Instead, the economic system of Fascist Italy could perhaps be best described as fascist corporatism. A system which exchanged laissez-fair for a new system of economic control that benefits state interest. Although, Welk (1938, 153-154) argues that, the system of Italian corporatism actually lies somewhere in between laissez-faire capitalism and a communist command economy. Therefore, in the continued existence of capitalism it is important to consider the key entity, big business.
The Role of Big Business in Fascismo
Big business is not only central to the fascist program but also financed the rise of fascismo as outlined in Mussolini’s rise to power. Thus, it is important to consider what and why big business stood to gain from the rise …show more content…
In the view of Guérin (1976, 27-31), light industry specializes in finished products, and their customer base is consumers, whereas government and businesses are the consumers in heavy industry. Moreover, heavy industry is considerably less adaptable to disruptions in supply or demand. This is due to two reasons, the first is that heavy industry has a higher ratio of fixed capital. Thus, any disruption in production or demand can incur incredibly high costs. The second, is that relatively low production numbers give firms less ability to spread out incurred cost across units. Therefore, the only efficacious manner to reduce costs is by cutting wages. Ordinarily, an effective union, or strike, would stop a drastic wage-cut. However, under Mussolini’s fascist regime, they were both outlawed, effectively removing the workers bargaining power. Moreover, in times of war, metals, and oil are perhaps the most important commodities. Accordingly, during war, these commodities will be very lucrative and in high demand. However, upon peace they experience a demand …show more content…
Guérin (1976, 217-218), notes that upon gaining power, Mussolini issued a 400 million lire subsidy to Ansaldo to return it to solvency. Ansaldo’s solvency ensured not only relative stability of the Italian economy, but also that Ansaldo would be prepared for coming military expeditions. This was the first of many bailouts of struggling banks and heavy industry by the Fascist state. The involvement of the state in returning firms and banks to solvency grew considerably in the 1930s when the great depression reached Italy. Three of Italy’s largest banks, Banco di Milano, Credito Italiano, and Banca Commerciale all faced bankruptcy, but were returned to solvency via three supposedly autonomous banking institutions financed by the
The Role of Big Business in Fascismo
Big business is not only central to the fascist program but also financed the rise of fascismo as outlined in Mussolini’s rise to power. Thus, it is important to consider what and why big business stood to gain from the rise …show more content…
In the view of Guérin (1976, 27-31), light industry specializes in finished products, and their customer base is consumers, whereas government and businesses are the consumers in heavy industry. Moreover, heavy industry is considerably less adaptable to disruptions in supply or demand. This is due to two reasons, the first is that heavy industry has a higher ratio of fixed capital. Thus, any disruption in production or demand can incur incredibly high costs. The second, is that relatively low production numbers give firms less ability to spread out incurred cost across units. Therefore, the only efficacious manner to reduce costs is by cutting wages. Ordinarily, an effective union, or strike, would stop a drastic wage-cut. However, under Mussolini’s fascist regime, they were both outlawed, effectively removing the workers bargaining power. Moreover, in times of war, metals, and oil are perhaps the most important commodities. Accordingly, during war, these commodities will be very lucrative and in high demand. However, upon peace they experience a demand …show more content…
Guérin (1976, 217-218), notes that upon gaining power, Mussolini issued a 400 million lire subsidy to Ansaldo to return it to solvency. Ansaldo’s solvency ensured not only relative stability of the Italian economy, but also that Ansaldo would be prepared for coming military expeditions. This was the first of many bailouts of struggling banks and heavy industry by the Fascist state. The involvement of the state in returning firms and banks to solvency grew considerably in the 1930s when the great depression reached Italy. Three of Italy’s largest banks, Banco di Milano, Credito Italiano, and Banca Commerciale all faced bankruptcy, but were returned to solvency via three supposedly autonomous banking institutions financed by the