Antonio Serra and the Economics

Introduction: Antonio Serra and the Economics of Good Government  Rosario Patalano and Sophus A. Reinert

In the great Harvard economist Joseph A. Schumpeter’s posthumously published masterwork  History of Economic Analysis, he “credited” the Southern Italian lawyer and economic writer Antonio Anton io Serra (f. 1613) with being “the first to compose a scientific treatise ... on Economic Principles and Policy”.1 What follows is the first ever anthology antho logy of essays dedicated to Serra, who, though long having been eulogized in the th e historiography of economics as a thinker of precocious sophistication, has seldom received sustained attention from scholars, especially outside of Italy. Italy. In fact, no monograph-length study has ever been dedicated to him in any language, and he remains a dark horse in the historiography of political economy – often quoted, but seldom understood or appreciated in his historical context. Partly, this might be because of the many mysteries surrounding the man and his work. Little is known of Serra, except that he wrote his extraordinary 1613  Breve trattato delle cause che possono far abbondare li regni d’oro e d’argento dove non sono miniere , or Short Treatise on the Causes that Make Kingdoms  Abound in Gold and Silver Even in the Absence of Mines , in the Neapolitan jail of the Vicaria, and that he died there soon afterwards. 2 We have few details beyond these, but the  Breve trattato  reveals that he was a doctor (probably in law) and that he intended to write a book on the  Forza dell’ignoranza, or The Power of Ignorance. The text of the book itself makes it clear that he furthermore both had a humanist education e ducation and was well versed in legal arguments and, strikingly, the languages and methods of contemporary trade and international finance.3  A contemporary Neapolitan chronicler furthermore mentions a meeting between Serra, “incarcerated in the Vicaria for a long time”, and the Duke of Osuna, Viceroy of Naples from 1616 to 1620, which occurred on Wednesday 6 September 1617, when the former wished to present a plan for reforms 1

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”of great use to the court” but, ultimately, was thrown back in his cell.4  Two royal dispatches discovered in the late-19th century by the Neapolitan historian and politician Luigi Amabile during his work on the mystic friar Tommaso Campanella, dated 11 November 1612 and 27 May 1614, describe the arrest of one “doctor Antonio Serra” on a charge of counterfeiting, but nothing proves that this was the same Serra. 5 Around the mid-20th century, the economic historian Luigi De Rosa in turn discovered a notarial contract, dating from 1591 and plausibly relating to the author of the  Breve trattato, that mentions one “doctor Serra” as the owner of a sizeable estate. 6 Finally, in recent work in the Neapolitan State Archives, Rosario Patalano has discovered two further Viceregal dispatches that mention the name of Antonio Serra. The first, dated 18 June 1613, is particularly interesting because it reveals a connection between Serra and Miguel Vaaz, Count of Mola, a converted  Jewish Portuguese merchant very close to the Count of Lemos, Viceroy of Naples in the period from 1610 to 1616. The dispatch says “Antonio Serra ... see the Viceroy; bring him this afternoon when the Count of Mola arrives”. The second one, dated 28 June 1613, mentions a Serra facing legal charges for debt.7 Plausibly, then, and though we may never be certain, Serra was a well-educated doctor of law, formerly of some means and with practical experience in trade and finance, perhaps in connection to Portuguese merchant circles, who might have been jailed either for counterfeiting or for the lesser crime of indebtedness. Whatever his life story and the reasons for his incarceration, however, the Breve trattato was, much like the plan for reforms that he presented the viceroy, an attempt at ingratiating himself with the authorities to be let out of jail.8 Yet, the wider context of his work’s publication, and indeed the focus of his writings, was a deep financial crisis in the Kingdom of Naples and an ensuing debate over its nature, causes, and possible remedy. The  Breve trattato  itself is so rare that only a handful of copies are extant, and for a long time it was believed that only a single volume had survived the ravages of time, passing, in the words of the great philosopher Benedetto Croce, like a “lamp of life” through the hands of Italy’s greatest economists, from the Neapolitan Ferdinando Galiani in the 18th century to the Piedmontese Luigi Einaudi in the 20th.9 The “legendary rarity” of the  Breve trattato, not to mention its unique content, in effect made it something of a Holy Grail among bibliophiles over the course of the four centuries since its first publication.10 A veritable mythology has come to surround Serra – about whom popular accounts have been penned, poems have been recited, and imaginary portraits

