When We Loved Mussolini
by Adam Tooze
The New York Review of Books, August 18, 2016 issue
http://www.nybooks.com/articles/2016/08/18/when-we-loved-mussolini/
The United States and Fascist Italy: The Rise of American Finance in Europe
by Gian Giacomo Migone, translated from the Italian and with a preface by
Molly Tambor
Cambridge University Press, 405 pp., $110.00
New York Times Co./Getty Images
Benito Mussolini and US Secretary of State Henry Stimson, Rome, July 1931
In the early 1960s, in the full flush of postwar Atlanticism, Gian Giacomo
Migone, the scion of a cosmopolitan family of Italian diplomats, arrived at
Harvard to study history. As a liberal Catholic, a follower of John F.
Kennedy, and a fan of Pope John XXIII, Migone was escaping the conservatism
and neofascism of the postwar Italian universities. He came to the United
States in search of the promise of democracy and new developments in
scholarship. What he found was something more complicated. It was the heyday
of the civil rights struggle and he and other foreign students ventured
South to witness the dying days of Jim Crow. Yet it was not America’s
present that would unsettle him but its past and, in particular, America’s
recent history in relation to his own country.
In 1965, the theme of Ernest May’s legendary seminar at Harvard on American
foreign relations was the 1920s, and Migone was given the task of exploring
US policy toward Italy. This was a ticklish assignment in a double sense.
The 1920s were a decade commonly identified with American isolationism, a
period in which the US was not credited with actually having had a foreign
policy. And Italy in the 1920s meant Mussolini’s regime. The question was
how the Republican administrations of Harding, Coolidge, and Hoover,
committed to their nationalist program of "normalcy" and modernization, had
engaged with the first effort to build a fascist dictatorship in Europe. As
the Vietnam War escalated in the background, it was an assignment that would
shake the young Migone’s naive assumptions about the alignment of Western
power with democracy.
Published in Italian in 1980, after many years of pioneering research in
American and Italian archives, Migone’s book established him in Italy as an
authority among left-liberal scholars of the fascist era and launched a
career that would lead by way of the University of Torino to a seat in the
Italian Senate. Still, in an age before the Internet and Google Translate,
Migone’s scholarship remained largely unknown to an Anglophone readership.
Like other classic works of European international history of the 1960s and
1970s, many of which were centered on the United States--in German one
thinks of Andreas Hillgruber’s Hitlers Strategie, Michael Geyer’s Aufrustung
oder Sicherheit, and Werner Link’s Die amerikanische Stabilisierungspolitik
in Deutschland--this European interpretation of American power was mostly
ignored in America’s own historiography. We owe thanks to Cambridge
University Press and Molly Tambor, herself a historian of postwar Italy, for
finally bringing us this highly readable translation.
Antifascism was the founding myth of the Italian republic after 1945. But
not only did a resentful minority of Italians cling to the memory of
Mussolini, as Migone discovered in the National Archives in Washington, it
was not until surprisingly late in the 1930s that the United States decided
to treat Il Duce as an enemy. In the interwar period, unlike after 1945,
Americans did not assume that democracy was the natural destiny of all
Western European states. Mussolini’s American admirers ranged from the
Hearst press to Columbia University’s president, Nicholas Murray Butler, who
gave a platform to fascist propaganda in the Casa Italiana on the Upper West
Side. Both Presidents Hoover and Roosevelt expressed their approval of
Mussolini’s regime. Fascism promised to bring order and progress to Italy
while holding at bay the menace from the left.
Already in 1972 John Patrick Diggins, in his Mussolini and Fascism: The View
from America, had revealed the widespread enthusiasm for Mussolini among
progressive American intellectuals. What Migone’s book laid bare was that
these affinities were founded on more than ideas and politics. Behind the
scenes, financial interests had a part in orchestrating the connubio between
America and Italian fascism. As he puts it in his preface, Migone may not
have started out as a Marxist, but through "reading documents produced by
central banks and investment bankers" he sometimes felt as though he might
"become one."
One of the obstacles to acknowledging the amicable relationship between Wall
Street and Italian fascism was the commonplace view of the interwar period
as an era of economic nationalism. Mussolini was famous for his advocacy of
autarchy and for triumphs such as draining the Pontine marshes and the
"battle for grain" in agriculture. Italy, for its part, was severely
affected by America’s nativist immigration quotas imposed early in the
1920s.
