Editing Economy of Italy (section)

=== Fascist regime ===
{{Main|Economy of Italy under fascism}}

[[File:Mussolini visiting Fiat, 1932.jpg|thumb|left|[[Benito Mussolini]] giving a speech at the [[Fiat]] [[Lingotto]] factory in Turin, 1932]]

Italy emerged from [[World War I]] in a poor and weakened condition. The [[National Fascist Party]] of [[Benito Mussolini]] came to power in 1922, at the end of a period of social unrest. However, once Mussolini acquired a firmer hold of power, laissez-faire and free trade were progressively abandoned in favour of government intervention and [[protectionism]].<ref name="knight2003">{{cite book |last=Knight |first=Patricia |year=2003 |title=Mussolini and Fascism |url=https://books.google.com/books?id=LrPb77YGb9gC&pg=PA64 |location=New York City |publisher=[[Routledge]] |pages=64–65 |isbn=978-0-415-27921-5 |access-date=8 February 2015}}</ref>

In 1929, Italy was hit hard by the [[Great Depression]].<ref>{{cite book |last=Welk |first=William G.|year=1938 |title=Fascist Economy Policy: An Analysis of Italy's Economic Experiment |url=https://books.google.com/books?id=hqcrAQAAMAAJ&pg=PA166 |location=[[Cambridge]] |publisher=[[Harvard University Press]] |page=166 |access-date=8 February 2015}}</ref> In order to deal with the crisis, the Fascist government nationalized the holdings of large banks which had accrued significant industrial securities, establishing the [[Istituto per la Ricostruzione Industriale]].<ref>{{cite book |last=Morgan |first=Philip |year=2003 |title=Italian Fascism, 1915–1945 |url=https://books.google.com/books?id=D9gcBQAAQBAJ&pg=PA160 |location=[[Basingstoke]] |publisher=[[Macmillan Publishers]] |page=160 |isbn=978-0-333-94998-6 |access-date=8 February 2015 }}{{Dead link|date=February 2024 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> A number of mixed entities were formed, whose purpose was to bring together representatives of the government and of the major businesses. These representatives discussed economic policy and manipulated prices and wages so as to satisfy both the wishes of the government and the wishes of business.<ref name="knight2003"/>

This economic model based on a partnership between government and business was soon extended to the political sphere, in what came to be known as [[corporatism]]. At the same time, the aggressive foreign policy of Mussolini led to increasing military expenditure. After the invasion of [[Second Italo-Abyssinian War|Ethiopia]], Italy intervened to support [[Francisco Franco|Franco]]'s nationalists in the [[Spanish Civil War]]. By 1939, Italy had the highest percentage of state-owned enterprises after the [[Soviet Union]].<ref name="knight2003"/>

Italy's involvement in [[World War II]] as a member of the [[Axis powers]] required the establishment of a [[war economy]]. The [[Allied invasion of Italy]] in 1943 eventually caused the Italian political structure – and the economy – to rapidly collapse. The Allies, on the one hand, and the Germans on the other, took over the administration of the areas of Italy under their control. By the end of the war, Italian per capita income was at its lowest point since the beginning of the 20th century.<ref>{{cite book |last=Lyttelton |first=Adrian |year=2002 |title=Liberal and Fascist Italy, 1900–1945 |url=https://books.google.com/books?id=D9gcBQAAQBAJ&pg=PA160 |location=[[Oxford]] |publisher=[[Oxford University Press]] |page=13 |isbn=978-0-198-73198-6 |access-date=8 February 2015 }}{{Dead link|date=February 2024 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>