Industrial Uncertainty – A Possible Socialist Split – Yield of Taxes

«The Economist», 30 ottobre 1920, p. 782

Turin, October 22

The first effects of the occupation of works are making themselves felt. The Director-General of Combustibles – a new official, born during the war – has recently sent a notice to newspapers to the effect that a part of his coal stocks will be put at the disposal of industry. The notice was partly prompted by the British embargo following the miners’ strike, but was also caused by the decline in the trade imports of coal. In the two weeks ending October 17th only 8,000 tons of coal were imported into Italy on account of industry; of the 350,000 tons which Italy used to import monthly from Great Britain over half was on account of trade, and half on Government account; during the month of October private traders will import only 30,000 tons. A feeling of uncertainty as to the future of industry is spreading among employers, and they dare not import raw materials from foreign countries when the exchange outlook is uncertain, and the exact purport of workers’ control over industry is not known. Signor Giolitti has, indeed, said to a foreign correspondent that “control” has not the same meaning in Italian as in the English language. Control is not predominance of workers over employers, but simply “verification” of the results of the balance-sheets, somewhat on the line of “auditing” the books and accounts at the end of the year. But the workers’ leaders are not of the same mind, and aim much higher; they tend towards a true “control”, as a first step of a proximate nationalisation of industry. Their position is, however, somewhat contradictory; for when Signor Agnelli tendered his resignation of the post of chairman and general manager of the Fiat works, and advanced proposals for the transformation of this gigantic enterprise into a working men’s cooperative society, the men’s leaders recoiled and took time to reply. They say they fear the men are unprepared for such a task; they fear not being able to obtain credit and preserve useful trade connections. But if they fear failure in a single case, what of nationalisation of the whole industry?

The social and political movement may be said to have as its pivot the future attitude of the Confederation of Labour and of the Socialist party. The evolutionist section of the Socialist party held its meetings at Reggio Emilia last week. They were strong in their determination not to sacrifice to Lenin’s orders the old guard of the party; so that a split of Socialism into two or three sections – communist after the Moscow fashion, centrist, and moderate – may be foretold for the end of the year, when the Socialist party will have their annual session. The best men of the labour world, the leaders of the Labour Confederation, are reduced to impotence by the contradiction between the sane, businesslike, progressive line of action they would follow in the interest of the working classes, and the extravagant politics of continuous strikes and agitation to which they commit themselves from fear of the extremist denunciations in the party Press.

That industry may again be put on her legs is in the direct interest of the State, for the recovery of the newly imposed taxes. These new taxes are giving good results. The capital tax, of which the first instalment was due on October 18^th – in Italy all direct taxes are paid in six instalments distributed evenly over the whole year – is giving 354 million lire a year on the provisional assessment. When the assessment becomes definitive, the product will reach 700 million, and perhaps 1,000 million lire a year for a period of 10-20 years, according as the wealth of the taxpayer is mainly composed of stocks and shares or of land and houses. But what of the taxes on industry – income-tax and excess profits tax, which Parliament decided should go to 100 per cent, of war profits – if industry is reduced to a standstill by labour troubles? War profits were mostly invested in new machinery and plants. Taxpayers cannot pay to the Exchequer taxes in kind, they must give money; and money will not be forthcoming if employers cannot set themselves calmly to work.