Mussolini had set himself 3 major economic targets to try to achieve within about the first 5 years of his regime. The first of these was the Battle for the Lira which tried to fix the value of Lira to 90 to the £, which was the amount when Mussolini came to power in 1922. Mussolini wanted to “defend the Lira with strenuous decisiveness…to the last breath, to the last drop of blood”. Prior to this, the Lira had been dropping in value due to the vast amount of inflation in the country, which was beginning to worry the big businessmen. Mussolini therefore wanted to try to restore their confidence and promote Fascism as being the restorer of normality to Italy. This, therefore, was basically a propaganda move to try to promote Mussolini as actively taking control of the economy. However, this also had repercussions. The inflation was not correctly handled which meant that the middle class began to lose support for the fascist movement as they had fixed incomes, which therefore deflated in value. Also, working conditions became poorer and more workers were needed in the cities, which promoted the growth of socialism and syndicalism. Also, it promoted a small rise of commercialism in the country as a lot of smaller firms could not survive the growing competition and were taken over by the bigger firms.
On the whole, the battle for Lira had the opposite effect of its intentions. It caused serious deflation too in the country, as Volpi tried to set a “balanced” budget (revenue = expenditure) but couldn’t keep the correct equilibrium for this. The sustainable lira therefore became an illusion to most in the country, and also it seems to Mussolini himself, who persisted in trying to set the Lira at a specific rate, despite the fact that it was harming the country and enabling his opposition to rise up against him.
Similar propaganda battles were seen in Mussolini’s other 2 major battles, the Battle for Grain, and the Battle of the Marshes. The battle for grain aimed to boost cereal production in Italy to help self-sufficiency, or “autarky”. It was promoted by Mussolini in an almost war-like fashion, with bold statements being used to promote this battle such as “The victory of Grain”. Grain itself was not an actual fascist “duty” but was almost a religious belief in Italy. Many wanted to see the country prosper, not least Mussolini himself. Therefore Mussolini put taxes up on all imports to try to help growth in Italy. This worked somewhat, with cereal production doubling and imports falling. However, there were expenses to the consumer in the form that the quality of people’s diets worsened. Mussolini was hell bent on trying to promote autarky in the country, but seemed to lose sight of the welfare of the Italian people. It seemed that Mussolini was ignoring the key economic problems in the country relating to production – the fact that poverty was on the increase and that in the South, agricultural production became less due to the push for growing grain. Yields were still low in the South due to the poor conditions, and to make things worse there was a 20% drop in farming.
This wasn’t helped either by Mussolini’s other major economic policy which was the Battle of the Marshes. This aimed to provide more agricultural land to grow more grain and to sort out problems of drainage and infertile land. It also attempted to provide more jobs to people in the South to fix the problems which had been created there by Mussolini’s other battles. However, the only real success of this battle was in the South in the marshes of Rome, which was the only city where the irrigation problems were sorted out. The policies didn’t really affect the North where most of the increased production came from, as these areas didn’t really need money putting into them in the first place. Northern landowners also had always been “classical” fascist supporters so therefore they were benefited for no apparent reason, when the real demands came from the South of the country. “Success” in this battle was therefore not achieved, and all it really did was to make the north/south divide in the country even greater. Again, this was an “illusion” to the Italian people, particularly in the south of the country, as they were given economic figures which somewhat “exaggerated” the truth.
One of Mussolini’s major aims at this stage was Autarky. This wasn’t unusual for a nationalist/right-wing government and was somewhat shadowed by the Nazi’s in Germany during this period. Mussolini believed that war was going to be inevitable, and therefore was willing to prepare to the best of his ability for war. He wanted to make sure Italy could feed herself and provide all of the necessary “materials” for war, such as food (the battle for grain), jobs (the marsh battles) and a stable currency (the battle for Lira). However there were several hindrances for Mussolini during this stage. The biggest of these was the great depression in 1929, which was initially caused by the Wall Street crash in the US. This had a global effect on trading worldwide but seemed to really hammer Mussolini hard. The trade deficit in Italy became even greater - in 1929 there were 60 more types of exports that imports – although Italian produce was selling well abroad, she couldn’t import the raw materials she needed. With the tariffs that Mussolini had placed on imports during the Grain battles, prices rose and wages also rose. Italy badly needed to increase her exports to pay for the importing of raw materials but the depression meant that this was a lot harder.
