The corporate state

Question 1

Describe the theory behind the corporate state

Answer 1

Early on the regime, workers benefitted from an economic revival. Unemployment fell and De Stefani’s policies curbed inflation

Things were not all good for workers even early on in the regime, however, with 1925-6 seeing the banning of independent TUs and the abolition of the right to strike

Around this time, M claimed that he was about to transform the Italian economy. By 1926, he was committed to creating his corporate state, a supposedly revolutionary way of running an economy…

Corporations would be set up for each sector of industry and within each corporation there would be employers and Fascist TUs to represent the workers

Already we can see inequality here, as the employers were allowed to represent themselves, while workers were represented by an unelected state official that most workers didn’t even know, let alone choose

Each corporation would organise production, pay and working conditions in its own industry

If employers and fascist TUs could not agree, they would go to a labour court, administered by the newly created Ministry of Corporations, where the dispute would be sorted out as quickly and amicably (in a friendly and peaceable manner) as possible

The regime claimed that the system would see workers and employers cooperating to maximise production for the good of the nation. Unlike in France and Britain, there would be no bitter industrial disputes that led to strikes and class conflict. Unlike in communist Russia, there would still be a place for entrepreneurship, as it was thought that this would help industries prosper. In short, the corporate state was intended to be a kind of ‘third way’ between capitalism and socialism

Question 2

What did leading fascist theorist and Justice Minister Alfredo Rocco say in support of the corporate system?

Answer 2

‘The corporate state is clearly the best way to regulate production, not in the interest of any one producer but to achieve the highest output, which is not only in the interests of all producers but also the nation as a whole’

Question 3

Give the reasons why a new way of organising the economy was needed at this time

Answer 3

Tension between socialism and capitalism across post-WWI Europe, leading to the idea of a class struggle between the capitalists and the workers

Fascists thought that the answer was promoting national interests over sectional interests. They wanted a society where all people could be involved in economic activity and could work together in the national interest, as it was thought that this would bring about the best result for all

M claimed that the corporate state provided the advantages of capitalism and socialism while avoiding both of their downsides

Question 4

Why was the concept not entirely new?

Answer 4

The concept was not totally new. It brought together a variety of existing ideas and practices about the organisation of production

Question 5

Describe what the corporations were

Answer 5

Organisations consisting of all workers and employers in a particular sector of the economy

Self-governing and supposed to discuss all matters concerned with things like production, working conditions and pay within their sector

They would then be represented at the National Council of Corporations, and later the Chamber of Fasces and Corporations, which made policy decisions

Question 6

Who represented who in the corporate system?

Answer 6

The national interest was represented by the Ministry of Corporations. Employers represented themselves. Workers were represented by fascist syndicate representatives who they did not elect

Question 7

List the ingredients of corporativism

Answer 7

Built on older ideas of economic cooperation. For instance, both medieval guilds and the Catholic Church had encouraged the harmonious cooperation of workers and empolyers to assist production

Early fascism had been built on the revolutionary idea of syndicalism, where syndicates organise production to produce a fairer society

Nationalistic ideas about workers and employers working together for the good of Italy

Employers saw corporations as a means to control the workers and therefore safeguard their own interests

M was looking for a grand idea to promote his regime, win international respect and provide office jobs for his supporters

Question 8

How many key steps can setting up the corporate state be split into?

Answer 8

9

Question 9

What were the first five of these steps about?

Answer 9

Weakening the TUs

Question 10

List the five things the regime did to weaken the TUs

Answer 10

Palazzo Vidoni Pact (1925) - A pact between the Confindustria and Rossoni’s Fascist TUs depriving other unions of bargaining rights. This was a great victory for industrialists

Rocco Law (1926) - Confirmed the position of fascist syndicates. Made strikes and lockouts illegal

Ministry of Corporations (1926) - Set up to conciliate disputes. Intended as a central organising and controlling body, but was obstructed by the Economics Ministry

Labour organisations CGL and CIL dissolve themselves after becoming powerless (1927)

Rossoni’s national syndicalist organisation split up (1928) - Independent TUs had already collapsed, now even the fascist ones were being weakened

Question 11

What were the last 4 steps of the process about?

