Fascism: 1975 and 1993

Bryan Klausmeyer

Ah yes, the old, “Nazis are communists are Nazis because they did not believe in the free market.” And Adolf Eichmann is such a reputable source. Wait, hold on. I wonder, maybe they were trying to convince workers that they should support the Nazis instead of the Communists… Nope, it definitely wasn’t the case that the Nazis co-opted Communist policies.

Also, the entire point of this post was to refute the silly claims you’re making. All you’ve done is simply restated the “liberal fascism” thesis in a way that makes it seem like you’re adding something new to the table.

Sep 28, 2008 @ 11:33 AM

Bryan Klausmeyer

If it wasn’t clear from my response, your argument was refuted in the link I posted, not in my response itself. This is the point:

Of course, fascism is against free markets. But then most people who proclaim that they are for free markets are against free markets. The question is never about the existence of socioeconomic controls. It’s about what kind of controls and who benefits. The same class of people who benefited from fascism in Germany and Italy are the same kind of people who benefit from the execution of Paulson’s plea.

The difference between right and left is not about “marginal tax rates” or whatever you’re talking about. As they make clear in the article, the difference is between WHAT KIND OF CONTROLS and WHO BENEFITS. In terms of McCain and Obama, you are right that they are both fairly similar — they are both corporate candidates who will likely follow the dominant neoliberal trend of trumpeting “free markets” abroad, while instituting minimal social programs at home. Anyone who thinks that Obama will bring about a Great Proletarian Cultural Revolution is going to be sorely disappointed, but nevertheless we do find important differences, one of which is found in their tax proposals:

http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST2008060900950.html

Here you’ll see that, whereas John McCain is for tax cuts for the rich, Obama is against them. Whereas John McCain wants to cut federal spending on social programs, Obama is for increasing funding for them. Again, the basic questions here are what are the controls and who benefits.

Let’s continue through the linked article:

Again, if you compare the two definitions of fascism, the latter guts out the most important part: its purpose. Sure, fascists tend to wage war and be racists and bigots, but the purpose of war has always been to seize someone else’s wealth. And the fear and hatred of the “other” has always served as a distraction from real motives for war and has always helped to denigrate those people who are about to be robbed.

This bailout plan pretty much wipes out the boundaries between business and state. The state serves business. With our tax dollars.

…What most people don’t know is that German businessmen and bankers gathered together to plan the location of Auschwitz. The purpose of the location was to supply slave labor for the different German factories in the area. Lots of people were murdered outright and gold plucked from their mouths, but a lot of them were worked to death. You see, the government provided the businesses with cheap labor and supplied Germany’s central bank with a steady supply of gold. Auschwitz was very good for business, not so good for the Jews and Gypsies.

One of men at the meeting where Auschwitz was planned was Herman Ab. Herr Ab was the head of Nazi Germany’s state bank during the war. As German armies swept over Europe their bankers followed, seizing the assets of the conquered. Ab must have had friends in high places because he survived Germany’s loss and went right on banking. When he passed away awhile back David Rockefeller was quoted in Ab’s New York Times obituary as calling him “the greatest banker of our time”. There was no mention in the obit of his work for Hitler or his part in the planning of Auschwitz.

If you are familiar with your Nazi history, you will know that although the Nazis styled themselves as a “workers movement,” the Nazis were actually led by the biggest business owners in Germany. For example, it was the executives of the German railroad companies that helped to build the cattle cars used to exterminate the Jews — and they made quite a hefty profit off of this. The argument being made in the linked article is that we are now experiencing a similar development with business and the state overlapping — again, this is not “leftist” simply because it involves the “state” — this is a ridiculous, simplistic, and wrong notion. Oh, here is more from Wikipedia:

By the late 1930s, the aims of German trade policy were to use economic and political power to make the countries of Southern Europe and the Balkans dependent on Germany. The German economy would draw its raw materials from that region, and the countries in question would receive German manufactured goods in exchange. Already in 1938, Yugoslavia, Hungary, Romania, Bulgaria and Greece transacted 50% of all their foreign trade with Germany.[21] Throughout the 1930s, German businesses were encouraged to form cartels, monopolies and oligopolies, whose interests were then protected by the state.[22] In his book, Big Business in the Third Reich, Arthur Schweitzer notes that:

