Autarky Flashcards
List the motivations behind autarky
M’s economic policies had never been designed just to benefit the average Italian, and this had become apparent by the mid-1930s
As he became increasingly pre-occupied with foreign affairs, living standards and the general welfare of the economy were relegated in importance and therefore suffered
He believed that war, either in Europe or Africa where he was trying to extend his empire, was inevitable and that Italy must be prepared
He thought that the armaments industries should be promoted and that Italy should become self-sufficient. In other words, Italy should be an autarky, able to supply itself with all the food and material needed to fight a modern war
The economic sanctions the League of Nations imposed on Italy in 1935 following the invasion of Ethiopia, which banned trade with Italy in certain goods necessary for war, such as grain, steel and textiles, seemed to M to prove his point that there must be no reliance on imports
M was freer to engage in personal projects like this now the dictatorship had been established
M wanted to establish the prestige of the government within Italy and Italy within the world
The policy was hardly surprising for a nationalist government that considered war inevitable
The collapse of world trade following the GD and the sanctions imposed by the League of Nations highlighted the benefits of having a largely self-sufficient economy
M wanted to solve the balance of trade issue
Nationalistic ideas of wanting to make Italy great and not dependent upon others
Militaristic ideas of preparing Italy for war
To justify imperial expansion to gain spazio vitale
Give two quotes from M showing the rationale behind autarky
‘I consider Italy to be in a permanent state of war against our so-called defiency in raw materials’ (M, 1925)
‘Italy can and must attain economic independence. The whole economic system must be directed towards this supreme necessity, as the future of the Italian people depends on it. This is based on the idea that our nation will be called into war’ (M, 1936)
List the actions the regime took to promote autarky
M encouraged heavy industries like steel, chemicals and shipbuilding by handing out government contracts. State control was expanded to the point that 80% of shipbuilding and 50% of steel production were state directed
Economies of scale were promoted to the point that the state allowed companies to merge into near-monopolies. For instance, Fiat controlled car manufacturing, Pirelli dominated rubber and Montecatini chemicals
Exports took a low priority as usual
The first major step was launcing the Battle for Grain in 1925
The policy of autarky was formally announced in 1936, accompanied by a vast propaganda campaign
Increased control on currency
Quotas on imports
Increased tariff protection for domestic industries
Government assistance to develop new products as import substitutes, such as cheese based lanital for wool and rayon for cotton, as well as assisting in locating new mineral sources
State agencies such as AGIP searched for new energy sources
High Commission on Autarky set up in 1937 to supervise policies
List the successes of autarky
The state had a large amount of control over wartime industries
In line with other policies such as the Battle for Grain
Having a largely self-sufficient economy helped Italy to better whether the GD and the sanctions imposed by the League of Nations following the invasion of Ethiopia
Italy became virtually self-sufficient in grain
The Battle for Grain cut wheat imports
List the failures of autarky
Monopolies are detrimental to employees and consumers
The export market suffered
The Italian economy was still far from self-sufficient when M entered WWII in 1940 despite the efforts of the regime. Key materials like coal, oil and iron ore still had to be imported in very large quantities
Italy was unable to match its enemies’ levels of production and could not even replace its losses in shipping and aircraft
The drive for autarky actually worsened Italy’s financial difficulties. The government was spending lots of money on contracts related to the autarkic and closely related rearmament projects at a time where they were already spending lots on military adventures in Ethiopia and Spain. Ever aware of the need to remain popular, the regime did not increase taxes to pay for all this, leading to massive government deficits by the late 1930s. The remedy for these massive budget deficits was either big cuts in military expenditure or very significant reductions in living standards
This was made worse by the fact that M refused to recognise the seriousness of the economic situation and so the problem remained unsolved when Italy entered WWII
Unsuccessful both economically and militarily
Although Italy became virtually self-sufficient in grain, it still depended largely upon imports for other basic needs
Due to a lack of foreign currency caused by the neglect of exports, Italy was unable to import the raw materials its military preparations required during the 1930s, which meant it was unable to join Italy in war in 1939, and then performed badly when it did join in 1940
Virtually no coal supplies, little iron and no oil discovered
Even by 1940 domestic production met on 20% of Italy’s industrial raw material needs
While the Battle for Grain might have cut wheat imports, other food imports rose
Italy really should have looked to increase exports to pay for essential imports instead
Led to increased prices
Some industries, such as textiles, suffered as a result of autarkic polcies. This was mainly due to the fact that when Italy imposed tariffs, foreign countries did the same in retaliation. This had the effect of making Italian goods more expensive for foreign consumers, meaning that industries that had traditionally exported much of their produce suffered
Italy continued to suffer from budget deficits, which made it harder to import the materials it did need
Domestic basic raw materials were incredibly expensive; coal was three times the price it was in England, and steel was double the price
What does Morgan say about autarky?
‘Autarky was an unattainable goal for a relatively poor and ill-resourced country like Italy, which would always need to import essential raw materials such as oil and coal. But the fact that it was unrealisable in present conditions was the very reason pushing Italy to war alongside Germany. German resources were already making up for some of Italy’s economic shortfalls. The attempt at creating an empire in Africa was motivated by the idea that Italy could become economically independent and powerful through war. Future expansion and conquest would achieve that redistribution of territory and resources that the regime wanted. Talk of living space (spazio vitale) was as common in Italy as it was in Germany’
