To what extent can fascist economic policy in the years 1924-1939 be seen as an alternative neither capitalist nor communist

To what extent can fascist economic policy in the years 1924-1939 be seen as an alternative neither capitalist nor communist?

Mussolini and the facsisits believed in the corporative state. Mussolini in theory believed that this was the state whereby all economic activity and political life would be organized through corporations with both workers and employers involved.

Mussolini saw the corporative state as the third way between communisim and capitalism. He saw it as a way of removing labour problems and creating an efficient economy. The corporate state existed more in theory rather than in practice.

had emerged from in a poor and weakened condition. An unpopular and costly conflict had been borne by an underdeveloped country. Post-war there was inflation, massive debts and an extended depression. By 1920 the economy was in a a massive disaster – there was mass unemployment, food shortages, strikes, etc.

Mussolini came to power in 1922 and transformed the country's economy along . But the question is did he really do this ? Was the new way of organising the econmy- ‘corporativisim’ really an alternative or was it merely another form of totalitarimsim that still favoured capitilisim?

In facisit economics, fascism was seen as a third way between laissez-faire capitalism and communism. Fascism in Italy grew out of two other movements: syndicalism and nationalism. The syndicalists believed that economic life should be governed by groups representing the workers in various industries and crafts. The nationalists, angered by Italy's treatment after World War I, combined the idea of class struggle with that of national struggle. ‘Italy was a proletarian nation, they said, and to win a greater share of the world's wealth, all of Italy's classes must unite.’ Mussolini himself was a syndicalist who turned nationalist during World War I. From 1922 to 1925, Mussolini's regime pursued a laissez-faire economic policy under the liberal finance minister Alberto De Stefani. De Stefani reduced taxes, regulations, and trade restrictions and allowed businesses to compete with one another. But his opposition to protectionism and business subsidies alienated some industrial leaders, and De Stefani. Mussolini soon consolidated his dictatorship in 1925, Italy entered a new phase. Mussolini, like many leaders at this time, believed that economies did not operate constructively without control over these by the government. Mussolini soon then began a program of massive deficit spending, public works, and eventually, militarism. Mussolini's fascism with the introducing of the new Corporative State, a supposedly realistic arrangement under which economic decisions were made by councils composed of workers and employers who represented trades and industries. By this method the economic rivalry between employers and employees was to be resolved, preventing the class struggle from undermining the national struggle. In the ‘new’ Corporative State, for example, strikes would be illegal and labor disputes would be controlled by a state agency.

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In theory the fascist economy was to be guided by a complex network of employer, worker, and jointly run organizations representing crafts and industries at the local, provincial, and national levels. At the top this network was the ‘National Council of Corporations.’ but although syndicalism and corporativism had a place in fascist ideology and were critical to building a consensus in support of the regime, the council did little to steer the economy. The real decisions were made by state agencies such as the Institute for Industrial Reconstruction among interest groups. Corpotativism was merely a novel view that still continued to favour capitilsim. Beginning in 1929, in preparation for achieving the "glories" of war, the Italian government used measures to turn the economy toward autarchy, or economic self-sufficiency. The autarchic policies were intensified in the following years because the effects of the depression and the economic sanctions that other countries imposed on Italy after it invaded Ethiopia. Mussolini decreed that government bureaus must buy only Italian products, and he increased tariffs on all imports in 1931. The sanctions following the invasion of Ethiopia spurred Italy in 1935 to increase tariffs again, and toughen its restriction on industrial goods. Mussolini also eliminated the ability of business to make independent decisions: the government controlled all prices and wages, and firms in any industry could be forced into a cartel when the majority voted for it. The well-connected heads of big business had a hand in making policy, but most smaller businessmen were effectively turned into state employees contending with corrupt bureaucracies. They acquiesced, hoping that the restrictions would be temporary. Land being fundamental to the nation, the fascist state strictly controlled agriculture even more fully, dictating crops, breaking up farms, and using harsh threats to makes sure its commands were obeyed. Banking also came under extraordinary control. As Italy's industrial and banking system completely collapsed under the weight of depression,, and as unemployment rose, the government set up public works programs and took control over decisions about building and expanding factories. The government created the ‘Istituto Mobiliare’ in 1931 this was set up to control credit, and the IRI later acquired all shares held by banks in industrial, agricultural, and real estate enterprises. As World War II approached, the signs of fascism's failure in Italy were clear: per capita private consumption had dropped to below 1929 levels, and Italian industrial production between 1929 and 1939 had increased by only 15 percent, lower than the rates for other Western European countries. Labour productivity was low and production costs were uncompetitive. The fault lay in the shift of economic decision-making from entrepreneurs to government bureaucrats, and in the allocation of resources by decree rather than by free markets. Mussolini designed his system to cater to the needs of the state and to meet fascist capitilist ideology, not to meet the needs of it’s consumers. In the end, it proved to serve neither the state nor it’s consumers.

To conclude Although the Italian system was based upon unlimited government control of economic life, it still preserved the framework of capitalism. Legislation of 1926 and later years set up 22 guilds, or associations, of employees and employers to administer various sectors of the national economy. These were represented in the national council of corporations. The corporations were generally weighted by the state in favour of the wealthy classes, and they served to combat socialism and syndicalism by absorbing the trade union movement. The Italian corporative state aimed in general at ‘reduced consumption in the interest of militarization.’

Overall the corpartive state as a social and economic system was not a third way between the and . It was merely another form of that sought to "combine its general totalitarianism with the individualistic character of society." Such policy created an extreme state whose chief production agent was the government-created monopolist.

To what extent can fascist economic policy in the years 1924-1939 be seen as an alternative neither capitalist nor communist

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