The New Italy

«The Economist», 18 novembre 1933, pp. 952-953

In a speech of studied gravity before the National Council of Corporations in Rome last Tuesday Signor Mussolini declared to his hearers that the economic crisis under which the whole creation groans and travails to-day is not a crisis in the private capitalistic system, but of it. The Duce went further: the capitalist system had had its day. Its dynamic phase endured from 1830 to 1870; the static lasted only a decade, from 1870 to 1880; then came the phase of decadence, inaugurated by a system of cartels and trusts, and developing into a State-regulated economy. In this process the private capitalist system had ceased to be merely economic; it had become a widespread social problem, under whose baleful influence we were now «standardised from the cradle to the grave: a diabolical thing!». These seem strange words from the creator of Europe’s corporative State par excellence; but stranger still followed. Signor Mussolini thought that Italy was not a capitalistic nation, and never would be one. The corporative principle will in future secure the people’s well-being; therefore the new Chamber of Deputies, that relic of capitalistic politics, when elected, will vote its own euthanasia and straightway proceed to commit it. Thereafter the National Council of Corporations is to assume power. The old parliamentary system, born with dynamic capitalism and liberalism, was now like them ripe for death. The Italian corporative renascence to-day, in a world of general crisis, would then impose itself everywhere, in Signor Mussolini’s view.

What, then, is this corporative State, and in what does the essence of «a corporative solution» consist? The following description of the former and present system is based upon information from our Italian correspondent. The corporative idea was put forward not long after the Fascist revolution, largely because the political and administrative control of the new Fascist regime was faced, as was only to be expected, with obstacles and loopholes inherent in the old private-capitalist economic fabric. The first application of the idea occurs in the law of April 3, 1926, which regulated the relations between capital and labour. The transformation, in virtue of this fundamental Statute, of free multiple unions into public employers’ and employees’ syndacates which were to regulate wages, hours, and conditions of labour, gave rise to the question: What will happen if the two sets of public bodies should not agree? Labour Courts, endowed with the power of compulsory decisions, were a solution, because Labour Courts can give decisions only on special points. But what if judicial decisions required changes in the methods of production, in price formation, or in marketing? Section 3 of the Statute of April 3, 1926, was content to say that central organs mediating, under a higher authority, between employers’ and employees’ syndicates, should be consituted. Regulations made on July 1, 1926, in pursuance of the same law, called these central organs by the name of corporations. The Labour Charter (sixth section) declared that corporations are the unitary organisation of productive forces in the State, and that they can issue compulsory orders (norme) as to the conditions of labour and also as to the co-ordination od production, when empowered to do so by interested syndicates (unions of employers or employees). As corporations then, however, did not exist, no use could be made of the powers granted. A further move was made by the royal decree of July 2, 1926, and a more extensive step by the statute of March 20, 1930, which created, instead of separate Corporations, a National Corporations Council, with power to issue «orders for the regulation of collective economic relations by legally formed syndacates». These orders could be made only if the Council was invited by the interested syndicates and if the head of the Government, representing the general interst, gave his assent. It soon appeared that the machine was not easy to work, as the conditions (1) of agreement between all the syndacates and (2) of the assent of the Premier were not easy to fulfil. The Council was not invited to make orders on the regulation of industry more than in one or two cases. Moreover, when a statute contemplated the creation of compulsory associations (e.g., on prices, production quotas, and other industrial group regulations), the whole procedure took place outside the Corporations scheme. The individual firms concerned and the Corporations Department (in its capacity as, say, the British Board of Trade) were the organs called on by the law to organise the particular associations. Finally, another special Departmental Committee was created to give advice on the requests of industrialists to start new ventures or to renew or extend industrial plant.

The present task is the coordination of all these scattered pieces of legislation. The Corporation, which has hitherto had a nominal existence, is now to become a living organism. The present economic organisation based on a hierarchy of linked employers’ and employees’ syndicates, and on their local, regional and national federations and confederations, must be integrated into a larger organisation based on interlocking units called corporations. Foreign observer will be interested in the fact that the Corporative State, which was from the beginning the leit-motiv of Fascism, only now finds its embodiment in an organisation which can properly be called corporative.

