«The Economist», 15 agosto 1936, pp. 303-304
SANCTIONS AND PLANNING. – The end of sanctions has not meant any departure from the centralised economic planning which, if not created, was emphasised by the Abyssinian war. No change has been made, for instance, in the wool, cocoons and wheat monopolies held by Public State Agencies. The price of wheat was fixed on a basis of 1,080 lire per ton, which in an average year is a remunerative price for farmers. It appears that the present year’s yield is under the average, owing to bad spring and summer weather. Since public elevators are as yet insufficient, wheat is left with the farmers, who receive a premium of 10 lire per ton for each month that well-conditioned wheat remains deposited in their granaries. The only relevant change in price policy is the reduction in the retail price of petrol, following a corresponding reduction of the sales taxes on all mineral oil products.
The newspapers are inviting motor-car owners to utilise the reduction, so that the State revenue may profit by it and the Treasury be encouraged to further reductions.
The most significant aftermath of the Abyssinian war is in social legislation. A clear trend towards a compulsory raising of the workers’ standard of living is noticeable. When in October, 1934, during the drive against unemployment, weekly hours of labour were reduced from 48 to 40, a special allowance was granted to those with a large family, in order to indemnify workers whose total weekly wages were thus reduced. A fund was constituted which draws its main revenue from a contribution by men (and their employers) who continue to work for more than 40 hours weekly. By a recent decree, the family allowance is extended to all industrial workers, whatever their hours of labour; 4 lire weekly is the allowance for each child of less than 14 years of age. In 1935 allowances up to a total of 164 million lire were distributed. Now the amount is estimated at 344 millions yearly, of which 215 will be paid by employers, 86 by men and 43 by the Exchequer.
More important are the new collective labour agreements, which are being made public. On July 24th the building employers’ and employees’ Federations agreed upon an increase of 10 per cent, on the present general level of wages. The new agreement also modified many other points in the labour code; for instance, bonuses on dismissal, paid holidays, piece-work, premiums, etc. The agreement was stated by the press to cover 26,000 employers and more than 800,000 men; it relates not only to the building industry proper, but also to public works and similar occupations. On July 31st a similar agreement was reached between employers and employees in the iron, steel and engineering industries. A rise in wages of 10 per cent, was also accepted, with several other changes. Agreements in other industries are under consideration.
THE END OF DEFLATION. – What is most significant is the spirit of those wages increases. The first official announcement (by the Federations) of the building agreement stated that the increase was granted so as to make current wages better related to the power to purchase normal necessities of life; and the Turin Stampa, in its comments, observed that the “corporative” system had thus taken account of the change in the cost of living. This appeared to mark the starting-point of a general increase in wages and salaries, even of public employees, and a revision of the deflationary policy begun in 1930 and accentuated in 1934 by reductions of wages and salaries. Rumours, however, have been widely current, if not of a thorough reversal of policy, at least of a generalisation of the 10 per cent, increase in wages and salaries. These rumours, however, have been explicitly denied by Signor Cianetti, President of the industrial employees’ confederation, in a speech in Genoa on July 30th. The “anti-inflationist policy” of the regime should not be reversed, he said. The workers were not aiming at inflation; they were convinced that a “fixed monetary standard” was the best guarantee of their standard of living. Therefore they did not ask for a hasty general increase in wages. They asked only for a participation in the improvement of industrial conditions.
According to the speech of the most representative figure among the workers, the industrial workers are anxious that their demands for an improvement in conditions should not be deemed a precedent for corresponding changes in other fields: i.e. rises in rents, interest rates, and price levels. Their aim is to share industrial profits equitably with the employers. This is, from their point of view, good policy. Certain questions, however, emerge. Is there a sufficient margin of profits for carrying out the wage-raising policy? If not, will not prices be bound to rise? Already, many wine growers, who were unable to sell wine at remunerative prices because of bad markets in industrial districts, hope that wine prices will rise in consequence of the increase in the purchasing power of thé working classes, their best customers. How will it be possible to discriminate between workers in firms making profits and firms making losses? Such discrimination in the same category is surely contrary to the policy of the employees’ unions; and it is difficult to imagine how it could fit into a “corporative” system. If, then, the aim of the current changes is to adjust money wages to the cost of living, how will it be possible not to extend the changes to all workers?
Turin, August 4.