123Iber. hist. econ. thought. 7(2) 2020: 123-131 El sistema europeo entre la vocación franciscana y el capitalismo luterano Catia Eliana Gentilucci1 Recibido: 16/04/2020 / Aceptado: 23/05/2020 Resumen. Este artículo sostiene que: a) los sistemas económicos son una expresión de sus propias culturas e historias y, por lo tanto, no pueden exportarse a lugares donde la cultura local no apoya su implementación; b) la aplicación indiscriminada del modelo alemán (luterano) a todos los países europeos (principalmente a los países católicos mediterráneos) ha fomentado el crecimiento económico en la UE a diferentes velocidades; c) Italia, cuna del capitalismo católico, intenta actualmente reaccionar contra las medidas de austeridad, impuestas por las restricciones económicas del modelo alemán, centrándose en el tercer sector y en las empresas sin ánimo de lucro, que son expresión del capitalismo católico originado en la Tercera Orden Franciscana. Palabras clave: economía civil; economía social de mercado; capitalismo católico; modelo franciscano; capitalismo lute- rano; crecimiento sostenible. Códigos JEL: B52, I31, P1 [en] The European system between Franciscan vocation and Lutheran capitalism Abstract. This paper argues that: a) economic systems are an expression of their own cultures and histories and they cannot therefore be exported to places where the local culture does not support their implementation; b) the indiscriminate application of the German (Lutheran) model to all European countries (mainly to Mediterranean Catholic countries) has fostered economic growth in the EU at different speeds; c) Italy, the cradle of Catholic capitalism, is currently attempting to react against austerity measures –imposed by the economic constrictions of the German model– by focusing on the third sector and non-profit companies, which are an expression of Catholic capitalism originating in the Franciscan Third Order. Keywords: Civil economy; Social Market Economy; Catholic capitalism; Franciscan model; Lutheran capitalism; sustain- able growth. JEL codes: B52, I31, P1 Sumario. Introducción. 1. The dual souls of European capitalism. 1.1 Saint Francis vs. Martin Luther. 1.2 Lutheran capital- ism. 1.3 Exporting state-building?. 2. The welfare state and sustainable growth. 2.1 The third sector. 2.2 Sustainable growth. 3. Conclusions. References. Cómo citar: Eliana Gentilucci, C. (2020). The European system between Franciscan vocation and Lutheran capitalism, en Iberian Journal of the History of Economic Thought 7(2), 123-131. 1 University of Camerino, ce.gentilucci@gmail.com Orcid: https://orcid.org/0000-0003-3859-4177 ARTÍCULOS Iberian Journal of the History of Economic Thought ISSN-e: 2386-5768 http://dx.doi.org/10.5209/ijhe.68895 Introduction The introduction of the Lisbon Treaty (2009) brought about a change in the management of the individu- al economies of European countries. In particular, the German economic model (Social Market Economy) was adopted as a model for Europe. Based on anti-Keynesian restrictive economic policies (both fiscal and monetary), it has steered Europe towards austerity and a resulting recession. In an attempt to exit the recession, Italy has chosen to turn to its Franciscan-Catholic vocation for solidarity inspired by the Secular Franciscan Third Order, incenti- vising the non profit sector (and green social farming in particular) and a new corporate culture whose mission is inclusive growth. In this study, we will see that in or- der to better comprehend the distance separating Italian/ Mediteranean and Euro/German economic thought, it will be necessary to look back to the two souls of Eu- ropean capitalism as embodied in the Franciscan School and Martin Luther’s call to reform. 1. The dual souls of European capitalism It is possible, in today’s Europe, to discern two logics of Capitalism: the Lutheran, which is rational and pur- sues the efficiency of economic aims; and the Francis- can-Catholic, which prioritizes social interests and aims for economic efficacy. In this sense, Latouche’s essay, Minerva’s challenge (2000, 62), separates the ‘reasonable’ from the ‘rational’. The reasonable is seen as the wisdom of economic behav- iour based on the efficacy of the desired result, that is to mailto:ce.gentilucci@gmail.com 124 Eliana Gentilucci, C. Iber. hist. econ. thought. 7(2) 2020: 123-131 say on its economic and social impact (i.e.: the number of individuals who benefit from results). The rational, instead, represents the a-valorial economic logic of the efficiency of economic results (with no reference to ethical values). In Economics, theoretical constraints ensure that ration- ality is detached from other overlapping spheres like poli- tics, the social and human relations. Reasonableness is evi- dent in those behaviours that combine a logic of rationality with priorities of other nature: social, political and humane. The bond between reasonableness, efficacy and ethical values is characteristic of the Mediterranean (Franciscan) civil economy; while the rational, efficient and a-valorial are prevalent in the German social market economy (as ap- plied to the economies in the European system). The distance between Italian-Catholic capitalism and German-Lutheran capitalism is evident on two fronts. The first, deriving from the Lutheran reform (Reforma- tion) which saw two cultures clash: the ancient Latin culture, refined by the Renaissance and the Catholic age; and the German, coarser and cruel (Fanfani 1961, 508); 13th-century German culture possessed these character- istics because it had not experienced religious dominion (Weber 1965, 88). 