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MUSSOLINI’S ECONOMIC POLICIES
Between 1922 and 1943 Mussolini pursued a bewildering range of economic
policies. Historians have struggled to find a consistent theme. Some have
concluded that fascist policies were muddled and a failure in that they failed to
prepare Italy for war or raise living standards or deal with Italy’s economic
weaknesses. Others have said that Mussolini’s economic policy was really
subordinated to political ends. Others have been more charitable pointing to
some real achievements.
As with so much of Mussolini any real achievements were wiped out in Italy’s
disastrous escapades in World War Two.
Some consistent themes are:
1.
A muddled ragbag of incompetently pursued policies.
2. Fascism is merely Mussolinism – Mussolini introduced policies to pander to
the elite and middle classes that kept him in power.
3.
A policy aimed at making Italy look good and to prepare Italy for War.
4. A genuine attempt to get to grips with Italy’s problems with some real
successes.
5. Any achievements were in spite of Mussolini’s policies rather than because
of them.
Mussolini appears to have had little understanding of or interest in dry economic
theory. In any event his supporters had radically different views as to how an
economy should be run.
WHAT WAS CORPORATISM?
Corporatism – the keystone of Mussolini’s economic policies. Very difficult to
define.
It grew out of the Syndicalist views of Edmondo Rossini and Michelle Bianchi.
Some saw it as a genuinely revolutionary socialist measure others such as
Rocco or Farinacci as a means of destroying socialist trade unionism and
bringing the workers under state control.
It was a middle way between unbridled capitalism and a Bolshevik planned
economy.
1.
The active involvement of government in planning the economy.
2.
Harmony among those involved in production- no strikes or exploitation.
3.
Economic growth and expansion.
1926 Alfredo Rocco’s Labour Relations law. Identified seven branches of
economic activity. Each had its syndicate which bargained with the bosses
essentially replacing trade unions.
1930 a National Council of Corporations was set up. By 1934 some 22 groups
had been identified each with it’s own syndicate.
1939 – Incorporated into a Chamber of Fasces and Corporation
Many have concluded that despite it’s high minded ideals Corporatism was a
crude sham – a mechanism for exploiting the workers in the interests of the rich
industrialists.
THE PHRASES OF MUSSOLINIS ECONOMIC POLICY
Historians have identified four phrases
1.
1922 – 1925 CAUTION AND PROSPERITY.
Mussolini has hardly in power during this period. There were battles between
trade unions and the industrialists. Mussolini was forced to agree to the Chigi
Palace Pact.
The economy was run by Alberto De Stefani an economics professor. Generally
it was hands off period when taxes were cut exports increased and state
spending cut. Living standards for all classes rose. However this was true
across the world.
2.
1925-30 RADICAL FALSE START, COMPROMISE AND RISK.
Mussolini is now really in power.
In 1925 the Vidoni Palace Pact banned trade unions and recognised the
Confindustria and the Fascist Labour confederation as the only representatives
of bosses and workers respectively. However the Labour Relations Law and the
Labour charter ensured that it was the state that dominated the corporations and
the system favoured the employers. The Fascist Labour Confederation was
broken up into six in 1928 which reduced its’ power.
THE BATTLE FOR THE LIRA
Mussolini pegged the lira at 90 to the $ rather then 150. This was called quota
90. It looked impressive – strong currency = Strong country.
It damaged exports by making Italian goods more expensive especially cars and
textiles. Workers had to endure longer hours and lower pay. However many
middle class Italians on fixed incomes were richer as foreign imports were
cheaper.
Mussolini puts tariffs on foreign imports. This protected Italian industry especially
steel and ships but it made food more expensive and increased the price of food.
THE BATTLE FOR GRAIN
Mussolini was keen that Italy should be self sufficient in wheat. This would
reduce imports and make it easier to fight a war. It would also increase the
incomes of farmers.
Government grants were given to farmers to buy tractors and fertilisers provided
they shifted to wheat.
It worked – grain production increased from 5.5 million tonnes to 7 million tonnes.
