The Economy of Italy during Andrew Fawls, Ralph Tsang, Himanchu Makaria. Dhiraj Mukhi. Aayush Shah

Economic Background The period , was a duration of rapidly rising prices, A period that necessitated a shift of the economy from wartime to peacetime all while the value of the lira sank to 1/5 its pre-war value. For the bulk of the Italians, these were perilous times. With the demobilisation of the two million soldiers, the unemployment added strain to the economy. After the First World War, much of Italy's heavy industry was hit badly. This was mainly due the major war orders. The government did not intervene, this left the people unhappy with the current government. They looked to more radical leaders (Mussolini)

Economic tax Government spending was high To cover their expenses from the unification and to recover from war debt taxes were raised. The bulk of the taxes were pushed on to the lower classes.

Effects Of War inflation and unemployment Unemployment was rising in Italy after the war, as 2.5 million soldiers demobilized. Wave of strikes in 1920 Agriculture labour exchanges were recognized and given subsidies. Inflation had negatively effected people’s standard of living , inflation had rose to 591 from 100

The Red Scare in Italy The Red Scare was the fear of Bolshevism spreading throughout the world, and because prominent after the Russian Revolution of In Italy, it was known as the 'Biennio Rosso'. The socialist party in Italy was gaining popularity and was winning elections. Socialism was very close to communism in terms of political affiliation Higher-classes in Italy were growing concerned.

Biennio Rosso This was a period of time between with intense social conflict in Italy. With the growing power of the Socialist party in Italy with all its supporters in the lower class income groups. They organized unions and held strikes. It took place because of the economic instability in Italy after WWI (economic crisis, high unemployment and political problems). One of the most notable strikes was during September 1920 where half a million workers occupied over 300 factories.

Government Response to Biennio Rosso Leader of the country at that time was Giovanni Giolitti, who was a moderate There was pressure for the government to take action as raw materials and output was low. In an attempt to stop the strikes he promised that the government would set up workers' council's in factories Both the Employers and workers accepted Giolitti's plans and the strikes stopped. Due to the inefficiency of the government system the plan was never carried out.

Public response to government action After the strikes had stopped due to promises made by the government, PSI tried to re-organize general strikes. They failed to due so due to lack of organization, and the onset of mass unemployment weakened the Socialists Due to the failures of the government and the trade unions the workers were growing disillusioned, not knowing who to trust. Two main parties were emerging Communism and Fascism o Anti-trade unions quickly became basis for their policies The Fascists were more appealing to the public and came to power in 1922.

Conclusion The Italian economy was already suffering due to o Lack of Natural resources o Economic and Social divide (North and South) o War Inflation o Spanish Influenza The government was passive and... o Charged high taxes o the Economy wasn't helped by the fact that Socialists were staging general strikes o or the rising unemployment Eventually the Fascists took advantage of the terrible state the economy was in to gain power.