The book of the Nobel Prize for Economics 2017 has been translated into Italian, and it sheds light on what really moves economic actions for individuals and businesses

Instincts. Often, much more often than you think, human behaviour is guided by instincts, irrational drives, various different contributory causes, emotions mixed with calculation. This also happens for entrepreneurs, their creatures (companies), managers, production organisations. As if to say: of course, rationality is there and it has to be, but it is not enough.

On the other hand, understanding how the mechanism of economic choices actually works is crucial, as is the awareness of the elements that influence the future of a market or of a business. All this however while taking into account that one of the basic assumptions of basic economic theory – rationality in choices – is in fact devoid of any foundations or nearly. It is on this particular kind of adventure that Richard Thaler set off, winner of the Nobel Prize for Economics 2017, and who has dedicated his entire career to studying the idea (once radical), according to which economic agents are predictable individuals who are prone to making mistakes. “Misbehaving” has just been translated into Italian and it is a summary-book of his intellectual and research journey.

Thaler’s essential thought, and that of his book, is simple. Traditional economic theory assumes that individuals are rational.But from the very beginning of his research, Thaler understood that these automatons did not in any way resemble real people who reason depending on different stresses, make mistakes, get back on track, change route. It is a contrast between the Homo sapiens (amicably referred to by Thaler as Human) and theHomo economicus (whom Thaler refers to as Econ). The author writes: “Compared to the fictional world of Econs, human beings (Humans) have many anomalous behaviours, and this means that economic models generate an amount of incorrect predictions, predictions which may have very serious consequences”. The reasoning about this statement takes up the whole volume. Which is not written like an economics manual, but rather like a life story, which in some parts is amusing even. And which has an objective:

to get an academic discipline back on its feet.

Thaler’s book is therefore useful reading for all. Including for production organisations. It is no surprise, right in the last few pages of the book, that the author reveals three important steps to understand: observe, collect data, say what you think. Principles of behaviour and of investigation which also refer to businesses.

What Thaler writes is not just the glossy summary of one of the most advanced frontiers of economic analysis (which among other things draws on the very best in economic thinking, recalling also how John Maynard Keynes was among the first to “practice behavioural macro economics”), but also an adventure of thought which is addressed to everyone.

Misbehaving. The birth of behavioural economics

Richard H. Thaler

Einaudi, 2018

The first, Gianni Brera, was a “Gran Padano” from San Zenone al Po. Born in 1919, he was a partisan in the Republic of Ossola from 8 September 1943. The second, Nino Nutrizio, a Dalmatian born in 1911 in Traù – Trogir when it became Croatian – was a prisoner of war in India until 1946. The destinies of Gianni Brera and Nino Nutrizio – possibly Italy’s greatest sports journalists in the twentieth century – were fated to come together in the world of newsprint in Milan as it struggled to return to life after the war. Brera had been into football since he was a boy and in 1945, back from the front, he ended up at the Gazzetta dello Sport. He became its director just a few years later. Nutrizio had been with the Secolo XIX but the events of the war meant that, when he returned to mufti, he had to start again from scratch as a journalist. In 1952 came his great break, when the industrialist Carlo Pesenti made him editor-in-chief of La Notte, Milan’s evening paper. It was to be a resounding success.

