Impact of Fascist Economic Policies on Industry Flashcards
What were Mussolini’s main priorities whihc lay elsewhere than economics?
- Securing power
- transforming the population into loyal Fascists
- transforming Italy into a strong military power
What are the three criteria to evaluate the success of Mussolini’s economic policies?
- how far econ pols helped achieve wider aims,
- impact on the Italian economy and standard of living,
- and how well the econ pols coped with broader events like the Great Depression.
In the early years he pursued
…………policies that would secure his position (under De Stefani).
liberal
Who was appointed as Minister of Finance by Mussolini to win over the industrial elite?
Alberto De’Stefani
What economic improvements were seen between 1921 and 1924?
- Improvement in manufacturing production and an upturn in exports.
How did government debt change from 1922 to 1925?
Fell from 74.8% of GDP to 50.6% of GDP
What groups were unhappy about the reduction in tariffs?
Agricultural groups
how did industrialists react to Mussolini’s traditional economic policy
They were happy and supported Mussolini.
What happened to Italian exports between 1922 and 1925?
- Exports of cars, textiles, and agricultural products doubled.
How did De’stefani’s policies follow economic liberalisation
De’Stefani focused on reducing government interference in the economy e.g. he privatised the telephone sector and cut protective tariffs
What was outlawed under the Vidoni Pact in 1925?
Socialist trade unions and strikes
Why was Mussolini not considered an economist?
A: He had little interest in or understanding of economics.
What economic shift occurred in the mid-1930s for Mussolini?
Focus on economic transformation due to the War in Ethiopia and association with Nazi Germany
What old problems did Mussolini ignore in favor of his principal aims of autarky & corporate state?
‘old problems’ –>Industrial underdevelopment, rural poverty, the north-south divide, and illiteracy.
OVERALL, THE CORPORATIONS DID NOT…..
ACHIEVE THE PIVOTAL ROLE THEY WERE SUPPOSED TO PLAY IN THE STATE AND THE ECONOMY
How were industrialists appeased during Mussolini’s regime?
- By outlawing Socialist and Catholic trade unions during the Vidoni Pact (1925)
What was the purpose of the revaluation of the lira according to Mussolini?
- It was for propaganda purposes to make the Italian economy appear stronger and demonstrate Mussolini’s power and prestige.
What negative impact did the revaluation of the lira have on Italian export industries?
- It made Italian products much more expensive for foreign buyers,
- leading to a depression in Italian export industries, particularly textiles
What happened to unemployment in Italy between 1926 and 1928
unemployment trebled
What did Mussolini do to prevent imports of foods and other products from becoming cheaper for Italian consumers
- He placed high tariffs on many foreign imports
When was the battle for Lira launched
- Augsut 1926
why was the battle for lir launched
- to revalue the lira after it had fallen against the British pound since 1922
What was the exchange rate of the lira to the British pound by 1926?
150 lira to the British pound
What were the new exchange rates set for the lira in December 1927?
- 19 lira to the American dollar
- & 92.46 lira to the British pound
What was the significance of the revaluation of the lira?
- It was the first example of Mussolini’s focus on policies that represented his power and strength
- rather than the actual economic needs of the Italian people
What did Mussolini begin to ignore after 1925?
Business interests
What was a sign of Mussolini’s shift in focus in economic policy?
The revaluation of the Italian currency and the dismissal of De Stefani.
What did the revaluation of the lira increase for Mussolini?
His prestige with foreign bankers and the Italian public.
Which industries were negatively impacted by the revaluation of the lira?
- Italian export industries, particularly textiles.
Which industries benefited from the high tariffs placed on foreign imports?
- Industries such as steel, armaments, and shipbuilding that needed large supplies of cheap tariff-free imported raw materials
What happened to the export industries as a result of the revaluation and high tariffs?
They fell into depression.
When Mussolini set a new rate of exchange in December 1927 what happened
- (this restored the value of the lira to what it was in October 1922).
What was the intended purpose of Mussolini’s Corporate State?
- To solve social/class conflict in the workplace by creating corporations in every sector of industry with employers and Fascist trade unions
What would each corporation organize in Mussolini’s Corporate State?
