Optimize the Italian economy for WWII

[Naval Aviation Fan]

Ok folks, so this thread is for batting around ideas for making the Italians have more money for their war effort. This can either be by investing in making more money outright, or by saving money by cutting costs, mainly from their military/navy.

My personal wish list would be for tourism, especially in Libya, as well as scrapping warships that are outclassed by the time of WNT, this means all 5 historical Italian BB getting scrapped, ASAP, and being replaced by 15" gunned new construction, in 1922, to put Italy on an even footing with respect to power on a ship for ship basis, even though having just 5 BB (175.000 tons) allocated at the WNT. I would also make Italy pass an "Italian Naval Law" that prevents the naval budget getting downsized when scrapping ships, so the funding remains as historical, while the costs drop considerably, and these set aside funds can only be used to make interest bearing loans to jump start Italy's economy by building for profit businesses, and then making these businesses pay back these loans (with interest) to the Italian navy fund.

By building hotels, resorts, casinos in Libya, Italy gets a better developed colony, makes money, and improves Libya's infrastructure, and to support this they need cruise ships to be able to come and go in numbers (ports get upgraded). Build resorts where nothing exists, so no native workforce, build everything from scratch, more ports get built. Connect them all by RR, and get to work with large scale freshwater extraction, using offshore water condensers and augment this with solar powered reverse osmosis purification techniques. As an aside, I don't know how much water the Italians would need, or how much they can collect using these methods, so anyone that has good science skills, feel free to jump in with some actual numbers.

Extracting water in massive amounts is a part of the key to Libya getting developed, but conserving the water is another big part, especially if you want to be able to pipe this water into the interior, and this requires underground pipe networks, and underground water storage (else evaporation is a big thing), and this means that pipes and tanks are going to have to being built in significant numbers, so creating some of these for Oil and Gas is not so hard anymore, because the Water pipes and tankage is already going to be there.

Anyway, these are just some of my ideas for how to get an optimized Italian economy for WWII, what are some other folks ideas?

 

[Grey Wolf]

Italy can't scrap ALL their ships. They don't know the future. You can mark them for replacement, but you can't just get rid of them

If you quick new construction, finish the Caracciolos

 

[Naval Aviation Fan]

Italy can't scrap ALL their ships. They don't know the future. You can mark them for replacement, but you can't just get rid of them

If you quick new construction, finish the Caracciolos

I was thinking about scrapping 3, building two replacements immediately, and then scrapping the Andria Doria class when they get a pair of 15" gunned ships in commission.

Edit:
I would see italy potentially claiming that they should be allowed a single 'bigger/better' ship, like all three navies above them, and so proposing a ship with {8 X 16" guns, 28kts, and 45,000 tons} just to be able to negotiate down to the pair of 15" gunned ships. The new 15" gunned ships would be more expensive than any of the other, previous Italian BB, so if they did go ahead and build two of them, their savings wouldn't be anything like just adding up the costs of maintaining three older BB, but the saving should still be substantial I would think, probably like 1.5 to 2 BB worth of savings, from 1922 on.

Edit 2:
I wouldn't see the Italians getting rid of all their ships, all at once, but trying to modernized older ships, rather than just scrapping them and building newer/better ships would be my goal over time.

As I don't know the composition of the WNT Regia Marina, I can only think that keeping 2 BB, 6 CL/CA, 12 DD, and 6 SS might be a better interwar navy for the Italians.

 

[gallen95]

By building hotels, resorts, casinos in Libya, Italy gets a better developed colony, makes money, and improves Libya's infrastructure, and to support this they need cruise ships to be able to come and go in numbers (ports get upgraded). Build resorts where nothing exists, so no native workforce, build everything from scratch, more ports get built. Connect them all by RR, and get to work with large scale freshwater extraction, using offshore water condensers and augment this with solar powered reverse osmosis purification techniques. As an aside, I don't know how much water the Italians would need, or how much they can collect using these methods, so anyone that has good science skills, feel free to jump in with some actual numbers.

