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/ 8
Mussolini, the Economy
and Society
IOC Ds
1925 Vion Place Pact banned independent trade unione
1926 Arsitonfrahtio sre Te
1926 Meisry of Corporations setup = start of corporat state
eperirere
1926 ON youth orgeazen cated
Launch of Bate for Bins designed to herease alan pop
1927 Revaluation of Lie damaged fafan ecoremys a" PoPON.
1929 Leran Agreement wth cahole Chock
1929 Sart of werlévace sconce cepresson
1935 Mussolini increased drive for economic autarky.
1938. Arijewish rac laws nodes
2, Mussolini’s Aims
KEY ISSUE What were the Duce’s aims regarding y
Se e's aims regarding the economy
Mussolini, lke Hider, was neither an economist nor a deg
‘nal thinker about socal affairs He did Net come ta Carte ah
coherent programme. In face. he bad given ite real thei ce chan
he would do once in alice. He had Hie knowledge ot otra
the workings of the economy, while his polices tose socee weet
‘oped rather slowly and were rarely propery planed ese
Mussolini was determined to hang bn © pone: aed enn in
bea yun fey atop plies a woul ee i
ion secure. His primary aim was to make the Duce all-powerful, but
as the 1920s progressed he also revealed 2 desire to cai
societyand even the Italian character He wanted lan ea
strong, playing a major role in European affairs, and carving hevelf
Economy 10
‘an Empire to rival that of Ancient Rome. Such an Italy would need an
economy capable of building and maintaining a modem war
machine, and would require a population of tough, disciplined and
‘warlike citizens. Mussolini’s preoccupations meant that the country’s
‘old problems’ ~ industrial underdevelopment, rural poverty, the
north-south divide and illiteracy ~ were largely ignored. They were
only tackled with any determination if they were obstacles to the
achievement of the Duce's principal aims.
'‘& Economy
KEY ISSUES What policies did Mussolini adopt towards the
‘economy? What effect did these policies have on living,
standards?
a) Industry
Mussolini was hicky enough to come co power just as Italian industry
‘was beginning a period of ‘boom’. The economic climate thronghout
Europe was improving and many Italian companies were able to sell
their products abroad with ease. Indeed, exports, particularly of cars,
textiles and agricultural produce, doubled in the period 1922-6.
‘The new political regime claimed the credit for imzeasing
company profits and attempted to win over the support of incustriak
ists by appointing an economics professor, de Stefani, as treasury min-
ister. De Stefani’s orthodox, liberal economic. policy limited
government spending which lowered inflation. He also reduced state
‘ervention in industry ~ the telephone network was taken out of
government control and handed back to private companies, while
taxes levied on industries which had made huge profits from govern-
‘ment contracts during the First World War were either reduced or
abandoned, Industrialists were also pleased by the outlawing of social
ist trade unions by the Vidoni Pact (see page 81) of 1925,
However, after 1925 Mussolini began to take less notice of business
interests. The dismissal of de Stefani and the revaluation of the ftaan
currency were two early but important examples of this. Revaluation
‘was particularly significant, By 1997 the boom was coming to an end
and the exchange rate of the lire was falling against other currencies.
