Notes on Mussolini – Economic Policy

Mussolini wanted to build a “Third way” in the economy – neither
Capitalist nor Communist! “I shall take the best bits of both capitalism
and communism”

The main thing Mussolini wanted, though, was Autarky.
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At
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However, from 1929 onwards, Mussolini tried to control the economy.
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Autarky was his main goal. If achieved, it would give Italy economic
self-sufficiency – very good in a war, as you don’t rely on anyone for
trade! No economic sanctions!

The Battle for Grain. 75% of Italy’s grain had to be imported!!
 Told farmers he’d pay them a lot if they grew grain, and gave them
tractors too.
 So they did, tearing up all their self-sufficient crops.
 When American and Soviet grain became really cheap, Mussolini dropped
his farmers like the proverbial hot brick.
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So
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first, the Fascists took a laissez-faire approach.
Public spending was reduced
Taxes on war profits reduced
Mussolini tried to balance the budget
“What is good for [Fiat] is good for Italy”
what happened??
Without self-sufficient crops, many fell into poverty…
…And were taken over by the bigger farms.
However, wheat imports fell by 75%…
…But exports of olive oil, wine meat and eggs fell, as countries
didn’t trade with Italy – “He’s not buying my wheat, I won’t buy his
wine. hah!”
Price of bread rose.

A huge propaganda campaign was released to try and help them achieve
autarky.

Autarky was always going to be impossible because…
 Virtually no natural resources
 Lands marked for grain failed
 As did the “spoils from a campaign” – Abyssinia for example.
 Still needed to import food.
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Abyssinia had no coal, iron, lands for grain, anything – basically a
waste of time! All it achieved was to restore some prestige after Adowa.

The Battle for the Lira was also launched.
 In 1922 Mussolini fixed the lira at 90 to the £.
 By 1926 it had fallen to 150 to the £.
1
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In 1927 he fixed it at 92.46 to the £, and 14 to the $. He also
reattached it to the gold standard.
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So
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what happened??
Professionals/salaried workers benefited from falling prices.
Undermined smaller firms – many went out of business.
Damaged Italy’s exports
Gov wages were cut b 20% to counter deflation!!
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Battle for the Marshes.
 Intended to drain the marshes and build towns there & grow grain.
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So
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Overall – progress in transport, introduced a system to protect small
shops from supermarkets, but left poverty and disease mainly untouched.
what happened??
Drained Pontine Marshes - erased Malaria
New towns built.
But Southern landowners often blocked the plans as they were offered
low prices for land that, when drained, would be worth a lot more!!
2
Revision on Mussolini – Fascism and the Church
The Church lost the Papal States in 1870 – this made them very bitter
towards the state, even though it was not Mussolini who took them away! In
1870 the Pope condemned the State, and encouraged people not to vote (men
got the vote in 1919)
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The Church was important to Mussolini, since 99% of Italy was Catholic –
a very good method of influencing many Italians if he had the Church on
his side. However, Mussolini himself was an atheist.

The Church and the State had many policies in common, but also clashing
ones:
 Fascism - Conquer territory, Military, Matteotti Crisis
 Both - Women + births, Youth, Totalitarian, Strong Italy, Fear of
Socialism
 Catholicism - Pope was a rival to Mussolini, Church schools, Catholic
Action, Pacifism, Education – secondary schools v. Fascist

To solve this, Mussolini drew up The Concordat, or the Lateran Treaty.

This did the following:
 Made the Vatican City a sovereign state
 The Pope recognized Rome as the Capital of Italy
 Church was given 750 million lira, and 1000 million lira in bonds –
so if state does well, so do they, so in their interest to make sure
Mussolini does well.
 Catholicism was recognized as sole religion of state
 RE in secondary and elementary schools
 Church marriages recognized by state
 State veto over major church appointments – state can control who is
in church.
 Church control of divorce
 State accepted Catholic Action

This also made the church the largest holder of state bonds; therefore
it was in their interest now to support Mussolini.