Monopolistic price fixing became the rule in most industries, and cartels were no longer confined to the heavy or large-scale industries. […] Cartels and quasi-cartels (whether of big business or small) set prices, engaged in limiting production, and agreed to divide markets and classify consumers in order to realize a monopoly profit.[23]

As big business became increasingly organized, it developed an increasingly close partnership with the Nazi government. The government pursued economic policies that maximized the profits of its business allies, and, in exchange, business leaders supported the government’s political and military goals.[24]

While the strict state intervention into the economy, and the massive rearmament policy, led to full employment during the 1930s, real wages in Germany dropped by roughly 25% between 1933 and 1938. [25] Trade unions were abolished, as well as collective bargaining and the right to strike. [26] The right to quit also disappeared: Labour books were introduced in 1935, and required the consent of the previous employer in order to be hired for another job. [26] In place of ordinary profit incentive to guide investment, investment was guided through regulation to accord with needs of the State. Government financing eventually came to dominate the investment process, which the proportion of private securities issued falling from over half of the total in 1933 and 1934 to approximately 10 percent in 1935-1938. Heavy taxes on profits limited self-financing of firms. The largest firms were mostly exempt from taxes on profits, however government control of these were extensive enough to leave “only the shell of private ownership.” [27]

(To prevent this again from being a discussion about how state intervention = leftism = Nazism, I’ll remind you the bit about “controls” and “who benefits”: here you’ll see how they argue that “private enterprise” was left hollow, but it wasn’t workers who profited — it was big business.)

On the other hand, the Soviets OVERTHREW THE BUSINESS LEADERS AND NATIONALIZED THE INDUSTRIES. I know this is a very subtle difference and therefore hard to grasp, but it is an important one. The idea behind this was that humans should not be reduced to labor power — they should be free. Yet you do need things like factories to continue running a society, so instead of having them be run for profit, the government should equalize the pay and let the workers democratically run the factories. As we know, this, tragically, did not happen. Yet it does provide us with a “utopian” kernel at the heart of the Soviet project: liberation, freedom. Here we have another difference between “socialism” and “fascism”: on the one hand, we can still see, even today, the “hope” of socialism, whereas we can all agree there was no such utopian kernel in “fascism”: it was merely class hatred redirected towards hating “the Other” (exterminating Jews, invading other countries to create slave labor armies).

Now, you’re attempting to argue that this is somehow similar to both “liberalism” and “communism,” although you haven’t actually constructed arguments for either of these. First of all, liberalism does not bear any connection whatsoever to communism. I haven’t met any liberals lately who are trying to raise class consciousness. Next, Bill Clinton is a liberal, but he is unlikely a fascist. I would love to see the argument made that Bill Clinton is a fascist, seeing as he was a “liberal” who reduced taxes and cut federal spending.

Let’s look back at what you are writing:

My entire point is that they DID share many “left” leaning policies. So what’s the big difference? Is it just that the Nazis only had a 50% wage tax and not 100% on the rich, or what? Or is the difference merely one of rhetoric?

Here is an amazing bit of rhetoric — you’re performing ideological operations that you accuse socialism/fascism of doing, which is simply astonishing. The idea that raising taxes is in itself Fascist-Socialist is utterly insane, and simply a rhetorical/ideological tool for manipulating people in order to prevent them from curtailing wealthy people’s income. For example, Sweden has something like a 30% wage tax — are they too “FASCISTS”! If so, we should surely begin gearing up for a military invasion, who knows what they will do, start annexing the Sudetenland and then exterminating their Jewish population? Or perhaps the combined armies of continental Europe, including Britain, are going to begin goose stepping across the Urals because they all have national healthcare — psshaw!

The last talking point I expect is the one about how the Holocaust and the Gulag Archipelago are simply two sides of the same coin: mechanization + an attempt to subvert the free market = shoa. Now this “seems” to be the case, from a very common sensical perspective. Yet if you look slightly deeper into your inner faculties, you’ll notice a slight moral/ethical difference: while the Jews were exterminated because they were Jews, comrades (95% party members, roughly) who were sent to the Soviet work camps actually had to have a show trial in order to “prove” that they were guilty. Although we all know these trials were a sham and a tragedy, the Soviets, at the bare minimum, did have trials. Because I agree with you about how important “appearances” are (as you say, “Or is the difference merely one of rhetoric?”), at least the Soviets made the attempt to show how they belonged to the Enlightenment tradition that people must be “proven” to be guilty.

