Transcript Mussolini`s Economic Policies

Mussolini’s Economic
policies
Economic policies
• A Great Country, A Great Lira.
• World Slump? Not Here.
• Buy Italian. Italy Can Provide for All Your Needs.
• Italy: Strong at Work, Strong in War.
• The Corporative State, One Prosperous, United
Family.
Economic policies:
AIMS
• To consolidate the political system
• To make Italy self-sufficient (autarky)
• To provide an economic basis for military might
Economic policies:
AIMS
“I consider the Italian nation to be in a permanent
state of war… To live for me means struggle, risk,
tenacity… not submitting to fate, not even to… our
so-called deficiency in raw materials.”
—Benito Mussolini, Dec. 1925
Economic policies:
AIMS
“Italy can and must attain the maximum economic
independence for peace and war. The whole of the
Italian economic system must be directed towards
this supreme necessity; on which depends the future
of the Italian people… The plan of control for Italian
economic policy in the coming Fascist era… is
determined by one single consideration: that our
nation will be called to war.”
—Benito Mussolini, March 1936
Economic policies:
The early years
• Economic Improvement:
 General European Recovery
 Laissez-faire policy favoring Industrialists
 Weakening of Trade Unions
 Ending of Socialist Threat—Increased Confidence of
the Economic Elite
Economic policies:
The early years
• The Battle of the Lira
• The Battle for Grain
• Battle of the Marshes
Economic policies:
The early years
• The Battle of the Lira:
 Stop Inflation by Fixing Lira to £
 Inflation Harmed Middle-Class
 Bring Stability to Italy (confirm Fascism)
 Show Italians & World Lira & Italy were Mighty
Power
Economic policies:
The early years
• The Battle of the Lira:
 Banks Tight Controls on Money Supply
 Economy Deflated which  value of Lira
 Returned Lira to Gold Standard (1927)
Economic policies:
The early years
• The Battle of the Lira Effects:
 Showed Authority of Regime
 Harmed Economy by  Price of Exports
 Hurt Smaller Firms; Often Taken Over by Larger Firms
 Helped Industries Dependent on Imports (chemicals &
steel)
 Serious Deflation
 20% Wage Cuts
 1936: Forced to Devalue Lira
Economic policies:
The early years
• The Battle for Grain:
 Make Italy Self-Sufficient in Grain
 Reduce balance of Trade Deficit
 Free Italy “From the Slavery of Foreign Bread”
 Make Italy Less Dependent on Imports (War)
 Show Italy is a Major Power
Economic policies:
The early years
• The Battle for Grain:
 High Tariffs on Imported Grain
 New Marginal Land (expensive to farm)
 Govt. Grants to Farmers to Buy Machinery &
Fertilizer
Economic policies:
The early years
• The Battle for Grain Effects:
 Cereal Production 
agriculture)
(expense of other areas of
 Wheat Imports  by 75%, 1925-1935
 Raised Cost of Bread & Grain
 Decline in Quality of Italian Diet
 Protection Benefitted Grain Producers (large landowners)
 Cereal Production  during War Due to  Fertilizer
Economic policies:
The early years
• The Battle of the Marshes:
 Show Dynamic Govt. in Action
 Increase Land Available for Cereal Production
 Provide More Jobs
 Improve Health by Reducing Malaria
Economic policies:
The early years
• The Battle of the Marshes:
 Laws Passed (1923,1928, 1933) on Reclamation & to
Extend Previous Reclamation Efforts
 Private Landowners Encouraged to Cooperate
w/Drainage Programs
Economic policies:
The early years
• The Battle of the Marshes Effects:
 1928-1938: only 80,000 (10,000 sq. meters) hectares
reclaimed (minute amount compared to propaganda
claims)
 Pontine Marshes Drained (near Rome)
 ¾ Land Reclaimed in North
 Ambitious Plans Blocked by Southern Landowners
 New Showpiece Towns Created
 Bigger Impact in Providing Jobs & Improving Public
Health than in Increasing Farming Production
Economic policies:
The corporative state
• A Third Way of economic organization
• post-war Europe affected by tensions between
capitalism & socialism
• Italy chose The Corporative State:
o national interests above sectional interests
o all people in economic activity worked together
(employers & workers) for national interest
o Mussolini claimed this third way used the strengths of
capitalism & socialism while avoiding their weaknesses
Economic policies:
The corporative state
“The corporation in which the various categories of
producers, employers and workers are represented… is
certainly best fitted to regulate production, not in the
interest of any producer but in order to achieve the
highest output, which is in the interests of all the
producers but above all the national interest.”
—Alfredo Rocco, Minister of Justice & leading Fascist
theorist
Economic policies:
The corporative state
• The Corporative Principle
• organization consisting of all employer & workers in a
specific field of economic activity (i.e steel production)
• self-governing & supposed to discuss all matters of
economic activity in their field (i.e. wages, production
goals, etc.)
• represented in national govt.
Economic policies:
The corporative state
• The Establishment Process
• weaken traditional labor unions: strikes & lockouts
made illegal, Ministry of Corporations (conciliate
disputes), labor organizations dissolved
• create Corporative State structure:
o work as social duty
o private enterprise most efficient
o workers’ rights granted (employment, social insurance &
welfare)
Economic policies:
The corporative state
• Did it succeed?
“Fascist Corporativism performed the function of a myth
to solve the dual problems of class conflict and
national economic poverty; in doing so it held the
divergent forces within the party and the country
together.”