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have been painted – the intensity of which can only be compared to the likes of Adam Smith, Karl Marx, and Thorstein Veblen in the history of economics.11 With recent translations of Serra’s  Breve trattato into Portuguese and English, Serra’s text has finally been made available to a wider scholarly and lay audience, and the time is therefore right to present a definitive volume on the state of scholarship regarding Serra’s context, life, work, and foundational role in the history of economics.12  After all, his  Breve trattato truly represents a watershed not only in the discipline of economics and in the longer history of financial crises and debates but in the history of social science and intellectual history more generally, explicitly and self-consciously formalizing a distinct sphere of economic knowledge in early modern Europe. The ancients, he argued in a humanist vein, were unsurpassable in all areas that had interested them, and there was little value in adding to the vast corpus of classical commentary. Yet, the dynamics of the modern world and the rise to prominence of economic forces had unveiled new areas of political life that the authorities of antiquity had not addressed. Hence, Serra did not want to discuss politics or the “art of government in general”, because whether one preferred monarchies or republics, one could not deal with such issues better than “Plato and Aristotle” had, nor would he struggle with jurisprudence and how to “distinguish just from unjust”, because in that one could not supersede the Emperor Justinian’s corpus of Roman Law. What Serra did   want to turn the attention of the reader towards was a third, hitherto neglected, aspect of statecraft – an aspect, however, which was of painful relevance for contemporary Naples: My aim is to discover the causes that can make a kingdom abound in money even if it possesses no gold or silver mines, a subject on which not a single word has been written by any of the ancient or modern writers on the ideal disposition of the political state. 13 Where later “codifications” of economic knowledge as a “science” in early modern Europe, especially in England, tended to emerge from an explicit refutation of more erudite currents of contemporary humanism and a concomitant embrace of technical expertise and merchant custom, Serra approached the nascent discipline very differently. Though clearly well versed in the minutiae of contemporary banking and the practice of international trade – to the extent that he formulated one of the very earliest analyses of a balance of payments – he resolutely quoted his Petrarch and preceded with “scholarly rigour” to uncover the true

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sources of the comparative, significantly competitive, wealth and poverty of nations in the real economy.14 Serra’s key insight, studying the economies of Venice and Naples, was that wealth was not the result of climate or providence but of policy. While Venice, built on rotting poles in a malarial swamp, through sound policy had risen to the very pinnacle of the world economy, Naples, gifted by nature in every way, languished in poverty, destitution, and dependence. Through a very systematic taxonomy of economic life, Serra then went on from this insight to theorize about the causes of the wealth of nations and the measures through which a weak, dependent economy could achieve worldly melioration. Most importantly, Serra realized, was that where a polity was located in the architecture of the international economy, and which economic activities it pursued, was of genuinely existential importance. Where Venice imported raw materials from all over the world to produce and export some of the most technologically sophisticated finished goods in Europe, Naples did the opposite, exporting its raw materials in exchange for foreign manufactures. Structures of international trade, which Serra theorized, in a revolutionary manner in light of the difference between increasing and diminishing returns to scale, could have deeply debilitating consequences for a nation’s economic, cultural, and social life that could only be reversed through policy. The following essays situate Serra and his work in their historical contexts – economic, cultural, and intellectual – and explore the enduring appeal of his Breve trattato across a number of fields. Not only does the present volume uncover new, hitherto unknown and unpublished materials relating to Serra’s life and succinctly present the state of the art of Serra scholarship, whether exploring the finer details of his theory regarding international financial interactions or his indebtedness to Renaissance legal traditions, but it further highlights its continuing relevance for facing some of the cardinal problems of the present. We again find ourselves at a turning point not only for the international economy but also for its ostensible “science”. Past certainties are dissolving in light of the ongoing crisis and the return – both good and bad – of state capitalism to international political economy. In the wake of the Asian Tigers and China’s spectacular reappearance on the world stage, scholars and laymen alike are being forced to rethink some of the fundamentals of economics as it has developed since World War II. And historians have an important role to play in this process, grounding theoretical debates and providing venerable yet crucial perspectives on current events.

