To what extent did Benito Mussolini establish economic self-sufficiency in Italy from 1922-9?
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Higher Level History
Word Count: 1 934
Part A: Plan of the Investigation (111)
This investigation establishes the extent to which Benito Mussolini achieved economic self-sufficiency in Italy. It will examine the actions taken by Mussolini to develop and modernize the Italian economy and the policies passed by his government between 1922-9. This investigation will be conducted through the use of primary and secondary sources, and two sources to be evaluated include Adrian Lyttelton’s The Seizure of Power: Fascism in Italy 1919-1929 and A. James Gregor’s Italian Fascism and the Developmental Dictatorship.
Mussolini expanded Fascist control over the Italian economy. Furthermore, the autarchic development of key industries was possible under a Fascist economic policy. Mussolini achieved economic self-sufficiency by establishing a corporate state in Italy.
Part B: Summary of Evidence (517)
Mussolini expressed that the doctrine of Fascism was “everything within the state, nothing against the state, nothing outside the state”.[1] Following the March on Rome, his first measure in government was the appointment of Alberto De Stefani as Minister of Finance.[2] De Stafani’s “laissez-faire” policy, which was in effect until his resignation in 1925, resulted in: a balanced state budget by 1925, a rate of savings and capital accumulation that was unsurpassed until Italy’s economic prosperity of the 1950s, and major industrial growth.[3] Iron and steel production, for example, doubled between 1922 and 1926[4]—bringing literal truth to Otto von Bismarck’s plea to Germany almost half a century earlier, that “the greatest problems of the time will be decided …by iron and blood”.[5] A liberal economy was not the goal of key Fascists like Alfredo Rocco[6] and Edmondo Rossoni[7], and their views were reflected in the Perrone brother’s memorandum of April 1924.[8] It stated that “Mussolini cannot submit to the present situation; he must become the master of the keys of the national economy”.[9]
The Pact of Palazzo Vidoni, signed in October 1925 between the Confederation of Industrialists and the Fascist unions, monopolized workers’ unions under a Fascist syndicate.[10] It also resulted in the removal of the commissioni interne.[11] Furthermore, the centralization of banking began in 1926 –by the fall, the government Instituto di Emissione became responsible for the issuance of national currency.[12] In April 1926, Mussolini declared that “We are …a State which controls all forces acting in nature. We control political forces, we control material forces, we control economic forces, and therefore we are a full-blown Corporate State”.[13] Under the April 1926 Law, organizations were divided into thirteen sections, which included farmers, industrialists, banks, shipping and aeroplanes, inland transport, and other professionals.[14] Mussolini announced re-evaluation of the lira in a speech at Pesaro in August 1926, where he pegged the exchange rate at 90 lira to the pound sterling.[15] He pursued the “quota 90” despite strong opposition from Italy’s industrial and financial elites.[16]
By the end of 1926, the chemical, metallurgical, mechanical, shipbuilding, and hydroelectric industries were largely expanded and modernized; the communications network expanded and, to a vast extent, electrified; and industrial and productive capability in Fascist Italy had more than doubled.[17] Mussolini called for the creation of special ‘parastate agencies’[18] under Fascist leadership, such as the Azienda generale italiana petrol in 1926 for the exploitation of economically scarce oil; or the S. A. fertilizzanti naturali Italia in 1927 for the promotion of growth and technical modernization of key chemical industries.[19] In order to make Italy independent of foreign grain imports, in June 1925 Mussolini introduced a program to increase the cereal and grain yield of the peninsula[20] and establish protective tariffs on grain.[21] Unlike the scarce resources of heavy industry, Italy was in the position to produce grain abundantly.[22] This included the dispatch of the Cattedre ambulanti d’agricoltura, travelling agro-biological teams that were employed throughout the peninsula to introduce the latest technological and scientific methods of working the field.[23] The result was that by 1935, Italy’s total foreign exchange reduced by fifteen percent.[24]
Part C: Evaluation of Sources (496)
The first source to be evaluated was A. James Gregor’s Italian Fascism and the Developmental Dictatorship, published in 1979. Gregor is a professor of Political Science at the University of California-Berkeley and he analyzes the evolution of the Italian political system under fascism for an academic audience. His thesis stated that the Fascist economy was “the construction of an insulated economy, an economy capable of sustaining itself against the impostures of the plutocratic and capitalistic powers”.[25]
Gregor provides an extensive degree of statistics as evidence. For example, he shows that one outcome of the Fascist government policies was that “by 1929 Fascist Italy’s output index per man-hour was 143.7, exceeding that of all major European creditors save France”.[26] This reinforces the notion that economic policy was the distinctive feature of the Fascist government.
