The economics of Italian Fascism is often ignored or trivialized because so much of it is found in today’s world economies. Consider some of the components of fascist economics: central planning, heavy state subsidies, protectionism (high tariffs), steep levels of nationalization, rampant cronyism, large deficits, high government spending, bank and industry bailouts, overlapping bureaucracy, massive social welfare programs, crushing national debt, bouts of inflation and “a highly regulated, multiclass, integrated national economic structure.”1

On numerous occasions, Benito Mussolini identified his economic policies with “state capitalism”—the exact phrase that Vladimir Lenin used to usher in his New Economic Policy (NEP). Lenin wrote: “State capitalism would be a step forward as compared with the present state of affairs in our Soviet Republic.”2 After Russia’s economy collapsed in 1921, Lenin allowed privatization and private initiative, and he let the people trade, buy and sell for private profit.3 Lenin was moving towards a mixed economy. He even demanded that state-owned companies operate on profit/loss principles.4 Lenin acknowledged that he had to back away from total socialism and allow some capitalism.

For more background information, see “Marxism”, by David L. Prychitko and “Socialism”, by Robert Heilbroner in the Concise Encyclopedia of Economics.

Mussolini followed Lenin’s example and proceeded to establish a state-driven economic model in Italy. In essence, Mussolini’s fascism was simply an imitation of Lenin’s “third way,” which combined market-based mechanisms and socialism—similar to Red China’s “market socialism.” In short, Lenin’s revised Marxism culminated in “socialist-lite” policies that helped inspire Mussolini to craft his own Italian-style fascism with a right-wing socialist twist. Thus, one could argue that Lenin’s politics were the first modern-day version of fascism and state-corporatism.

Economist Ludwig von Mises, who fled the Nazi conquest of Europe, contended that the “economic program of Italian Fascism did not differ from the program of British Guild Socialism as propagated by the most eminent British and European socialists.”56

In The Concise Encyclopedia of Economics, Sheldon Richman succinctly states: “As an economic system, fascism is socialism with a capitalist veneer.”7 He contends that socialism seeks to abolish capitalism outright, while fascism gives the appearance of a market-based economy, even though it relies heavily on the central planning of all economic activities. According to authors Roland Sarti and Rosario Romeo, “[U]nder Fascism the state had more latitude for control of the economy than any other nation at the time except for the Soviet Union.”8

Interestingly, Mussolini found much of John Maynard Keynes’s economic theories consistent with fascism, writing: “Fascism entirely agrees with Mr. Maynard Keynes, despite the latter’s prominent position as a Liberal. In fact, Mr. Keynes’ excellent little book, The End of Laissez-Faire (l926) might, so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud.”9

After the worldwide Great Depression, Mussolini became more vocal in his claims that fascism explicitly rejected the capitalist elements of economic individualism and laissez-faire liberalism.10 In his “Doctrine of Fascism,” Mussolini wrote: “The Fascist conception of life accepts the individual only in so far as his interests coincide with the State. . . . Fascism reasserts the rights of the state. If classical liberalism spells individualism, Fascism spells government.” In his 1928 autobiography, Mussolini made clear his dislike for liberal capitalism: “The citizen in the Fascist State is no longer a selfish individual who has the anti-social right of rebelling against any law of the Collectivity.”11

As the effects of the Great Depression lingered, Italy’s government promoted mergers and acquisitions, bailed out failing businesses and “seized the stock holdings of banks, which held large equity interests.”12 The Italian state took over bankrupt corporations, cartelized business, increased government spending, expanded the money supply, and boosted deficits.13 The Italian government promoted heavy industry by “nationalizing it instead of letting the companies go bankrupt.”14

Fascist leaders deemed Italian corporations as “revolutionary,” and claimed that the corporative state would “guarantee economic progress and social justice.”15 Italian Fascist theories of corporatism arose out of revolutionary and national syndicalism that often paralleled the activities of the trade unions, craft guilds and professional societies. Mussolini acknowledged Fascism’s socialist roots and influences. Among those whom he acknowledged as influencing Fascism were French Marxist Georges Sorel and French Revolutionary Unionist Hubert Lagardelle.16 Moreover, Mussolini was a union man: he decreed mandatory unionism for all Italian workers. It is true that Mussolini banned strikes, but Lenin had done the same in the Soviet Union.