1.1. Saint Francis vs. Martin Luther Lutheran capitalism derives from Martin Luther’s vision of the human condition, in which man, guilty of original sin, can only find salvation by living a life of conscious repentance, at the end of which only God can grant eter- nal salvation. This pessimistic view colours man’s life with an inner struggle as he tries to do the best for him- self (individualism and selfishness) in the hopes that he will be saved. Subsequently, all contacts with other men will be influenced by the fact that each man will focus solely on his own goals in order to obtain the best re- sults. This view of the world exalts individualism, com- petition and efficiency, all values which are central to late 19th-century Anglo-Saxon capitalism. 19th-century positivism (formulated by the French author Comte, while J. S. Mill e H. Spencer were its main exponents in Great Britain) gave even more strength to the Lutheran spirit within a rational econom- ic vision which had as its main priority the achievement of individualist aims and gave origin to the theory of neoclassical capitalism. This system, which came to It- aly in the early 20th century, was influenced by a less individualistic Catholic viewpoint and was inspired by the Franciscan conviction that original sin can be expi- ated through a life of good deeds, altruism and poverty (possessing only what is necessary to live a dignified life, and sharing any excesses). Civil economy is a system of thought, defined in the studies of Stefano Zamagni2 and Luigino Bruni (Bruni, Zamagni 2004), that conveys an idea of the market that is humane and centered on relational goods and recipro- 2 Stefano Zamagni, full professor of Political Economy, University of Bologna, is one of the major theorists of civil economy. From 20017 to 2011, he was President of the Agency for the Third Sector (a Gov- ernment agency of Public Law operating under the Presidency of the Council of Ministers). city3. In the Franciscan model, reciprocity possesses a strong human value and is aimed at the recognition of the other as an integral part of the greatness of the uni- verse. Reciprocity goes beyond family ties, economic rela- tions between people, or fraternal bonds: it is man’s re- ciprocal recognition of his sense of belonging to Creation (Bazzichi 2016). In this sense, reciprocity was included in the economic thought of the school of civil economy and activities pertaining to the Third Sector, economic pillar (between State and Market) of the social system4. In Italy, this vision has its roots in the 13th-century Franciscan school5 and the humanism of the 15th century which placed Man, in contemplation of Creation, at its centre, accepting of his status and putting himself at the service of humankind (Bazzichi 2016 and Niccoli 1967). As is known, the central ideas of Franciscan thought are poverty, gratuity, searching for fulfillment through work and commitment towards others, charity towards the needy, and sharing ones riches. These attitudes can be summed up in altruism, reciprocity and social equity –values that are at the basis of contemporary civil eco- nomics. Poverty implies the search for one’s own well-be- ing and the common good in objects and relationships that are not, naturally, subjected to economic evaluation (friendship, fraternity, solidarity, reciprocity). In this way, wealth is no longer exclusively material in nature, but also, and most importantly, embued with spirituality by the things of the world (Creation) and its creatures (Todeschini 2004, 59-60). Monastic poverty as experi- enced in religious (Franciscan) communities or monas- teries can be seen as an economic and institutional way of life in which personal renunciation coincides with the enhancement of public heritage (Bazzichi 2016). In the 13th century, with the Franciscan Order, Fran- cis’s attitude towards the world started to move towards what is now known as Civil economy. This school of thought is not limited to the Italy of St. Francis of Assisi and the Italian Renaissance, but can also be found in Spain with the School of Salamanca6. 3 Zamagni and Bruni (2009) claim that «relational goods are those hu- man relations which cannot be ‘produced’ or ‘consumed’ by a lone individual, as they depend on the ways and reasons that motivate hu- man interaction and consequently can only be enjoyed when they are shared in a reciprocal manner». Reciprocity is a fragile intersubjec- tive relationship based on an act of generosity that, unlike economic exchanges, is unrecognised by law. In reciprocity, A pledges an act of generosity to B (a gift) expecting not payment but that B might do the same thing for A, or others. Morally speaking, reciprocity is more demanding than exchange as it requires loyalty, honesty, re- sponsability and care for others. It is not self-serving (exchange of a good and its value) but a gesture towards the common good and the division of common values. 