Much has been said about fascism, some in good faith, and much in bad. One of the most hotly contended topics to surround fascism as an ideology is the outcomes of its social and economic revolution. Scholarship has been extremely divided for the better part of the past century over the successes, failures or what-have-yous of the various fascist regimes.

We intend in this article to help clear the air and provide the facts of the regimes and their impacts, beginning with Italy.

The Semi-Feudal State of Pre-Fascist Italy

While the rest of Europe was riding the wave of the Second Industrial Revolution, a young, unified new Kingdom of Italy was left in the gutter, experiencing limited growth between its unification and the 1920s when the Fascist movement would succeed in taking the reins. Italy had limited access to required natural resources, extremely underdeveloped transportation mechanisms, and an incredibly weak, financially bankrupt state. Overall, Italy experienced a thirty-year delay in comparison to other European nations on average. From the 1860s to 1870s, when taxes were introduced to finance national economic growth, the brunt weight fell on the end of consumers, as consumption taxes were introduced rather than wealth taxes, meaning the rich got away with more while the purchasing power of the average Italian was utterly and completely crushed [1]. By 1861, only 20,000 Italian citizens owned land, a requirement to vote.

But this is all a rather long time ago, let’s focus more on contemporary Italy during the time immediately before Mussolini’s rise to power. At the turn of the century, Italy’s delayed industrialization reinforced the agricultural-based aristocracy which had a stranglehold on the Italian economy [2]. While the situation for Italy notably did improve to some degree under subsequent left-liberal rule from 1899 to 1914, much remained the same. Up until 1914, the data indicates that the top 10% of the Italian population controlled 70% of the wealth of Italy, while the top 1% controlled 40% [3].

Growing social unrest mounted into the “red biennium” in Italy, otherwise known as the Red Years, which saw the mobilization of Italy’s peasantry, the occupation of factories, and food riots. During this period, those who would soon join the fascist movement, such as the lawyer Rotigliano, would join in on the side of the revolutionary workers’ movement.

World War 1 caused significant inflation within the Italian economy, and by 1920, Italy was experiencing 50% inflation annually. Basic goods such as food and housing became immediately more expensive. Italian wealth had been crippled. Currency and credit had been expanded, increasing the money supply and entailing extremely high prices. The nation was reliant on imports, foreign borrowing and experienced a severe lack of credit from international markets. On top of this, the national debt continued to skyrocket with each passing day [4]. 

The Rule of Fascism

With this economic reality in mind, the purchasing power of wages had to be adjusted downward to reflect the unfortunate reality which Italy found itself facing. Due to this, fascist austerity measures were implemented by necessity. 

However, it would be a severe mistake to classify the fascist economy as delegitimizing the labor movement in favor of the industrialists, as has been frequently claimed. To the contrary, the fascists saw equal danger in both the communist labor organizers of the late 1910s and the old bourgeois, as is covered in Herbet W. Schneider’s “Making The Fascist State”. Schneider covers the fact that under fascist rule, employers were price-capped to help consumers, and those firm-owners who did not comply with new labor organs under fascist governance were forced to do so, with the State going so far as to beat employers until they recognized the new laws. After all, it is Mussolini, who, at Ferrera stated “We fascisti are the first not to yield to a base sort of demagogy, but to maintain that the rights of the laboring class of the nation are sacred and that the rights of those who cultivate the soil are all the more sacred.” [5]

In one instance, fascist squadristi gave employers a set allotted time to lower prices, and when employers neglected this requirement, they were beaten harshly and then brought to trial. After repeated offenses against the price requirements, their shops were closed by the State [5]. Only after extensive pushback from private enterprise did this most harsh treatment of the bourgeois finally end.

In the early period of Mussolini’s reign, the economist Alberto De Stefani was appointed as Minister of the Economy. He initiated mild privatizations (not extensive, as has been claimed elsewhere) and liberalizing reforms. Stefani simplified and cut taxes, liberalized trade and curbed public spending. Under his ministership, the Italian economy grew 20% while unemployment fell 77%. Why did Mussolini appoint Stefani? Was this a return to the old liberal regime? Quite to the contrary. Utilizing the economic boom which was enabled by Stefani, Mussolini was able to heavily increase public confidence in his government. Through this boost in public confidence, Mussolini was able to enact what he had been hoping for the entire time, which was a heavier hand from the State in the weak Italian economy. As soon as this path was paved, Stefani, already unpopular with business sectors who opposed his liberalization, was dismissed as Minister of the Economy. 

