One of the “anti-recession” measures talked of by liberal politicians during the recent session of Congress was creation of a gigantic federal bureau to oversee American industry.
Among other things the bureau would be empowered to move industrial plants into pockets of unemployment and thus provide work for the jobless. Rep. John W. Byrnes calls the idea 99.9 per cent socialism. he sees it as an opening wedge for further government control of private enterprise.
In the light of historical experience the idea of government control over a nation’s industrial resources is an interesting one, especially since it is apparently being offered now as a brave progressive step toward economic utopia.
The fact is that such a proposal is neither brave, new or very progressive. State control of the means of production is usually associated with communism — a theory advocated by the extreme left side of the political spectrum. The idea is Marxist in its conception, but it was a man named Benito Mussolini, hardly a liberal saint, who developed it into a working reality, all the while professing a vague belief in private enterprise.
A great show was made of utilizing all productive forces of the nation by combining politics with economics in Mussolini’s Italian “corporative state.”
He tried to produce a social paradise by organizing producers into nine syndicates — four for employers and four for employes, in agriculture, industry, credit and commerce, plus one for professional men and artists. These syndicates were responsible for wages, working conditions and industrial relations. They also exercised a measure of control over production.
The fascist constitution gave the syndicates power to “fix fair prices” on the basis of “reasonable profits.” They could adjust wages “to meet the normal requirements of life and assure a fair price to the consumer.” In short, the state had total power to regulate prices, profits and wages.
Economic life was further organized and controlled by the formation of 22 corporations or guilds, each to be concerned with all phases of production in one field — such as cereals, mining, internal communications, the tourist industry and so on. Mussolini, representing the state, was head of each corporation and of the national council of corporations. He appointed ministers of corporations who were nominal directors of the system.
Eventually the chamber of corporations, plus a collection of other party hacks, took the place of Italy’s parliament. As head of the ruling party and the corporations, Mussolini could legislate by degree and depend on the chamber for confirmation.
An enlightening sidelight to the “corporative state” was that once the government decided to regiment industry, it developed similar plans for labor. Unions too became appendages of the government. Stating that “public order must not be disturbed for any reason, at any cost.” Mussolini decreed a national labor charter. He saw it as a means of eliminating industrial conflict and bringing about a balanced economy.
With one or two exceptions, the terms of the fascist labor charter sound like the realization of a trade unionist’s dreams. It established uniform collective labor contracts and labor courts to resolve disputes. The 8-hour day became law of the land. Each labor syndicate was given jurisdiction over workers in one field of production.
But, in return for state protection, the government asked some concessions from labor. Into the charter went terms stating that each syndicate would be controlled by the government, and wages and conditions were to be regulated “as best suited to the needs of employes and type of job.” Since the economic paradise was at hand, there wouldn’t be any need to strike, so the right to strike became illegal.
What did the utopia bring? A contemporary writer reported that between 1923 and 1932 wages in Italy were reduced 40 to 50 per cent and the cost of living was reduced 5 per cent.
Image from the CusterMen website
The “corporative state” was hardly a success and Mussolini, its founder, ended up a bullet-riddled corpse, shot by his own people.
The lesson taught by the “corporative state” experiment should be borne in mind again today when politicians of another stripe seek to protect capitalism from itself.
Appleton Post Crescent (Appleton, Wisconsin) Sep 12, 1958