The Dark Side of Embeddeness: The Construction of Economic space and Prestige in Italy 1896-1907

The creation of a national economic space is the necessary structural condition for the unfolding of the "self-protective" measures of society that Polanyi analyzed for the post-WWI period, and that he saw as more generally arising in response to free market policies. A national economic space is itself the product of specific institutional arrangements, in particular the state agencies that allow the state to centralize the monetary system in its own hands: in the modern period, these have been central banks. By analyzing a longitudinal sample of the minutes of the meetings of the governing body of the Bank of Italy in its crucial transitional period at the turn of the century (1896-1907), this paper attempts to trace the historical process by which the Italian economy came to be understood as a national space. It shows that the creation of an area of economic prestige measured by the technical success of the central bank and the strength of its relationship with the Treasury was a crucial achievement of the liberal state. ..PAT.-Unpublished Manuscript