Does this leave fascism as “capitalism in decay”? No. What has been demonstrated instead is that fascism was able to utilize temporary liberalizing reform in order to enable itself to pursue its egalitarian governmental mission. Contrary to what those at Forbes would state (who cover Mussolini’s utilization of Stefani [6]), the Italian economy soon became a model for success worldwide. Inspiration from the Italian system would soon take root in FDR’s administration in America, and countless nations across Europe & South America.

Quota 90, a goal to revalue the lira, succeeded under fascist governance in creating a much stronger lira, targeting an exchange rate of 90 lira per 1 British pound, which it succeeded in doing by June of 1927.

The creation and expansion of Italy’s school system and infrastructure under Mussolini’s rule was unparalleled anywhere else across all of Europe. What Forbes has referred to as “runaway spending” [6] was in fact the greatest infrastructural development across all of contemporary Europe. Bridges, canals, roads, hospitals, train stations, educational facilities and orphanages were built across the entire nation, while swamps were drained and forests were planted [7]. James A Gregor in “Italian Fascism and Developmental Dictatorship” notes that the scope of Fascist Italy’s social welfare programs were entirely unparalleled compared to the rest of all of Europe and much more progressive. This welfare aid included food assistance, infant & maternity care, wage supplements, public housing, paid vacation, unemployment benefits, and various insurances [7].

The real GDP underwent a sharp increase under the Fascist period in Italy, as demonstrated by the graph below which illustrates a notable jump in the nation’s wealth during the interwar period. This chart also shows, in reference to our previous discussion, that Italy, as far as real GDP per capita goes, was in fact far richer during the 1450s than it was during the 1850s.

Many readers may ask about the governance structure in this period. What did it look like? Was there genuine economic inclusion within Italy that represented the working man? The National Council of Corporations, which was founded on paper in 1926 through Royal Decree 1131, and put into effect in April of 1930, became in Italy “the thinking brain that prepares and coordinates” the Italian economy. This organization was inclusive of the representatives of fascist syndicates and business organizations, as well as other functional representatives such as the secretary of the fascist party, various state ministers, and experts in trade union organization, economics, production, trade and profit. The Council would be included in the Chamber of Fasci and Corporations in 1939, which too had representatives from the Grand Council of Fascism, families, veterans, public employees, railway workers, postal workers, employees of the state industrial companies, various cultural & veterans associations, confederations of employers and workers, professionals and artists, business owners and governmental ministers. In every sense, the cooperative structure of the Italian government was inclusive from top to bottom.

When the Italian Social Republic would be founded in 1943, although brief, Italian citizens were given the right to housing, uncultivated agricultural land was to be expropriated either to the State or transformed into worker cooperatives, and workers were to be guaranteed participation in company profits.

The Kingdom of Spain

The Directory of Miguel Primo de Rivera, who was indeed a fascist, basing his National Corporative Organization off of Italy’s Council of Corporations, and who also himself stated “Fascism…is a universal phenomenon that ought to conquer all nations…Fascism is a living Gospel”, needs little clarification or contextualization other than what will be provided here. The Directory was an astounding success for the Kingdom of Spain. Here are just some of the facts of the success of Miguel Primo de Rivera’s regime [23] [24] [25]: 

• The National Telephone Company was established in 1924.
• CAMPSA was created in 1927, achieving a monopoly on petroleum.
• Tobacco was also monopolized by the State.
• Average income rose by 8.9% (compared to an increase hardly over 1.5% in the prior two decades).

• Industrial production increased by 57.3%.
• Real wages rose by 31.3%.
• Exports grew by 86.2%.
• Cost of living decreased by 13.4%.
• GDP grew at an annual rate of 4.1%.
• Agriculture’s share of national income dropped from 51% (1923) to 40% (1930).
• Industry’s share rose from 26% (1923) to 34% (1930).
• Full employment achieved across Spain.
• Social housing, retirement systems, and protection for mothers and families were established.

• Illiteracy rate decreased from 52.35% (1920) to 42.33% (1930).
• 8,000 new schools were built, accommodating 300,000 new students.
• Number of primary school teachers rose from 28,924 (1923) to 34,680 (1930).
• Secondary education enrollment increased by 20%, as the economic conditions of the middle-class improved.
• University students more than doubled, from 27,000 (1923) to nearly 60,000 (1930).
• Reform of the Baccalaureate (1926) placed a brand new emphasis on technical-scientific education and Spanish history, fostering patriotism among the youth.

Only after one year of the Great Depression did Miguel Primo de Rivera’s directory fold under the pressure of international collapse, leaving behind a mixed legacy of both progress, modernization and development, alongside political unrest caused by external and internal forces (namely the heavily politicized military that had been overstepping its bounds since the 1890s, and the withdrawal of foreign investment due to the Stock Market Crash of 1929).

