According to THEFREEGEOGRAPHY, Italian economic policy has gone through two phases, in many ways different from each other, in the last fifteen years. The first, which lasted about eleven years, can be called a war economy, even if the war was limited to a total of seven years (Ethiopian conflict, intervention in the Spanish civil struggle, World War II); the second runs from 1945 to today and is characterized by an empirical economic policy, but mainly anti-autarchic and oriented in a cosmopolitan sense.
About a tenth of the national income, not increased after the great crisis in proportion to the population (see wealth, in this second App., II, p. 705) was spent by now, from 1935-36, annually for military needs; the actual expenses of the state, ordinary and extraordinary, had reached the threshold of 40 billion in 1938-39, another dozen billion were spent by the municipalities and provinces, that is, on the whole almost half of the total net income, equal to in 1938 to about 116 billion lire. Emigration had dropped in 1934-38 to about 60,000 units per year, which forced the remaining population to apply to a job with ever lower income to avoid the dangerous widening of unemployment; thus food availability had fallen from 2806 to 2723 daily calories per capita from 1928 to 1938, real average hourly wages in 1938 were equal to 96% of those in 1928. agricultural and industrial activity only then, after a decade, had they managed to surpass, and only slightly, the levels of 1928; and the traffic of goods transported by rail was still less than 1/6, while the maritime traffic had exceeded it in weight only by 1/10; exchanges with foreign countries had reduced in value to 2/3 and in volume even more.
The large part of the national income devoted to the two armed conflicts, from 1935 to 1937, to investments in Africa and public works within the country and the cost of the autarchic transformation made them aware of the financial impossibility of facing a world war in 1939 – awareness that yielded in 1940 to the illusion of a very short-lived conflict – and placed Italy in extremely weak economic conditions in the immediately following period, when it was a question of concretely experiencing the results of the attempted policy of initiating autarchy. The long condition of imbalance between the possibilities offered by a national income susceptible to low savings, due to the rigidity of consumption that cannot be further compressed, and the strong demands for public investments had in fact already anemic the country. And this even before the huge expenses for a world conflict had begun, although the state structure and the centralized mechanisms of economic policy were ready – and increasingly refined from 1934 to 1939 – as instruments of a war economy, and undoubtedly the currents commercials initiated with Germany facilitated some essential supplies. The network of interventions in the country’s economy, supported by the possibilities of a dictatorial regime, was almost complete, with savings and credit controlled and managed through specific bodies, exchanges and a fully restricted currency system; production plants and activities dependent on a management of the initiatives and limitations of extensions; prices,
The existence of these legal and administrative instruments of regulation made it possible to provide without excessive difficulty for the financing of public works and reclamation first, then that of autarchic initiatives and subsequently that of war industries; therefore the alternative was not posed of following the path of an in-depth action on incomes, which, on the other hand, would have implied a different political approach. In essence, therefore, all economic and financial policy in the pre-war and war period operated through the maneuver of credit, flanked only rarely by particular measures and tending to channel the available savings towards public investments.