The Great Depression and the corporatist shift of Italian economists

The profound crisis which occurred in economic theory in the period between the two wars forced the neoclassical economists to look in different directions. One of them was the corporate economic theory -- understood as a theory which asserted the fundamental role of the state in economic affairs. The protagonists of this attempt to integrate in Italy corporatism into economic science were L. Amoroso, G. La Volpe, E. Fossati, G. Del Vecchio, M. Fanno, G. Papi, and G. Masci, and therefore leading economists of the Italian school who adhered to both the Marshallian and Paretian traditions. The discussion in Italy was concerned more with economic policy problems than rigorous theoretical analysis. What interested the Italian economists was not the development of new theories, but the introduction of new economic institutions able to give concrete responses to the dramatic economic problems of the time. The principal result of economic reflection on corporatism was recognition of the state's central economic role also within a free-market economic system.