Production, pay, and working conditions within its industry
What were the objectives of the Corporate State?
- Avoid industrial disputes,
- maximize output for the good of the nation,
- & maintain a role for private business.
How did Mussolini curb the power of unions with the ‘Labour Charter’ of 1927?
- Declared private ownership of business as most efficient,
- did not oblige employers to provide paid holidays,
- & allowed changes to working hours without consultation
What was guaranteed by the ‘Charter of Labour’ of 1927 but not followed through?
- Workers’ rights in employment, social insurance, and welfare.
Why were the hopes of workers having a real say in corporations destroyed?
Rivalries within the Fascist Party and Mussolini’s reluctance to alienate big business interests destoryed all hopes
Who was Giusseppe Bottai, and what was his view on unions?
- Head of the Ministry of Corporations,
- he saw little role for unions and preferred a partnership of employers and technical experts.
How were Fascist officials biased in labor disputes?
- They tended to side with employers’ representatives over wages and working conditions.
What was the impact of the corporate state on workers’ representatives by 1934?
- Workers were represented by Fascist nominees, not by their own representatives.
How many sectors of industry did the 1934 law implement corporations for?
implemenred corproations representing 22 sectors of industry
What did the 1939 replacement of Parliament with the Chamber of Fasces and Corporations signify?
It meant nothing, as Parliament had long lost any power.
What were the consequences of the corporate state on the efficiency of the economy?
The system was inefficient, with a vast, complex, and expensive bureaucracy that never achieved its stated aims.
How did historians view the corporate state’s effect on the economy and industrial relations?
Historians now dismiss claims of transformation, seeing it as thinly disguised exploitation and oppression of labor.
What did Martin Blinkhorn say about corporativism?
In 1984, he called it the thinly disguised exploitation and oppression of labor.
Who controlled the real power over the economy in the corporate state? Mussolini, in consultation with large industrial interest groups.
- Mussolini, in consultation with large industrial interest groups
What was one of the few successes of corporations regarding workers’ interests?
Introduction of sick pay and paid national holidays in 1938
What was one of the few successes of corporations regarding workers’ interests?
- Introduction of sick pay and paid national holidays in 1938
What did the Rocco Law of April 1926 allow?
- Allowed Syndicates (cooperative groups of employers and employees) some rights to represent views/concerns,
- but banned strikes, go-slows, and lock-outs.
What was the function of the Ministry of Corporations set up in July 1926?.
- To discuss and implement national economic planning that met both employers’ and employees’ interests
What was the aim of the ministry of the corporations
- By having both groups work together more efficiently, harmoniously, and productively for the good of the nation
What did Salvemini say about understanding the corporations?
He described it as trying to understand what the corporations actually did as looking in a dark room for a black cat which is not there.
How did the corporate state function as propaganda?
- It was used to show that Mussolini had overcome class conflict and created a ‘third way between capitalism and communism.’
How were industrialists’ interests prioritized in the corporate state?
- Industrialists kept their own employers’ organizations and largely ignored the existence of the corporations.
What did the corporate state require for any plans put forward by the corporations?
- Approval by the Central Corporative Committee headed by Mussolini
What roles did the corporations theoretically have in 1934?
- Fixing prices of goods,
- settling disputes over hours,
- wages, and conditions,
- & regulating apprenticeships
The Corporate State was studied by political and economic scientists from across the world, who acclaimed…
- this new and original economic system
What caused the Great Depression?
- The Wall Street Crash in the USA in 1929
What was the impact of the Great Depression on companies and car production?
- A large number of companies collapsed, and car production fell by 50%.
How did the Great Depression affect unemployment in Italy between 1928 and 1933?
Unemployment rose from 500k in 1928 to over 2 million by 1933
What were the public works schemes introduced by the Fascist state to combat unemployment?
Building motorways and hydroelectric power plants
Why were public works schemes important during the Great Depression?
They increased the amount of money in circulation, increased demand, and created further jobs.
What was the purpose of the Istituto Mobiliare Italiano (IMI)?
