Mussolini’s Economic Policies

Question 1

Mussolini economic policies - EARLY

Answer 1

First goal is to win over the established elite of Italian society ; thus he appointed conservative economics professor De’Stefani as a minister of finance which pleased Confindustria and the big groups - Alberto favoured an economic policy of privatisation and reduced government interference in order to balance the budget. He privatised telephone sector and cut protective tariffs too which improved the manufacturing production between 1921 and 1924 but agricultural groups were unhappy about the reduction in tariffs + pressure on lira in foreign markets that Italy’s rapid economic growth produced

Question 2

Who was De Stefani replaced by?

Answer 2

July 1925 - replaced by Giuseppe Volpi which marked a transition in economic policy towards a more regulated state run economy with more government influence - first example was Battle of Lira in August 1926

Question 3

Battle for Lira (1926)

Answer 3

Mussolini restored the inflating Lira to what it was in 1922 - Quota Novanta of 90 Lira = 1 British pound ; he viewed the strength of the Lira as representing the strength of the fascist regime itself (propaganda) - fate of the regime tied to fate of the lira - therefore in December 1927 the lira was artificially fixed at 90 Lira ; demonstrated the will of Il Duce and Italian economic pride

Question 4

Downsides to battle of Lira

Answer 4

Economic costs were considerable - government was forced to introduce a range of deflationary measures, massive price reductions and cuts to workers wages - EXPORT INDUSTRIES WERE MAIN LOSERS AS MUSSOLINI’S POLICIES OVERVALUED ITALIAN PRODUCTS IN OVERSEAS’ MARKETS - first battle showing shift towards strength as leader and less on actual economic needs of Italian people

Question 5

Corporate State

Answer 5

One of Mussolini’ most prominent policies was the implementation of the corporate state - grew out of the Rocco Law of 1926 that had failed to balance the interests of the fascist syndicates and Italian industry - set up ministry of corporations which was meant to be a mixed union of employees, employers and the government in all interests (harmonious economic order) - under Botatti charter of labour drawn up in 1927 which in theory ensured workers rights in social insurance and welfare - SIMPLY A PROGRAMME AND DID NOT FOLLOW THROUGH ; MINISTRY DID VERY LITTLE EXCEPT MEDIATE LABOUR DISPUTES

Question 6

How were corporations organised?

Answer 6

1928 - Rossini head of fascist syndicate was dismissed and syndicate split into 6 parts representing the 6 employers’ confederations ; 1930 a national council of corporations founded which was meant to be a consultative body made up of employer and worker organisations ; in 1934 another law passed implementing mixed corporations representing 22 areas of the economy

Question 7

On paper vs reality

Answer 7

Could allegedly fix the price of goods and settle industrial disputes, advise the government and help produce a more efficient economic outcome ; in reality this was simple propaganda. These were just councils where both employees and employers met with the PNF overseeing everything - ONLY ONE SIDE REPRESENTED - workers were not represented at all but by fascist officials approved by Mussolini. Any plans out forward had to be approved by Mussolini and national council - REAL POWER WAS HELD BY MUSSOLINI WHO COULD DEVISE THE LAWS ETC AND CONFINDUSTRIA MADE MAJOR ECONOMIC DECISIONS OUTSIDE VAST CORPORATE BUREAUCRACY

Question 8

Point of corporate state?

Answer 8

Provided jobs for loyal fascists - pragmatically speaking
Used as propaganda showing that Mussolini has found a third way between capitalism and communism - overcoming class conflict ; harmonising industrial relations and working together for national interest

Question 9

Overall corporate state?