The Third Republic of Uruguay

From 1931-1933, at the peak of the Great Depression, government deficits in Uruguay reached nearly 1 to 1.5 million pesos per month, exports of beef and mutton fell sharply, imports were not proportionally reduced, payments on foreign debts to the U.S. and Britain were defaulted, and the nation was experiencing high unemployment & near bankruptcy in institutions such as public health and pensions, while the nation’s favorable 1930 trade balance turned into a deficit of 6,949,342 pesos in 1931 [9].

In 1933, Gabriel Terra, the then-president of Uruguay, and ideological fascist who hoped to institute a corporatist government and economy in Uruguay, conducted a self-coup that instituted his regime as a dictatorship. He quickly sought to mobilize a new constitution that would dictate a “Third Republic of Uruguay”. Immediately, the situation in Uruguay began to improve.

In 1934, Uruguay’s foreign trade increased, with exports growing from 42,171,956 pesos to 43,012,250 pesos. The U.K. absorbed 24% of these exports, followed by Germany (16%) and the U.S. (11%). The Uruguayan peso exchange rate stabilized after a sharp devaluation in the early years of the crisis. Bank deposits grew by 13% between 1936 and 1939, with an increase in private banking participation. Bank loans and advances grew by 32.5% between 1936 and 1939, driving investment and consumption. Agricultural production and industrial activity recovered, stabilizing employment and purchasing power as the State began implementing credit policies and expanding public employment.

By 1937, material production exceeded 1930 levels by 82%, driven mostly by the manufacturing sector. The industrial profit rate had increased from 21.4% in 1930 to 24.3% in 1936. After 1936, the industrial sector’s growth rates became 7% and 8% annually. Private banks which had initially lost resources even from 1921-1925 before the Great Depression became more lively as credit was reactivated, benefiting livestock and industry. Check demand increased from 222,000 checks in 1933 to 513,000 in 1939, demonstrating a greater money circulation. Between 1935 and 1939, chilled beef exports averaged 136,100 tons. By the second half of the 1930s, the nation had paid off its debt. The State promoted labor laws such as work-hour reductions to address unemployment as well.

The United States’ National Recovery Administration

 Under FDR, the corporatist institution known as the “National Recovery Administration”, run by Hugh S Johnson, although brief in its existence, oversaw some of the most impressive benefits of the entire period of FDR’s first term. According to Johnson’s “Blue Eagle, from Egg to Earth”, published in 1935, the NRA succeeded in creating 2,785,000 jobs during its two-year existence and encouraged more job growth than all other New Deal agencies combined during its operation. The organization also aided in adding $3,000,000,000 annually to American purchasing power. The Bituminous Coal Code introduced by FDR’s NRA helped 4,500 small coal companies return to operation, while the Lumber Code revived over 2,000 small mills, and the Retail, Wholesale, and Rubber Tire Codes saved tens of thousands, perhaps over 100,000 small merchants [10].

According to the National Archives, in the first four months of the Presidential Reemployment Agreement & the NRA’s Blue Eagle Campaign, 96% of commerce and industry voluntarily complied with the NIRA, covering over 400 industrial labor regulation codes [11].

For one important case study, the NRA reduced the workweek from 55 to 40 hours in shipping container production, increasing employment by 30.7%, raising minimum wage to 40 cents per hour, while over the course of three years, shipment values rose by 76.34% while the industry’s share of national income increased from 0.1% in 1930 to 0.29% in 1937 (a 190% increase), continuing to use its container code regulations after the fall of the NRA when the Supreme Court ordered its dissolution [12].

Early on however, by 1934, the government had began attempting to hamper the NRA as it threatened the power of the Supreme Court, which feared a dictatorship from FDR. Due to bureaucratic hampering, such as the federal government enforcing delays, the original 96% compliance in 1933 dropped rapidly by late 1934 and the NRA was declared unconstitutional in Schechter Poultry Corp v. United States (1935) [13].

Peronist Argentina

Juan Peron, who rose to power in Argentina following the Military Revolution of 1943, utilized his position in the military to aim in establishing the fascist corporate state within Argentina between the years of 1944 to 1955. Under Peron, most middle-class children and a significant part of the upper working-class within Argentina finally gained access to widespread secondary education, especially in commercial and technical education [14]. In 1946, following Peron’s rise to power, there were a mere 2,049,737 students enrolled in primary school, and 217,817 in secondary school. By 1955 when he was overthrown by reactionary and traditional political forces, there were 2,735,026 students in primary school and 467,199 in secondary according to Argentina’s Ministry of Education [15] [16]. Until 1955, in Argentina, school curriculum was well coordinated, 14 new universities were created since Peron’s rise, and the budget for universities was raised from $48 million (1946) to $256 million (1950). On the other hand, free university education roughly doubled the number of Argentina’s university students. This was due to Peron’s own 1949 free public university education Decree 29.337/1949 [17] [18]. 

