Although many suffered economically because of the war, Industrialists did not. Industrialists, in contrast, did well out of the war. Providing their production was linked to the war effort, they were assured of a market. As inflation increased they simply raised their prices and a government desperate for military victory continued to buy their products. Large companies such as Pirelli tyres and Montecatini chemicals made huge profits while Fiat expanded to the point where it became the largest manufacturer of commercial vehicles in Europe in 1918. When presented with this evidence, one may argue that in fact the economic consequences of the First World War on Italy were not the most significant. However, victory meant the end of easy profits. Any ideas of continued prosperity were distorted; the war had created a false boom. There was no longer any need for enormous quantities of rifles, artillery, trucks and the like. A government which, in 1918, had spent 23.3 billion lire more than it had collected in taxes could no longer afford to hand out lucrative contracts. Profits fell as government spending was cut back. Hard times lay ahead for industry. The statement ‘The economic consequences of the First World War on Italy were the most significant’ becomes plausible once more.
To make matters worse as far as the industrialists were concerned, the end of the war led to a wave of labour militancy. Wartime discipline in the factories, enforced by the military, was relaxed. Workers who had resented the longer hours, the fall in real wages caused by inflation and the ban on industrial action vented their frustration. During 1919 over a million workers took part in strikes and the membership of Socialist trade unions shot up from a quarter of a million in 1918 to two million in 1920.
Finally, soldiers returning from the war were plunged into this deteriorating economic situation. The hoped-for prosperity was nowhere to be found. Industries whose profits were falling did not take on new workers. Unemployment was rising and broke the two million mark during 1919. To the soldiers this seemed a very poor reward for their sacrifices.
As the economy worsened political divisions widened. The industrial workers flocked to the Socialist Party, whose membership rose from about 50,00 in 1914 to about 200,000 by 1919. The party had long abandoned the commitment to gradual reform that Giolitti had tried to encourage during the pre-war years. It now advocated revolution. Inspired by the Russian Revolution of 1917, socialists called for the overthrow of the liberal state.
Many middle classes were terrified. In this state of fear, many conservative Italians were disgusted that the government appeared to be doing nothing to meet the threat. Instead of using the power of the state to crush strikes and to harass Socialists, the Liberal government of Francesco Nitti was urging industrialist to make concessions to workers. Shopkeepers had been alienated in June 1919, by what they sa3w as a government surrender to rioters who were protesting against the spiralling price of food. To government had set up food committees that had requisitioned supplies and set prices. The continuing inflation that had provoked the foot riots was taken to be proof of government incompetence.
In addition, landowners were appalled by the government’s failure to halt the spread of revolution to the countryside. Here many peasants were occupying uncultivated land and farming it for themselves. Agricultural labourers were joining socialist trade unions in ever greater numbers, particularly in the province of Emilia Romagna, and were beginning to demand higher wages and guaranteed employment.
It was not only over the issue of the supposed ‘Socialist threat’ that the right condemned the government. Nationalists, who had always considered the Liberals weak and incompetent at running the war, were now convinced that the government would fail to defend Italian interests at the peace conference. They demanded that Italy should not only receive those territories agreed with the Entente in 1915 (southern Tyrol, Trentino, Istria, and parts of Dalmatia), but also be given the city of Fiume on the border of Istria. The Treaty of St Germain did cede Austrian land in the south Tyrol and the Trentino, but when Britain and the USA refused to had over Fiume because the city was vital to the economy of the new Yugoslav state, the Nationalists blamed Liberal weakness. When, in addition, it became apparent that Italy would be denied Dalmatia because so few Italians lived there, and would not share in the division of German colonies in Africa, Nationalists were outraged. To them Italy had been cheated. Her sacrifices had won only a ‘mutilated peace’, and Liberalism was the culprit!
Demobilised soldiers, struggling to adjust to civilian society and with work difficult to find, saw the peace settlement as a further humiliation. Many ex-officers, in particular, feared that the vibrant, expansionist Italy they had fought for was being undermined by a weak government. Their Italy was falling into the hands of Socialist revolutionaries who had opposed the war from the start and who had done their best to sabotage the war effort. For such men, Liberalism and the parliamentary system had proved abject failures. A powerful, dynamic Italy would have to be achieved by other methods…
In conclusion, at a first glance there is some strong evidence that would suggest that the economic crisis was not in fact the worst consequence of WWI. The war certainly divided the war politically and led to the Biennio Rosso. But, I feel these other consequences of the war were greatly magnified if not caused indirectly by the economic crisis itself. It was in fact the workers resentment towards longer hours, a fall in wages (due to inflation) and the ban on industrial action which brewed hatred towards the political system and led to the growth of Socialism. One may argue that if the economic situation had not been so bad that support for Socialism may not have grown so rapidly and in turn the Bienno Rosso may not have happened. The socialists would not have had enough support to prove a real threat and so their strikes (if there were any) would have been insignificant and their ideal of revolution may not have spread fear amongst the middle class and the rights anger towards the government’s inability to control the perceived Socialist threat. Therefore, in conclusion, I do believe that the economic consequences of the First World War on Italy were the most significant.