Answer 11

The creation of the corporate structure

Question 12

Describe these last 4 steps

Answer 12

Charter of Labour (1927) - Claimed as the magna carta of the fascist revolution and the ‘greatest document in the whole of history’. Work was now seen as a social duty. Private enterprise was declared to be the most efficient means of production. To counter the image of exploited workers, workers’ rights were stated to be employment, social insurance and welfare. However, it was only a general indication of intent and not legally binding

National Council of Corporations (1930) - Seven large corporations covering the main parts of the economy were created. Workers couldn’t choose their representatives. Consultive role, discussing matters decided elsewhere; a façade. Did not meet after 1937

Charter of Labour (1927) - Claimed as the magna carta of the fascist revolution and the ‘greatest document in the whole of history’. Work was now seen as a social duty. Private enterprise was declared to be the most efficient means of production. To counter the image of exploited workers, workers’ rights were stated to be employment, social insurance and welfare. However, it was only a general indication of intent and not legally binding

National Council of Corporations (1930) - Seven large corporations covering the main parts of the economy were created. Workers couldn’t choose their representatives. Consultive role, discussing matters decided elsewhere; a façade. Did not meet after 1937

22 corporations of major economic sectors (1934) - Issued regulations in their areas, such as fixing prices. In practise they did little. Employers were suspicious and this limited their powers. Decisions still had to be approved and issued by M

The Chamber of Fasces and Corporations replaced parliament (1939) - Essentially one powerless body replacing another

Question 13

Describe the process of setting up the corporate state

Answer 13

The process of setting up the corporate state was a gradual one

Initially, the Fascist TUs were favoured, with Rossoni having high hopes of establishing powerful Fascist syndicates to improve workers conditions, emboldened by the fact that there had been a series of successful strikes between 1924-5

However, M would not put up with this threat to the industrialists for long, as he felt as though he needed their support to remain in power

The existing socialist and Catholic TUs, deprived of negotiating rights and harassed by the authorities, faded out of existence

Workers were promised improvements in the much-heralded Charter of Labour, but this was more impressive on paper than in reality

Fascist syndicates proved unable to protect workers from powerful employers and the state

Over the next decade the government gradually created a system that it claimed would protect the interests of both workers and employers, with economic development occuring through harmonious cooperation in the interests of the state

A new chamber of representatives of all aspects of the economy replaced parliament, so the corporative system came to cover the political aswell as economic organisation of Italy

Question 14

What did the corporate system actually amount to in practise?

Answer 14

In practise, the system amounted to vast bureaucracy with little real power

Question 15

Why can it be argued that M did not take corporativism seriously?

Answer 15

It has been argued that M never took the system seriously apart from for propaganda purposes

Question 16

Why was the corporate system limited by the fact that M did not want to risk alienating big business?

Answer 16

M was concerned with not alienating the economic elite, so the corporate state became little more than an instrument for worker exploitation

Question 17

List some of the comments that M made about the corporate state in his 1928 biography and give the counter point to these views

Answer 17

Said that it was the fascist experiment that interested the outside world the most

Said it was necessary to emerge from the immoral habit of class conflict and put aside hate and anger. Said that these ideas had reached fever pitch following the seditious post-war propaganda of Lenin

He said that 5 years of harmonious work in Italy had transformed the economic, political and moral life of Italians

This is incredibly debatable, as the corporate state had only begun to have been set up 2-3 years before this comment was made

He said he did not have to coerce workers into this discipline, but they rather did it because all had a vision for the welfare and good name of Italy

Again, it seems as though M did do a lot to suppress workers, suggesting that they only cooperated because they had no real alternative

He said that fascist corporations replaced TUs and this reduced conflict

While it may have reduced industrial disputes, this was simply because workers had lost their right to strike

He said that they had abolished the long lasting troubles and disorder that had long poisoned the nation

However, it should be said that he did this by suppressing workers’ rights

Said they had finally brought about collaboration between the classes

Class conflict still existed; workers just no longer had a way to voice their opinions

Question 18

What did point one of the Labour Charter say?

Answer 18

The state is bigger than the individual. It is a political, economic and moral unit that has finally become realised under the regime

Question 19

What did point two of the Labour Charter say?

Answer 19

Labour is a social duty, therefore it should be under the protection of the state. Production should work towards the ends of the welfare of Italian individuals and the development of national power

Question 20

What does point three of the Labour Charter say?

Answer 20

Only fascist syndicates can exist

Question 21

What does point four of the Labour Charter say?

Answer 21

Class conflict should be subordinated in favour of the higher interests of production

Question 22

What does point six of the Labour Charter say?

Answer 22

Corporations are there to ensure the legal equality of employers and employees, maintain discipline and labour and promote improvement

Question 23

What does point seven of the Labour Charter say?

Answer 23

Private ownership is the most efficient means of production and will therefore be used as an instrument in the national interest

Question 24

What does point nine of the Labour Charter say?

Answer 24

State economic intervention only takes place where private initiative is lacking or is not in line with the political interests of the state. Such intervention may take the form of control, encouragement and direct management

Question 25

What does point 27 of the Labour Charter say?

Answer 25

The state proposes to improve social insurance

Question 26

What did M say in his speech made on the inauguration of the 22 corporations in 1934?

