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How Far Do You Agree That Mussolini’s Economic Policy in the Years 1922-39 Was a Complete Failure?

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How far do you agree that Mussolini’s economic policy in the years 1922-39 was a complete failure?

Having come to power in 1922, an immediate concern for Benito Mussolini was the current state of the Italian economy, specifically its obvious inability to support military expansion and move into a state of total war, with the aim of creating and developing an Italian Empire, which was Mussolini’s chief aspiration. Furthermore, the weak economy maintained and strengthened the north-south divide, due to its negative effects being focused on the poorer south, while some northern industrialists benefited from the increased focus on production. Therefore, in order to counter the depression and prepare the Italian economy for conflict, Mussolini employed several policies, in order to stimulate the financial system and cut public spending, specifically increasing production and revitalising the Lira. As well as revaluating the inflated currency, these policies included boosting food production and converting to self-sufficiency, or autarky, all the while promoting nationalism and strengthening commitment to the regime. Whether these were a success is debatable, while Italy did convert to total war in 1939, the consequences were far reaching and crippling. Therefore a deep, detailed analysis, of Mussolini’s policies, their aims and effects, is necessary in order to gauge to what degree, if any, his economic policies failed.

An example of Mussolini’s economic policy would be the sharp revaluation of the Lira in 1926. The value changed from 150 lira to 90 lira, against the pound, and became known as the Battle for the Lira. Its initial effects were that Italian, exported goods became more expensive, and therefore less competitive, however this led to a focus of necessity upon the national market, which caused an increase in the workforce and therefore, for some, specifically those who were previously unemployed, led to a greater standard of life. As well as making exported goods more expensive, the Battle for the Lira made imported goods cheaper, which benefitted businesses that were reliant upon raw materials, such as chemical and steal, which provided the basis for the armaments development. Therefore this decision was successful, as military expansion and development was a main aim and motivation of Mussolini’s, an aim which would be easier to achieve with a thriving heavy industry. Furthermore, certain areas of the general population benefitted from the availability of more jobs, therefore, in terms of these areas, the policy was a success. On the other hand, those industrialists reliant upon the selling of products abroad suffered as they became less competitive, along with some workers, whose wages were hit by a government-enforced twenty percent cut. Consequently, in many aspects the Battle for the Lira was unsuccessful, as scores of workers faced a decreased quality of life, due to wage cuts, which they could not fight thanks to the Vidoni Pact, which banned trade unions, and considerable, effective levels of propaganda. Furthermore, major, historic Italian industries such as cars and textiles were damaged due to their reliance on exporting. As a result, while also considering that some groups benefitted, the Battle for the Lira can be deemed a partial failure, as Mussolini reduced the public wage bill dramatically, while cleverly avoiding public unrest, and increased the strength of military production, but also damaged both the lives of many people and the success of several industries.
Another of Mussolini’s economic policies would be to achieve self sufficiency in terms of grain production, a policy known as the Battle for Grain. Mussolini aimed to end reliance upon other nations for grain; as such reliance would not be feasible in times of war, and did so placing high tariffs on imports and supplying grants to pay for farmer’s machinery and fertilisers. Despite this attempt to reduce imports, it was necessary for farmers to buy fertilisers from abroad in order to keep pace with the level of agricultural development that was being demanded. As a result the production fell during the war, as fertiliser importation was restricted. Furthermore, this governmental stimulation concerned only one area of agriculture, as a result livestock farming and viticulture suffered, and while the grain production benefitted farmers, the price of bread rose, resulting in greater cost for the consumers. Despite this, there were some benefactors. For example thanks to the reclaiming of marshland, the likelihood of catching Malaria decreased, although it had little agricultural impact, while between 1925 and 1935 wheat imports fell by 75% and wheat production was up by 40% since the start of the Fascist regime. Therefore, Italy was almost self sufficient in cereals during this period, with some benefiters, such as large grain farmers in northern Italy, especially the Po Valley, and so this can be considered only a partial failure, despite the negative effect it had on the living standards of average Italians, much like the Battle for the Lira.