On this issue of appearances: it is significant that the Communists created many of the things we now associate with fascism, but what this DOESN’T mean is that Communists = Fascists because they are aesthetically similar. As you know from your history, Communism vs. Fascism was an all-encompassing ideological struggle in the 20th century. If you are trying to fight what you might consider an “existential” enemy, you cannot do it by simply oppressing people, you have to first convince them that it is in their best interest to do so. Thus, for example, neither the Communists nor the Fascists, at least early on, could directly oppress the people who would be a part of their mass movement: you have to appeal to them! But here again is a difference, and it is one that occurs with a temporal gap: the Communists appealed to workers based on the idea that workers ought to be liberated from the yoke of servitude (remember, workers conditions were VERY, VERY BAD back in the mid 1800s to early 1900s), and they did seek to liberate them. The Fascists co-opted this appeal to workers because they conceived of the Communists as their existential enemy aimed at liquidating chiefly the wealth of elites (this was ideologically mystified through an appeal to “The Nation”), and because they knew it was effective.

As to a defense of Communism against capitalism, I don’t feel like getting into an extremely long, tedious debate that has already been hashed out numerous times on this board. I’ve already gone long enough on why this “liberalism” = “fascism” = “communism” argument is bullshit and I’m sad and a bit disappointed that you find it even remotely agreeable since it is so ideologically absurd, historically inaccurate, and morally reprehensible.

To conclude on a philosophical point: I find it bizarre that you are attempting to argue that politics is essentially pointless because the Right and the Left are somehow the same. First of all, the latter is simply not the case. Second, this “depoliticization” of politics, this idea that, rather than Right or Left, one should merely “administer” society, is one that I find deeply suspicious, especially as someone who is interested in psychoanalysis. It believes that there can be a kind of “neutral,” “safe,” “bipartisan” position, one that is guaranteed by the “big Other” (the ‘rules of the game,’ so to speak). To my mind, this is the essential notion of “utopia”: the idea that we can move past all of our differences and work together towards a common, depoliticized goal within the current system/structure. Politics is nothing other than the fact that there is no “common ground”: anything that proposes itself to be a common ground is an ideological mystification. There is always an irreducible deadlock, the stain of particularity, that prevents the universal from fully realizing, actualizing itself. The great thing about Marx is that he elevated that deadlock (“class struggle”), that stain (the “useless” proletarian masses), to the highest ethical position.

Sep 28, 2008 @ 1:38 PM

Bryan Klausmeyer

So perhaps it once again bears repeating (this time for the third time):

Of course, fascism is against free markets. But then most people who proclaim that they are for free markets are against free markets. The question is never about the existence of socioeconomic controls. It’s about what kind of controls and who benefits. The same class of people who benefited from fascism in Germany and Italy are the same kind of people who benefit from the execution of Paulson’s plea.

If “small government” is your new ideology, then so be it. No one is making the argument that there existed a free market economy under fascism, and for that it is eternally guilty, and also identical to communism! Your inability to acknowledge this laboriously obscurantist notion of “WHAT ARE THE CONTROLS” and “WHO BENEFITS” is also why pretty much every response you’ve made misses the target. For example:

Is it any less insane than suggesting the bailing out of several financial firms is fascist? The shoe fits just as well in both cases, no? As regards to Sweden being fascists, they certainly have many elements of a fascists system.

Jason: please listen, I implore you. I have not said, nor has anyone said, that bailing out several financial firms is IN ITSELF fascist. What makes it fascist, or, at the very least, proto-fascist, is that, given the terms of THIS SPECIFIC BAILOUT, it mobilizes the State on behalf of big business. It is NOT the State taking over big business, but big business literally taking over the State through vested interests. Henry Paulson is a good example of this monstrous merger: he is both the ex-CEO of Goldman Sachs and current Treasury Secretary.