Extracting water in massive amounts is a part of the key to Libya getting developed, but conserving the water is another big part, especially if you want to be able to pipe this water into the interior, and this requires underground pipe networks, and underground water storage (else evaporation is a big thing), and this means that pipes and tanks are going to have to being built in significant numbers, so creating some of these for Oil and Gas is not so hard anymore, because the Water pipes and tankage is already going to be there.

Anyway, these are just some of my ideas for how to get an optimized Italian economy for WWII, what are some other folks ideas?

How about early development and agriculture use of the oasises especially The Al Khufrah Oasis in southeastern Libya

 

[BlackDragon98]

Libyan oil discovered somewhere between 1933 and 1936 when Balbo was governor of Libya.

That is the only thing that can save Italy and probably the entire European Axis war effort.

North Africa is going to become a much bigger battleground much sooner.

 

[marathag]

Grow the Economy.
Then you can modernize all the Armed Services

The Moose needs to forget about Autarky, and embrace international Trade.
Make deals with US and UK corporations. Embrace Fordism

Mechanize Agriculture, Get US Geologists looking all over all the Italian African holdings for Water and whatever else is around, then connect it by Rail

 

[Reisen Storm]

what are some other folks ideas?

Mussolini needs to embrace Fascist syndicalism in an effort to retain his reputation as being loyal to the left-wing tradition of supporting trade unionism if he has any hope of optimizing the Italian Economy.

 

[Bored Young Man]

Don't fight in the 1930s and deplete the economy, Fascists are hilariously corrupt and incompetent get rid of them, and hey look the economy is even better now that there aren't Fascists dragging it off to war.

Realistically, how much investment can a corrupt fascist nation garner and how much is actually invested after?

But if Fascists are a must then so are corruption, incompetence, and needless wars.

If Italy must have the wars, then it will peak in the 1930s militarily. I don't see how they can reliably predict WW2(even Hitler predicted a later date and told the Italians), one needs a decade or more of preparation for a total war effort which can only peak a few years.

 

[Bored Young Man]

Grow the Economy.
Then you can modernize all the Armed Services

The Moose needs to forget about Autarky, and embrace international Trade.
Make deals with US and UK corporations. Embrace Fordism

Mechanize Agriculture, Get US Geologists looking all over all the Italian African holdings for Water and whatever else is around, then connect it by Rail

Except this will all be done under a heavily state controlled economy running imbalances with political cronies and corruption at every level. IOTL everything came to a slump two years into his scheme and he had to ratchet up the oppression.

Trade would also be hard when the Moose is busy pissing off trade partners with his expansionism till the only choice left was Germany and small neighbors he could bully.

You get rid of the corruption and incompetence then you'd get rid of the Fascists and reasons for war.

 

[marathag]

Except this will all be done under a heavily state controlled economy running imbalances with political cronies and corruption at every level. IOTL everything came to a slump two years into his scheme and he had to ratchet up the oppression.

OTOH, current Chinese Corporatism does all the above features, and has worked successfully for decades since Deng did his Jedi Mind Trick on the Communists on how a State Controlled Economy could really work to get an agrarian society transitioned to industrial powerhouse without another Great Leap. It's not that far off from Italy's Fascist Corporatism/Crony Capitalism

The State there still picked the lead for an area of business, but worked on exports as the driver for profitable business and rapid growth than just the internal market.

Back before WWII, with the New Deal and it's Three Letter Programs and Agencies and thumb on the scale for Unions, USA was a mix of Fordism and Corporatocracy 'What's good for General Motors is good for the USA' than Capitalism

 

[DJ03]

you'd get rid of the Fascists and reasons for war.

