Europe is destroyed at the end of WWI. There are 8 million military deaths as a result of WWI, with a further 22 million wounded and often crippled as a result of the conflict. Italy alone has half a million battlefield casualties and a million wounded soldiers out of a prewar population of around 35 million (1% of population is killed and 3% is wounded). Even those who survive the war in one piece are often mentally scarred, suffering from PTSD or ‘shell shock’, and other nervous disorders. There is also huge infrastructural damage to railways, roads, cities, etc. Uncleared ammunition creates permanent ‘dead zones’ that cannot be cultivated. In France, the damage is concentrated in the areas that previously housed the majority of its industry. All of this damage decreases the competitiveness and strength of the European economies and needs money and supplies to be repaired. Furthermore, the entirety of eastern Europe continues to be engulfed in war, either over new national borders or ideological struggles. This further damages the existing infrastructure and industry of eastern Europe and Russia.
Most Europeans have nothing to show for the war. The territorial changes that result of WWI are minor: some German colonies get transferred to France and Britain, some other German colonies go to Japan, and Italy gets Tyrol and Trieste. Most territory goes to newly independent states and thus benefits none of the belligerents. Publicly, these territorial changes are seen as totally not worth it for the all trial and hardship of war. The victors cannot believe that they went through all of that for so little; the losers cannot believe that they suffered so much and still lost.
Economic collapse
There is a general economic collapse after 1918. This collapse is the result of the disruptions to global trade occasioned by WWI. Prior to 1914, trade and finance are heavily globalized: production chains stretch across multiple European countries, supply chains depend on colonial empires, and finance is multinational. None of this can exist after the outbreak of war, as economic blockade is an essential part of the ‘total war’ practiced during WWI. The economy, thus, collapses as factories struggle to find supplies and move production to the homefront or to allies.
1918 also sees the end of the war economy. Total economic collapse had been prevented by a massive increase in spending on war industries, which keep people employed and businesses open. For some countries, like the USA, this is actually a period of major economic growth. After the end of the war, this source of financing goes away. Once government orders for war materiel stops, the economy crashes again. This crash occurs right as soldiers are demobilized, meaning most soldiers return to poor economic prospects. This is true even in the USA. All belligerent governments are massively indebted from the conflict and impose austerity measures to focus on paying off debt. Austerity further shrinks the business cycle, exacerbating and lengthening the recession.
A return to high levels of international trade was inhibited by the end of the Gold Standard. The Gold Standard was the global monetary system that existed between around the 1870s and 1914. Under this system, all currencies are convertible to gold at set rates. The money supply changes as more gold is discovered and minted into circulation. The major upside of the system was that, because all major currencies were gold convertible, transactions could be done in a shared currency with a known value. This facilitated easy trade and investment and virtually eliminated currency speculation. The Gold Standard was suspended in 1914 because no country, except the USA, actually has the gold reserves necessary to back up all its wartime spending. As a result, there would be a risk of a run on national banks if gold convertibility were maintained.
At the end of the war, some European countries try to restore the Gold Standard, to limited success. A return to the system is crippled by the loss of faith in currency value due to the overextension from the war, exposing countries to the kind of currency speculation that did not previously exist. Britain, in particular, overvalues the pound and causes mass transfers to gold that it cannot afford, triggering a monetary crisis. On top of this, the return to the Gold Standard sharply reduces the money supply, causing deflation and exacerbating the recessionary cycle. Germany and many other countries did not restore the Gold Standard or devalued their currencies relative to gold to cover massive debts and new expenses. This made their currencies essentially worthless in international exchange, while also crippling their ability to take out and service loans. The breakdown of the Gold Standard makes trade and finance more logistically difficult and dependent on faith in the values of national currencies, which was minimal. Overall, international trade and investment was risky and difficult in the Interwar period.
Societal and social change
Societies, particularly in the less developed parts of Europe, have to adapt to changing social norms as women enter the workforce. During WWI, women entered the labor force to do many jobs left vacant by conscription, as men left to fight. As women could be paid less than men, they remained in the workforce after 1918. Women are more prevalent in countries dominated by light industry, like Italy, than those with mainly heavy industry. Veterans often return home to an economic crisis and a profoundly changed society, with women playing a larger role, occupying previously male-only jobs, and exerting a downward pressure on wages. Many are angry at changes to an intensely conservative and patriarchal society.
