"I would say that, for the first year since 1914, Europe Begin to heal, slowly but steadily..."
De Stefani began, unsure where the duce wants him to go, but still determined to express his thoughts, liberal as they are.
"After the set of the unjust treaty dictated to Europe in Versailles, after the weapons were lay down, Europe was shattered materially, morally and economically."
Yes, never forget to express how much Versailles and the Vittoria Mutilata imposed on Italy is an abomination, it is the type of nice words that easily make you sound devoted enough to appease any nationalist.
And as they said, true praise needs no disguise, it's easy to flatter some ego when the words are honest like they come from a child's mouth.
"But now, seven years later, we are beginning, at last, to see the fruits of this new European stability. And the partnership between great powers prior to 1910 and which was resurrected has helped to heal the worst of the scars, the people begin to hope again, not only by maps, military prowess or vague notions about ending the enemy, but by stability and economy."
"Britain, though still quite weighed down by debts and unemployment, has returned to the gold standard and took back her place as one of the leading forces of this world. France has rebuilt its industry, especially the one in the east and north, around Sedan and Verdun, which were previously destroyed by these years of western front."
"Slowly but steadily, every old wheel begins to turn again, the scorched earth blossoms again.
Germany, after years of chaos following its revolution, short civil war and the Ruhr crisis, begins to stabilise again. Its economy, although still heavily under debts, and that is an euphemism, is again on the rise, under the Dawes Plan. Even the now little Austria begins to show some good signs, economically speaking at least."
He pauses while crossing his arms, half lost in thought, the gaze turned toward an inexistent point on the horizon.
After this bloodshed, this "Great War" as they now call it, and the fever of revolution it brough everywhere, Europe is returning to order, the political situation in Italy being the greatest signs of this. It still hasn't returned to greatness yet but it's definitely on the right track to function. The financial system is healing, borders are enforced and stable again, the commerce, even between previous archenemies, is reviving. Peace, though still tense and teared by suspicion and unforgotten scars, is holding."
"Europe has suffered. But in 1926, it is recovering — and if it stays the course, if it does not abandon economic reason for political fantasy, it will thrive again. There is cause for hope."
"Yes, you mentioned Europe." The duce says, his face showing neither clear approval nor disapproval of Alberti's thoughts.
"But what about the new great player and new center of this capitalist world ?"
De Stefani leaned on his chair, before answering.
"Yes, globally, the center of economic gravity has shifted. As the great leaders of the world, the European powers, were distracted while killing each other, dropping in the fight every inch of manpower, money and ressource they had, the giant of the west was calmly rising, spared from the war and providing useful resources and loans to both sides, at the great cost of these two."
"It is clear, economically speaking at least, the United States now leads, in production, finance and even in technology. Their industries were spared from the destructions and the lack of workforce, they have very profitable loans distributed to Great Britain, France, German, us and everyone else during the war. Their markets are as vast as their natural ressources and their never-ending waves of immigration, the optimism there seems unshakable, unbothered by a war only a very miniscule portion of their population was even only slightly close of. They lend to Germany to rebuild its economy, buy cheap from Britain, dominate without contest in Latin America and some parts of Asia, mainly Japan. The American spirit is reshaping the capitalist world, and the politics which came with it."
"The global economy and especially the United States, is expanding at a pace history has rarely seen, probably never did."
"America is the new engine now. While Europe shed blood on the battlefield, they made sure to make themselves essential for the entire world. Their productivity is astonishing. From automobiles, food, steel to radios, all types of consumer goods are produced and exported from there. Mass production like we never saw."
"And now, Wall Street is the new center of international finance, the new shepherd of the liberal order."
He turned slightly, his gaze shifting from right to left as he gauged the reactions of the two silent men beside him.
The man on his left, Giordani, seemed agreeing, at least reluctantly, biting slightly his lower lip in thought, before nodding while expressing his opinion.
"I can at least partially agree with Signore De Stefani, as the situation shows clear signs of a rejuvenating economy. Which is quite normal, considering the terrible state that preceded it. And as an economist, and quite respected among his pair, i would be bold to oppose his thoughts on the matter, being not even an economist myself."