Here we now get at the final point: no one who proclaims to be in favor of “small government” and is backed by corporate power is actually in favor of “small government.” This isn’t due to an ideological mystification or pure opportunism. It’s because capitalism, by its very essence, does not work without a State. You can’t secure a market without State power (for example, without State power you can’t protect private property), and the bigger the economy, the more it is required for the State to intervene. No where in the history of human existence has this ever not been the case. Moreover, this “free market” vision is also a very violent one: it proposes the idea that people have to have their “slates wiped clean” in order to act as rational consumers, from Chile, to Argentina, to Indonesia, to New Orleans, to 2003 Tsunami-afflicted areas, and even to Iraq and its “green zone.” Perhaps reading Naomi Klein’s Shock Doctrine would be of some service here.

The only reason why “small government” and “free markets” became a historically contingent ideology is as a resentful reaction to Keynesianism in university institutions and developmentalist/progressive policies. Meaning: the “small government”/”free market” mantra is not meant to even be taken seriously, because it is only used to dismantle social spending, which benefits the poor. It moreover uses the shock in overthrowing social programs designed to equalize society in order to mobilize a large, non-democratic transfer of wealth from the poor to the rich.

Now, back to the topic of Sweden. You’ve curiously alluded to their secret fascist tendencies, but insofar as they are a mixed economy, which is also not “fascist,” I’m afraid I’ve missed the boat. But you’re right to point out how Sweden and the bail-out are connected. In fact, a while ago, Sweden faced the same problem. You know what they did? They fully nationalized the failed industries and used them to equalize pay in order to benefit lower and middle class families, whereas the U.S. bailout does practically no such thing. By the way, in terms of democracy, Sweden ranks #3, vs. the US which is favorably ranked at #15. ((worldaudit.org/democracy.htm)). If that is fascism, then sign me up!

(Side note: Fannie and Freddie were government entities before 1968, then they became quasi-private GSEs without any good reason since they ostensibly functioned far better beforehand. The fact that they were “nationalized” is more the case that they were merely “de-privatized.”)

(Side note II: You keep bringing up how ‘fascism’ is not anti-Semitic by its nature, and I’ll give you this point. But Italian fascism was by no means friendly to its “Others”: take for example the plight of the Romas, Italy’s “other” par excellence. Under Berlusconi, Mussolini’s anti-minority policies are being brought back under fascist rhetoric. ((www.independent.co.uk/news/world/europe/plight-of-the-roma-echoes-of-mussolini-855436.html)). Fascism by its nature entails a hatred of the Other qua existential enemy, because in order to gain support it has to appeal to workers. It has to appeal to workers because workers want freedom from capitalism, which involves class antagonism. If workers got their way, they’d revolutionize the means of production, but since fascism is run by big business, this doesn’t happen. Instead, it encourages workers to hate the “Other” in order to obfuscate class antagonism. Thus, as with any far-Right movement, fascism by its very nature entails the hatred of minorities and the desire to remove them at all costs.)

(Side note III: there is actually, in my opinion, far more in common between modern conservatism and fascism than liberalism and fascism, but generally speaking I am not a liberal and don’t care for liberalism any how. This fetishization of a return to a smaller, simpler world, one untainted by the cosmopolitan, foreign presence of the federal government, disturbing the peace and tranquility of our true, native roots, is an extremely fascist, irredentist attitude, with the federal government acting as a kind of metaphor for the all-pervasive Jewish threat. Perhaps it is no surprise that Ron Paul’s greatest contingent of supporters are openly racist and anti-Semitic — just take a look at 4chan or the fact that he received large campaign donations from StormFront.org. This is why it is so depressing to see you, as a Jew, to support this kind of right-wing attitude. One of the great things about being a Jew, in my opinion, is that they have always historically existed as a kind of “part of no part,” but with Israel those political alignments have sadly shifted.)

Finally, perhaps it might be of service to you to revisit your Hegel and Marx. We can talk all we want about Actually Existing Socialism, the perversion of Stalinism, the failures of Lenin’s NEP, etc., but I think we’ll basically be in agreement that the Soviet Union was an evil institution and good riddance. (Here again another difference: we won’t really be learning all that much by consulting the philsoophico-theoretical expositions of the fascists, save perhaps Carl Schmitt and a handful of others).

