Fascist Corporative Economy and Accounting in Italy during the Thirties: Exploring the Relations between a Totalitarian Ideology and Business Studies

Abstract

In the last century the fascist era in Italy continued for more than 20 years, ending with the conclusion of the Second World War. This paper explores how the strong ideological commitment of Fascism, in contrast to liberal ideologies of democracy and free market, operated within the field of accounting and business studies at the pinnacle of the dictatorship experience (the thirties). The totalitarian regime called for the transformation of society and the economic system by introducing an alternative corporative economy, planned and regulated but without abolishing private enterprises. The degree of adhesion to the ‘corporative’ ideology on the part of academics, the influence on subjects and on further development of Italian accounting and business research are investigated and discussed.

Keywords:

• Fascist ideology
• corporative economy
• accounting

Acknowledgements

Preliminary versions of this paper have been presented at: VII National Congress of Italian Society of Accounting History, Bari (Italy), 5–6 December, 2003; workshop on Corporate Management, Accounting, and National Ideology—A Multinational Perspective, Aarhus School of Business, Aarhus, Denmark, 11–13 December, 2003; XXVII Annual Congress of European Accounting Association, Prague, 1–3 April, 2004. The author is grateful to Paola Miolo (University of Pisa), Luca Zan (University of Bologna), Falconer Mitchell (University of Edinburgh), Stephen Walker (University of Cardiff), Yuri Biondi (University of St Etienne) and the two anonymous reviewers for their comments and suggestions.

Notes

1. The contribution of Gino Zappa to the development of Italian accounting and business studies is outlined in the fourth section.

2. The issue of the meaning of ‘totalitarianism’ has been widely debated in political science: see Arendt, 1958.

3. In this context ‘Corporations’ refers to organs in which the interests of workers and entrepreneurs of specific economic categories of trade or industry find their expression and cooperate to address the solution to economic issues. ‘Corporations’ are the basis of the ‘corporative’ fascist model of economic system (see the next paragraph). The concept is rooted in the medieval arts and crafts ‘guild’.

4. De Viti De Marco, a well-known economist, was among those who refused the oath. This forced adhesion, that caused great suffering to many leading Italian academics due to blackmail and threats of probable job loss, has been documented in Goetz, 2000. It has also been noted that the substantial lack of effectiveness of the ‘oath of loyalty to fascism’ is proved by the persistence, after 1931, of attacks against anti-fascist professors by some of the fascist journals (De Felice, 2001a: II, p. 27: fn 115).

5. The extremely fascist laws passed in 1925–1926 by the Parliament elected in 1924 in an election held in a violent and intimidating atmosphere. Among the multitude of publications on the history of Fascism some recent notable Anglo-Saxon contributions are Payne, 1995; Knox, 2002; Littleton, 2002; Paxton, 2004; among recent outstanding Italian works see Guerri, 1995; Gentile, 2004. See also references in footnote 9.

6. ‘Futurism’ was an early twentieth-century cultural movement founded by Marinetti in 1909; it stressed the strong feelings against the ‘past’ ( just because ‘past’), the love for the ‘new’ (just because ‘new’), the exaltation of vital energy, dynamism, activism, incoherence, the apology of danger, that of purifying violence and of war.

7. These aspects also differentiate fascism from Nazi ideology; the latter attempted to remove modernity from German culture to make the arian race free (De Felice, 1976; Mosse, 1977).

8. ‘Against the two opposite claims of the abstract individual and of the state, corporatism contrasts the concreteness of the individual, that freely acknowledges its own aim and reason of existence within the state, and the concreteness of the state, that has a spiritual value only due to the circumstance of its living in the mind and the will of the citizen’ (Spirito, 1934: 37).

9. A recent review of historiographical positions on fascist ideology can be found in De Felice, 1998 and Kallis, 2003. During the seventies a debate arose on the specificity of Italian Fascism. In Anglo-Saxon historiography the work of Gregor (1979) and in Italy the massive biography of Mussolini by De Felice (2001), developed between 1967 an 1997, detected a modernising legacy in Fascism, mainly originating from its early days as a radical movement which, in contrast to Nazism, was forward looking and revolutionary. Italian Fascism would be interpreted as a mass mobilising ‘developmental dictatorship’, able to direct Italy—considered its socio-historical complexity—in a pathway of modernity. An outline of this debate can be found in Kallis, 2003: pp. 15–19.

10. IMI was founded in 1931 for the purpose of relieving the banking system of the pressure that arose from the large demand for loans on the part of enterprises, by granting them long-term loans. This action was, however, insufficient and the situation of the banks, that also owned shares in firms deteriorated, until 1933, when IRI was instituted (r.d.l. no. 5, 23 January 1933) in order to cut the ties between banks and industry. IRI bought the shares from the banks with the intention of giving them back to the private entrepreneurs after restructuring the firms, thus holding the shares temporarily. Instead, in 1937 IRI became a permanent institute with the objective of assuming additional participation ‘in great industrial firms involved in national defence, autarky and the valorisation of the Empire’.

11. After the conquest of the African land of Abyssinia, heavy trade sanctions were issued against Italy by the League of Nations. This circumstance gave the fascist regime the chance to issue a new mobilising outcry: ‘Autarky!’, through which the highest level of independence from import of goods and materials would have to be reached by national industries and internal demand. On the Italian economy during fascism see: Toniolo, 1980; De Cecco, 2002.

