This study rests on the premise that a critical analysis of monetary and financial policy from the outbreak of World War I until the March on Rome can illuminate important, even crucial aspects of the crisis of liberal Italy. Monetary and financial policy is a particularly useful prism through which to view political conflict. What is at issue are the manifold forms of state intervention in the economy, including the role of government in accumulating and expending resources, and the role of the central bank as a macroeconomic stabilizer – some of the basic aspects of the state's interaction with society. In particular, this study focuses on real and perceived conflicts and often painful choices in monetary and financial policymaking between great power politics, economic growth, macroeconomic stabilization, and the preservation or strengthening of democratic consensus. The key issue it proposes to explore is why the post-war governments, although headed by prime ministers of the centerleft, were unable to press ahead with the democratic reformism which characterized the “Giolittian era,” 1901–14.

Rapid economic growth at the beginning of the century allowed political leaders in the pre-war years, most notably Giovanni Giolitti himself, to promote social reform, and broaden the basis of political consensus in the liberal state, while at the same time pursuing an expansionist foreign policy, designed to stake out a claim for Italy as a great power.