"But…" he began, before being abruptly cut off.
"A sentence that ends with the word 'but' is just a truth that never had a chance to exist." The Duce spoke sharply, his hand tapping on the desk as if physically crushing any attempt at flattery or courtesy.
"Whatever comes before it is only a mask — a pathetic attempt to disguise what the speaker truly means behind a veil of praise and pleasant words... a disingenuous lip service, serving only a moral laziness wrapped in veiled criticism."
The words are sharp, cutting in a methodic and precise way.
"Speak your mind, Signore... no "but", "however" or "though.". Not any of those pretty little words that act like an eraser quietly following the pen, turning your carefully crafted sentences into candles in the wind, tiny flames which briefly lit, only to be instantly snuffed out."
"Sì, your eccellenza..." The confidant and bearded man nodding after the remontrance, then finally openly speaking his mind.
"The vision of Signore De Stefani's is right on a lot of points... and on paper it seems perfectly fine. Still, i am not sure it perfectly applies outside of a desk or outside of a stock exchange hall. In the factory and in the laboratory, we can see a different reality."
"Italy cannot sustain itself, it cannot live alone. it is perfectly normal, I don't think a lot of countries, or even any country in the world, can realistically do that. But it is particularly true for our country, way too much for a great power like Italy."
"Almost everything here depends on the global markets, we need the global economy, we don't require that, we NEED that. Ressources that come from outside the country, beyond the government's control. Anglo-American capital is essential for our economy's survival. We do not produce enough, we cannot produce enough. We rely heavily on costly natural resources, most of which are not found in our soil. And our national industry is neither modern nor large enough anyway."
"And, sadly, we are backward, we lag far behind in terms of technological advancements."
"The state must invest heavily in these areas. It needs to invest in machinery, education, energy, secure resources for our factories, and catch up with the technology of our neighbors. A truly modern state should guide industrial transformation and innovation—not just balance the budget and ensure that the numbers on the paperwork show a positive outcome."
"While Germany, even though all of its destructions and with this immense war reparations on its shoulders, is still rebuilding, with the American loans and a lot of careful planning. Even the hydra in the east, this new "Soviet Union", even after this great war, years of civil war, of independence wars and famine, is also rebuilding itself. Brutally, yes, from what I've heard, but it seems they are already electrifying and mechanizing. Meanwhile, we are clinging to the gold standard as if it was our holy relic and satisfy ourselves with our current status because "It has been worse"."
"We need a more coordinated and controlled industrial policy, not faith in the market purity. We also need capital and direction... and a plan."
"Because we can look at all of this and think that it is okay, we do not need to produce or harvest something as it is available overseas. But what if it is suddenly not ? What if the people that have the monopoly on this particular ressource decide to stop exporting to us, or stop exporting abroad in general because of a sudden crisis ? Or massively increase the prices because they know this raw material is essential to us and that they have the upper hand ? Or even in case of war ?"
"The world is still healing from the greatest human tragedy in the entire history of mankind, and you are already thinking about the next bloodshed to do ?" De Stefani Cut suddenly, now fully turned to his interlocutor, still calm, as he is still a gentleman, but increasingly irritated by the horrendous ideas he is hearing right now.
After all of that, all of these deaths, what sort of madman could think about making the world, about making Europe burn again in the fire of war ?
"I really think you should return disti..."
"Enough, both of you."
The voice is sharp, but calm, not even raised, but leaving no room to any opposition either.
The man then silently turns his eyes in direction of the current minister of finance, asking him to express his thoughts on the matter.
As it is needed, everyone here, except maybe this pompous chemist, knows about the doge vision of an economy, or a state economy if you wanted to be more precise.
Giuseppe Volpi doesn't need as much time as the young man to answer the silent question. His slow voice begins to express his opinion, deliberate, calculated, sounding like a knife being unhurriedly dragged on some stone.