But policies of national economic development were far from being
incompatible with fostering international commercial and financial
interconnections. One should take the "national" in "international"
seriously. Italy’s business elites never envisioned their country’s economic
development as severed from the world economy. The immediate effect of World
War I was not so much to unleash deglobalization as to bring about a
rearrangement of international economic interactions. Whereas before 1914,
visionary industrialists like Giuseppe Volpi looked to Germany to assist in
the development of modern industries in Italy, such as hydropower, from 1917
onward, Italy’s economy came to rely on loans from Britain and the US, which
by 1919 amounted to $2 billion and $1.65 billion respectively. After the
Paris Peace Conference, despite the showdown there with Woodrow Wilson over
Italy’s claim to Fiume, Italian liberals continued to look to Wall Street.
Tragically, in the wake of Wilson’s failure to persuade the Senate to ratify
the Treaty of Versailles, America’s mind was elsewhere. Insofar as the
Senate and the State Department were interested in European stabilization at
all, it was the fate of Germany that concerned them. It was the disastrous
Franco-German conflict in the Ruhr that caused the US to reengage with
European affairs in the autumn of 1923. By then, for Italy’s first
generation of Atlanticist liberals, it was too late. Mussolini had seized
power in October 1922.
Migone shows how, with Germany as Washington’s priority, Mussolini
positioned his regime as far more amenable than republican France to America’s
new hegemony. Though Mussolini boasted of his war record, he did not pursue
an aggressive policy toward Germany. He made it clear early on that he
understood the power of the US. As he put it to King Vittorio Emanuele III
in 1923 in urging him to make a state visit to America:
The return of migratory flow into the United States and cooperation with
American capital represent two elements of vital importance for us. Beyond
the economic advantages...it would be of immense benefit to Italy...because
of the inarguable influence it would have on our relations with other
States,...and among them none more than England.
Unlike the democratically elected politicians who ruled in Paris, in Italy
Mussolini’s dictatorship delegated financial policy to a succession of
businessmen and technocrats. Unlike the French, they accepted the basic
economic terms set down by Congress and articulated by Commerce Secretary
Herbert Hoover and Andrew Mellon at the Treasury. Circulating among them, as
ubiquitous facilitators of conversations on both sides, were prominent
bankers and above all J.P. Morgan.
In her preface Molly Tambor notes that one of the most difficult decisions
she and Migone had to make in rendering his book into English was how to
translate classe dirigente. Out of respect for modern sensibilities they
rejected the most obvious option, "ruling class," in favor of a variety of
synonyms such as "elites" and "business leaders." But even through the
filter of this deliberately depoliticized translation, the picture Migone
paints is clear. America’s new power in the 1920s was based on its economy,
and in the projection of an American vision of international order beyond
the League of Nations, it was US bankers who led the way. The crucial issues
of Italian--American diplomacy were not questions of democracy, but of
finance. They concerned the settlement of Italy’s war debts and the
restoration of the gold standard. And with the friendly guidance of J.P.
Morgan, Mussolini’s regime came willingly to agreements on the terms of
financial arrangements with the US. The war debt deal negotiated in 1925 was
the most generous that America concluded with any of its wartime associates.
It set off a flow of American investment to Italy that only accelerated
after 1927, once Italy stabilized on the gold standard.
Altogether America’s investment in fascist Italy soon exceeded $400 million.
Remarkably, by 1930 when President Hoover began his push to restore order to
the world (starting with the London conference on naval arms control),
fascist Italy, after Ramsay MacDonald’s Labour government in Britain, was
Washington’s favored partner in Europe. When Mussolini’s foreign minister,
the charismatic ex-squadistra Dino Grandi, met Hoover in 1931, the president
is said to have assured his Italian guest that the vocal minority of
antifascists in America should be ignored: "They do not exist for us
Americans, and neither should they exist for you."
What tore the harmony of the 1920s apart was not the increasingly
dictatorial tendencies of Mussolini’s regime, but the Great Depression. The
collapse of the gold standard and the end to international lending sundered
the ties of "soft power" that had restrained Mussolini’s regime. Mussolini
had always talked of war and conquest, but since the Corfu incident of 1923,
in which Italy was drawn into a diplomatic and military crisis with Greece
over the island, he had moderated his foreign aggression. In 1935
expansionism flared back into the open. With his unprovoked attack on
Abyssinia, Mussolini unhinged the interwar order. Hitler’s militarization of
the Rhineland, Franco’s coup in Spain, and the Anschluss of Austria
followed. Insofar as there was any hope of stopping this escalation, it
would have consisted of early and aggressive sanctions against Mussolini
over Abyssinia. But instead the liberal powers vacillated. Why?
