Misurata, G. V. (1937). Economic progress of fascist Italy. Roma: Usilia.
Fascist action in the economic field
In the last few days I have been reviewing once more the leading events in the several economic sectors, with a view to bringing them before you in a summarized statement, leaving aside the action of Fascism in the field of national and international politics and culture, and confining myself strictly to the economic and social fields.
I shall not of course try to insulate political from economic facts, the latter are in function of the former, and it is no exaggeration to say that everything is in a certain sense political.
This is more than ever true in the case of contemporary Italy, molded in all her manifestations by Fascism, or rather by the man who personifies Fascism, Benito Mussolini.
Yet without losing sight either of the dominant or of the interdependent factors, we many usefully review the economic aspects of the history of these fifteen years of the Regime.
When Fascism first came to the fore the Italian business world was still facing problems and difficulties arising from the great war then still far from being solved or ended.
Later on, Fascism had to meet the great depression of 1929. Apparently that crisis started in America but in reality it had far deeper roots; it was the crisis of a system, caused by the transition from one epoch to another. It marked the failure of a whole ideologic system, a failure long foreseen by Fascism.
Then again, Fascism had to face another crisis arising from the economic effort required of it, necessary in so for as it was needed for the creation of the Empire, unnecessary in so far as it was due to the hostile action taken by others. We thus have three great cycles; three great historic moments.
After these introductory remarks, as captain of a ship, - and the Head of the Italian Industrialists may well be compared to one, let me take my bearings and then proceed unhesitatingly on my course, convinced, as we Fascists are, that the course for Italy's economic and social life has now been definitely traced, and is being methodically followed day by day, with firm confidence in the morrow and unlimited and enthusiastic faith in the Leader.
Past achievements afford surety for the future, and it is of these and these only that I will spend a short time on.
THE FOUNDATIONS FOR ECONOMIC GROWTH
However anxious we may be to limit our field of observation, we must nevertheless refer briefly to the foundations on which our economic growth is based.
Of these the most important is the corporative organization now universally recognized as the most characteristic achievement of the Fascist regime.
Corporatio is an old Latin word, but the Fascist corporation is something radically different from that known to the ancients which was a trade society formed for strengthening and protecting its members, quite regardless of any collective interest.
The Fascist corporation is profoundly different for it brings together all the factors engaged in production, conciliating class interests within each branch of industry and the interests of the several branches within the nation.
We can safely say that the Act which set up the corporations gave final shape to the Fascist Revolution in the economic field. That act, drafted on lines traced in accordance with the experience acquired in the working of the occupational unions (sindacati] and with the principles Laid down in the Labor Charter, gives clear expression to a conception of economic discipline which regulates economic activities not only by legal enactments, but by instilling into all concerned a clear realization of the collective interests involved in individual activities.
As I have already had occasion to say elsewhere, it would be a mistake to judge corporative activities solely by the number and nature of the regulations issued by the corporations or by the economic agreements ratified by them.
The invitations issued to producers and occupational groups to solve definite problems submitted to them after carefully studying all their aspects and all the possibilities involved; and the policies laid down for the guidance of the several branches of production, must also be considered as effective measures for the regulation and coordination of production. Thus side by side with the activities assigned them by law, the corporations perform a most valuable work of persuasion and education among the producing classes, they create a moral atmosphere, and form and strengthen in each and all that corporative mentality which is essential to make regulations effective.
The corporations have completed a first cycle of work and have already started on the second. Their work, like that of all other bodies, is susceptible of improvement, but it is already fruitful.
The reform of the Chamber of Deputies and the formation of the Chamber of the Fasci and the Corporations, as approved by the Grand Fascist Council, will insert the corporations in the legislative machinery of the State, increasing their legislative powers and heightening their political and constitutional prestige.
As was inevitable, economic progress has been accompanied by an improvement in the physical, moral, and intellectual health of that prime factor of every civilisation, and more especially of Fascist civilization, man.
The success of the action of the Regime in this vast field is shown by the following figures:
The death-rate has been reduced from 18.21 per thousand in 1922 to a little over 13 per thousand in the last few years.