Under the fascism of the corporate state, “planning boards set product lines, production levels, prices, wages, working conditions, and the size of firms. Licensing was ubiquitous; no economic activity could be undertaken without government permission.” These measures restricted new business from forming or expanding.1718 Moreover, “levels of consumption were dictated by the state, and ‘excess’ incomes had to be surrendered as taxes or ‘loans.'”19

By the mid-1930s, corporate statism and regulatory concentration had caused the Italian credit system to be put “under the control of the state and parastate agencies” and, by late 1930s, about 80 percent of available credit was “controlled directly or indirectly by the state.”20 As war with Ethiopia approached, Italy’s government imposed price controls, production quotas, and higher tariffs. A large trade deficit swelled, which led to more restrictions on imports, tighter controls on foreign exchange, and greater controls over the distribution of raw materials.21 As Mussolini moved towards “autarky” or self-sufficiency and imposed more protectionist laws, Italy’s “government spending rose and budget deficit increased sevenfold between 1934 and 1937.”2223

With the passage of the Bank Reform Act in 1936, the Bank of Italy and most of the other major banks became government entities.24 One year earlier, the confiscation of capital had begun with state edicts requiring all banks, businesses, and private citizens to surrender their foreign-issued stocks and bonds to the Bank of Italy.25

Mussolini doubled the number of Italian bureaucrats under an enormous bureaucracy of committees. By 1934, one Italian in five worked for the government.26 There was a labyrinth “of overlapping bureaucracies where Mussolini’s orders were constantly being lost or purposely mislaid.”27

In May 1934, as the Institute of Industrial Reconstruction (IRI) started to take over bank assets, Mussolini declared, “Three-fourths of [the] Italian economy, industrial and agricultural, is in the hands of the state.”2829 In 1939, Italy saw the highest rate of state-owned enterprises in the world, outside of the Soviet Union.30 In that year, the state “controlled over four-fifths of Italy’s shipping and shipbuilding, three-quarters of its pig iron production and almost half that of steel.”31

Learn more about the interactions between socialism, Marxism, and fascism from the EconTalk podcast episodes John Ralston Saul on Reason, Elites, and Voltaire’s Bastards and Hitchens on Orwell.

By September of 1943, Mussolini was heading a Nazi puppet state called the Italian Social Republic (RSI) in which he proposed additional “economic socialization.” He began to display a renewed interest in his earlier radicalism. Claiming that he had never abandoned his left-wing ideals,32 “he returned to a type of socialism which once again attacked capitalism,” in an effort to “annihilate the parasitic plutocracies.”33 In February 1944, Mussolini’s government devised a “socialization law” that called for more nationalization of industry and under which workers would participate in managing factories and businesses, along with land reform.34 The Italian Social Republic “obsessively emphasized” commitments to socialization and a “variety of fascist equalitarianism and an amplified fascist welfare state.”35

In essence, the economics of Italian Fascism was Marxist and syndicalist-inspired—and far more left-wing socialist than the economies of many current western nations that embrace a mixed economy of socialism, welfarism and unionism. Now, if only economists and historians would, even if belatedly, recognize that fact.


Stanley G. Payne, A History of Fascism 1914-1945, Madison: Wisconsin, University of Wisconsin Press, 1995, p. 7.

V. I. Lenin, “The Tax in Kind,” written April 21, 1921, Lenin’s Collected Works, 1st English Edition, Progress Publishers, Moscow, 1965, Volume 32, pages 329-365.

V. N. Bandera “New Economic Policy (NEP) as an Economic System,” The Journal of Political Economy, Vol. 71, No. 3 (June, 1963), 265-79: p. 268.

V. N. Bandera “New Economic Policy,” p. 268.

Sidney and Beatrice Webb, Constitutions for the Socialist Commonwealth of Great Britain, London: UK, London, New York, Longmans, Green & Co. 1920.

Ludwig von Mises, Planned Chaos, Foundation for Economic Education, Irvington-on-Hudson: NY, 1970, p.73, first printing 1947.

