But there was also a successful progressive prescription for reducing income gaps and boosting mobility by attacking crony capitalism, investing in the young (especially by broadening access to education) and creating a safety net for the poorest (particularly through unemployment insurance and pension schemes).

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Our own political problems and bloated pension systems, high unemployment, poor housing market and the hit to U.S. corporate earnings from overseas weakness all add up.

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Thanks to these reforms, Italy's prospective pension bill and its overall unemployment (though not its youth unemployment) compare well with other European countries.

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People receiving unemployment or incapacity benefit can have their state pension credited as though they are working.

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It will introduce a child allowance, cut road tolls and taxes on small businesses, raise unemployment benefits, support farmers' incomes and revamp a pension system that cannot keep up with an ageing population.

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In general, while companies raised wages in response the low unemployment in the 1990s, they partly compensated by cutting back on pension contributions and health care payments.

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And the main reason why unemployment has come down is that, in fact, many countries have adopted labour-market, pension and other liberalising reforms in the past few years, and are now reaping the benefits.

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