UNFAIR COMPETITION

When Pietro goes with his Grandpa to meet the Count Treuberg, a jaunty old clockmaker whose serviceable place of business is literally a hole in the wall, Grandpa says that his old friend once had a grand shop in his homeland before he moved to Rome. The boy wants to know who destroyed that wonderful place, and the Count begins to tell them. But Grandpa stops the story, satisfied just to call them "savage beasts." The Count jumps in with a wry defense: "Let's not," he says, "insult the animal kingdom."

We don't need to be told where the Count came from, or why he left. For this is 1938 Italy, and Pietro has already talked about Il Duce like he's a Dutch uncle. His casual visit to the Count, 25 minutes into Unfair Competition (Concorrenza sleale), is the first hint from writer/director Ettore Scola (A Special Day) that his leisurely slice of Italian life will eventually turn into something more.

Unfair Competition revolves around the extended family of Pietro, a bright little boy (and unwitting historian) who writes and draws in a notebook, and who observes the adult world with a bittersweet whimsy. His bombastic father, Umberto, owns a fine clothing shop. His mother reads books, his brother Paolo studies philosophy and spoons with the girl next door, his erudite Uncle Angelo (Gérard Depardieu, dubbed in Italian) is a perfectionist schoolteacher, and his blithe Uncle Peppito likes to dance. Life is sweet enough for the clan until Peppito commits a familial sin: He buys a pair of pants from Leone, a haberdasher and neighbor whose competing shop undercuts Umberto's and piggybacks on his promotional ideas.

Of course, this rivalry leads to a brawl, which spills out onto the sidewalk, where everyone gathers around to pull the men apart. That's when Papa's temper introduces Pietro to his country's future. "A Jew's always a Jew," Umberto says, with Pietro by his side. Leone's bespectacled little boy -- who's Pietro's best friend -- hears it, too.

We all know what happens next. Slowly at first, boldly soon enough (after Hitler visits Italy), an insidious anti-Semitism begins to spread. With storm clouds groaning outside, an embarrassed Umberto refuses to admit to the police that he's "more Italian" than his Jewish friend and rival, with whom he later reconciles when Leone takes to his bed. And Paolo's girlfriend is Leone's daughter, adding a touch of classical R&J to the tangled tale.

In the cafés and on the cobblestone streets of Unfair Competition, Scola seems to suggest that the Italian people didn't share their imprudent leader's taste for the German solution. But neither did they oppose it, and when Pietro asks his mother why, she can only tell him: "In life, bad things sometimes happen. Luckily we're Catholic." It's a statement as plain and simple as anything in Scola's muted contemplation of Italy's historic crossroads. In Italian, with subtitles. * * 1/2