"Signore De Stefani, my predecessor, is a model in the world of economists, a mentor for a long line of brilliant minds, he truly deserves praise for his works... My Duce, I hold him in the higher respect..."
The hell you do. You over-groomed peacock. You wouldn't recognise respect if it stood in front of you with a seal of approval pinned to its chest.
The Doge showed a wry smile for mere seconds, as if he had heard every thought in Alberto's head. Letting the silence instal itself a little bit before continuing, under an irritated gaze from the Duce, claiming is position in a show of silent confidence, but without never crossing the line, ensuring he doesn't irritate the capo del governo beyond the acceptable. He sure is a master of nuance, always reaching the abyss but never overstepping.
"De Stefani is a man of principles, a man of clean numbers and clean hands, and a fervent believer for the right to economic liberty. I don't fault him for that. But our nation is not governed by principles alone."
"He always talks and think of the market as if it were a sacred force. A sort of great divinity which will always prosper, a great force far beyond our reach, that we must idealise and pray. Offering it all sort of presents while waiting for it to give us the fruits of our prayers, like a force of nature which will always sustain us without any need for us to interfere."
"I really wonder then, are we the old neanderthal, this half monkey that our ancestors were millions of years prior to now ? Are we savage from Africa and Amazonia ? Or the red skinned barbarians hunting bisons that the American replaced and destroyed ?"
"Are we really back to these obscure period ? where we weren't producer, farmer and livestock farmers, but simple hunter-gatherers, unable to live by themselves ? Dependent on the beauty of the sky, the state of the earth, and the whims of life ? Is this what we are with this economy ? Slave to an unknown, unnational and unpredictable force ?"
"No ! We need to control our economy, we cannot let this country be the slave of the big finance !"
Volpi continues in his slander, all kinds of respect having now disappeared.
"I recently talked to bankers in London and Paris who barely knew where Trieste is. Incapable to see the world outside their elitist self-centered plutocratic and liberal bubble. Can we really afford to let these people wo know nothing about our country, its way of life and its problem, and who are all but loyal to the state, to take control of our life and the life of our citizens ? Do we have to wait for these invisible hands to reach us ?"
"De Stefani speaks elegantly of discipline, free market, liberty and a lot of other nice Keynesian ideals... and I respect him. But Italy is not Britain or America. Our situation requires some control, not blind faith or dogma toward this new liberal, internationalist capitalist religion, with Wall Street as its papacy !"
"Yes, Europe is stabilizing, and America is booming, but is Italy thriving ? No. Again, like in all her history, she is deprived from her greatness by the international bankers ! She has different needs. We must guide our economy , not let it float on the idealistic currents of this vague free trade concept which repeatedly showed it flaws. The lira must be defended, our credit strengthened, and our industries modernized. And it requires intervention..."
"The state must not be helping the economy... the state must be the economy ! The economy must be the state ! All within the state, nothing outside the state, nothing against the state !"
"Do not worry my friend, we are not killing your little dream. We are not dismantling capitalism, we will discipline it."
"The future belongs to those who organize their economies, not to those who romanticize them, treating her like some sort of mythological virgin who must be courted to expect some favors from her. We must tame it."
"When I stabilized the lira, when i will stabilize it i mean, it is not theory that i am currently doing. It is negotiation, built through deliberate action and foreign capital. The markets want and respect only results, not lectures on classical liberalism."
"Look at around us. Germany relie on the American credits, waiting and begging loans, like a little dog moving its tail for some bones. France protects and rebuilds its industries through sheer protectionism. Even Britain, the embodiment of free market since its creation and for all its gold standard pride, intervenes in the economy when it must. The world is moving, the old free trade capitalist dream is losing the fight against the natural need of the nations, and those who stand still, as quoting Adam Smith, will be left behind."
"We are not betraying capitalism. We are readjusting it; we are giving it structure. And that, my friend, is what makes a nation strong."
And there we are, Alberto thinks, between the hammer and the anvil.
"Thank you for your opinion my friend, it is always a pleasure to share our different visons about things." He says with a slight smile on his lips, not even caring enough to try to hide his disdain for the pompous man.
