Monday, September 19, 2016

Marcello de Cecco (1939-2016)

The Department of Economics and Statistics of Siena University held a day-long conference in memory of Marcello de Cecco on 17 September, which would have been his 77thbirthday. 

I first met Marcello in October 1963 in Cambridge. Our dear common friend the late Bruno Miconi, a fellow research student in economics, introduced him to me. I already knew and appreciated Marcello from his contributions to Mario Pannunzio’s Il Mondo, but I found him even more impressive in person. Flamboyant, brilliant, learned, ironical and witty, yet approachable, friendly, generous. We got on well immediately. I have been fortunate in having him as a friend and colleague not only in our Cambridge years but also at Siena University, at the European University Institute in Florence, and at the Sapienza University in Rome – in almost daily contact for a total of over 25 years out of the over 50 years of our association.

Marcello was an alert and insatiable observer of current economic, political and social affairs, never satisfied with simple explanations but searching for deeper causes, enquiring “come va il fatto”. I remember his surprise when the daily Il Fatto Quotidiano that follows a similar inquisitive approach was published. Bruno Miconi used to say that Marcello should have been a film scriptwriter.

A Pembroke man, Marcello was held in great esteem by his supervisor Michael Posner; given his interests in international finance he was also in touch with Kingsman Richard Kahn, who however suspected him (injustly) of monetarist inclinations, because of his contacts with Chicago and Milton Friedman. Marcello had created a considerable intellectual niche for himself through his work on Eurodollars – dollar-denominated deposits held outside the US, mostly in Europe, thus escaping regulation by the Federal Reserve Board including reserve requirements. In this area at the time he knew more than his teachers and his expertise was appreciatively recognised and utilised in seminars and discussions. We both were invited to become members of the Monday Group, a seminar in Economics held regularly if reservedly in King’s. We shared an interest in the history of economic thought, indeed in a little known Russian pioneer of mathematical economics, Vladimir K. Dmitriev; Marcello edited the Italian version of his Economic Essays on Value, Competition and Utility, I edited the English version. When it became apparent that we were working on the same thing Marcello simply said that nobody had a monopoly on that author. At a Faculty seminar we presented a joint criticism of the Modigliani-La Malfa model of the interaction of monetary and real aspects of the Italian balance of payments. Later we co-operated in other research projects, especially in Florence.

Marcello was unique – among Italian students in Cambridge – in that he had come with his Mother, not wanting to leave signora Antonietta on her own back in his home town of Lanciano (pronounced as if written Langiano). They looked after each other well. Somehow, in spite of linguistic obstacles compounded by the regional variety of food nomenclature, his mother always succeeded in securing from the butcher her desired cuts of meat. Marcello gave the delightful account of his mother meeting Piero Sraffa in Cambridge Market Square, when she greeted Mr Sraffa with: “I am delighted to meet you, Professor; my son has spoken very highly of you …”. Marcello theorised the optimality of driving only second hand cars, but he chose only beautiful comfortable large ones, including a memorable Jaguar. When a lectureship was advertised at the University of East Anglia, I encouraged Marcello to apply and supported his candidature strongly. His appointment was a great success, and there, too, he met Julia Bamford – the other great woman behind the great man – so that I could boast of involvement in his taking both a job and a wife.

When the prospect of Italy joining the Euro began to be widely discussed, in 1992 on the eve of the French referendum on the subject Marcello gave enthusiastic endorsement of Italian membership. He wrote an article for Repubblica – Affari e Finanza, entitled I disgregati del 2003, which marked the beginning of his long collaboration to Repubblica (18/09/1992, reprinted in L'economia di Lucignolo, Donzelli, see Marcello’s obituary by Carlo Clericetti). In that article Marcello described an apocalyptic picture of Italy as a member of a Latin Union (with France, Spain, Portugal and Greece) ten years later: backward, underdeveloped, impoverished, authoritarian, repressive, bigoted and male-dominated; the article ends with a decrepit professor, who dares teaching politically incorrect views about the evolution of the international monetary system, being arrested and taken away by police. By contrast the member states of the Mittel-European Union thrive and prosper even more than the Anglo-American Federation, and hire the young unemployed migrants from Italy, who send food parcels to their parents at home in spite of this being officially frowned-upon.