Many problems must therefore be resolved. Leaving aside such problems as are purely political, the most pressing technical points seem to be the following. Will corporations merely integrate, or entirely supplant the syndicates? If a special organ, called a corporation, regulates economic and social problems, what will the respective employers’ and employees’ syndicates have to do? If both parties are represented in the corporation, are both to have ample scope for discussion and agreement inside the corporation? Will the syndicates, the sources of functional initiative, «agree to die quietly»?

Again, the present syndicates are mainly organised by trades or functions: industry, agriculture, commerce, transport, credit, profession and arts. This is all very well, when syndicates must discuss and decide labour questions. But should textile workers deal with the vaster problem of regulating industry? As Signor Mussolini said, the corporation will determine what commodity to produce, the manner of producing it, and the selling price. But these are not problems to be discussed between interested men in the same industrial category. Textile manufacturers cannot be authorised to legislate for themselves on problems which also influence very considerably other industries, consumers, and the common weal in general. The corporation is therefore a wholly different thing from the unit syndicate. Both may co-exist in their respective spheres. What, then, will be the sphere for which the corporation will legislate?

Two conceptions have come to the front based upon the industrial group, and the product. The group conception involves regulation by bodies representing the comprehensive division of industry, credit, agriculture, transport, etc. Each group will legislate for itself, provided that some device is contrived to protect the general public from a too narrow legislation in price-fixing, limitation of new ventures, Customs duties, etc. The product conception, on the other hand, aims at automatically providing this necessary device. The corporation, according to this second idea, should not embrace all «agriculturists, and exclusively the agriculturists; but all interested in the production and marketing of a product; for istance, the wheat and other cereal growers, the miller, the baker – together with all those interested in marketing the intermediate and final goods, inclusive of all their respective employees». This vertical organisation should be able to keep the primary, intermediate and final producers and merchants in touch with one another, and should be better able to test the needs of the consumers. In the interview already quoted, Signor Mussolini concluded that the group system is preferable for industry, and the product system for agriculture. Problems are apt to arise, however, over the relations between the two conceptions. The National Council of Corporations will thus be called upon again to solve the eternal problem created by the free initiative of the individual and the co-ordination of separate individual activities.

As if to dissolve doubts by some concrete proposal, the Duce himself last Monday presented to the National Council a resolution in which the corporation is defined as «the instrument which under the aegis of the State disciplines the productive forces in view of the development of the wealth, political power and well-being of the Italian people». In the terms of this resolution the corporation is to embrace representatives of «the State, administration, the Fascist party, capital, labour, and the technicians»; the corporation receives from the National Council the power to enact laws of an economic character; and the Fascist Grand Council has the task of making the constitutional modifications necessitated by the creation of these new legislative units.

We therefore know enough of the corporative basis of the future Italian State to say that the decisive step is only now being taken; and it is a step which cannot fail to have far-reaching consequences in other spheres than the economic, and in other lands than Italy. The Chamber will have disappeared; the individual citizen’s interest in his liberties of thought, speech, meeting and expression will be subordinated to the economic organisation of Italy on the one hand, and to the exigencies of the Fascist Party, as evidenced by the Fascist Grand Council, on the other. But is it a fact that a political system based on economic groupings covers all the citizens’ needs? If the State so identifies itself with the control of industry and the maintenance of individual well-being, it must accept responsibility for the economic situation at all times. Before the laurels descend upon the brows of the constitution-maker in Italy, one may be pardoned if one «asks for more» information on the technique of labour recruitment and transfer, production-control, price-fixing and capital- provision and investment. These form the Achilles’ heel of all State- controlled bodies economic; and there is more than a mere presumption that in future the internal political stresses in Italy will wax and wane in direct ratio to the fluctuating fortunes of the economic system. Upon these fortunes, now State-directed, the eyes of the outside observer will henceforth be closely riveted; and upon their variations the new Italian constitution will itself be judged by the Italian people.