The exchange rate slipped to around 150 Lire to the pouné, a rate
Mussolini found unacceptable. He considered that a strong, vibrant
country should have a strong, vibrant currency and, consequently, in
1997 he decided to try to set a new rate of exchange of 90 lire to the
pound. This decision increased Mussolini's prestige boths with foreign
financiers and with the Italian public, and thus the Dice's main aim
had been achieved, But, the effects on the Italian economy were far
from beneficial. Ata stroke, foreign buyers found Italian goods nearly 102 Mussolini, the Economy and Society
‘vice as expensive, and it was not surprising that Italian export indus
tries, particularly textiles, went into depression, Even Fiat was export
ing fewer cars in the late 1930s than it had done in the early 1930s,
‘The revaluation of the lire should have helped the Italian consumer
‘because imports of foods and other products from abroad should have
become cheaper. However, the Duce prevented this by placing high
tariffs on many foreign imports. The only winners in econo
were those industries such as steel, armaments and ship building
which needed large supplies of cheap tarifffice imported raw
materials. It was these heavy industries that would be promoted
throughout Fascist rule. They made healthy profits from the protected
domestic market while export industries were neglected
‘The early 1980s saw a worldwide economic depression and Italy did
not escape its effects. A large number of companies collapsed and car
production fell by 50 per cent. By 1983 unemployment had risen to
{wo million, The democratic governments of western Europe and the
USA vere reluctant to intervene to help the private sector out of its
difficulties as their traditional economic philosophy regarded such
actions as being counter-productive. The Italian fascist state had no
such qualms. It inuoduced public works schemes, notably building
motorways and hydro-electric power plants, which put the uneme
ployed back to work. This was important because it significantly
increased the amount of money in circulation which, in turn, stimu
lated demand and created more jobs. The state also did much to
avoid the banking collapse which affected the USA and Germany in
articular. Banks had lent money to industry, but many companies
could no longer meet the repayments on their loans. The banks
therefore found themselves without enough money to pay their
investors. The fascist government simply stepped in and “bailed out
the banks.
A result of this intervention was the creation of the Institute for
Industial Reconstruction (IRI) in January 1983. This efficiently run
‘organisation took over from the banks the responsiblity for providing
loans for Ralian industry. It also attempted to promote the latest
managerial techniques, with some success.
‘The government's measures may have cost the taxpayer a great
deal of money, but they did enable Ttaly to weather the depression a
litde better than her democratic neighbours. Indeed, Mussolini was
delighted to hear his admirers claim that President’ Roosevelt had
copied the Duce’s example when drawing up America's ‘New Deal”
Mussolini's economic policies had never been designed simply to
increase the wealth of the country or the prosperity of the ordinary
Italian, and this became very apparent by the mid-1930s._As the
Dictator became increasingly pre-occupied with foreign affairs, living
standards and the general welfare of the economy suffered. He
believed that war, either in Europe or to further his African Empire,
was almost inevitable and that Italy must be prepared. The
‘armaments
Economy 103,
' y me self
industries must be promoted, and Italy's economy must beco:
tnffcien Italy shoei be an aut abe to supply sel with lhe
‘and material needed to fighta modern war. The economic sanc-
Sle mpesed hy the beage of Nations afer Heys tion of
Ethiopian 1933 e is po’ here rus. be no
¢hiopia in 1985 seemed to prove his point that 1
ioe elites Says
in as steel, chemicals and shipbuilding by placing large goverm-
tment contact Sate contol was expanded {othe point Wher 80 pet
Cent of shipbuilding and 50 per ceat of steel production was directed
by the government. Economies of scale were looked for and the
regime allowed major companies to merge into near monopoly
‘organisations. Fiat, for instance, controlled car manufacturing, while
Pirelli dominated rubber, and Montecatini chemicals. Exports, a8
usual, took low priority -
Despite these efforts the Italian economy was stil far from selfs
ficient when the Duce declared war in 1840, and indeed it had
into major difficulties. The huge sums of money required or rear-
tnament and adventures in Ehopia and Spain could not be raised
simply by increasing taxes, and the government found that its expen
dliture was greater than its income. fee eeenereet deficits rea eee
by the late 1930s for which the remedy was cither swingeing cuts 5
military expenditure or very significant ea in living standards
cally, Mussolini refused to recognise the seriousness ™
Dee sont and the: problem remained wnsohed. when Tal
entered the Second World War.
is enol her fare under i? Ae al
cism was supposed to eliminate the struggles between employer an
Employee which had led to stkes and nets in prefasit fay. Class
cont oso be ating ofthe past. The aos clases shuld work
ther harmoniously for the good of the nation, The worker shoul
nelonger be vexpoted” and shold be able to look forvard
eater prosperity and increased respect within society.
