Facing Crises by Words. Perception and Propaganda in Wartime Italian Financial Crises (1866-1918)

We focus on the Italian debt crises in correspondence of Italian Independence warfare periods, in 1866 and in 1915-1918 (also called the 4th war of Independence). In both cases, the way adopted by governments was to resort to “national loans”, and this entails the support of domestic public opinion in order to increase the share of Italian debt owners and to bolster bonds value, as well. In this case, the success of underwriting in the presence of serious default risks makes us question about the public's real perception of the crisis and how trust and consensus to public loans (Prestito nazionale) can be reinforced and conveyed through narrative and institutional language. To answer this question, after describing the main characteristics of the debt crises (1866, 1914-1920) and their impact on the Italian budget, the multidisciplinary analysis moves to iconographic and other narrative sources, focusing mostly on the rhetoric and propagandistic use of terms such as Nation, Liberty, Independence, utilized to extend the subscriptions of the National Loans despite the precarious conditions of public finance. Our approach is inspired by that theoretical address which considers the epidemiology of narratives as relevant to economics (Shiller 2017). Basic actions, such as spending and investing (that depend on the human brain) are supposed to be directly influenced by narratives, that connect actions to deeply felt values and/or needs. Since narratives (whatever their nature) are deeply human phenomena difficult to study scientifically, a quantitative analysis may help to gain a better understanding of how these “epidemics” affect activities or decisions according to perception. This approach is useful to understand how a period of crisis, however its severity, may give rise to actions/decisions that cannot be fully explained as purely economic feedback or in terms of variables to model.