12. Alberto Beneduce—a leading IRI manager of the age—is one of the main Italian non-politician protagonists of the public intervention in the economy, functioning as a collaborator of Mussolini for the entire twenty years of the Regime. Beneduce provided a technocratic imprint for the new economic-financial institutions founded in that period. This was coherent with the renewed value given to professional and technical competences, one of the principles of the fascist party, in contrast to both the old liberal bureaucracy and the statism of the left wing. On the personality of Beneduce see Sarti, 1971.

13. In this regard see the Special Issue on Italy of Fortune (Luce, 1934) and Diggins, 1972.

14. According to Cavalieri ‘It seems difficult, in conclusion, to recognize in Italian corporatism the charter of an authentic school of economic thought. Too weak was its theoretical substance and too obvious the intrinsic poverty and lack of originality of its scientific content. In the field of economic studies corporatism was not able to propose either a new research methodology, or a new theoretical formulation … a corporative economic theory—understood as an organic system of theoretical knowledge which concurs to interpret economic phenomena considered in their broader sense—has never existed, and it cannot therefore find a place in the greater and more meaningful history (the historia maior) of our economic thought. This doctrinal conception … is something different: it is the economic theory “of corporatism”, a theory that could not expect to rise to general system of knowledge, because it had the more limited purpose of formulating regulating principles of the functioning of a particular organizational order of the economy, i.e. the corporative one. This is the natural frame of reference within which it must be evaluated.’ Cavalieri (1994: p. 46). Essentially, due to the extreme generality of the formula proposed, it can also be said that anyone could find in corporatism some reason for correspondence to his own convictions. Faucci (1990: p. 210) addresses the corporative view of economy as ‘a box for whatever idea’. About the fascist ideological foundations of corporatism see Spirito, 1934; 1936 and Bottai, 1934.

15. The translation of the term ‘economia aziendale’ is a questionable issue. ‘In a non-literal translation, it stands for something like the “economics of economic units” or the “science of economic administration”‘(Zan, 1994: p. 289). Others have translated economia aziendale’ as ‘concern economics’: in fact ‘A concern is an economic entity and the term covers all kinds of economic units such as business firms, government agencies, private households, etc. The term concern is used because it is general and applicable to the economic aspect of any social institute (typical institutes are a family, a firm or enterprise, a territorial public institute, a cultural institute and so on). The word firm (or enterprise or business) designates only the institute whose economic aspect is the production concern’ (Galassi, 2002: fn 9). For consistency ‘business economics’ has been chosen in the text.

16. This debate was strong also after the Second World War. The adhesion to Zappa's theoretical proposals has not been unanimous and many scholars criticised the business economics approach to research in business studies up to the 1960s. See: Zan, 1994.

17. The term is used by the author with the meaning of ‘outlook’.

18. A legal reference to this assumption can be found in the VII declaration of the Charter of Work (1927), where it is stated ‘since the private organization of production is a function of national interest, management is responsible to the State for its production policy’.

19. The concept of company as a ‘cell’ is linked to the organicist view of the social and economic body; we read in Giannessi (1943): ‘In the organized economic world, companies represent the elementary cells of the social-economic system to which they belong. Within this, they are operating complexes, resulting from the actions of people over economic assets, instituted to pursue a certain task and achieve, with respect to that task, a useful economic result’ (Giannessi, 1943: p. 12).

20. The word addresses the relation of subjects to the ‘azienda’.

21. This is also a reason why the acquisition of private firms by the State can find justification within the perspective of business economics: ‘If any company is judged inefficient, the State has the right to intervene and, if necessary, to take the place of the entrepreneur’ (Giovannini, 1942: p. 570).

22. The quotation is from Malinverni, R., Le corporazioni ed il problema dei costi (Corporations and the problem of costs), Commercio, 1939.

23. This book was in its 5th edition by 1962.

24. The works of Clark (1923), Schmalenbach (1925) and Church (1930) should be acknowledged here.

25. ‘The autarkic and rearmament policies on which the regime embarked after 1934 contributed to the rise in production of electric power, industrial machine tools, chemical and synthetic materials, but in an unplanned and chaotic way, creating imbalances among Italian industrial sectors’ (Castronovo, 1975: p. 332).

26. IRI ‘became a permanent institution, by 1939 acquiring 21.5 percent of the capital in all joint-stock companies in Italy, gaining control of a number of the major sectors of industry, and giving the Italian government ownership of a greater portion of the national economy than in any other nation-state west of the Soviet Union’ (Payne, 1995: p. 225). IRI continued to play an important role after the end of the Second World War in consistently supporting the industrial policy of reconstruction in Italy (Saraceno, 1978).

27. In a famous conference held in Ferrara in 1932, the idea of the ‘fascist owner corporation’ as final end of the corporatism revolutionary process was proposed by the more extremist wing of corporatism (Spirito, 1934: pp. 351–360), and provoked violent controversies and debates: see Asor Rosa, 1975: pp. 1488–1500.

28. Giannessi (1954) gives an outline of the Italian business studies in the first decade after the Second World War.