Shortly after, in 1956, Gianni Brera took over the sports desk of Il Giorno, and the newspaper’s sales rocketed. The two directors of “the day” – Il Giorno – and “the night” – La Notte – could hardly fail to meet up on the pages of Pirelli magazine, which already in those scintillating 1950s was attracting the finest pens around. Football – a national sport, together with cycling – was naturally the domain of Gianni Brera and Nino Nutrizio. And, as it still does, it called for the greatest critical powers. Nutrizio never got over the immediate elimination of Italy from the World Cup in Switzerland, in June 1954, nor did he like the fact that the seventeen-year-old Giuseppe Virgili went from Udinese to Fiorentina for the astronomical sum of 60 million lire. In an article entitled “The Sick Millionaire” in no. 4 of 1954, he wrote that everyone in the world of sport – footballers and cyclists, motorcyclists and gymnasts, trainers and directors – was being ruined by the money god, “to earn so much money, so as not to work in the fields or on the shop floor, to have a beautiful house and a beautiful car, to wear beautiful clothes…”. Brera echoed his sentiments a few months later, in January 1955, with “The Tough Life of a Footballer”. “Possibly because it’s been gradually slipping into a gladiatorial struggle and thus into a blatant striving for lucre, Italian sport has not yet found worthy master singers” – the opening words of the article say it all. That same year, in issue no. 6 in December, Nutrizio had it in for defensive football: the notorious close-defence system was “an odious spectacle in at least six out of every nine games each Sunday” and a symptom of a “worrying decline of Italian football”. In his article in January 1957, Nutrizio warned, among other things, that this sort of mentality meant running the risk of not even making it to the World Cup in Sweden just a few months later. History has the story: Italy failed to qualify. The 1958 World Cup was won by Brazil, who beat their hosts, Sweden. Brera, a known aficionado of “Italian-style” defensive football, which Nutrizio detested, was at last able to welcome the transformation of the South Americans from “squandering cicadas” to “ants”, who were careful and cautious in defence. It was a “Metamorphosis”, as Brera’s last article, in issue no. 4 of 1958, was titled.

Brera and Nutrizio were truly two great visionaries of football – one need only re-read their articles in Pirelli magazine to see how relevant their observations still are today.

Fondazione Pirelli will be at the International Book Show in Milan to tell about the Pirelli corporate culture with a program packed with events touching the topics of science, art, literature and innovation.

The factory and innovation culture of Pirelli will be a key attraction of “Tempo di Libri”. Fondazione Pirelli will be at the “Tempo di Libri” International Book Show for the first time to tell about the corporate culture of Pirelli which is grounded on the reciprocating exchange between scientific research and humanistic culture. The book show will be held in Milan at Fieramilanocity from March 8 to 12.

Many cultural events will be organised to tell about the key developments in the field of industry, design and corporate communication which have characterised the history of Pirelli since the beginning.

More in detail, on March 9 and 10, actors Marco S. Bellocchio and Fabrizio Martorelli will read excerpts from “Pirelli. Rivista d’informazione e di tecnica”, the magazine published once every two months by Pirelli from 1948 to 1972, on the pages of which major writers – such as Eugenio Montale, Salvatore Quasimodo, Carlo Emilio Gadda, Italo Calvino, Leonardo Sinisgalli, Piero Chiara, Umberto Eco, Dino Buzzati and Gillo Dorfles – animated a prolific cultural debate.

On March 8, 9, 10 and 12, workshops will be organised for schools to learn more about the world of employment and technological research, the transformations of the city of Milan and the benefits which can come from digitising historical documents. Fondazione Pirelli has been involved in all these fields since 2008 when it was established to protect the cultural heritage of Pirelli seen as an invaluable asset for the corporation, for society and for the city as a whole.

The Historical Archives of Fondazione Pirelli, which is officially recognised for its outstanding historical interest, thus become a hub of true stories and of history – 3.5 kilometres of Pirelli documentation, dating from when the company was established in 1872 to the current day. The central part is dedicated to advertising and communication, witnessing the profitable collaboration of Pirelli with intellectuals, artistic, photographers and the company’s ability to anticipate the development of language and communication tools.

Bruno Munari, Riccardo Manzi, Raymond Savignac, Arno Hammacher, Peter Lindbergh, Stefan Glerum, Bob Noorda, Lora Lamm, Armando Testa, Hans Magnus Enzensberger, Guillermo Martinez, William Least Heat-Moon, Javier Cercas, Hanif Kureishi, Javier Marías are only some of the names whose works are linked to the history of Pirelli.

Of course, “Tempo di Libri” is also about libraries. Pirelli has very actively promoted reading among workers and the first corporate library was opened in 1928. More recently, the company opened libraries in the Milano Bicocca Headquarters, in the plant in Bollate and in the Industrial Hub of Settimo Torinese. Company libraries are a key part of many projects aimed at improving the quality of life at home and at work, and today, like in the past, are lively, dynamic places where workers can find thousands of books, including the most recent best-sellers, history books, non-fiction, art catalogues and books for children.

