[Peace-discuss] The real threat of fascism

[Paul Patton]

 *The Real Threat of Fascism *
 *by Paul Bigioni*

Observing political and economic discourse in North America since the 1970's
leads to an inescapable conclusion: the vast bulk of legislative activity
favors the interests of large commercial enterprises. Big business is very
well off, and successive Canadian and U.S. governments, of whatever
political stripe, have made this their primary objective for at least the
last 25 years. Digging deeper into twentieth century history, one finds this
steadfast focus on the well-being of big business in other times and places.
The exaltation of big business at the expense of the citizen was a central
characteristic of government policy in Germany and Italy in the years before
those countries were chewed to bits and spat out by fascism. Fascist
dictatorships were borne to power in each of these countries by big
business, and they served the interests of big business with remarkable
ferocity. These facts have been lost to the popular consciousness in North
America. Fascism could therefore return to us, and we will not even
recognize it. Indeed, Huey Long, one of America's most brilliant and most
corrupt politicians, was once asked if America would ever see fascism. His
answer was, "Yes, but we will call it anti-fascism".

By exploring the disturbing parallels between our own time and the era of
overt fascism, I am confident that we can avoid the same hideous mistakes.
At present, we live in a constitutional democracy. The tools necessary to
protect ourselves from fascism remain in the hands of the citizen. All the
same, I believe that North America is on a fascist trajectory. We must
recognize this threat for what it is, and we must change course. I propose
to identify the core economic elements of fascism. In doing so, I will show
that present-day political fashions are leading us down the path already
trodden by Italy and Germany.

Consider the words of Thurman Arnold, head of the Anti-trust Section of the
U.S. Department of Justice in 1939:

*"Germany, of course, has developed within 15 years from an industrial
autocracy into a dictatorship. Most people are under the impression that the
power of Hitler was the result of his demagogic blandishments and appeals to
the mob… Actually, Hitler holds his power through the final and inevitable
development of the uncontrolled tendency to combine in restraint of trade."*

Arnold made his point even more clearly in a 1939 address to the American
Bar Association:

 *"Germany presents the logical end of the process of cartelization. From
1923 to 1935 cartelization grew in Germany until finally that nation was so
organized that everyone had to belong either to a squad, a regiment or a
brigade in order to survive. The names given to these squads, regiments or
brigades were cartels, trade associations, unions and trusts. Such a
distribution system could not adjust its prices. It needed a general with
quasi-military authority who could order the workers to work and the mills
to produce. Hitler named himself that general. Had it not been Hitler it
would have been someone else."*

I suspect that to most readers, Thurman Arnold's words are bewildering. Most
people today are quite certain that they know what fascism is. When I ask
people to define fascism, they typically tell me what it was, the assumption
being that it no longer exists. I have asked this question on numerous
occasions, and the usual answer contains references to dictatorship and
racism which trail off into muttering when the respondent realizes that he
or she knows almost nothing about fascism's political and economic
characteristics.

Before the rise of fascism, Germany and Italy were liberal democracies.
Fascism did not swoop down on these nations as if from another planet. To
the contrary, fascist dictatorship was the end result of political and
economic processes which these nations underwent while they were still
democratic. In both these countries, economic power became so utterly
concentrated that the bulk of all economic activity fell under the control
of a handful of men. Economic power, when sufficiently vast, becomes by its
very nature political power. The political power of big business supported
fascism in Italy and Germany.

Business tightened its grip on the state in both Italy and Germany by means
of intricate webs of cartels and business associations. These associations
exercised a very high degree of control over the businesses of their
members. They frequently controlled pricing, supply and the licensing of
patented technology. These associations were private, but were entirely
legal. Neither Germany nor Italy had effective antitrust laws, and the
proliferation of business associations was generally encouraged by
government. This was an era eerily like our own, insofar as economists and
businessmen constantly clamored for self-regulation in business. By the mid
1920's, however, self-regulation had become self-imposed regimentation. By
means of monopoly and cartel, the businessmen had wrought for themselves a
"command and control" economy which effectively replaced the free market.
The business associations of Italy and Germany at this time are perhaps
history's most perfect illustration of Adam Smith's famous dictum: "People
of the same trade seldom meet together, even for merriment and diversion,
but the conversation ends in a conspiracy against the public, or in some
contrivance to raise prices".

