Economic policies Flashcards
Mussolini was not…
an economist. He had little interest in, or understanding of, economics.
Mussolini’s priorities lay elsewhere. What were his priorities?
- Securing himself in power.
- Transforming the population into loyal and proud fascists.
- Transforming Italy into a strong military power (with an empire).
What is one test of the success of his economic policies?
How far they helped him achieve his wider aims e.g securing himself in power, increasing his control and prestige.
What other tests can be used to assess the impact of Mussolini’s policies?
Impact of his policies on:
* the Italian economy or;
* the Italian people and their standard of living
* how far they helped Italy cope with the economic pressures created by broader events e.g the Great Depression
Early policies: What was Mussolini’s first goal in economic policy?
To win over the powerful industrial elite of Italian society.
Early policies: Name 3 policies that increased Mussolini’s control.
- Mussolini appointed the conservative economies professor Alberto De’Stefani as Minister of Finance, a move that pleased Italy’s business groups.
- Industrialists were happy to support Mussolini. They were reassured by his traditional economic policy.
- De’Stefani focused on reducing government spending to balance the budget and reduce inflation (quite a conservative government).
Early policies: Name 8 policies that improved the economy.
- Mussolini appointed the conservative economies professor Alberto De’Stefani as Minister of Finance, a move that pleased Italy’s business groups.
- De’Stefani focused on reducing government interference in the economy e.g he privatised the telephone sector and cut protective tariffs.
- Italy’s manufacturing production improved between 1921 and 1924, and there was an upturn in Italian exports.
- De’Stefani focused on reducing government spending to balance the budget and reduce inflation.
- Government debt fell from 74.8% of GDP in 1922 to 50.6% of GDP in 1925.
- By 1924/25, Italy is running a budget surplus.
- Industrialists were happy to support Mussolini. They were reassured by his traditional economic policy.
- Many Italian companies were able to sell their products abroad with ease. Exports, particularly of cars, textiles and agricultural products, doubled between 1922 and 1925.
Early policies: Name 2 policies that increased Mussolini’s prestige.
- De’Stefani focused on reducing government spending to balance the budget and reduce inflation.
- Mussolini claimed the credit for increasing company profits. However, this was really down to an improving economic climate across Europe.
Early policies: Name 2 policies that worsened the lives of workers and the Italian people
- Agricultural groups were unhappy about the reduction in tariffs.
- Socialist trade unions and strikes were outlawed under the Vidoni Pact (1925), which recognised fascist syndicates (groups of employers and employees) as the only representative body for Italian workers (said that you couldn’t go on strike, had to be in a fascist group).
Early policies:
Who did Mussolini appoint as Minister of Finance to please Italy’s business groups?
Alberto De’Stafani - the conservative economics professor.
Early policies:
What did De’Stefani focus on doing?
- Reducing government interference in the economy e.g he privatised the telephone sector and cut protective tariffs.
- Reducing government spending to balance the budget and reduce inflation.
Early policies:
What did De’Stefani do to the telephone sector and protective tariffs?
He privatised the telephone sector and cut protective tariffs.
Early policies:
What happened to Italy’s manufacturing production between 1921 and 1924?
Improved. There was also an upturn in Italian exports.
Early policies:
What did government debt fall from?
Government debt fell from 74.8% of GDP in 1922 to 50.6% of GDP in 1925.
Early policies:
By 1924/25, what was Italy running?
A budget surplus.
Early policies:
What were agricultural groups unhappy about?
The reduction in tariffs.
Early policies:
What happened to socialist trade unions and strikes?
They were outlawed (made illegal) under the Vidoni Pact (1925), which recognised fascist syndicates as the only representative body for Italian workers.
Early policies:
What did the Vidoni Pact do?
The pact abolished Catholic, Socialist and all other independent unions and declared Fascist-controlled unions to have a monopoly on labour representation
Early policies:
When was the Vidoni Pact?
October 1925
Early policies:
Were industrialists happy to support Mussolini? If so, why?
Yes industrialists were happy support Mussolini because they were reassured by his traditional economic policy.
Early policies:
What happened with many Italian companies?
They were able to sell their products abroad with ease.
Early policies:
What happened to Italian exports between 1922 and 1925?
Exports, particularly of cars, textiles and agricultural products, DOUBLED between 1922 and 1925.
SLICED
Strong
Lira
Imports
Cheaper
Exports
Dearer
What does a strong currency mean?
Imports are cheaper.
Exports are more expensive.
When was the “Battle for Lira” launched?
August 1926
What was the “Battle for Lira”?
This was Mussolini’s desire to revalue the lira after it had fallen against the British pound since 1922 (which would damage their exports).
By 1926, what had the lira sunk to?
It had sunk to 150 lira to the British pound.
Revaluation of the lira: Therefore, what happened in December 1927 as a result of the lira falling against the British pound?
The lira was artificially fixed at 19 to the American dollar and 92.46 to the British pound.
So other countries didn’t think lira was weak.
How did the revaluation of the lira increase Mussolini’s prestige?
The revaluation was purely for propaganda purposes, making the Italian economy appear stronger. It also demonstrated the will of Il Duce and his power to uphold Italian economic pride, increasing his prestige.
What was the revaluation of the lira purely for?
Propaganda purposes, making the Italian economy appear stronger.
How did the revaluation of the lira worsen the economy?
- It crippled Italian exports, as it meant foreign buyers found Italian products much more expensive and overvalued (nearly twice as expensive).