During this period, it’s difficult to say whether a policy of Autarky really is a good idea and makes sense politically. To me, it further adds to the whole “illusion” of a “fascist” economy. Mussolini launched these policies under great scrutiny from the elite and also launched them with huge propaganda campaigns. At a time of economic uncertainty, such as a time caused by the world depression, Autarky can be either the best policy to adopt or the worst, considering how it’s carried out. To me, Mussolini went about the autarky policies in the wrong way, as he was totally focused on preparing Italy for the “inevitable” war. He also believed his core nationalist principle that he should try to make Italy “great” and not dependant on other countries. This links back to Mussolini’s initial desire to make Italy a “nation” and not merely a country. However, Mussolini was creating his own illusion and selling it to the Italian people via the use of extreme war-like propaganda. This is shown during the battle for Grain, which was designed to try to help produce production in preparation for this great “war”. Autarky was pretty much unachievable in a country like Italy at this stage anyway, as she had no real sources of raw materials and had to depend on coal/oil from other countries.
A change was obviously therefore needed to this system to try to stimulate economic growth in the country again, as the illusion created by Mussolini, juxtaposed with the actual economic figures, shows that Mussolini’s policies had failed greatly.
The depression was to eventually lead to the increase of state intervention in the economy, something that is normally associated with the ideals of Communism & radicalism, and indeed was being exercised by Stalin in Russia during this stage. The way this was done was by trying to introduce a “Corporative State”. This was to try to protect Italians from the economic slump and to promote change within the economy. This was needed because of the changes of stability in Europe, and due to the belief that the Fascists should promote the national interest in the country over sectional interests – to be done in the form of Corporations. This idea was not totally new – it was based around uniting the employers & the workers and promoting self-governing groups to sort out production. This almost promoted syndicalism – the basis of the rise of the Socialists in the 1910’s and 1920’s, i.e. groups of people coming together to decide how the economy should be run to ensure a “fairer society”. This almost immediately caused problems. Many different groups of people wanted something different from the new system and wanted an element of control over the system. This led therefore to the rise in union action and union growth. Mussolini had to therefore cast his illusions over the people once more, and convince people that he could draw together the interests of the worker and employer. Mussolini wanted to act as the “arbiter” between the two. However in reality, Mussolini was using this as a blanket to cover up his real actions. He didn’t want socialism to come back into the country and was therefore trying to gradually weaken the unions. He did this via 2 pacts, one called the Palazzo Vidoni Pact (1925) and the Rocco Law (1926). Both these banned the bargaining rights of unions and isolated pickets, and make striking illegal. Mussolini was therefore creating an illusion to the workers that they would have fair representation under the new system, when instead they were being slowly depowered and their existence becoming more and more insignificant. The employers however were not happy with this system either. Mussolini wanted an interventionalist system where wages & prices were fixed. However, the employers wanted control and wanted free employer negotiation. The employees themselves, represented by a labour confederation know as the FLC, were therefore made powerless to keep the employers happy. This led to a rise in numbers of members of the FLC, as many wanted to protest against the new system and have their voices heard.
It seems therefore that Mussolini was ignoring his own people in favour of an increased element of control. This therefore describes the illusion that Mussolini himself was causing to the people about the state of the economy. What seemed to be an efficient, self-sufficient & booming economic system was in fact littered with corruption and false interests. Mussolini claimed to the people that “the fascists had abolished the troubles and disorder that poisoned the national soul” [autobiography extract] when instead, with the new system of corporativism and the old effects from the economic battles still looming, Mussolini was providing the poison for the economic soul of Italy.