A further economic policy employed by Mussolini, would be his attempt to create a Corporate State in Italy. Il Duce wanted to promote the idea of workers and their employers avoiding and resolving conflict for the benefit of Italy and its economy. He attempted to fulfil this want by setting up a series of corporations to represent the industrial elites and their subordinates, with the hope that they would negotiate issues with one another, hence avoiding strikes and other industrial conflict. The resulting system, overseen by the Ministry of Corporations had numerous critical weaknesses, for example employers represented themselves, while workers were represented by Fascist Party members, and as a result the representation was unbalanced, with Fascists siding with employers in most disputes. Therefore workers lost their right to be represented and strike, as most disputes were suppressed rather than dealt with, and this resulted in a decreased standard of living for most. Because of this, most industrialists benefitted, as they could pay their workers less without the threat of industrial action. Overall this meant that the creation of the Corporate State was a partial failure, however the suffering and injustice it caused the workers exceeded the benefit of Fascist bias to the employers.

One of Mussolini’s main economic policies was the aim for self sufficiency, or autarky. As he intended for war, it was clear Mussolini could not allow Italy to be dependent upon other countries for resources, as these could be withheld in times of conflict. In order to cut imports and focus on essentials production, Mussolini reduced the level of manufacture of consumer goods, which resulted in a reduced quality of life and living standards for workers. Furthermore Mussolini focused most of the finance gained from these cuts onto military spending, which drove the economy from 1935 onwards. Therefore the living standards of most Italians declined further, a consequence Mussolini foresaw and accepted in order to gain autarky. However, it was clear autarky would never be achieved, as Italy was a country poor in raw materials, such as oil, and therefore continued to rely on other countries. After the 1935 invasion of Abyssinyia proved that Italian occupation of Africa could not provide sufficient raw materials, it was clear the quest for autarky had been a complete failure, shown by Italy’s total dependence on their economic superior, Germany, to provide raw materials during the Second World War.

Another example of Mussolini’s economic policy would be those he used to combat the depression of the 1930s. Mussolini brought in public work schemes, such as motorway construction, and bailed out banks, to prevent a collapse caused by non-payment of debt. Furthermore Il Duce established the Institute for Industrial Reconstruction (IRI) which took control of the distribution of loans to banks, although its cost in as example of the massive amounts of taxpayer’s money which was spent on the economic recovery process. Despite this massive cost it is clear that the way in which Mussolini dealt with the depression was successful, as his power as a virtual dictator allowed him to be more decisive in his actions. Furthermore, the simple fact that Italy’s degree of suffering, in this period, was far less than other major nations shows that Mussolini had been successful in his dealing with the depression.

A final example of Mussolini’s economic policy would be the providing of leisure provisions. This was done through the establishment of the Opera Nazionale Dopolavoro (OND), which, along with entertainment, holidays, activities and sports, provided a means by which the regime could control the social aspect of people’s lives, aiding their aim to control every aspect, as well as improving the health of the general public. More importantly, it served as a way for the Fascists to expose, those who were less affected by the influence of the press, radio and cinema, to propaganda. Furthermore it gave financial assistance to those members in need, with subscriptions being subsidised by the state, along with an employer’s contribution, as well as acting as a level of compensation for the wage decreases. Therefore it is clear that this was a successful policy, as it increased support for the regime and improved the lives of Italian workers, to the extent that it was continued after the war.

Overall, it is clear that Mussolini’s economic policies were a great, but not total, failure. The hardship for the Italian worker, brought about by the Battle for the Lira, Grain and quest for autarky, was not compensated for with the Opera Nazionale Dopolavoro. Furthermore, throughout his time as Prime Minister, Mussolini’s economic policies were geared toward going to war, and as a result they were a failure. By 1939 Italy were in no position to go to war and wouldn’t have been for another 10 years at least, due to their crippling economy. As a result, the military expansion which Mussolini hoped would define his leadership could not be supported by the economy, with only the successful way in which he combated the depression and the legacy provided by the Opera Nazionale Dopolavoro preventing his policies being a total failure.

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