4 For these reasons, civil economics is in opposition to the social mar- ket economy model. 5 See also: Barucci (1961), Baldini (2001), Bruni (2006), Bruni and Porta (2006), Bruni and Porta (2007), Zamagni e Bruni (2003), Gen- tilucci and Testa Bappenheim (2013). 6 The School of Salamanca was a group of theologians and philos- ophers who taught at the University of Salamanca, following the input of the Thomist Francisco de Vitoria who was responsible for significant theories of economics and international law, in particular regarding financial issues and international contracts (Gómez Rivas 1999). The most comprehensive study on the School of Salamanca 125Eliana Gentilucci, C. Iber. hist. econ. thought. 7(2) 2020: 123-131 To understand the true origins of civil economics, we must start from the franciscan philosophical economic thinking promulgated by Pope Leo XIII (Pérez, Malo 2018), usually quoted in relation to his encyclical Re- rum Novarum (1891); although his modernisation of the Catholic church had already commenced with the earlier encyclicals Aeterni Patris (1879) and Auspicato Concessum (1882). Wishing to counter the rise of Marxist socialist thought, Leo XIII set the course for an important social reform in the Catholic church, ready to face the chal- lenges of the modern era as an international spiritual guide. He is remembered as the «workers’ pope» and the «social pope». This particular phase in the history of the church, though not well-documented (Pérez, Malo 2018), is a relevant phase in Catholic economic thought. With his profound knowledge of the philosophy of Saint Thomas Aquinas7, he writes the history of the Catholic church and sets out the foundations of the Com- pendium of the Social Doctrine of the Church (2004), disseminating franciscan thought in all dioceses and in particular, the principles of the Third Franciscan Order8 of which he was a member9, contributing to the regener- ation of christian society. A strong point and a turning point of this philosophy is the fact that members undertake to bring their voca- tion to all areas of the family and working life, searching for Christ in one’s neighbour who is seen as a brother. Christ is announced through deed and word; daily life testifies to love, poverty, obedience and justice. In concrete terms, the Franciscans undertake to build a world that is more fair, evangelical and frater- nal; which welcomes all men, viewing them as gifts from God; the franciscans are happy to be on a level with the weakest members of society. The simplicity of this logic of thought and action made the Church and Catholic society far more aware of the needs of our neighbours and increasingly sensitive to social and labour issues10. We also find this Christian philosophy in Spain, thanks to the diffusion, through the School of Salaman- is attributed to Marjorie Grice-Hutchinson, a pupil of F. A. Hayek. In it, she maintains that the economics of the free market originate in Spanish Catholic scholasticism. In his History of Economic Analysis (1954), J. A. Schumpeter affirms that Italian, Spanish and French Franciscan scholastics distinguished themselves by theorising the stimulating role of creative entrepreurship in the free market (Zanot- to 2005, p. 40). 7 From Archbishop of Perugia (Gioacchino Pecci) through the founda- tion, in 1872, of the Academy of St. Thomas along with his brother Giuseppe Pecci. 8 Francis of Assisi established three orders: the first order of Order of Friars Minor, the Order of Saint Clare, and the Third Order of Saint Francis, committed to living the gospel according to the example of Francis in daily life. 9 Before ascending to the pontifacate, all popes from Pius IX (1846- 1878) to John XXIII (1958-1963) were members of the Third Order. 10 This Franciscan view of society is an alternative marxist social theo- ry, prioritising a social order founded on justice between labour and pay, charity harmony between social classes as a solution to the ills of capitalism. These principles inspired the 1897 article entitled “La rénovation sociale et le Tiers Ordre franciscain” published in “Le XXème siècle”. Numerous meetings dedicated to the social question and distributive justice have been held in France, Spain, Italy and Germany (Rivi e Gasparini, 2012). ca, of the thought of Thomas Aquinas between the 16th and early 17th centuries (Zanotto 2005, 38). The Spanish Scholastics, seen as the first real econ- omists by Joseph Schumpeter, were theologians who attempted to harmonise faith, reason and social reality by inviting governments to follow a rigorous ethic. The crucial factor being the identification of a theory of val- ue that considered the objective and subjective factors that contribute to making trade fair (Melè 1999 and El- egido 2009). The School of Salamanca forms a bond between It- aly and Spain, leading from the 13th century’s Thomism to the Neo-Thomism of the 20th century (Don Curzio Nitoglia 2015). In this period, the bond between Italian and Spanish economic thought is clearly seen in the The Pontifical Academy of Saint Thomas Aquinas of Rome established by Pope Leo XIII in 1880, which included two Spanish collaborators of neo-thomist formation: the Dominican friar Zeferino González11 and professor José Manuel Ortí y Lara (Pérez, Malo 2018). Its protagonists influenced the writings of Rerum