Nick Izzo

Multimedia WR
11/18/14
Italian Fascism and Industry
Italy is commonly thought to have experienced an entirely dark political period
between the years of 1922 and 1945. In the former year, Benito Mussolini, a member of
the National Fascist Party, first took power. The latter marked the end of World War II,
and with it the beginning of a new era in Italian history. Despite the common belief that
Mussolinis regime was nothing but trouble for the Kingdom of Italy, Il Duce actually
led Italy to see improvement in certain fields of industry. Although Mussolini's regime
ultimately saw an overall loss of industrial power, that loss is often overstated, and the
fascist regimes buildup of engineering and entrepreneurial power, their experience with
a major scarcity of crucial imports, and their new economic system built towards heavy
industry ultimately allowed post-war Italy to find massive economic success.
The negative aspects of the fascist regime were many. Even before the war, the
fascists had begun their attempt at vastly reorganizing the Italian economy. Mussolini
intended to strengthen his countrys economy, starting with his ascension to power in
1922, in order to quickly display the success of his ideology, and for a few years was
successful, but the commercial banks had, however, begun to suffer in the second half of
the 1920s...[bringing] industry and banks to their knees (Lyttelton 76). Even from the
very beginning, the fascists plans were not faring smoothly. The cause of this crisis was
entirely the fault of the fascist regime, rather than, as some might claim, the liberals who
ruled Italy before them. [I]n Italy the electrical engineering and chemical industries were
born with [World War I]. Shipyards and the engineering industry grew so much that their

structure was altered completely, and the liberals, who ran Italy for decades prior to the
fascist regime, had successfully given Mussolini firm economic ground to stand on
(Lyttelton 73). It was Mussolinis actions, and his alone, that caused the downturn of the
Italian economy in the 1930s. Historians like Jon Cohen argue that Mussolinis quota
novanta, or Q 90, the revaluation of the Italian Lira to roughly 90 pound sterling, was a
major factor in weakening the economy, causing Italy to be more reliant on imports, and
saw that across the board wage cuts of 15 to 20 per cent were imposed (Cohen 99).
Mussolinis advisors had all argued with him against such a plan, asking to perhaps
establish a higher rate. Il Duce, however, in order to establish stronger government
control over the economy, took a major risk with his revaluation, and lost. Between the
poor economic results of Mussolinis plans, and the dark, destructive political period that
the fascists brought to Italy, not to mention the close relationship between Mussolini and
Adolf Hitler, the fascist regime is often compared closely with the Nazis. And like the
Nazis in Germany, Mussolinis reign was so terrible for the Kingdom of Italy, that in the
Italian Constitution today, it is forbidden to reorganise, under any form whatsoever, the
dissolved Fascist party (Italian Const., Transitional and Final Provision XII). Evidently,
the ideas of the fascists did not win the support of the Italian people, but despite being
formally banned from the politics of the new Republic of Italy, the fascists were not, in
fact, entirely the destructive force they are commonly portrayed to be.
If the fascists are to be blamed for the suffering that they brought to Italy, they
must also be credited for the good that they achieved. The destructive results of the
fascist regime are often overstated, and when looking at the numbers, it is clear that much
of what the fascists did was in fact beneficial to Italy. Il Duces alignment with the Axis

in World War II, and the subsequent devastation of the country, is often quickly looked to
as a major failure of the fascists. However, the fascist regime managed to keep losses
rather modest throughout the war. In Italy: How to Lose the War and Win the Peace,
Vera Zamagni notes that ...war losses in industry were relatively limitedthere are very
few branches in which the 1946 capacity was inferior to that of 1938 (Zamagni 211).
Zamagni specifically points to the engineering sector of the economy, among others, as
having actually strengthened during the war, noting the total increase in the war years
had been by 50%, and was reduced to one-third only by war damage. The machine-tool
industry, among other engineering branches, ended the war greatly enlarged (Zamagni
211). Despite the heavy losses to Italian industry, engineering prominently stands out,
having seen a massive increase over the period of the war. The decimation brought by the
war was not only completely cancelled out by the fascists involvement in growing
industry, but is actually overtaken by it. It is this specialty in engineering that would be
among the advantages that Italy would benefit from following the war. In another book,
edited by Patrick McCarthy, Zamagni states "Italy ended the Second World War with
modest overall loses in its industrial capacity, which actually resulted in a greatly
enlarged engineering sector. This was the sector destined to become the cutting-edge of
the great industrial expansion in the following half-century (McCarthy 42). In addition,
Mussolinis regime managed to keep losses of human capital, as well as industrial
capacity, relatively low. Overall casualties, both military and civilian, were low,
[totaling] less than half a million, and equal to 1.3% of the population of more than 10
years of age. Military casualties alone in World War I exceeded 700,000 men (Zamagni
213). The greater number of workers available to the Italian economy allowed it to