The death-rate from tuberculosis has been reduced to less than half, falling from 1.56 per thousand to 0.76.
The death-rate from malaria, that old curse of our country which seemed fated to endure for ever, has been more than halved.
In the field of education, the number of pupils frequenting the primary schools has risen from three and a half million in 1921-22 to nearly 5 million last year.
The regular instruction given in these schools is moreover supplemented by the educational activities of the Balilla foundation, that characteristic and inimitable instrument of the Fascist regime.
The stimulus given to vocational training should also be noted.
Insurances against disability, old age, unemployment, and sickness protect our workers against the risks they run both as workers and as men.
The 40 hour week is a factor in the physical and social uplift of the working classes, which countries describing themselves as the leading democracies, have copied from us and have laboriously attained after struggles and political unrest which Italy has not experienced.
Paid vacations and the Fascist Saturday may be described as further and natural successes secured by the working classes, which are completed and justified by the Dopolavoro, (Leisure time organization another excellent creation of the Regime which has been brought to a remarkably high standard of perfection.
The system of family allowances, recently introduced, is in full keeping with the several measures taken in connection with population policies. Its deep moral significance, apart from its economic bearing, completes, I might almost say ennobles, the action taken by the Regime for protecting the worker and strengthening the race.
Means of communication.
In all ages the means of transport and communication have been instruments of and an index to civilization.
All of us remember the condition of Italian roads before 1922.
Today they are some of the best in the world.
As the roads have improved, the circulation of motor vehicles has increased, although it has not yet attained its full development. At the end of 1922 the number circulating in Italy barely exceeded 75,000; at the end of 1936 it exceeded half a million.
In 1923 the length of the routes run by public automobile services did not exceed 20,000 km; it now exceeds 105,000.
The differentiation between rail and road traffic, each supplementing the other, is giving a new settlement to the goods transport problem.
In 1922 the railways employed 223,525 men; they are now giving better service and handling a heavier traffic with 134,000.
The length of railway lines electrified is now the longest in Europe, having risen from 857 km in 1922 to over 5,000 in 1936.
Turning to the merchant marine, we need not remind you that the Italian transatlantic liners enjoy the preference of foreign tourists on the American and Far Eastern routes.
Our harbors have been improved, and not less than 2,000 million lire have been spent on enlarging our leading ports and providing them with equipment in keeping with modern needs.
Twenty-eight air lines, covering a distance of nearly 22,000 km, connect our different cities between themselves, and with Italian Africa and the leading capitals of Europe, Asia, and Africa.
Our telephone system, automatic all through, has grown threefold; the international connections have increased tenfold.
But it would take too long to complete this review of the foundations on which our economic activities are built. We must be satisfied with the data given, and pass on to describe the progress achieved in the leading sectors of production
THE GROWTH OF PRODUCTION
Italy is and must continue to be a great agricultural country. But two formidable problems had to be met: the reclamation of the land and the increase of the wheat yield. Fascism, more than ever impersonated by the Duce, has devoted itself with untiring determination to these two problems, and here again facts speak for themselves.
Not only has integral land-reclamation brought into use the swampy lands which are the most obvious feature of the reclaimed area, but it has also given value to the mountain sides which form so large a proportion of our country. The reclamation works, completed or in course of execution, cover an area of some 5,030,000 hectares, equivalent to 17 % of the total national area and plans are drawn up for the reclamation of another 3,500,000 hectares.
The area under wheat has risen from approximately 4,700,000 ha in 1922 to 5,031,000 in the last crop year, but yet more notable is the marked increase secured in the average yield per hectare, which has made it possible to raise production from an average of 4.5 million metric tons of wheat per annum to an average fluctuating between 7 and 8 million metric tons, except in years when meteorological conditions are exceptionally unfavorable.
This is no longer the battle of the wheat, but the victory of the wheat.
During the same time the production of corn has risen from 2.2 to 2.8 million m. tons; that of paddy from 450,000 to 600,000 m. tons, that of potatoes from 1.5 to 2.5 millions m. tons, and so forth.
