Main Problems of Economic Reconstruction

From the American point of view perhaps the most interesting question about Italy’s future is whether the Italians can and will workout a really democratic system of government to replace fascism. It is an academic question, however, unless the underlying truths about economic reconstruction are kept in the foreground of discussion.

Effective political parties, free and regular elections, and all the other practices of democracy are likely to have a hollow sound in Italian ears if Italian stomachs are hollow. Unless food, shelter, clothing, transportation, and a few other essentials of life are present on a minimum scale at least, it is no use to talk about political reform from within.

Obviously Italy is going to have to supply the major part of these essentials. But for some time—depending on how long it takes for all Europe to get back to peacetime operation—Italy will not be able to do it alone. It will be a United Nations problem, if the United Nations want it. To the extent that they help, they can probably expect to see the results in political machinery more in line with democratic ideas.

This suggests another fundamental truth: How quickly any solidly Italy gets back to its feet economically depends a good deal on the situation in the rest of the world. Foreign trade will probably be important in renewing economic well-being in Italy. But it takes two to make a trade as well as a match. If the rest of the world relaxes tariff walls and other barriers to foreign trade, Italy can share in the general benefits. If the rest of the world keeps the barriers high, then Italy must suffer along with the rest and probably continue to skimp along on the fascist policy of national self-sufficiency.

What next?

There seems to be wide agreement in postfascist Italy on certain economic policies for the future.

  1. In agriculture, greater concentration on crops suited to Italy—fruits, olive oil, wine, silk, and other specialized-cultures—and abandonment of the absurd fascist emphasis on production of wheat at home instead of importing it from the low-cost wheat-producing areas of the world.
  2. In industry, a similar shift away from the fascist insistence on complete national self-sufficiency. This means a great cut in the steel, armaments, and related heavy industries, and reduction of others, such as shipbuilding perhaps, to a reasonable level. Conversely, the textile industry, which employs many workers, and the lighter industries using hydroelectric power—of which Italy has an abundance—would be expanded.
  3. In commerce, a marked lowering of tariff and other barriers in order to return to a large and active foreign trade. Bound up in these policies is the question of who should own the factories, distribute the goods, and provide the services needed for Italian economic life. The debate is the old familiar one between private ownership and a more or less modified free enterprise system on the one hand, and state or social ownership on the other. On this issue there is great disagreement.

The argument does not start from scratch. The Italian government now is a major owner of productive enterprise, as a result partly of fascist policies and partly of policies dating from prefascist years. All armament factories, all shipyards, all shipping lines, half the synthetic rubber industry, much of the iron and steel capacity, practically all the means of communication—telephone, radio, and railroads—and all the banks now belong to the government.

What the parties think

The Communist, the Socialist, and the Action parties say that there should be more, not less, nationalization or socialization of the means of production. One policy or the other, they say, should be followed with regard to all banks, trusts, and other financial institutions, all heavy industries, all public utilities.

These parties see a great difference between nationalization—which some of them favor—and socialization—which others prefer. The first follows the Russian pattern, in which the state owns and operates practically everything, the workers being employees of the state. The second proposes that the workers themselves own the factories and other productive organs, running them as cooperatives with the state hovering in the background to help out if needed.

The Christian-Democratic and the Liberal parties, on the other hand, seem to favor a mixed economy. In this everything possible would be left to free enterprise. The state would be responsible only for framing general policies for the common welfare. Supporters of this policy contend that it is the only one that guarantees political freedom, which is impossible, they say, when everyone is directly or indirectly employed by the state.

The problem of farm lands

In general Italy is a country of small farms. Some of them are owned by the farmers who work them, others are worked on a rental or crop-sharing basis. Large estates, however, prevail in certain regions, especially in southern Italy. On these large-scale farms, called “latifundia,” poor peasants do the work under the control of an agent of the landlord—often an absentee owner.

The small-farm tenant may actually be a well-to-do farmer with considerable technical skill. He cultivates intensively land which he does not own, but he gets a substantial share of its product. The peasant on the big estate, however, is at the bottom of the economic scale and is often exploited by those above him. These differing aspects of the land problem are usually recognized, though some reformers want to apply the same remedy to both, while others say only the issue of the big estates has to be faced at once.

A strong political group, spearheaded by the Socialists, proposes to act on the simple slogan, “The land to the peasant who cultivates it.” Under this formula all farms, big or little, could be taken from owners who do not work then and given to the actual cultivators.

On the other side of the fence are those who prefer to leave the small farms alone while tackling the problem of the estates. They believe, however, that simply parceling out the land to the peasants is not enough. They also call for a large amount of state help and planning over a long period to provide the peasants with houses, roads, electricity, water, and the other things that are needed to make peasant ownership profitable.

The new party line-up

Before turning from the economic to the religious and political questions in Italy’s future; it may be well to look at the newly resurrected political parties that are so actively debating the issues. The revival of parties is one t the most interesting developments in postfascist Italy. Perhaps it indicates an underlying democratic foundation on which Italy’s future can be built.

On the Left, the Communist and Socialist parties are working together. The former does not now (Dec. 1945) advocate any violent change. It accepts the Catholic church and private property—in medium or small holdings. According to the party’s leader: “Our problem is to create a democratic system and somehow live as best we can. We Communists believe in small landowners and in private property here in Italy. Can you imagine an Italy without them?” In the spring of 1945 the party leader’s wife came out strongly against making divorce possible. She did not oppose divorce as a matter of principle, but stressed the vital role of the family and opposed any move that would weaken family ties at this moment.

The Socialist party was antirevolutionary before fascism came to power, Now it is more radical than the Communist. It desires the socialization of all means of production, with the workers organized in factory councils which would then become the basic units of the political structure, the bricks in the building of state. One faction in the party, however, is not happy about the present radical policy and continues to press for a return to the old prefascist program of moderate and revolutionary socialism.

The Christian-Democratic party stands in the middle between conservatism and progress. It wants to rebuild on the foundation of individual rights, the family, religion, private property, and parliamentary democracy. At the same time, it favors breaking up monopolies and great industrial power, improving conditions of the landless peasants, and in other ways using the authority of government to promote the economic welfare of the people.

There are other parties beside these three, and some of them—such as the Action and Liberal parties—may become important. For the time being, however, it is probable that stable and representative government in Italy will have to rest on agreement among the three big ones.