The Fascist Economy Flashcards
How did Mussolini gain support from small shop owners ?
Liscencing system which protected small shops from larger supermarkets.
How did Italian Business benefit from the PNF ?
Trade union policy favoured Fascist syndicalists.
Palazzo Vidoni Pact (1925)
Rocco Law (1926)
Who benefitted the most from PNF economic policy ?
Rich industrial + Agricultural interest groups
Palazzo Vidoni Pact
1925
Abolished all existing trade unions and replaced them with fascist syndacalists.
Rocco Law
1926
Banned all strikes, walkouts and slow-downs
Compulsory Arbitration introduced
Key Actions of De Stefani
Minister of Tresuary 1922-25
Laissez-Faire Ideals
Privatised Telephone lines
Reduced state expenditure
Deregulation
Reduced Protectionism
Success of De Stefani
Italy’s manufacturing production increased
Balanced Budget 1924-25
Failures of De Stefani
Agricultural Groups unhappy about tariff cuts
Inflation / Pressure on the lira
Key actions of Volpi
Replaced De Stefani in 1925
State-run economy
Greater personal influence from Mussolini
Battle for the Lira
How did Mussolini establish the corporative state ?
Rocco Law (1926)
Ministry of Corporations (Jul 1926)
Charter of Labour (1927)
Head of Fascist Syndicates (Rossoni) dismissed (1928)
National Council of Corporations (1930)
Ministry of Corporations
July 1926
Corporations = Mixed Union of workers + employers
Charter of Labour
1927
Promised to organise Italy’s economy and guarantee workers’ rights in employment, social insurance and welfare.
Programme of intent - never followed through
National Council of Corporations
1930
7 corporations established to represent the 7 key sectors of the Italian economy.
Additional 22 Mixed Corps. in 1934.
They fixed prices of goods / services, settled industrial disputes, regulated apprenticships + advised Govt.
Failures of the Council of Corporations
Highly complex bureaucratic system - did not achieve
Employers / employees met under the guidance of PNF
Worker groups were not represenative - PNF officials approved by Mussolini (Minister of Corps).
Policy of 22 mixed corps had to be approvaed by NCC
Mussolini essentially dictated all economic policy
Successes of the Corporate State
Jobs for loyal fascists
Useful for propaganda / support for PNF
Superficially resolved class divides
Mid-way between Capitalism / Communism
Govt. response to Great Depression
Wages cut c.12% in Nov 1930.
Encouraged Price Fixing + Cartelisation
Mergers sometimes made complusory
Public work schemes - 1929-33 = 5,00km railway electrified + Govt. road building funding doubled.
IMI
IRI
Istituto Mobiliare Italiano (IMI)
1931
Loaned millions of Lira to Italian Businesses
Protected Businesses from closing
Provided credit to banks to ensure that they did not collapse
Istituto di Ricostruzione Industriale Scheme (IRI)
1933
Bought shares in banking, industry and commerce
Prevented bankruptcy + job loss
Provided financial / management advice
Weakness of respomse to GD
By 1936, the Italian state owned a larger % of industry than any other European nation.
Growing budget deficit / foreign reserves were depleted
Welfare payments increased 6.9% (1930) to 20.6% (1940) of the state budget.
Cartelisation / IRI restricted innovation - prices remained high.
Success of response to GD
By 1939 - Govt. owned majority of companies in the steelworks, shipbuilding, electricty, machinery and telephone industries.
Protected jobs in Italy.
Maintained confidence in the economy
More successful management of the GD than other countries.
Reasons for Autarky
- General decline in international trade due to the overvalued lira.
- Sanctions placed on Italy in 1936 due to the militaristic actions in Africa.
- Preparation for War.
Policies to achieve Autarky
Trade was conducted via bilateral agreeements - making imports = exports.
Tight control of money supply / reserves
Import licensing
Stockpiling of agricultrual goods.
Govt spending on Autarky spending = 30mil (1934) to 60 million (1938).
Effectiveness of Autarky
Italy lacked the natural resources
International trade would have been cheaper
Economy became distorted - eg. lack of consumer goods, focus on military production
Wages fell below cost of living
Battle for Births
May 1927
Aim to increase population size to 60 million (1950)
Tax reductions / rewards for large families (7+ 1928)
Bachelors Tax - Unmarried men
Better career opportunities for men from large families
All forms of birth control banned.
Effectiveness of Battle of Births
Highest proportion of married women in employment in Europe.
Wages cuts for women attempted to reduce their employment but this only increased the demand for female labour.
Italy’s birth rate continued to fall and marriage rate fell.
Battle for Grain
1925
Self-sufficiency in grain
Wheat tariffs (1925/28/29)
Propaganda Campaign
Annual wheat growing competitions
Farmer subsidies
New techniques + technology
Northern + Central Italy grain production increased 50%
Battle for Grain (Success / Failures)
Wheat production rose from 5.39mil (1925) to 7.27mil (1935) + imports reduced.
Other industries struggled - olive trees, citrus + grapes
Cattle and Sheep farming reduced.
Food costs rose 400 lira for families
Agricultural Policy
Ruralism - 1927
Empty the cities - prevented internal migration - 1928
Bonfica Integrale - marsh draining, irrigation, road buildings, house building and aqueducts.
Effectiveness of Agricultural Policy
Pontine Marshes - useful farming land
Reduced Malaria by 50%
Public Work Schemes provided employment during GD
Only 5% of the estimated 475 acres predicted was reclaimed.
Only 1,000 peasants given land
1,000,000 people left rural areas
>50% were not employed in agriculture.
Battle for Lira
1927
Lira artificially fixed at 19 to $1.
Forced to introduce deflationary measures
Price reductions
Cut workers’ wages
“the fate of the regime is tied to the fate of the lira”
Effectiveness of the Battle for the Lira
Italian exports were overvalued and struggled eg. textiles
Food prices rose
1925-28 = workers’ wages fell by 10%
Unemployment reached 1 million 1931.
Economy During WW2
Italy was the only nation who’s GDP did not increase
Entry to war = 25% reduction in industrial production
Lacked Raw materials to support army
Strikes in 1943
Reduced Agricultural Production
Food Rationing = c. 1,000 calories/ day
Increased Taxation for war efforts
Heavily reliant on Germany = a net drain on the economy
WW1 Equipment