FAC ibe the workers benefited from the economie real of the
early 1920s, Unemployment fell and de Stefani’s policies curbed infla-
tion. Admittedly, the years 1925 and 1826 saw the banning of inde-
pendent trade unions and the abolition of the right to stike, but
Mussolini aimed to be about to transform the Italian economy. The
new ‘corporative system’ would involve setting up trade unions con-
fisting of both employers and employees. Each trade union, or cor
poration, would organise production, pay and working conditions in
its own industry. both sides could not agree then they would go to
a labour court to sort ot the dip, Hower in Mow ie,
h disputes would be rare ~ since both employers and employees
ould be dedicated fascists they would agree on the best policy to
pursue! In fact, he even hoped that parliament would be replaced by
dan assembly of these corporations, representing all the types of indus-
wey in lly. Senne
A Mini of Corporations wat stp in 198
i 2 8 up in 1996 and thin hrce
years i daimed to have removed all class coniict In indy
met, what had happenin really was that employees oe
unable choose their tm eprecenaties a ick eee nten ed
instead a sci nominees Obed upon them. Thee fac aces
ead sie wth he moe uprnates Indu ise se
dlonet'o keep tha omn nonFasstenpiyers ean se
hus mainained ter power and ndependence. nth eo
Pore revolution’ never materialised Contr bene eel
and employee was not solved, only suppressed, and the comporssoce
never achieved ihe peta ie i te ae ad she ese ae
‘aged by the Duce. Hae
Workers had lost er fcedoms and thers :
; : om and ther sondard of ving as
aboutin decline seriously. As the economie revi petered owt the
te Tis industry responded by enghoning wena heres nd
abandoning the eight-hour day. Wages were also cut. It js estimated
that ding the period 1025-88 real wages forthe Isa worker el
byron Ip cen atthe ame tir, tsempioynent Sega oes
dba te pic works programmes and eae soe eno
by OH. Ths was aig eu tat of rian sal
thedfeencen populations The Brush Tunes Beetee eo
alleled in Italy. Even Mussolini recognised this and dropped his
claims that he had improved the workers
{Sao aka improved dhe worker low Instead, by December
forunatey the ltalan people were not accustom
therefore feel the privation less than others. Peenetega nea
And, by 1936, he was arguing that:
We must our minds ofthe idea tha wh
v idea that what we have called the days
prosperity may reurn. We are probanly moving toward 4 seed
when humanty wil exist on a lower seandard FI
The Duce had never really heen co
living of ordinary Italians and vie
meats bad thing for his people
mmnitted to raising the standard of
swed economic hardship as by no
b) Agriculture
Mussolini did not concern himself with thi
underlying problem:
Aelia agricaleare ~ the existence of a sizeable cla Sf soon bane
hungry peasants and the use of be
man be ep ay ge
began in 1925 and attempted to achieve both ai ae
: ed to achieve both aims, Treivonaly Lal
had needed to impor large quantities of grain m cides oe eee
eee eee ee
people. Mussolini saw this as a grave weakness, as in time of war sup-
plies could be cut off and the country would face starvation. 4 eam-
paign to increase grain production dramatically would soe this
problem and would also illustrate to the world just how dynamic the
rhew fascist state was. Consequently, the government offered grants t0
tenable farmers to buy tractors, fertilisers and other machinery necess-
ary for wheat production. Free advice was made available on the
Jatest efficient farming techniques. Farmers were also guaranteed @
high price for the grain they produced
‘The incentives did work and the average harvest rose from 5.5 mil
lion tonnes per year in the early 1920s to over seven million tonnes
ten years later. Grain imports declined sharply, dropping by 75 per
cent in the period 1925-85. The Batue for Grain appeared io be a
resounding success and Mussolini claimed the credit. He ensured that
press photographers were on hand to record him visiting farms and
Relping out with the harvest. Not only was the Duce a genius for con
ceiving the Battle for Grain, he was also prepared to get his hands
Jirty in the ields~a true leader of his people! Appearances, however,
‘were deceptive
‘The Battle for Grain certainly had dramatically increased produc-
tion and helped farmers, but there had been a large price to be pric.
Firstly, much of the land in the central and southern regions which
had been tumed over to wheat was unsuitable for such a crop. The
soil conditions and hotter, drier climate were more suited to the
growing of citrus froits or the production of wine and olive oil. The
Fesult was that these waditional agricultural exports. declined.