Let's be realistic, Italian ambitions couldn't peacefully coexist with Franco-British interests in the Mediterranean, which means that, fascists or not, there will be conflict at some point

 

[Bored Young Man]

Let's be realistic, Italian ambitions couldn't peacefully coexist with Franco-British interests in the Mediterranean, which means that, fascists or not, there will be conflict at some point

Well that goes deeper into Italian interwar politics, specifically the lingering militarization of the country post WW1 and the unwillingness to accept that they fought a war that was bloody for everyone and that they should move on. It by no means defined meant the ascendancy of the reactionary/conservative aristocracy and nascent Fascists, plenty of times throughout the late 10s and 20s and where things could've tilted towards an inwards looking government or just a more reasonable non-Fascist one.

OTOH, current Chinese Corporatism does all the above features, and has worked successfully for decades since Deng did his Jedi Mind Trick on the Communists on how a State Controlled Economy could really work to get an agrarian society transitioned to industrial powerhouse without another Great Leap. It's not that far off from Italy's Fascist Corporatism/Crony Capitalism

China is the exception, not the norm. The vast majority of Crony Capitalists around the world now and then languished in poor growth to stagnation. China mind you, was also busy stabbing its own eyes out with Maoist policies/confusion for a few decades until things were so messed up that pragmatists took over in the late 1970s and a pragmatist was not the Moose. China was also benefited from a greater threat in the USSR in contrast to its passive foreign policy; something Italy can also benefit from but not if it shows itself to be another expansionist warmonger in the 1930s. China also existed at a time of free-trade, containerization, of great wealth contrast to its economic neighborhood (just in time too as Korea and Taiwan became developed economies) all in contrast to the middlingly income Italy in an crowded economic neighbourhood with even poorer neighbours

The Moose and his fascists-syndicates took over in 1922 and made an alliance with the entitled old nobility (while promising to solve class conflict); neither of which favors reasonable economic managers nor is there much time or chance for such men to make their way into his personal circle of power.

Unprincipled, the Moose started out privatizing (to cronies of course) till 1925 then opted for greater state-control to the woe of the Italian economy.

IOTL the Moose spent Italy into structural deficits in economically unsound investments that shocker, came up in the 1930s. Meanwhile the extra spending combined with poor economic fundamentals led to inflation, which helped make Italian exports competitive but was politically unpopular and hurt the Moose's ego which wanted a stronger Lira and he engaged in deflationary policies in 1926 that hobbled economic growth.

As the Moose penetrated more into the economic sphere he created large cartels that reduced competition while also losing control since enforcement was uneven, inconsistent, and focused on emotional national darlings in contrast to the best performers.

Come the Great Depression: where the Italian lack of domestic industry inputs and dependence on loans meant that it was intimately linked to the global economy. What does the Moose do? He takes more control like a strong-manly man should; the cartels are replaced with state-direction through political interventions that increased his power, made a show of it, and ignored the underlying economic issues. Sometimes he's lucky, the pragmatic technocrats gets to manage the state-enterprise like the IRI, more often he's indifferent to the details and it flounders like the Battle for Grain. By 1939, Italy was second to the Soviet Union in terms of state-control; it was arguably a command economy by the time.

Autarky, a critical component of Fascist policy and more practically war policy is always inefficient, sure they could've had greater growth if they invested overseas, traded more, and made use of competitive advantages but then they can't reasonably conduct war when the RN can just cut off Mediterranean trade. Italy lacks strategic resources even more than Germany, if it wants to be prepared for WWII then there's little choice but to has to stockpile for a multi-year war and it can't do that for years without major economic sacrifices; at least not if it plans on going on its diplomatically isolating and economically damaging adventures in the 1930s. And there's several threads debunking the myth of Italy making bank from Liberian oil in the middle of the 1930s oil glut.

To plan for a multi-year war against vastly larger economies is something even the Nazis and Japanese recognized as a fools errand in 1939/1941, so they rationalized and convinced themselves that it was going to be a short-war. Given the realities of 1930s Italy a reasonable man would plan for a multi-year war, yet no reasonable man would start a multi-year war against vastly stronger economies and militaries. The goal is unrealistic, so there aren't going to be realistic plans. If the goals are changed, then Italy isn't joining the war except on the side of the Allies when the Nazi are losing.