Novarum, published in 1891. From the 13th to the 19th century, in fact, a Medi- terranean logic of economics, more civilised and geared towards the social12 (compared to the reasoning that developed in Germany with Martin Luther, and France with John Calvin (Knio 2013), emerged in Italy and Spain, putting the individual, with his relational values, and the collective, with its ethical and moral principles, at the centre of the economy (Banyuls, Miguélez, Recio, Cano, Lorente 2009). Latouche also recognises a Med- iterranean tendency to take into account the complexity of socio-economic relations, the diversity of production and ethical and social values. However, the path of Civil economics, from St. Fran- cis to the present day, is long and discontinuous. From the end of the 18th and early 19th centuries onwards, the influence of Positivism mathematised economic thought in an attempt to make economics a pure science, remov- ing the social sphere from the concerns of scholars. Civ- il economic thought in the 19th century remained in the background, though there have been authors who have kept its principles alive (Gentilucci 2015). Thus, the years spent preparing Rerum Novarum were rich in ideas of a social bent and it was drafted during the challenging conditions brought by social is- sues and the accompanying discussion on capitalism and socialism (Manzalini 2008, 79). Between 1884 and 1885, the Church held several meetings on the social programme of the Catholic doc- trine. These meetings were frequented by the Jesuit Mat- teo Liberatore, Count Edoardo Soderini, and the priest Salvatore Talamo13. Inspired by the discussions held in this circle, two books were published: one by Matteo 11 Zeferino González, Dominican, was one of the major figures in Spanish social catholicism and one of the most important neoscho- lastic philosophers. After being apointed Bishop of Cordoba, he founded the Catholic workers’ circle. 12 See Zamagni: sites.google.com/site/uominieculture/people/ste- fano-zamagni/zamagni-su-avvenire-2009. 13 Matteo Liberatore founded the magazine La Civiltà Cattolica in Naples, 1850. Salvatore Talamo and Giuseppe Toniolo founded the magazine, Rivista internazionale di Scienze Sociali in 1893. 126 Eliana Gentilucci, C. Iber. hist. econ. thought. 7(2) 2020: 123-131 Liberatore, Elementi di economia politica (1889) and the other by Antonio Burri, Il lavoro: studio sociale (1888). The 1891 Encyclical paved the way for the 10-year- ly publication of other social encyclicals until the most recent, Praised Be (2015) of Pope Francis, which is par- ticularly sensitive to environmental issues. Pope Fran- cis reminds us of the force with which St. Francis con- templated Creation, seen by him as proof of the bounty of the Lord. As is known, the Canticle of the Creatures praises the environment, as well as speaking of a love for all creatures. In Franciscan thought, this becomes an undying commitment towards our neighbours and the recognition of human value within the economic sphere. The ethical principles and moral values found in the Social Encyclicals are set out in the Compendium of Social Doctrine of the Church (Pontifical Council for Justice and Peace, 2004) and still stand as the founda- tions of the tradition of civil economics heralded by the Franciscan school. For our purposes, it is interesting to note that this train of thought was also influenced by the founder of Opus Dei: the Spaniard, Josemaria Escrivá de Balaguer (Zanotto 2005, 8). This combined Italian-Spanish Mediterranean train of thought continued from the late 20th century and came to light in the school of civil economics, which offers a new way of seeing economics as shown in the work of Zamagni. A humanised science based on solidarity, reciprocity, gratuity which seems to indicate a path of sustainable growth and proposes solutions for escaping the current economic crisis. 1.2. Lutheran capitalism If Franciscan thought influenced the view of society in Mediterranean culture, Lutheranism, as already said, shaped the social market economy school of thinking which today is the basis of European economic systems as forseen by the Treaty of Lisbon (AA. VV. 1989). So- cial market theory has its origins in ordoliberalism (Frei- burg School), a liberal school of thought developed in the 1930s as an answer to the profound economic and political crisis Germany was undergoing. The Freiburg School was influenced by Von Mises’ work Nation, State and Economy (1919), which advo- cated the need that free competition be regulated within an institutional framework14. Forte and Felice (2010, 20) claim that the market should act by following natural laws of «price as indicator of scarcity», regulated by constitutional laws, that is to say: «interventions that do not suppress price mechanisms or the market’s capacity to govern itself, but are included as new data». Political economics can not, therefore, go beyond the provisions of Law, which involves an «anti-keynesian policy» of controlling aggregate demand (and public spending in particular). To our ends, it is worth mentioning Wilhelm Röpke, who concluded the debate on social market economy in 14 For a history of Social Market Economy see the numerous contribu- tions of Francesco Forte and Flavio Felice. his 1958 work, Beyond supply and