The participation of Fondazione Pirelli in “Tempo di Libri” will be the opportunity to see how factories can span beyond manufacturing and business to become spaces open to culture as well as work in a perpetual partnership where one draws inspiration from the other.

Giuseppe Ungaretti’s archaic, primitive Brazil, Eugenio Montale’s gentle, cheerful Versilia, Salvatore Quasimodo’s Sicily drenched in pure white light: from 1949 to 1951, the classic threesome of Italian hermetic writers helped shape Pirelli magazine, which had been launched in 1948 as a company magazine open to the greatest names in contemporary literature.

Giuseppe Ungaretti was already at the height of his fame when he published “Vecchio Brasile”, a collection of sonnets, in the magazine’s first issue in 1949. A complex but brilliant composition, this was the Italian translation of the “chronicles” that the Brazilian poet Oswald de Andrade had dreamt up in 1924 and ’25 as though they had been written by explorers and conquerors of an Amazon lost in the mists of time. The original work by Andrade was entitled Pau Brasil – the Tree of Brazil – and it is a perfect expression of the Modernist movement that brought to life the literary world in the South American country in the 1920s. In other words, this was the rediscovery of a golden age of Brazil. Ungaretti, who taught at the University of São Paulo from 1936 to 1942, added a further “chronicle” of his own to Andrade’s, which was published in the magazine under the title “Boschetti di cahusù”. “Those Indies use rubber / for bottles and water-skins… Seringa is the rubber / And he who extracts it the seringueiro / And the strange little wood is the seringal…”. The photos that accompanied the article had been taken forty years previously by Alberto Pirelli, son of the founder Giovanni Battista and the vice-chairman of Pirelli in 1949, during a study trip to the rubber plantations in Manaus, in the Amazon basin. “Ungaretti’s jest” was taken up years later – in Pirelli magazine no. 1, 1953 – by the literary critic Giansiro Ferrata as an example of living “inside” poetry.

Pirelli magazine no. 4, July 1949: “Vacanze in Versilia” bears the signature of Eugenio Montale. This minimal diary tells of a holiday in Forte dei Marmi and Marina di Pietrasanta: “a delightful hole hidden in the green”, with a pergola of unripe grapes “to see without being seen, the way I like it”. The result is a story of delicate and astonishing humour, filled with the amused frivolity that the poet dispensed bit by bit, sparingly, so as not to upset his restrained aloofness. And just as Montale described Versilia for the magazine, so the Lucca-born writer Ermanno Pea decided that he too would talk of “half a century of Versilia” in an article published in issue no. 4 of the same magazine in 1953.

Salvatore Quasimodo had already put his name to the translation of the 23rd Book of the Iliad in 1949, with “Giochi funebri in onore di Patroclo”. But to remain with our hermetic landscapes, we cannot fail to go to the “Muri siciliani” in no. 5 of 1951. Just a few lines, not even half a page, but of extreme pithiness, describing a man who builds a house for himself by the sea in Trabia: a man who is worker and boss, architect and engineer, a man barefoot and with “sandpaper hands”, with “a purple nail crushed by a beam”. And his house is cut by the light, a house of foam that might easily slip like a sailing ship into the sea. A love letter that the Sicilian poet wrote to land that was Greek but also primitive, Norman, Saracen and Spanish. In search of a memory that evokes “clear, simple forms that are home to the man who has been my companion and friend for thousands of years”…

A book collects the stories of men and women in blossoming Italian companies

Men and women. And then machines, factories and offices. More than anything else, however, dreams that come true. Multiform companies, never perfect, constantly evolving, always on the go. It is good to see that companies are the result of these elements. Made up of technique but especially of people (entrepreneurs, managers, technicians, workers and employees), production organisations need to be explored. Starting also with the people who populate them.

