History Optional Paper-2 Solution – 1995: Q.8

History Optional Paper-2 Solution – 1995: Q.8

Q.8 Corporate State was Mussolini’s answer to socio-political problems of his country. Elucidate.


Socio-political problems faced by Italy

Benito Mussolini came to power in 1922 when Italy was facing many socio-political problems:

(1) Class conflict was prevalent where society was split into working class, middle class, Industrialists. Strikes were frequent in factories.

(2) There were increase in violent activities by left wing Communist Parties and right wing radicals.

(3) Situation of working class was worsening due to exploitation and capitalists were always fearful about left wing revolutionary activities.

(4) These conflicts and violent activities along with worsening economic condition had resulted in political instabilities.

(5) Economy was in crisis due to Italian participation the First World War and ineffiecient economic system of Italy.

Mussolini’s answer to the problem

Mussolini and his Fascist government believed in cooperation between employers and workers and to end class warfare. Mussolini believed that both capitalist and communist approaches to economic strategy were flawed, they both led to civil unrest, class struggle and caused socio-political problems in Italy.

The answer of Mussolini to these problems was to devise a new economic strategy, called the ‘Corporate state’. This was called “third way” claiming that it was a genuine alternative to capatalism and communism. The corporate state was in theory meant to have the best elements of both capitalism and communism.

Mussolini’s Corporate state had the following characteristics

(1) The twenty-two corporations, each dealing with a separate industry was created. Everyone involved, be it worker or boss, would be in the Corporation.

(2) Within the Corporation, companies would be privately owned, allowing for competition – however the Corporation would be state controlled. Thus, in theory the Corporation had both advantages of Capitalism (profit and private enterprise) and Socialism (the state overseeing everything).

(3) Workers and bosses would resolve disputes (working condition, pay scale etc) in the Corporation. Fascist controlled unions negotiated on the behalf of workers. Strikes and lockouts were not allowed.
To compensate for their loss of freedom, workers were assured of such benefits as free Sundays, annual holidays with pay, social security, sports and theatre facility and cheap tours and holidays.

(4) State intervened directly as needed to create a collaboration between the industrialists, the workers, and the state. The government crushed fundamental class conflicts in favour of corporatism.

(5) Similar to socialism, the idea of the Corporate state was for every Italian, no matter what race, to contribute themselves to the state, rather than themselves.

The lack of industrial resources, especially the key ingredients of the industrial revolution, was countered by the intensive development of the available domestic sources and by aggressive commercial policies – searching for particular raw material trade deals, or attempting strategic colonization.

How successful was the Corporate State?

Corporate State was Mussolini’s way to control workers and direct production and economy but is was only partially successful.

(1) Mussolini claimed that his Corporate State was a revolution. But in reality, very few changes were made to the Italian economy. The working classes were still completely answerable to their employers and gained little in return.

(2) Employees lost freedoms and employers were supported by the state to get what they wanted. Class sonflict was supressed not solved.

(3) Corporatism was criticised with communists saying it was too capitalist and visa versa.

(4) In the short term the government worked to reform the widely-abused tax system, dispose of inefficient state-owned industry, cut government costs, and introduce tariffs to protect the new industries. But Italy still remained economically backward and inefficient.

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