—E. Tannenbaum, Fascism in Italy
Economic policies:
The corporative state
• Did it succeed?
“When it came to dealing with the effects of the
depression, the corporative system proved totally
irrelevant.”
—A. de Grand, Italian Fascism, its Origins and Development
Economic policies:
The corporative state
• Did it succeed?
“Corporativism in practice… involved the thinly
disguised exploitation and oppression of labor… For
the Duce Corporativism was… an apparent social and
political experiment useful for bestowing respectability
on his regime in the eyes of foreigners; and an
elaborate façade behind which corruption and
exploitation could floursish.”
—M. Blinkhorn, Mussolini and Fascist Italy
Economic policies:
The corporative state
• Did it succeed?
“Corporative theory constituted a not unintelligent
reaction to fragmentation of modern society. But its
application in Fascist Italy was an elaborate fraud. In
this, the Corporative State was a true child of
Mussolini: the great poseur brought forth an
organization that was a travesty of what it purported to
be.”
—A. Cassels, Fascist Italy
Economic policies:
The Great Depression
• Impact:
• American investment after 1924-1925—much of
money withdrawn from economy
• farmers hit hard because committed to Battle for Grain
then prices collapsed
• Unemployment increased to 2,000,000
• wages fell
• GDP declined about 5.4% for Italy (7.1% rest of
western Europe)
Economic policies:
The Great Depression
• What did Mussolini’s govt. do?
• increased govt. intervention in the economy—moved
away from laissez-faire
• made claims that the corporative structure of Italy
protected citizens from woes of other countries
• did prevent widespread political & social unrest and
political turmoil of most other European countries
• Mussolini survived the crisis, unlike most European
rulers
• Italy recovered from Depression faster than other
countries
Economic policies:
The Great Depression
• Government Intervention:
• IMI: organization to support banks after a number of
bank failures through govt. loans & bonds
• encouraged price-fixing by businesses
• encouraged cartels
• increased public works: land reclamation, roads,
electrification
Economic policies:
The Great Depression
• Government Intervention:
• reduced working day—help share work
• lifted ban on emigration
• extended welfare system: childcare allowances, infant
welfare programs
• NO: health insurance (1943); ne extension of pensions;
no improvement in unemployment insurance
Economic policies:
The Great Depression
• Government Intervention:
• Institute for Industrial Reconstruction (IRI), 1933
o IRI took control of industrial shares held by banks &
other companies in trouble
o IRI reorganized companies to maintain production
o 1937: extended power to take over private firms
o 1937: becomes permanent instead of temporary
o like an economic hospital service for failing & sick
businesses
o 1939: 75% pig iron production; 45% steel production;
90% ship building; and, controlled 20% of all industrial
production
Economic policies:
The Great Depression
• Government Intervention:
• 1935– Fascist Italy virtually always at war (Abyssinia,
Spanish Civil War, WW II)
• govt.  intervention for industries supplying military
materiel
•  budget deficit (2 billion lira in 1934 to 28 billion
lira in 1939)
•  taxation to pay for deficits
• Most programs designed to increase power of nation
Economic policies:
An assessment
“Overall Italy was more prosperous in 1939 than in 1923.
On average, the gross domestic product increased…
but this modest increase did not filter through equally
to all sections of the Italian population.
The industrialists and great landowners from the north
profited most… but the middle classes also gained
stability and protections from Socialism… By doubling
the number of public employees... his regime was able
to offer the more educated member of the middle
classes secure jobs in the state service...”
—D. Williamson, Mussolini, from Socialist to Fascist
Economic policies:
An assessment
“Like the monarchy, the Church and the armed forces,
big business, both urban and rural, co-operated with
the regime when it had to but never committed itself
completely and ran its own affairs with very little
outside interference… With these giants [Fiat, Pirelli,
Bank of Italy] the regime destroyed Italy’s independent
labor movement and herded the workers into its own
unions. These unions were uniquely Fascist, not
company unions and not really state unions either.
They were the outstanding example of the way in
which the regime pushed millions of people around
while merely barking, so to speak, occasionally at the
rich and powerful.”
—E. Tannenbaum, Fascism in Italy
Economic policies:
An assessment
“The rhythm of Italian industrial development does not,
therefore, seem particularly tied to the Fascist regime…
Fascists interventions were part of a longer pattern of
periodic public initiatives… Italian Fascism… encouraged
spurts of development when it came to power and switched
to autarky…
The Italian fascists took charge of a country still dualist in
nature, still ripe for the major transformation associated
with industrialization. Nevertheless, the Fascists did not
succeed in pushing through structural changes outside the
regions already on their way to development… The regime
enjoyed two growth spurts, 1922-25 and 1935-39; between
the two, Fascists suffered from the same stagnation that
afflicted all the capitalist economies…”
—C. Maier, In Search of Stability
Economic policies:
An assessment
“
Fascist economic policies had their failures, particularly
in agriculture and in the field of wages. But those
policies also stimulated important modern industries
such as electricity, steel, engineering, chemicals and
artificial fibers. Italy’s profile began to resemble that of
modern European countries to a greater degree than in
the past.”
—S. di Scalia, Italy, From Revolution to Republic
Economic policies:
An assessment
“Under Fascist rule, Italy underwent rapid capitalist
development with the electrification of the whole
country, the blossoming of the automobile and silk
industries, the creation of an up-to-date banking
system, the prospering of agriculture… Italy’s rapid
progress after World War II.., would have been
impossible without the social progress begun during
the Fascist period.”
—M. Vajda, The Rise of Fascism in Italy and Germany