Italy remained poor and backward, despite all Mussolini's attempts to promote economic growth. Consider the validity of this judgement on the Italian economy in the years 1924-1936.

Italy remained poor and backward, despite all Mussolini’s attempts to promote economic growth.

Consider the validity of this judgement on the Italian economy in the years 1924-1936.

Mussolini had inherited an Italy with limited resources. The industrialisation of the north and modernisation of agriculture left the south behind with its mass poverty and lack of education. Mussolini believed in will power as a driving force in society. The battle for the lira, grain and marshes were used to mobilise the Italian people who struggled to achieve these targets.

In 1926 Mussolini engaged in the Battle for the Lira. In October 1922, the lira was fixed at 90 to the pound and had been falling rapidly since. In 1927 the quota of 90 was achieved by returning to the gold standard. The economy was deflated to drive up the value of the lira, however this drove up the price of Italian exports seriously harming the economy. Small firms were taken over by larger ones. This serious deflation caused government imposed wage cuts of 20%. The battles’ good intention of returning economic stability was a lost cause that forced the government to devalue the lira in 1936.

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The battle for grain in 1925 aimed to promote economic growth with autarky to reduce the need for grain imports and make Italy more independent. To make this possible high tariffs were imposed on imported grain and government grants were made available to farmers for machinery and fertiliser. Although cereal production doubled other forms of agriculture were hard hit, which raised the need for imports of meat and eggs. Italy became almost self-sufficient in grain but not fertiliser so cereal production fell during the war due to the restrictions on fertilisers.

The corporate state was created as ...

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The corporate state was created as a third way between communism and capitalism. It presented Italy as a unified nation, both workers and employers worked together in harmony to create a fairer society and increase national production. Corporations were organisations of all workers and employers in a particular area of production. These corporations were self governed and represented at the National Council of Corporations. However the representation was unbalanced employers represented themselves, but members of the fascist party represented the workers. Corporations discussed issues whilst Mussolini made the real decisions. The corporate state hoped to improve the workers’ condition and social improvements to protect workers from employers and the state. Economic development would occur through co-operation between the worker and employer. However Mussolini used this as a tool to stop the alienation of the economic elites. The system became more of exploitation in the workplace.

Italy’s industrialisation and development saw an increase in some sectors and decline in others. Agricultural production saw the grain production double during the battle for grain. The grain farmers became wealthy due to this but other areas of agriculture were hard hit. The fascist policies failed to tackle the matter of poverty in the south, which lead to a 20-40% wage, cut in agricultural workers wages. A ruralisation campaign was designed to cut the number of people moving to the city by helping to establish a prosperous landowning peasantry. However, life was hard and 1.5million people fled from the land.

Chemical production was high in industry, probably due to an increase in the weapons industry. Compared to this textiles did less well and fashion became unaffordable. A close government-bank-industry link was in place, government intervention grew as the slump hit from 1929 and especially in 1933. Government assistance was more geared towards preserving the existing structure the encouraging efficient reorganisation. The production in electricity increased immensely, probably due to the development of television, cinema and radio, which were cheap and affordable with the increasing industry.

With a country lacking major resources trade should have been important but a major decrease in trade between 1931-35 meant a lot less money was going out then before. Italy was making a profit from its exports around 20% more then its imports. However this was partly due to Italian goods becoming more expensive abroad, as after 1936 the payments increased due to the devaluation of the lira. High tariffs on grain had an effect on the amount being imported.

During the 1920’s taxation had benefited the wealthy by being reduced to stimulate investment. However, the indirect taxation of the mass population was raised. The increase in government intervention meant that the 1930’s was a period of heavy taxation on both the wealthy and the mass population as the state tried to build up its armaments.

The judgement that Italy remained poor and backward is neither true of false. From the raise and development of industry it’s clear to see that Italy wasn’t backward. Living standards were affected by the over valuation of the lira causing huge wage cuts. The new grain autarky made the Italian diet less varied and developed, but an increase of leisure activities accompanied the development of industry. The corporate state aimed to improve the workers conditions with respect to pay and hours, but government imposed wage cuts were put in place to help industry during the depression. This period, 1932, saw a huge rise in unemployment but compared to Germanys massive numbers it was a 6th of the size.

Hannah Green