The object of this analysis is the moment of consensus that was achieved in the Italian political economy in the 1990s, which allowed the élite to implement 'neoliberal' reforms of industrial relations, pensions, labour market, as well as austerity measures. In contrast to previous work on these issues, I apply a neo-Gramscian theoretical approach that is able to overcome the limitations of an institutionalist paradigm without at the same time taking refuge in a form of determinism. The notion of 'common sense' is fruitfully applied to the Italian case: through a 'common sense' analysis of interviews with representatives of social forces and parties, I show that the genesis of consensus can be both described and explained. A second - related - aim of the research is to explore the '"common sense' underpinnings of the Left's ideological transformation in 1990s Italy. The main finding of the research is that the shared 'common sense' assumption among the social actors was that Italy suffers from economic vulnerability and thus unilateral sacrifices (including - crucially - wage moderation) on the part of labour are necessary in order to adapt the national political economy to 'the international'