Furthermore, Italian consumers ad to pay more for their bread as
the result of government taxes and a tariff on imported grain.
YFaseism’s second major initiative, and an equally highly publicised,
cone, was land reclamation and improvement. Liberal governments
hhad made a start here, providing money to drain or inigate farmland.
Massolini simply expanded these schemes. The Pontine Marshes,
nly 50 kilometres from Rome and handy for foreign pressmen, were
the showpiece. These malarial swamps were drained and a network of
small farms was set up, owned by ex-servicemen, Overall, and recla-
‘nation was a success, as mmuch because it improved public health and
provided thousands of jobs during the Depression. The amount of
Tand reclaimed was, however, very limited.
‘Of course, rural poverty was just as widespread as ever, particularly
in the south. This poverty was worsened by the USA's decision to stop
‘irtually ll furdher immigration. In the first two decades of the cen-
tury 200,000 Italians, mainly southerners, had emigrated to the USA
feach year. With this escape route from rural poverty closed, more
Italians left the countryside for the towns and cities to find work and
a better standard of living. Up to halfa million people left the land in
the 1920s and 1930s, despite the fact that Mussolini tied to prevent
all further migration, He claimed to have a love for the countryside and wanted to ‘ruralise' Italy, creating a vigorous
peas devoted to fas, lower his gover id ote
Png hi about in acts pols rot sich mae Dene
sxdowner than to poor and landless peasan
needed enough land to suppor thc faites a law to boeakng ig
éstato and datibate tem to the pean ha! been nodes
ino aliament in 1922, but Mussolini quietly dropped the policy f
ear Of offending the great landowners, his poli supporters
1B Society
KEY ISSUE Why did Mussolini w i
KEY ISSUE Why ssolini want to improve relations with the
a) The Catholic Church
Mussolini wanted to sce Fascism penetra
see, at hea neither aatemte i hs les nee peop
aon that atc must compromise in order to cae upon
Parsclaly evident in his dealings with the Church, not
‘bls neve ort the nvelgious ates of i youth, but he
vas, shred enough to raise tht ah accomodation i the
church cond bring him great public support ad increase
the prestige of his regime al
Oe st of hi broad. As early as 1921 he told the
1 Laie in hie House that the Lai
Se thax the Latin train of Imperial Rome ft
rapeseed by Catoism am very uc Sere when | ee
chores Bing found on» ational bt because mean th ie
ont and lors of ren wll no longer look toward Tey nd
cons Rae An es adance ths hypo: kee
acon deftly give up is tomporal dre
shold ford the Vaca all ater Rep and ereorzgsmen or
seek ehurhe, te hosts or any eter pues ch anh
jp ition, Because the development of Cathoesm inthe word an
incrnse inthe four hundred millon men wns Took evans Ronee
from all parts of the earth, is of i
os th, is of interest and a source of pride for us
By th me he became pie mints in 192 Mos wa ox
an alternative to anti-Catholic Liberals and “godless! com, meni
and secalss. Restoring Catholic educadon in save schools and
icreamng overt pent pss canted Ue een
ih ee ait hoe Re appre te pt he
the Church as potenial source of opposiion, Hosen end wey
mean that fascism had the active support of the Vatican ~ this would
only come with the Lateran Agreement of 1929.
‘The treaty and concordatwhich comprised the Lateran Agreement
ended the conflict between Church and state thathad existed since the
foundation of the Italian kingdom in 1860. In the treaty, the Pope
agreed to recognise the Italian state and its possession of Rome and the
‘ld Papal States. in return, the state recognised the Pope's sovercignty
over the Vatican City. The Pope also received financial compensation
OF £30 million for surrendering his claim to Rome. The Concordat
established Catholicism as the state religion of Italy and outlined what
this would mean in practice: the Pope could appoint all bishops, but
the government could veto any politically suspect candidates; the state
‘would pay the salaries of the clergy; clergy could not belong to polit
‘il parties religions education, of a Catholic nature, would be com-
ppulsory in state schools; there would be no divorce without the consent
Pe che Church and civil marriage would no longer be required by law.