The majority of dictators in history and at the time practiced state corporatism, there was nothing unique about Italy that made it more conductive to economic development. 1919 Italy was an underdeveloped rural economy, it can either grow or seek military autarky to compete with developed economies and militaries like France and the UK, it can't do both.

 

[Naval Aviation Fan]

The majority of dictators in history and at the time practiced state corporatism, there was nothing unique about Italy that made it more conductive to economic development. 1919 Italy was an underdeveloped rural economy, it can either grow or seek military autarky to compete with developed economies and militaries like France and the UK, it can't do both.

You've spent a great deal of time and effort trying to tell us all how/why OTL Italy couldn't do these things, but this thread isn't about OTL Italy, right?

 

[Bored Young Man]

You've spent a great deal of time and effort trying to tell us all how/why OTL Italy couldn't do these things, but this thread isn't about OTL Italy, right?

I'm laying the framework, both Meiji and the PRC were exceptional for breaking the norm and they didn't squander their economic success within a generation on war. I'm arguing that Fascists Italy can't do it from a starting point of 1919, that even rational Italy can't triple it's economy in 20 years with the Great depression given it's lack of domestic resources to get near Britain's economy let alone approaching it's naval buildup. Especially since any buildup that large will see the UK and maybe France respond disproportionately. If Italy sticks to the WNT its still going to be outnumbered 3:1 against things that depend more on a larger and more advanced civilian economy like radar and electronics.

Sure Italy can lose 20-40% less with some adjustments, but that's boring. I've written about it before, more rational planners wouldn't bother trying to compete with Britain or to a lesser extent France, you'd need it like Germany where more competent people ran the economy and military leaving an inheritance of rational institutional and economic strength and then some war loving Fascist takes power and crash builds a military for war a decade later. From a starting point of 1919 there's no getting around the fact that there's more Brits than Italians, that they are far richer, far more advanced all while trying to compete navally; a field overwhelmingly reliant on economic and technological capability is nearly impossible in 20 years.

Italy can't go on a war footing in the 1930s and sustain it into the 1940s without serious costs and military equipment a generation out of date. The Moose analog would need to take power in the 30s with a clear plan for war, good diplomacy, stay at peace, while subtly preparing the population for war, then backstab during WWII, a willingness to buck the trend and delegate to technocrats all while maintain an oppressive enough government that is willing to devote so much of the country's future on a risky war against far greater opponents. Does this patient, competent, deceptive, nihilistic, and war-loving man have much in common with the reality of Fascists like Hitler or Mussolini?

Let's try it, Notsolini becomes a the PM of Italy in the 1920s. Balances things just right that he is able to start weeding out aristocrats in the military while radicalizing the population for war under the guise of Roman nationalism and the mutilated peace, there's enough economic delegation and monetary relaxation that the Italian economy is more competitive than IOTL while inflation is at a moderate rate all while providing just enough social care for all the peasants still exiting the feudal estates of the 1870s-1890s and people remember this, it also leads to a reproachment in class relations as a rising tide raises all boats.

However the lack of patronage and clientelism means that his power is shaky and he is removed in 1929 just in time for him to avoid association with the Great Depression by sheer luck. Taking on the mantle of the the harbinger of the good times and protector of the people against the scapegoats he is reelected in 1932 (just as the depression was improving from its worst) consolidates power via a bunch of populist moves and corruption. The clock is now ticking, the same corruption that allows him to ignore the people go to on an insane war is also slowly sapping his strength. Children are now taught political education, while graduates are more loyal and motivated, they are considerably less skilled and it'll be up to the older generation to compensate. Its a gradual process but the Moose builds a coalition and extends control over the economy over 5 years. Deficit military spending becomes the norm and he inadvertently engages in monetary stimulus. Libya is still going to happen, the Roman Empire can't exist with Carthage and the adventure reveals a lot of glaring faults in the Italian army. Ethiopia on the other hand is avoided since it was never a part of the Roman empire and the Italian military industry manages to both design and produce the most modern generation around 1939. While butting heads with the Nazis over Austria, Italy folds (can't have WWII as we know it without Anschluss or Sudetenland) and it is the last straw for Italy's diplomatic prospects. still ongoing. TLDR a much better Italy still gets crushed by its lack of resources and the sheer size and ability of the RN and British economy alone.