Sep 28, 2008 @ 5:18 PM

Bryan Klausmeyer

I am consistently aware of your point that it is about what kind of controls and who benefits, and I’m saying that fascism and liberalism have strong welfare states and strong anti-big business, rich people elements. I mentioned wage taxes on the rich in Nazi Germany and the fleecing of shareholders on Wall Street today, among other things. I have completely acknowledged that argument, so pay attention.

I ignored these points because they are simply not true. If you think fascism contains strong “anti-big business” elements, then you’ve clearly failed to distinguish between “rhetoric” and “reality.” Let’s start out from a simple premise: people and groups in society have conflicting interests (for example, banks and home-owners). To mobilize on behalf of an interest is politics. Fascism, even though it SPEAKS ON BEHALF OF WORKERS, works in the interest of business. A further definition of this would be “corporatism,” or “corporate welfare,” which is exactly what the Paulson Bail-out is, save for the few progressive terms Democrats were able to pathetically secure. On the one hand, it socializes risk, while on the other hand, it privatizes gains

Next, the majority of shareholders on Wall Street are not exactly proletariat. Either way, the problem with the bail-out is not that it doesn’t in some miniscule way benefit investors, regardless of their “class status,” which is basically irrelevant anyway: the problem with the bail-out is that, in a no-strings attached state, it does nothing to punish, and in many ways rewards, the fraudulent and immoral lending practices conducted by the companies and their CEOs who sought to make billions of dollars (although, again, one of the good provisions in the bill now is to curtail CEO pay). You can read more about the differences between the current bail-out (which, again, is now slightly amended as a result of Dodd, etc.) and Sweden’s 1992 bail-out here. The difference is basically that Sweden is a first rate democracy, whereas the U.S. is a crumbling, outstretched plutocratic empire.

Finally, if welfare and workers rights are fascist, then call me a fascist. I would take it any day over your onerous free markets.

Sep 28, 2008 @ 6:36 PM

Bryan Klausmeyer

Let’s look at Fascist Italy before the Great Depression hit. I’ll quote from Wikipedia, for lack of a better source:

The National Fascist Party of Benito Mussolini came to power in Italy in 1922, at the end of a period of social unrest. Working class activism was at a high point, militant trade unions were organizing increasingly frequent strikes to demand workers’ rights, and the Italian Socialist Party was making significant electoral gains. This caused widespread fear among Italian business circles and part of the middle class, who believed that a communist revolution was imminent. With the traditional right-wing parties appearing incapable of dealing with the situation, King Victor Emmanuel III turned to the young Fascist movement, which he considered to hold a hardline right-wing orientation by violently suppressing strikes, and appointed Benito Mussolini prime minister. Soon after his rise to power, Mussolini defined his economic stance by saying that:

The [Fascist] government will accord full freedom to private enterprise and will abandon all intervention in private economy.”[20]

Specifically, during the first four years of the new regime, from 1922 to 1925, the Fascist had a generally laissez-faire economic policy under the Finance Minister Alberto De Stefani. Free competition was encouraged. De Stefani initially reduced taxes, regulations and trade restrictions on the whole.[21] De Stefani reduced government expenditure and balanced the budget. Some former government monopolies (such as the telephone system) were privatized. Some previous legislation introduced by the Socialists, such as the inheritance tax, was repealed.[22] During this period prosperity increased and by mid-1920s industrial production had passed its wartime peak. However, this was accompanied with inflation.[23] Overall, this was a period when Fascist economic policy mostly followed classical liberal lines, with the added features of attempting to stimulate domestic production (rather than foreign trade) and balancing the budget.[24] In a speech given in May 1924, Mussolini declared that he supported the right to strike.[25]

However, “once Mussolini acquired a firmer hold of power… laissez-faire was progressively abandoned in favour of government intervention, free trade was replaced by protection[ism] and economic objectives were increasingly couched in exhortations and military terminology.”[26] De Stefani was forced to resign in 1925 because his policy of free trade was opposed by many Italian business leaders, who favored protectionism and subsidies to insulate domestic business from international competition. In 1926, Mussolini gave an impassioned speech demanding monetary policies to halt inflation and stabilize the Italian currency (the lira). He also took the final step of officially banning any kind of strike action. From 1927 to 1929, under the leadership of the new Finance Minister Alberto Beneduce, the Italian economy experienced a period of deflation, driven by the government’s monetary policies.[27][28]

Now, this whole affair has two big, important issues: (1) Mussolini was not brought into power through a revolution; (2) Mussolini rejected the free market on behalf of business leaders who were in control of the State.

