Fascism Then. Fascism Now?

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Tue, 29 Nov 2005 22:24:54 -0500

Fascism Then. Fascism Now?

 

 

 

 

Published on Monday, November 28, 2005 by the Toronto Star (Canada)

 

 

 

Fascism Then. Fascism Now?

 

 

When people think of fascism, they imagine Rows of goose-stepping

storm troopers and puffy-chested dictators. What they don't see is the

economic and political process that leads to the nightmare.

by Paul Bigioni

 

 

Observing political and economic discourse in North America since the

1970s 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 past 25 years.

 

Digging deeper into 20th century history, one finds 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. " Yes, " he replied, " but we will call it anti-fascism. "

 

By exploring the disturbing parallels between our own time and the era

of overt fascism, we can avoid the same hideous mistakes. At present,

we live in a constitutional democracy. The tools necessary to protect

us from fascism remain in the hands of the citizen. All the same,

North America is on a fascist trajectory. We must recognize this

threat for what it is, and we must change course.

 

Consider the words of Thurman Arnold, head of the Antitrust Division

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, Arnold's words are bewildering. People

today are quite certain that they know what fascism is. When I ask

people to define it, they typically tell me what it was, the

assumption being that it no longer exists. Most people associate

fascism with concentration camps and rows of storm troopers, yet they

know nothing of the political and economic processes that led to these

horrible end results.

 

Before the rise of fascism, Germany and Italy were, on paper, liberal

democracies. Fascism did not swoop down on these nations as if from

another planet. To the contrary, fascist dictatorship was the result

of political and economic changes 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 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 1920s, 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 that 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 the reduction of 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 Arbeit Macht Frei — " Work shall set you free. " I

do not know if this was black humour 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, Fiat and the Ansaldo shipping

concern being the chief examples of this.

 

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 sharecropper 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; 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 that 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.

 

Antitrust laws do not just protect the marketplace, they protect democracy

 

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 U.S. 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 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 '20s and '30s, business associations

clamour 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.

 

U.S. census data from 1997 shows that the largest four companies in

the food, motor vehicle and aerospace industries control 53.4, 87.3

and 55.6 per cent of their respective markets. Over 20 per cent of

commercial banking in the U.S. is controlled by the four largest

financial institutions, with the largest 50 controlling over 60 per

cent. Even these numbers underestimate the scope of concentration,

since they do not account for the myriad interconnections between

firms by means of debt instruments and multiple directorships, which

further reduce the extent of competition.

 

Actual levels of U.S. commercial concentration have been difficult to

measure since the 1970s, when strong corporate opposition put an end

to the Federal Trade Commission's efforts to collect the necessary

information.

 

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 that 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 certain, however, that

former president Bill Clinton was not worried about fascism when he

repealed federal antitrust laws that had been enacted in the 1930s.

 

The Canadian Council of Chief Executives is similarly unworried about

fascism as it lobbies the Canadian government to water down proposed

amendments to our federal Competition Act. (The Competition Act, last

amended in 1986, regulates monopolies, among other things, and itself

represents a watering down of Canada's previous antitrust laws. It was

essentially rewritten 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

that recognizes the political danger of monopolistic conditions.

 

Antitrust laws do not just protect the marketplace, they protect

democracy.

 

It might be argued that North America's democratic political systems

are so entrenched that we needn't fear fascism's return. The

democracies of Italy and Germany in the 1920s were in many respects

fledgling and weak. Our systems will surely react at the first whiff

of dictatorship.

 

Or will they? This argument denies the reality that the fascist

dictatorships were preceded by years of reactionary politics, the kind

of politics that are playing out today. Further, it is based on the

conceit that whatever our own governments do is democracy. Canada

still clings to a quaint, 19th-century " first past the post " electoral

system in which a minority of the popular vote can and has resulted in

majority control of Parliament.

 

In the U.S., millions still question the legality of the sitting

president's first election victory, and the power to declare war has

effectively become his personal prerogative. Assuming that we have

enough democracy to protect us is exactly the kind of complacency that

allows our systems to be quietly and slowly perverted. On paper, Italy

and Germany had constitutional, democratic systems. What they lacked

was the eternal vigilance necessary to sustain them. That vigilance is

also lacking today.

 

Our collective forgetfulness about the economic nature of fascism is

also dangerous at a philosophical level. As contradictory as it may

seem, fascist dictatorship was made possible because of the flawed

notion of freedom that held sway during the era of laissez-faire

capitalism in the early 20th century.

 

It was the liberals of that era who clamoured for unfettered personal

and economic freedom, no matter what the cost to society. Such

untrammelled 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 that 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

20th 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 post-war 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 1900s.)

 

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 end, 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 he is being ripped off. 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 Friedman 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,

we need to re-examine what we mean when we throw around the word. We

must conceive of freedom in a more enlightened way.

 

Indeed, it was the thinkers of the Enlightenment who imagined a

balanced and civilized freedom that 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 is a lawyer practicing in Markham. This article is drawn

from his work on a book about the persistence of fascism.

 

© 2005 Toronto Star