‘The Lateran Agreement signalled that Mussolini had given op apy
hope of removing the influence of Catholicism from Ktalian society.
Nevertheless, he was very happy with the deal. Clerics could not
become a focus of opposition and, more importantly, the Church
would throw its support behind Mussolini as Duce. As the American
‘Time magazine reported in 1929:
+) Leaning forward ina carved armchair atthe Palazzo Chigl, Signor Benito
Mussolini sat with his hard chin cupped between contented palms watch-
ing newsreel flashes of Cardinals and Monsignors marching to the ballot
bax atvended by blaring brass bands and wildly cheering throngs. Never
+ before have Princes of the Church shepherded their clergy and people
to vote in a Parliamentary Election of the present Italian Kingdom.
‘Always before the priesthood has abstained, urging their flocks to do
tikewse, in protest against the Government's suppression of the Pope's
temporal power in 1870. Recently, however, ll Duce’ has restored 2
jo mite of earthly authority to ‘ll Papa’ and last week cinema machines
proved how mountainous is the Pontif’s gratitude to the Dictator.
Especially vivid were the footages showing Cardinal La Fontaine,
Patriarch of Venice; Cardinal Gamba, Archbishop of Turin: and Cardinal
Maff Archbishop of Pisa, all of whom proceeded directly from the cel-
1s ebration of High Mass to vote at the head of their clergy. Pollsters est-
Fated that His Holiness’ influence had flung nto the scale of ‘Fascismo
[eleast|,000,000 extra votes. Last weok's election statistics prove thac
thoee lralians who went to the polls are 98.28 per cent pure endorsers
of the ‘Duce’ —a record eclipsed in the US. only by Ivory Soe.
‘The Lateran Agreement was hailed as.a great achievemen:, but not
ail Talians were impressed. The exiled intellectual G.\. Borgese
attempted to explain why the Church had reached such aa accom
tnodation with Fascism, and outlined what he saw as the conse-
quences: 1 There was no reason w
There was no reason why Pope and Duce whom agra! destiny had
brought in the same year te Rome, should nor come eopebers
Teson except in Chri: bt Chistansm was by no means te ac
_ ee Scorn Pope Ras mi He wa sire at he aed ay
ie iat lemocracy and Socialism ... the nt
nistanty of Fascism, which would hive horrified « Frage ants
Seyonarola aire roming to him, eee
rch became allay to atheistic eyranny; an
revardedf by aking supreme inthe elemantry alo ccclone my
10 family, Marriage and divorce bee: ages
on * became a monopoly te Vatean ae
rest eh hand o the square nie al of pene ane
virtues to the purpose of national vole
The intellectual life ofthe co sy sgoninginehe ee eae,
De inalecial ny, already agonising in the gas chamber
Fascist censorship, had its coup de grace from the ‘pine of ere
1s Inquisition, and over her new
in her new black shirt Iealy donned her old black
te ¢ ime in 1931 when the government attem; st ore
Beier eae eae etre
fascisma’s own youth and leisure organisatic A mise
Senior clergy did
id support allan volvement in the w
Ebioia an Spain as they saw them os Chistian Croce eal
Jng and defending the faith, bit they were ere of te sent
of fascist policy. The ereed of the faseis Dalila (ae page Isty
fom the san. The Duce had never shaved Miles obcae ea
of the, Jee put he felt pressured to show “fascist solidarity’ ‘vith i
sc lh, He therefore tdopied anaemic messes 1068 fo
-nee bmne fom teaching a sate schools forbidden tomaey dee
Jews a na prevente from owning large companies or large landed
cater Anse was nove Widespread ie in Men eee
or inde within the cei par) and hese ere ener ey
rced. Nevertheless, the Pope, Pius X1 spoke out betel
and the Pope openly regret :
Fre mere Cbenly regretted the Church's earlier eagerness to
b) Women
KEY ISSUE What were Fascist a
de itades towards the role of
One sphere of life where fascist policy and Catholic belief could coin-
cide was the role of the sexes. Catholicisin held that birth con:rol and
abortion were unnatural and offensive to God, which imped that
‘woman's role should be that of wife and mother. Fascism shared this
‘raditional attitude towards the place of women and was happy-to ban,
contraception and to encourage women to have children. Schools
emphasised traditional gender roles and the regime tried to discour-
age girls from entering higher education. However, the Duce’s con-
cern was not simply to confine women to a domestic role ~ be wanted
to taise the population dramatically and so provide soldiers for his
armies and colonists for the new Italian Empire.
