the_dunk_tank

From Mattei's The Capital Order, on wartime measures during WW1:

While it is true that the British imposed caps on sale prices and limits on profits, these measures did not antagonize private capital. Rather, private capital had cooperated, securing for itself guaranteed fixed dividends and substantial economic advantages. Moreover, the windfall opportunities that came with compelling trade unions to abandon their restrictive practices (for example, on work hours and wage flexibility) and a license to impose tighter factory discipline outweighed any disadvantage of the modest profit limitation (Rubin 1987, 19). The British government also footed the bill for the reproduction of the labor force through welfare measures. In other words, these costs were transferred from the private capitalists to the community at large—i.e., a process of socialization of the cost of reproduction.

In Italy, as in Britain, during the war the state assisted capitalists with deference. It became the main supplier and client of industry; it procured raw material, acted as guarantor of bank credits and as discipliner of the labor force; and it provided subsidies and coordinated effort (see De Stefani 1926a, 144–55). During the war Italian capitalists gained exponentially more; unlike in Britain, the Italian state had no ceiling on profits. Industrialists ably justified price increases while the government lacked any serious tool to account for their production costs, ultimately accepting and buying at inflated prices. Purchasing contracts were often made informally, and negligence, abuse, and fraud were the ordinary state of things. The state granted tax breaks to abet the capitalists further (Segreto 1982, 42–43). The metallurgical and mechanical sector especially benefited. Large industries like Fiat, Ilva, and Ansaldo had increased their workforce tenfold (Zaganella 2017, 190). Fiat alone was producing fifteen times more vehicles in 1918 than in 1914 (more than 90 percent of which were for the Italian government). Overall, the automobile sector increased its revenue from 32 million in 1913 to 160 million in 1918. The surge in profits confirmed the expectation of many Italian capitalists who had strongly supported war intervention as an opportunity to get out of the overproduction trap while minimizing their dependence on foreign capital (Porisini 1975, 8).

in this environment, the only justification for not continuing to heavily involve the state was that it would have eventually (and indeed very almost did in Italy) lead to a socialist revolution. as such, the theories of neoclassicist economists in the immediate aftermath of WW1 which eventually culminated in neoliberalism; a political project accepting capitalist crises and lower profitability in exchange for not allowing workers to accumulate any power, masquerading as an economic project of objectivity