Communism
Communism is seen as a solution to the economic and political crisis in Europe. Communist groups are active all over Europe since the late 19th Century and call for the overthrow of capitalism and bourgeois democracy. They blame monopoly capitalism for starting the war, have been prominent in the antiwar movements across Europe, and accuse capitalism of having caused the current economic crisis. As such, they respond to both the economic crisis and the political legitimacy of the present government.
Economics: your economy is crashing because of fundamental contradictions within capitalism, also your boss is exploiting and profiting off of you. Communism will restore the economy and better your wages and working conditions.
Politics: your government is bourgeois democracy and only serves the interests of the dominant class. It is not and has never represented your interests, that’s why they launched the war. The Communists represent the true interests of the working class.
Communist insurrection is widely seen as a sign of a political crisis, the inability of the political establishment to address political issues within its existing framework, and as a symptom of political crisis, a response to the inability of the current political system to resolve the pressing economic and social issues of the time. Communism undergoes an immense growth in popularity in the later years of and WWI its aftermath. There are attempted Communist revolutions across most of Europe, as well as mass strikes and other insurrection. It seems possible for most of the 1910s and 1920s that the Communists will take over all of Europe.
In Italy, this potential Communist insurrection takes the form of the Biennio Rosso. Beginning in April 1919, Italian trade unions take over factories across the Po Valley. Almost half a million workers occupy factories, over a million peasants seize and illegally occupy land, and railway workers refuse to transport troops to put down the strikes. Trade unionists set up armed paramilitaries to defend industrial areas. The situation is settled in 1920, when the major Italian trade union cuts a deal for pay increases and worker representation and orders the strikes and occupations to end. Begrudgingly, armed workers comply. Anarchist leaders are arrested in subsequent raids. From the Summer of 1920 on, there is constant violence across northern Italy between fascists and socialists, the latter organized into the the Arditi del Populo after June 1921.
Italian Fascism
It is during the Biennio Rosso that Benito Mussolini and his Fascist movement became a major part of Italian politics. Mussolini was a socialist newspaper editor and writer who broke from orthodox Marxism in 1914 due to his Italian nationalism and support for the war, although he remains fundamentally socialist until at least 1920. He fought in WWI, afterwards founding his own political movement and paramilitary together with Gabriele D’Annunzio. Later on, he will become Il Duce and the figurehead of Italian Fascism.
Before talking about what fascism is, it is important to cover common mistakes and say what fascism is not: fascism is not a rightist, conservative, or traditionalist ideology. It is a revolutionary ideology that rejects capitalism, communism, traditional institutions, democracy, and Enlightenment individualism. Fascism's core principles are nationalism, corporatism, and militarism.
The fascist version of nationalism exalts the nation as representative of the collective good and nationalism as the cure for the sectional divisions that capture and undermine bourgeois democracy. Rejects Marxist class warfare, saying that class is also used to divide people and that society needs to exist from the harmony of all classes, not the domination of one class or another. Italian fascism is extremely patriotic and advocates Italian expansion to historic areas of control. It identifies Italy with the Roman Empire’s control of the Mediterranean.
The fascist goal of corporatism aims to reflect the common goals of all classes in society. To this end, the economy should be controlled by the state and run for the benefit of the country as a whole. They believe that democracy results in the domination of a single class or interest group, so government should instead be a nationalist dictatorship, but with representatives of ‘corporate groups’ present in a consultative capacity. To prevent the kind of class warfare that exists under capitalism or communism, factories should be run by the government, with the participation of both unions and capitalists.
Militarism is an essential part of Italian fascism. It holds that war is essentially good and encourages nationalist self-sacrifice. Society should be organized along military lines, with a heavy emphasis on discipline, bravery, sacrifice, and health. War rids the Italian population of the weak and effeminate and creates a strong masculine Italian race. War is the primary way in which strong and virile powers dominate weaker powers.