1930’s – concordat. 1931
Compromise reached. 1935 –
Crusade’ but condemned use
and Spanish Civil War. 1938
– Quarrels over Catholic Action. 1932 –
Abyssinia – supported by church as a ‘Holy
of gas. 1937 – Quarrel over Catholic Action
– Anti-Semitism.
3
Mussolini Foreign Policy
Aims
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Acquire territory rich in resources – this gives Mussolini more cash and
power. Especially needed iron ore and oil.
Acquire new lands for cultivation – grow grain, make bread – Autarky.
Unify lands they already have.
Increase military.
Expand the Empire! Take Abyssinia – restore pride after Italy was beaten
in Adowa in 1886.
AUTARKY – major point! Mussolini wanted Italy to be “free from the
slavery of foreign bread”, so wanted to make Italy self-sufficient.
Problems
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Italy was the only Fascist country – everywhere else was democratic.
British forces controlled the Mediterranean.
Lack of natural resources.
Mussolini needed resources to build up the army, but needed an army to
seize resources – Catch 22 situation!!
Timeline

1924 – Hitler tried to ‘put down the rebellion’ in Austria – in reality,
he wanted to invade. To protect South Tirral, which was under Italian
control, Mussolini placed the army at the Brena pass, forcing Hitler to
back down. This earned him a lot of international prestige.

1935 – Italy invades Abyssinia under the impression that Britain said it
was OK, and that deserved an African colony due to the Treaty of
Versailles. However, the British decide that they said no now, and
Abyssinia went to the League of Nations. However, no sanctions were
imposed, since the British were scared of the Italian airforce
assaulting their navy.

1936 – Spanish Civil War. Mussolini supported Franco – Hitler was also
supporting Franco, and so this brought the two dictators closer
together. But Italian troops were still there in 1938!!

1937 – Anti-comintern pact. Basically allied Germany, Italy and Japan
together against the ‘threat of communism’.

1938 – Anschloss. Germany invades Austria, just like in ’24. This time,
though, Mussolini welcomes Hitler.

1938 – Munich Crisis – Hitler makes demands or he’ll invade
Czechoslovakia. Chamberlain gets them. Hitler wants them within 10 days.
Chamberlain mobilises. Mussolini organises meeting, sorts it out. Lots
of prestige for Mussolini.

1939 – Pact of Steel – military alliance between Germany and Italy.
4
Mussolini – Propaganda
Newspapers
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1923 law made sure that Prefects, who were usually Fascist, made sure
that papers contained suitable content. Hostile Journalists could be
arrested.
Popular journalists were given Government grants.
State controlled what papers did and did not say – for example,
reporting crime, disasters and unemployment was forbidden.
But Fascist party papers never had more than 10% of the overall
circulation.
Catholic Church still had an unchecked newspaper.
Journalists had to join a Fascist organisation.
Radio
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Originally neglected, but soon Mussolini realised its importance.
Two hours a day of official broadcasts, though this increased in the
1930’s.
Mussolini’s speeches were broadcast live.
Few people had radios, but they were set up in town squares and given to
schools.
Good way of reaching the illiterate.
Cinema
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Slow to realise potential again. LUCE created to produce documentaries
etc.
Before all films was a newsreel, local colour item, and a happy story
about animals/children (why don’t we get those anymore?!).
1920’s – Italian cinema dominated by USA imports. In 1934 the Gov
intervened, more due to Autarky than propaganda.
Restricted imports, but in 1938 ¾ of ticket sales were still for
Hollywood films!
Initially the Government valued the commercial success over propaganda,
e.g. escapist films, and only in the late 1930’s did self-consciously
Fascist films appear.
Films offered the Italians a false sense of security and pride.
Posters
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Again reached illiterate.
Government had a monopoly on posters.
Rallies
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Instilled a sense of belonging into viewers.
Showed state as a perfect machine as well as a work of art.
5
Sport
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Helped discipline, socialised people.
New stadiums (Roman architecture) were built.
Culture
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Official Fascist art produced. Many artists conformed to enhance their
career.
Still considerable cultural diversity in art.
Exhibitions were held, and ancient-Rome style buildings helped reinforce
the idea of Mussolini as an ancient Roman leader. Also demonstrated
stability of regime.
Literature and drama was left mainly alone, since it did not reach the
masses. Music also escaped regimentation despite the Ministry of Pop.
Culture supposedly controlling it.
Mussolini wanted to develop a Philosophy of Fascism. But Fascism had no
text explaining its nature!
Conclusion