Mussolini secured a propaganda victory by being shown with his shirt off helping
in the harvest. However, land was lost to olives fruit etc and much of the land
was unsuited to wheat. The quality of the Italian diet got worse. It also cost a lot
of money. A lot of subsidies went to the rich big farmers.
THE BATTLE FOR LAND
Mussolini was keen to increase the land available for farming. This would
increase food production and give land to small farmers. It would also employ
people and drain malarial ridden swamps.
On the plus side the Pontine Marshes near Rome were drained for farming.
However, much of the land ended up with rich big farmers. Overall the land
reclaimed was small and in the South the attempt to found new towns (usually
called Mussolinia) in barren deserted areas came to nothing.
In the countryside 0.5% of the population owned 42% of the land so fascism was
not helping the small farmer.
PHASE 3 1930-1935 STATE INTERVENTION AND LOSS OF WORKER
POWER.
In 1929 the Wall Street Crash hit America and was followed by the worldwide
Great Depression.
Mussolini’s response was massive government intervention. Roads and hydro
electric dams were built and the train system was electrified. Banks were
compensated for bad debt and the newly formed Institute for Industrial
Reconstruction (IRI) bought up failing businesses. These methods mirrored the
New Deal in America and indeed what is being done today. They were costly to
the taxpayer but may have saved Italy from the worse impacts of the Great
Depression. Two million Italians were unemployed (8%) but it was not as bad as
in Germany or the US. On the other hand Italy’s backward economy with its’
limited international trade and grinding poverty may have been less vulnerable to
a world slowdown.
Mussolini also clamped down on the workers. From 1928 workers could no
longer vote their representatives to the corporations and party officials nominated
people. It was very much run in the interests of the bosses.
PHASE 4 EXPANDING CAPITALISM AUTARKY AND CRISIS
This period is dominated by preparations for War
As a result of the invasion of Abyssinia sanctions were imposed on Italy by the
League of Nations. This drove Mussolini into an economic policy of autarky or
National Self sufficiency. Politically he was becoming allied with Hitler.
Industries that were necessary for war such as ship building, steel tyres and
chemicals were subsidised. Capitalists such as Pirelli and Fiat were allowed
near monopoly status. For ordinary Italian wages went down while and prices
taxes and working hours went up.
By the end high minded ideals of helping workers seems to have been
subordinated to pandering to rich industrialist and preparing Italy for War.
By 1940 the economy was in crisis. Italy was isolated economically and
politically. There was a huge budget deficit (a surplus of expenditure over
income). Autarky had not been achieved and the army and the economy were
woefully unprepared for war. Mussolini may have seen a war of conquest as the
final throw of the dice and a gamblers chance of getting out of his difficulties. It
led to catastrophe.
WAS IT A SUCCESS?
There were some areas of success.
1.
Industrial output did increase
2.
. However, it was from a low base and so did other countries as well
3.
Italy did not suffer as badly as other countries in the Great depression.
4.
Great strides in road and railways and hydroelectric power.
5.
Some success in reclaimed land and grain production.
HOWEVER,
1. Italy was woefully unprepared for War. It’s economic output in important
areas such as vehicle production was some 15% of Britain or France. At the
start the Army Navy and Airforce were ill equipped with out of date kit. As the
war progressed, from trousers to artillery shells, the Italian economy proved
unable to supply the forces with what they needed.
2. Under the Corporate state workers and small firms were exploited. The
industrialist and the big landowners got richer the poor did not.
3. Working class Italians got poorer and worked harder. Wages dropped by
10% in real terms. The Middle classes suffered far less. Mussolini was not
unduly concerned with this and seemed to think that privation would toughen
them up.
4. The structural problems of Italy were not solved – North South divide,
corruption, rural poverty and low productivity remained.
5.
Living standards were low and there were few consumer goods.
“This is not to say there were no achievements. Rather, it is to assess them as
achievements on a small scale, compared to the betrayal of the apparent radical
objectives of the Corporate State, and the ultimate failure of the Italian economy
to sustain the unrealistic demands that Mussolini’s foreign policy placed on it”.
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