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The Italian Dilemma

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Italy is by far my favorite European country, but what appeals to a visitor — the great museums, archeological sites and superb  food— may not provide a sustainable road to a prosperous future.

Tourism injects money into an economy, and produces some mostly moderate to low end jobs. But it cannot be the basis of a successful economy, particularly for the next generation. It’s youth unemployment rate is among the EU’s highest and approaching three times that of the US. Italy also has the highest percentage of people under the age of 30 as any major European country.

As is generally the case in Europe, as well as the UK, there is no clear path for  recovering economic dynamism that started to fade in the 1980s.  Western Europe’s GDP per capita is about $63,000 per year, adjusted for the cost of living. In the United States, it is $86,000. Italy’s is $40,000.

The problem, Veronica de Romanis, a leading Italian policy analyst and author of the recently released L’Economia de Paura, or economy of fear, lies in a kind of lazy welfare state regime   fundamentally opposed, left and right, to any meaningful change. “Italy is going backwards but Italians don’t see it,” she told me last month in Rome. She sees Italy as dominated by narrow “tribes” who protect their niches from competition.

Italy is also plagued by the lowest birth rates of any major EU country. Yet it may have   a weapon that could prove useful in the post-AI era— it’s traditions of artisanship. You see this  in food, fashion, urban design and art. But Italy is rich in creative talent, but lacks ways to exploit it. The low youth employment and high rate of   disengagement , despite an extreme slow rate of labor force expansion, is a natural reflection of this fact.

Another aspect on this dilemma is what Italians seem to prioritize. Americans tend to be instinctively mercenary, but in Italy the priority tends to be la dolce vita, a way of life that is far more relaxed and frankly more human-focused than most EU countries.

So, is there nothing to learn from Italy? In the work I am conducting with Professor Irene Lottini from the University of Iowa, we are examining Italy’s artisan economy. This includes interviews with firms in fields as diverse as furniture making, textiles, food, jewelry and stone masonry. Together these firms possess  a store house of talent that is worth Italy’s nurturing, and also our emulation.

As more of the information and high-end services sector face digitization, artisanal skills and the arts remain one area that the nerds cannot totally control. Tactile experience, as I wrote about for National Review, is in great demand, as we can see by the massive expansion of farmer’s markets and the growth of artisan industry even in the US.

As artificial intelligence entrepreneur Rony Abovitz told me, tasks that require physical skills like plumbers, carpenters, and custom design. These trades are growing rapidly while the computer-centric field has retreated to 2017 levels, notes economist Gad Levanon . Increasingly skilled workers are doing better than products of the diploma mills.

But it’s not just about economics. Italians may suffer from a stagnant economy but they also enjoy healthier food, notably less ultra-processed ones, with much production coming from local, small farms. Italians tend to live  longer, despite having less money, than Americans or Germany.

Can we find a middle ground between genteel decline and the kind of high-tech nihilism common among top  American tech entrepreneurs, who tend to promise us a dark future dominated by computerization and scientific hierarchy?

These are among the questions Professor Lottini and I are exploring for the Italian Institute and the Center for Demographics and Policy, both at Chapman University. Interested in your ideas on this subject as well. Please feel free to comment to my Substack.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com, follow him on Substack and Twitter @joelkotkin.

Homepage photo: Cinqueterre, Emilia-Romagna, Italy, by Ian MacKay.

Thoughts On a Roman Legacy

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Ever since I was in high school, Rome has fascinated me. I studied Latin for six years, including two in college, and have kept my interest for the next fifty years.

In the past three years I also have spent considerable time in the Eternal City, and its history provides lessons, both positive and negative, particularly for a citizen of what is essentially the world’s pre-eminent empire, the United States. Read more

When the AI Revolution is Over, Trades May Be the Only Jobs Left

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The biggest long-range danger looming over the remaining liberal democracies does not come from U.S. President Donald Trump, Chinese President Xi Jinping, Russian President Vladimir Putin or the nutty mullahs in Iran now being pummelled. Instead, it comes from the seemingly inexorable force of technology that increasingly threatens not just to aid humanity, but replace it.
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Tomorrow’s Cities Are Here

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If you go east from hilly Austin, Texas, onto the flat coastal plain that stretches for 130 miles toward Houston, you can glimpse a future of the American city. But it won’t look like Manhattan, Chicago, or even Los Angeles. In fact, you might not realize you’re looking at a city at all.

