposes itself to nature, impoverished since centuries,
to corrupting government, to torpid environment, to surrounding misery”>>.
4. The relevance of Caffè's ideas to the present day
How contemporary are Caffè's ideas? Firstly one must not forget his intellectual
originality, happy synthesis of ethics, history and economics, from which a world view
distant from every metaphysical determinism emerged. Through the cultural path
previously described, Caffè came to define in an entirely new and fruitful way, the
contents and methodology of economic policy, a discipline often considered merely a
technical appendage of more solid economic theory.
Secondly, strictly on the plane of economic investigation, the insistent statement
that it should serve as a “guide to action” meant recalling and researching useful
messages in the most hidden corners of national and international economic thought,
while simultaneously approaching these ideas with an eclectic attitude. He thought that,
even in this way, it was possible to rediscover the necessary energy to react to the
conservatives' advocacy of impracticable policies.
Certainly the world and the practice of economic policy are different now from
those of the 70s and 80s, the years of full maturity of his ideas. All over the world the
role of the state is much different today than it was then; and in Italy the changes have
been even more radical. Certainly, if the indicator of state role were given by the
presence of direct intervention in the economy, his views would be entirely opposed to
the mainstream.
Some observations however are essential. Caffè had never been, even in the
years of the complete and unquestioned triumph of certain forms of public intervention
an advocate of its benefit at all costs; it is sufficient to recall his criticism against the Iri
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formula articulated exactly in the 50s and 60s, a period of maximal development of this
form of public intervention which appeared particularly alluring. Moreover, Caffè
always accurately proclaimed the autonomy of thought with respect to reality, doubting
strongly that this was always rational and acceptable. Lastly, contemporary economic
thought may today be closer to Caffè's than it might have been in the 80s. The problems
of macroeconomic stability, accentuated by market and production globalisation as well
as by the deflationary policies adopted in Europe, contributed to rekindling interest in
Keynes' work in recent years, in particular his fundamental contributions on the
workings of financial markets.
Beyond everything else, Caffè's ideas – like those of other thinkers and social
scientists from whom he often drew inspiration – will remain relevant, surpassing the
liberalistic intoxications and transient fashionable ideas, until the market and public
intervention are capable of guaranteeing employment, social justice, and protection for
the weak and disadvantaged.
We can agree with him that a progressive socio-economic approach cannot
prescind from an economic policy that includes, amongst its tools, conditioning controls
over individual choices; which considers indispensable the objectives of egalitarianism
and aid usually embodied by a state guaranteeing social welfare, and which entrusts
public intervention with a fundamental role in economic conduct.
(From Introduzione ai Saggi di politica economica in onore di Federico Caffè
(Introduction to Essays on economic policy in honour of Federico Caffè), edited by
Nicola Acocella, Guido M. Rey and Mario Tiberi; Franco Angeli, Milan, 1999, Vol. III,
pp. 11-6. This Introduction has been translated by Francesca Uda).
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