Mussolini and the Economy Flashcards
When was de Stefani appointed as finance minister?
1922
What kind of economic policy did de Stefani prefer and what exactly did he introduce to win the support of the industrial elites?
- Little gov interference (laissez-faire economics)
- Reduction of gov spending
- Privatisation of telephone sector
- Taxes on excess war profits reduced/abandoned
- Cartels/Large firms allowed to expand
How successful were de Stefani’s policies and what problems did he encounter along the way?
- From 1921 to 1924 –> manufacturing production improved, achieved budget surplus, exports in textiles, cars + agricultural produce doubles
However: - Agricultural grps unhappy about reduction in tariffs
- Inflation issues
- Pressure on lira in foreign markets
By 1930s, how had Mussolini’s economic focus shifted and why did this happen?
- Focus is rearmament
- Achieving autarky
- This is because he wanted to expand Italian territory
When was de Stefani replaced and what did this change mark?
- Jul 1925
- Transition into more regulated, state-run economy
What was the first example of this change?
- Aug 1926 –> Battle for Lira launched
What was the exchange rate in 1922 and how did this change in 1926?
- 1922 –> 90 lira to British pound
- 1926 –> 150 lira
Why did this number worry Mussolini?
- Risk of inflation (Weimar Germany 1923) particularly impacting middle classes
- Believed strength of lira represented strength of fascist regime
What important statement did Mussolini make to Volpi, when and what action was taken as a result?
- Aug 1926 –> “the fate of the regime is tied to the fate of the lira”
- Dec 1927 –> Lira artificially fixed at 92.46 to British pound
At this point in time what did Fascist propaganda focus on?
- Showing need for revaluation
- Acceptance of wage cuts
What were the economic costs of revaluation and who lost the most as a result of this decision?
- Import tariffs introduced
- Workers’ wages fell more than prices
- Living standards declined
- Export industries eg. car manufacturing suffered the most as foreign buyers’ prices doubled, textile industry went into depression
What were positive consequences of revaluation of the lira, but how did one of these this conflict w/ another one of Mussolini’s aims?
- Imports became cheaper, which benefitted rearmament industries, steel, chemical, which conflicts w/ aim of autarky
- Raised prestige w/ foreign bankers and Italian public
What does the term ‘Corporate State’ actually describe?
Every industry being part of a Fascist-led corporation resolving disputes and improving production
How was the Corporate State formed and what did it begin with?
- After failure of fascist syndicates to balance everyone’s interests (Rocco Law)
- 1926 –> Began w/ setting up of Ministry of Corporations
What was the Ministry of Corporations designed to be?
Mixed union of workers and employers implementing national economic planning serving both their interests
What was drawn up in 1927, by who and what did it promise?
- Charter of Labour
- By Giuseppe Bottai (Head of Ministry of Corporations)
- Promised organisation of economy and guaranteed workers’ rights
Giuseppe Bottai:
- Active in March on Rome
- Supported antisemitic laws
What did the Charter and the Ministry actually do?
- Charter was never followed through
- Ministry did very little but mediate in labour disputes and reduce fascist syndicates’ power
What major change was made in 1928?
- Edmondo Rossoni (head of fascist syndicates) dismissed
- Syndicates split into 6 parts representing main areas of economy mirrored by 6 employers’ confederations representing same grps
Edmondo Rossoni:
- Began as socialist
- Held syndicalist views as a result
What was founded in Mar 1930 and what was this designed to do?
- National Council of Corporations
- Consultative body of employer and worker organisations representing 7 large sectors of economy
What law was passed in 1934 that made the system fully operational and what did these corporations have the power to do?
- Law implementing mixed corporations representing 22 major economic sectors
Powers: - Fix prices of goods and rates of service
- Settle industrial disputes
- Regulate apprenticeships
- Advise gov on economic issues
Although this system appears effective, how was it flawed?
- Only one side was actually represented in meetings, as workers were represented by Fascist officials approved by Mussolini (Minister of Corporations)
- Any plans put forward by corporations had to be approved by National Council of Corporations, headed by Mussolini , who decided whether it would become the law
- Mussolini controlled everything
As a result, in reality, what was the purpose of the Corporate State and how did it effectively achieve this?
- Propaganda
- Catholic social teachings were implemented
- Mussolini had overcome class conflict issues and found a third way between capitalism and communism
Overall, how successful was the Corporate State?
Failures:
- By end of 1920s –> Only one corporation created
- Took until 1934 to cover all areas of economy
- Only in 1938 were paid holidays introduced
- Workers were not truly represented
- Leading industrialists ignored corporations
What did the National Council of Corporations become in 1935?
Central Corporative Committee
What was the impact of the Depression on the Italian economy?
- Stocks and shares declined by more than 35%
- Manufacturing down by 14% between 1931 and 1932 compared to 1929
- Unemployment rose from around 300,000 to more than 1 mil
- Balance of payments deficit increased
What economic policies did Mussolini introduce during the Depression?
- Nov 1930 –> Wages cut by around 12%
- Price fixing and cartelisation encouraged
- Mergers were common (sometimes compulsory)
- Public work schemes eg. railway electrification, road building
- Welfare increased
- Ensured major banks that had loaned to Italian businesses were protected from collapse through IMI policy
- Bought up shares in banking, industry and commerce
- Provided education on new management techniques + financial assistance to support growth of newly state-owned businesses
Give one stat to show increased welfare spending:
Between 1930 and 40, percentage of all state and local tax receipts increased from 6.9% to 20.6%
Cartelisation:
- Fascist gov assists large companies to take over smaller ones
- Less competition so less chance of small businesses closing
What are the negatives of cartelisation?
Less innovation and competition result in continuous high prices for Italian public
When was cartelisation made compulsory and under what condition ?
- Jun 1932
- Under the condition where a significant majority in a sector wanted it