ABSTRACT
For an economic system war poses allocation and distribution problems of hitherto unknown proportions since it may rely only in a very limited way on obtaining the necessary resources through growth in gross domestic product (GDP). Actual government expenditure which in Italy, during the twenty years before the First World War, had remained at between 10 and 15 per cent of gross national income. During the War, Italian agriculture produced on average more or less the same quantity of goods as in the period 1908-12. With general conscription a large part of the work force has to be removed from production, and those industries hitherto producing capital goods have to devote much of their energy to war production. The demand for war products and the way in which its production was financed gave rise to a number of large enterprises which would play a crucial role in Italy's industrial history for many decades to come.