remain strong and grow substantially in the years following the war. In addition to many
war veterans able to return and contribute to the economy, many other Italians gained
valuable experience working during the war, which they could put to use rebuilding their
country. Italian firms had trained workers who were then laid off at the end of the war
with enough skills to start their own business (McCarthy 44). By the time the
devastation of the war was over, the fascists had kept Italys industrial and human capital
both relatively strong, and ready to rebuild their nation following the war.
The Italian economy was so prepared, in fact, to rebuild the country that
immediately following the war Italy experienced what is today known as the economic
miracle. Zamagni states this is a period obsessed with enlarging capacity. and the
results are truly amazing (McCarthy 49). It would be in this period that those
entrepreneurs and engineers from the fascist era would come to lead their country.
Zamagni presents data stating that, over the years 1938-1943, production in the sector of
Engineering jumped 50%. This jump also happened while other sectors, such as metals,
chemicals, and building, fell as much as 73% (Zamagni 182). Italy saw the creation of a
multitude of new products, including refrigerators, typewriters, plastic materials, [and]
motorbikes, one of which was created by the company Vespa. Production of the Vespa
started in 1943, and only became more popular, with markets today in the Europe, the
US, and Brazil (Vespa). Brands like Vespa were the face of the Italian miracle, and their
heritage can be traced back to the Fascist era. Italys ability to innovate and become
competitive in world markets, especially in such a short time after such a terrible war,
proves that the Fascists influence on the industrialization of Italy was substantial, and
not the destructive force as which it is often portrayed. In addition to new engineering

success, Italy also had a strong entrepreneurial base and economic leaders. As stated in
McCarthy, Italy had no shortage of entrepreneurs ready to start their own businesses.
Additionally, an element that strongly supported the Italian drive during reconstruction
and the economic miracle was the availability of economic leaders trained during
fascism (McCarthy 47). While the Marshall Plan and other projects in Italy were critical
in allowing the country to become strong again, Italy could not possibly have bounded
back so fast without the entrepreneurial and economic power created under Mussolini.
The fascist regime also put Italy under the economic brace of weak imports.
Italy, similarly to her World War II ally Japan, is extremely poor in resources, and their
major exports include fruits, wine, food pastes, cheese, sul[f]ur and mercury (Miller
556). Like in Japan, resources notably missing from that list include important strategic
resources such as coal, oil, steel, and copper, and Italy relied heavily on imports to supply
itself with those commodities. However, Italys choice of alliance in the Second World
War caused those imports to be weak. Zamagni mentions, during World War I, Italy
could avail herself of the alliance with the UK and the US and was able to expand
imports considerably (Zamagni 183). In World War II, however, Italys position in the
world commodity market was significantly weaker; with her only allies a resource-weak
Japan, and a Germany preoccupied with supporting the Fhrers army, Italy had nowhere
near as much power importing her resources. In another table by Zamagni, it is made
clear that Italys imports fell far short of her need during the war. In the category of liquid
fuel, among other commodities, Italy is estimated to have needed, on average, 8380
thousand tons of fuel per year, and only received roughly 1100 thousand (Zamagni 188).
This trend was not unusual; in other categories, such as coal, steel, and copper/tin,