Gregor argues “conventional wisdom that Mussolini acceded to power without any immediate or general economic program... is false”.[27] By taking this position, Gregor subsequently proves that the establishment of an economically self-sufficient Italy was possible only though the efforts of Mussolini’s Fascist regime. This provides insight into the effectiveness of Fascist economic policy, and gives weight to Mussolini’s contributions.
Charles F. Delzell states that a limitation of Gregor’s work is that he “misses any discussion of other important aspects of Fascism, including violence, militarism, and imperialism”.[28] By not considering other key components of the Fascist regime, the focus of Gregor’s work becomes too narrow.
The second source to be evaluated is Adrian Lyttelton’s The Seizure of Power: Fascism in Italy 1919-1929, published in 2004. Lyttelton is a Professor of History at the Johns Hopkins University Center, Bologna, and his book is published for an academic audience. Lyttelton’s thesis states that “economic self sufficiency and the controlled economy under political direction: these were feelings and aspirations shared by many Fascists and … Mussolini himself”.[29]
Lyttelton is effective in demonstrating the changes in economic policy that occurred once Mussolini began to consolidate his power. He states that between “1925-7 De Stefani's policy was reversed and both industrial and agricultural tariffs were raised”.[30] By explicitly contrasting former economic policy with the current Fascist one, Lyttelton is able to distinctly characterize Fascist economic policy. This gives insight into Fascist economic policy, and this specific example suggests that the Fascist regime was aimed towards developing national resources for the purpose of self-sufficiency.[31]
Furthermore, Stuart Woolf asserts that Lyttelton’s work is effective in conducting “historical research away from the personality and psychology of Mussolini towards analysis of the party”.[32] Lyttelton avoids generalizing items under Mussolini’s name. He is exact in his information about policy-making and the individuals members involved in specific events. Lyttelton therefore provides an accurate account of events in Italian politics between 1924-9.
Stuart Woolf also comments that through Lyttelton’s work, “the reader is left with an image of the dominant dictator… The image is misleading …because it is coloured by the external appearances of Mussolini' later years”.[33] Woolf asserts that Lyttelton presents the rhetoric of Mussolini’s cult of personality too strongly and this prevents the reader from realizing other aspects of the Fascist regime.
Part D: Analysis (687)
Since the State was absolute in Fascist Italy, there were opportunistic shifts in the conduct of the regime which resulted in contradictory phases in economic policy. The appointment of De Stefani initiated the first phase of Fascist economic policy; a period of fiscal responsibility, capital accumulation, and industrial and economic development was necessary to establish the foundation for the development of a self-sufficient economy.[34] Mussolini focused on heavy industry because he understood that the strength of a nation rested on the strength of its military; therefore Mussolini pursued self-sufficiency in wartime production.[35] Economic and industrial development and modernization under De Stefani allowed Mussolini to “domesticate the existing economic elites” in the second phase of Fascist economic policy.[36] This was the development of an insulated economy, which was necessary for the retrograde Italy to sustain itself against plutocratic and capitalist world powers. Key figures in the Government like Rocco and Rossini demonstrated this idea in the early stages of Fascist rule through the Perrone memo. The memo stated that employers, organized under distinct ‘corporations’, would have absolute control of the workers and the State would have absolute control of the employers.[37] Fascists believed that absolute authority over the economy was necessary for prosperity in Italy because they “recognized the deficiencies of the Italian proletariat …where such industrial systems have not yet developed, the proletariat could only remain immature”.[38]
