The 1929 Crisis and the Rise of Fascism in Italy
The 1929 Crisis: Causes and Consequences
Private enterprise, fueled by a philosophy of encouraging consumption and financial speculation, drove the market to a breaking point. On Thursday, October 24, 1929, over 13 million shares went on sale without sufficient demand, causing investor distrust and widespread bankruptcy.
Causes of the 1929 Crisis
The causes were linked to the protectionist measures of the ruling Republican administration:
- The Customs Tariff: Raised tariffs, reducing trade with the United States.
- Immigration Law: Limited the entry of immigrants, a political concession to the KKK racist movement.
- Overproduction: The gap between production and consumption caused an accumulation of surplus, resulting in workforce reductions.
Consequences of the Crisis
- Bank failures.
- Industries, unable to find financial support, closed their factories, causing the unemployment rate to rise above 15 million.
The New Deal: A Solution to the Crisis
In the 1933 elections, Democrat Franklin Delano Roosevelt was elected President. He presented a program inspired by the economic theories of Keynes, emphasizing state intervention to revive the economy.
Key Laws of the New Deal
- Agricultural Adjustment: Subsidies for cotton and tobacco.
- Reduction in working hours.
- Encouragement of construction, including dams and hydroelectric power plants.
- Guaranteed economic security for the neediest people.
- Governing relations between employers and employees.
The Rise of Fascist Italy
The First World War caused Italy great debt, high inflation, and high unemployment.
On March 23, 1919, the Fasci Italiani di Combattimento, a group of unemployed workers and ex-combatants, was formed. It was founded by Benito Mussolini, a former member of the Socialist Party. Initially, their program included anti-capitalist demands of the workers and nationalist principles: universal suffrage, secular schools, and a retirement age of 55. In 1921, the Fascists established themselves as the National Fascist Party, abandoning revolutionary and anti-capitalist ideas. In 1922, the March on Rome by the Blackshirts took place, and King Victor Emmanuel III commissioned Mussolini to form a new government.
Mussolini’s Policies
Mussolini initially formed a coalition government with only two Fascist ministers. He assumed the portfolios of Interior and Foreign Affairs. His first action was to change the electoral law, allowing him to gain an absolute majority with only 25% of the vote.
Domestic Policy
- Pursuit of Absolute Power: Persecution of opposition party leaders.
- Elimination of trade unions and political parties, except for his own.
- Control of the press.
- Promotion of birth rates.
- Fascist propaganda through newspapers, radio, etc.
Economic Policy
- Economic protectionism: Limiting imports and strengthening the lira, which caused a reduction in exports.
- Large public works projects.
- Prohibition of the right to strike.
- Creation of the Institute of Industrial Reconstruction.
Foreign Policy
- Signing of the Lateran Treaty.
- Territorial expansionism, leading to the invasion of Abyssinia.
- Aid to Franco in the Spanish Civil War.
- Signing of the Pact of Steel with Germany in 1939.
Educational Policy
- Creation of Fascist youth organizations.
- Establishment of the Fascist Culture Institute.
- Obligation of teachers to swear loyalty to the regime.
- Compulsory Catholic education in schools.