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An outstanding Italian economist and influential figure on the broader political and cultural scene, Einaudi was born in Carru (Piedmont) on 24 March 1874 and died in Rome on 30 October 1961. He graduated in law from Turin in 1895 and then, while continuing with this studies, embarked on a career in journalism. The success he achieved in both fields underlined his rare talent and his endless capacity for work. In fact, his academic progress was so rapid that in 1907 he was appointed as professor of public finance at the University of Turin. Meanwhile, he wrote articles for the most influential Italian daily newspaper of the period, the Corriere delle Serra, which not only brought him national recognition but also earned him the reputation of ‘educator’ of the entire country. He became a member of the Senate in 1919, but retired from all political and public activity with the advent of fascism. Towards the end of the First World War he went into exile in Switzerland. On his return, he was appointed Governor of the Bank of Italy (1945), Vice-President of the Cabinet and Minister in charge of the Budget (1947), and was finally elected President of the Republic of Italy (1948–1955). At the end of his seven-year presidential term of office, he was made a life member of the Senate.

The most important aspect of Einaudi’s achievements is the use he made of his academic and journalistic ability, as foundations for his activity as a statesman and politician. In addition, close study of his strictly scientific works reveals the extent to which he drew on the wealth of knowledge and experience which he had gained also in other fields. The 3,800 recorded items of Einaudi’s works cover such a wide range of interests that it is necessary here to concentrate on his contributions to the study of public finance and his ideas on economic policy. Einaudi’s main contributions to the study of public finance were investigations, based on the classical ideas of John Stuart Mill, which gave a solid logical basis to the principle of the exclusion of savings from taxable income; his research into the theory of capitalization of taxation; his critical and constructive contributions on the effects of certainty and stability of fiscal principles; his important analysis of the concept of taxable income which he identified with normal income, or, in other words, with the average income potentiality of the person subject to taxation.

Einaudi’s position vis-à-vis public intervention in the economy was not hostile in principle, though he undoubtedly took a limited view of state interference in economic life. Since, for Einaudi, ‘All liberties were jointly liable’, autonomous sources of income were a necessity to prevent people from being subjected to a single centralizing order of the state. He asserted this during the 20 years of fascism, when he continued to teach with the same independence of mind and without compromising his fidelity to economic liberalism. Even though Einaudi had been stressing the usefulness of productive public expenditure since 1919, he showed a singular lack of comprehension of the Keynesian contribution, in the belief that it would be an inevitable cause of inflation.

Selected Works

  • On Luigi Einaudi himself there is a Bibliografia degli scritti edited by Luigi Firpo under the auspices of the Bank of Italy, Turin, 1971. It is useful to divide his work into the three main areas which he outlined: theory, politics and history. Representative works of the three sections are as follows:

  • 1912. Intorno al concetto di reddito imponibile e di un sistema di imposte sul reddito consumato. Turin: V. Bona.

  • 1919. Osservazioni critiche intorno alla teoria dell’ammortamento dell’imposta e teoria delle variazioni nei redditi e nei valori capitali sussequenti all’imposta. Turin: Fratelli Bocca.

  • 1929. Contributo all ricerca della ‘ottima imposta’. Milan: Bocconi.

  • 1938. Miti e paradossi delli giustizia tributaria. Turin: Luigi Einaudi.

  • The following handbooks are available:

  • 1914. Corso di scienza delle finanze. Turin: Tip. e Bono.

  • 1932–66. Principi di scienza delle finanze. Turin: La Riforma Sociale.

  • 1932. Il sistema tributario italiano. Turin: La Riforma Sociale.

  • With reference to the history of finance and the history of ideas see:

  • 1908. La finanza sabauda all’aprirsi del secolo XVIII e durante la guerra di successione spagnola. Turin: Società Tip. Editrice Nazionale.

  • 1927. La guerra e il sistema tributario italiano. Bari: Laterza.

  • 1953. Saggi bibliografici e storici intorno alle dottrine economiche. Rome: Ediz. Storia e Litteratura.

  • Einaudi’s journalistic work has been largely collected in eight volumes comprising the Cronache economiche e politiche di un trentennio (1893–1925), Turin: Ed. Einaudi, 1959–65, and in Lo scrittoio del Presidente 1948–1955, Turin: Ed. Einaudi, 1956. For many years Einaudi was Italian correspondent for the Economist.