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Summary Mussolini and the Economy 1922-40
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Summary notes on Mussolini and the Economy 1922-40. Explores the successes and failures of Mussolini's economic policies.
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Mussolini and the economy 1922-40Mussolini’s aims
Mussolini, like Hitler, was no economist. He had little knowledge of, or interest in, the
workings of the economy and on coming to power had no coherent programme of reform.
He adopted economic policies that would make his position secure.
As the 1920s progressed, Mussolini became more ambitious and attracted to the idea of an
economic transformation of Italy.
He proclaimed the world’s first ‘corporate state’, a supposedly new way of organising and
running a nation’s economy.
By the mid-1930s, Mussolini’s priorities had begun to shift again. His war in Ethiopia and his
ever-closer association with Nazi Germany convinced him that a new type of economic
transformation was vital. Fascist Italy would need an economy capable of building and
maintaining a modern war machine.
Mussolini declared that Italy must strive for autarky: economic self-sufficiency.
Mussolini’s preoccupations first with the corporate state and then with autarky meant that
the country’s ‘old problems’- industrial underdevelopment, rural poverty, the north-south
divide and illiteracy- were largely ignored.
The impact of Fascist policies on Italian industry
Mussolini was lucky enough to come to power just as Italian industry was beginning a boom
period.
The economic climate throughout Europe was improving and many Italian companies were
able to sell their products abroad with ease.
Exports of cars, textiles and agricultural produce doubled in the period 1922-5.
Policies 1922-7
Mussolini’s government claimed credit for increasing company profits and attempted to win
over the support of industrialists by appointing an economic professor, Alberto de Stefani, as
treasury minister.
De Stefani’s economic policy was traditional and reassuring to industrialists because it
limited government spending, which helped to fight inflation. He also reduced state
intervention in industry.
Industrialists were also pleased by the outlawing of Socialist and Catholic trade unions by the
Vidoni Palace Pact of 1925.
‘Battle for lira’
By 1926, the economic boom was coming to an end and the exchange rate of the lira was
falling against other currencies.
The exchange rate slipped to around 150 lire to the pound, a rate Mussolini found
inacceptable, thus triggering him to declare the ‘battle for lira’.
He decided to set a new rate of exchange of 90 lire to the British pound in December 1927.
This decision, restoring the value of the lira to its value in October 1922, the month of his
appointment as prime minister, increased Mussolini’s prestige both with the Italian public
and with foreign bankers.
, The Duce had achieved the propaganda victory he desired, but the effects on the Italian
economy were far from beneficial. At a stroke, foreign buyers found Italian goods nearly
twice as expensive, and it was not surprising that Italian export industries, particularly
textiles, went into depression. Unemployment trebled in the years 1926-8.
The revaluation of the lira should have helped the Italian consumer, however the Duce
prevented this by placing high tariffs on many foreign imports.
The only winners in economic terms were those industries such as steel, armaments and
shipbuilding that needed large supplies of cheap tariff-free imported raw materials.
Corporate state: the theory
At first, the workers benefited from the economic revival of the early 1920s. Unemployment
fell and de Stefani’s policies curbed inflation.
By 1926, he was committed to creating a corporate state.
Corporations would be set up for each sector of industry and within each corporation there
would be employers and Fascist trade unions to represent the workers.
Each corporation would organise the production, pay and working conditions in its own
industry.
If employers and Fascist trade unions could not agree then they would go to a labour court,
administrated by the Ministry of Corporations, where the dispute would be sorted out
quickly and amicably.
Corporate state: the reality
At first it did appear that the Fascist trade unions might provide a real say for workers in the
running of their industries, but rivalries within the Fascist Party and Mussolini’s reluctance to
alienate big business interests soon destroyed any such hopes.
Rossoni, the head of the Fascist trade union movement, envisaged a major role for his
unions but he was opposed by the employers’ organisation.
Confindustria disliked all kinds of trade unions and was determined to ensure that
businessmen kept control of their industries.
In the middle was the Ministry of Corporations, headed by the Fascist Giuseppe Bottai. He
distrusted Rossoni and saw little role for trade unions.
In 1927, Mussolini came down on the side of Bottai and Confindustria: Bottai was charged
with the task of writing a ‘Labour Charter’ setting out the rights workers.
The Charter posed no threat to the employers: private ownership of business was declared
the most efficient method of running an economy; employers might, but were not obliged to
provide annual paid holidays; and they were also given the power to alter working hours and
night shifts without any real consultation.
In 1929, the Ministry of Corporations claimed success. By 1934, there were 22 corporations
covering nearly every area of the economy.
The reality, however, was very different. Workers were unable to choose their own
representatives in their corporation (and instead had Fascist nominees foisted on them e.g.
once a philosopher was chosen to represent the interests of grain growers).
Only on issues such as sick pay and national holiday pay did the corporations further
workers’ interests.
Industrialists, on the other hand, were allowed to keep their own non-Fascist employers’
organisations, and largely ignored the very existence off these corporations. That regulations
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