| Several bureaucratic-ideological currents competed to formulate and implement American policy toward Italian economic reconstruction following the Allied invasion and occupation of Italy in 1943. Treasury and State Department liberals, led by Cordell Hull and William Clayton, foresaw a basic transformation of the Italian economy along free market lines, as well as its rapid recovery and reintegration into an open, universal liberal system according to the precepts of the International Monetary Fund and the International Trade Organization. New Deal-inspired planners, concentrated in the Allied Control Commission, Foreign Economic Administration, and UNRRA, sought to promote a "middle way" to economic recovery based on controls, intervention, and basic social reforms. Both currents were effectively isolated from power during the war by an Anglo-American military occupation bureaucracy that subordinated economic rehabilitation to the imperatives of "military necessity."; The Italian resistance coalition was similarly divided in its vision of postwar recovery. Important segments of each major party proposed economic planning and basic structural reform. At the same time, classical free market economists emerged from the collapse of Fascism with great prestige, business support, and a determination to guide the course of economic reconstruction. Following the liberation in 1945, both US currents sought to extend ties to their potential Italian interlocutors. The apparent alliances were never consummated. Both the US Hullian and New Deal currents lacked public support, financial leverage, and diplomatic authority, as well as a practical understanding of Italian economic problems. The political stalemate in Italy--embodied in the Communist, Socialist, Christian Democratic coalitions after 1945--permitted no systematic approach to economic reconstruction. The hopes of both US currents were gradually abandoned, leading to a new consensus promoted by conservative, geopolitically-oriented State Department professionals, whose anti-communism suited the requirements both of Italian economic recovery and US domestic opinion.; The US backed De Gasperi's expulsion of the Marxist left from the coalition in May, 1947, in order to remove a fundamental political and psychological obstacle to recovery along capitalist lines, and to set the stage for the long-delayed stabilization of the Italian currency. That event coincided with the advent of Interim Aid and the ERP, programs that provided the US executive at long last with sorely needed financial resources with which to promote a revised scenario for European economic recovery. But US officials proved unable to dictate either the political composition or the economic policy of the new, loosely-constituted center-right coalition. The political and economic consequences of deflation and the summary expulsion of the left forced the US to resort to massive intervention before the April, 1948, elections. Thereafter, despite its fond hopes to promote a new American recipe for economic, political, and social progress, the US relinquished control of internal Italian developments to the newly-consolidated client regime, in return for a guarantee of US strategic interests in the Mediterranean area. |
