Learning from failure
The contrast between the massive failure of the Fascists during the 1919 elections and their strong performance in the 1921 elections is quite fascinating.
Both elections saw them trying to make alliances. In 1919 unsuccessfully with his former comrades of the Italian Socialist Party, in 1921 successfully with various secular nationalist moderate parties. In both cases the party presented itself as new and multifaceted and in both cases there was widespread turmoil across Italy.
Both elections saw the Fascists embrace unconventional populism. During the 1919 elections, when competing with the Italian Socialist Party, (after they had rejected his offer to form a coalition with their former comrades turned fascists) he tried to outsocialist the socialists. He called himself the Lenin of Italy. While presenting a completely new movement and sometimes using anti-Communist rhetoric, Mussolini didn’t fear association with Lenin’s dictatorship at the same time. He had represented himself as revolutionary alternative to Socialist, alternative in a sense, or dissident Left, not just Nationalist, but renewal based, corporatists, non-dogmatic and meritocratic.
The most important question is, what was more bizarre, Mussolini attempting to ally with the party that had kicked him out AFTER some Fascists had already attacked the Socialists or the fact that he presented himself as the Lenin of Italy AFTER he had decided to compete with the actual Soviet-aligned party instead. This was a trick question, the craziest thing was that his party had a faction of papal theocrats even as Mussolini called for the confiscation of church property.
But since his attempt to sway supporters off the revolution to his alternative revolution, he instead started to recruit the opponents off the revolution that would eventually result in a de facto dissident right-wing campaign in 1921. That strategy payed off in a country where the prospect of the Socialists installing a Soviet state frightened people, but the parliamentary system seemed incapable of providing any kind of solution. It seemed like either impotent democracy or Soviet dictatorship were the options.
Fascism matures into its broad appeal form
As such, Fascism proceeded on its natural course of convincing the establishment to accept its moderate revolution in 1920 and 1921. Yet that course ironically involved Mussolini uniting and organising radicals off a different kind, specifically, the Squadrismo. They served as the Fascist militias that violently fought the Socialists (and later the Communists), but some only worked with the Fascists while being independent or at least remaining autonomous. Some of them would even end up criticising Mussolini for being too moderate and also for remaining too influenced by Socialism (I am surprised that the fanatical anti-Socialists were surprised that supporting a party led by a man who during the last election called himself the Lenin of Italy, meant serving under someone with Socialist tendencies).
For the political establishment, the anti-Socialist Fascist violence meant that the Fascists could be the fire that fights the fire.
This presents another important trend in the phenomena of what is often called the ‘Far Right’ during the early twentieth century. They were not necessarily the most extreme Right-wing possible or even moderate Right using Extreme methods, they could be dissident Leftists, Third positionists or Centrists who were fanatically anti-Communist and anti-Socialist. Extremely opposed to the mainstream Left. Does a moderate revolution that defeats a more radical revolution, count as a counterrevolution? One of the leading figures amongst the Squadrismo was Roberto Farinacci, who had ironically gone from the Socialist Party to the Reformist Socialist Party (yes those proto-Social Democrats that Mussolini had helped to kick out back in the day) before embracing Fascism in 1919.
But Fascism did co-opt some mainstream Right points while embracing the fight against the mainstream Left. It decided to strategically lean both Right and appeal to the Centre. This is what resulted in Left-leaning Liberal Giovanni Giolitti to invite the Fasci Italiani di Combattimento into the National bloc and caused the Fascists to do well in the 1921 elections.
Ironically, even after the electoral success (and having declared himself Far Right) Mussolini didn’t want to entirely give up his place on the Left either. After having strengthened his base through the Right he was back to making overtures to the Left as in 1919. He actually managed to get the Socialists to agree to a Pact of Pacification whereby both sides ceased hostilities. This led him into a conflict with important Squadrismo who opposed the pact. Mussolini threatened to resign over it. He also desired to reaffirm his Leftist credentials by renaming the Fasci Italiani di Combattimento to the Fascist Labour Party. Not as Leftist or class-based as workers party obviously. Many Squadrismo opposed this as well and Mussolini ended up relenting in exchange for becoming the undisputed hands-on leader of the party, which was centralised into the National Fascist Party.
Hereby Fascism completed its transformation from its early 1919 radical risk variety to its more mature and effective form.
It was this form of Fascism that managed to seize power the next year and establish its regime. This is the form that became famous or rather infamous. This version would inspire clones and luke-warm imitators. But its origins were in Sansepolcrismo 1919 when the Fasci Italiani di Combattimento were born, its ancestry lay with the Fascio d’Azione Rivoluzionaria during WWI and even pre-WWI dissident Leftists.
(Fun fact: the English Wikipedia describes the Fascio d’Azione Rivoluzionaria from WWI as Left-wing but both the Fasci Italiani di Combattimento and the National Fascist Party as Far Right. The Italian Wikipedia however describes the former as syncretic; I suppose that served as the transition from Leftist to ‘Far Right’? Though Fascism didn’t really end up becoming more Right-wing as much as it accommodated the Right a bit more, even before renaming the party, and working with the mainstream more.)
The mainstream Left splinters and crystalizes
The Socialist Party had been big enough to be a threat and organise revolution on a local level, but too isolated and feared by the majority to seize power (a similar problem to what the KPD would experience in Weimar Germany).
Then in 1921 the Italian Socialist Party splintered and the Italian Communist Party was formed by the extremists who abandoned the party. While the Socialist Party had been pro-Soviet Union, they didn’t embrace party unity enough and refused to carry out a purge against the moderate democratic Socialists similar to the one against the Social Democrats back in 1912, so the Communists left (I guess that when they kicked out Mussolini, they had ironically kicked out the leading Marxist-Leninist who kicked out revisionists, causing him and one of the revisionists to team up as Fascists). Yet the Socialist Party ended up kicking out the moderates in 1922 anyways resulting in the establishment of the Unitary Socialist Party; a Social Democrat and Democratic Socialist party; to the Left of the Reformist Socialist Party but to the Right of the Italian Socialist Party). Throughout all of this the Italian Socialist Party leadership considered whether to remain committed to the Comintern.
As such there were 3 Socialist off-shoot parties, 2 which were strongly associated with Soviet horrors. With the mainstream Left now divided, Fascists had it easier.