Marcello’s enthusiastic endorsement of the euro was tempered, when it actually happened, only by his disapproval of Berlusconi’s failure to contain price increases in the changeover from lira to euro, something experienced only by Greece and there to a much smaller degree. Marcello’s enthusiasm was right: the euro brought about significantly lower interest rates; that the fiscal space was not used to reduce public debt and on the contrary encouraged greater indebtedness is another matter. The euro also brought about a rate of inflation lower than that achieved in Germany by the Bundesbank itself, and greater European and global integration of trade and Foreign Direct Investment. It did not bring about economic growth, but this was due to poor economic policies and various factors both on the demand (e.g. increasing inequality) and supply sides (productivity slowdown, etc.).

Ten years after, there was a lot to justify Marcello’s evolving position as a Eurocritic. Austerity policies enshrined in the Treaties under German hegemony were self-defeating and suicidal, Marcello was a Keynesian dyed-in-the-wool and knew it well. The German trade surplus, which Marcello attributed primarily to the post-Transition integration of Germany with Eastern Europe regardless of the weakness or strength of the euro, contravened EU rules but was unduly tolerated, and pushed trade deficit countries to run public budget deficits. Improvements could have been made, even without renegotiating the Treaties. Failure to make progress not only towards a Federal Europe design, but even towards piece-meal improvements, justify Marcello’s latest position as Eurosceptic, especially considering that he never indulged in advocating Exitaly, the Italian exit from the Euro that many advocated and still advocate lightly and unthinkingly. On the Euro, Marcello was always right.

For Marcello, the current crisis of the Euro was triggered by the Deauville Summit of 19 October 2010 at which Angela Merkel and Nicholas Sarkozy announced that at least part of any default on public debt would be born by bondholders. At the time I disagreed strongly with Marcello: why should investors who had benefited from large interest differentials, knowingly taking the associated risk, not have to bear the entire cost of default? If worried by that risk they could always have covered themselves as much as they wished by buying Credit Default Swaps. Yet, with the benefit of hindsight, now I am inclined to agree with Marcello. It was the prospect of bail-in that created the spread and effectively split the euro area.

By displaying the richness and depth of Marcello’s contributions of a lifetime, the Siena Conference stressed how dependent on his wisdom many of us had become. Today I find myself often wondering what Marcello would have said about current problems. Many Conference participants asked themselves what he would have said about Brexit: the consensus was that his natural diffidence towards Britain as a free rider of European integration, and the various exemptions repeatedly negotiated by the British (no Schengen, no common currency, the British rebate), would have led him to conclude that European integration might have progressed and improved without Britain. But we have no hard evidence that he would have taken that line. And we have no clue on what view he would have taken about the European migration crisis or the Islamic threat or the US elections with their problematic presidential candidates. It is at difficult times like these that we miss him most.

P.S. On the Siena Conference see also contributions by Emiliano Brancaccio
Paolo Paesani Salvatore Settis and Carlo Clericetti.


Pompeo Della Posta said...

Dear Mario,
thanks for telling us in such a passionate way so many unknown aspects about Marcello.
I can only add a little story. I saw him maybe 3-4 years ago and, knowing that I was in the process of writing a book on globalization (that hasn't come out yet...), the first thing he told me (with his well known way of speaking) was: "Della Posta, hurry up with that book on globalization, because it is not going to last for long!!!".
I was a bit surprised then, but now I understand how clearly he could see things in advance...

Ciccio said...

Caro Mario,
As a long-time friend and enthusiastic admirer of yours, my father would be delighted with your words, and very pleased to learn that he was right...
You are right about his views on Brexit, although - on a personal level - he would also worry that Martin Wolf’s prediction that the UK will be "meaner and poorer" may turn out to be accurate.
Un abbraccio,

D. Mario Nuti said...

Thank you Ciccio, for your appreciation and endorsement. We all miss Marcello but he will not be forgotten.
I supported Brexit out of sheer despair about this German Europe of ours, also because I thought (wrongly) that it was unlikely to happen and, if it did, it would help its improvement and democratisation (wrong again). Britain might become poorer as a result, but sterling devaluation might offset this effect, which if it occurs will be diluted over the next ten years. Mean it was already.

