The Fascist Economy

Question 1

How did Mussolini gain support from small shop owners ?

Answer 1

Liscencing system which protected small shops from larger supermarkets.

Question 2

How did Italian Business benefit from the PNF ?

Answer 2

Trade union policy favoured Fascist syndicalists.
Palazzo Vidoni Pact (1925)
Rocco Law (1926)

Question 3

Who benefitted the most from PNF economic policy ?

Answer 3

Rich industrial + Agricultural interest groups

Question 4

Palazzo Vidoni Pact

Answer 4

1925
Abolished all existing trade unions and replaced them with fascist syndacalists.

Question 5

Rocco Law

Answer 5

1926
Banned all strikes, walkouts and slow-downs
Compulsory Arbitration introduced

Question 6

Key Actions of De Stefani

Answer 6

Minister of Tresuary 1922-25
Laissez-Faire Ideals
Privatised Telephone lines
Reduced state expenditure
Deregulation
Reduced Protectionism

Question 7

Success of De Stefani

Answer 7

Italy’s manufacturing production increased
Balanced Budget 1924-25

Question 8

Failures of De Stefani

Answer 8

Agricultural Groups unhappy about tariff cuts
Inflation / Pressure on the lira

Question 9

Key actions of Volpi

Answer 9

Replaced De Stefani in 1925
State-run economy
Greater personal influence from Mussolini
Battle for the Lira

Question 10

How did Mussolini establish the corporative state ?

Answer 10

Rocco Law (1926)
Ministry of Corporations (Jul 1926)
Charter of Labour (1927)
Head of Fascist Syndicates (Rossoni) dismissed (1928)
National Council of Corporations (1930)

Question 11

Ministry of Corporations

Answer 11

July 1926
Corporations = Mixed Union of workers + employers

Question 12

Charter of Labour

Answer 12

1927
Promised to organise Italy’s economy and guarantee workers’ rights in employment, social insurance and welfare.

Programme of intent - never followed through

Question 13

National Council of Corporations

Answer 13

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.

Question 14

Failures of the Council of Corporations

Answer 14

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

Question 15

Successes of the Corporate State

Answer 15

Jobs for loyal fascists
Useful for propaganda / support for PNF
Superficially resolved class divides
Mid-way between Capitalism / Communism

Question 16

Govt. response to Great Depression

Answer 16

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

Question 17

Istituto Mobiliare Italiano (IMI)

Answer 17

1931
Loaned millions of Lira to Italian Businesses
Protected Businesses from closing
Provided credit to banks to ensure that they did not collapse

Question 18

Istituto di Ricostruzione Industriale Scheme (IRI)

Answer 18

1933
Bought shares in banking, industry and commerce
Prevented bankruptcy + job loss
Provided financial / management advice

Question 19

Weakness of respomse to GD

Answer 19

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.

Question 20

Success of response to GD

Answer 20

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.

Question 21

Reasons for Autarky

Answer 21

1. General decline in international trade due to the overvalued lira.
2. Sanctions placed on Italy in 1936 due to the militaristic actions in Africa.
3. Preparation for War.

Question 22

Policies to achieve Autarky

Answer 22

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).

Question 23

Effectiveness of Autarky

Answer 23

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

Question 24

Battle for Births

Answer 24

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.

Question 25

Effectiveness of Battle of Births

Answer 25

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.

Question 26

Battle for Grain

Answer 26

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%

Question 27

Battle for Grain (Success / Failures)

Answer 27

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

Question 28

Agricultural Policy

Answer 28

Ruralism - 1927 Empty the cities - prevented internal migration - 1928 Bonfica Integrale - marsh draining, irrigation, road buildings, house building and aqueducts.

Question 29

Effectiveness of Agricultural Policy

Answer 29

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.

Question 30

Battle for Lira

Answer 30

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"

Question 31

Effectiveness of the Battle for the Lira

Answer 31

Italian exports were overvalued and struggled eg. textiles Food prices rose 1925-28 = workers' wages fell by 10% Unemployment reached 1 million 1931.

Question 32

Economy During WW2

Answer 32

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