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The importance of studying Serra and rediscovering the origins of economic knowledge is testified to by the fact that the very issues with which his contemporaries were concerned are currently at the forefront of our political and scholarly consciousness, from the role of policy in economic development to the challenges and possibilities of international competition, the balance between finance and the real economy, and the vexing nature of economic dependence and interdependence. Though history may not supply immediate answers to our most pertinent questions, a deeper, more nuanced, and less triumphalist understanding of the history of economics – in short a more historical understanding of political economy – can certainly inform our thoughts and policies. And in few cases is this resonance deeper than with Serra and his  Breve trattato. The first chapter, by Gabriel Paquette, sets the stage for appreciating Serra’s context through an analysis of “The Spanish Empire and their Viceroyalties: Structures, Policies, and Historiography”. It situates Serra’s Neapolitan milieu in the global context of the Spanish Empire, its contemporary policies for political and economic reform in Viceroyalties such as Naples, and how the ongoing re-appreciation of Serra must be understood in light of recent historiographical developments in the study of the reforms, political economy, and intellectual and cultural history of the Spanish Empire. This is followed by Francesca De Rosa’s short essay “The Vicaria Prison of Naples in the time of Antonio Serra”, which contextualizes the origins of the  Breve trattato through an exploration of the little-known conditions of incarceration in early 17th-century Naples. This facilitates De Rosa’s historiographical discussion of the various theories that have been proposed for Serra’s incarceration and helps set the stage to better analyse the physical and legal world that Serra inhabited at the time of his writing and how someone jailed at the time was able to write a work like the Breve trattato to begin with. Building on this background, Giovanni Zanalda’s chapter on “The Cost of Empires: Antonio Serra and the Debate on the Causes and Solutions of Economic Crises in the Kingdom of Naples in the Early 17th Century” connects the structural problems that Serra’s Naples faced to the intellectual life of the time and adumbrates the larger echoes of both in the history of economic development. Tripartite in nature, it opens by exploring a number of macroeconomic factors to shed light on the crisis facing Neapolitans of Serra’s generation, including demographic changes, the balance of payments, and institutional structures. It then charts Serra’s reaction to these problems in terms of his emphasis on

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the “real” rather than “financial” economy, before concluding with an analysis of the extent to which Serra can be seen to have foreshadowed subsequent views about wealth and the role of institutions which emerged in later debates about the political economy of the Dutch and English commercial empires, not to mention in recent and contemporary discussions regarding economic growth and development. The fourth chapter, by Rosario Patalano, entitled “Serra’s Breve trattato in a World-System Perspective: The Dutch Miracle and Italian Decline in the Early 17th Century”, considers the dynamics of Serra’s larger European economic context at the time. It employs a framework of world-systems analysis to revisit Serra’s  Breve trattato, and the contemporary debate in which he partook regarding economic reforms triggered by the so-called “twelve years’ truce” between the great powers of the period, in light of contemporary developments in the European economy at large. Largely retrograde and agricultural, Southern Italy’s integration into a larger European and increasingly global economic architecture offered new possibilities as well as challenges, and Serra’s “industrial” model, which looked back to the experiences of the Italian city-states of earlier centuries, was from this perspective in the process of being overcome by the rise of territorial powers such as England and the Low Countries. Following these different macroeconomic contexts for Serra’s work, Gaetano Sabatini turns in Chapter 5 to the local milieu with which Serra might have engaged in “The Influences of Portuguese Economic Thought on the Breve trattato: Antonio Serra and Miguel Vaaz in Spanish Naples”. Exploring the  Breve trattato’s indebtedness to the Portuguese tradition of political economy known as arbitrismo, this chapter breaks new ground in Serra scholarship by charting the existence of newly converted Portuguese Jews in Naples known as cristãos novos, or “new Christians”, who soon occupied positions of privilege and served as a conduit for Portuguese political and economic thought to the Spanish Viceroyalty of Naples. On the basis of suggestive evidence, not only from Lisbon and Naples but also from Serra’s hometown of Cosenza – and corroborated also by Patalano’s recent archival discoveries – it further suggests that Serra might have been close to this circle of Portuguese thinkers and politicians and that his mysterious imprisonment can be explained by virtue of his theoretical opposition to many of the main tenets of the Neapolitan arbitristas. Setting aside the question of Serra’s contexts, the sixth chapter, Sophus A. Reinert’s “Authority and Expertise at the Origins of Macroeconomics”, revisits the epistemological origins of thinking about macroeconomic

