How successful were Mussolini's economic policies?

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Tom Willis                30/04/2007

How successful were Mussolini’s economic policies?

When Mussolini came to power, he inherited a weak economic system.  In summary, Italy had very few, and a limited supply of raw materials, there was an industrialising North with modernising agriculture, and a more backward South with large estates and mass poverty.  There was also limited literacy, and in addition to this there was a tradition of close industry – banks – state links.

Mussolini’s aims were to basically resolve these problems, so to sum this up he wanted to consolidate the political system, make Italy economically self-sufficient, and to provide the economic base for military might.  Additionally, Mussolini wanted a strong currency (Lira), he wanted to make Italy’s trade flourish, or in other words he wanted other countries to buy their goods from Italy, and he wanted Italy to import as little as possible and in doing so, make Italy a self-sufficient country.  It has been argued, at one time or another, Mussolini probably plastered all his key economic policies in slogans on walls, here are some examples of what may have been used.

“A great country, a great Lira.”  “Buy Italian. Italy can provide for all your needs.”

In order for Mussolini’s economic objectives to be met, he believed, (as a dictator) that will power should be used as the driving force of a society which could overcome all obstacles and strengthen Italy’s economic system.  Subsequently, the Italian people were mobilised in a series of battles, and were encouraged to achieve their targets.  

“The Battle for the Lira” took place as an attempt to “fix” the Lira at 90 to the £, since it has been reaching 150 to the £.  Also it aimed to reduce inflation, which was harming sectors of the middle class and some lower class, confirm the image of Fascism and in doing so bringing greater stability to Italy, and it was intended to show Italians and the world that the Lira, and hence Italy, was a mighty power.

The actions that were taken to attempt to achieve these aims are as follows.  Banks instituted tight controls on money supply, the economy deflated in order to drive up the value of the Lira, and a Quota 90 was achieved in 1927 when the Lira was returned to Gold standard and the exchange rate was fixed.  The effects of this “battle” were, it showed the authority of the regime, and it possibly boosted Italy’s prestige.  Also it helped industries dependant upon imports, e.g. chemicals, and it caused serious deflation.  However, there were many disadvantages to this battle, which were, it harmed the economy by hitting exports, as now, Italian goods were more expensive abroad.  It undermined smaller firms, which were taken over by larger ones, it made the government impose a 20% cut in wages, and the government was forced to devalue the Lira.

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“The Battle for Grain” occurred in order to boost the cereal production to make Italy self-sufficient in grain.  It was intended to try and reduce the balance of trade deficit, to free Italy “from the slavery of foreign bread,” to make Italy less dependant on imports when war came, and finally to show the rest of the world that Italy was a major power.  The way in which Mussolini attempted to achieve these aims were, he firstly announced the battle in 1925 and as a result high tariffs were emplaced on imported grain.  Secondly new marginal land was used to ...

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