How could the German government not be influenced by Fritz Thyssen, the man
who controlled most of Germany's coal production? How could it ignore the
demands of the great I.G. Farben industrial trust, controlling as it did
most of that nation's chemical production? Indeed, the German nation was
bent to the will of these powerful industrial interests. Hitler attended to
reduction of certain taxes applicable to large businesses, while
simultaneously increasing the same taxes as they related to small business.
Previous decrees establishing price ceilings were repealed such that the
cost of living for the average family was increased. Hitler's economic
policies hastened the destruction of Germany's middle class by decimating
small business. Ironically, Hitler pandered to the middle class and they
provided some of his most enthusiastically violent supporters. The fact that
he did this while simultaneously destroying them was a terrible achievement
of Nazi propaganda.

Hitler also destroyed organized labor by making strikes illegal.
Notwithstanding the socialist terms in which he appealed to the masses,
Hitler's labor policy was the dream come true of the industrial cartels that
supported him. Nazi law gave total control over wages and working conditions
to the employer. Compulsory (slave) labor was the crowning achievement of
Nazi labor relations. Along with millions of people, organized labor died in
the concentration camps. The camps were not only the most depraved of all
human achievements, they were a part and parcel of Nazi economic policy.
Hitler's untermenschen, largely Jews, Poles and Russians, supplied slave
labor to German industry. Surely this was a capitalist bonanza. In another
bitter irony, the gates over many of the camps bore a sign that read "Urbeit
Macht Frei" – "work shall set you free". I do not know if this was black
humor or propaganda, but it is emblematic of the deception that lies at the
heart of fascism.

The same economic reality existed in Italy between the two world wars. In
that country, nearly all industrial activity was owned or controlled by a
few corporate giants, F.I.A.T. and the Ansaldo shipping concern being the
chief examples. Land ownership in Italy was also highly concentrated and
jealously guarded. Vast tracts of farmland were owned by a few latifundisti.
The actual farming was carried out by a landless peasantry who were locked
into a role essentially the same as that of the share cropper of the U.S.
deep south. As in Germany, the few owners of the nation's capital assets had
immense influence over government. As a young man, Mussolini had been a
strident socialist, and he, like Hitler, used socialist language to lure the
people to fascism. Mussolini spoke of a "corporate" society wherein the
energy of the people would not be wasted on class struggle. The entire
economy was to be divided into industry specific "corporazioni", bodies
composed of both labor and management representatives. The corporazioni
would resolve all labor/management disputes, and if they failed to do so,
the fascist state would intervene. Unfortunately, as in Germany, there laid
at the heart of this plan a swindle. The corporazioni, to the extent that
they were actually put in place, were controlled by the employers. Together
with Mussolini's ban on strikes, these measures reduced the Italian laborer
to the status of peasant.

Mussolini the one-time socialist went on to abolish the inheritance tax, a
measure which favored the wealthy. He decreed a series of massive subsidies
to Italy's largest industrial businesses and repeatedly ordered wage
reductions. Italy's poor were forced to subsidize the wealthy. In real
terms, wages and living standards for the average Italian dropped
precipitously under fascism.

Even this brief historical sketch shows how fascism did the bidding of big
business. The fact that Hitler called his party the "National Socialist
Party" did not change the reactionary nature of his policies. The connection
between the fascist dictatorships and monopoly capital was obvious to the US
Department of Justice in 1939. As of 2005, however, it is all but forgotten.


It is always dangerous to forget the lessons of history. It is particularly
perilous to forget about the economic origins of fascism in our modern era
of deregulation. Most Western liberal democracies are currently held in the
thrall of what some call market fundamentalism. Few nowadays question the
flawed assumption that state intervention in the marketplace is inherently
bad. As in Italy and Germany in the 20's and 30's, business associations
clamor for more deregulation and deeper tax cuts. The gradual erosion of
antitrust legislation, especially in the United States, has encouraged
consolidation in many sectors of the economy by way of mergers and
acquisitions. The North American economy has become more monopolistic than
at any time in the post-WWII period. Fewer, larger competitors dominate all
economic activity, and their political will is expressed with the millions
of dollars they spend lobbying politicians and funding policy formulation in
the many right-wing institutes which now limit public discourse to the
question of how best to serve the interests of business. The consolidation
of the economy, and the resulting perversion of public policy are themselves
fascistic. I am quite certain, however, that President Clinton was not
worrying about fascism when he repealed federal antitrust laws that had been
enacted in the 1930's. The Canadian Council of Chief Executives is similarly
unworried about fascism when it lobbies the Canadian government to water
down our Federal Competition Act. (The Competition Act regulates monopolies,
among other things, and itself represents a watering down of Canada's
previous antitrust laws. It was essentially written by industry and handed
to the Mulroney Government to be enacted.)