Nor has this increase been secured at the cost of other crops; on the contrary, a more or less important increase has been secured in the yield of all other farm crops.
Conspicuous progress has also been made in animal husbandry, the number of head of live-stock having considerably increased.
The present consumption of chemical fertilizers (some 2 million metric tons per annum) is nearly double that of the period prior to 1922.
And while the Fascist regime has taken a whole series of technical and economic measures to encourage agricultural production, efforts have been made on a vast scale to create higher living standards for farm workers, to attach the tillers to the soil by bonds of affection, to make them realize that their obscure and seemingly humble toil is one of the most potent and reliable sources of life, prosperity and independence for the nation, secures the physical and moral health of the race, and ensures the safety of the social system.
If it is possible to sum up thus briefly the essential problems of agriculture, characterized by mass phenomena and large-scale figures, this is not possible in the case of industrial production.
As I have often said in speaking to Italian manufacturers, what may be described as the traditional, century old, capillary system of production in Italy is that of the craftsman. Those brought within the system of syndical unions alone, number 800,000. Not far removed from the activities of the craftsmen are those of small industry, another typically Italian formation. There are 130,000 small businesses, employing from 10 to 50 workers each, totaling about one million workers. They differ but little in their characteristics from the family business in which man is all and the machine counts for little. The system is a sound and valuable one in a country like ours where the skill and ingenuity of the workers are among the most valuable raw materials vouchsafed to us by nature.
Medium-sized industrial concerns have also characteristics of their own and they mostly meet the needs of the home market.
Large scale industry is essential to any great country. Mass production on a scale which can meet international competition, and the output of vast quantities of goods and services essential to modern civilization, cannot be secured except by business concerns of great size, equipped with powerful plants and provided with adequate financial resources.
But while big business is necessary, its demographic importance is not great. In Italy there are only some 700 firms employing more than 500 workers each, accounting in all for some 700,000 workers; a number somewhat below that of the craftsmen.
Undoubtedly it was in the industrial field that the Regime had to solve the most difficult technical problems, and the one in which it has obtained the biggest success. As in all the other countries which took part in the great war, Italian industry experienced a violent, artificial expansion, and in the period of reaction which followed, grave and deep perturbations.
While inflation attempted to check the phenomenon of reduced productive activity, delaying for a brief time the inevitable phase of involution, it only made the collapse more serious. The situation was made still worse by the incapacity of the governments of the day, whose instability, due to their subservience to political parties, lack of any definite policy, and absence of all will and possibility of achievement, unfitted them for grappling with situations requiring strict discipline, spirit of sacrifice, and a clear vision of national interests above and apart from those of individuals or classes.
In the meantime the class-war was raging, fanned by the inevitably painful consequences of the war, and ignominiously exploited by the false patrons of the working classes desirous of sowing the seed of hatred and of creating disorder.
In 1920, sixteen and a half million days of work were lost through strikes and locks-out; in 1921 eight million, in 1922, seven million. Strikes and lockouts; two words which Italians, thanks to Fascism and to the corporative spirit, have now fortunately forgotten.
Fascism courageously identified, elucidated and rehabilitated the industrial situations bequeathed it by the past regime, situations which had inevitably affected by the banking system.
We must glance backwards at the banking, financial, and economic system, both governmental and private, of that period which leaned for support on industry and in turn supported it, in order to realize the great work of selection and reconstruction which has been carried out, and the solidity of the foundations which have been laid for the future.
First of all, the fundamentals of national finance had to be revised so us to give producers the possibility of safe international exchanges. Money and prices had to find a definite equilibrium.
The reduction, in the years immediately following the advent of the Fascist regime, of the budget deficit, converted in 1925 into a surplus which was only lost in 1929 as a result of the vicissitudes of the depression, was followed by the settlement of the financial relations existing between the Fascist and foreign governments.
The foreign debt, which amounted to the astronomical figure (Mussolini's expression] of 140 billion lire, had to be settled and an honorable settlement was made. These were the leading factors which afforded a basis for the great monetary operation carried out in 1927, after the historic Pesaro speech, which gave our national economy a sound and stable monetary situation.