"Yes, that's true. I am delighted that you could all express your own opinions about our current situation" The duce answer in place of Volpi, clearly not wanting any other long speech from the the weasel at his left, the auto praising being quite too much, even for him.
"And i hope you appreciate each other, because you will be working very closely together."
Yeah that's true, take t...
What ?
De Stefani turns again to the man, while he is giving him a folder, with his name in big red letters on it.
"I am reinstating you in the higher positions of the government, a new minister... don't mind at page 36, i was drinking some coffee."
De Stefani don't know what to say while he takes the papers in his hands, it is very unexpected, specially as the two other men here are clearly differing to his economical vision. He read the first page, taking note of his new post.
"Minister of Fiscal Audition, head of the FPA, Fascist Procurement Authority"
"Yes i know, a very ugly name." The duce interrupts his thought; he will have to read that after this reunion.
"Your main thing will still be money. But you will not direct it or predict some market boom or i don't know. You will track it. You will manage the utility and the integrity of state finances. Your objectives will be diverses."
"First, you will manage and foresee the account, ensuring all state spending is transparent, efficient, and free from corruption. Cut what seems like waste for you, leads audits and investigations, ensure a proper use of our funds. And of course, you will coordinate government-wide efforts to detect and prevent fraud, embezzlement, and misuse of public resources."
"If you think someone is guilty, send them to Diaz, he will ensure if it is true or not, and will deal with it."
Yes, Diaz, the man was appointed recently to a new post and sent in the south. Alberto having already heard about some of his news... exploits. Along with his new partner to ensure Sicilia and the rest of the Mezzogiorno follow the lead of the party and stop some of its more... traditional activities.
It is said that there is already a shortage of rope in Palerme.
He nods silently as the duce go to the next point
"You will oversee the spending, reviews emergency or stimulus spending proposals for compliance with established rules, then report your thoughts and review to the minister of finance, your dear friend Volpi. But you do not control budgets or approve expenditures, he does. it will aim to evaluates efficiency and effectiveness of government programs then advise the Ministry of Finance on potential improvements, you will provide an independent analysis rather than directing budgets."
"You will also oversee the publication of detailed and accessible rapports of the economy to the grand council of fascism and myself."
"And last but not least. Managing public debt and foreign loans and negotiating with banks and international financial bodies. While it is true that the Ministry of Finance and your camarade Volpi are generally more concerned about that, he will be busy with all of his own economic reforms. So, you will work together on this, and as you are well suited for international funding, you will play a key role on this matter."
"You are well known for your rigorous fiscal discipline and sharp anti-corruption instincts, your oversight and your great capacity to protect taxpayers' interests and maintaining the government's financial health. With you there I can ensures that resources are directed toward genuine priorities rather than mismanagement or favoritism."
A Ministry again ? And such an important one ! Although he was clearly opposed to the new corporatist lubies of the government ?
Even if it pains him still of losing his post as minister of finance, this is a huge opportunity, to clean the country, regulate the economy, make sure every lira is sent where it needs to be sent and he can still influence the government leaning and choices toward debt management and still make sure to attract some foreign capital to Italy ?
"My duce, i am su..;"
"Shut up Volpi..." Mussolini said with this time some emotion in his voice, not even gazing on the man
"If you understand that the Società Generale Nordafricana incident was already sufficient to test my patience with you, then I suggest you keep your mouth closed."
"Giordani." The man doesn't wait for any confirmation to continue, turning his eyes in direction of the chemist, before throwing him another folder, even more impressive by its size than the one for Alberto. "You will also work with these two. You will be the head of a new minister."
"I am merging four ministries in one, agriculture, industry, mining, commerce. All in one, under your management.
"You are a scientist, you have the perfect mindset for this, you are a long-term thinker, no need to ask me where i know that from, i will not answer... And you are depoliticized economically speaking, which mean that you will be a bridge between these two irritating men, sorry for your loss...
