What role did Mussolini′s ″Battle for Lira″ play on the economy of Italy after 1930′s?
To evaluate the role that was played by the Mussolini battle for the Lira, I will be using two sources that will give adequate details, analysis, and explanation of the historical analysis. The Mussolini battle for the Lira, being one of the most significant battles in shaping the economy of Italy in the 1930s, is what I will be evaluating.
Source 1: Sarti, R., 1970. Mussolini and the Italian Industrial Leadership in the Battle of the Lira 1925-1927. Past & Present, (47), pp.97-112.
According to this source, the period just after World War I was a very tough time for the European nations after having been drained a lot of manpower and the agricultural resources that they were investing in at the time. The source goes on to explain the reason why it was hard for the Italians to recover from the world war and the resulting depression for the period. Not just for Italy but also other countries that were heavily burdened with debts as they already had borrowed to fund the war against the enemies. The review explains how bad the state of the nation was when Mussolini was inheriting the leadership. Mussolini being a World War I veteran and die-hard, he went on to be given the role of leading the ruling party of the nation at the time, the Fascist. The nation was in shambles during the inheritance of Mussolini and in specific the financial condition of the country. When it came to the commercial forefront, according to the review by Sarti, the nation was in the fall. The article explains how he took on the economic struggle starting with the Battle of the Lira. Being a short-term need, he had to handle it. To work on the Battle on the financial Battle, he had to work on the value of the Lira, which had drastically dropped in value. The article is very relevant in the aspect of the role taken by the Battle of Lira in the economy of the 1930s because it has started from as far as the world war dates up to the post-Lira Battle period. Don't use plagiarised sources.Get your custom essay just from $11/page
Source 2: Clark, Martin. Mussolini. Routledge, 2014.
The source is a book by Clark, which is more of a biography of the great leader in Italy from the world war I era up to the post-world war period when there was due to be rise from the woes. It is a comprehensive book in most of the issues that Mussolini had a hand in, and the decisions he had to make. One such focus is on the Battle of Lira. It is one of the most significant matters that he had to deal with when he was new in power. Having not been involved in a lot of decision-making before, this was among the initial points of the process. And to work on the value of the Lira, he hugely focused on the issue of Imports and Exports to improve the value of the currency. As per the book, the results were not very appealing, and they made the situation even harder for the state. Much of the impacts were negatively affecting. The book is unbiased and gives the whole account of the Mussolini world.
Section 2: Investigation
At the time when Mussolini was climbing to power, Italy was at financial conflicts. Just like many other European countries, the country had already spent much of its finances on world war battles. There were a lot of debts that were waiting to be cleared, most of which were borrowed to facilitate the war against the enemies. The nation was not well armed, and thus they had to make purchases if they had not to be defeated. And in the endeavor of being elevated to power, the country started falling economically and more significantly financially. As per the state of the country, it was a position that required to be solved immediately if the nation was to resume back to stability. Besides stability, the country also needed to remain competitive in Europe. Other countries were getting better economically as they were rising from the woes of the First World War. Italy did not want to fall to the levels that Germany had. At that time, Germany, the monarchy under Wilhelm II, had crashed under the hands of the Republicans.
It was the first time that Mussolini had to decide for the whole country after being appointed to power through the Fascist. And being new in leadership, he required time to start making the right decision, “time” that was not there to solve the economic crisis. In this case, there were several battles to be fought; there was the Battle of the grains, which was meant to fix the cereals shortage in the nation. In getting to this war front, the greater wish of Mussolini was to make the economy stronger and self-sufficient. That is why he opted for the growth of grains in the place of fruits and vegetables which were easier to produce but less sufficient. From that point, the Italian bread rose in price due to increment of the grains prices. The poor were hit since they heavily depended on the breads as their staple food. It was an advantage to the rich who were guaranteed reasonable prices of their productions in the farms. There was also another battle for Land that Mussolini had to fight within the same while. With the latter, he was to clear the marshy lands and make them effective for farming and other economic elevating purposes. The mosquitos heavily infested areas were made productive farms as others had houses built on them. To improve infrastructure, the marshy land had roads built on them. There were a lot of people also employed in the construction system. Thus it was a successful project. Lastly, there was the Battle for the Lira in the same period.