- Italian export industries, particularly textiles, went into depression. Unemployment trebled between 1926 and 1928 - people starting to struggle as Mussolini interferes with the economy.
- The revaluation should have helped the Italian consumer because imports of food and other products should have become cheaper. However, Mussolini prevented this by placing high tariffs on many foreign imports.
How did the revaluation of the lira cripple Italian exports?
Meant foreign buyers found Italian products much more expensive and overvalued (nearly twice as expensive).
After the revaluation of the lira, what happened to Italian export industries, particularly textiles?
Went into depression.
After the revaluation of the lira, what happened to unemployment?
Unemployment trebled between 1926 and 1928. Italian export industries went into depression.
The revaluation should have helped the Italian consumer because imports should have become cheaper. Why was this not the case?
Mussolini prevented this by placing high tariffs on many foreign imports.
What the revaluation of the lira the first example of?
How the economy was shifting towards a greater focus on policies that would represent Mussolini’s power and strength as leader and less on the actual economic needs of the Italian people.
What was the Corporate State?
Advocated cooperation between the classes instead of class conflict. Corporatism became one of the main tenets of fascism, and Benito Mussolini’s fascist regime in Italy advocated the collective management of the economy by state officials by integrating large interest groups under the state.
One of Mussolini’s key policies, intended to solve social/class conflict in the workplace. Under this system, every industry would be part of a fascist-led corporation that would resolve disputes between workers and managements and help to organise production, pay and conditions.
What happened in April 1926?
The Rocco Law
The Rocco Law
April 1926
What was the Rocco Law April 1926?
Allowed the syndicates some rights to represent views/concerns. However, strikes, go-slows and lock-outs were banned.
What happened in July 1926?
Ministry of Corporations set up.
Ministry of Corporations set up
July 1926
Why was the Ministry of Corporations set up?
The corporations were set up to be an alternative mixed union of workers and employers who would discuss and implement national economic planning that met both their interests.
Why was the Ministry of Corporations set up?
The corporations were set up to be an alternative mixed union of workers and employers who would discuss and implement national economic planning that met both their interests.
What was the aim of the Ministry of Corporations?
For employers and employees to work together more efficiently, harmoniously, and productively for the good of the nation.
When was the “Charter of Labour” drawn up?
1927
1927
“Charter of Labour” drawn up.
What did the “Charter of Labour” do?
Guaranteed workers’ rights in employment, social insurance and welfare.
But what was bad about the “Charter of Labour”?
It was all really for show, workers weren’t guaranteed rights.
What happened to trade unions?
They were banned and replaced by fascist syndicates (Vidoni Pact 1925).
Quote about the Corporate State from Salvemini
“Looking in a dark room for a black cat which is not there.”
How did the Corporate State worsen the lives of workers and the Italian people?
- The Charter was simply a programme of intent and was never followed through.
- 1934: Another law was passed which implemented corporations representing 22 sectors of industry. In theory, they could fix the price of goods, settle disputes (over hours, wages, and conditions), regulate apprenticeships and advise the government.
- In reality, the system was simply propaganda. Although the corporations allowed employers and workers to meet under the guidance of the PNF, only one side was represented. While employers chose their own representatives, the workers were not represented by workers at all, but by fascist officials approved by Mussolini, who was Minister of Corporations.
- The fascist deputies who were meant to represent the workers invariably supported the business and factory owners, as a result of the support they gave to the Italian government. Workers therefore had little to say in labour disputes.
- However, historians now dismiss claims that the corporate state transformed the economy and industrial relations. Conflict between employer and employee were not solved, only suppressed. Martin Blinkhorn, a British academic writing in 1984, adds that “Corporativism in practice involved the thinly disguised exploitation and oppression of labour”.
- Salvemini described trying to understand what the corporations actually did as “looking in a dark room for a black cat which is not there.”
The Corporate State: How did Mussolini’s economic policies increase his control?
- In reality, the system was simply propaganda. Although the corporations allowed employers and workers to meet under the guidance of the PNF, only one side was represented. While employers chose their own representatives, the workers were not represented by workers at all, but by fascist officials approved by Mussolini, who was Minister of Corporations.
- Industrialists were more or less happy with the system as the fascists tended to favour them in disputes.
- Any plans put forwards by the corporations had to be approved by the Central Corporative Committee headed by Mussolini, who alone could decide what became law. Real power over the economy was thus held over Mussolini, who came to decisions in consultation with large industrial groups.
The Corporate State: How did Mussolini’s economic policies increase his prestige?
- In reality, the system was simply propaganda. Although the corporations allowed employers and workers to meet under the guidance of the PNF, only one side was represented. While employers chose their own representatives, the workers were not represented by workers at all, but by fascist officials approved by Mussolini, who was Minister of Corporations.
- Industrialists were more or less happy with the system as the fascists tended to favour them in disputes.
- The Corporate State was excellent propaganda, used to prove that Mussolini had overcome the problems of class conflict and had constructed a “third way” between capitalism and communism.
- The Corporate State was studied by political and economic scientists from across the world, who acclaimed this new and original economic system.
The Corporate State: How did Mussolini’s economic policies improve the economy?
- 1934: Another law was passed which implemented corporations representing 22 sectors of industry. In theory , they could fix the price of goods, settle disputes (over hours, wages, and conditions), regulate apprenticeships and advise the government.
- Damaging industrial disputes were generally avoided. Along with close state control, this limited the effects of the depression.
- Industrialists were more or less happy with the system as the fascists tended to favour them in disputes.
