Pyramids of Trust: Social Embeddedness and Political Culture in Two Italian Gold Jewelry Districts

This article demonstrates the usefulness of the notion of embeddednessto the historical study of Italian industrial districts of smallfirms and of local economic change more generally. The developmentof gold jewelry production in two Italian towns, Valenza Poand Arezzo, shows that vertical disintegration was enabled bythe creation of networks of heterogeneous social relations.In both towns, social and political ties led to the creationof institutions of collective governance, which in turn produceda workable level of trust between economic actors. The productionof trust, however, never ceased to be a contentious process,endowed with multiple and often contradictory meanings embeddedin specific networks and contexts, ranging from collective projectsof modernization in Valenza Po to the cementing of a secretiveinformal economy in Arezzo. The embeddedness approach to economicaction is superior both to the communitarian arguments of muchof the literature on the Italian industrial districts and totransaction-cost theories, which tend to view institutions ininstrumental and functionalist ways.