Answer 9

Precise economic policy was subservient to a facade that was more intent on constructing Mussolini as leader of international renown rather than actually implementing a workable economic basis for Italy

Question 10

Autarky

Answer 10

Quest for self-sufficiency in Italy - present through all the Battles and driven principally by the general decline in Italian overseas trade (battle for lira), preparation for war (more prominent in 30s), sanctions placed on Italy in 1936 in response to militaristic actions in Africa

Question 11

Trade (Autarky)

Answer 11

Conducted through bilateral agreements for imports to match the value of exports ensuring Italy could minimise and control imports and would not have to use its foreign currency/gold reserves to pay for them - strengthened control of foreign currency and import licensing system and boosted their export industry by devaluing the lira in October 1936 - therefore less reliance on overseas imports

Question 12

IRI scheme

Answer 12

Government took over private if it was justified for national defence, autarky and imperialist goals - these companies mainly in iron and steel sector were made responsible for improving drive for self sufficient by finishing raw materials within Italy and its colonies - developed synthetic substitutes like Rayon ; agricultural products such as cereals were stockpiled and guaranteed a consistent supply at regular prices

Question 13

Government spending on autarkic measures

Answer 13

30 billion in 1934 (lire)

60 billion in 1938 - doubled BUT DEBATABLE WHETHER GOALS WERE ACHEIVED

Question 14

Response to the Depression

Answer 14

Arguably quite successful in shielding Italy from the full impact of the worldwide economic downturn

Question 15

How did he help businesses survive during the depression? (Cartelisation)

Answer 15

Government cut workers wages by around 12% in November 1930 and encouraged price fixing and cartelisation (forced mergers where fascist government assisted large businesses to take over smaller ones - meaning less competition and fix prices for their goods within their domestic market) - MADE OBLIGATORY IN 1936 meaning that employment levels were stable as fewer businesses forced to close

Question 16

How was employment provided during the depression?

Answer 16

Large public work schemes such as road building, house construction and electrification of railways ; government funding of road building double between 1929 and 1933 and 5000km of railway was electrified ; welfare increased to ease the difficulties of those workers who could not find employment

Question 17

How did they help out banks?

Answer 17

Ensures that big banks that had loaned out millions to Italian businesses were protected from possible collapse through the IMI policy ; provided credit to banks to guarantee they would not collapse

Question 18

IRI scheme

Answer 18

Government brought up shared in banking, industry and commerce to help prop up the Italian economy and ensure these companies did not go bankrupt and collapse ; provided education on new management techniques and gave financial and technical assistance to support the growth of these state owned industries. By 1939 - government owned a majority of companies in steelworks, shipbuilding and telephone ; government intervention guaranteed financial support for both the banks and key employment industries and thus was quite successful in singing public confidence in the economy

Question 19

Overall Great Depression

Answer 19

ITALY EAS SHIELDED FROM THE WORST OF IT

Question 20

Battle for Births

Answer 20

Introduced in May 1927 - aimed at encouraging Italians to increase size of families so that by 1950s population = 60 million ; they wanted a large population to compete militarily and economically it would create COMPETITION FOR LABOUR and thus keep employment costs etc down and increase the number of consumers

Question 21

Better relations with Catholic Church

Answer 21

Ideal of Italian women focused on the family with the sole aim of giving birth and raising as many children as possible (CATHOLIC VALUES) ; poorer southern areas which were more traditional such as Basilicata were seen as model examples

Question 22

Incentivising battle for births

Answer 22

Tax reductions and loans were provided for families with large number of children and prizes given (by Mussolini himself in Rome) to mothers of these families ; 1928, employed men were given tax concessions if they had a family of 7 children or more ; this also ensured that single men (Bachelors tax) took on more of a financial burden in comparison to married men with families. Fathers of thee families were given better employment opportunities

Question 23

How did they increase births?

