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In Gold We Trust: Social Capital and Economic Change in the Italian Jewelry Towns

Author(s):Gaggio, Dario
Reviewer(s):Ceron-Anaya, Hugo

Published by EH.NET (October 2007)

Dario Gaggio, In Gold We Trust: Social Capital and Economic Change in the Italian Jewelry Towns. Princeton: Princeton University Press, 2007. xvi + 352 pp. $39.50 (cloth), ISBN: 978-0-691-12697-5.

Reviewed for EH.NET by Hugo Ceron-Anaya. Department of Sociology, University of Essex.

In Gold We Trust is an accomplished historical and sociological analysis of the development of the Italian gold jewelry industry (at Valenza Po in Piedmont, Vicenza in the Veneto, and Arezzo in Tuscany) and the same business in the United States (at Providence in Rhode Island), during the twentieth century. In doing so, the book not only provides the history of the three main centers of gold production in Italy and the main one in the U.S., but also a fascinating discussion about the conflict and tension economic development generates. The work of Dario Gaggio (Associate Professor of History at the University of Michigan) utilizes the history of these places to engage in a broader theoretical discussion about the meaning of social capital and embeddedness. This work seeks to demonstrate that the former has been extensively used in a reductionist manner, whereas the latter requires a redefinition to better capture the complexity of economic life.

Trust is a central concept in Gaggio’s book; this notion equally allows him to explain why smuggled gold was commonly used in the Italian industry, and to analyze why the U.S. government has not been able to eliminate exploitative homework practices in Providence, despite the efforts made against it. It is worth saying that the author does not follow a main stream conception of trust, which links the latter to beneficial social practices. On the contrary, he wants to provide a more complex and encompassing description of the concept.

The book is divided into seven chapters plus an introduction and conclusion section. In the introduction the author situates the three Italian jewelry towns analyzed (Valenza Po, Vicenza, and Arezzo) into a broader perspective, that of the study of Italian small-scale capitalism. It is of special interest to the discussion Gaggio develops about the concepts of social capital and embeddedness, as he seeks to expand the meaning of these ideas in order to develop flexible terms that allow him to encompass apparently contradictory categories, such as patronage and trust or illegality and development. In this section the author mainly discusses Granovetter’s ideas regarding embeddedness and trust, as well as those of Bourdieu, Coleman, and Putnam in respect to social capital.

In the first and second chapters the author extensively utilizes the ideas of space, community and trust to explain the history of the Italian town of Valenza Po (in Piedmont), its jewelry entrepreneurs, and the importance political notions ? i.e. socialism ? have had in shaping social relations. Instead of simply endorsing a notion of civic engagement and narrating a successful history of progress, Gaggio shows how trust, social networks, institutions and even the local economy are cultural practices constantly negotiated within the community. In these two sections, the author challenges cultural essentialisms ? regarding for instance the progressive North and the regressive South ? as well as simplistic accounts about trust, economic growth, and building institutions, by showing how these elements are shaped by contradictions and struggles.

The third chapter narrates the history of Vicenza (in the Veneto). Despite being part of the “progressive” and “social capital rich north,” it has not been characterized by a history of cooperation or mutual support. Gaggio explains how the local political culture ? dominated by Christian organizations ? and its early specialization in highly mechanized production influenced the creation of a mass-production industry with a poorly organized workforce. In this town, small artisanal firms have had an ephemeral existence and cut-throat competition has been a normal practice. Despite these attributes, Vicenza became a key center of jewelry production in Italy. The fourth chapter analyzes the history of Arezzo (in Tuscany), which created its “jewelry tradition” in the last fifty years. This section develops a fascinating account of how the local economy became feminized as the jewelry industry expanded; a situation that shocked the male-dominated political elite. The “problem” was eventually solved by incorporating and empowering men into the industry. The recent history of this jewelry town permits Gaggio to illustrate the contingent nature of social capital.

Chapter five explores the politics of knowledge, or in other words how the latter is deeply connected to the reproduction of social hierarchies, the distribution of local resources, the creation of social identities, and ultimately to power. These factors are used to explain why society in Valenza Po, for instance, hindered the introduction of public education, while Arezzo’s community in contrast embraced it. It is worth noting that unlike the rest of the book this chapter is not entirely successful, as Gaggio does not fully develop the concept of tacit knowledge, introduced early in the section.

Chapter six analyzes the form in which local and global actors have interplayed and influenced the construction of the local economy, particularly regarding legal and illegal practices. The author provides a fascinating explanation about how illegal activities, such as smuggling gold, were supported and even encouraged by legal actors, such as Swiss banks, local politicians, and jewelers. Chapter seven focuses its attention in Rhode Island, the largest jewelry district in the U.S. This section seeks to challenge some assumptions made about the development of the U.S. economy, it also illustrates the existing similarities the jewelry industry in both countries have. Gaggio insists that the history of the jewelry industry in Providence needs to be framed in light of the local political economy. Otherwise, it is not possible to understand why this economic activity has been regarded as a failure despite its endurance throughout the twentieth century.

The concluding chapter draws the reader back to the early theoretical discussion, as the author returns to reassess the notions of trust, embeddedness, social capital, and the conflicting nature of economic development. It is worth saying that Dario Gaggio’s book is indeed a successful attempt to challenge economic determinism and cultural essentialism, precepts which unfortunately remain very popular within the academia.

Hugo Ceron-Anaya is a Ph.D. candidate in the Department of Sociology, University of Essex, UK. His project analyzes the link between business communities, economic and cultural globalization, upper-class social networks, and golf. It is precisely through this sport that the previous issues are bounded together. The analysis looks at how ideas such as status, class, distinction, gender, and power generate global patterns of social relations.

Subject(s):Markets and Institutions
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII