European's federation and currency: the contribution of Luigi Einaudi

Abstract

Luigi Einaudi was a well-known economist in Italy and abroad, a very prolific journalist, a great public figure particularly after the end of the Second World War. As his thoughts and writings were permeated with a solid liberalism, he was keen on looking for constraint on the State's absolute sovereignty, propensity to interfere with consumer and producer choices, and ability to finance public expenditure through money printing; the first was the principal cause of war, the other two the origin of misallocation and the worst of taxes, inflation. To fight these evils he advocated federating the states of Europe, thus transferring to a supranational level part of the sovereign prerogatives, particularly in the defence, interstate-commerce and monetary fields. As to the strategy to achieve this result he started from a functionalist approach, moved to a technocratic one, and ended up embracing the thesis to have "political federation" right away. JEL Codes: B31, F02 Keywords: Luigi Einaudi