Economic Policy

Question 1

What were Mussolini’s aims for his economic policy?

Answer 1

• Securing himself in power - increase control/prestige
• Transforming Italy into a strong military power
• Improve the overall economic situation to make Italy appear stronger

Question 2

What was the lesser aim of Mussolini’s foreign policy?

Answer 2

Improve the lives and living standards of the people of Italy

Question 3

What was Mussolini’s key economic priority in the early years?

Answer 3

To get the powerful industrial elite on his side

Question 4

What economic measures in the early years of power did Mussolini introduce that improved his control in Italy?

Answer 4

1925 - The Vidoni Pact outlawed trade unions and said fascist syndicates were the only body that could represent Italian workers. Made industrialist happy as workers couldn’t strike.

Question 5

What evidence is there that the economy in Italy improved in the early years of Mussolini’s rule?

Answer 5

• By 1924/25 the economy was running a budget surplus
• Exports of cars, textiles and agricultural products doubled between 1922 and 1925
• Government debt fell from 74.8% to 50.6% of GDP between 1922 and 1925

Question 6

How did the early economic policies improve the lives of the Italian people?

Answer 6

• The minister of finance De’Stefani focused on reducing government spending and reducing inflation
• Exports doubling meant workers kept jobs and businesses kept good income

Question 7

When was the ‘Battle for Lira’?

Answer 7

Started August 1926, revalued December 1927

Question 8

What did the battle for lira involve?

Answer 8

• The Lira had sunk to value 150 to the British pound

* December 1927 the lira was fixed at 92.46 to the pound, 19 to the dollar

Question 9

How did the revaluation of the lira benefit Mussolini’s control and prestige?

Answer 9

• Purely for propaganda
• Designed to make the Italian economy appear strong
• Demonstrated for the first time Mussolini was more concerned about prestige than improving people’s lives

Question 10

What were the effects of the revaluation of the lira?

Answer 10

• Unemployment trebled between 1926 and 1928

* Crippled Italian exports as Italian products were nearly twice as expensive as other foreign goods

Question 11

Describe the purpose of The Corporate State

Answer 11

It intended to solve the social/class conflict within the workplace

Question 12

What 3 laws/actions created The Corporate State?

Answer 12

• April 1926 Rocco Law
• July 1926 Establishment of the Ministry of Corporations
• 1927 Charter of Labour

Question 13

What did each law or action do to create The Corporate State?

Answer 13

• Rocco Law - allowed (fascist) syndicates to represent workers
• Ministry of Corporations set up to be a mixed union of workers and employers to negotiate economic policies to suit both groups
• The Charter of Labour guaranteed workers’ rights in employment, social insurance and welfare

Question 14

How did The Corporate State improve Mussolini’s control and prestige?

Answer 14

• The system was propaganda - made him look like he had come up with a new economic system. Also favoured industrials who therefore continued to support Mussolini
• All plans had to be approved Central Corporative Committee which Mussolini headed

Question 15

What were the weaknesses of the Corporate State?

Answer 15

• Corruption and mock factories occurred
• Wasn’t equal, workers simply not represented
• The system was large, ineffective and expensive bureaucracy that never achieved any of the state’s aims

Question 16

How did The Corporate State help workers?

Answer 16

It didn’t. Apart from the introduction of sick pay and paid national holidays introduced in 1938 the workers gained nothing

Question 17

Did The Corporate State help the economy?

Answer 17

Partially. meant damaging industrial disputes were generally avoided and combined with state control the effects of the depression weren’t too bad

Question 18

What was the Italian economy like during the Great Depression?

Answer 18

Not too bad, policies were quite successful in the earlier years so the impact on Italy wasn’s as dramatic as on other nations

Question 19

How did Mussolini’s policies during the depression help his prestige and control in Italy?

Answer 19

The relatively good control of the economic situation meant that Mussolini was seen to be running Italy well

Question 20

What economic policies were passed during the Depression?

Answer 20

• Large public work schemes such as road/house building kept employment levels stable
• The IRI (Istituto di Ricostruzione) bought up shares in banking and industry to prevent bankruptcy. Govt. owned larger % of industry than any other country apart from the USSR
• Welfare spending went from 6.9% to 20.6% between 1930 and 1940, putting a huge strain on government finances
• The IMI (Instituto Mobilare Italiano) ensured major banks did not collapse after loaning out milions to businesses

Question 21

How did the government try to generate autarky in Italy from 1934 onwards?

Answer 21

• Agricultural products such as cereals and wool were stockpiled to keep supply and prices stable
• Government spending on autarkic measures doubled from 30 billion to 60 billion lire between 1934 and 1938

Question 22

What is evidence of the failure to achieve autarky in Italy?

Answer 22

• Lat 1930s Italy produced 1.8 million tonnes of iron ore annually which was less than 1/10 of what Germany was producing at the same time
• Goods that were produced at home could have been bought abroad for cheaper

Question 23

Why was the battle of the births linked with the Italian economy?

Answer 23

• started 1927, wanted to increase the population from 40 to 60 million in order to strengthen Italy militarily and economically stronger
• Financial incentive of married men with 6+ children not having to pay tax introduced

Question 24

What happened with the battle of the births?

Answer 24

Marriage rates stagnated, birth rate in late 1930s was 102 births per 1000 people compared to that of 147 to 1000 in 1911

Question 25

What was the battle for grain part of?

Answer 25

The attempts to create autarky

Question 26

What did the government do in the battle for grain?

Answer 26

Invested in educating farmers of new techniques and providing fertilisers

Question 27

Give evidence of the battle for grain being a success

Answer 27

• Northern/Central Italy’s wheat production increased by 50% between 1914-1938
• Imports of grain reduced

Question 28

Give evidence of the battle for the grain being a failure

Answer 28

• South stopped growing olives and fruit and cattle farming, greatly damaging these industries and exports
• By late 1930s, families were paying around 400 lire extra in food costs compared to in the 1920s

Question 29

Describe the ruralisation policy introduced in May 1927

Answer 29

The attempt by the government to try to keep rural population, rural traditions as well as increase birth rate (battle for births).

Question 30

Was ruralisation effective?

Answer 30

No - only 5% of the 475 million hectares of land that was reclaimed was used improved and used by farmers but draining southern marshes decreased malaria by 50%

Question 31

What happened to GDP between 1922 and 1938?

Answer 31

It rose at an average of 1.9% a year (which is good as it shows economic improvement), compared to 2.8% between 1903-1911 (which shows that growth slowed under the fascists)

Question 32

Give evidence of the Italian economy being effective during the war

Answer 32

• Protectionist policies and low taxes stimulated f=growth in the North
• The deficit fell from 75% to 50% in 1932

Question 33

Give evidence of the Italian economy being ineffective during the war

Answer 33

• Never put more than 25% of GDP towards was production compared to Germany’s 64%
• Italy was dependant on Germany for fuel and could only import 50% when its needs were significantly higher
• Steel production decreased from 2.3 million tonnes to 1.7 million
• Rations only allowed for 1000 calories in 1941
• The Soviet Union industry was 900% bigger than Italy’s by 1939