The Pact of Palazzo Vidoni placed organized labour into the submissive control of Mussolini’s government.[39] This was important in accommodating Mussolini’s subsequent efforts to assume control of the economy because he could now be more aggressive with left-leaning party extremists since the Pact signified an official repudiation of Liberalism.[40] The commissioni interne represented the last remaining aspects of the free electoral system in Italian society, since its removal was the loss of any right for investigation or representation for the worker.[41] The centralization of banking allowed for the increase of legislative control over financial institutions, and the rising problem of inflation could now be combating by the control of monetary circulation.[42] These various movements towards a more rigidly controlled economy were characterized by Mussolini when he declared the “Corporate State” of Italy into existence. This ‘State’ employed class-collaboration, uniting workers and employers under distinct corporations controlled by the government.[43] It superseded the problem of class-struggle and economic individualism, which was necessary for mobilizing the Fascist economy towards self-sufficiency under the all-encompassing authority of the State.[44] Mussolini’s first official demonstration of authority over the Fascist economy was through the “Battle of the lira”, where he insisted on the “quota 90” for the defence of savings and investment capital, to reduce foreign imports to minimal levels, and to maintain a strong national currency.[45] Though the “quota 90” was a questionable economic value, Fascist government had significant political capital invested in the “strength” of the symbol of the nation’s wealth.[46] Mussolini’s disregard of opposition from financial and industrial experts demonstrated that the Fascist economy would not be affected by external factors of any form.[47] It functioned under the will of the State, which was essentially the will of the Duce.[48]
The “Corporate State” fostered the autarchic growth of key industries in the peninsula, allowing them to establish international independence and self-sufficiency.[49] Many parastate agencies were established to extend Government control various aspects of a corporation, such as wages and pricing, trade, and conditions of labour.[50] Since parastate agencies were separate from the administrative structure of the state and largely under the responsibility of immediate Fascist leadership, Mussolini tactfully employed them in expanding the control of government in key industries.[51] The intention of Fascist government under the “Battle for grain” was to reduce Italy’s dependency on foreign bread, which was considered a significant drain on the country’s ability for foreign exchange.[52] Though little could be done to expand resources that were lacking in Italy, such as fossil fuels and metal, Fascist leaders understood that the agricultural sector could be advanced through the use of technical and scientific innovations. The “Battle for grain” signified the first effort towards the goal of constructing a self-sufficient nation since Italy became independent in its production of grain.[53]
Part E: Conclusion (123)
This investigation established the extent to which Mussolini achieved autarky in Italy. The Fascist government was able to effectively create an economically self-sufficient Italy by establishing a corporate state. This was achieved by Mussolini’s expansion of Fascist control over the economy. Furthermore, he developed economically isolated corporations out of key industries. Mussolini employed an aggressive but effective economic policy that secured the establishment of an autarchic Italy. He considered the economy just as he considered all other aspects of his nation—to be under a “permanent state of war”.[54] As a result, Mussolini understood the Machiavellian concept that “all armed prophets won and the unarmed perished”[55]; his subsequent application of this doctrine to the Italian economy ensured the success of his policy for autarky.
Bibliography
De Grand, Alexander. Italian Fascism: Its Origins and Developments. Lincoln: University of
Nebraska, 1982.
De Grand, Alexander. Italian Fascism: Its Origins and Developments. Lincoln: University of
Nebraska, 1982.
Delzell, Charles F. The American Political Science Review. Vol. 74, “Book Reviews:
Comparative Politics”. Washington: American Political Science Association, 1980.
Ebenstein, William. Fascism at Work. New York: Ams Press, 1934.
Gregor, James A. Italian Fascism and Developmental Dictatorship. New Jersey: University of
Princeton Press, 1979.
Lyttelton, Adrian. The Seizure of Power: Fascism in Italy, 1919-1929. London: Routledge, 2004.
Machiavelli, Niccolò. The Prince. London: Penguin Books, 2004.
Schmidt, Carl T. The Corporate State in Action. New York: Oxford University Press, 1939.
Taylor, A.J.P. Bismarck: The Man and the Statesman. New York: Vintage Books, 1967.
Woolf, Stuart. The Historical Journal. Vol. 18, “Reviews”. Cambridge: Cambridge University
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[1] Benito Mussolini, “The Doctrine of Fascism” In Enciclopedia Italiana, eds. Giovanni Gentile. (Florence: Vallecchi Editore, 1935). 848.