Answer 23

All forms of birth control were banned and women’s employment in industry and service were opposed (NOT COMPATIBLE WITH MATERNAL DUTIES)

Question 24

Battle for Grain (autarky)

Answer 24

Announced in 1925 as a response to substantial imports of grain and their international price - wheat tariffs were implemented and a huge propaganda campaign was launched to free Italy from the slavery of foreign bread
Annual wheat growing competitions held and farmers subsidised by government grand to increase wheat and cereal production ; fascist made a big effort educating growers on new farming techniques and providing fertilisers/farm machinery therefore more wheat could be grown in previously unsuitable areas and in north and central Italy grain production rose by 50% previous to 1914 ; this self sufficient still had MANY DOWNSIDES

Question 25

Ruralisation

Answer 25

Policy of ruralism announced at same time as battle for births in 1927 ; believed there was a link between industrial urbanisation and decline in birth rate ; in order to boost its population and conserve traditional values, Italy had to protect its peasant population. Mussolini commonly exalted the traditional values of the rural population tomthe decadent and corruption pleasure-seeking lifestyle found in the modern city - where he was suspicious of a lot of socialist activities.

Question 26

When was the empty the cities campaign?

Answer 26

1928 - prevented internal migration from rural areas to the cities and to encourage them to stay in peasant areas, a massive land reclamation and improvement scheme was launched known as bonifica integrale

Question 27

What was bonifica integrale?

Answer 27

Marsh draining projects, irrigation, road building, house building and aqueduct construction were all carried out to provide more arable land for Italy’s peasantry. Government claimed this would be carried out on around 475 million hectares and provide land for Italy’s peasant farmers ; these peasants would be carefully selected for their working and childbearing qualities and thus Italian countryside would be repopulated

Question 28

Economic failures

Answer 28

Battle for Lira caused serious deflation and hampered export industries
Corporate state produced vast bureaucracy that never really achieved its aims
All major decisions sere made by Mussolini - no system of sharing responsibility for the economy
By 1936 Italy owner a larger percentage of industry than any other country exceot USSR - Italy’s budget deficit grew massively and its foreign reserves were depleted

Question 29

Downsides of dealing with depression?

Answer 29

Increased welfare spending during depression with percentage of all state and local tax receipts spent on welfare increasing from 6.9% to 20.6% (1930-1940). Taxes were raised to try to deal with this problem and a forced loan of 5% on the value of housing had to be paid

Question 30

Downside of cartelisation

Answer 30

Maintained jobs but restricted innovation and nationalisation of the economy and kept prices high

Question 31

Downside of autarky

Answer 31

Italy lacked raw materials and had to import coal and oil ; products were being prkduced that would’ve been cheaper to buy from overseas thus adding to national deficit ; italy’s economy was becoming very distorted in its focus on autarky snd war materials and the expense of consumer goods

Question 32

Why was unpopularity of PNF growing from 1936-1939?

Answer 32

Wage cuts, lack of worker representation and 4 direct taxes on property, capital and shareholdings that were introduced between 1935-1939, saw wages fall below the cost of living

Question 33

Battlemfor grain downsides

Answer 33

Itsly was successful in producing more wheat with production from 5.39 to 7.27 (between 1925-1935) BUT government incentives meant many farmers in the south removed their olive trees, citrus fruits and vineyards to make more land availabale for wheat growing. These had been major export industries for Italy that Spain now took over. Cattle and sheep farming too was massively reduced, affecting Italian diet and increasing price of grain and bread (had to pay 400 lire extra in food costs)

Question 34

Ruralisation failures

Answer 34

Only successful in areas such as the Pontine Marshes - turned into a successful farming area. But in South where most intense irrigation and complex work was required it was barely attempted. Only around 5% of the claimed 475 million hectares was actually improved and only 10000 landless peasants were ever given land through the scheme. OVER HALF A MILLION PEOPLE LEFT RURAL AREAS AND FOR FIRST TIME MORE THAN 50% OF POPULATION NOT INVOLVED IN AGRICULTURAL INDUSTRY

Question 35

Downsides of Battle for Births

Answer 35

By 1930s - fascist Italy had highest proportion of married females in employment than any other european country - governemtn had tried to discourage women from working in 1927 by lowering wages but this only encouraged employers to hire them. Cuts in mens wages meant that women had to provide for families (during Great Depression). Policy had little success with birth rate declining and marriage rate falling.