The Battle for the Lira was aimed at stopping the dropping value of the Italian currency. By the year, 1926, the British Sterling Pound would be traded at the value of 150 Italian Liras. At no other time had the value of the state currency dropped further than that. And for Mussolini, a fascist who believed in national elements, which included currency, he had to work on the issue. He started the journey towards creating a stronger domestic currency. In the speech given at the city of Pesaro, he announced the journey towards the regaining of the Lira value. Nothing was going to stop Mussolini from fighting his Battle. Even it meant some demerits on the side of the citizens and an advantage on increasing the value of the currency. In the Battle, Mussolini brought the initiative, the Quota Novanta, or a Quota that was meant to raise the value of the Lira within the conversion rate of 90 Liras for a British Sterling Pound. And with such a goal by the leader of the nation, a fascist and great rebel for this case, there was nothing that was going to stop him.
Mussolini at the beginning of his era, for the first four years, he was a democratic leader. At this whole time, he was only trying to align with the policies of the country and protecting the integrity of the new leader of the country that he was at the time. But the time for democracy was over after 1925; he got back to the person that he was, a dictator whose rule was definite, a despot who would only reason to his voice and not anything to do with the majority. He was even quoted to have said, ” Democracy is beautiful in theory; in practice, it is a fallacy. You in America will see that someday.” He was telling that to the Americans, a country that was heavily oriented on democracy and would not entertain such limits such as despots. With his orientation, he was not worried about the effects that were going to accompany regaining the value of the Lira. He knew that there was no way that Italy was going to be a respectable country if the value of their currency was still very low. And that is why he began working on the Battle of the Lira through the imports and exports.
The first move that Mussolini made and ended up enormously affecting the economy was through the increment of the export values. The products that were coming from Italy’s agricultural sector and also the industrial sectors started increasing in prices. It was a move that was meant to make sure that the value of the Lira got better easily since exports determine what the value of the currency of the nation will be. If a country makes its exports cheap in the international market, that is how the value of its currency will be too low. But when the values of the exports are high, the currency value and the exchange rate also tend to rise accordingly. For any increase in the value of exports despite the increase in the value of the currency, other effects are, in most cases, not accounted for.
To begin with, when the export values are hyped, it means that the country will not be able to make as many exports as they were doing before. There is no country that will be willing to make imports from a country that is overvaluing products while there are cheaper options in the market. Hence the rate of exportation from the Italian market started dropping immensely. Countries began looking for better choices that they would capitalize on. This move also hits industries and farmers because they will have to reduce the production that they were making before. Since Italy did not have a big market that industries could depend on, exports were the main income bringing points. The increase in exports and reduction in the market, therefore, was a weak move that negatively affected the economy of the country by hitting the industries and the producers in the nation. With the low exports, the sectors had to cut down on the wages of the employees and also reduce the number of employees. There was no need to have a massive workforce, while the production amounts needed were low. And with the decreased rate of exports, the industries would not afford the big wages they were rendering before.
The other effect was on the imports. The importation rates became better since the value of imports dropped comparing to how they were before the Battle for the Lira. The imports depend on the value that is attached to the currency, and now that the value of the Lira had hugely risen, they were going to access the imports at the lowest price. With a high value of the Lira, Italy now had the image of a superpower. There was no nation at the time that would not be willing to trade with Italy. Having a high-value currency makes the country have a value that cannot be accorded to a country whose conversion rate is very poor. Italy was now climbing to a class that was held by other prominent countries in Europe. There was no reason why they would not be able to access cheap imports having already achieved a prestigious position in the market. It was a tremendous positive to associate with the Mussolini battle for the Lira.
Section 3: The Reflection
According to the sources that I used for this case, it is imminent that the Mussolini battle for the Lira was clearly recorded by different people who had different perspectives. There are some people who are for the decision taken by the leader while others are against. Being a first-time decision that he was making in power, it mattered much about how his legacy was to be written. That was none of what mattered to Mussolini, though. He was very strong in supporting and standing by his policies regardless of how much they would cost the economy of the well being of the people. For the history of the occurrence, most of what has been covered are all about stories that people had or learned from those that were there during the period. Since there were not many publications from the post First World war period, the publications are more of reported documents. It becomes even harder to determine which is the more legitimate news than the other.
The main limitation is being able to confirm the exact data for the different cases in the Battle for Lira. For example, when it comes to the exchange rate for the Lira, different figures have been given while changing to the British Sterling Pound. That leads to questionable events in the setting of raising the value of the Lira. Some dates are unconfirmed about the events and speeches that were key towards the betterment of the Lira Value. It is a challenge determining who between the protagonist and antagonists of the Mussolini story were giving the correct information.