demand. Towards a human economy15. In Röpke’s view, the market should base its actions on a system of values; the State is allowed to intervene but its actions must always conform to the principles of a free market. In this view of the economic system, free competition is seen as the best possible condition, excluding value judgement on the equity of results ob- tained and championing the above-mentioned values of «rationality-efficiency-avaloriality». Röpke’s ideas came to Italy as well, thanks to Luigi Sturzo and Luigi Einaudi (Forte 2016). For Felice and Angelini (2014, 45-47), the Röpke-Einaudi model ac- counted for the principle of subsidiarity, though only when compatible with a competitive market interven- tion (Forte and Felice 2010, 68). Luigi Sturzo’s model can be summarised as follows: political and economic freedom is unique and individual in nature; the main role of the State is to watch over and guarantee collective and private rights, maintain public order, national defence, protect credit and monetary systems; and subsidiarity as a fundamental requisite of democratic progress. There was so little interest for the principles of mar- ket economy while the Italian Constitutional Assembly was in session that Luigi Einaudi was not able to steer their views towards the German model, even though he saw it as the «third way» (Forte-Felice-Forte 2012), an alternative to Socialism and the free market, regardless of his 1946 election as Deputy in the very same Assem- bly, the fact that he was an economist and a politician of undeniable merit, too. 1.3. Exporting state-building? As anticipated in the introduction, the Lisbon Treaty, in applying the German economic model unconditionally to all European countries, actually created paradoxical situations: Italy, a country historically economically close to social issues, solidarity and sharing, has had to apply a form of management that is rational and a-valo- rial which contradicts social needs and historical neces- sities (for example, the immigrant crisis and solidarity towards the socially disadvantaged). The basic idea is that applying economic criteria as set out in the German model to the entire European area would guarantee a sta- ble future for the eurozone by controlling inflation, the containment of economic crises and increased competi- tivity in world markets. In truth, however, economic systems answer to their own culture and histories. Referring to a well-known discussion on state-building, it is not possible to export and apply economic systems to societies which are not culturally able to receive them. This evident truth was noted as long ago as 1902 by internationally-renowned economist Enrico Barone, critical of the efforts of his colleagues to apply Marx’s historical materialism to Italian capitalism. In Bar- one’s words, “one thing is often found in the history of 15 In Röpke’s previous writings – The Social Crisis of Our Time (1942) and International Order (1945) – Social Market Economy is under- stood as a «third way between liberalism and socialism». 127Eliana Gentilucci, C. Iber. hist. econ. thought. 7(2) 2020: 123-131 thought: nordic ideas, sons of the snows, come trium- phantly down to Italy, only to melt in the ardent rays of our logic. And this is the fate that awaits historical ma- terialism or economic determinism” (Barone 1902, 36). He makes it clear that German determinism, ascrib- ing historical evolution exclusively to economic factors, is too arid in order to explain the dynamics of a social system (which are basically interdisciplinary and mul- tidimensional in nature). So much so that in Barone’s opinion, Italian culture is based on the philosophy of the «poor man of Assisi». He writes: Man is far too complex to narrow his motives down to one desire, namely the enjoyment of materi- al pleasures, without taking into consideration his heart, intellect, feelings and ideas, such powerful components of history. The affairs of humanity are too intricate to encapsulate within the confines of a simplistic theory which is unable to explain the birth of great religions such as Christianity, in the name of which crowds of every social class, turning their backs on the riches of the Earth, faced persecution and martyrdom serenely, swept by a high ideal be- come belief; or were lifted to the highest peaks of altruism by the quietly fascinating words of Jesus Christ, or by the mild words of the poor man of As- sisi, who in punishing times melted the hearts of the powerful with the gentle voice of compassion for the miserable and wretched. (Barone 1902, p. 45) More recently still, Amintore Fanfani (1961) ob- serves that the 15th century is significant for the creation of an Italian capitalistic spirit that, unlike the German, sees business as being at the service of society. There- fore, in the writer’s opinion, the application of the Ger- man (Lutheran) model to European countries (and coun- tries in the Catholic/Mediterranean tradition in particu- lar) has contributed to the growth of a two-speed system in Europe. Restrictions imposed by this system have meant cuts to public spending, in primis the welfare state, and lo- cal institutions, made necessary by enforcing econom- ic policies of austerity. These cuts hold back economic growth; in Italy, the percentage of people living in pov- erty has increased in recent years16. 