The new Italian kingdom was far removed from the aspirations of the nationalists. It was a conservative constitutional monarchy ruled by a dynasty that was identified above all with Piedmont. Less than 2 percent of the population had the right to vote. Moreover, resistance in the south and in Sicily to occupation and rule by Piedmont challenged the integrity of the new state. The government attempted to hide the scale of the resistance by referring to it as brigandage (banditry), but much of the south and Sicily remained under military law until 1864, and more men died in the operations against the “brigands” than in the wars of independence. To add to the sense of unease, Italy suffered two humiliating defeats by the Austrians in 1866 during the Seven Weeks’ War. The wars against Austria and the wars of unification also left the new state with enormous debts. During its first two decades the new government imposed severe financial austerity and heavy taxes. The poorest Italians bore the burden of the financial difficulties, which caused frequent and often violent protests.
Following the principles of Cavour, Italy adopted free trade (trade unrestricted by tariffs). This policy encouraged the development of agricultural exports but seriously damaged the development of textile manufacturing and other industries in the north. In the south free trade destroyed all the industries that had developed earlier in the century. Italy thus became especially vulnerable to a European agricultural crisis caused by the arrival of cheap North American grain and South American beef in the 1870s and 1880s. The collapse in farm prices devastated small farms throughout Europe, and in Italy the scale of the damage was immense. The first major waves of Italian immigration to North and South America began at this time. Italy responded to the crisis by imposing tariffs designed to protect agriculture and industry.
From the early 1880s the government also intervened to develop industries such as steel making, shipbuilding, and railroads that were deemed to be of strategic importance. But Italy remained hampered by its lack of natural resources: It had no coal and few mineral ores. The situation began to change with the development of hydroelectric power at the end of the 1800s. Between 1896 and World War I (1914-1918) the Italian economy grew faster than any other in Europe. An industrial triangle formed by Milan, Turin, and Genoa emerged in the north. Textiles remained the most important product, but the chemical, hydroelectric, and machine industries expanded rapidly. "Italy" © Emmanuel BUCHOT, Encarta, Wikipedia.
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