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 8 ditions of Italian economic life after the war, and the failure of the working class to dominate the situation in 1919.

The first thing to be understood about Italian economy is that it is primarily agricultural. Only in the north is industrial capitalism well-established, and even there the greater part of the population follows agricultural pursuits. In spite of their numerical inferiority, the industrialists are now the ruling class in Italy. Until the war, the landlord class predominated, the whole system of government working in their interests and hindering the expansion of the industrial north.

The prime economic problem of the Italian industrialists is to secure a good supply of raw materials, especially of coal and iron, in which the country is very poor. The war gave the industrialists the opportunity they needed. An active policy of intervention in the war, with its promise of imperialist extensions, new markets, and new sources of fuel supply, was precisely what the industrialists desired. The agrarians, on the other hand, had no concern in imperialist expansion or coal supplies. They opposed the war, and in this they were joined by the proletariat, both urban and rural.

It was at this Stage that Mussolini appeared in the forefront of Italian politics. A campaign to popularise the idea of intervention among the workers and the small bourgeoisie was Started. Mussolini had been a right wing Socialist and was the editor of the Party paper Avanti; as a result of his militarist attitude, a resolution expelling him was passed on 25th November, 1914, at Milan. Immediately afterwards, with funds provided largely by the French Government, he founded the paper called Popolo d'Italia to support the case for Italy's participation in the war.

It is significant that Mussolini's first arguments for war were drawn from Socialist ideology. War was to be the midwife of revolution; it was to achieve the ideals at which Socialists aimed. "War or a Republic!" was his cry, the implication being that the Republic was coming in any case—either before war or as a result of it: either way, the industrialists stood to gain, since either eventuality would give them the control of the State apparatus. Popolo d'Italia bore on its title page the phrase "a Socialist daily paper" until 1917, when Mussolini's Socialist principles were finally swamped by nationalist and bourgeois ideas.

Giolitti, the Prime Minister, at that time represented (owing to his connection with the Banca Commerciale) pro-German and agrarian interests, and he was able to withstand the pressure of the interventionist campaign for a long time. But in the spring of 1915 he was forced to yield and his Government resigned. The King (although closely allied with the landed interests) dared not oppose the war movement, and the new Government declared war on Austria,