2. The welfare state and sustainable growth We have, thus, affirmed that the Mediterranean cultural and social tradition is different to the German and be- cause of this, applying this model to all European coun- tries has caused a two-speed growth (Greece’s default in 2015; Brexit in 2016). We have also said that in an attempt to keep up with the financial restrictions imposed by Germany, Italy has acted by making cuts and rationalising public spending 16 In 2015, 1 million 582 thousand households were living in absolute poverty (6,1% compared with 5,7% in 2014) for a total number of 4 million 598 poor: the highest number recorded since 2005. Essen- tially there are as many poor people as there are inhabitants in the Veneto region. (Ottaviani 2016) and (Cottone 2016). (spending review), though these actions have resulted in an evident increase in unemployment, above all for young people, and a structural change in economic and social equilibriums. Regions and municipalities have had to deal with expenditure cuts and controlling aggregate demand. The application of the Lutheran model to Med- iterranenan countries has created the inconveniences and difficulties currently debated (Panebianco 2012). We have also stated that the largest difference be- tween these two models is faith in the market’s ability to achieve the best economic results. In aiming for ef- ficiency, market economy views free competition (via free negotiation) as the best possible method to achieve the best results as well as the highest levels of global competitiveness. Monetary policy must therefore be re- strictive and free markets must be checked (even if re- sults are uneven, and show themselves in lower wages, the impoverishment of some classes or price levels that curb consumption). On the otehr hand, the Mediterranean civil economy, aiming for efficacy and results with a positive social im- pact, has less faith in the ability of markets to obtain the best results and allows for state intervention in order to support (sustainable) consumption, investment and the fair distribution of wealth (Keynesian policies) (Conti 2015). An important aspect in both theories is the role given to the State. In the Lutheran view, the State is referee of the market, while in the catholic, there is more room for the welfare state. In Italy, a certain degree of care for one’s neighbour as well as the disadvantaged, has traditionally been passed down through the generations, in so far as to in- clude the welfare state in the Constitution of the Repub- lic17. In fact, Italy is actually looking towards the world of profit, through a combination of organisational effi- ciency and social efficacy. Thanks to the rationalisation and revision of public spending imposed by Europe, Italy currently has less resources to apply Keynes- ian policies supporting development, but thanks to the contribution of the third sector is contemplating a «welfare society». And finally, the politics of today tend to highlight the fact that austerity does not create social and economic stability and it is, consequently, necessary to return to the type of public spending which is able to boost the economy (while avoiding waste). History is showing us that Project Europe, as envisaged by the Lisbon Treaty, is encountering many difficulties. 2.1. The third sector Due to cuts on public spending imposed by Europe, It- aly, faithful to her spirit of solidarity, is reacting to the economic crisis by applying a “welfare society” ap- proach which is based on strengthening the third sector 17 The welfare state is recognised by the Italian Constitution under arti- cles: 3, 4, 9, 29-38, 41-47. 128 Eliana Gentilucci, C. Iber. hist. econ. thought. 7(2) 2020: 123-131 and social enterprises,which include the green economy and civic agriculture. The role of social enterprise in Italy has become so important that it has been granted legal recognition (Enabling Act of August 2016). In Italy, the third sector comprises over 300 thousand non-profit organisations generating a yearly income of about 63 billion euro in- volving 6,63 million volunteers of whom 3 million par- ticipate without being part of an organization. This type of business can be found in Germany, too, but its conditions and prospects are quite different. First of all, there is no law granting an autonomous role to so- cial enterprises and the third sector, differentiating them from ‘for-profit’ operations. Furthermore, as indicated by Boccaccini (1993, 279), there is a substantial differ- ence between the Italian third sector, strongly character- ised by “solidarity”, and the German which maintains an aid-based approach. This distinction has its roots in the cultural heritage common to catholic countries, com- pared to those in which protestantism is prevalent. The reference to solidarity puts a spotlight on altruistic and reciprocal leanings of an intersubjective nature that are not present in a welfare approach. In Germany (Defourny-Nyssens 2008, 23) (Gros 2014), in a legal sense social enterprises are included under the general umbrella of insurance companies, lim- ited liability companies, cooperatives and foundations which have economic, political and legal restrictions which in turn limit economic activity in social enterpris- es. Many of these are not even able to access funding for the private sector18. 