At present, monopolies are regulated on purely economic grounds to ensure
the efficient allocation of goods. If we are to protect ourselves from the
growing political influence of big business, then our antitrust laws must be
reconceived in a way which recognizes the political danger of monopolistic
conditions. Antitrust laws do not just protect the marketplace, they protect
democracy.

Our collective forgetfulness about the economic nature of fascism is also
dangerous at a more philosophical level. As contradictory as it may seem,
fascist dictatorship was made possible because of the flawed notion of
freedom which held sway during the era of laissez-faire capitalism in the
early twentieth century. It was the liberals of that era that clamored for
unfettered personal and economic freedom, no matter what the cost to
society. Such untrammeled freedom is not suitable to civilized humans. It is
the freedom of the jungle. In other words, the strong have more of it than
the weak. It is a notion of freedom which is inherently violent, because it
is enjoyed at the expense of others. Such a notion of freedom legitimizes
each and every increase in the wealth and power of those who are already
powerful, regardless of the misery that will be suffered by others as a
result. The use of the state to limit such "freedom" was denounced by the
laissez-faire liberals of the early twentieth century. The use of the state
to protect such "freedom" was fascism. Just as monopoly is the ruin of the
free market, fascism is the ultimate degradation of liberal capitalism.

In the postwar period, this flawed notion of freedom has been perpetuated by
the neo-liberal school of thought. The neo-liberals denounce any regulation
of the marketplace. In so doing, they mimic the posture of big business in
the pre-fascist period. Under the sway of neo-liberalism, Thatcher, Reagan,
Mulroney and George W. Bush have decimated labor and exalted capital. (At
present, only 7.8 per cent of workers in the U.S. private sector are
unionized – about the same percentage as in the early 1900's.) Neo-liberals
call relentlessly for tax cuts which, in a previously progressive system,
disproportionately favor the wealthy. Regarding the distribution of wealth,
the neo-liberals have nothing to say. In the result, the rich get richer and
the poor get poorer. As in Weimar Germany, the function of the state is
being reduced to that of a steward for the interests of the moneyed elite.
All that would be required now for a more rapid descent into fascism are a
few reasons for the average person to forget that he is being ripped off.
The racist hatred of Arabs, fundamentalist Christianity or an illusory sense
of perpetual war may well be taking the place of Hitler's hatred for
communists and Jews.

Neo-liberal intellectuals often recognize the need for violence to protect
what they regard as freedom. Thomas Freidman of the New York Times has
written enthusiastically that "the hidden hand of the market will never work
without a hidden fist", and that "McDonald's cannot flourish without
McDonnell Douglas, the designer of the U.S. Air Force F-15…". As in
pre-fascist Germany and Italy, the laissez-faire businessmen call for the
state to do their bidding even as they insist that the state should stay out
of the marketplace. Put plainly, neo-liberals advocate the use of the
state's military force for the sake of private gain. Their view of the
state's role in society is identical to that of the businessmen and
intellectuals who supported Hitler and Mussolini. There is no fear of the
big state here. There is only the desire to wield its power. Neo-liberalism
is thus fertile soil for fascism to grow again into an outright threat to
our democracy.

Having said that fascism is the result of a flawed notion of freedom, I
respectfully suggest that we must reexamine what we mean when we throw
around the word "freedom". We must conceive of freedom in a more enlightened
way. Indeed, it was the thinkers of the Enlightenment that imagined a
balanced and civilized freedom which did not impinge upon the freedom of
one's neighbor. Put in the simplest terms, my right to life means that you
must give up your freedom to kill me. This may seem terribly obvious to
decent people. Unfortunately, in our neo-liberal era, this civilized sense
of freedom has, like the dangers of fascism, been all but forgotten.

*Paul Bigioni – paul at bigionilaw.com – is a lawyer practicing in Markham,
Ontario, Canada. He is a commentator on trade and political issues. This
article is drawn from his work on a book about the persistence of fascism*.
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