This is exactly what Edoardo Segantini – long-term journalist, with the Corriere della Sera for many years now, but also with a past in other newspapers – has done with his “La nuova chiave a stella” (The new wrench). An absolute tribute to Primo Levi, the nature of which is clearly understood in the sub-heading: “Storie di persone nella fabbrica del futuro” (Stories of people in the factory of the future). Because the book in fact tells the story of people (men and women) who move around in factories and offices today looking at what might happen tomorrow.

The book (approximately 200 pages long) thus unravels over fourteen stories of the stars of an historical transformation: the Fourth Industrial Revolution. A fact seen through many aspects: not just technological innovation, artificial intelligence, the connected factory, but also a cultural, social and human change that is much more profound and disruptive. All the players have courage and curiosity about change in common. They know how to collaborate with others and react to setbacks. They stay up to date. They feel sympathy for the world.

The philosophy of the book emerges from the words of the same Segantini: “To write this book, I spoke to many people and visited dozens of factories. The aim was not only to see things, even admirable, but rather to understand what they think, how they think, what people who work in the factory of the future want. I investigated fourteen stories that seemed to be the most interesting to me. I didn’t choose the testimonies on the basis of their hierarchical position nor did I go in search of celebrities: I preferred to focus on the lives of undistinguished characters (even though they are distinguished for me)”. The book therefore covers the stories of people who work in major, well-known companies (from FCA to Amazon, via Dallara, Alfa Romeo, CNH Industrial, Poliform, StMicroelectronics) as well as trade union associations. The objective: to narrate the new opportunities and the new impact caused by an earthquake in which man must remain centre stage.

So, stories, but also more. Segantini in fact does not lose sight of the difficult reality of today with the problems linked to unemployment (including technology), the transition times and the need to implement a new set-up of the employment market. For the author, the very same stories contained in this book could indicate a possible future and therefore a possible way to go.

To be read with extra attention, subsequently, is the interview that the same Segantini had with Levi in 1984.

La nuova chiave a stella (The new wrench). Storie di persone nella fabbrica del futuro (Stories of people in the factory of the future).

Edoardo Segantini

Guerini, 2017

One of the most recent speeches by the Governor of Banca d’Italia manages to combine economy and literature and provide guidelines for a complete manufacturing culture

It is now something quite common: before the increasing digitalisation of the economy and of production, it is important not to lose sight of what is different from this. By excess, men and women against machines and computers. Which is not something to do or even to pursue, but it shows how important it is today – even in companies and more in general in economies – to watch the human and creative aspects of the production activity and everything which can be connected to it. In short, corporate culture all-round. Also made up of social responsibility towards what lies outside factories and offices. And also made up the coexistence of calculation and art, organisation and literature, knowledge all-round.

To this end, it is a good idea to read what was said and written by Ignazio Visco (Governor of Banca d’Italia) on the occasion of the 35th Seminario di Perfezionamento della Scuola per Librai (Seminar for the Improvement of the School of Booksellers) and in particular about the question: “Where are stories born?”.

In his “Investire in conoscenza” (Investing in knowledge) writes from the perspective of an economist and Governor, but also of a passionate reader. And he writes while managing to put together – in under twenty pages – reasonings that bind the good economy with a good read, finance with literature, the urgent need to resume development with the just as compelling need for a humanistic culture that is gradually being lost.

The story of the dense interweaving between literature and economy – because it is in fact a story – therefore starts with the answer to the question where stories are born (also in the economy), and then moves on to addressing the “changing world and delays of Italy” (summary of the progress and of the position of our Country) which ends up touching upon difficult topics such as the nature of human capital and skills and therefore training and education; lastly, he wonders where our society is actually headed. Visco then concludes by elaborating a response. The right path is to invest in culture and knowledge (in this respect, an albeit minimal positive change is detected). Elements that are not however purely technique and calculation, but something much broader.

Throughout the Governor’s text, highly disparate authors crop up, of various genres and all of whom fitting: Adam Smith and émile Zola, Ivan Turgenev and George Eliot and also Tolstoy, Sraffa, Keynes, Tomasi di Lampedusa, Durrenmatt, Wilder, Homer, Oscar Wilde, Tullio De Mauro and Federico Caffè, without counting Dante, Seneca and Socrates. All of whom at the service not of the economy or of literature, but of complete knowledge.