Propaganda would have affected different groups in different ways, and
was only one factor helping to sustain the regime. It still played a
major part in sustaining his regime, and helped to reinforce support
gained for other reasons. It can be seen as unable to prevent
discontent, though, and the excesses of the *Cult of the Duce led to a
decline in Mussolini’s popularity. It can also be seen that Mussolini,
like Hitler, ended up believing his own propaganda, and this led to the
downfall of his regime.
6
Mussolini – School, University and Propaganda
How did the Fascists use Schools & Universities for propaganda purposes?
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No major change in structure.
Mussolini appointed the renowned Gentile as Education Minister to
reassure the elite.
Mussolini also encouraged Grammar schools, as they were favoured by the
Middle Class and led to professions.
30% illiteracy rate in 1921.
Gentile discriminated against women.
School attendance dropped by 100,000 in the first 4 years of Fascist
rule.
Gentile and his system of “fewer but better schools” angered many
Fascists and was dismantled in July 1924, when he departed.
The Government increasingly laid down what was to be taught.
In the 1930’s the Government started to seriously attempt to control
education.
Standard textbook – Libro Unico. Mussolini claimed this was to mould in
children “a real awareness of their duties as Fascist citizens”.
Teachers required to swear loyalty to the regime.
Bottai’s 1939 school charter – he wanted to establish an organic union
of the Party and the schools, and break down the class barriers in the
system, and focus on science and technology more.
Hence manual work became part of the curriculum, and so did military
training.
But this radical idea worried the middle classes.
Gov. control over what you learnt declined as you went higher up the
education ladder – possibly due to the fact people are more
impressionable when young, so only occasional reminders as to who the
Duce was were needed with older pupils?
Ditto control over teachers – University lecturers were not as strictly
“policed” for their values as primary/secondary schoolteachers.
More courses added, e.g. weapons training, rather than totally changing
the curriculum.
Not all teachers were committed Fascists despite the oath!
Indeed, the oath prevented a much-needed purge of teachers, which was
really needed for the state to achieve its aims.
The limited extent to which the Fascists controlled education is
surprising for a regime claiming to be Totalitarian!
7
“Mussolini’s control of Italy in the period 1925-1929 owed more to
propaganda than to the use of terror” How far would you agree with
this judgement?
Introduction
Outline that
however once
Mussolini’s
ignored, it
regime.
terror was used initially to ensure his hold on power,
in power, the focus turned to propaganda to portray
‘successes’. Although fascist repression cannot be
played a far more minor role than previously in the
Main Body

Early Repression: Fascist violence was more prominent in the
period 1920-1925 and although less obvious after that period,
repression was still apparent. There was comparatively less
repression in Italy than in German or Russia, however, Morgan
argued that “Repressiveness was not the most distinctive feature
of the Fascist Totalitarian system, but was an essential and
inescapable component of it”. It could be argued that popular
policies and successful propaganda were more important in
sustaining the regime than terror. Matteoti (1924), Rosselli
Brothers (1937), OVRA- 20,000 actions weekly, 50,000 armed
militia intimidated opponents, 400 people killed by state for
political reasons.

Propaganda: Used effectively, many different
propaganda used. Used to affect peoples attitudes.

Cult of Romanita: Ancient Rome was used as an example to show how
great an Italian empire could be and to give Italians pride in
their past, belief in their future and prepare them for the
expansion of fascism. It was filtered into many policies such as
education, archaeology, and even the fascist salute, marching
style and symbol. Duce- Dux compared to leaders such as Augustus

Press, media, film and radio: The press and media conformed to
the fascist state and were therefore largely independent. Film
and radio were used as propaganda, mixture of foreign and Italian
films were shown. Foreign radio stations were also uncensored.
Press was informed to keep Mussolini favourable- Cult of the
Duce- called back to balcony ten times, not tired after 4 hours
on a threshing machine.

Arts and Culture: The regime tried to influence the people
through arts and culture, alongside fascist productions and
commissions, as a result the artisans were allowed virtually
unrestricted freedoms. Despite Mussolini’s wishes, there was
never a fascist style of art. Most popular styles neoclassical
and modernist- contrasting styles.
varieties
of
8
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Dopolovaro: the fascist leisure organisation was set up in 1925.
It improved health and created support for the regime. Mass
activities and sport were also important. The world cup wins for
Italy in 1934 and 1938 were seen as a coup.