2.2. Sustainable growth A decisive factor for sustainable growth is transdis- ciplinarity. In order to adopt growth strategies for the 21th century, we must we have to get out of the ivory tower (or restricted environments) of individual disci- plines and open up to broader discourses that embrace culture, innovation, society, law and man. Even in this, Saint Francis has taught us to be open to others and to their truths, thus avoiding a situation in which we isolate ourselves in the belief of being above others. Each dis- cipline contains a truth to be seized, and these multiple truths allow us to find the best way in which to solve specific issues and reach specific goals. This view of science, influenced by the ancient Latin culture, is very Mediterranean. Italy is showing herself to be capable of adopting sustainable growth strategies, allowing her to combat high industrial unemployment. The three pillars on which this strategy is based, designed to reinforce each other while facing significant challenges to tackle un- employment, are: smart growth based on knowledge; greener and more competitive sustainable growth; inclu- sive growth to favour social and territorial cohesion19. 18 Report of the Italian Chamber of Commerce for Germany, October 25 2012; http://itkam.org/2012/10/cosa-significa-fare-impresa-so- ciale-germania-normativa-numeri-e-sfide/) 19 Website: http://www.aiccon.it/file/convdoc/quaderno15x21_econo- miasociale_web__1_.pdf 2.2.1. Intelligent growth. Knowledge In this innovative, multidisciplinary framework, the for- mation of human capital becomes vital, in sharing ex- periences at work but also and more importantly within the educational sector. It is interesting to observe that, in recent years, education and training is moving towards a solidarity economy and the non-profit sector. 2.2.2. Sustainable growth and the contribution of civic agriculture In the context of Mediterranean civic economy, found- ed on the principle of reciprocity, the enhancement of social needs and the recognition of the third sector as an autonomous economic sector, it is possibile to insert civic agriculture. In the framework of Mediterranean civil economy, based on the principle of reciprocity, the enhancement of social needs and the identification of the third sector as an autonomous economic sphere, it is possible to in- troduce the civic agriculture business model. In Italian civic agriculture there has been a noticeable return to local knowledge and skills (as demonstrated by the Ital- ian industrial districts) that enhance the territory and its specificity. It is characterized by networks of small and micro local systems that work together in a multi-rela- tional dimension, attracting numerous local realities (ur- ban planning and landscape, economic, environmental, historical, social, recreational). The mission of civic agriculture is, as a matter of fact, to enable sustainable development (respecting the environment and producing goods and services with a social vocation) that takes into account the overall com- plexity and, therefore, interdisciplinary nature of the actions involved (social, environmental and economic). The multifunctional character of a farm derives from the creation of external effects in an environmental, land- scaping, food security, educational, social and health care, recreational, eco-friendly setting. Caporali (2010) observes that, when giving pointers for sustainable agriculture, scholars should consider a multidisciplinary, multisectoral approach, seeing as this is closely connected to ecology, agronomy, econo- my and sociology. The author is of the opinion that it is common practice for international institutions to meas- ure the sustainability of agriculture through biophysi- cal and socio-economic performance indicators. In this sense, studies on civic agriculture might lead the way in introducing an approach that is open to diverse circles which have erroneously been considered separate. In fact, civic agriculture functions as a territorial, participative, relational model which puts local organ- isations in a logic of service, proposing a model of wel- fare society which appreciates identities, protection and freedoms of all citizens. The term civic agriculture was used for the first time by Lyson (1999) at the annual meeting of the Rural So- ciology Society, underlining the connection between economic growth, food needs and the civic duty to re- spect the environment. In the same manner, in 2014 http://itkam.org/2012/10/cosa-significa-fare-impresa-sociale-germania-normativa-numeri-e-sfide/ http://itkam.org/2012/10/cosa-significa-fare-impresa-sociale-germania-normativa-numeri-e-sfide/ 129Eliana Gentilucci, C. Iber. hist. econ. thought. 