Sheldon Richman, “Fascism,” in David R. Henderson, ed., The Concise Encyclopedia of Economics, 2nd ed., (Indianapolis, Indiana: Liberty Fund, 2008). Online at the Library of Economics and Liberty.

Franklin Hugh Adler, Italian Industrialists from Liberalism to Fascism: The Political Development of the Industrial Bourgeoisie, 1906-1934, New York: NY, Cambridge University Press, 1995, p 347; original source: Rosario Romeo, Breve Storia della grande industria in Italia 1861/1961, Bologna, 1975, pp.173-4; Roland Sarti, Fascism and the Industrial Leadership in Italy, 1919-40: A Study in the Expansion of Private Power Under Fascism, 1968, p. 214.

James Strachey Barnes, Universal Aspects of Fascism, Williams and Norgate, London: UK, 1929, pp. 113-114.

Gaetano Salvemini, Under the Axe of Fascism, London: UK, Victor Gollancz, LTD, 1936, p. 134.

Mussolini, My Autobiography, New York: NY, Charles Scribner’s Sons, 1928, p. 280.

Michael E. Newton, The Path to Tyranny: A History of Free Society’s Descent into Tyranny, 2nd edition, New York: NY, Routledge, 1994, p. 170.

Jeffrey Herbener, “The Vampire Economy: Italy, Germany, and the US,” Mises Institute, October 13, 2005.

Newton, Path to Tyranny, p. 171.

Martin Blink Horn, Mussolini and Fascist Italy, 2nd edition, New York: NY, Routledge, 1994, p. 29.

Sternhell, Zeev, Neither Right nor Left: Fascist Ideology in France, English translation ed., Princeton: NJ: Princeton University Press, 1986, p. 203.

Richman, “Fascism.”

Gaetano Salvemini, Under the Axe of Fascism, London: UK, Victor Gollancz, LTD, 1936, p. 418.

Richman, “Fascism.”

A. James Gregor, Italian Fascism and Developmental Dictatorship, Princeton: NJ, Princeton University Press, 1979, p. 158.

Alexander J. De Grand, Italian Fascism: Its Origins & Development, Lincoln: NE, University of Nebraska Press, 1982, p. 106.

Michael E. Newton, The Path to Tyranny: A history of Free Society’s Descent into Tyanny, 2nd edition, New York: NY, Routledge, 1994, p. 173.

Alexander J. De Grand, Italian Fascism: Its Origins & Development, p. 108.

Alexander J. De Grand, Fascist Italy and Nazi Germany: The “Fascist” Style of Rule, second edition, New York, NY, Routledge, p. 52.

Jeffrey Herbener, “The Vampire Economy: Italy, Germany, and the US,” Mises Institute, October 13, 2005.

George Seldes, “The Fascist Road to Ruin: Why Italy Plans the Rape of Ethiopia,” The American League Against War and Fascism, 1935.

Gianni Toniolo, editor, The Oxford Handbook of the Italian Economy Since Unification, Oxford: UK, Oxford University Press, 2013, p. 59; Mussolini’s speech on May 26, 1934.

Carl Schmidt, The Corporate State in Action, London: Victor Gollancz Ltd., 1939, pp. 153-76.

Patricia Knight, Mussolini and Fascism (Questions and Analysis in History), New York: Routledge, 2003, p. 65.

Martin Blink Horn, Mussolini and Fascist Italy, 2nd edition, New York: NY, Routledge, 1994, p. 35.

Denis Mack Smith, Mussolini: A Biography, New York: NY, Vintage Books, p. 31.

Stephen J. Lee, European Dictatorships 1918-1945, 3rd edition, New York: NY, Routledge, 2008, p. 17.

Stephen J. Lee, European Dictatorships, p. 171-172.

R.J.B. Bosworth, Mussolini’s Italy: Life Under the Fascist Dictatorship,1915-1945, New York, NY, Penguin Press, 2006, p. 523)


*L.K. Samuels is author of the 2013 book In Defense of Chaos: The Chaology of Politics, Economics and Human Action. He is editor and a contributing author of Facets of Liberty, an anthology of political and economic writings from 1969 to 2009. His website is