Economic policies of Fascist Italy

The economy of Italy under Fascism refers to the economy in Italy between 1922 and 1943 when the Fascists were in control. Italy had emerged from World War I in a poor and weakened condition. Post-war there was inflation, massive debts and an extended depression. By 1920 the economy was in a massive convulsion — mass unemployment, food shortages, strikes, etc. This conflagration of viewpoints can be exemplified by the "Two Red Years".

Benito Mussolini came to power in 1922 under a parliamentary coalition until the National Fascist party seized control and ushered in a one-party dictatorship by early 1925. Before the dictatorship era, Mussolini tried to transform the country's economy along fascist ideology, at least on paper. In fact he was not an economic radical, nor did he seek a free-hand in the economy. The National Fascist Party held a minority faction of only three positions in the cabinet, excluding Mussolini, and providing other political parties more independence. During the coalition period, Mussolini appointed a classical liberal economist, Alberto De Stefani, originally a stalwart leader in the Center Party, as Italy’s Minister of Finance, who advanced economic liberalism, along with minor privatization. Before his dismissal in 1925, Stefani “simplified the tax code, cut taxes, curbed spending, liberalized trade restrictions and abolished rent controls,” where the Italian economy grew more than 20 percent under his influence.

To proponents of the first view, Mussolini did have a clear economic agenda, both long and short-term, from the beginning of his rule. The government had two main objectives — to modernize the economy, and to remedy the country's lack of strategic resources.

Before the removal of Alberto De Stefani, Mussolini's administration pushed the modern capitalistic sector in the service of the state, intervening directly as needed to create a collaboration between the industrialists, the workers, and the state. The government moved toward resolving class conflicts in favour of corporatism. In the short term the government worked to reform the widely abused tax system, dispose of inefficient state-owned industry, cut government costs, and introduce tariffs to protect the new industries. But theses polices ended after Mussolini took dictatorial controls and terminated the coalition.

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