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phenomena in early modern Europe. Examining the longer history of “economic expertise”, it focuses on key debates over the relationship between theory and practice and the appropriate sources of trust in arguments about economic matters in two “founding” moments of the discipline: the Naples of Serra and the Williamite Settlement in England. In both cases, the question of what sort of expertise could confer “authority” to economic ideas was brought to the forefront, and, though through very different channels in vastly different cultures of learning, both cases ultimately saw influential theories emerge from the codification and generalization of successful historical practices, both micro and macro. Linking the debate surrounding the  Breve trattato  more explicitly to questions of political philosophy, Luca Addante’s “Wealth and Freedom in the Republic: The Politics of Antonio Serra” turns to Serra’s faith in the primacy of politics over the economy. Drawing on a current of political realism that emerged from Niccolò Machiavelli and a Southern Italian tradition of naturalism represented by Scipione Capece, Bernardino Telesio, and Tommaso Campanella, Addante unveils Serra’s argument for the importance of republican institutions in explaining Venice’s rise to economic greatness. Though forced to embrace a certain discursive opacity by the censorial context in which he wrote, the  Breve trattato nonetheless made powerful claims regarding the stability of republics and their unique ability to direct elite behaviour towards the patriotic aim of the common good. The rise to prominence of economic forces in international affairs had profound political consequences for Serra, and he considered the Italian republican paradigm uniquely able to harness the commercial revolution. A similar comparison informs Lilia Costabile’s “External Imbalances and the Money Supply: Two Controversies in the English ‘Realme’ and in the Kingdom of Naples”. Turning more strictly to the  Breve trattato’s economic theories, she returns to Serra’s debate with his contemporaries to shed new light on the theoretical origins of balance of payments analysis. Comparing and contrasting the debate between Serra, Marc’Antonio de Santis, and later the Neapolitan economic writer Giovanni Donato Turbolo to a contemporary debate in London between Gerard de Malynes and Edward Misselden, Costabile considers how they created sophisticated frameworks for analysing the relationship between financial markets, the real economy, and the international system. On the foundation of this deeper understanding of the origins of balance of payments analysis, she reassesses the school of economic thinking known as “mercantilism”.

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The ninth chapter, André Tiran’s “Real and Monetary Factors in the de Santis–Serra Controversy”, similarly argues for Serra’s extraordinary role in the history of economic analysis by virtue of his pathbreaking attempt to formulate a comprehensive theory of economic development. Not only did the Breve trattato analyse the problems of a country’s trade balance and balance of payments in a precocious manner, but in it Serra more generally theorized the relationship between economic development, the real economy, and physical space. Serra highlighted the fact that the balance of trade is a result of economic conditions in the country in relations to others and that monetary phenomena are consequences rather than causes of changes in the real economy. Economic growth thus resulted from a plurality of economic and non-economic factors in the real economy for Serra, who refused to allow money as such to have a decisive role in the story. Cosimo Perrotta then turns to “Serra and Underdevelopment”, considering the  Breve trattato   in the context of mercantilism and exploring its similarities to, and divergences from, iconic works published elsewhere in Europe. In this larger debate, Serra’s position was unique in that he wrote in a context of political and economic dependence (to Spain as well as to Northern merchants). Naples was unable to adopt an effective development policy of its own, because it was a colony in terms of its international politics, dominated by foreign merchants and domestically oppressed by feudal landlords. So though Serra’s analysis of the causes of economic development was extraordinary in a European context, the focus of his work was on backwardness and dependence. In examining the Kingdom of Naples, in short, Serra insightfully revealed the other face of the coin of comparative growth in an international system: underdevelopment, the mirror image of development. Turning to Serra’s rich reception, Koen Stapelbroek’s “‘To Console and Alleviate the Human Mind’: Ferdinando Galiani’s Attempted Republication of Serra in the 1750s” opens the long history of Serra’s historical influence, beginning with Ferdinando Galiani’s rediscovery – and attempted republication – of the Breve trattato in the 1750s and his public praise of it in 1780. Serra’s work became an inspirational text for the first great generation of political economists in Enlightenment Italy, including not only Galiani, a thinker whom Friedrich Nietzsche considered among the greatest of his century, but also Antonio Genovesi, Italy’s first professor of political economy. On the basis of unpublished manuscript evidence as well as in-depth analysis of Galiani’s work, Stapelbroek shows how the Breve trattato served as a model for economic reforms in

