Economy Flashcards
What were Mussolini’s economic aims, 1922-1925? How did he approach these?
(7)
needed support of big business to consolidate his regime
–>1922, appointed De Stefani as Minister of Finance;
- safe, pro-business, ‘laissez faire’ approach
- mininal gov. interferance in economy
- limited gov. spending
- privatised public-owned businesses (telephone industry)
- supported free-trade
How successful were De Stefani’s measures?
- agricultural groups unhappy about his ‘freetrade’ policies as tariff cuts = income cuts
- BUT Italian companies could generally sell products abroad easily
–> 1922-1925, car + textile exports doubled
Why did Mussolini change the Finance Minister?
1925, De Stefani replaced by Volpi due to high inflation
How did Italy’s economic focus change?
1930s; focus more on autarky because of;
- Ethiopian war
- relationship with Germany/Hitler
- preparing for a large scale European war
- -> promoted heavy industry through large government contracts with steel, chemical, shipbuilding industries
What was the corporate state?
- each corporation represented one aspect of the economy & had employers, workers, state official representatives
- –> by 1934, 22 corporations
- aimed to find a third way between communism and capitalism
How was the corporate state set up?
(5)
- October 1925, Palazzo Vidoni Pact; Confindustria + Fascist TUs were the only organisations allowed to negotiate on behalf of employers/workers
- 1926, non-fascist TUs dissolved + Ministry of Corporations set up
- April 1926, Rocco Law banned lockouts + strikes
- 1927, Charter of Labour drawn up to guarantee workers’ rights; employees not obliged to give annual paid holidays + could alter working hours
- 1928, fascist TUs broken down into 6 smaller federations
How successful was the corporate state really?
in reality did little for workers
- workers unable to chose their own representatives, so representatives often sided with employers
- 1938, finally workers granted sick pay and paid national holiday leave
What was the Battle for Grain?
- announced in July 1925
- promised to liberate Italy from “the slavery of foreign bread”
- aimed to make Italy less dependent on imports, emphasised self-sufficiency
How was the Battle for Grain put into place?
- wheat + cereal production encouraged by placing high tariffs on foreign imports
- government gave grants to farmers to invest in machinery + fertilisers
How successful was the Battle for Grain?
- wheat production increased by over 50%
- 1925-1935, grain imports dropped by 75%
- BUT other crops (olives, fruit, vegetables) neglected
- decline in animal farming; total livestock fell by 500,000
- Italy still dependent on imports; 1933, over 500 mil tonnes imported
What was the Battle for Lira and how was it put into place?
(5)
- idea was that strong currency = strong country
- post-war inflation, lira fell in value –> 1922; £1 - 38 lira, fear of economic collapse
- 1927, Quota Novanta; Mussolini fixed rate at £1 - 90 lira; same rate as in October 1922 (propaganda purposes)
–> big businesses wanted £1 - 120 lira, ignored - 1936, government forced to devalue lira
How successful was the Battle for Lira?
(3)
- exports cost more to foreign buyers = wage cuts & 1926-1928, unemployment trebled, standard of living fell
- made economy vulnerable before global depression/1929 Wall Street Crash
- cheaper imports = chemical + steel industries profited
What was the Battle for Births?
(4)
- aimed to increase the population from 40 million to 60 million by 1950
- strenghten military
- create competition for employment; keep wage + labour costs low
- create new generation of fascists + strengthen regime
How was the Battle for Births put into place?
(6)
- gov. issued marriage loans, after each birth part of debt was cancelled (6 births = no debt)
- Bachellors taxed more than married men
- large families given prizes
- jobs + promotions in gov. sector given to married men eith children only
- women’s wages lowered to discourage from working
- 1933, quota set for women to make up 10% of public sector work force
How successful was the Battle for Births?
- 1950, Italian population was 47 million
- 1911-1936, marriage rate stayed the same & birth rate fell
- lower-class women still needed to work (just paid less) & some middle class women enjoyed it; 1936, women made up 33% of workforce (3% decline)
- bosses encouraged women to stay as cheaper to employ
What was the Battle for Land?
- promised to ‘ruralise’ Italy (irnonic as it promoted industrialisation while romanticising doing things manually)
- needed more rural land to increase production of crops
How was the Battle for Land put into place?
(4)
- promised prosperity and land to small peasant farmers to gain support
- 1928, Mussolini Law; promised large sums of money to land reclamation projects
- Pontine marshes near Rome were drained (reduced malaria by 50%)
- Bonificia Integrale scheme; move from city to rural areas
How successful was the Battle for Land?
(5)
- 1931, 500,000 hectares already reclaimed
- land reclamation created employment and stimulated economy during 1929 Wall St. Crash
- 58% of 475 million hectares reclaimed + 3 irrigation schemes completed
- 1920, USA stopped allowing Italian migrants = 0.5million moved into cities during 1920s/30s –> Rome’s population doubled
- 1940, 90% of peasants owned 13% of land VS richest o.5% owned 40% of land
How did the Great Depression affect the Italian economy?
(3)
1929, Wall Street Crash
- high unemployment;
–> 1928; 300,000 unemployed –>1933; 1 million unemployed
- drop in wages
- 4 fold increase in government spending
How did the Italian State handle the Great Depression?
- cartelisation
- the Italian treasury founded the IMI + IRI to cope with bankruptcy
What was cartelisation?
encouraging the growth of big conglomerate economic enterprises (cartels) through mergers + takeovers
–> benefitted big cartels in the northern industrial triangle
–> mnay smaller companies in the south were shut down
What were the IRI + IMI?
- IRI; lent money to bankrupt Italian companies that could be saved (eg. Ansaldo) and took control of any bank owned companies
- IMI; protected Italian banks from collapsing by granting 5.5 billion lire to be repaid within 10 years
How successful was the Italian state in coping with the Great Depression?
- by 1939, the government owned the majority of companies in various industries; 90% of shipbuilding + 75% of pig iron production
- Italian state owned the largest percentage (20%) of its industry in Europe, after the USSR
- President Roosevelt copiedd Mussolini’s policies in America’s ‘New Deal’ to combat unemployment
What is autarky?
- a self-sufficient economic system where dependency on other countried is decreased; closed system + limited trade
- aimed to lessen the balance of payments & establish Italy as a global military power
- officially announced as a policy in 1936
How was autarky put into place?
(4)
- 1937, High Commission of autarky etsablished to supervise policies
- Battle for Grain
- substitutes made for goods not produced in Italy
–> 1935, lanital = wood substitute & rayon = cotton sub. - government took full control of some steel, chemical, armaments companies
How was successful was autarky?
- determined to import less coal, oil and iron ore BUT domestric production only met 1/5th of needs
- mid 1930s, steep prices as high price of import goods (tariffs)
- 1925 -1938, wage cuts; wages fell by over 10%
- lowered living standards to avoid spending cuts + high taxes
- 1940, when Italy joined WWi was unable to match enemies’ levels of production
- contradicted ruralisation aims
= Italy unable to be economicallu self-sufficient
What were Italy’s major economic successes?
- depression was largley avoided (IMI, IRI, cartelisation effective, state owned industry)
- autarky had some successes (substitutes found, wheat production increased by >50%, land reclamation stimulated economy)
What were Italy’s major economic failures?
- Corporate State (worker’s rights not protected, failed to find com/cap alternative, corporations did little for workers)
- autarky (battle for lira made economy vulnerable, battle for births failed, only 58% of target land reclaimed, Bonifica Integrale failed, Italy still dependent on imports, not ready for war by 1940)
- failed to address Italy’s old socio-economic problems (industrial underdevelopment, rural poverty, north-south divide, illiteracy)