Having fixed, as the fundamental premises of the industrial system, respect of private property and private enterprise, while subjecting both to organic regulations laid down by the Government which, in the Fascist system of ethics, is above the interests, needs, and wishes of individuals, the action taken for transforming and strengthening industry was able to proceed in that atmosphere of quiet security so essential to industrial activity and progress.
Monetary stabilization marked the end of productive policies based on progressively rising prices, and forced the several branches of activity to conduct their business on realistic technical and administrative lines. This was a first step towards the revision of the whole machinery of production, and pointed the direction for those further modifications and regulations, which were to attain their highest expression during the Ethiopian war.
Let me here give a few figures. The general index of industrial production, on the basis 1922=100, rose in 1929 to 228, showing that production had nearly doubled, and the increase extended to all branches: in the mining industries, 83%; in the textile 92%; in the electric 199%; in the chemical 122%; in the engineering 140%; and in the building 412%. If we bear in mind that similar index numbers, compiled for agricultural production, show for the same period an increase of 38 % we shall realize the growth of industry as compared to that of other Italian economic activities.
And this growth compares favorably with that of other great countries in the same years. While the Italian index, as stated, showed an increase of 127%, that of Great Britain increased 22%, that of Germany 44 %, the United States 39%, and France, a country in which post-war phenomena were akin to ours, 79%.
It may be said that some of these great and old countries had a much broader economic structure than ours, and could not therefore secure expansion on so large a scale; but even this criticism does not stand the test of figures.
But, as already stated, Fascism, in common with the whole world, had to face the depression of 1929, described by the Duce as a crisis of the system and not in the system, a crisis which marked the end of liberalism even in foreign trade relations.
The economic system of a century collapsed after attaining its culminating point, for the means of self-preservation with which, like all organisms, it was provided, no longer sufficed to keep it in repair.
The result was a slump of prices and of all values, disparity between costs and prices, the accumulation of huge stocks, the rapid inflation of all manufacturing production, the spread of unemployment which in 1932 affected 22 million persons, an almost astronomical figure, an index of misery, a threat of revolution.
The index of industrial production on the basis 100= 1929, fell in our case in 1932 to 66, that is to say by one third. The decline was however markedly below that of other countries because social discipline, the absence of strikes and locks-out, the constant support given by the Government to production, had checked the phenomenon while some sectors, such as those of the chemical and electric industries which were still in a phase of rapid development, were able to avoid violent fluctuations, and suffered only a decline in their rate of expansion.
The culminating point in the crisis of readjustment came in 1932, after which the several factors began to adjust themselves to the new economic situation through a slow and laborious process of revision. Situations in all fields of activity improved, more especially in our country. The labor market, decongested by the timely introduction of the 40 hour week, rapidly absorbed unemployment; tax exemptions granted to new buildings led to exceptional expansion in the building trades with favorable reactions in all other industrial sectors; unemployment became a practically negligeable quantity, and even foreign trade, though still the most depressed branch, showed symptoms of recovery.
It was then that under the guidance and by the wish of the Duce, the enterprise was started which was to build up the new Italian in the thousand years of Italian history a new chapter of heroism, abnegation and power.
Even in its preparatory stages this Ethiopian campaign, undertaken in the name of the King, conceived and conducted by the Duce to ensure the safety of our old Colonies and to give our country those openings to which it is fully entitled because they are essential to its future life, placed a heavy strain on all Italian productive activities.
It is a source of pride to all Italian producers, in agriculture, industry, and commerce, that they prepared the means required for equipping an expeditionary force of over half a million men, fighters and non-combatants, for a campaign whose duration could not be gauged, while at the same time arming and preparing a formidable army at home, ready to meet all the eventualities which might have arisen on the torbid European horizon.
And everything was got ready rapidly and silently, with methodical, well-regulated fervor.
The import trade was regulated, special powers were extended and gradually enlarged to a Commissariat for the production of munitions, a whole series of measures for securing the total and complete economic mobilization of the country were taken.
Those who like myself were in close touch with the several branches of producers in that period of preparation, know what an effort was required of them. They had to pass rapidly from the reorganization phase of industrial recovery to that of feverish production.