- To bail out banks that could no longer pay their investors
When was the Institute of Industrial Reconstruction (IRI) created and what was its role?
- created in January 1933, it took control of major shareholdings in Italian companies after their banks were bailed out.
How did the IRI impact the Italian state’s involvement in businesses?
The Italian state became a major shareholder of many top Italian companies
What managerial improvements did the IRI attempt to promote?
The latest managerial techniques
How did these measures taken by the Fascist state help Italy during the Great Depression?
- They cost the taxpayer but enabled Italy to weather the depression better than its democratic neighbors
How did Mussolini’s early economic policies respond to the Great Depression?
- Government funding for road building doubled between 1929 and 1933,
- & large public works schemes were introduced to keep employment levels stable.
What was the role of the IMI in protecting major banks during the Great Depression?
- It ensured major banks that had loaned millions of Lire to Italian businesses were protected from possible collapse.
What did the IRI do to prop up the Italian economy?
- The government bought shares in banking and industry to prevent these companies from going bankrupt
How did welfare spending change between 1930 and 1940?
- Welfare spending went from 6.9% to 20.6%.
hat was the impact of welfare increases during the Great Depression in Italy?
- It eased difficulties for workers who lost their jobs but put a huge strain on the government’s finances.
How did the Fascist state handle workers’ wages and company mergers during the Great Depression?
- Workers’ wages were cut, and companies were merged to prevent closures
What percentage of industry was owned by the Italian state compared to other European countries?
- The Italian state owned a larger percentage of industry than any other country in Europe other than the Soviet Union
What drove the quest for self-sufficiency (autarky) in Italy?
- Decline in overseas trade,
- sanctions placed on Italy in 1936 in response to aggression in Africa,
- & preparation for war in the late 1930s
Why were agricultural products such as cereals and wool stockpiled?
- To boost reserves, ensuring supply and price stability.
What synthetic substitute was developed instead of wool?
Lanital
What raw materials were scarce in Italy during the late 1930s?
Coal, oil, and iron
How much iron ore did Italy produce annually in the late 1930s compared to Germany?
- Italy produced 1.8 million tonnes of iron ore annually,
- less than a tenth of Germany’s production at the time.
Which industries suffered because they were not prioritized under autarky?
Textiles
How did government spending on autarkic measures change from 1934 to 1938?
It doubled from 30 billion Lire in 1934 to 60 billion by 1938
What did firms have to do to comply with autarkic measures?
Find new energy sources that did not require importing oil or gas
What quotas were introduced to favor domestic goods?
- Quotas on foreign imports
What was a negative result of autarky on the Italian economy?
- Goods were produced that would be cheaper to buy from abroad, adding to the national deficit
How did Mussolini’s focus on foreign affairs affect Italy?
Living standards and the general health of the Italian economy suffered.
What did Mussolini believe was inevitable, prompting the push for autarky?
- War, whether in Europe or to further his African Empire
Which industries were promoted to prepare for self-sufficiency?
- Armament industries.
What seemed to prove Mussolini right about the need for self-sufficiency?
- Economic sanctions imposed by the League of Nations after Italy’s invasion of Ethiopia in 1935.
How did Mussolini encourage heavy industries like steel, chemicals, and shipbuilding?
- By placing large government contracts
What percentage of shipbuilding and steel production was directed by the state under Mussolini?
- 80% of shipbuilding & 50% of steel production
What was the impact of regime policies on major companies?
- Major companies were allowed to merge into near-monopoly organizations,
- e.g., Fiat in car manufacturing and Pirelli in rubber.
What did Italy still need to import
- key materials like oil, coal, and iron ore for the making of steel in large quantities
What was Italy unable to match during WWII?
- The production levels of its enemies and the ability to replace losses in shipping and aircraft.
What was the result of the government not increasing taxes in the late 1930s?
Government expenditure greatly exceeded its income.
Why did the government not increase taxes during the autarky period?
- To avoid alienating big business and conservative elements of society.
How did autarky affect government financial difficulties?
The government spent huge sums on armament contracts and military ventures in Ethiopia and Spain