Answer 26

‘Today we confirm that capitalism has been superseded. After falling into difficulties, capitalism has thrown itself into the arms of the state. This is the instant where state intervention has become increasingly necessary. There is no economic field where the state should not intervene. The corporations are set up to develop the wealth, political power and welfare of the Italian people. Corparativism has overcome both socialism and liberalism by combining the two’

Question 27

Describe how the corporate state worked in reality

Answer 27

At first it appeared that Fascist TUs might be able to provide a real say for workers in the running of their industries, but rivalries within the PNF and M being scared of alienating big business destroyed these hopes

Rossoni was in charge of the Fascist TU movement. He envisaged a major role for his unions but was opposed by Confindustria (a powerful organisation representing big business interests). This was a big business organisation that disliked all kinds of TUs and was determined to ensure that businessmen kept control of their industries

In between the employers and the TUs was the Ministry of Corporations. This was headed up by the Fascist Giuseppe Bottai. He distrusted Rossoni and saw little role for the Fascist TUs, and wanted to see corporations dominated by a partnership of employers and technical experts from the Ministry of Corporations, as he thought that this would be the best way of maximising industrial production for the good of the nation

This internal conflict made M very powerful, as they all looked towards him to clarify what his vision for the corporate state actually was

In 1927, M came down on the side of Bottai and the Confindustria: Bottai was charged with the task of writing a labour charter setting out the rights of workers. When finished, it posed no threat to employers: private ownership of business was declared to be the best way of running an economy and it did little for workers’ rights, with employers being encouraged but not obliged to provide paid annual holidays. Employers were granted the power to alter working hours and night shifts without properly consulting workers

The radical influence of Rossoni was reduced even further in 1928 when his single confederation of Fascist TUs were split up into six smaller federations, with his followers in these federations removed from their posts

By 1929, the Ministry of Corporations claimed that the corporate state was a success. They said that it had ushered in a new economic era and had apparently removed all class conflict in industrial

This last point is incredibly debateable, it seems much more sensible to say that workers simpy had their right to strike and complain about things like working conditions and pay suppressed

By 1934, there were 22 corporations covering nearly every area of the economy, with the regime claiming that it had the ability to influence every aspect of industry. The reality was quite different, however…

Question 28

List the successes of the corporate state

Answer 28

Some worker issues were furthered, such as sick pay for workers and albeit belated introduction of paid national holidays in 1938

A new chamber of representatives of all aspects of the economy replaced parliament, so the corporative system came to cover the political aswell as economic organisation of Italy

Question 29

List the failures of the corporate state

Answer 29

Undemocratic; workers were unable to choose their own union representatives in their corporation, having fascist nominees foisted upon them. These fascist officials tended to side with employers on the key issues of wages and working conditions. There was also disparity here, as industrialists were allowed to keep their own non-Fascist employers’ organisations. They were also allowed to effectively ignore the existence of the corporations

The regulations the corporations issued to employers were only advisory, meaning that employers retained complete power and independence, with the workers and their right to strike being the only thing that really came under state control

Elaborate cover up for the exploitation of workers

Led to the duplication of government agencies and added to the vast, expensive and inefficient government bureaucracy

All the powers were subordinate to M anyway; the corporations just discussed issues, all the big decisions still fell to M

Ministry of Corporations was obstructed by the Economics Ministry

The centrepiece document about corporativism, the Charter of Labour, was only a statement of intent and not legally binding

The National Council of corporations was not properly representative; a philosopher represented grain growers and a professor represented textiles. It was also just a façade, discussing matters decided upon elsewhere

The 22 corporations set up in 1934 did very little in practise and what they did decide upon still needed to be approved and issued by M

In practise, the system amounted to vast bureaucracy with little real power

The replacement of parliament with the Chamber of Fasces and Corporations meant very little; replaced one powerless body with another

The Charter of Labour was much impressive on paper than in reality

Fascist syndicates proved unable to protect workers from powerful employers and the state

It has been argued that M never took the system seriously apart from for propaganda purposes

M was concerned with not alienating the economic elite, so the corporate state became little more than an instrument for worker exploitation.

The fact that M did not set up a ‘Battle for Corporations’ in the way that he did with his other economic policies is a reflection of his apathy

Question 30

What does Tannenbaum say about the corporate state?

Answer 30

‘It performed the function of a myth to solve the dual problems of class conflict and national economic poverty; it doing this it held the divergent factions of the PNF and the country together’

Question 31

What does De Grand say about the role the corporate state had in solving the GD?

Answer 31

‘The system proved completely irrelevant in terms of dealing with the depression’

Question 32

What does Blinkhorn say about the corporate state?

Answer 32

‘In practise it involved the thinly disguised exploitation and oppression of labour. For M it was a political and social experiment useful for gaining international respect for the regime. It was an elaborate façade behind which exploitation could flourish’

Question 33

What does Cassels say about the corporate state?

Answer 33

The theory was a not unintelligent response to the social issues at the time. But in practise it was an elaborate fraud. It was a true child of M; the great poser brought forth an organism that was a travesty of what it claimed to be’