imports were far below the total Italian demand. However, as necessity is the mother of
invention, the weak import situation was one major reason why Mussolinis regime made
sure to support the Italian engineering sector of industry so strongly. Additionally, by
experiencing this brace, the economic leaders of post-war Italy, including those trained
during the fascist period, became clearly aware of the huge part that imports played in
Italys political and economic trade situation. According to Zamagni, indeed, hardship
was so sever that a lesson was learned; one of the basic postwar guidelines of Italian
foreign policy was for Italy to be open to trade and international cooperation, to avoid
crippling Italian industry (Zamagni 188). Italys leaders knew that history repeats itself,
and could not possibly put their country again through the economic trouble spelled by
weak imports.
Internationally, Mussolini and the fascist regime allowed Italy to realize its
position in world economics, but domestically, Il Duce also drastically altered Italys
economic system in order to support heavy industry, which would allow post-war Italy
that great increase in industrial capacity that it witnessed during the economic miracle.
The backbone of this system was the Istituto per la Recostruzione Industriale, or IRI. This
institution, created by Alberto Beneduce, the real protagonist of Fascist economic
policy-making, was a state-owned but profit-motivated institution which came to own a
very substantial part of large-scale, capital-intensive industry (Lyttelton 75, 76). IRI
shifted the economic landscape of Italy in favor of the state, which subsequently
supported heavy industry, and allowed Italian industry to flourish. IRI worked so well, in
fact, that the institution was only dissolved in 2000, almost 60 years after the end of
World War II. IRI both enabled the state to support Italian industry in the fascist period,

but also financed major reconstruction projects after the war. The Italian financing
system allowed private industry to build a very large automobile industry, a reasonably
large chemical and pharmaceutical industry, [etc.,] that managed to stay for several
decades at the leading edge of technology (Lyttelton 78). Vespa again is a prime
example, which both came from the industries Mussolini supported the most, and became
a popular export. Overall, Lyttelton says, "in all honesty it must be recognized
that...[Beneduce and IRI] succeeded in putting Italian capital-intensive industry on a
more efficient footing (Lyttelton 76). Beneduces new economic system was clearly the
factor that allowed Italian industry to find its strength, both before and after World War
II. Without the new economic system, the fascist regime would not have been able to
support Italian industry in the same way, and the country could have never capitalized on
its strengths in engineering and entrepreneurship.
Contrary to popular belief, Il Duce and the fascists did not run Italy into the
ground during their reign. Between Italys engineering and entrepreneurial buildup, the
experience of the economic brace of weak imports, and the drastically altered
economic system of Alberto Beneduce, fascist Italy saw that her industry would become
drastically stronger, at first in certain sectors before and during the war, and then
immediately following it.

Works Cited
Cohen, Jon S. "Was Italian fascism a developmental dictatorship? Some evidence to the
contrary." Economic History Review 2nd ser. 41 (1988): 95-113. JSTOR. Web. 25
Oct. 2014. <http://www.jstor.org.proxy.library.nd.edu/stable/2597334?seq=1>.
"Costituzione della Repubblica Italiana" ["The Constitution of the Republic of Italy"].
Constitutionnet.org. N.p., n.d. Web. 17 Nov. 2014.
<http://www.constitutionnet.org/files/Italy.Constitution.pdf>.
Davis, John A., and Adrian Lyttelton, eds. Liberal and Fascist Italy. New York: Oxford
UP, 2002. Print.
Davis, John A., and Patrick McCarthy, eds. Italy Since 1945. New York: Oxford UP,
2000. Print.
"Italian Industry: End of an IRI." The Economist. N.p., 22 June 2000. Web. 17 Nov.
2014. <http://www.economist.com/node/81311>.
Miller, Henry S. "Italian Monetary and Exchange Policies under Fascism." American
Economic Review 30 (1940): 554-60. JSTOR. Web. 25 Oct. 2014.
<http://www.jstor.org.proxy.library.nd.edu/stable/1807581?seq=3>.
Vespa.com. Piaggio & C S.p.a., n.d. Web. 17 Nov. 2014. <http://www.vespa.com/>.
Zamagni, Vera. "Italy: How to Lose the War and Win the Peace." The Economics of
World War II: Six Great Powers in International Comparison. Ed. Mark
Harrison. N.p.: Cambridge UP, 2000. 177-223. Print.