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a Naples that, though formally a sovereign polity in the 18th century, continued to struggle with different yet similar problems of decline and dependence as it had during the time of Serra. The twelfth chapter, Antonio Trampus’s “Francesco Saverio Salfi and the Eulogy of Antonio Serra: Politics, Freemasonry, and the Consumption of Culture in Early Nineteenth-Century Italy” subsequently maps the real beginning of Serra’s rise to Italian and international fame in the context of the Neapolitan Revolution of 1799 and the political programs of Masonic networks throughout the peninsula. In particular, he focuses on Francesco Saverio Salfi’s 1802  Elogio di Antonio Serra, or  Eulogy of  Antonio Serra, and Serra’s subsequent 1803 inclusion in Baron Pietro Custodi’s 50-volume collection of Italian economics, the vehicle for the  Breve trattato’s eventual fame in 19th-century Europe. Salfi’s importance for the historiography on Antonio Serra is also highlighted in Francesco Di Battista’s essay on “Serra’s Discovery and Ill Fate in the Liberal Nineteenth Century”, which places the  Breve trattato  in a longer tradition of Italian “civil” political economy rendered famous by Antonio Genovesi, the peninsula’s first professor of the subject. Considering the text’s mixed fortunes in the 19th century, Di Battista focuses particularly on the debate that raged across Europe over the “primacy” in economics and Serra’s eventual fall from grace as a mere “mercantilist” and later more “social” writer in light of the rising influence of economic liberalism. Building on this, Alessandro Roncaglia’s “The Heritage of Antonio Serra” adopts a bird’s-eye view of Serra’s Breve trattato and its legacy. Partly theoretical, partly historiographical, Roncaglia analyses the main the mes of Serra’s work and engages critically with many of the main curre nts of interpretation that dominated scholarship on the Breve trattato over the past four centuries, from libertarians to fascists, even including those that suggest that Serra was a nationalist, a chrysohedonist who confused specie with the wealth of a nation, and a proto-Meridionalist – that is, a champion of Southern Italian interests in opposition to an abusive North. Roncaglia, in short, highlights both some of Serra’s main contributions to economics and their polyvalent reception in the history of the discipline. Adopting an explicitly presentist stance, Jan Kregel then turns to “Serra’s  Breve trattato   and the Theory of Economic Development”. Considering the debate between Serra and his opponent de Santis in light of the longer history of financial crises, he asks what one still might learn from the treatise after four centuries, how the “political economy” of the  Breve trattato   differs from more recent traditions