Minculpop: Established in 1937, amateurish in comparison to Nazi
Germany and Soviet Russia. Symbolised an increase in the
propaganda campaign.
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Battle For Births (1927): launched with a massive propaganda
campaign- films, public events and poster campaigns tried to
encourage a baby boom in Italy. Celebrated successes, in 1933
Mussolini met 93 mothers who had produced over 1300 children. Not
all women so readily seduced by the policy. As a result BfB
failed.
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Battle for Lira: aimed to fix Lira at 90 to £, reduce inflation,
and show Italians and the world that Lira and Italy was a mighty
power. Boosted Italy’s prestige, harmed economy by hitting
exports as well as Italian goods. Caused deflation 1936government had to devalue Lira. Despite propaganda successes.

Battle For Grain: aimed to boost cereal production to make Italy
self sufficient, less dependent on imports when war came. Cereal
production doubled at expense of other forms of agriculture.
Decline in quality of Italian diet, “success in this battle
was…another illusory propaganda victory won at the expense of the
Italian economy in general and the consumers in particular.

Battle of the Marshes: To provide more jobs, to increase land for
cereal production, to show dynamic government in action, to
impress foreigners. Latina and Sabaudia built as showpieces,
1928-1938 only 80,000 hectares of Land reclaimed one twentieth of
the propaganda claim of one sixth of Italy. Bigger impact in
providing jobs and improving public health than successes with
farming. Pontine Marshes were propaganda victory to show how
Mussolini was transforming the country.
Conclusion
Propaganda helped to strengthen the regime, reinforcing support for
Mussolini, particularly as there was a type of propaganda which
could appeal to everyone, across the whole of society. It appears
that propaganda was more influential than terror, which was not
widely employed to sustain power in Italy.
9
Mussolini – The Depression
Main Effects
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Withdrawal of US investments.
Farmers were hit badly with the collapsing grain prices.
Unemployment went up to two million.
Wages fell.
Industry was also badly affected by the fall in demand.
Government Action
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IMI set up to help banks
The IRI (Institute to Reconstruct Industry) was also set up.
This held the shares of firms to protect them.
It acted mainly as a hospital for ailing firms rather than trying to do
anything drastic.
The amount of hours in a working day was reduced.
More public works introduced.
This meant that people worked (no unemployment), and earned money,
buying cars etc. as there are lots of roads now (so businesses are
fine), and they spent this money with tax (so Government is OK). A + B +
C = Everyone is happy!
Extension of welfare.
Ban on emigration lifted.
Government encouraged price fixing and cartels (groups) by imposing wage
cuts.
Main features of the IRI
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Took over industrial shares held by banks and other companies, so fewer
firms went under.
By 1939 it controlled 75% of Pig Iron production, 45% steel and 20%
overall economy.
Bypassed the corporate state
Did not attempt to make radical or ambitious changes in industry etc.,
instead reorganizing industry to make it more efficient. If they had,
people would have lost jobs etc., and that would have meant no tax
coming in for the Government.
Significance
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Mussolini’s Government remained strong throughout the depression, unlike
other countries. This meant more support for Mussolini, both at home and
abroad.
There was minimal interest in Italy despite wage cuts and unemployment.
IRI demonstrated pragmatic nature of economic policy e.g. increasing
Government invention (communist!!) and irrelevance of Corporativism.
Unemployment in Italy was lower than the rest of Europe, as was the
decline in the GNP – in Italy it was only 6%, whereas in Europe it was
averaging at 7%.
10
Mussolini 1922-39
Main Effects
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Withdrawal of US investments.
Farmers were hit badly with the collapsing grain prices.
Unemployment went up to two million.
Wages fell.
Industry was also badly affected by the fall in demand.
Government Action
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IMI set up to help banks
The IRI (Institute to Reconstruct Industry) was also set up.
This held the shares of firms to protect them.
It acted mainly as a hospital for ailing firms rather than trying to do
anything drastic.
The amount of hours in a working day was reduced.
More public works introduced.
This meant that people worked (no unemployment), and earned money,
buying cars etc. as there are lots of roads now (so businesses are
fine), and they spent this money with tax (so Government is OK). A + B +
C = Everyone is happy!
Extension of welfare.
Ban on emigration lifted.
Government encouraged price fixing and cartels (groups) by imposing wage
cuts.
Main features of the IRI