This ministry will direct all of these sectors of economic activity. Merging Italy's most important bases under one singular entity. Aiming to streamline economic activities and better control our production output. Creating a unified body for all production, to reduce inefficiencies, and promote economic resilience with technological innovation and industrial expansion. With your technocratic contact and personality, you are perfect for this kind of job. And you are from a scientific background, you understand how it works outside of a desk, on the field. "
"And as i said, you don't have to worry about the more economical or technical aspects of this, you will closely work with these two men right at your sides, they know very well this kind of stuff, don't hesitate to ask for their advice and help if you have difficulties. Just be sure to not do it while they are together in the same room, i don't like bloodshed."
"And as it is, it will take quite some of your time. So, congratulation for your promotion and my condolences for your firing from the university of Napoli... no need to call them, i asked them to do that...
"It will be called ministry of national production. A valet has already taken and deposed all of your university material and personal effects in your house, you are welcome."
That's quite the change, Alberto thought. A new semi finance ministry, a change from the full corporatist route, still leanings toward that but way less radically, an openly dismissal of Volpi and a merging of four ministries of production into a new single one ?
"You probably ask yourselves why did i do that."
The duce says, interrupting the three men in their respectives thoughts.
"As i said, there will be a crash... A global one" he adds, intriguing again De Stefani
"You said it yourself." He continues while showing Alberto with a vague wave of the hand
"The problem is you don't see the danger, the knot in all of your perfect liberal point of view... or maybe you just don't want to see it..."
"I am not judging or mocking you." He add after seeing the slight frowns on Alberto face, after all, which economist would like to be lectured about this type of things ? Especially by a novice in the matter.
"After all, it is truly a splendid system they created after this splendid bloodbath." He adds with a wry smile while leaning in his chair, the gaze directed to the picture on the wall, a map of Europe, with Italy at its center.
"Germany was crushed, crumbled under the debts and forced to pay huge reparations to a lot of countries, mostly to France and Britain."
"But there is a problem... Germany doesn't have the money ; they don't even have enough money to normally function as a society, even less with war reparations, So, what does it do? It borrows from the Americans, very big loans, large sums of cash and gold, as their own money is plagued with inflation and their industry is destroyed. While America has none of these problems and is happy to give generous loans in conditions of nice credits once the money is paid back."
"Now, France and Britain, once receiving this victory payment, use that German money to pay back the debts they already owe to the United States, debts they accumulated during the war when America lent them billions to fight, and that they borrow again once it is finished to rebuild their industry."
"So, the Americans lend money to Germany, Germany pays France and Britain, and France and Britain pay back the Americans. It's a perfect wheel. Truly magnificent indeed ? A perfect cycle where the money never gets out. And always finish in the hands of the same persons, where everyone can end his own problem by giving money they will receive again the next time. Like a sort of musical chairs game. Perfect cycle, or rather, a vicious one."
"No real money is made out of this, it is just debts moving around, like a dog chasing its tail. What if one of the player suddenly, for any x reason, stop moving from its chair ? what happen ? What happen If at any point Germany can't borrow enough, America just takes back its loans and Britain or France can't repay the debts ? The whole cycle breaks, and you realise no money was made out of that little scheme."
"This is the fragile foundation on which the 'peace' rests. An unstable house of cards built on borrowed money and impossible promises."
The duce leans back in his chair, tapping his pen on the desk. The room is quiet, heavy with sudden realisation, even a newborn would see what could be wrong with that. So, for brilliant economist and intellectuals like these three people, it was not difficult to not feel suddenly sweating in profusion. although it may seem hypothetic, presented like that, it shows a very possible and realistic outcome for this situation, not a good one.
Mussolini looks up from a report before throwing it on the other side of the desk, silently inviting the men. De Volpi is the first to go, soon joined by the two, the now three ministers all reading together. A folder filled with economic news clippings from the United States.
"You see this?"
The man says as he gestures in direction of the piece of paper.