[2] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 336.
[3] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 337.
[4]A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 143.
[5] A.J.P. Taylor, Bismarck: The Man and the Statesman. (New York: Vintage Books, 1967) 56.
[6] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 202. Rocco was a leading Fascist theorist and Minister of Justice from 1925-32. He stated that “the Fascist economy is…an organized economy. It is organized by the producers themselves, under the supreme direction and control of the State”.
[7] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 325. Rossoni became Secretary General of the Confederation of Fascist Corporations in 1922. He stated that the Italian economy required a “totalitarian solution: all corporations should be grouped together in one great Confederation … the head of the Confederation could only be B. Mussolini”.
[8] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 335. Pio and Mario Perrone were major armaments manufacturers in Italy. They were prominent figures in industry that endorsed Fascist economic policy.
[9] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 335.
[10] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 319.
[11]Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 319. The commissioni interne were workers’ councils. They were elected by all workers and concerned with disciplinary and arbitrational matters. Before their abolishment, the commissioni interne represented the means by which workers exerted their power in the workplace.
[12] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 144.
[13] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 347.
[14] William Ebenstein, Fascism at Work. (New York: Ams Press, 1934). 176.
[15] Alexander De Grand, Italian Fascism: Its Origins and Developments. (Lincoln: University of Nebraska Press, 1982). 61.
[16] Alexander De Grand, Italian Fascism: Its Origins and Developments. (Lincoln: University of Nebraska Press, 1982). 61.
[17] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 149.
[18] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 154. ‘Parastate agencies’ undertook research, discovery, extraction and exploitation of economically significant natural resources in Italy.
[19] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 154.
[20] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 145.
[21] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 340.
[22] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 146.
[23] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 145.
[24] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 146.
[25] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 147.
[26] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 143.
[27] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 127.
[28] Charles F. Delzell, The American Political Science Review, vol. 74, Book Reviews: Comparative Politics. (Washington: American Political Science Association, 1980). 1115. Delzell was a Professor of History at Vanderbilt University. His other works include: Mussolini’s Enemies: the Italian Anti-Fascist Resistance; Mediterranean Fascism, 1919-1945; and The unification of Italy, 1859-1861.
[29] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 361.
[30] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 341.
[31] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 341.
[32] Stuart Woolf, The Historical Journal, vol. 18, Reviews. (Cambridge: Cambridge University Press, 1975). 222. Woolf is a Professor of Contemporary History and Economics at Ca Foscari University of Venice. His other works include: Fascism in Europe; A history of Italy, 1700-1860: the social constraints of political change; and Italian Public Enterprise.
[33] Stuart Woolf, The Historical Journal, vol. 18, Reviews. (Cambridge: Cambridge University Press, 1975). 223.
[34] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 336.
[35] Carl T. Schmidt, The Corporate State in Action. (New York: Oxford University Press, 1939). 40.
[36] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 147.
[37] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 335.
[38] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 129.
[39] Carl T. Schmidt, The Corporate State in Action. (New York: Oxford University Press, 1939). 63.
[40] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 320.
[41] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 319.
[42] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 144.
[43] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 221.
[44] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 329.
[45] Alexander De Grand, Italian Fascism: Its Origins and Developments. (Lincoln: University of Nebraska Press, 1982). 61.
[46] Alexander De Grand, Italian Fascism: Its Origins and Developments. (Lincoln: University of Nebraska Press, 1982). 62.
[47] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 334.
[48] Carl T. Schmidt, The Corporate State in Action. (New York: Oxford University Press, 1939). 57.
[49] Carl T. Schmidt, The Corporate State in Action. (New York: Oxford University Press, 1939). 62.
[50] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 154.
[51] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 155.
[52] A. James Gregor, Italian Fascism and Developmental Dictatorship. (New Jersey: Princeton University Press, 1979). 155.
[53] Alexander De Grand, Italian Fascism: Its Origins and Developments. (Lincoln: University of Nebraska Press, 1982). 64.
[54] Adrian Lyttelton, The Seizure of Power: Fascism in Italy, 1919-1929. (London: Routledge, 2004). 333.
[55] Niccolò Machiavelli, The Prince. (London: Penguin Books, 2004). 23.
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