THE STATESMANSHIP OF GIOVANNI GIOLITTI
The fact that the Giolitti tariff of 1921 provided very high protection for the iron industry is far from sufficient proof that Giolitti had a tacit alliance with the iron industrialists. That these industrialists profited from protection is clear, that their pressure induced the government to grant it is questionable, and that the government conceded this assistance to these men so they would in turn grant higher wages is unlikely. A northern bloc of capitalists and organized workers might well have emerged as a result of the commercial policy pursued by the State; there is no proof, however, that this bloc was completely responsible for shaping the commercial policy of the State.
The most reliable and impartial sources seem to agree that the main consideration that prompted the erection of tariff barriers for the iron industry was the blatant failure of free trade. Just as Sella had warned, the removal of all barriers provoked the eclipse rather than the expansion of this industry. Soon this was apparent to all. Foreign iron producers, enjoying natural advantages which the home producers lacked, including more modern physical plants, as well as abundant iron ore and coal, were able to bring their products to the Italian market for about half the price of the domestic product. Small wonder that the production of iron ore declined and hit a low of 16,000 tons in the years from 1878 to 1880.1 Free trade proved all but disastrous to an industry that had survived prior to 1860 only because of the protective policies of the various Italian States.
The virtual disappearance of the Italian metallurgical industry troubled a number of Italy's military and political figures. These men considered this basic industry indispensable for the nation's safety and survival. Hence as early as 1861, General Luigi Federico Menabrea, then Minister of the Navy, secured the creation of a commission to advise the government how best to develop an indigenous iron industry. This was followed by a series of studies in 1861, 1864, 1872 and again in 1873, all seeking to find the means of establishing an Italian iron industry--and all ending in failure.____________________
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Publication information: Book title: Planning, Protectionism, and Politics in Liberal Italy:Economics and Politics in the Giolittian Age. Contributors: Frank J. Coppa - Author. Publisher: Catholic University Press. Place of publication: Washington, DC. Publication year: 1971. Page number: 89.
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