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The Myth of the Post-Industrial Economy

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The cancellation of Donald Trump’s tariffs cannot stop what is a painful, but potentially gainful, reindustrialisation of America. Leadership across both parties – excluding the libertarian fringe on the right and the socialists on the far left – supports such a step, and the vast majority of Americans favour the large-scale reshoring of industry, primarily from China.

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Downtowns Are Dying, But We Know How to Save Them

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For decades, Los Angeles business and political figures have focused their attention on creating a sleek, vibrant downtown. The common thought, as the late Eli Broad suggested, has been, “a great city needs a great downtown.”

This notion of a revived downtown is still embraced by booster groups and the Urban Land Institute. Yet despite the huge investment in such things as the convention center, Crypto.com Arena and a downtown-centric subway system, the core remains more dystopic than great.

Today, downtown Los Angeles’ office vacancy rate approaches 30%, among the highest in the nation. Office vacancies, notes one recent study released by the Central City Assn., could result in a $70-billion loss in assessed value over the next decade.

This decline is not unique to L.A. The core cities have been losing their share of metropolitan residents since the 1950s, a trend that has accelerated in recent years. According to a recent MIT study, suburbs and exurbs constitute roughly 80% of the nation’s metropolitan population, while barely 8% live in the urban core. The rest are based in traditional transit-oriented suburbs. Even the vast majority of millennials, once seen as immutably attracted to dense environments, are heading to the suburbs, particularly as they start families (albeit later in life than previous generations have).

Across the country, once-flourishing downtowns — Seattle, Portland, San Francisco, Boston, Chicago — suffer vacancy rates over 20%. New office construction, declining for decades, has all but stopped. Even in Manhattan, taxes, regulations and crime are pushing financial firms, the lodestone of the borough’s economy, to places such as Miami and Dallas, where firms such as AT&T often choose suburban locations. New York, despite optimistic predictions, continues to be plagued by “zombie office space.”

Although Manhattan has remarkable cultural advantages, for most workers, it and other high-price cities no longer provide wages that compensate for the local cost of living. Brookings Institution scholar Mark Muro has noted that salaries across the 19-state American heartland region — from the Appalachians to the Rockies — are above the national average, once the cost of living is factored. All 10 of the highest-average-salary metros are small and midsize markets; none has more than a million people.

Read the rest of this piece at MSN. Originally published in The Los Angeles Times.

Joel Kotkin is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and a senior Research Fellow at the Civitas Institute at the University of Texas at Austin. He writes a regular column for The National Post (Canada) and Spiked but contributes regularly to Unherd, LA Times, The Spectator, National Review, The Telegraph and City Journal. His last book was The Coming of Neo-Feudalism: A Warning to the Global Middle Class (Encounter: 2021). Also find Joel at joelkotkin.com, on Twitter @joelkotkin and Substack.

Photo: Carol M. Highsmith, donated to the Library of Congress.

The End of Green Energy

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Not long ago, all right-thinking liberals were sure that fossil fuels would soon become “stranded assets” as The Guardian once put it. Hydrocarbon-based energy sources, the thinking ran, would become ever more worthless as the world entered a bright renewable future. Yet as President Trump’s takeover of Venezuela demonstrates, there is, in fact, a lot of life left in those deposits; as the progressive American Prospect recently lamented, the “fossil-fuel empire” has struck back. Read more

The Housing Crisis

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Amid the growing cost of living crisis, Marxist firebrand Zohran Mamdani has been elected to the position of Mayor of New York. Mamdani’s popularity, which is based largely on unease about prices, most notably rents, augurs a possible American turn towards radical collectivism. Read more

Can Social Democracy Save Capitalism – Again?

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Zohran Mamdani’s inauguration this week as New York City mayor is a moment of reckoning for those who care about preserving the American way of life. As a matter of policy, Mamdani mostly represents a continuation of the lifestyle and identity Leftism of recent decades, rather than a turn to traditional socialism. Yet it’s a telling indicator that his pseudo-socialist message has resonated so deeply with many young New Yorkers, tracking a broader shift toward urban radicalism. Read more

Equal But Separate

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Even as many scholars and pundits deny the differences between the sexes and vastly expand the concept of gender, society is increasingly dividing along these clear and simple lines. Read more