Took over industrial shares held by banks and other companies, so fewer firms
went under.
By 1939 it controlled 75% of Pig Iron production, 45% steel and 20% overall
economy.
Bypassed the corporate state
Did not attempt to make radical or ambitious changes in industry etc., instead
reorganizing industry to make it more efficient. If they had, people would have
lost jobs etc., and that would have meant no tax coming in for the Government.
Significance
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Mussolini’s Government remained strong throughout the depression, unlike other
countries. This meant more support for Mussolini, both at home and abroad.
There was minimal interest in Italy despite wage cuts and unemployment.
IRI demonstrated pragmatic nature of economic policy e.g. increasing Government
invention (communist!!) and irrelevance of Corporativism.
Unemployment in Italy was lower than the rest of Europe, as was the decline in
the GNP – in Italy it was only 6%, whereas in Europe it was averaging at 7%.
11
Mussolini 1922-39
Key Economic Periods
1922 onwards - Economic recovery in Italy. Mussolini comes to office with
no specific programme and purcues traditional liberal economic policies of
lowering inflation and limited govt intervention.
1927 onwards - economy begins to weaken. Partly caused by the overvaluation
of the lira.
1929 onwards - Italy is hit by the Great Depression. Mussolini responds
with growing govt intervention to bail out the industrialists. Efforts are
made to establish the distinctly Fascist Corporative State.
1936 onwards - The economy is increasingly harmed by the stress on autarky
and the needs of war.
Chronology
1922 October - Lira valued at 90 to £
1923 - Law passed on reclamation of land (Battle of the Marshes launched)
1924 - Loans from US start (end in 1929)
1925 - Battle for Grain announced - high tariffs put on imported grain, new
marginal land used that was expensive to farm and govt grants to farmers to
buy machinery and fertilisers.
1925 - Palazzo Vidoni Pact passed (victory for industrialists, a pact
between Confindustria and Rossoni's Fascist trade unions depriving other
unions of bargaining rights).
1925 - Opera Nazionale Dopolavoro (OND) created.
1926 April - Rocco Law passed
1926 July - Ministry of Corporations set up
1926
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high tariff on imported grain introduced
Lira valued at 150 to the £
OND has membership of 281,000
1927
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Labour organisations CGL and CIL dissolve themselves as powerless.
Lira valued at 90 to the £ reached again, lira was returned to Gold
Standard and the exchange rate fixed.
Charter of Labour passed.
imposition of wage cuts by govt.
OND reorganised under PNF control.
12
1928
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Law passed on reclamation of land (Battle of the Marshes extended)
Rossoni's National Syndicalist Organisation splits up.
1929 October 24th - Great Depression hit.
1930 March - National Council of Corporations set up.
1930 - imposition of wage cuts by govt
1931 - OND has membership of 1.7 million
1933 - The IRI (Institute for Industrial Reconstruction) is set up (govt
agency) to help industry recover. It took over industrial shares previously
held by banks and those of other companies in trouble.
1933
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Law passed on reclamation of land (Battle of the Marshes extended).
imposition of wage cuts by govt.
1934
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Institute of Foreign Exchange set up as a govt agency to control trade.
budget deficit = 2 billion lira
1935 - National Prices Committee to control prices. Inflation controlled
until 1943.
1935-36 - Sanctions imposed on Italy by League of Nations as a consequence
of the Abyssinian War but they excluded oil and coal.
1936
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govt forced to devalue Lira
Exports shift from Western Europe to Germany increasingly from 1936.
Autarky formally announced as an official policy accompanied by a vast
propaganda campaign.
1937
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Ministry of Currency Exchange set up as a govt agency to control trade.
High Commission on Autarky created to supervise policies.
IRI becomes permanent with extended powers to take over private firms.
1939
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The IRI now controlled 75% of pig iron production, 45% of steel
production, 90% of ship building and overall controlled 20% of industry.
The state via the IRI now controlled a higher proportion of industry
than any other controlled except the USSR.
budget deficit = 28 billion lira
Chamber of Fasces and Corporations replaces Parliament.
OND has membership of 3.8 million
13