Like many European nations, Italy emerged from the First World War as a democracy in distress. Italy was on the winning side, but the war had cost nearly 700,000 Italian lives and over $15 billion. Moreover, Italy had received secret promises of specific territorial gains during the war, only to find those promises withdrawn when they con- flicted with principles of self-determination. Italian claims to the west coast of the Adriatic, for instance, were denied by Yugoslavia. Italy received most of the Austrian territories it demanded, but many maintained that these were inadequate rewards for their sacrifices. Groups of militant nationalists seized Fiume, a port city on the Adriatic, and held it for a year before being disbanded by the Italian army. At first, the nationalists blamed the "mutilated victory" on President Wilson, but after a short time they turned on their own rulers and what they considered the weaknesses of parliamentary democracy. Italy had long-standing problems that were made worse by the war. Since unification, the Italian nation had been rent by an unhealthy economic split-divided into a prosperous industrialized north and a poor agrarian south. Social conflict over land, wages, and local power caused friction in the countryside as well as in urban centers. .
Governments were often seen as corrupt, indecisive, and defeatist. This was the background for the more immediate problems that Italy faced after the war. Inflation and unemployment were perhaps the most destructive effects of the war. Inflation produced high prices, speculation, and profiteering. And though normally wages would have risen also, the postwar labor market was glutted by returning soldiers. Furthermore, business elites were shaken by strikes, which became increasingly large and frequent, and by the closing of foreign markets. The parliamentary government that was set up after the war failed to ease these dire conditions, and Italians wanted radical reforms.