How successful were Mussolini’s economic policies between 1922 and 1943?
Mussolini’s had three key economic aims when he became the Duce in 1922, first to consolidate the political system, second to make Italy economically self-sufficient (Autarky) and lastly to provide the economic base for military might. These aims were desired to make Italy a great power, like Germany and France. However the economy of the Italy was effectively split into two eras, pre-world war two and during world war two, making many of these economic policies less effective and irrelevant after 1939.
After 1922, Mussolini aimed all his policies, including his economic ones, to consolidate his power. Mussolini aimed to improve social and economic conditions for Italians across the nation – he wanted to appease the masses so that his grip on the nation would become far stronger. Mussolini aimed to fix the Lira at 90 for £1 and this was achieved in 1927 when the Lira was returned to the ‘Gold Standard’ and the exchange was fixed. Exports became more expensive and so smaller firms were undermined; they were the foundations of Italy’s economy and were being put on the back foot by Mussolini’s poor economic policies. Furthermore, serious deflation corresponding to a 20% wage cut meant that firms and consumers were both struggling financially and consequently, the standard of living across Italy diminished greatly. The great extent to at which the quota 90 failed is exemplified by the decision to devalue the Lira in 1936 due to the severe economic implications it had inflicted in Italy. The Battle for the Grain was a key battle – it aimed to boost cereal production and reduce Italy’s import-dependency – however, it was another major failure. In 1925, high tariffs were imposed on imported grain, whilst farmers received new machinery and techniques to help boost grain production. Although, cereal production doubled between 1922 and 39, what imports fell by 75% between 1925 and 1935, its indirect negative effects were heavily outweigh the positives brought by the economic policy. Export dependent industries suffered greatly and faced a huge fall in demand and thus caused great amount of unemployment. Furthermore, grain prices increased and the quality of Italian diet diminished greatly, so quality of living fell greatly – the social costs from improving grain production are more potent that the economic benefits as grain is a part of all Italians’ diet and hence affected more people adversely than those affected by the economic boosts in the Grain industry. As a result, it is clear that socio-economic conditions did not in fact improve as people found it harder to living, whilst industry became typically regressive. This meant that Mussolini lost great amounts of support and so his political opposition increased; this meant that it would practice his authority over Italy as there would be more disapproval and rebuttal.
Autarky was a central theme in Mussolini’s economic policies – he wanted Italy to produce all its major needs such as food, raw materials and manufactured goods for itself. Mussolini directly faced this issue by forcing industry to create import substitutes to reduce its import-dependency, for example a cheese-based lanital was used instead of wool, rayon instead of cotton and new mineral sources of energy were being sought. Increased tariff protection and increased currency control were also implemented; they did not help Italy economically and socially. On the whole, these economic policies were very wasteful of financial resources as no coal and oil supplies were discovered. Furthermore, by 1940, only 1/5th of Italy’s industrial raw material needs were met which meant that industry could not advance greatly. Import prices rose meaning that the cost of living for Italian citizens rose drastically and so significantly reduced the standard of living. The textiles industry was hit greatly as production of things like wool and cotton were being transferred to other substitutes like rayon and lanitals and so those firms who could not adapt went bankrupt; this created unemployment and reduced output. As a result, Autarky was a failure as Italy was still dependent on imports to meet the vast majority of raw materials and it adversely affected businesses and people; profits and disposable incomes reduced respectively. As a result, businesses went backwards, whilst people endured diminishing standards of living and hence Mussolini’s economic policies were very regressive. Since Mussolini lost the support of a large amount of people and businesses, this can be seen as a great failure as it did not increase his political support and as a result fragmented his grasp in Italy. Mussolini believed that self-sufficiency would help Italy when engaging in war as it would reduce their dependence on other economies. However, the war deteriorated Italy’s economic position and autarky was certainly unsuccessful as many Italians could not feed themselves adequately during the conflict.
The war economy between 1940 and 43 was disastrous; industry and people found conditions significantly more strenuous, whilst illegality (the black market) strived. Annual steel production fell very heftily between 1938 and 1943 – output fell by 0.6m tonnes which destabilised such firms and the long term viability of them became very questionable. Furthermore, major firms like FIAT experienced the number of vehicles manufactured being halved between 1938 and 41 and this greatly diminished Mussolini’s perception as a leader since a key, established Italian firm was deteriorating. Morale of workers were also damaged during the war; systematic bombings of Italy’s major industrial centres as well as wartime shortages of heating fuel and consumer goods were to blame for this. The hardships of workers were also exacerbated by the fact they could only consume 1000 calories a day, which significantly reduced the quality of living. It highlighted how Autarky had clearly failed and that Mussolini was incapable of fully implementing a policy that would be achieved – in other words, Mussolini was not decisiveness enough and did not follow through as well as he could have with the economic policies he imposed. The Black Market also strived as farmers looked to capitalise in the increasing domestic demand for food by charging higher prices. Consequently, it is clear that the war economy as a failure as it epitomised Italy’s well-renowned economic backwardness and socially regressive nature during difficult times. Resultantly, Mussolini lost the support of a vast amount of industrialists as well as average working class members in society and so his prime aim of political consolidation liquidated and meant that his power was being tarnished. Restoring socio-economic prosperity was clearly unachieved since people were enduring famine-like conditions and were unable to enjoy new consumer goods.
In conclusion, it is evident that Mussolini’s economic policies were unsuccessful, and as Mussolini's ambitions grew domestic policy was subsumed by foreign policy, especially the push for autarky after the 1935 invasion of Abyssinia and subsequent trade embargoes. The push for independence from foreign strategic materials was expensive, ineffective, and economically wasteful. It was achieved by a massive increase in public debt, tight exchange controls, and the exchange of economic dynamism for stability. Even though there was some economic improvement, this was short term and largely insignificant.