At one point, a quote of a passage by Durrenmatt about fate is rather striking (and thus indirectly about calculation, also in economics), taken from a crime novel (“The pledge” dating back about 60 years) that says: “You build your plots with logic. […] With logic, one only partially approaches the truth […] the disturbance factors that sneak into play are so frequent that too often it is only professional luck and fate which decide in our favour. Or to our disadvantage. […] A fact cannot ‘make sense’ like an account makes sense, because we never know all the factors necessary but just a few of the more secondary elements. And what is random, incalculable, immeasurable plays too large a part”.

Reading Visco is in this case – perhaps more than in others – a pleasant experience, to be enjoyed and repeated.

Investire in conoscenza (Investing in knowledges)

Ignazio Visco

35° Seminario di Perfezionamento della Scuola per Librai (35th Seminar for the Improvement of the School of Booksellers) about: “Tradizione e innovazione in libreria” (Tradition and innovation in the bookshop), Final day: “Dove nascono le storie?” (Where are stories born?)

Venice, Fondazione Cini, 2018

In its April 1952 issue, Pirelli magazine published an article on “Lombard houses”: a reflection on the vernacular architecture that dotted the Po Valley landscape with farmsteads and livestock buildings, creating a sort of “geography of the spirit”. The dry, evocative prose bears the signature of a poet from Luino, Vittorio Sereni: this was his first contribution to the magazine published by Pirelli and directed by Arturo Tofanelli and Leonardo Sinisgalli. Not yet forty, Sereni was already a well-established author. In 1941, before being called up to the front, he published Frontiera, a collection of poems, and in 1947 came his Diario di Algeria, about his experience as a prisoner of war in northern Africa from 1943 to 1945. In 1952, Sereni was teaching Italian and Latin at the Liceo Classico Carducci in Milan, living with his wife Maria Luisa and his two daughters, Maria Teresa and Silvia.

He was one of the “great names” of Pirelli magazine which, ever since it first came out in 1948, published works by great writers and contemporary intellectuals: Ungaretti-Quasimodo-Montale, the “hermetical threesome”, in 1949, Riccardo Bacchelli in 1950, and Piero Chiara and Michele Prisco in 1952. The director himself, Leonardo Sinisgalli, was nicknamed the “engineer poet”. It was Sinisgalli’s name that Sereni wrote in the “references” section on the application form for a job at Pirelli SpA, which he submitted on 16 August 1952. The two of them had known each other since university: these “travelling-companion poets” were joined by Alfonso Gatto, Carlo Betocchi, Giancarlo Vigorelli and none other than the great Salvatore Quasimodo himself, who had already had the chance to praise the young Sereni on his thesis on Guido Gozzano. Pirelli and its magazine were destined to be the place where Sereni and Sinisgalli would meet again. The job application was successful and Sereni entered the “Servizio Propaganda”, now the Communication Department. Its undisputed head was Arrigo Castellani, who had the foresight to set up an office devoted to relations with the Press, and Sereni, who had already worked with magazines like Corrente and Rassegna d’Italia, was put in charge of it. It would be Castellani himself, just before his annual contract expired, who wrote to Human Resources: “We are absolutely satisfied with the work carried out by Dottor Sereni and, indeed, we believe he should in time be made an executive.” The contract was open-ended: the personal file of Dott. Prof. Vittorio Sereni, now in the Pirelli Historical Archive, bears registration number 4062, centralised accountancy office 0400, “Direzione Propaganda”.

During his six years as a Pirelli employee – he left in 1958 for Mondadori – Sereni gradually wrote less for Pirelli magazine. Just a few articles, but weighty ones. One of them, already in issue no. 6, signed V.S., is a “Secret assessment of a year of advertising” after “his” Servizio Propaganda had won the Palma d’Oro della Pubblicità award, thanks to Bruno Munari’s Coria soles, Ezio Bonini’s Stelvio tyre, and Bramante Buffoni’s hot water bottle. Another of Sereni’s Pirelli articles, entitled “A fifty-year-long P”, became a milestone in the history of the magazine, with a legendary account of the birth of the Pirelli logo in New York.