Even then, how does Italy afford both an army and navy capable of competing all while stocking up enough industrial inputs for a multi-year war? Are they going to build battleships and aircraft engines out of domestic inputs like wood and marble? This also doesn't go into the issues with aristocratic officers within the Italian military, an entire can of worms on its own that while it can be solved with rational professional people, probably won't support an irrational war against a navy 3 times more powerful with no domestic fuel source.

To put things in context India has great potential today, but no one believes that it can reasonably match the USN within 20 years; 50 or 80 if the will and competence is there.

 

[DJ03]

Well that goes deeper into Italian interwar politics, specifically the lingering militarization of the country post WW1 and the unwillingness to accept that they fought a war that was bloody for everyone and that they should move on.

Yes, the public always felt the country wasn't "justly compensated" at the peace table
What I meant is the kind of expansion they were looking for was not in (and I'd argue run counter to) British and French interests, so collaboration with the UK and FR simply wasn't an option for any government aiming for more than 3rd place
Edit: now a liberal Italy may accept that, but only as long as no chance of seemingly turning the tables appears

 

[Bored Young Man]

Yes, the public always felt the country wasn't "justly compensated" at the peace table
What I meant is the kind of expansion they were looking for was not in (and I'd argue run counter to) British and French interests, so collaboration with the UK and FR simply wasn't an option for any government aiming for more than 3rd place
Edit: now a liberal Italy may accept that, but only as long as no chance of seemingly turning the tables appears

That's fine everyone has their own goals, as long as they see reality and work with it. That both Empires dwarfs Italy economically, militarily, and strategically with regards to position, population, and resource access that Italy would need to grow its economy and wait for a good time. That short of a time-traveler no matter how well it planned, 20 years just isn't enough for the Italian economy to grow so much while somehow also finding resources for a military to rival Britain while also spending resources on military adventures that turn Britain and France into rivals.

 

[jsb]

what are some other folks ideas?

I think you need a mix of the two options, going all in for just one of scraping all old ship or just rebuilding old ships is not going to work? You can't afford sufficient new ships in short term, and you can't make the old ship sufficiently good long term so you need a mix?

 

[DJ03]

That's fine everyone has their own goals, as long as they see reality and work with it. That both Empires dwarfs Italy economically, militarily, and strategically with regards to position, population, and resource access that Italy would need to grow its economy and wait for a good time. That short of a time-traveler no matter how well it planned, 20 years just isn't enough for the Italian economy to grow so much while somehow also finding resources for a military to rival Britain while also spending resources on military adventures that turn Britain and France into rivals.

Probably true

 

[Garrison]

Libyan oil discovered somewhere between 1933 and 1936 when Balbo was governor of Libya.

That is the only thing that can save Italy and probably the entire European Axis war effort.

North Africa is going to become a much bigger battleground much sooner.

There's a big difference between finding it and exploiting it. Also oil was dirt cheap in the 1930's and opening up a new field is unlikely to be economic. The bulk of the world's oil was coming from the Americas, not the Middle East.

 

[DJ03]

There's a big difference between finding it and exploiting it. Also oil was dirt cheap in the 1930's and opening up a new field is unlikely to be economic. The bulk of the world's oil was coming from the Americas, not the Middle East.

As soon as I read "and the entire European Axis war effort" I knew you were going to appear 😂