The difficulties of this economic mobilization were increased by the absurd sanctions. It would be superfluous for me to retrace their history, but I may be allowed to remind you that their purpose was to prevent us from exporting our goods, as it was thought that the consequent reduction of our means of foreign payments and the refusal of credits would make it impossible for us to secure the raw materials we had to import. Italians should also remember that these measures were strictly enforced by the sanction countries, reducing our foreign trade with them by 80 %.
Sanctions had to be met first of all by limiting imports, thus causing heavy loss to industry. National discipline however made the attack ineffective, and sanctions became a decisive factor in determining our action for securing self-sufficiency, or at least the largest possible measure of economic independence.
The work performed by Italian producers in adjusting and modifying their methods during the period of sanctions was not restricted to those great branches of production which can more readily be controlled and identified, but it penetrated, by a capillary process, in all directions including the less conspicuous and less known.
I am not called on in this rapid review of the general situation to illustrate the technical and economic problems which have been or are being solved in the field of self-sufficiency by securing the fullest possible development of national resources, using all industrial and agricultural raw materials, manufacturing new finished or semi-manufactured products, utilising agricultural and industrial bye-products which formally could not, or it was thought could not be economically availed of.
All that will be told by others who have been asked to deal with those specific problems.
Let me say, however, that when the Duce outlined future policies for securing economic independence in his memorable speech on the Capitol, his words already had a solid basis in fact.
Sanctions had a stimulating effect on our economic life. The rhythm of work was maintained at a notable level, in many branches it was even higher than in 1934. On the basis 100 = 1929, the index of industrial production, which averaged 80 in 1934, averaged 82.9 in 1936 and rose to 90.9 in December of that year. Manufacturers, faced by the imperative need of economic independence, surpassed themselves; and today economic independence is no longer an effort of adjustment, but a fundamental aspect of our productive mentality.
Remember and prepare! the Duce said in one of his recent speeches, and for all Italians those words represent the lesson taught by sanctions.
Great historic events are costly to those who live them. This is an unavoidable fact, true for us as for others. But let us not exaggerate the cost, let us not allow foreigners to talk of our financial ruin when they have nothing better to talk of.
The Grand Fascist Council has silenced such flights of fancy. It has announced that our note circulation does not exceed 15,500 million lire, of which 1,500 million circulate in East Africa, and that our gold reserves stand at 4,000 million, exclusive of the special Treasury reserve. It added that the operations of the Treasury, which culminated in the recent loan on real estate, will suffice to meet all needs until the close of the financial year 1937-38 without recourse to further emergency measures, whereas other countries, with financial and economic resources far exceeding ours, and who have to their credit no such gigantic undertaking as the conquest of the East African Empire, have to resort day by day to new forms of loans to guarantee their credit and cover the needs of the Treasury.
THE ECONOMIC DEVELOPMENT OF THE EMPIRE
This third cycle which Fascism had to face and overcome after those of the post-war years and of the depression, has given Italy an Empire.
In the highlands of Abyssinia, Italy now has some 8 to 10 million new subjects who are now pacified. A new stage in her existence and in the life of Fascism is dawning now, one which requires resolution and enterprise, qualities of which our recent glorious past gives sure promise. We already know the existing economic resources of Ethiopia: the large production of coffee, the best in the world, can be greatly increased; the cotton already grown in the north and south, and which grows wild in many parts of the country, appears to be of excellent quality and susceptible of great development. The vast verdent plains we hear of from those who return from that country, can support a vast current of emigration and allow of the development of a well organized ranching industry. Hardwoods of the most prized varieties are assured us; and day by day we are receiving news, which does not yet amount to a technical certainty, but which justifies well-grounded hopes of the mining resources of the country. In short, a new and unexplored world awaits the Balilla, the Avanguardisti and the Young Fascists of to-day, one which they must develop with the same daring and in the same spirit in which the sons of Italy have enriched immense territories in North Africa and in the two Americas. But now and henceforth no longer as obscure emigrants, but as soldiers, blackshirts, and workers under the flag of a great King Emperor and led by a great Leader.