Hitler famously said that he had seen the statesmen of the West at Munich
and they were "worms." On this, at least, Churchill agreed with him. For
Migone, the logic of appeasement was not a matter of moral weakness. It was
systematic. The failure to impose sanctions on the fascists was the faded
echo of a once-powerful strategy of financial hegemony. In view of the
policies of the 1920s, America’s refusal to back even the minimal sanctions
imposed by the League of Nations was entirely predictable. Instead, surging
imports of American oil and motor vehicles propelled Italy’s murderous
aggression against the only independent African member of the League of
Nations. The State Department’s principal concern was not to punish this
violation of international law, but the fear that if Mussolini were to be
humiliated, his regime might collapse and Italy might fall victim to
revolution.
Viewing appeasement against the backdrop of financial and political
relations in the 1920s is certainly illuminating. But it also reveals a
one-sidedness in Migone’s history. He does not take seriously enough the
bewilderment in Washington and London as they responded to Mussolini’s
sudden aggression. What, they asked, could Mussolini possibly want in
Abyssinia? It was a real question. According to the accepted model of
capitalist hegemony, which the Americans believed themselves to have been
pursuing with their fascist collaborators, there was no obvious answer. Nor
does Migone provide us with one. In his effort to refute the overly
ideological readings of fascism as a violent political religion, he neglects
to give us a systematic account of fascist aggression.
The violence that exploded in 1935 had many sources. But according to Migone’s
own argument it can best be interpreted as the underside of the compliance
that he describes so powerfully in the 1920s. Do-or-die insurgency was a
different kind of reaction to the new world order created in 1919. We cannot
account for the singularity of Mussolini’s regime--or that of Hitler--unless
we acknowledge this duality. Il Duce did not just pay homage to the power of
the British Empire and America. He also railed and plotted against them.
How to respond to this violent insurgency was a real challenge to the
strategy of liberal governments after World War I. Their preference for
peace was solidly founded. Social and economic interests and a distaste for
war played their parts. The military potential of a German-Italian-Japanese
alliance was not a threat to be taken lightly. But what drove appeasement
was not so much the fear of defeat as the ruinous cost of winning again. The
victory of the Entente powers in 1918 had come at a price so high that it
called fundamentally into question the value of war as a tool of power
politics. Since the Washington naval conference of 1921, both American and
British strategy had consisted in solidifying their strategic dominance on
the oceans. In 1935, if they had wished to assert it, the superiority of the
British fleet over Italy would have been enormous. But imposing a full
blockade would have required political mobilization at home and strategic
alliances with France and the US that they did not offer and that Britain
was not prepared to undertake.
What was missing was a credible system of deterrence, a standing force so
formidable and so clear in its political and strategic mission that it would
render implausible any effort to overturn the status quo. Since the Paris
Peace Conference that is what the French government had been calling
for--through some combination of a League army, automatic sanctions
mechanisms, and security guarantees with real teeth. But it was precisely
that insistence that made the French republic so obnoxious to Washington.
The subsequent disaster would reveal the limitations of a one-dimensional
financial hegemony. To secure a congenial liberal order, a far denser mesh
of politics, ideology, and military power would be required. After 1945,
America’s promotion of European integration and its anchoring role in NATO
were two vital elements of the new order. Anti-communism solidified domestic
political support. Eisenhower’s nuclear "New Look," horrifying though it
was, made deterrence financially affordable. As Migone’s revisionism
energetically reminds us, a further element of the postwar order was a
rewriting of the history of the 1930s that drew a veil of silence over the
fact that as recently as 1935 institutions as pivotal as J.P. Morgan had
been working closely with men who were now treated as fascist outlaws.
The work of "coming to terms with the past" begun by Migone and his
generation thus illuminated both the interwar period and the political
foundations of the postwar order. And though fascism has passed from the
scene, it is this edge of critical self-reflection that gives Migone’s book
its relevance to recent developments. What is the relationship between
democracy and internationalized financial capitalism? How squarely can we
face the tensions between them? In the era of Vietnam and Pinochet, Migone
posed those questions about America’s relationship with Mussolini’s Italy.
They are still with us today. And in facing them we need all the help we can
get. Though the return of the humanities to the "history of capitalism" is a
welcome side effect of the financial crisis, decades of neglect have taken
their toll on our critical and analytical faculties. We will do well to
sharpen our wits on the efforts of an earlier generation to grasp the
political economy of international capitalism. Migone’s lucid and powerful
book is a bracing place to start.
Related
The Great Pretender
A.J.P. Taylor
The New Deal We Didn’t Know
Nicholas Lemann
The Pope Who Tried
Alexander Stille
Also in This Issue
---- August 18, 2016 ----
Fences: A Brexit Diary
Zadie Smith
Black Lives and the Police
Darryl Pinckney
The Mystery of Bosch
Ingrid D. Rowland
Why Growth Will Fall
William D. Nordhaus
The Consolations of Strangeness
Charles Simic