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of economics, and what the consequences are, for large parts of the world, of his warnings not having been heeded. Focusing on Serra’s early analysis of a balance of payments, Kregel particularly emphasizes the continuing dangers of precocious liberalizations of capital accounts for developing countries, one of several pressing contemporary problems on which Serra can still shed light. The  Breve trattato ’s continuing relevance for economics and economic policy is also the topic of Erik S. Reinert’s “Antonio Serra and the Problems of Today”. His chapter focuses on two dichotomous aspects of Serra’s theories: first, the relationship between the financial and the real economy; second, the role of increasing and diminishing returns in economic development. Strikingly, both of Serra’s dichotomies have frequently gone in and out of fashion in the economics profession. They were strong in the period immediately following WWII, but, because of the chosen tools o f economics since then, they were neglected with disastrous results. Engaging in wilful yet informative anachronism, he asks what Serra still might teach us regarding the problems of the EU, green growth, and the importance of a large division of labour in a multitude of increasi ng return activities for economic development. Apart from the continuing use of Antonio Serra’s  Breve trattato by modern economists and the historical curiosity that no similarly sophisticated work of political economy would appear in Europe for well over a century if not more, Serra’s treatise remains an invaluable source for understanding a crucial period in Neapolitan, Italian, and European history. It testifies to the changing nature of political liberty as the pressures of international economic competition first became paramount; it uniquely affected the cultural and political histories of economics and nationalism in Italy for centuries; and it is a powerful, still fertile argument for the economics of good government – for political economy as such. Taken together, the essays in this volume provide a wholly new perspective on one of the most mysterious and striking figures in the history of finance and of economics. But, drawing inspiration from their subject, they also strikingly address the importance of history for economics. The image that emerges of Serra and his book ultimately reminds us that the kinds of ideas and policies that were actually successful in history for promoting development may be more important than the ideologies that emerged to explain that development. In other words, Serra’s work can provide pertinent answers to some of the most difficult questions of political economy, but it can also reveal to us the questions we have for so long forgotten to ask.

 Introduction 11 Notes

1. Schumpeter, J.A.,  History of Economic Analysis, ed. Schumpeter, E.B., Oxford: Oxford University Press, 1954, p. 195. 2. For what little we do know, and think we know, see Reinert, S.A. “Introduction” to Antonio Serra,  A Short Treatise on the Wealth and Poverty of Nations, translated by J. Hunt, ed. Reinert, S.A., London: Anthem, 2011, pp. 9–17. 3. Serra, 1613, pp. 225–226. 4. Zazzera, F., Giornali di Francesco Zazzera napolitano nel felice governo dell’Eccmo.  D. Pietro Girone, Duca d’Ossuna, Viceré del Regno di Napoli, dalli 7 di luglio 1616, con il modo tenuto nel dare il possesso al Signore Cardinale Borgia suo successore, dalli signori eletti di questa fidelissima cittá, con intervento del Conseglio Collaterale, 1667, p. 78. 5. Amabile, L.,  Fra Tommaso Campanella: la sua congiura, i suoi processi e la sua  pazzia, 3 vols, Naples: Morano, 1882, vol. III, pp. 646–648. 6. De Rosa, L., “Antonio Serra e i suoi critici”, Clio, vol. I, no. I, 1965, pp. 115–137. 7. The readable text of the first dispatch states “Antonio Serra [ ... ] acuda al V.rey; traerlo esta tarde cuando venga el conde de Mola”, both in Viglietti originali, Segreterie del Viceré, N. 6 1613–1614, Archivio di Stato di Napoli, Naples, Italy. 8. Reinert, “Introduction”, p. 11; Serra, 1613, p. 133. 9. Croce, B., Storia del regno di Napoli, Bari-Rome: Laterza, 1925, p. 160. 10. Famous Bologna bookdealer Gino Brighenti, pencil annotation on inside front board of Antonio Serra, Breve trattato delle cause che possono far abbondare li regni d’oro e d’argento dove non sono miniere, Naples: Lazzaro Scorrigio, 1613, Reinert Collection, Hvasser, Norway. 11. Reinert, “Introduction”, p. 6 and  passim. 12. Antonio Serra,  Breve Tratado das causas que podem fazer os reinos desprovidos de minas ter abundância de ouro e prata (1613), translated by M.T. Vicentini, Curitiba, Brazil: Segesta Editora, 2002; Antonio Serra,  A Short Treatise on the Wealth and Poverty of Nations (1613), translated by J. Hunt, edited and with an introduction by S.A. Reinert, London: Anthem, 2011. 13. Serra, 1613, p. 115. 14. Serra, 1613, p. 115.