Sereni continued working with the magazine even after he left the company: in 1963 came his clearly autobiographical story “The capture”, which played on the moral conflict between victors and vanquished during the landing of the Allies in Sicily. In 1964, Sereni went from being an external contributor to the magazine to running a literary section called “Nei libri e fuori”. This introduced the Italian public to Primo Levi’s La Tregua, and to Mary McCarthy and Massimo Bontempelli, to Henry Miller’s The Colossus of Maroussi and to the poems of Georgios Seferis, through to Hemingway’s posthumous A Moveable Feast, reviewed in the no. 4 issue of 1964.

Then came “The blue-black phantom” in no. 5-6 of 1964: “So here I’m supposed to be taking the side of Inter, or rather justifying the blue-black shade of part of my thoughts and feelings”. The intellectual gave way to the fan inside him, mourning the loss of the legendary footballer Giuseppe Meazza, called Peppino, the “blue-black phantom”. And where there’s a phantom, there’s a mystery. The original article was published with an abstract drawing by Alberto Sughi. A drawing by Riccardo Manzi, which has recently been purchased by the Pirelli Foundation, dates from the same year, 1964. It shows a football player wearing a blue-black jersey with a note written by a Pirellian: “Nose too big!”. Might this have been an illustration for Sereni’s article? We cannot be sure, but we can date with absolute certainty Vittorio Sereni’s last contribution to Pirelli magazine: an article entitled “Two Venetian voices” in no. 5/6 of 1970.

The tales of entrepreneurial experiences outline the multiform essence of those who create and move production organisations

Confidence in what one feels capable of but also the desire to get things done and to involve others. And also something that is difficult to summarise and even more difficult to understand by anyone who hasn’t experienced it. The synthesis of being entrepreneurial is nevertheless in danger of always outlining a partial image. So it is necessary to tell the story better to understand. And this is what Ray Smilor has done with his “Audaci Visionari. Come gli imprenditori fondano aziende generano fiducia e creano ricchezza (Daring visionaries. How entrepreneurs found companies, generate confidence and create wealth) published in Italy a few weeks ago in a new edition.

Smilor is currently Chairman of the Foundation for enterprise development  in addition to being a long-standing teacher at the Graduate School of Business at the University of Texas. He knows a lot about companies and therefore understands the elusiveness of their essence if you only look at the theory. The book is therefore a presentation of concrete business success stories and failures. It is through this technique of narration that the author deciphers the entrepreneurial genetic code, as well as illustrating the qualities that enable entrepreneurs to overcome obstacles and to move towards the future with energy and optimism, managing to involve other people in their journey.

Comprising six sections and an epilogue, the book (a little over 200 pages long) starts by searching the entrepreneur’s soul, and then attempts to understand what he defines as the “secrets” of entrepreneurship and subsequently the qualities that every self-respecting entrepreneur has to have. Smilor then looks more closely at the “dark side” of entrepreneurship (i.e. the failures and bankrupted companies as well as the negative image that may accompany going out of business), and then at the social impact of the same. What emerges is a multi-faceted portrait of entrepreneurship, which is never the same, always different and constantly evolving, made up of many victories and just as many defeats. Far from the business theory set in textbooks, but totally immersed in a contradictory reality which is also continuously changing.

Entrepreneurs, Smilor argues, “firmly believe in their ability to influence events, in their ability to divert fate and in their power to shape the future”. Daring, precisely, and also visionaries.

A history of business stories, the book – which perhaps has the sole inconvenience of having too many forewords, presentations and premises before getting to the true essence of the author –, should be read attentively and perhaps even reread in some parts.

Audaci Visionari. Come gli imprenditori fondano aziende generano fiducia e creano ricchezza (Daring visionaries. How entrepreneurs found companies, generate confidence and create wealth)

Ray Smilor

Guerini Next, 2017