Assessing the Success of the Corporate State's Objectives

Assess the extent to which the Corporate State achieved its aims.

The central theory of the Corporate State was that the economy would be organised by corporations in which both employers and workers would be equally represented in a field of economic activity. Firms would remain in private hands but would be regulated by the corporations in order to ensure that production was directed in the national interest. The corporations were to be state bodies and so included state and Fascist Party officials among the membership precisely in order to ensure that the interests of the state were paramount. These self-governing corporations would bring about good labour relations, provide rational plans for production, stimulate enterprise, negotiate working conditions and pay, and generally encourage the production of wealth in a setting free from traditional class conflicts between labour and management, thus avoiding strikes and other labour disputes.

The corporations became consultative bodies, largely over labour issues, and not the direct managers of industrial undertakings. This dilution of syndicalist theory was inevitable, given the compromises Mussolini had to make with capitalist forces in Italy in order to build up the fascist movement. The fascist government mediated a settlement between these syndicates and the largest employers' organization, which agreed to recognize only the fascist syndicates in future negotiations. In return, the syndicates accepted that they would exert no control in managing the factories where authority would remain in the hands of the owners. Because they had no representation within the factories, the syndicates were unable to monitor the behavior of the employers. The fascist syndicates were denied any say in economic policy, and the new system also constituted a major loss of previously hard-won workers' rights. The workers' syndicates were also deliberately fragmented, and unsurprisingly, these soon proved incapable of defending the interests of their members, particularly in the difficult economic conditions brought on first by the revaluation of the lira, then the onset in the early 1930s of the worldwide trade depression. The Charter of Labor, which supposedly defined workers' rights promising not only fair judgments in labor disputes, but also social reforms such as improved health and accident insurance schemes posed no threat to the employers' private ownership of businesses was declared the most efficient method of running an economy, and, as for worker's rights, employers were not obliged to provide annual paid holidays, were given the power to alter working hours and night shifts without any real consultation.

The Ministry of Economics worked throughout to limit the powers and responsibilities of the corporations, and the great employers were happy to work outside the restrictions on their freedom that corporatism implied. Initiatives, reorganizing or expanding major industries, usually with the aid of state money, were undertaken by the Instituto per la Ricostruzione Industriale (IRI) and without reference to the corporations.

During the early 1930s depression, the banking system and many great manufacturing firms came under state supervision and sometimes control, but this, a massive extension of the role of the state in economic matters happened outside the corporate system and through negotiations between owners and state officials.

The state increasingly ignored the corporations in the late 1930s when the economic priority became self-sufficiency. As state contracts, subsidies, and directives took on greater economic significance, so state officials preferred to deal directly with the big industrialists. At the level of national policy, the corporations became spectators of the new direction taken by the economy. The corporate system became a vast and unwieldy bureaucracy. Far from rationalizing production and encouraging enterprise this corporate bureaucracy became a brake on economic development and an additional obstacle to be overcome by entrepreneurs. The corporations played no part in defining economic policy or developing the economy. Employers had undue influence within the corporations, especially as the workers' representatives were selected by the Fascist Party or the ministry of corporations, rather than being chosen directly by the workers. Only on other less significant issues such as sick pay for workers and the belated introduction of paid national holidays in 1938 did the corporations further workers' interests. The employers were nearly always supported by the three government representatives, who were Fascist Party members, even though they were supposed to be neutral. The corporations’ voice was subordinate to Mussolini. The economy remained in private ownership, and the government worked alongside and in support of large private firms. The regime allowed major companies to merge into near-monopoly organizations. For example, Fiat controlled car manufacturing, Pirelli the rubber industry, and Montecatini the chemicals industry. The imposition by the government of wage cuts in 1927, 1930, and 1934 reduced wages below the cost of living; these were facilitated by the weakness of Fascist unions, and the unbalanced corporative structure. All this fitted with fascist ideas on the overriding importance of the state and the subordination of citizens to the purposes of the state. The Corporate State gained the support and further approval of the Catholic Church to the regime. The corporate state was a useful propaganda device for the fascist regime both internally and internationally. Italian propaganda presented it as a unique ‘middle way’ between the failed anarchy of capitalism and the oppressive command economy favored by communists. The corporate state has been seen largely as a means of sharing power between Fascism and the economic interests of the landowners and industrialists. It was more about creating a subservient labor force than providing a structure capable of undertaking genuine economic change. It acted as an effective tool for the centralizing fascist state to control the working classes. Strikes and lockouts were made illegal by the Rocco Law in 1926, and independent trade unions were also abolished. Hence, it can be concluded that Fascist Italy had complete control over the labor force but very little control over the nation's economic structure.