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THE STATE AND ECONOMIC LIFE IN FASCIST ITALY1 LoRNE T. MoRGAN FASCISM results from economic crisis, a decline in parliamentarianism , and the threat of communism. In its origins it is a petit-bourgeois movement with a muddled programme, composed of a mixture of quasi-radical reforms and ultra-nationalism. The inconsistencies of this curious medley of contradictions, frequently referred to as National Socialism, are overlooked or forgotten in the worship of a blindly followed leader whose word is the final dictum on all matters. Fascism comes to political power by finally gaining the support, at first surreptitious, of large-scale capital interests, which see in it a potent weapon for the defence of the status quo. To begin with, it amply justifies the hopes and expectations of this group whose backing made its ascent to power possible. In so doing, however, it abandons the progressive planks of its earlier platform and ruthlessly suppresses the elements which advocated them. So much for its origins and early development.2 The question then arises: What is Fascism in its maturity? Italy has been chosen for study because it best exemplifies the logical working-out of the forces inherent in Fascism. In the relation of the state to the economic life of Italy between 1922 and the present four periods can be distinguished. The first, from the inauguration of Fascism in 1922 to the beginning of the depression in 1929, may be called the period of non-intervention. The second, extending from 1930 to 1933, witnesses a large amount of involuntary and haphazard intervention; the results of the depression necessitate state action in the economic sphere, but that action is neither the result of preconceived planning, nor is it systematized in any way. The third period, covering 1934 and 1935, sees the state inaugurating a programme of dearly planned and closely correlated intervention, although intervention is still !This study, the result of two years of research, was written and set up before Itnly's entry into the war. The writer wishes gratefully to acknowledge the aid given him by the Commercial Counsellor of His MPjesty's Embassy in Rome, and by the Commercial Attache of the United States Embassy in Rome. He alone is responsible, of course, for the opinions expressed. •For a more detailed account, see the writer's "The Origins and Development of Fascism" (f.ssays in Political Economy, ed. H. A. Innis, Toronto, 1938, pp. 167-90). 428 FASCIST STATE AND ECONOMIC LIFE 429 generally regarded as an undesirable necessity inflicted upon the government by forces which it now endeavours systematically to control. In the fourth and final stage, extending from 1936 to the present, the government deliberately establishes, as an admittedly permanent policy, a planned economy whi«;h results in a high degree of what may best be State Capitalism. I. THE PERIOD OF LAISSEZ-FAIR£ (i) 1922-9 The years 1922 to 1929 were characterized by a reaction against the progressive legislation and government interference of the,postwar period. The departure from the previous policy was clearly foreseen by industrialists, whose official mouthpiece, Organizzazione lndustriale, wrote on November 1, 1922, two days .after Mussolini set up his first government: · The new regime is formed. Industrialists look to it with 'great hopes. Industrialists will support the programme of this regime with all their strength, for in it, for the first time after long years, a protection of the rights of property, the general obligation to work, a full valuation of the energy of the individual and of n:~.tional sentiment are proclaimed energetically. It recognizes the importance and the great influence of a class which, i( numerically insignificant, is devoted to its high task of preparing the economic re-birth of ltaly.a Mussolini showed that this confidence was not unwarranted when, addressing the International Congress of Chambers of Commerce in Rome on March 18, 1923, he promised that "the State would renounce its economic functions, and the Government'would accord free play to free initiative and would abando'n any interventionist legislation." 4 In implementing its non-interventionist programme during the first seven years of its existence, the Fascist government restored certain state monopolies to private enterprise...


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