Economic Management: the establishment and structure of The Corporate State

The Corporate State Every industry would be part of a fascist led corporation that would sort out disputes between workers and management and help to organise production, pay and conditions. Mussolini argued that the Corporate State was the Third Way standing between communism and capitalism. The corporate state existed more in theory than in practice. Establishment of the Corporate State was not carried according to a clear-cut plan. The structures and even the ideology of the corporate state emerged only slowly during the late 1920s and 1930s and were dominated by the stateappointed officials. They played no part in defining economic policy or, indeed in developing the economy Most industrialists were suspicious of them and Mussolini failed to give them any backing. It took until 1934 before the system was fully established, with corporations formally set up in 22 areas of the economy.

Key Chronology
The structure of the corporate state 1925 Oct- Palazzo Vidoni Pact 1926 April- The Syndical Aw (Rocco Law) 1927 July- Ministry of Corporations set up 1927 April- Charter of Labour 1928 Nov- Break-up of the fascist syndicates 1929 March- Giuseppe Bottai, Ministry of Corporations 1930 March- Council of National Corporations set up 1931 Dec- IMI established 1933 Jan- IRI established 1934 Feb- Launch of 22 reformed corporations

Aims of the Corporate State: There were two main aims of the corporate state: To solve the problems of class conflict and industrial unrest. To increase the extent if state intervention in the economy. These aims caused tension within fascist movement because key groups and individuals had rival ambitions and wanted to pursue different policies.

Rocco law/Syndical Law 1926: April 1926 Mussolinis Justice Minister, Alfredo Rocco introduced the Syndical Law (Rocco Law) banning strikes and providing for cooperation between workers syndicates and employers. This was the real beginning of the corporate state. He set up in each major area of the economy, separate corporations of workers and employers each of which would also have state-appointed officials on its committee. The Syndical Law was actually designed to weaken the union rights, primarily through banning the right to strike.

Edmondo Rossoni This man was the driving force behind the corporatist ideas. He was the leader of the fascist syndicates and helped their unions to greatly increase their membership. On the other hand Mussolini didnt want to offend large business or to allow the syndicates to become too powerful. Rossini in 1928 he lost his power along with the old leaders of the syndicates. In the Palazzo Vidoni Pact, the fascist syndicates gained a monopoly of the right to negotiate with employers.

There were three very different views as to how the Corporate State was to work: 1. The view of the fascist unions, who had nearly 3 million members and expected to be able to dominate the employers - the fascist unions power was a threat to the big employers. This was due to the large amount of members (nearly 3 million) that Edmondo Rossoni helped to gain. 2. The view of the big employers, who were very nervous of the power of the unions and wanted Mussolini to get them under control. 3. The view of the fascist politicians who really believed in the ideology of corporativism and wanted to make the system of corporations work.

Ministry of Corporations This was set up in July 1926 put industrial relations even more firmly under state control. The new Minister of Corporations was Giuseppe Bottai, an ambitious and ideologically committed fascist. Quote from Alexander De Grand: the only serious attempt to realise a corporative policy in Italy occurred between 1929 and 1932 under Giuseppe Bottai. Key points - 1926 high tariff on imported grain introduced Lira valued at 150 to the OND has membership of 281,000

National Council of Corporations (CNC) Supervised by Bottai in April 1930, the CNC was like a pyramid 1. At the top it was run by Mussolini and government ministers 2. Second level were civil servants and Fascist Party Officials 3. On the bottom were representatives of corporations from sector of the economy. Bottai hoped that this system could be made to work efficiently and that it would bring about economic modernisation and social unity.

There were three main reasons why this did not happen The system of power in fascist Italy was very complicated and implementing coherent policies was always difficult. The ideology of the Corporate state was not fully worked out until 1932 and the structure of the corporations was only finalised in 1934 The unions had been weakened so much and the employers had gained such a strong position that the CNC could not impose policies the employers did not like Mussolini was not willing to have a confrontation with the big industrialists, so Bottai could not rely on baking from Il Duce. In 1932, Bottai moved from the Ministry of Corporations and the momentum behind the policy slackened off

Evaluation Complete failure It never had real power over the economy and was easily passed by big businesses It was not an economy policy at all, only a confidence trick to take away power of the unions and allow the bosses and state to exploit the workers. Wages and living standards were kept down deliberately The Corporate State was based on sound policies, but these were never implemented properly because of the inefficiency of the system and the internal divisions within the fascist regime

Partly successful It was admired and imitated abroad. British and American trade unions leaders, for example, genuinely believed Italy was coping better with the great depression than their own countries. Hitler in Germany and Oswald Mosley in Britain copied many of Mussolini's ideas on bringing people together in one united national community The original aim, to prevent strikes and industrial unrest, was achieved. Industrialists had virtually complete control over their workers. Italian workers were at least partially satisfied by the benefits provided by fascist social policies Politically, Mussolini won the backing of big business and strengthened his regime

Exam Question How far did the corporate state transform the Italian economy?

Revision Questions 1. 2. 3. 4. 5. Explain why the Corporate State was introduced? Whats the CNC? When was the Syndical Law introduced? Briefly explain what were the three different views? Briefly explain why the corporate state didnt work?