D'Annunzio's Fiume
The predecessors of Mussolini's fascist state in Italy was the government of Gabriele D'Annunzio in Fiume. Fiume (today Rijeka) was claimed by both Croats and Italians. The city had been taken over by mutinying Croat soldiers on 23 October 1918, but they had then been forced to concede authority to an Italian-led government on 4 November. The Western Allies then get involved on 17 November, forcing Italy to withdraw and placing Fiume under joint control of Britain, France, and the USA. Italian demands for Fiume are rejected at the Paris Peace Conference, making the city a focus of Italian nationalism. Gabriele D’Annunzio, a prominent poet and war hero, gathered several hundred volunteer ‘Arditi’ and marched into Fiume on 12 September 1919. He established the ‘Regency of Carnaro’ as a corporatist dictatorship enforced by the Arditi. Italy never approves of the ‘annexation’ of Fiume and negotiates the Treaty of Rapallo with the new Kingdom of Serbs, Croats, and Slovenes that cedes Dalmatia and establishes Fiume as a free city. Angered by the surrender of Dalmatia, Fiume seizes neighboring islands on 13 November 1920. Fiume then renounces Italy on 3 December, triggering a brief naval bombardment on 28 December that ends D’Annunzio’s rule. Fiume itself is relatively unimportant, but the precedent it set for the creation of a corporate state and the use of nationalist paramilitaries to seize and retain power is tremendously important and directly inspires Mussolini.
Rise of the National Fascist Party (PNF)
After a dismal electoral performance in 1919, the PNF is reinvigorated through participation in political violence in the Po Valley beginning in the Summer and Fall of 1920. The conflict intensifies in 1921, as Fascists plan and carry out raids to burn socialist offices and beat or kill socialist officials. Socialists are targeted because of their pacifist stance during the war, attracted the support of veterans and (initially) capitalists and landowners. The Fascists win the support of conservatives, capitalists, and landowners by crushing the socialists, and win the support of the peasantry by forcing landowners to give peasants small plots (or else…). After beating the socialists, Fascist leaders established themselves as de facto authorities, calling themselves ‘Ras’, across northern Italy. They began public works projects for the unemployed and essentially displaced the state in local affairs.
Mussolini compromises with the establishment in a way that socialists cannot and other fascists refuse to. By abandoning his calls for total nationalization of industry, confiscation of Church property, and the abolition of the monarchy, Mussolini earns conservative allies who support him as an alternative to Communism.
In Spring 1922, Fascist action across Italy expanded and Fascists overthrew local governments across Italy, restoring the fascist government in Fiume and chasing out the socialist governments in Ferrara and Bologna. During the Summer, they moved south, violently clashing with socialists and overthrowing governments as they went. In each city, they appointed their own government, which immediately gathered the unemployed into public works projects. The Italian government is unable to effectively respond to this threat, being split between the Marxist PSI, the Catholic Socialist PPI, and the conservatives. It vacillates between responding with force and trying to appease Mussolini by including him in government.
Mussolini took advantage of his political momentum to stage his March on Rome. On October 24 1922, Mussolini came up with a plan to seize power in Italy, sending Fascist bands to seize control of all remaining cities in northern Italy and then continue down to Rome. The Italian government, then under the caretaker government of PM Luigi Facta, blockaded railroads into Rome and garrisoned the city with elite Alpine regiments. These measures are mostly successful, and around 20,000 Fascists are stopped at checkpoints before reaching Rome. On 28 October, around 9,000 Fascists had reached Rome. Although outnumbered and outgunned by the Italian Army, there were worries about the loyalty of the soldiers and the risk of starting a civil war. King Vittorio Emanuele III refused to agree to martial law and appointed Mussolini PM. Mussolini came to Rome and assumed power on 30 October 1922. Although the official head of government as PM, Mussolini would soon exercise dictatorial power in that role due to the street presence of Fascist paramilitaries, soon expanded and organized into the Blackshirts.
Fascism as a global movement
Fascism was an inspiration for movements globally. It was seen as a solution for the economic and political crises facing the world in the Interwar period. Economically, Fascism is a tremendous success. Not because of the corporatism, although that does reduce the number of strikes, but because it implements Keynesian stimulus spending through public works, jumpstarting the economy and solving unemployment. Politically, Fascism has managed to end the threat of Communist takeover, which had seemed very possible from 1918 until 1921, and the streamlined dictatorship allowed it to adopt solutions (like Keynesian stimulus and political violence) that democratic governments cannot employ.
— Eunice Noh, June 2020