In Gold We Trust: Social Capital and Economic Change in the Italian Jewelry Towns (review)

Dario Gaggio’s examination of northern and central Italy’s small-scale capitalism in the twentieth century dramatically illustrates the extent to which “new” social and cultural approaches have infiltrated and transformed the study of economic history. Despite its modest-sounding title, this theoretically sophisticated, methodologically innovative, and empirically well grounded study confidently challenges or complicates longstanding assumptions about the evolution of modern industry, structural analyses of social networks, and traditional narratives of successful or failed modernization on the Italian peninsula. In the process, Gaggio takes on such academic luminaries as Alexander Gerschenkron, Alfred D. Chandler Jr., and Robert Putnam.

From the outset, Gaggio argues convincingly that development of specialized clusters of firms belies the notion that modern industry necessarily entails the triumph of “homo economicus,” with large, integrated corporations operating in a separate sphere isolated from other forms of social, political, or cultural action. While his interdisciplinary approach explicitly borrows from the social sciences such key concepts as “embeddedness,” “social capital,” and “informal economy,” he subjects these terms to a rigorous critical analysis. Thus, for instance, he rejects Putnam’s treatment of social capital as an “unintentionally produced and functionally deployed” (p.15) public good on the grounds that it assumes the presence of an “omniscient social scientist,” cannot explain sudden historical changes, and deprives the actual participants of any real agency. Gaggio argues instead for a notion of social capital as an essentially deliberative project, in which historical actors utilize family ties, friendships, and political affiliations to gain resources and opportunities under circumstances that can change and thereby create new conflicts and challenges. In this fashion, he treats social networks and political cultures not as structures but rather as processes, where meanings are flexible and constantly renegotiated and where the boundaries of public and private sectors are blurred and interlinked.

In order to illuminate these complex and fluid processes, Gaggio employs a micro-historical methodology to explore in detail developments in three leading golden jewelry towns—Valenza Po, Vicenza, and Arezzo—from the late nineteenth century to the early twenty-first. This approach offers a “thick description” of interactions at the local level as an antidote to a body of scholarship that has relied exclusively on long-term quantitative variables. In Gaggio’s able hands, this economic “history from below” teases out the heterogeneous and contradictory perspectives of local craftsmen, suppliers, traders, bankers, and political patrons in their dealings with each other and with the national government in Rome and international markets. What emerges is a story that highlights the central role of conflict and historical contingency in the processes that transformed these towns into the leading global centers of gold jewelry production by the late 1960s.

Significantly, Gaggio’s larger theoretical conceptual interests do not come at the expense of his empirical research. On the contrary, his book provides a series of richly detailed case studies of the distinctive paths taken by each of the three Italian jewelry towns and one of their American counterparts, Providence, Rhode Island, which offers an additional international comparative perspective. His historical reconstructions rest on a very effective mining of bankruptcy records, petty criminal trials, and anonymous allegations, as well as interviews with surviving protagonists in order to expose the dynamic interpersonal relations of trust, competition, patronage, and betrayal involved in the creation and maintenance of these communities of production. Gaggio’s stories challenge any standardization of categories and institutional roles. Thus, in Valenza Po, socialism ironically provided the ideological and emotional cement for the local community of entrepreneurs, helping them to survive market crises and resist opportunistic behavior. Elsewhere, he shows how informal economic practices, often associated with the economic backwardness of the south, were key components of the jewelry towns’ success, which depended on gold and stones smuggled into the country, rampant tax evasion, the violation of labor standards, and ties between local elites and international traders.

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