"They think they've discovered a new kind of prosperity. A new Aztec gold, an eldorado of finance, a miracle of machines, stocks, credit. But it's all too fast, too artificial. And it is too human, like gambling but regulated by the current emotion of a bunch of peoples with probably zero knowledge about any of the society they are investing in. The Americans are building a skyscraper on quicksand. Every month, more speculation, more money injected, more paper wealth. Not industry. Not agriculture. Not real strength. Just numbers and the fool bet, guided by the idea that these numbers will rise and rise again indefinitely.
They are drunk on growth. On this illusion that the market can rise forever. Each day the newspapers celebrate a new height in prosperity, and the bankers fuel it, making their food on simple citizen's hope. And the politicians just smile while letting it happen, too busy to claim this success on their policies, and too afraid of the popular backlash to do anything about the coming disaster. No success, just future chaos, masquerading as liberty and a never ending American dream."
He stands and walks slowly to the window, gazing out at the plaza
"A system like that cannot last forever. Sooner or later, the debt will crack under its own weight, or the bubble will be too big, and any attempt will be too late. Confidence will vanish, as more and more people successively take back their investment. And when it does, when Wall Street falls, it will not fall quietly. It will take everything with it: jobs, banks, governments."
This will not happen this year, probably not even next, i expect it for later 1928, or even 1930. But it's coming, it is not an opinion, it is fact."
"The foundations are rotten. And when they will crumble, the liberal democracies won't know what to do, and the entirety of Europe, tied to America through their series of greedy loans, will fall with it. "
"But us..." He says while he taps his chest
"I will be sure that us, that Italy is ready. Because we believe in order, authority and the primacy of the State. When the others fall into crisis, we will show them what strength looks like, that what they thought was a pathetic attempt at dictating the economy will be a success, with us standing as they fall."
"This is not economic policy." Alberto think as he finish to read and listen to the confident voice in front of him. "It is geoeconomic chess."
"He is either the greatest brain of his time, a mastermind of economy and geopolitical foresight, or the maddest prime minister this country ever had, it says much."
The man in question smiles slightly, like he heard that, before throwing another folder, this time way less good looking, clearly not made by a secretary hand, but written with at novice hand, not used to the pen, very ugly.
"My own propositions but add whatever you want and feel free to ignore everything written there if you think it is a dumb idea, you are the minister, you are the economists and the technocrats. I count on you"
The list of examples is short but not that simple, enough to make the three men and all of their employes work for the next 5 years.
Pre-Crash :
- Liquidation of vulnerable foreign holdings , (US very important !!!)
- Conversion of liquids reserves to gold or stable currencies ( Swiss francs ? British pounds ?)
- Enact capital controls quietly: limitation of speculative foreign inflows; force repatriation of profits if necessary
Industry :
luxury/consumer credit sectors = bad idea
chemicals, energy infrastructure, electrical manufacturing = develop
Subsidize food self-sufficiency = +++
Authorisation to disband or absorb ideological economic appointees. Permission to foreign and "non-aligned" minds
Crash :
Immediate:
- emergency law to freeze all foreign debt repayments temporarily
- Public works programs: rail electrification, ports, dams, new towns.
- Offer "stabilization loans" or deals to weak Balkan/Mediterranean economies = economical and political concession ?
(!!! Special attention to next countries: Albania, Greece, Spain.)
- Acquisition of distressed foreign assets : use gold reserves.
-merging and nationalization of banks
Alberto stopped at the last phrase, before seeing the man now standing at his side, his blue eyes... where they blue before ? Gazing intensely on him, like piercing through his soul, his hand now resting on his shoulder.
"They will laugh for now. But in the future, we will hold the last laugh. And history, my friend, will be laughing with us, not them."
____________________________________________________________________________________________________________________
Author note :
If you think other things should be done for the economic crash, before and after, don't hesitate to tell me.
And can some of you explain to me why suddenly this story seems to attract a lot of bot ? proposing to me some "advice" for my book via copy paste message that they send to every story they can find ?
I delete a lot but they are really numerous.
I am on this app since sometimes and it is only since recently that I begin see this kind of things. can someone have an explanation for that ?