Through an ideological conception that prioritized social benefits over individual profits, Argentina dropped its infant mortality rate from 90 per 1,000 in 1943 to 56 per 1,000 in 1955.  Tuberculosis rates on the other hand, fell from 130 per 100,000 in 1946 to 36 per 100,000 in 1951 [19]. The number of hospital beds, 66,300 in 1946, rose in 1954 to 131,440 hospital beds. By 1947, Peron had eradicated endemic diseases such as malaria through extensive medical campaigns, alongside syphilis and venereal disease, while creating 234 free hospitals or polyclinics. The mortality rate from tuberculosis freefell from 130 per 100,000 to 36 per 100,000 by the end of Peron’s administration while epidemics such as typhus and brucellosis were defeated in their entirety [19]. 

In 1942, 6.5 million Argentinians had piped water and 4 million sewage services. By 1955 the beneficiaries were 10 million with piped water and 5.5 million with sewage services. Infant mortality, which was 80.1 per 1,000 in 1943, fell to 66.5 per 1,000 in 1953, and life expectancy, which was 61.7 years in 1947, shot up to 66.5 years in 1953 [20].

Between 1945 and 1948, the real wages of public employees rose by 35%, while wages for industrial workers rose an average of 50%. During the same period, consumption both in the public and private sectors rose around 20%, while pension funds grew from 300,000 members in 1944 to 3,500,000 in 1949. A fund was also established to grant pensions to all low-income persons over 60 who are not covered by any pension system. In addition to this, indirect wages were paid for through housing schemes, free distribution of clothing for schoolchildren, free distribution of textbooks, free holiday camps and personalized attention to individual and family needs, by the Eva Perón Foundation. Oil production increased by over 50%, reaching 84% of total crude oil extraction as well [21]. Electrical energy between 1946 and 1955 (in million kWh) went from 3.84 million in 1946 to 7.20 million in 1952 [22], while Peron’s First Five Year Plan resulted in the commencement of the construction of 41 hydroelectric power stations. 

All of this progress and impressive growth occurred simultaneously as the USA almost completely restricted Argentinian imports into Europe. Even with this in mind, in 1952 the Peronist government decided to pay off its foreign debt in full.

Conclusion

Under Mussolini, Italy transformed from a semi-feudal agrarian hellscape of an economy, to one with substantial infrastructure, expansive social welfare programs, and significant economic growth. His early austerity measures stabilized the Italian economy, and allowed for future state intervention. The Fascist State fostered significant infrastructural development, social welfare expansion, and real GDP growth, while defending the needs of the working, succeeding in balancing labor rights and the interests of private property. The fascist Directory of Miguel Primo de Rivera succeeded in founding long-lasting state monopolies on industries such as petroleum and tobacco, boosting the GDP, raising wages, and reducing the cost of living. Spain during his rule saw an until-then unprecedented improvement in education, literacy and social protections, only collapsing under the pressure of the Great Depression, Rivera’s ailing health and communist subversion alongside conspiracies from within (by the King & the military) and betrayals from his closest allies (the UGT & Socialist Party). The Third Republic of Uruguay under Gabriel Terra revitalized the nation, stabilizing the currency, promoting agro-industrial recovery, and implementing unprecedented labor laws. 

By 1939, Uruguay’s material production and industrial growth surpassed pre-Great Depression levels, driven by increased investment and public employment. The regime succeeded in balancing the economy, mitigating the unemployment crisis caused by the liberal order, stabilizing public finances, and implementing a corporatist economic vision. The United States under FDR’s brief NRA created millions of jobs, raised wages, and revitalized struggling industries, only being cut down due to federal bureaucracy that hampered its ability to move onward, and opposition from the classical liberal Supreme Court. Argentina under Justicialist rule, significantly improved public health, education and social security, implementing free and universal education, eradicating various diseases, and expanding access to clean water and sewage all while reducing infant mortality, expanding domestic production and raising real wages.

Each of these states demonstrated the undeniable and absolute success of fascist economics in stabilizing each of their own national economies while eradicating unjust inequalities. May there finally be no doubt by now that fascism was nothing other than an inexcusable success for each and every nation which implemented its ideals.

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