"A “Battle for Births’, launched in 1927, was designed to increase
the population from 46 million to 60 million by 1950. Mussolini spec-
ified 12 children per family as the ideal. To achieve this, a series of
‘carrot and stick’ measures was introduced. Marriage loans were
offered to encourage couples to have more children, Part of the loan
‘vas cancelled as each new child was born. A further financial induce-
nent was that a married man with at least six children was exempt
from all taxation. Propaganda suggested that all good Italians had a
duty to produce children for the Duce. Indeed, Mussolini gave prizes
to the most prolific mothers.
For those still reluctant to become parents, penalties were intro-
duced, Bachelors were taxed increasingly, to the point where the
government raised some 230 million lire in 1939, and, by the late
1930s, jobs and promotions in the civil service were open enly to the
fertile married, Pressure was exerted on women to stay at home; prt
vate companies promoted married men, while the state railway
Company sacked all women who had been appointed sirce 1915,
With the exception of war widows. In 1933 a quota system was intro-
duced into the public sector, limiting women to 10 per cant of the
Workforce. In 1938 this was extended 10 laige- and medium-sized
‘vate firms. OF course, the quota system was not applied to tra:
‘onally female, low paid occupations such as cleaner or waitress
Such discrimination revealed Fascist prejudices and was designed to
help win the Batde for Births. But it also proved useful in coping
with the unemployment problem,
Despite all the meastres, and to Mussolini's mystification, the
Baitle for Births was lost, The rate of marriage remained uncharged,
‘while the birth rate declined undil 1936 and rose only slightly there:
After. Indeed, the 1936 figure of 102 live births per 1,000 women of
child-bearing age compared very unfavourably with the 147 per 1,000
jn 1911. As for the target population of 60 million by 1950, all the
Duce's efforts could only produce 47.5 million Italians by this date
During the Second World War Mussolini reflected biserly that
Italians’ lack of patvioti effort in this field had lost him the equivalent
of 15 army divisions. Even in the workplace, Fascist policies towards
women had only limited success. Despite all he pressure 10 exclude eee eee
them from paid employment,
‘women still made up 98 per cent of the
industrial workforce in 1936,
a fall of only 3 per cent since 1921.
©) Young People
KEY ISSUE Why was Mussolini concerned with the education and
waining of the young?
Mussolini's dream of millions of aggressive,
cists spreading Italian power overseas led to his interest in the edu
cation and gaining of the young. He was also fully aware that loval
youth could help preserve the regime both at the time and in the
frure. In schools the cult of personality was heavily promoted.
Teachers were ordered to stress Mussolini's genius and were supplied
with sycophantic biographies for use in the classroom, The Duce's
Portrait had to be hung alongside that of the king. Italian youth was
to have absolute, unquestioning faith, as the compulsory textbook for
eightyearolds explained:
athletic, disciplined fas
The eyes of the Duce are on every one of you. A child who, even while
‘not refusing to obey, asks "Why?" is like a bayonet made of mille You
must obey because you must. What is the duty ofa chill? Obedience!
The second? Obedience! The third? Obedience!
Musselini had been sent by providence to restore Italian greatness
and students must leam 0 take pride in the Italian’ nation
Accordingly, History and Italian literature became priorities in
schools. Existing books which were insufficiently patriotic were
banned. In 1926 this amounted to 101 out of $17 History texts in
Schools and, by 1936, a single official text was compulsory. Students
‘were to be left in no donbt that Italy had been the cradle of European