7(2) 2020: 123-131 at the XXIV session of the Committee on Agriculture (COAG), José Graziano da Silva –the Brazilian FAO Di- rector-General– called for a paradigm shift in favour of multi-sector agriculture that deals with food safety and energy efficiency, which are fundamental issues towards a more “humane” economic growth. In order to obtain the best results for longer in the future, the environment must be taken into consideration. The OECD Report also shows that speaking of mul- tisectoriality in relation to agriculture is more appropri- ate considering the characteristics of a small business, the fact that it nurtures rural traditions and is close to the environment and society. Green social farming responds, therefore, to the characteristics of alternative development proposed by civil economy. It arises from the need to find alterna- tive sources of income compared to those of the old Anglo-Saxon capitalist production processes, from the need to heal the social divisions that have arisen in the capitalist system and from the need to fill the vacuum in the local welfare sector, originated by the spending review imposed by Europe. 2.2.3. Inclusive growth: a shared value A shared value is conceived as the set of policies and practices that enhance the competitiveness of a com- pany, improving economic and social conditions in the communities in which it operates. Shared values include social objectives, which aim to optimize welfare society, and the multi-functional effects of the productive sectors of goods and services. The same assessment of the productive and organi- zational performance of non-profit companies depends on the level of fulfilment of shared values (that is, the so- cial impact of the activity undertaken) because non-prof- it businesses are conceived as an instrument for creating social value. The ability of a social enterprise to meet the requirements specified in the shared values of the com- munity of reference is evaluated according to Corporate Social Responsibility (CSR). One method for evalutat- ing CSR proposed by Europe is stakeholder satisfaction, which is used motly in evaluating the multifunctional impact of social enterprises (Piorr, Müller 2009). CSR is inspired by an economic theory based on the Fran- ciscan-inspired thought of Léon Harmel (1829-1915), a Franciscan tertiary since 1861, a notable figure in the French Catholic social tradition. Harmel transformed his textile mill into a Christian factory with a view to encouraging unity among workers and reawaken their sense of responsibility in the work they carried out. He is remembered for having taken the moral and social formation of workers to heart and es- tablished his business according to Christian principles of equality and freedom (Guitton 1929). His efforts were instrumental for the 1877 publication of the Manual of a Christian Corporation, which was well received by both Pius IX and Leo XIII20. 20 Harmel, one of the main architects of Third Order conferences, de- voted himself to organising pilgrimages to Rome for French work- ers, spreading the social principles found in Rerum Novarum. His Harmel can be considered the precursor of Cor- porate Social Responsibility, the theory of which reached its fulfilment in the current thinking of Rob- ert. E. Freeman (mathematician and philosopher)21, stating that the purpose of a capitalist company, albeit listed on the stock exchange, must be to make profits and share social and ethical interests with all stake- holders. Interestingly, these concepts appear in a publica- tion issued in 1968 by the Italian economist Pallavi- cini, the creator of the “parameter breakdown meth- od”, which calculates the performance of a business in a manner which is not strictly economical and includes ethical, moral, social, cultural and environ- mental aspects. The contribution of Harmel, Pallavicini and Free- man is in sharp contrast with the still-dominant theory of profit enterprise (capitalist and neo-classical) drawn up in 1970 by the Nobel prize for economics Milton Friedman (father of the restrictive monetarist theory adopted by the European market) which identifies the ultimate aim of company policy as being exclusively in the financial interests of shareholders. It is a rational view of the economy that considers the social dimen- sion of a firm as an obstacle, rather than an incentive for improvement. 3. Conclusions The chain reaction regarding austerity measures im- posed by the European Union and the consequent reces- sion has led to a structural change affecting the countries which are part of it. Italy, with its Mediterranean culture, is demonstrating an ability to react, and is managing to avoid adopting a system (the Lutheran) that does not be- long to it in a passive manner, by employing its own cultural tools based on the values of solidarity and social cohesion. Italy is proposing a new economic and social par- adigm to Europe, based on sustainable growth which translates into respect for the environment and territorial enhancement. In Italy, the non-profit sector is becoming a new culture of enterprise and a new way of doing busi- ness which is also recognised by the legal system, a sit- uation which puts the country at an advantage compared to other European member states. activity concerning ethical markets drew the attention of Pope Leo XIII, with whom he forged a deep friendship, and established the base for a social enterprise model that was both franciscan and catho- lic (Pérez, Malo 2018). 21 Professor of Business Administration at the Darden School of Busi- ness, academic director of the Business Roundtable Institute for Cor- porate Ethics, and director of the Darden’s Olsson Center for Applied Ethics. 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