And thanks, Pompeo. Yes, your anecdote figures, Marcello was well aware of the recent threats to globalisation, well ahead of other observers,

Renzo Daviddi said...

Dear Mario,
thanks for sharing this.
You painted a very nice picture with a lovely insight into your friendship with Marcello. I have much appreciated your reference to your years in Cambridge and the reference to some unique events, like the encounter of Mrs De Cecco with Piero Sraffa at the market.
i had the pleasure to follow Prof. De Cecco lectures during my undergraduate years in siena where i followed his courses in monetary and applied economics. i had also the opportunity to get to know him better at the EUI in Florence. i will always remember the organised chaos of his desk, where he was able to find with incredible precision just the document he was talking about among a pile in precarious equilibrium. i still have in mind the final sentence 'bene, molto bene, benissimo' which he used to conclude his lectures just before taking the door and leaving the class.
un gran galantuomo that I am glad to have got to know.
Renzo Daviddi

Robert Skidelsky said...

Dear Mario,

I loved your recollections of Marcello. I also have the fondest memories of him, from the time we were colleagues at the Johns Hopkins University of Bologna in the 1970s. He used to trundle up once a week, from Siena I think, to deliver extraordinary discursive lectures on the history of money which, after several weeks (I was told), had barely got beyond the Roman monetary system.

I had a small problem with him. I was preparing for publication a collection of essays (published as The End of the Keynesian Era in 1977) and solicited a contribution from Marcello, who cheerfully agreed. Soon his was the only essay outstanding. Each week I pressed him, and he promised 'next week', but without result. Deadlines came and went.

The last week of the semester, he came into my office and handed me a note book. 'Here it is'. With great excitement I opened it and found several pages of almost indecipherable hand writing, which had every sign of being the product of the train journey to Bologna. 'But Marcello', I expostulated. 'It's all there', he replied, 'make of it what you can'.

So I did. It was idiosyncratic and wonderful. Entitled 'The Last of the Romans', it ended with the defeat by the Americans of Keynes's plan to set up an international clearing union. The final paragraph was a gem. 'So Keynes lost his last battle. He began life as a Roman and ended it as a mere Italian; too late, however, to acquire the lucid bitterness of Niccolo’ Machiavelli.'

D. Mario Nuti said...

Thank you for such a gem, Robert. One of these days we must organise an international event to remember him.

And thank you, Renzo, the state of his desk was legendary, but I did not know about his lecture ending.

JS said...

A beautiful portrait of Marcello, thank you. Though you forgot to mention his unmistakable Abruzzo accent when he spoke English, or any other language...

D. Mario Nuti said...

Others mentioned his (deliberate?) Abruzzo accent at the Siena Conference. An endearing trait, wouldn't you say?

SH said...

A great loss, clearly. I wish I had known him better.

JG said...

Thanks greatly for sharing this.
So far as I know, our paths never crossed but one degree of separation is still very close.

Susan Senior said...

Many thanks for your recollections, Mario. I have fond memories of many seminars and conferences with you and Marcello, often at the European University Institute, but also elsewhere. Frequently these ended in memorable meals, and many of the restaurants I still use were discovered in this way.
Perhaps my friendship with Marcello dated from the first pantomime we presented at the EUI. For those who don’t know, English pantomime is a development of the commedia dell’arte in which a fairy tale is loosely used as a basis for a skit, often about the place where the participants work. The theme was Snow White and my husband (also with a mustache) played Marcello (Grumpy) wearing a yellow jumper, and carrying a large panino wrapped in the FT and a sign “Mortadella and Empire”. Marcello came up on stage after with tears of laughter running down his face.
Later when he heard we were getting married, he took my future husband aside and gave him words of advice on how to cope with an English wife! I have never been able to discover the contents of that conversation.
I owe my long career at Siena to Marcello’s generosity as he notified me of a job vacancy there, initially teaching English. I am still there over 30 years later, and was glad Siena paid so much tribute to somebody who was such an important figure in the Faculty.

D. Mario Nuti said...

Whatever advice Marcello gave your future husband it clearly worked! Perhaps Paolo might be persuaded to reveal the secret?

D. Mario Nuti said...

Riccardo Bellofiore wrote an excellent obituary of Marcello de Cecco, published in the Newsletter della Royal Economic Society (