Point #1 is simply an all-pervasive point related to the difference between Left and Right: a Left-wing revolution always comes into power by overthrowing the government; a Right-wing reaction always comes into power by being appointed, usually by the collapsing ancien regime.

Point #2 is that the interests of the State and the interests of business are not diametrically opposed, precisely because business interests can express themselves through the State. This is why the mere fact that “Nazis instituted public works” does not make public works fascist: public works can be anything it wants to be politically. What makes “public works” fascist is when the interests of the State and the interests of big business collude in order to use “public works” to prevent the real (communist) revolution from ever happening.

Here are some more tidbits apropos of the economics of fascism, which Wikipedia summarizes much better than I can.

Class collaboration:

Nevertheless, fascists did have a number of important political views that shaped many of their economic decisions. The first of these was the fundamental fascist opposition to both socialism and liberal capitalism. Fascists argued that the implementation of their ideas into the economic sphere would represent a “third way”, and they favoured corporatism and class collaboration. They believed that the existence of inequality and separate social classes was beneficial (contrary to the views of socialists)[10], but they also argued that the state had a role in mediating relations between these classes (contrary to the views of liberal capitalists).[11]

Class collaboration is to a large extent the reversal of the Marxist concept of class struggle. Whereas the doctrine of class struggle urges the lower classes to overthrow the ruling class and the existing social order for the purpose of establishing equality, the doctrine of class collaboration urges them to accept inequality as part of the natural state of things and preserve the social order.

Social Darwinism:

Fascism also operated from a Social Darwinist view of human relations. Their aim was to promote “superior” individuals and weed out the weak.[15] In terms of economic practice, this meant promoting the interests of successful businessmen while destroying trade unions and other organizations of the working class.[16] Historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because “the State pays for the blunders of private enterprise… Profit is private and individual. Loss is public and social.“[17]

That last line is really beautiful considering the point I made earlier: in the no-strings-attached bail-out, gains are privatized, risk is socialized.

Finally, here is an excerpt from the NY Times article on Sweden (relinked here):

Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.

That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.

“If I go into a bank,” said Bo Lundgren, who was Sweden’s deputy minister of finance at the time, “I’d rather get equity so that there is some upside for the taxpayer.”

Sweden spent 4 percent of its gross domestic product, or 65 billion kronor, the equivalent of $11.7 billion at the time, or $18.3 billion in today’s dollars, to rescue ailing banks. That is slightly less, proportionate to the national economy, than the $700 billion, or roughly 5 percent of gross domestic product, that the Bush administration estimates its own move will cost in the United States.

But the final cost to Sweden ended up being less than 2 percent of its G.D.P. Some officials say they believe it was closer to zero, depending on how certain rates of return are calculated.

The Swedish crisis had strikingly similar origins to the American one, and its neighbors, Norway and Finland, were hobbled to the point of needing a government bailout to escape the morass as well.

Financial deregulation in the 1980s fed a frenzy of real estate lending by Sweden’s banks, which did not worry enough about whether the value of their collateral might evaporate in tougher times.

…Soon after the plan was announced, the Swedish government found that international confidence returned more quickly than expected, easing pressure on its currency and bringing money back into the country. The center-left opposition, while wary that the government might yet let the banks off the hook, made its points about penalizing shareholders privately.

On a final note, I would simply like to remark on the patent absurdity of how, just now that we’re experiencing what is essentially the implosion of neoliberal legitimacy as a result of the deregulation of US financial institutions that led to this mess, the problem is not one about capitalism, but instead how communism is fascist. In light of that, I can’t help but think that perhaps your comments serve a much more cynical purpose, especially given how out of touch they are from present reality.

Sep 28, 2008 @ 8:21 PM